Author: Martin B. Zimmerman

Publisher: Cambridge, Mass. : MIT Press

Published: 1981

Total Pages: 232

ISBN-13:

The increased use of coal as an energy source in the United States has risen to a high priority on the national agenda. Coal is the only such source that is readily and abundantly available for supplanting expensive and uncertain imported oil for industrial and utility use. It is the power base on which the synthetic-fuel industry is to be built. And it is seen as a backstop for the faltering nuclear power industry, which is facing a slowdown in new plant construction if not an outright moratorium. The U.S. Coal Industryinvestigates a wide range of economic and policy alternatives by developing and utilizing several linked models that are sufficiently general to deal with policy proposals that may be seen as viable at some future date as well as those now being debated, and sufficiently specific to provide quantitative forecasts of the economic consequences of changes in key variables. These models focus on the broad trade-offs that the United States must make in developing a comprehensive coal-use strategy. Among the relevant trade-offs are environmental regulation versus oil imports, sulfur pollution from Appalachian coal versus strip mining for low-sulfur Western coal, and the hazards of coal mining versus those of nuclear power plants. The introductory chapter reviews the current coal environment, the current state of regulation, and related issues (such as the rent, tax, and railroad situations that can limit or encourage coal production). Subsequent chapters discuss the models used in the analysis (the coal supply model, the demand model, and the link between them, along with a consideration of regional transportation rates), the basic forces in the industry (the drive to western and midwestern coal and the decline of Appalachia, the effects of sulfur pollution regulation, changing relative factor prices, supply and demand developments, user costs, and policy responses), the economics of environmental trade-offs (including their impact on the cost of electricity to consumers), and the coal industry in the absence of a nuclear alternative (the electric utility model as a predictor of nuclear power generation, the effects of a nuclear moratorium, and the interaction of coal and nuclear policy). A final chapter presents a summary and conclusions, encompassing supply side influences, demand side effects, and the impacts of coal policies on oil imports.