Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, October 12, 1993 TAG: 9310120053
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE: LENGTH: Medium
The legislature this year passed a resolution sponsored by State Sen. William Wampler Jr., R-Bristol, and others calling for the state Department of Economic Development to prepare an export plan for Virginia coal.
The legislators acknowledged that the coal-export businesses can be dramatically affected by "international events, growing environmental concerns abroad and changing technology."
In 1990, coal exports contributed $1.5 billion to Virginia's economy, the resolution said.
Exports have accounted for a significant portion of coal production in Virginia. In recent years, 30 to 40 percent of the coal mined in the state has been sold in markets outside the United States.
But a recent drop in the state's coal exports adds some urgency to the need to develop a plan.
Information compiled by the Virginia Center for Coal and Energy Research at Virginia Tech shows coal exports at Hampton Roads grew steadily from 1988 to 1991 before dropping significantly in 1992.
Exports of Virginia coal began dropping even before that, falling from a 17.9-million-ton peak in 1990 to 15.9 million tons in 1992. Virginia coal accounts for only 30 percent of the total coal exports at the state's primary port.
There is, however, potential for growth in Virginia coal exports. The U.S. Department of Energy has predicted the trade in coal worldwide will grow 3 percent annually through 2010.
With hope of harnessing that potential, the Department of Economic Development turned to Tech researchers for help preparing the export plan.
A team of five graduate students at Tech's Pamplin College of Business expects to complete the draft of a plan by early November. After review by coal company managers and brokers, it is to be presented to the General Assembly during its 1994 session.
James Littlefield, a Tech marketing professor supervising the project, said the students so far have focused on nations the state should target with its coal trade.
When complete, the students' work will include an assessment of countries - including Australia, South Africa, Poland and Colombia - that are competing with the United States in the coal business. The study also will address pricing and environmental issues affecting the international market.
How steel industries worldwide use coal can have a big effect on the Virginia's coal exports because more than 90 percent of the coal exported from Virginia is used in steel making.
Technological changes that allow the use of lower-quality coal, the recycling of steel and the use of other types of materials instead of steel are all having an impact on the demand for exports of Virginia's steel-making coal, said Carl Zipper of the Tech coal and energy center.
Other trends that could affect the demand for Virginia coal are:
Elimination of subsidies by European governments for their own coal industries.
An increase in the demand for coal by electric utilities in Asia.
Increased environmental regulations, which could benefit producers of high-quality Virginia coal.
An increase in the production of high-quality coal by developing countries, which could work against Virginia producers.
by CNB