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By Tim Peterson

Factors Controlling Stability Stability of slopes in soft rock, waste dumps or soils is governed by three factors: ?Slope configuration ?Groundwater ?Shear strength

Jan 1, 2004

Good Morning. Thank you for your kind welcome, Lyle and thank you for having me here today. I spoke at the fall meeting of the Utah state RMCMI in Price and it's nice to be invited back. I can see by the program that you have two great days of interesting and informative meetings, including the mine rescue team exhibition and the safety recognition award presentations. As you all know, I am here standing in for Dave Lauriski, who is in China with Secretary of Labor Chao. As you also know, Utah is near and dear to his heart - and so is the Rocky Mountain Coal Mining Institute. I want to assure you Dave would be here if it were at all possible. But it is my good fortune that I could come in his place. We have made great progress as an Agency thanks to the hard work and dedication of MSHA's employees. But we are always looking for new ways to solve problems and continue to send more miners home safe and healthy every day. And we have been working on some great ways to do that, including thinking strategically. During my presentation today I'm going to talk about where the Agency is in terms of our transformation to the MSHA of the 21st century, a little bit about how we got to be where we are, and then describe our roadmap to the future state. And I'm going to focus on the significance of our plan and the planning process to demonstrate the implication for the mining industry. Former President Dwight Eisenhower once said, "In preparing for battle I have always found that plans are useless, but planning is indispensable." Now I do like Ike, but I would have to take exception to the first part of the sentence. I have found plans and the planning process to be indispensable - the plan to give me a roadmap to my goal, and the process to focus me on the steps I must take to get there. We all know that having a strategic plan makes the difference between success and failure. We've seen it time and time again, in business, in our lives - and in government: Having a strategic plan is crucial to success. And the process of making the strategic plan is crucial to its success. Putting together a workable strategic plan - a good roadmap - that will successfully lead you to your goals requires a thorough, careful process that takes into account each factor that you may encounter along your way to success, as well as those with whom you will travel. In order to talk about our current plan I want to take you back to three years ago, when Dave Lauriski went to Washington to lead MSHA. He knew that change was in the air. Dave was confirmed as Assistant Secretary with 30-plus years experience in the coal mining industry, and more than 20 years of experience in dealing with

Jan 1, 2004

The eighth annual RMCMI Mine Rescue Evaluation was held during the 1999 Institute convention at the Crested Butte Marriott Resort, Colorado. [ ] Elliott Tsosie, Mary Rowell, Janna Aune, Guy Horton, Art Saenz and Bill Balaz were pleased with the 1999 Mine Rescue Program, The Mine Rescue committee is but one of 17 volunteer committees; this one co-chaired by Bill Balaz, Elliott Tsosie and Janna Aune. There were three evaluators, Art Saenz, Western Environmental; Mary Rowell, ProCare and Guy Horton, Horton Rope Rescue. Nine teams participated and brought 89 participants, 26 spouses, nine children and five teens. The teams were BHP LaPlata, BHP Navajo, BHP San Juan, all from Farmington, NM; Bridger Coal Co., Rock Springs, WY; The Coteau Properties Co., Beulah, ND; Northwestern Resources, Jewett, TX; Powder River Coal Co., Gillette, WY; Solvay Minerals, Green River, WY and Western Energy Co., Colstrip, MT. To observe were members from Centralia Mining Co., Centralia, WA. [ ] Evaluators: Mary Rowell, Guy Horton &Art Saenz The three professional evaluators provided challenging scenarios for the Mine Rescue participants on the grounds of the resort property. Some attending convention were alarmed to see stretchers with "victims" and phoned the hotel switchboard to report the catastrophe. Team members had no prior knowledge of what the scenarios might be and derails were provided only as they arrived at the scenario location, with one exception. Seven to ten or more articipants make up each team. Some teams also ring an alternate and team trainer. For identification purposes, the "victims" wore white shirts emblazoned both front and back with a red VICTIM designation. There was a staged demonstration by three response teams who had not previously worked together. This was enacted on the convention floor following a Technical Session meeting attended by about 200 members. Three response teams from BHP's Navajo and San Juan Mines together with Coteau Properties' Freedom Mine provided a demonstration of their response skills. For never having worked together before, they presented a very professional enactment. This is described at length in the Welcome Session copy. Training sessions were held Saturday and Sunday to enable the teams to prepare for the scenarios. A swap meet was Saturday evening for teams to swap hats, shirts, belt buckles, stickers etc. Each participant received a royal blue golf shirt and ivory cap with royal blue bill. Culmination of the Mine Rescue program was a Tuesday morning Awards breakfast when teams were presented with jade acrylic plaques. [ ] Teams participating in the Mine Rescue Evaluation received trophies on Tuesday morning. The captains above represent BHP-La Plata, BHP-Navajo, BHP¬San Juan, Bridger Coal Co., The Coteau Properties Co., Powder River Coal Co., Solvay Minerals, and Western Energy Co. Sponsors who contributed financially to the 1999 Mine Rescue program were Balaz & Associates, CMC, Civil Constructors, Colstrip Electric, Farmington Fire Equipment & Safety, Fisher Safety, Flanders Ellctric Motor Service, Magnum Metals, Richard Palmtag, Rocky Mountain Electric Motors, Sedona Consulting and Western Water Consultants. [ ] Evaluator Art Saenz likes to have the upper hand and will take whatever steps necessary to get it.

Jan 1, 1999

The seventh Annual RMCMI Mine Rescue Evaluation was held during the 1998 Institute convention at the Silvertree Hotel, in Snowmass Village, Colorado. The Mine Rescue committee, co-chaired by Becki Boam and Elliott Tsosie, is one of 18 committees of the Institute. In 1998 a record number of 10 teams participated in the program. The teams were from the four western states of Montana, New Mexico, Texas and Wyoming and were comprised of about eight members each. Teams participating were BHP-La Plata Mine, BHP-Navajo Mine, BHP-San Juan Mine, all from Farmington, New Mexico; Bridger Coal Company, Rock Springs, Wyoming; General Chemical, Green River, Wyoming; Jacobs Ranch Mine, Gillette, Wyoming; Powder River Coal Company-North Antelope/Rochelle, Gillette, Wyoming; Sabine Mining, Hallsville, Texas; Solvay Minerals, Green River Wyoming, and Western Energy-Colstrip, Montana. The professional evaluators provided challenging scenarios for over 90 participants and many observers. The evaluators were: Art Saenz and Tom Bass of Western Environmental Associates, Keith Mitchell and Jim Jennings of Emergency Services Detail; Mary Bailey of Mary Bailey Associates; and John Peleaux of Innovative Access. Teams are not given advance warning of what the problem will entail. They are provided the necessary details when they arrive at the scenario location and work to resolve the problem in an effective and efficient manner. [ ] Seven participants made up each team with an . eighth member as an alternate. Team trainers and other mine personnel traveled with the team from scenario to scenario providing support and encouragement. The teams were presented with four scenarios each day, involving High Angle Rescue, Low Angle Rescue/Medical, Hazmat, and Confined Space. All of the victims, except for one, were provided through the cooperative efforts of the Snowmass Fire Department, who also assisted with providing several evaluators. Snowmass Fire Department is to be commended for providing over 20 victims/evaluators each day to facilitate the evaluations. Training sessions were held Friday afternoon and Saturday evening to help the teams prepare for the scenarios. A swap meet was held Friday evening for teams to trade hats, shirts, belt buckles, stickers, etc. All mine rescue participants and spouses and registered families attended the Bar-B-Q on Sunday evening followed by an adult dance. [ ] Front row: Ray Blaisdell, Solvay; Gary Rasmussen, General Chemical; Spencer Thompson, Sabine; Jack Ervin, Western Energy. Back Row: Ken Kellywood, BHP Navajo; Jonathan Sorrell, BHP LaPlata; Elton Stanton, Jacobs Ranch; Travis Roy, Powder River Coal; Ron Neff, BHP San Juan; Steve Whaley, Bridger. Sponsors who contributed to the 1998 program financially were: Blue Mountain Energy, (Deserado Mine); Flanders Electric Motor Service, Inc.; Rocky Mountain Electric Motors, L.S.; and Western Environmental Associates. Glass trophy cups, with an etching of a Mine Rescue figure and the RMCMI Logo on cherry wood bases, were presented to the 10 team captains at the Monday Mine Rescue Awards Breakfast. Eight of the ten teams had a proficiency level of 3 and 2 teams achieved a proficiency level of 2.

Jan 1, 1998

By Peter B. Lilly

Thank you, Tom, I appreciate that generous introduction - and your generous welcome. When Doris Finnie asked me to speak here today, my decision to join you couldn't have been easier - for two reasons. First, I can't say no to an opportunity to return to Steamboat Springs. My family has wonderful memories of skiing here. And this time of year, golf in the mountains is so good you almost don't miss the skiing. The second reason this was such an easy decision is that The Rocky Mountain Coal Mining Institute is such an important forum for the coal industry, and it's certainly important to Peabody. We have mines in five western states - Arizona, Colorado, Montana, New Mexico and Wyoming. Last year, our western mines produced more than 110 million tons of coal. That's about two-thirds of our total domestic production. So western states are obviously critical to us. A couple of weeks ago, the west became even more significant to Peabody. Of course, I'm speaking of PacifiCorp's planned acquisition of The Energy Group - including Peabody - announced the middle of this month. Admittedly, when I agreed to speak here - some months ago - I had no idea just how much change Peabody would face in this relatively brief period. Still, not knowing then about the PacifiCorp announcement, I chose change as the subject for this talk. I'll update you on our recent news. But, first I want to establish a broad context for the PacifiCorp/Energy Group announcement and other change in the electricity business, change here in the United States and all over the world. ? We'll see how change is driven by two major trends - privatization in emerging markets and deregulation in mature markets, In turn, those two trends will cause ever-increasing consolidation - in both the coal industry and the broader power industry. ? After outlining those trends, I'll discuss the change that will dramatically affect Peabody following the announcement a week ago that PacifiCorp and The Energy Group intend to join forces to create one of the world's largest international integrated energy companies - an event that adds considerable credibility to the prophesies I'll outline in my remarks today. ? Finally, I will discuss an issue that threatens our industry's future - and, indeed, the economic future of all Americans. That issue is the inappropriate response to the unproven possibility of global climate change. Let's set the stage for change. And let's begin with the first trend I mentioned - the trend to privatization in developing economies. What drives the trend to privatization? Economics. It's all about the supply and demand of capital. And the engine that drives the supply/demand ratio is growth in electricity demand - tremendous growth in demand in developing economies. The U.S. EIA projects worldwide growth in electricity demand at 63 percent between 1990 and 2010, most of it in developing countries. This strong growth means that a new 500 MW power plant will be needed every three and one-half days until the year 2010. Now, if we say that a 500 MW plant will cost about $500 million dollars, we're talking about a bill of about $1 billion dollars a week - through 2010. That voracious demand for capital drives the trend to privatization. It means countries in Eastern Europe and the former Soviet Union want to sell generating assets. And Asian countries - for example, India, Indonesia and the Philippines - want to find private investors to build power plants. Privatization already is well underway. In the future, it will grow, with countries in South America, Central America, and Africa joining the trend. Bottom line: The privatization trend means rich new opportunities for companies willing to think beyond "business as usual." Meanwhile, developed economies face a different but no less fundamental change. Western European countries, the United States and Australia face deregulation. Why does deregulation represent such a big change? Consider a few basic facts about the U.S. electricity market to see what a big change -

Jan 1, 1997

Profiled on these pages are the eight RMCMI 1996 Scholarship Award winners. All eight winners were present as guests of the Institute at the June convention in Durango, Colorado. Each received recognition at the Institute Awards Luncheon Monday, July 1. 1996. Each state vice president sewed as the host for the collegiate winner and his firm provided travel and hotel expenses. In addition to receiving a plaque from the Scholarship Chairman, Alan Czarnowsky, each winner receives $1,000 tuition credit for the coming academic year, as well as transportation hotel lodging and meals at convention as guests of the Institute. Because this is a continuing award, the winners from the previous year also receive a $1.000 tuition credit in their senior year if recommended by the dean of the college or university and are full time students. A resident from each of the eight RMCMI member states is selected from among Board approved institutions. Criteria for these awards to be made in the spring annually is that the recipient (1) Is a full time sophomore student who will use the tuition credit during the junior year. (2) Be both a U.S. citizen and a resident of the member state. (3) Maintain good academic standing, be pursuing a degree in a mining related field and have an expressed interest in western coal as a possible career path. The scholarship program includes curricula other than in the mining departments, but in engineering disciplines, such as geology, mineral processing and metallurgy. Contributions to this worthy project are tax deductible to each individual RMCMI member or his firm. Through annual donations of $100 or more, the Patrons of the Institute fund the scholarship program. A listing or current donors is found elsewhere in this book. Donations to this worthwhile program are payable to RMCMI Scholarship and may be mailed to the RMCMI Office, 3000 Youngfield Street, Suite 324, Lakewood, Colorado 80215. Profiles of the 1996 Scholarship Winners follow. [ ] ARIZONA WINNER Michelle Begaye New Mexico Tech - Socorro. New Mexico Michelle Lisa Begaye plans to work in a mine near her Navajo Reservation after graduation. She would like to continue teaching the young in her community as she has been doing for the past few years. As a volunteer with the Natani' Trails, she takes at-risk students on wilderness experiences such as rafting, repelling, etc. Active in school, she played the trombone, was in speech and drama, played softball, and was the first female to play football as a right and left tackle. A member of National Honor Society in High Shool, she also made the Dean's List at Navajo Community College. Michelle will pursue a degree in Environmental Engineering when she transfers to New Mexico Tech this fall. [ ] COLORADO WINNER Nicole Albert Colorado School of Mines - Golden. Colorado Nicole is pursuing a BS in Mining Engineering with a Minor in Mineral Economics - and has already proven her serious intent with her many activities related to mining. She is a member of the Society of Women Engineers; Society of Mining, Metallurgy and Exploration; and has participated in two different projects related to mining, one of which was to clean up a mine tailings site. Nicole enjoys hunting, camping, fishing, softball and horses. Growing up with her father, working at a surface coal mine, sparked her interest in this industry.

Jan 1, 1996

By Clifford R. Miercort

When it was announced that the economy grew at an annual rate of 4.7 percent in the Fourth Quarter of 1992, it appeared that our long awaited recovery from recession was here. Unfortunately that much growth proved to be unsustainable, and in the First Quarter of 1993, the number dropped to less than one percent. Today it is clear that the recovery is continuing, but at a very slow rate. One of the Most disturbing statistics during this recovery is that unemployment has not improved as one would expect but has been hovering around 7 percent for over a year, making this recovery a ?jobless? one. In a recent Harvard Business School presentation, a professor reported that the United States has slipped from its leadership position in almost every manufacturing category since World War II. From the production of cars to consumer electronics, we have lost significant world market share to others, most notably Japan and Germany. Obviously this is not new news, but the magnitude of the loss and the number of industries affected was surprising to me. The result has been that our negative balance of payments has soared, and the United States of America now has the dubious distinction of being one of the world's largest debtor nations. It has been common for politicians, and political want-a-be's, to blame all of our trade problems on industry. They say that the moguls of American industry spend too much time seeking short-term gain at the expense of long-term growth. They say that we are interested more in our own perks and economic security than in producing quality products that can compete in the world marketplace. One of the stared goals of the Clinton Administration is the targeting of strategic industries to receive help from the government so they can compete on the world stage more effectively. Personally. I think that is an oxymoron. My experience has been that whenev-

Jan 1, 1993

Allis Mineral Systems ARCO Coal Company Buckley Powder Co. CALCO, Inc. Coal Magazine Colowyo Coal Company Continental Conveyor & Equipment Company Crane & Hoist Sales Cummins Southwest, Inc. Energy West Mining Company Paul J. Epley FMC Corporation The Falkirk Mining Company Fleischli Oil Co., Inc. T. J. Gundlach Machine Company Halbach & Braun Harnischfeger Corporation Hemscheidt Corporation Hyatt Regency Beaver Creek Jennmar Corporation Joy Technologies, Inc. K&P Sales Engineers, Inc. Kennametal, Inc. Kerr-McGee Coal Corporation McLanahan Corporation National Coal Association The North American Coal Corporation Northwestern Resources Company Peabody Coal Company Phillips Machine Service, Inc. Pincock, Allen & Holt, Inc. Pittsburg & Midway Coal Mining Co. Roberts & Schaefer Company Rust Tractor Company Salt River Project Santa Fe Pacific Coal Corporation Schroeder Industries Shearson-Lehman Brothers Southern Pacific Transportation Stamler Corporation Trapper Mining Inc. Wagner Equipment Company Western Energy Company Wheeler Machinery Company

Jan 1, 1992

By Gordon E. Jackson

I read a book the other day called Opportunity 2000. The book, Opportunity 2000, talks about what's going to happen in the next nine or ten years as we propel ourselves through the 1990s into the 219 century. The book, Opportunity 2000, is a futuristic book, somewhat like Megatrends. It said that by the year 2000, baby boomers will be old people, and when you got here before the baby boomers, how does that make you feel? It said that there will be more women in the American work place by the year 2000 than men. The book, Opportunity 2000, discusses diversity. The big challenge for the 1990s is ?diversity?. We'll have the D-word in the 1990s. We had the G-word in the 1980s ? ?global.? Diversity in terms of more immigrants, more minorities, more females into the American work place, but also value systems diversity. We'll have to deal and adapt to four different generational clusters in dealing and interacting with employees and management in the 1990s-value systems diversity. I think there will be five generational clusters that we'll have to deal with. Massey says four. He says we'll still have the old people around, the World War II mentality; those who

Jan 1, 1991

WILLIAM P BALAZ RMCMI PRESIDENT 1990-1991 on behalf of the RMCMI Board of Directors and Officers of The Rocky Mountain Coal Mining Institute cordially invites you and your family to attend the 87th Regular Meeting and Convention to be held June 30, July 1 & 2, 1991 Keystone Resort, Colorado

Jan 1, 1990

By William Perry Pendley

Let us go back in time, back to when a Navy veteran from the South was President of the United States, a man from the Rocky Mountain West was Secretary of the Interior and a leading environmentalist was head of the EPA; and there followed what many perceived of as a war on the West-on our water, on our timber, on our oil and gas and mineral exploration, and on our small communities. It's easy to think that I'm talking about the administration of James Earl Carter, III of Georgia, but I'm not. I'm talking about this administration, the administration of George Herman Walker Bush of Texas. I say that as a life-long Republican who never voted for a Democrat and who worked hard to put George Bush in the Oval Office. Many of us wondered, in 1988, what Vice President George Bush meant when he said; "I am an environmentalist." Well, now we know. In his State of the Union address, which was otherwise lacking in specific detail, George Bush said two very specific

Jan 1, 1990

By John D. Janak

Thank you for inviting me to come here and be your keynote speaker. Texas also thanks you for being included as part of the Rocky Mountain Coal Mining Institute. We'll kind of think of Texas as Baja Rocky Mountains. I've always wondered why coal miners were the only people to go to the mountains in the summer time-and now I know why. The program committee should be given a big hand for selecting this RESORT. And the golf course is stimulating to say the least. This is a very beautiful location. I was asked to talk about CHALLENGES, OPPORTUNITIES and INNOVATIONS as they affect the coal industry. I am going to do that from a Texas perspective. But first, since Texas is the newest state to belong to the Institute, I would like to give you a little background on how our coal industry got started and where we are at today. The vast majority of our coal is called lignite-it has a little lower heating value than most other coals and ranks somewhere between buffalo chips and sub- bituminous. Lignite is found In three geological formations running Northeast to Southwest through South and East Texas. In-place reserves lying within 200 ft. of the surface total 14 billion tons. This slide shows the lignite formations with cur- rent mine operations colored in RED. Mines that are planned to be built in the next 10 years are shown in BLUE. Lignite was used mostly by settlers in Texas during the 1800s. It was used as a fuel to fire locomotives during the Civil War. Between 1900-1930, about 100 mines, mostly underground, were operating in Texas producing lignite for home heating and as a boiler fuel. Here are some slides showing underground access, [lie tipple used to process the lignite, and the underground workings. This is the "BIG LUMP COAL COMPANY" as shown here. The typical underground mine was 100-150 ft. deep and each miner produced 7-10 tons per day-all by hand. In 1926, the Texas Power & Light Company built the Trinidad Power Plant and began using lignite as a boiler fuel. The lignite was mined by the McAlester Fuel Company at the nearby Malakoff Mine. Here are some slides showing a stripping shovel at Malakoff uncovering lignite. The lignite was loaded into railcars in the pit for transport to the power plant. This is a picture of the Trinidad Plant which had two 20 MW units and one 32 MW unit. At the time, Trinidad was the largest power plant in the United States using lignite exclusively as a fuel. Trinidad operated until 1942 when it was converted to natural gas that was sold to the plant for 3 ½ ¢ per MMBT'U. The mine closed after having produced 7 million tons. Lignite was mostly forgotten about until 1953 when Alcoa started an aluminum smelter. Our Company formed a subsidiary called Industrial Generating Company to operate the power plant that furnished electricity to the smelter. We also operated the nearby Sandow Mine that supplied lignite as a fuel to the power plant

Jan 1, 1989

By Donald P. Brown

[Mr. Brown did not make his speech available for reprint.] Productivity is the Answer - Always Was; Always Will Be When Bill Balaz invited me to speak here this morning, he asked me to examine the three most important issues Consol will face over the coming decade. There are more than three. But the more I thought about that question, the more I realized all our issues come down to only one. As I reviewed the U.S. coal industry over the past ten years, and as I thought ahead into the year2000, one thing stood out. Not markets. Not government regulations. Not record tonnages. But productivity. The recent history of American coal is a tale of productivity improvement. It is a story that needs telling. And understanding. Not just for the good of the coal industry, but for the benefit of the American economy. Americans today do not appreciate the value of productivity growth. I don't say that lightly. As I review recent debate over American industrial competitiveness, as I look at certain legislative proposals, I see disturbing trends. It's not that anyone is against productivity per se. But many people seem to fear the very processes that enhance productivity. Twentieth century America enjoyed unprecedented growth in productivity. And in personal standards- of-living. Those two go together. This century has been one of change. Demographics. Education. And technology. Many new industries-cable television, computer services, telecommunications, for example-have grown from mere dreams to billion- dollar enterprises employing tens-of-thousands. And some older industries have declined. The nature of work has changed-from manual work to know- ledge work. From agriculture, to manufacturing, to services. In the mid-1960s. AT&T employed more than one million people. These were not high-paying jobs: telephone operators, linemen and equipment assemblers. Today, the successor Bell companies and their new competitors employ no more than a few hundred thousand. Because of automation. Because of enormous gains in employee productivity.

Jan 1, 1988

By Gary Carmack

Overview: Public awareness of the drug abuse problem within the government and industry is growing each day. The economic cost to industry is staggering-estimated to be more than $50 billion per year. Employee drug testing programs are one way to combat the problem, yet they are not without legal and scientic pitfalls. Some of the issues and needs that should be considered before implementing or continuing a testing program are: Why test? What do you test for? Are the results accurate? What impact will the new Federal Rules have? Accuracy of the testing continues to be controversial, especially when the "poppy-seed" and "cold-medications" issues are mentioned. The new Federal laboratory certification program which is about to start, should reduce or eliminate the question of lab error. Determination of on the job impairment will, however, continue to be a problem.

Jan 1, 1988

By Michael A. Poling

Ladies and gentlemen, I appreciate this opportunity to be with you, and to share my outlook on the future of Federal coal leasing. I'm told that you wanted the best speaker on this subject in the world. Perhaps it's a reflection of these trying financial times, but I'm glad you finally agreed to settle for the best speaker your budget would afford. I have been asked to give you some insight on the status of Federal coal leasing, and how the budget problems facing the Department will affect the coal program. So I've polished up my crystal ball, and I'll try to give you a peek at the future. Before I do that, however, let me first go back in time - to when this Administration took office in 1981. We had a coal program then, after a hiatus of ten years. But that program was untested and - for reasons well known to all of you - did not work well in practice once we began operating the program. We went back to the drawing board and redesigned the program so that it can do what it is intended to do. We've made the program more predictable. That means that when future lease sales are scheduled, those sales will be reflective and reactive to the need to lease coal. On February 26, Secretary Hodel unveiled a framework for resumption of Federal leasing program activities, ending a more than two-year suspension of regional coal sales. The new program will provide the opportunity to satisfy market demand for acquiring and developing new leases, assure the government of fair market value for its coal reserves, and provide a stable supply of coal for this country's energy needs. The new program grew out of the Department's response to recommendations of the Linowes Commission and the Office of Technology Assessment, coupled with a supplemental environmental study. The Linowes Report, issued in 1984, contained 36 recommendations and three Judgments on leasing levels, tract selection, sale procedures, appraisal methods, key statutory and related factors, and organization and management of the leasing program. Major changes in the new leasing program reflect these concerns. We have developed a definition for captive tracts and devised procedures to appraise their value to the adjacent coal or mine owner. Other steps include a coal lease appraisal guide which describes our appraisal methodology and is available to the public. Improvements have also been made in the gathering of lease assignment information to help in estimating the value of potential lease tracts. To improve market analysis, a three-tiered system will be used to ensure that steps of the lease sale decision process are undertaken in the context of coal supply and demand. Regional Coal Teams will thus have the advantage of long range, regional and tract specific market studies to help them determine whether sufficient demand is expected first to warrant the initiation of activity planning, then to set regional leasing levels, and finally to actually offer specific tracts for lease sale. Sale procedures will also be improved in many ways to encourage competition, improve the chances for receiving adequate bids, and to evaluate whether bids represent fair market value. We made additional modifications to the program in response to the OTA recommendations. Regional Coal Teams have been given a larger role in recommending key decisions concerning the amounts of coal to be studied and the actual selection and scheduling of tracts for lease sale. These recommendations will be accepted unless the Secretary can cite an overriding national interest factor, or a governor's request to modify the recommendations. Smaller, more frequent sales will be held, to better judge market conditions and prevent over- or under-leasing. Public participation guidelines have been written, to document all opportunities for the public to comment at various stages in the planning process. We also decided that resource management plans prepared after the passage of FLPMA in 1976 must be completed, in order for a new round of lease sale planning to begin. The BLM will also beef up its procedures for consulting with affected Federal agencies during the planning process, to assure that the purposes and values of those agencies are considered and factored into land use decisions. To assure consistent use of an adequate data base in coal lease decision-making, Regional Coal Teams will develop standards and guidelines for data adequacy, and document the use of these standards. These procedures will also be applied to the unsuitability criteria screening process. Thus, the new leasing system announced by Secretary Hodel: is fully responsive to recommendations made by the Linowes Commission and the Office of Technology Assessment for improving environmental planning and fair market value procedures; gives the regional coal teams a major say in determining leasing levels, and on the timing,

Jan 1, 1986

By Paul Schmechel

This time of year, our lawn is host to goodly numbers of birds - robins, English sparrows, finches of various flavors and some whose names I don't know. We lure them with a feeder in our backyard and I'm sure Patti and I spend several minutes a day watching them through a picture window that overlooks their coming and going. And, while the picture window supplies us with a constantly changing view, it does not treat our winged friends nearly so kindly. You see, at certain times of the day, reflections on our window feed back to our birds a mirror image of the backyard. Lifting off from the bird feeder, they see before them what is behind them. And, not infrequently they fly straight into the window. They stop abruptly, of course. It has to be quite a shock to discover that what is behind you is not the same as what is in front. At this point, I might be tempted to say something about bird brains - except for the fact that we humans also are prone to deceptive images thrown up by the past. Today, I think we hear a great many voices painting past images as they look to the future. We hear that the price of oil soon will rise to its former elevated position; the price of copper will bounce back; a hungry world soon will escalate the demand for food and our agricultural industry will be back in the black. In fact, we can hear hope from many voices telling us that our major resource-rich, basic industries are poised to fly up. I can hope that the voices are right, but I keep thinking that those expressions come from people seeing false images. Most certainly, it is more comfortable to see the past, rather than acknowledge that the world economy is being restructured and that the restructuring is affecting the Rocky Mountain states profoundly and negatively. The worst mistake we could make may be to place too much credence in the images from our past. We can be lulled into a dangerous complacency. What we need is a tighter belt and the will to do some serious bootstrapping. Before proceeding, I would make two points: First, it is not my intent to be a prophet of doom. But I do think we need some healthy doses of realism, if we are to avoid the shock of flying into a false future. Second, by now you have detected that I have choosen to diversify the assignment you handed me on utility diversification. As I proceed, you soon will see that the roots of diversification for many utilities lie in the subject that we ponder now. We could begin in many places, but let's start with energy. It is pervasive in our businesses and industries. We all use it. And, despite conventional economic wisdom, we are using less of it. The price is down, but we have not reverted to our profligate ways. That is true whether you look at the industrial customer or the residential consumer. As a nation and as a people, we have learned to do more work with less energy. A few statistics illustrated the point. If we use 1973 as the base year, energy use in the United States has declined almost I percent. If we examine the year of peak energy use, 1979, the decline approaches 7 percent. Let's look at it another way. In 1973, for every dollar of gross national product, the United States consumed 27,100 Btu of energy. Last year, 1985, the comparable figure was 20,700 Btu - a decline of 24 percent. So, not only are we using less energy, but we are using it more efficiently. Even though the price of energy has declined, we are unlikely to use substand with natural gas and petroleum consumption. Use of natural gas has dropped almost 21 percent since 1973. Petroleum consumption has declined 1 I percent since 1973 and almost 19 percent since 1978, when the U.S. used a record quantity of petroleum. We also know there's been no appreciable change in amounts of oil and gas used since 1981. We weathered both a sharp recession and a healthy recovery without altering the amount of those fuels used. That the use of oil and gas dropped sharply, while the total use of energy merely slumped a bit is easy to explain. The use of coal, nuclear power and hydroelectricity from 1973 through 1985 increased almost 48 percent. Some people will tell you that the large decrease in the price of oil and gas will result in increased demand that will displace coal, nuclear and hydropower. In turn, demand will force the price of oil and gas upward. I doubt it. From the poking around I've done on the subject, I suspect there may be some short-term displacements, but they will be, for the most part, cancelled out by declining use among existing customers. For instance, we all know what has happened in the automotive sector. In 1973, the average U.S. automobile made 13.1 miles to the U.S. gallon of gasoline. In 1984, the most recent available statistic, the average auto made 16.94 miles to the gallon. That's a 19 percent improvement. Because annual miles driven per automobile are essentially unchanged over the period and the number of cars on the road is not increasing, we are witnessing a drop in this segment of the petroleum market. That trend will continue. Now, let's look at energy consumption patterns still another way. Between 1973 and 1985, consumption in the residential and commercial sectors of our economy increased total energy use by 11.2

Jan 1, 1986

By Vincent R. Bovino

The future of coal mining is bright - only if we realize and then manage as though we are competing in the world marketplace. Accept it or not, our market is global. We tend to think our problems are caused by the uncontrolled foreign production of coal, and the uncontrolled drop in coal prices. I submit that our problem is not the world pricing structure - part of our problem is our on-site cost structure - our productivity. We are the world's best at getting out the tons - that is, production. Most mine managers thrive on that. What is in serious doubt is our productivity - our ability to produce tons of coal in a cost effective manner. Please think about the difference: ? Production is tons of coal. ? Producitivity is decreasing the cost per ton of coal. Our future is bright, only if we can increase our productivity by trying different and new ways to manage our businesses and our people. Unlike the easy successes during the 60's and 70's, success in the decades ahead will depend on our ability to achieve greater levels of productivity. If mining and other old line smoke stack industries are experiencing difficult times in 1986, three years into an economic recovery, what will happen when the economy cycles downward? Any operation can achieve unlimited productivity by developing the resources within their employees. As an industry, we have harvested the

Jan 1, 1986

By Ted Schwinden

It's my pleasure to welcome the Rocky Mountain Coal Institute to Montana. Now that you've ended a 74 year history of meeting outside our borders, I hope you'll be back more often. Even if I can't convince you to come back before 2060, when another 74 years will be up, I'm confident the Kalispell and Flathead Lake area will do the persuading for me. In recent weeks, I've made a number of speeches around the state pointing out just how wrong the revenue projections in Montana's state government made in April of '85 were when we came to April of '86. Since the middle of this month, Montana's legislators have been in Helena struggling to balance a state budget that, by the end of fiscal year '87, threatened to be some $88 million in the red. Other western states reliant on natural resource and agricultural economies have found themselves caught in the same deflationary spiral. The "window of opportunity" I proposed and the 1985 Montana Legislature passed, couldn't have been opened at a more difficult time. What was envisioned as an incentive to expand Montana's coal production, and our tax base, ran aground on low oil prices and excess hydroelectric power. De- spite the one-third severance tax rebate offered on new coal production, year-to-date figures published in the June 2nd Coal Week show that production in Montana is down almost 10 per- cent from last year. Again, we're not alone. Production in Wyoming is down 8 percent and in North Dakota, it has dropped 13 percent. An over- all 3 percent production decline in western states looks even worse when contrasted against a 12 percent increase for your eastern competitors. Montana's "window of opportunity" had the potential to be a significant signal to your industry. That potential was quickly tempered by the inability of Arab nations to stabilize world energy prices. If any of us had forgotten, the last twelve months have reminded western states that the well-being of our natural resource economies has a tremendous impact on the ability of all levels of government to provide services. The past year has also driven home that in the world of business and in the business of the world, risk-taking is still the name of the game. The Western Governors recognize the problems facing this industry - and our states - and we're prepared to fight for the future of western coal. In the past two decades, legitimate environmental concerns have created a vast body of new legislation affecting coal producers. The industry has been required to meet new reclamation standards - tough regulations relating to ground water, air quality and wildlife habitat. To the industry's credit, coal companies have hired professionals with the technical know-how to do it right. Rather than considering reclamation laws to be an unreasonable burden, today's coal company is more likely to view its reclamation efforts as a source of corporate pride. In a sense, the industry and the agencies which regulate it have matured together . . . although at times OSM is reluctant to admit that either of us capable of or willing to play by the rules. Certainly some abuses exist and OSM's oversight has been helpful in ensuring parity between those states willing to comply and those that would rather defy federal law. Nonetheless, penalizing the more modem and responsible western coal industry for abuses that occur elsewhere is both unfair and counterproductive. Federal penalties range from "cruel and unusual" reporting requirements to the proposed electricity tax that would effectively force utilities and ratepayers who have already met the sulphur emission standards to subsidize those who have dodged their cleanup responsibilities. As a member of the Alliance for Acid Rain Control, I have joined corporate leaders, academicians, environmental representa-

Jan 1, 1986

By W. R. Deeths

The Great Plains Coal Gasification Project is the first commercial scale grass roots synthetic fuels (SNG) plant to be built in the United States. The plant will be constructed in two phases, with each phase producing 125 million cubic feet per day of pipeline quality (970 BTU per cubic foot) substitute natural gas from lignite coal. The plant is located north of Beulah in Mercer County, North Dakota. The first phase complex, when completed, will cost about 1.2 billion dollars and will include all necessary process units, oxygen production, steam generation, coal handling and preparation, utilities and infrastructure. The plant will be owned and operated by, the Great Plains Coal Gasification Associates, a partnership consisting of the following companies: ANG Coal Gasification Company, Mid Con Corporation, Tenneco, Inc., Transco Energy Company and Pacific Lighting Co. The Project began in late 1973 with a Phase I feasibility study and site selection study. The feasibility study was completed in 1975, at which time Kaiser Engineers and C. E. Lummus, the two engineering contractors, proceeded with a Phase II conceptual engineering design for the project. The culmination of the Phase II work was the publication of a detailed scope definition and control estimate, which was to become the cost guideline for procurement and plant construction. Following an engineering slowdown period in 1979, due to continuing delays in regulatory procedures, detailed engineering effort was reinstituted in early 1980 and by mid-1981 was approximately 35 percent complete. The total home office engineering effort amounts to approximately 3.5 million man hours of work split between Kaiser Engineers and Lummus. These totals exclude the engineering effort expended by Lurgi of Germany in the process design. The gasification plant shares the site and certain other facilities with the Basin Electric Power Station. Among these facilities are the plant access railroad, peripheral drainage ditch and raw water supply system. In addition, the gasification plant will draw its power directly from the Basin main substation, and Basin will receive coal from the gasification plant, consisting of the coal fines which cannot be gasified in the Lurgi units. The overall construction program covers a period of approximately 44 months with mechanical completion and initial gas production slated for late 1984. Craft labor requirements amount to approximately 11.5 million man hours and the work force peaked in excess of 4,500 people. In anticipation of an early resolution of both Federal Energy Regulatory Commission ruling and Department of Energy loan guarantee commitments, certain work on the site was commenced during 1980. This work consisted of site rough grading, driving of piles, and erection of three of the plant auxilliary buildings. Orders and subcontracts were placed for compressors, pumps, electrical equipment, material handling equipment, piping, structural steel, boilers, oxygen plant and cooling towers. Over 40 major Federal, State and local permits were required. Among these were such diverse permits as: ? Soil conservation ?Railroad and pipeline rights of way ? Certificates of site compatibility ? Permits for structures in areas controlled by the ? U.S. Army Corps of Engineers ? Environmental permits required by the North ? Dakota Department of Public Health. The preparation of an Environmental Impact Report began in September of 1973. FPC (now FERC) guidelines and North Dakota special requirements were followed except that, at the time, the highly structured form of environmental impact statements we know today was not in use. We were required to develop a number of new sampling and evaluation techniques and reporting procedures at a time when the requirements were vague and often contradictory. In March 1975, field studies were completed and submitted to the Bureau of Recla¬mation, which then began to prepare its own EIS. Two years later, in May 1977, public hearings began on the Project. The hearings and public review of the report drew over 400 comments or questions. Responses o the comments were in¬corporated in a Final Environmental Impact Statement issued in January 1978. In March 1975, the original filing was made for an FPC Certificate of Public Convenience and Necessity which included: ? A technical feasibility study ? An Environmental Impact Assessment ? An Economic and financial feasibility assessment. An amended filing was submitted in 1976 to build the plant in two phases because studies then indicated that the cost of the plant had increased substantially. A second amended filing was submitted in 1977 to reflect the involvement of Peoples Gas (now Mid-Con Corporation) in the Project. At the time, it was believed that an FPC Certificate could be issued by December 1977. However, approval would be contingent on the U.S. Bureau of Reclamation having a complete Final Environmental Impact Statement for the Project. In 1977, with the formation of the Department of Energy, the FPC

Jan 1, 1984

Jan 1, 1984