Saturday, July 18, 2020

Controversial Coal Slurry Bill in House (WaPo, July 18, 1978)

42 years ago:  In 1978, a diverse coalition of Western farmers and ranchers, environmentalists,  UMWA, antitrust and consumer advocates and investigative journalists (including me) helped expose stunningly pro-cartel special interest legislation that would have given eminent domain legislation to corporations seeking to build coal slurry pipelines.

In a moment, the results of that epic battle for the soul of our Nation, in the U.S. House of Representatives.

From The Washington Post:

Controversial Coal Slurry Bill in House

By Ward Sinclair
July 18, 1978
The Washington Post

The House yesterday took up a little-publicized but intensely controversial bill that some say is an answer to the nation's energy problem and others say will simply start a new energy cartel.

The issue is the long-debated coal slurry pipeline, a new way of moving coal from mine to electrical generating station.

The legislation, on which the House is expected to vote today, could affect jobs, the use of precious water in the West, the health of railroads, electricity costs in some regions and, inescapably, the profits of a number of major corporations.

The legislation sanctions the construction of pipelines - some more than 1,400 miles long - carry slurried coal, a mixture of pulverized coal and water, to power plants.

To call the bill controversial is understatement. It pits railroads and environmentalists against pipeline interests and utilities, labor against labor and region against region.

It also pits House committee against House committee. The Interior and Public Works committees approved versions of the pending bill: Interstate and Foreign Commerce opposed it.

A key feature of the legislation would give the pipeline companies the power of eminent domain - allowing them condemnation power for rights-of-way across the property of railroads that also haul coal.

Railroads and railway labor groups have fought the legislation since it was first proposed in the early 1960s, on the ground that pipelines would undermine them and cost jobs.

Other opponents, led by Reps. Teno Roncalio (D-Wyo.), Ron Marlenee (R-Mont.) and Joe Skubitz (R-Kan.) charge that the legislation would lead to "an unwarranted raid on water already badly needed by farmers and ranchers" in the arid Western states.

They also contend that the bill inadequately protects the states in controlling allocation of water to the slurry pipelines, which need a ton of water for every ton of coal shipped to a power plant.

But the Interior Committee, asserting that the legislation would stimulate competition with railroads and benefit consumers, argues that coal slurry "may be crucial" in meeting national energy needs.

The battle over the future of coal slurry pipelines has created an unlikely alliance between environmentalists and the Association of American Railroads, which are opposing the bill for different reasons.

"We have no great love for the railroads - their coal-carrying unit trains create a lot of problems - but we fear that if you stimulate that competition, you'll be swapping one restraint of trade for another," said John Doyle of the Environmental Policy Center.

"We feel this legislation is going to create little coal slurry cartels in some regions of the country.They will own the coal, build the pipelines and control them, build the boilers for utilities."

In response to such criticism, the Interior and Public Works committees struck a compromise - they agreed that no single company could control more than 20 percent of a slurry pipeline.

Interior originally set the limit at 5 percent: Public Works, 35 per cent.

But other critics, such as Reps. James H. Weaver (D-Ore.) and Fred B. Rooney (D-Pa.), say the compromise doesn't go far enough - that it still would allow a few companies to control the slurry business.

Critics cite the largest proposed pipeline system, a 1,000-mile span between a strip mine at Gillette, Wyo., and a new power plant at White Bluff, Ark., as an example of the cartel posibilities.

That project is the brainchild of Energy Transport Systems Inc. (ETSI), a combine made up of the Bachtel Corp. (pipeline builder), Lehman Brothers (investment house), Kansas-Nebraska Natural Gas Co., and United Energy Resources of Houston.

The pipeline they want to build would carry coal slurry from a Peabody Coal Co. operation at Gillette to a new Arkansas Power and Light Co. plant at White Bluff.

Arkansas Power is owned by Middle South Utilities Inc., a regional holding company. Peabody is partially controlled by Bechtel, the Boeing Co., the Williams companies and the Fluor Corp., each of which has interests in pipeline construction, power plant construction and hardware.

Middle South and Panhandle Eastern Pipeline Co. have entered into a long-term agreement with Peabody to produce coal at Gillette, where ETSI's pipeline would start.

Such an arrangement, the critics say, would lead away from competition. Railroads would be unable, even at lower hauling rates, to win contracts to carry Wyoming coal to the middle South, they say.

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