# Appendix — United States v. General Dynamics Corp. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386414_0099%3A06 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1974 - **Citation:** 415 U.S. 486 ## Text APPENDIX | oct 10 1578 (Pages 921-1380) 7 MICHAEL RODAK, JRC Supreme Court of the United States OCTOBER No. ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS JURISDICTIONAL STATEMENT FILED SEPTEMBER 8, 1972 PROBABLE JURISDICTION NOTED DECEMBER 11, 1972 UNITED STATES OF AMERICA, —V.— GENERAL DYNAMICS CORPORATION, THE UNITED ELecTric CoaL COMPANIES, and FREEMAN CoAL MINING CORPORATION Appellant ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS Government Exhibits: Gx Gx Gx Gx Gx Gx Gx Gx 1— Annual Report of General Dynamics Corporation S— Ansnal Revert Gd dehtent Bois Gataaiice S— Anes Resort’ al Giceaat tipbcilbel ukiaaaics 4 Annual sport of General Dyianice Corporation 6 Annaal Report of General Dyasnice Corporation €— Annual Report of General Dynemico Corporation 7— Auual Report of General Dynamics Corporation 24— Chart entitled “The United Electric Coal Com- panies Fixed Assets, Gx Gx 35— City, Water, Light & Power (Springfield) letter to Department of Justice dated March 21, 1968 ___ REROSSsA RE a SE 74 ; i § i ‘ft That E B 5 z z uction of Coal in Illinois g Companies and Their Subsidiaries re pee : c “4 { i RE : : Hb 7 i : i : Re g F Be i } t : A sitar Collipeees Gar Skee ee Their Subsidiari Calendar Year” 2 ae entitled “Production of Coal in Illinois by Companies and Their Subsidiaries for i | 1 } i ; 3 . ‘ f i Re i: : | : z | af zl i 3 ; Ey i ft i ” Gx Gx Gx Gx Gx Gx Gx Gx Gx Gx (From Mines Located in Eastern Interior Coal Province)” 75— Chart of Illinois, pany to Identical Customer Facilities by The United Electric Coal Companies and Freeman Coal Mining Corporation for the Year 1965-1967” ___ 98— Central Illinois Public Service Company letter to Department of Justice dated October 28, 1966_ 91 101 107 111 114 117 118 INDEX Government Exhibits :—Continued GX 94— Illinois Power Company letter to Department of Justice dated October 17, 1966 GX 104— Central Illinois Electric and Gas Company letter to Department of Justice dated October 20, 1966_ GX 155 March 28, 1970 Petition of Commenwesith: Kdioos to form GX 200— United Electric Coal Companies, Board of Di- rectors Minutes—1959 GX 201— United Electric Coal Companies, Board of Di- GX 210— Testimony Jack Simon ‘ore Illinois Com- Commission merce GX 219— Keystone Coal Buyers Manual 1967 GX 232— Article entitled “The Energy Outlook”, by Gerber yee Netschert, entered in the IEEE Spectrum, une 1969 GX 23 Article entitled “New Horizons for Coal—the oa Comeback Industry”, by Robert E. Lee Hall, } printed in The Commercial and Financial Chron- GX 253— Article entitled “Nuclear Power Economics,” 1968- 1969 Report by Philip Sporn to the Joint Con- KE ge ggg @ . = 176 194 197 198 oan) 210 INDEX Defense Exhibits:—Continued - Dx Dx Dx Dx Dx Dx Dx Dx Dx Dx DX Dx Dx Dx Dx Dx Dx Dx Dx Dx Dx Dx Dx 8— December 11,.1958 letter from Geo. Robert Boller to F. F. Kolbe with one page attachment .._ 9— February 5, 1959 letter from Frank Nugent to F. F. Kolbe 1i— May 27, 1959 letter from R. J. Hepburn to F. F. Kolbe 12— October 2, 1959 Paul Weir Co. report to F. F. 18— May 27, 1960 letter from T. H. Latimer to R. J. Hepburn 14— August 23, 1960 letter from J. M. Morris to C. Evans Parks, Iowa Southern Utilities Co.___ 16— September 13, 1960 letter from H. L. Mann to J. M. Morris 17— November 15, 1961 letter from J. M. Morris to H. L. Mann 18— June 12, 1962 memorandum from R. J. Hepburn to J. M. Morris re Preliminary Report Sunshine Coal Property, Centerville, Iowa 19— November 30, 1962 letter from H. L. Mann to Robert J. Hepburn 20— December 10, 1962 letter from Robert J. Hepburn to H. L. Mann re Iowa Coal Field 21— March 8, 1963 letter from R. J. Hepburn to J. M. Aiken 22— May 19, 1964 letter to Frank Nugent enclosing one page draft letter to Arch Kraakevik of Illinois Power Co. 23— June 16, 1964 memorandum from Irving Crown to Frank Nugent with four page attachment 24— June 29, 1965 memorandum from J. M. Morris to R. H. Inman et al. re Industry field __ = 25— October 27, 1965 letter from J. M. Morris to Frank Nugent with one page attachment 26— January 5, 1966 letter from Q. W. Wéllington to J. M. Morris 27— March 8, 1966 memorandum from Dale H. Emling to J. M. Morris with two page attachment ___ 28— March 14, 1966 letter from J. M. Morris to Frank Nugent : 29— July 13, 1966 memorandum from D. H. Emling to R. H. Inman 30— July 29, 1966 memorandum from R. H. Inman to T. H. Latimer, et al. 31— August 9, 1966 memorandum from D. H. Emling and B. C. Jensen to R. H. Inman re Star Lake Field, McKinley County, New Mexico Defense Exhibits :—Continued Dx 82— September 12, 1966 letter from J. Morris to Frank Nugent 30, 1969, Zeigler: Coke Company : i BES 8§sg9 ge gee Fw 21, 23, 26, 27, 80, 37, 44-46, 50, 5l and 54. 295 DX 47— May 29, 1969 letter from John T. Cusack to Reuben L. Hedlund __ 302 DX 48— December 15, 1954 letter by George P. Harring- ton, President, Chicago, Wilmington and Franklin Coal Company to its stockholders ___ iin? 2 DX 49a— Subpoena Questionnaire form and related court orders 345 DX 49— Producer data exhibits, mine characteristics __ 397 DX 50— Producer data exhibits, comparison of leading DX 651— Producer data exhibits, coal characteristics by DX 52— Producer data exhibits, overburden of strip mines and depth of deep mines “ 447 DX 53— Consumer data exhibits, boiler specifications .___—«- 458 Dx 54— Consumer data exhibits, types of sales by produc- ing districts sek BE DX 55— Consumer data exhibit, analysis of consumption and production of coal by freight rate districts__ 462 R 332 3 SEGES SESS SE FEE SE CH ee a aa i : ae # i : f a : i 31 il ; ie pie age i aa: : : : i noe [eli al gibt tail CRE dcds! ycbctige di datlvapcdybcteliedy tment aye ; Lu Hua Ht engl fig 4 ih auhanal aH idea chi idea TURP U UR S ecrmarrerrrrrei rere INDEX Defense Exhibits :—Continued Dx Dx Dx Dx Dx Dx Dx Dx Dx Dx Dx DX Dx Dx Dx Dx DX 97— Dx Dx 8i— 1968 Annual Report of Standard Oil Company (New Jersey) 82— Plaintiff's proposed findings of fact 5a, 5b, 5b(2), 5d(4) and 5e(3), United States v. Standard Oil Company (New Jersey et al.), Civ. ma beeen D. N.J. (1964) 83— Plaintiff's memorandum accompanying plaintiff's 90— 1969 Annual Report of Commonwealth Edison __ 91— Letter of January 17, 1969 from Preston Kava- nagh to Security Analysts 92— Letter Letter of December 4, 1969 from Preston Kava- nagh to Security Analysts 98— Commonwealth Edison: Profile of No. 1, Nucle- onics Week, April 4, 11, 18 (1968) 94— 1968 Annual] Report of Commonwealth Edison 95— “Edison Seek A-site Downstate,” Chicago Daily News, March 9, 1970 96— Advertisement entitled “Nuclear Power for Chi- cago,” Chicago Daily News, March 138, 1967 Advertisement entitled “Commonwealth Edison Reports on Chicago’s Air Pollution Problem,” Chicago Sun Times, July 11, 1969 98— Advertisement entitled “Commonwealth Edison Reports on Progress Toward Cleaner Air,” Chi- cago Sun Times, August 27,1969. 99— Advertisement entitled “No Smoke. ‘No Dirt. No Fumes,” Chicago Tribune, February 8, 1970_ 617 ees 78 x INDEX Defense Exhibits :—Continued DX 100— Advertisement entitled “You're Looking at 20,000 Tons of Smokeless, Fumeless ‘Coal’,” Chicago Tribune, March 8, 1970 DX 101— “Coal Strip Mining—Is It Reaching a Peak?” by Hubert E. Risser, Illinois Geological Survey (September 18, 1968) DX 102— Report of the National Fuels and Energy Study Group to the Committee on Interior and Insular Affairs, United States Senate, 87th Congress, 2d Session (1962) DX 103— Comparison of Coal-Fired and Nuclear Power Plants for the TVA System, June, 1966 DX 104— Letter of October 17, 1962 from Elmer Hill to Barton Gebhart DX 105— Letter of October 18, 1962 from Barton Gebhart to Elmer C. Hill with two page attachment _._.__ DX 107— Central Station Nuclear Plants, AEC Division of Industrial Participation, March 80, 1970 DX 108— AEC Release N-2, January 13, 1970, re Status on U.S. Civilian Nuclear Power Plants - DX 110— Chart entitled “U.S. Utility Orders for Electric Generating Equipment” ee os DX 111— Letters of February 19 and 22, 1968 from Rich- ard P. Ryan, General Counsel, Humble Oil and Refining Company to John T. Cusack __- DX 112— Excerpt from Minutes of Meeting of Board of Directors of General Dynamics Corporation on September 30, 1966 _ DX 1138— Excerpts from the Minutes of the Board of Di- rectors of The United Electric Coal Companies on October 9, 1959, May 18, 1960, July 15, 1960, September 9, 1960, October 28, 1960, March 10, 1961, May 12, 1961, September 8, 1961, May 18, 1962, July 18, 1962, March 8, 1963, September 13, 1963, May 8, 1964, and August 12, 1966 _ DX 114— Proxy statement of The United Electric Coal Companies 1954, 1955, 1956, 1957, 1958, 1959, 1960 DX 116— Nuclear Power Briefing For The Coal Industry, September 29-30, 1966. USAEC...... DX 136— Advertisement entitled “Caution: Commonwealth Edison is Hazardous to your Health”, Chicago Sun Times, July 8, 1969 a DX 187— Advertisement entitled “Before everyone ‘runs out of breath talking about pollution, we’re doing something to clear the air,” Chicago Sun Times, December 12, 1969 _. DX 188— 1969 Steam-Electric Plant Factor Defense Exhibits :—Continued DX 144— Map entitled “Investor-Owned Electric Utility Service Areas” DX 145— Map entitled “Service Area, Dairyland Power Cooperative” ‘ DX 146— 1966 Annual Report, Union Electric Company __ DE 16 ae dena Eee eee DX 153— Article entitled “Crackdown on Air Pollution!” Chicago Sun Times, July 14, 1969 DX 154— Article entitled “Edison Cuts Use Of Coal, Re- duces Air Pollution,” Chicago Sun Times, Novem- ber 11, 1969 DX 155— Article entitled “8 Utilities Face Pollution Probe,” DX 157— Article entitled “Mikva Bill Would Make Air Pollution A Federal Offense,” Chicago Sun Times, November 20, 1969 DX 158— Article entitled “Pollution Fight—Edison Tells Coal Doubts,” Chicago Daily News, December 1, 1969 DX 159— Article entitled ““Black Diamond’ Boom: Kleen- ‘burn Coal Mines Enjoy Demand Surge,” The Wall Street Journal, January 7, 1970 DX 160— Article entitled “Business Bulletin—A Special Background Report On Trends In Industry And Finance,” The Wall Street Journal, March 19, 1970 DX 161— Letter entitled “The News That Nobody Prints,” Mid-West Coal Producers Institute, Inc. DX 162— Article entitled “New Ruckus On Foreign-Oil Imports To Pin Nixon Between Pollution Issue, Coal Groups,” The Wall Street Journal, March 6, 1970 1130 1139 1141 xii INDEX Defense Exhibits :—Continued DX 1638— Article entitléd “Commonwealth Edison Is Allowed To Import Low-Sulphur Fuel Oil—Hickel Says One-Year License Doesn’t Establish New Policy; Coal Industry Fought Action,” The Wall Street Journal, March 26, 1970 DX 164— Article entitled “The Real Meaning Of Alaskan Oil Finds,” U.S. News & World Report, March 8, 1969 DX 165— Article entitled “Petroleum Prize—Oil Firms At North Slope Race For Data As Giant Lease Sale Bidding Approaches,” The Wall Street Journal, May 2, 1969 DX 166— Article entitled “Jersey Standard Unit To Send Oil Tanker Through Northwest Passage In Test Run,” The Wall Street Journal, June 4, 1969 ____. DX 167— Article entitled “Three Oil.Companies To Study Feasibility Of Building First Coast-To-Coast Pipeline,” The Wall Street Journal, July 24, 1969_ Major Canada Pipeline—Cost Of System To Transport Canadian Gas To The U.S. Put At About $1.4 Billion—Government Approval Need- ed,” The Wall Street Journal, April 1, 1969 ____ Ee ee eae eee 7 Midwest Area’s First Gas From Canada,” Wall Street Journal, June 18, er, DX 170— Article entitled “Alberta Agency Backs Northern Natural On Bid To Export Gas To U.S. Midwest,” The Wall Street Journal, December 17, 1969 __ DX 171— Article entitled “Consumers Power Announces Plans For Atomic Plant—Dow Chemical Will Be Chief Customer Of New Facility; Cost Put At $267 Million—Completion Is Slated In 1975,” The Wall Street Journal, December 15, 1967 ___ DX 172— Article entitled “Jersey Standard Joins List Of Companies To Make Nuclear Fuel—Subsidiary To Build Plant In 1970 In Washington State; Re- search Assigned To Battelle Institute,” The Wall Street Journal, March 20, 1969 _..... - __.-_- DX 178— Article entitled “In 1970: 23 Utilities Will Ask Bids On 29 Nuclear Units,” Nucleonics Week, January 15, 1970 ____ DX 174— Article entitled “The Anti-Atom Nuts,” Chicago Tribune, January 20, 1970 DX 175— Article entitled “Consumers Power Announces Pians For New Plant—Pumped Storage Facility Set For 1973: Detroit Edison To Share Cost And Output—Outlay To Total $186 Million,” The Wall Street Journal, November 28, 1967 INDEX xiii Defense Exhibits :—Continued Page DX 176— Article entitled “FPC Aide Again Approves Con Edison Bid To Build Power ; Protests lately,” ‘The Wall Street Journal, August 7, 1158 Journal, January 19, 1970 1159 DX 178— Article entitled “Geophysics,” Time Magazine, July 26, 1968 1160 DX 179— Article entitled “Earth’s Own Power Source,” Chicago Daily News, January 9, 1969 DX 180— Article entitled “Burning Refuse To Be Used In ‘Total Energy’ Concept,” The Wall Street Journal, June 28, 1969 1162 Dx 181— Excerpt from transcript of Hearings before the Joint Committee on Atomic Energy, 99th Con- gress, 2d Session, on Participation by Small Elec- trical Utilities in Nuclear Power.—(Part 1-April 30-May 3, 1968), “Affiliation Is Fast Becoming A Necessity.” . 1163 DX 182— Article entitled “New England Affiliation Slated —Utiilty Concerns Plan Affiliation,” New York Times, June 12, 1968 1164 DX 183— Article entitled “Boards of Iowa P&L And Iowa- Illinois G&E Approve Merger Plan—New Entity, Towa Energy Corp., Plans To Retire The 2 Utili- ties’ Outstanding Preferred Shares,” The Wall Street Journal, July 22, 1969 1165 DX 184— Article entitled “Ayrshire Collieries Asks Bids of 5 Firms—Coal Concern Invites Offers To Pur- chase Or Merge With It; Replies Expected Next Month,” The Wall Street Journal, November 27, 1968 1166 DX 185— Article entitled “Ashland Oil Plans To Buy Or Lease Ayrshire Assets—Boards Vote Proposal That Includes The Sale Of Coal Royalties To Third Firm—Pact Involves $125 Million,” The Wall Street Journal, January 22, 1969 _______. , 1167 DX 186— Article entitled “Metal Climax, Ayrshire Sign Merger Accord—Acquisition Of Coal Producer By Metals Firm Valued At Minimum Of $62.6 Million—Boards And Holders To Vote,” The Wall Street. Journal, April 24, 1969 1168 1161 May 16, 1967 DX 188— Advertisement entitled “1977 The Year Our City Died.” Philadelphia Inquirer, December 4, 1967_ DX 189— Advertisement entitled “You Can Heat 2% Houses With Modern Oil For What It Costs To Caused By Burning Money. How Much Of It Was Yours?” Fortune, March 1, 1968 DX 192— Advertisement entitled “What’s Gas Energy Doing To Make Industry Nice To Be Near?” American Gas Association, Inc. DX 193— Advertisement entitled “How Nuclear Science May Give America More Gas Energy.” American An Apartment And The Service Staff Is Cut By 2/3.” American Gas Association, Inc... DX 195— Advertisement entitled “Who Offers You 24-Hour Plant Site Location Service On The 60-Mile Illi- nois Shore? Peoples Gas, Of Course.” The Peoples Gas Light And Coke Company And North Shore Gas Company —__ DX 196— Advertisement entitled “The Not-So-Brief Case For Complete Chicagoland Plant Site Informa- tion,” The Peoples Gas Light And Coke Company And North Shore Gas Company ~~... DX 197— Advertisement entitled “The Perfect Salt Substi- tute,” American Natural Gas Company DX 198— Advertisement entitled “St. Louis’ Tallest Office Building Will Be Total Energy All The Way,” The Wall Street Journal, May 13, 1969 _.__... DX 199— Advertisement entitled “The Savings And Loan That Saves With Natural Gas,” American Gas Association, Inc. DX 200— Advertisement entitled “Natural Gas Energy .. . The Electrifier—Pretty Soon You May Be Making Your Own Electricity From Natural Gas.”___ 1169 1170 1171 1172 1173 1174 1175 1176 1177 1178 1179 1180 1181 1182 INDEX Defense Exhibits :—Continued DX 201— Advertisement entitled “What Do You Call It? aoe From Takes T Ca Beene hae More atural — + Lot More Coming From Natural Gas Energy.” Northern Illinois Gas C. 's ompany DX 202— Advertisement entitled Another DX 206— Advertisement entitled “This New School Uses Gas Energy For Heating, Cooling And Electric Power And Saves $1,000 a Month.” American Gas Association, Inc. = DX 208— Advertisement entitled “Williams Hardware Bu All Of Its Electricity From The Gas Company. And Saves $14,000 A Year In The Bargain,” Fortune, November 1968 ties DX 209— Advertisement entitled “Introducing The Gas Guitar—The Switch To Gas Total Energy Is On,” Fortune, May 15, 1969 dette a DX 210— Advertisement entitled “Gas Air Conditioning Is Like A Car That’s Better Than Good.” Northern Illinois Gas Company Vmabuimeeee DX 211— Advertisement entitled “Turn On A Party With A Gas Grill And Gaslight—We Call It The Patio Pair... By Charmgiow.” _—s__ i DX 212— Advertisement entitled “Now. The Gas Self- Cleaning Oven. For Builders Who Like To Build Sales. Period. It’s The Biggest, Wildest, Most Exciting Gas Industry Promotion Ever. Period. The Theme Is: The Gas Self-Cleaning Oven For People Who Like To Cook. Period.” American Gas Association, Inc. 1184 1187 1188 1189 1190 1191 1192 1194 1196 1197 1198 1199 xvi INDEX ense Exhibits :—Continued DX 218— Advertisement entitled “Texas Gas Invites You To The Wireless House.” DX 214— Advertisement entitled “Here’s The Story Of The Gas Fuel Cell. It’s Electrifying.” American Gas Association, Inc. DX 215— “Nuclear Steam-Generation of Electricity: Its Implication for the Future of Coal Transport by DX 216— “The Story of Coal,” The (October 27, 1969 and November 28, 1969) __._ DX 218— Chart entitled “The Prime Interest Rate, 1928- 1968,” Chicago Daily News, December 18, 1968 _ DX 219— Letter dated March 9, 1970 from V. H. Clark, Secretary-Treasurer, Electric Energy, Inc., to Reuben L. Hedlund DX 220— Letter dated June 29, 1942 from Frank F. Kolbe to B. L. Slack DX 221— Letter dated July 23, 1954 from Frank F. Kolbe to Herman G. Schenck - DX 222— Letter dated June 11, 1956 from Frank F. Kolbe to Nye F. Morehouse DX 223— Brochure entitled “Taum Sauk, Union Electric’s Pumped—Storage Hydro Plant.” DX 224— Press release, University of Chicago, January 19, 1970 DX 225— Letter dated May 25, 1960 from Ward B. Cham- t of Justice and exhibit C thereto. _ DX 227— November 1, 1963 Memorandum from R. H. In- man to R. J. Hepburn re Freeman analysis of Kerr Mine DX 228— Excerpts from the Minutes of the Board of Di- rectors of The United Electric Coal Companies of September, 1966, pages 4386-4389... DX 229— Form 250 Response to the Court-Ordered Sub- poena Questionnaire for the Freeman Coal Mining BR Gt a 2 RSS Ces BE Tine se ks a TAR DX 230— April 18, 1970 letter from Mr. Allen Van Wyck, Chairman of the Board of Illinois Power Company, to Donald G. Kempf, Jr. - DX 231— April 14, 1970 letter from K. E. Bowen, President of Central Illinois Public Service Company, to Donald G. Kempf, Jr. DX 282— Brochure entitled “Low Cost Electric Power and Dependability . . . Through MAPP” =. ss DX 233— Brochure entitled “Mid-America Interpool Net- _. Wwork—MAIN” Page Defense Exhibits :—Continued DX 234— 1969 Annual of Illinois Power Company__ DX 235— Article entitled of Low-Sulphur Coal Electric forts,” The Wall Street Journal, April 6, 1970 __ DX 236— April 1, 1970 letter from Marvin 0. Young, Vice Compan 1nd, Goneral Counsel for Peabody Coal Company, to Reuben Hedlund re coal reserves in McDonough, Schuyler, Adams, Brown and Hancock Counties (Illinois) DX 287— Series of four tables: (1) “Fraction of Total Illinois Production of Leading Companies Other _ Than Peabody”; (2) “Average Production Per Company”; (3) “Changes in Concentration in Illinois Coal Production Since 1959”; (4) DX 257— West Central Region Power Survey 1970-1990, A Report to the Federal Power Commission pre. Page 1274 xviii INDEX Annual Report of Wisconsin Power & Light Company__ Deposition tion, Offer, and Award Contract GS05S-4945" insued Fiain of sha dietben aber Deposition Exhibit 3—Mineral Industry Surveys, Bituminous Coal and Lignite Distribution, Calendar United States entitled “Air Pollution by Federal Facili- ties” and dated January 1968 Griswold Deposition Exhibit 4—Second Report of the Secre- tary of Health, Education, and Welfare to the United States Congress entitled “Air Pollution Abatement by Federal Facilities” and dated January 1969... Griswold Deposition Exhibit 5—Document entitled “Oper- ating Experience with Wet-Dolomite Scrubbing” by F. McLaughlin, Executive Assistant, Union Electric neering, Inc., Windsor, Connecticut, presented at the Air Pollution Control Association Annual Meeting in New York City on June 22-26, 1969 Jensen Deposition Exhibit 12—Memorandum trom: Burl C. Jensen to Mr. R. H. Inman dated June 7, 1965 _....___. Jensen Deposition Exhibit 13—Memorandum from D. H. Emling and B. C. Jensen to Mr. R. H. Inman dated June 7, 1966 Kolbe Deposition Exhibit 2—Annual Report of The United Electric Coal Companies 1956 Kolbe Deposition Exhibit 4—Annual Report of The United Electric Coal Companies 1958 >. Kolbe Deposition Exhibit 7—Annual Report of The United Electric Coal Companies 1961 Kolbe Deposition Exhibit 12—Letter to Mr. W. B. Hillery, unsigned, by the President dated February 27, 1957 __- Page 1409 1410 1411 1412 1413 1415 1416 1456 1470 1502 1519 1521 1526 1530 1582 1533 Kolbe Deposition Exhibit 57—Annual Report of The United Electric Coal Companies 1954 Kolbe Deposition Exhibit 59—Paul Weir Company Valuation of Physical Assets of UEC as of December 31, 1959 Kolbe Deposition Exhibit 60—Document entitled Need For Additional Stripping Equipment at Fideli Mine” dated June 17, 1966 and signed by J. M. Morris. Kolbe Deposition Exhibit 61—Contract and agreement be- tween Alcoa and UEC dated September 5, 1956 Kolbe Deposition Exhibit A—Comparison between Truax- Traer Coal Company and The United Electric Coal Com- panies Kolbe Deposition Exhibit E—Notebook entitled “Report on Proposed Merged Illinois t Kolbe Deposition Exhibit L—Letter dated September 12, 1960 from J. M. Morris to Mr. Frank Nugent... Lawrence, Wilmington, Dela- ware, assignor to Hercules Powder Company, Wilming- ton, Delaware, a corporation of Delaware”. Kolbe Deposition Exhibit T—Letter from Mr. LeRoy Keane, Assistant -General Manager of Hercules Powder Com- pany, to The United Electric Coal Companies dated June 27, 1956 Kolbe Deposition Exhibit W-1—Letter from Frank Kolbe to Harry LaViers dated February 25, 1958 x INDEX Deposition Exhibits :—Continued Kolbe Deposition Exhibit W-2—Letter from Harry LaViers Latimer to/R. J. Hepburn dated November 25, 1957 Kolbe Deposi Exhibit Y—Memorandum from T. H. Lati- mer to R. - Hepburn dated November 7, 1955 _..._____ Kurtz Deposition Exhibit 9—Bituminous Coal Facts 1966 __ Kurtz Deposition Exhibit 10—Bituminous Coal Facts 1968 __ Latimer Deposition Exhibit 25—Memorandum from T. H. ee Pe oe Latimer Deposition Exhibit 88—Memorandum from T. H. Latimer to Mr. R. H. Inman dated July 19, 1966 Latimer Deposition Exhibit 48—Memorandum from T. H. Latimer to Mr. R. J. Hepburn dated February 10, 1961_ Deposition Exhibit 1—General Dynamics Proxy Statement and Agreement and Plan of Merger with respect to Material Service Corporation dated November of Health, Education and Welfare Morris Deposition Exhibit 3—Memorandum dated December 17, 1959 from R. J. Hepburn to Mr. J. M. Morris _.__. Morris Deposition Exhibit 4—Letter from Mr. John M. Morris to Mr. Frank Nugent dated January 10, 1966 ___ Morris Deposition Exhibit 5—Letter from J. M. Morris to Mr. Frank Nugent dated March 14, 1966 _.._ >> Morris Deposition Exhibit 14—Letter dated May 8, 1965 from J. M. Morris to Mr. Frank Nugent _.. > Morris Deposition Exhibit 31—Memorandum from R. J. Hep- burtr to Mr. J. M. Morris dated January 24, 1961 Morris Deposition Exhibit 832—Memorandum from R. J. Hepburn to Mr. T. J. Tarzy and Mr. J. M. Morris dated February 24, 1960 .__._ 1676 1678 1680 1682 1683 1686 1688 Morris Deposition Exhibit 85—-Memorandum ‘from R. J. Hep- _ burn to Mr. J. M. Morris dated July 17, 1962 1689 INDEX Deposition Exhibits :—Conitinued Beg pag ay ey ary eae gaa burn to Mr. John Davis dated February 8, Tarzy to Mr. J. M. Morris dated February 15, 1961. Nix Deposition Exhibit 1—Document entitled “Term Con- tract Ordering Data for: FSC Group 91 Fuels, FSC eterans Administration for the effective period of the date of award through June 30, 1968 Nugent Deposition Exhibit 1—Financial Reports: Freeman 1691 1695 1712 1718 1714 1715 Coal Mining Corporation; Year Ended December $1,~ 1959 Nugent Deposition Exhibit 2—Financial Reports: Freeman Coal Mining Corporation; Year Ended December 31, 1960 Nugent Deposition Exhibit $—Financial Reports: Freeman Coal Mining Corporation; Year Ended December 81, 1961 Nugent Deposition Exhibit 4—Financial Reports: Freeman Coal Mining Corporation; Year Ended December 381, 1962 Nugent Deposition Exhibit 5—Financial Reports: Freeman Coal Mining Corporation; Year Ended December $1, 19638 Nugent Deposition Exhibit 6—Financial Reports: Freeman Coal Mining Corporation; Year Ended December $1, 1964 1741 1744 1747 1750 1753 1756 xxii | INDEX Deposition Exhibits :—Continued Nugent Deposition Exhiibt 7—-Financial Reports: Freeman pe DO Year Ended December 31, Nugent Deposition Exhibit 8—Financial : Freeman ; a ante Year Ended December 31, Nugent Deposition Exhibit 9—Financial Reports: Freeman Coal Mining Corporaiton; Year Ended December 31, 1967 Nugent Exhibit 11—Annual Report of the Chi- cago, ilmington and Franklin Coal Company for the ear 1953 Nugent Deposition Exhibit 16—Advertisement of Freeman eens Cee 1967 Keystone Coal Buyers ual Nugent Deposition Exhibit 17—Advertisement of The United Electric Coal Companies in the 1967 Keystone Coal Buyers Manual Nugent Deposition Exhibit 19—Advertisement of The United UEC, January 1, 1959 to December 27, 1967___. Nugent Deposition Exhibit 29—Annual Report of The United Companies 1964 _— Nugent Exhibit for Tenders of 7 . f held October 28, 1960 re Capital Appropriation for Nugent Deposition Exhibit A—Letter from Frank Kolbe to Henry Crown dated October 9, 1956 — “1796 1797 INDEX Deposition Exhibits :—Continued Pedersen Deposition Exhibit 5—United Electric Coal Com- panies Computation of Provision for Federal Income Taxes, Month of October 1966 and Ten Months Ended October 31, 1966 Redard Deposition Exhibit 1—Keystone Steel and Wire Com- wens ‘stter to Department of Justice dated Apeil 36, 1 Simon Deposition Exhibit 1—Simon, J.A., An Evaluation of Illinois Coal Reserve Estimates, 1968 7 Ree ee ee Steiner Deposition Exhibit 2—U.S. v. General Dynamics, et al., Memorandum of Expected Testimony of Peter O. Deposition Exhibit Institute, Inc. Report of Mine Performance, 1957-1958__ Deposition Weir Deposition Exhibit 8—Memorandum from R. H. In- man to Mr. R. J. Hepburn dated August 5, 1959 Weir Deposition Exhibit 19—Brochure entitied “Paul Weir Company” f Se ee een ee eeeees emeeseee mS ge, Fa COrGIssLs Paw 921 LL th. th ee ee my REPORT o7 TH? NATIONAL FUELS AND ENERGY STUDY GROUP ox AN A33ZSS CENT OF AVAILABLE INFORMATICI a CNURCY NT THE UNITED STATTS 70 TE COMAITTEE ON INTERIOR AND INSULAR APFAIRA UNITED SPATS SENATE REPORT Or THE NATIONAL FUELS AND ENERGY STUDY GROUP On AN ASSESSMENT OF AVAILABLE INFORMATION ON ENERGY IN THE UNITED STATES TO THE COMMITTEE ON INTERIOR AND INSULAR AFFAIRS UNITED STATES SENATE y SEPTEMBER 21, 1962 Printed for the use of the Committee on Interior and Insular Affairs US. GOVERNMENT PRINTING OFFICE STs WASEINGTON : 1962 # 923 COMMITTEE ON INTERIOR AND INSULAR AFFAIRS CLINTON P. ANDERSON, New Mexico, Chairman HENRY M. JACKSON, Washington THOMAS H. KUCHEL, California ALAN BIBLE, Nevada GORDON ALLOTT, JOHN A. CARROLL, Colorado JACK R. MILLER, Iowa FRANK CHURCH, Idaho JAMES B. PEARSON, Kansas ERNEST GRUENING, Alaska JOE H. BOTTUM, South Dakota FRANK E. MOSS, Utah LEN B. JORDAN, Idaho OREN E. LONG, Hawaii QUENTIN N. BURDICK, North Dakotas LEE METCALF, Montana J. J. HICKEY, Wyoming Jenny T. VERELER, Chief Clerk SrEwart Frencu, Chief Counsel EX OFFICIO MEMBERS CLAIR ENGLE, California ~ NORRIS COTTON, New Hempshire JENNINGS RANDOLPH, West Virginis 924 _CHAIRMAN ANDERSON’S MEMORANDUM OF TRANSMITTAL Serresmser 21, 1962. To the Senate Committee on Interior and Insular Affairs: icy study, as well as to other interested parties a staff pre- Lem fang Raptr x5 chy, assessment of available information I want to commend these gentlemen individually and pete for their cooperation during the conduct of thestudy. Asa t of thei ili efforts, in less than a year our committee has before it in a ingle volume pertinent information relating to fuels and energy dings oven athena est gan ego} algae | be carefully considered in reac any decisions respecting recom- i 4 When the Interior and Insular Curvton P. ANDERSON Chairman, Senate Committce on Interior and Insular Affairs. REPORT NATIONAL FUELS AND ENERGY STUDY GROUP AN ASSESSMENT OF AVAILABLE INFORMATION ON ENERGY IN THE UNITED STATES i US. Senate, Comarn1ree on Interior anv Insutar Arras, September 7, 1962. Hon. Curxton P. Anprrson, Chairman, Committee on Interior and Insular Affairs, US. Senate, Washington, D.C. Dear Mr. Cuirrmax: We are honored to present herewith to the Senate Committee on Interior and Insular Affairs our assessment of the available information on energy in the United States. The report pairs nts “patho, =~ ip hegarne ignsbente suena work was started ae 1961, the study group was not fully assembled until November. More information could be included, and the analysis made a little more penetrating, here and there, but the broad con- clusions to be derived would remain and we do not think the additional time and effort would be justi : The report presents first a brief historical and economic perspective, examines current opinion about future consumption of energy, con- siders one by one the various déterminates of fear (reserves, plant capacity, transportation, labor supply and productivity, technology, marketing, competition, and like influences), and then compares the ddientad future consumption with the Nation’s ability to supply it. The years 1965 and 1980 were selected as check points. Emergency as well as peacetime demand and supply are covered. A subsequent chapter discusses the economic and social costs of various policy direc- tions, and the last chapter of all presents the opinions of industry and consumer groups as to what they think national fuels and energy policy should be, in their own words. Your instructions regarding the making of this study are presented in the introduction to the report. In brief, the instructions were to assemble the information that is currently available, to study it, and to assess its worth. In doing so we found ourselves continuously dis- mayed to learn how little positive information exists, how much is impression and folklore, in subject area after subject area, in industry after industry. Belief in this folklore is deep and it is held wi passionate, though —— Too often, to our minds, have we been forced to write: “No one knows * * *.” One result of this set of circumstances is that our report contains occasional statements that do not have the complete endorsement of one or another of the mem- bers of the study ip. All this we have tried to d faith full and objectively. Yet despite the imperfect fabric of fae thin there has emerged from this study a reasonably good picture of energy in the United States and of the policy, legal, and regulatory frame- work within which it sets. It is our earnest hope and belief that we have given you and your committee the information you want. 3 927 4 NATIONAL FUELS AND ENERGY STUDY Through you we want to acknowledge the generous and expert co- operation provided us by many agencies, trade associ- — comps and inva in iding us with information our draft report. The credit for whatever value this’ report muy havo mst be shared with them, Bits Fema Eamcr Son Orc, Samvrt G. Lasxy, Chairman. 928 CONTENTS Page Chairman Anderson’s memorandum of transmittal... ........-...------ 111 Rabter oF elated sis ob nove Sn eda b ecco cksedce desde decgbdacoest 3 DORNNOY gins. oases LEEhs cds cecocscspeccccbcscshs césidceceesue = The OS int a gt aaa Ri 5 RR 17 Ricard oct 2 tg hc ldMusbescakacsMhictmiesere 90 Bow far inte the Gattte oi isin do ch vntctddccnscncecccncegecteces 18 Part I. Energy in the economy... -......----------------------------- 20 DUEER. « nc ce ccacececaccteccepcccscccncecesscccuqoueccces 4 Part II. UNM AARNE 5 sie cic hes ace doncaconbead od ansaapavetbinie 25a EEE LED IAEA CRETE 26 ae ee 33 es Pe eed ewekbandegihbebabenesaed eee ‘ General war without nuclear attack..............-.---------- . Limited ERR ELLIE SEES COLAO ERA Mobilization short of war_......-.----------.---------------- = Energy as a “free good” _--- Jubswbdonchabiedanmicteben sagional problem. . . .. . 2.2... 22222222 - coco e oo ee icioack 48 Past B56. FeRRiavcvincscccawntcccncncccnccceccscceggorcecccosece 61 Snel sil aga TE ERE Ie a aa ee Cea E a. Rees near t nee pe = Crude ofl and natural ges liquids...--.------.---.------- 62 ace Siememetamre re ae ee. ee I Ce cn ncdcewcocdsencucboedeccs 83 GR chaise and tat ebb. «5 ono icc ctccccccdcccciscs 85 ToS sctetaeromeeeceenoneminas : 5A nan it BRN Saat OEE ENE AN SEIS AIMEE Mt | ue es Be he sane dbabeseatenenens 86 NN SN ee te edb wcebbonoubiobetmadbces 94 TN a i ideeendaneénine 94 ‘ Remainder of the world. __..........-.----------------- 4 Domestic. 1 ipa E ese Etc 2 RR SUSE RI ees OTS 99 SONG Oe a ee bebenasbiusdsnauon 99 Coe naetn par nae ae? NR aD 104 sn and natural gas production............-.------ Crude oil and refined piedust Sic hascrnncanccngenin ts Oil RMI Rates stiieecicact oserieorsersensccssaeey Raed deel ee ee ied deel Oe ee OOO 6 a a aE ee EGR RE a RCE IES te te SB Nuclear (radioactive) materials. Residential and commercial ee SRE E 930 - ane RSREEE cnc ekeEEee & 56 50 60 60 30 60 60 00 00 60 60 : i and EEE EEE EEE laws, t V. Unconventional sources of Part VI. Comparison between requirements and supply. ...........-... Coal. : ii i chs of macs doaain pipeline right-of-way. .----- The Hh! it PEP EEPEDEE DEE LEE ET for coal... _. 3 Es 3! i a % i law Oo ewer eee wereswceceesceceococcecoccoocoseccoe Rehab iulccacuwnncnwhpesebenéneeannde i 30} : HH ee ee eee Controlled end Electric transmission intcrties.........-----------s- NATIONAL FUELS AND ENERGY STUDY ~ reserves) is more than enough comfortably t rt a 1980 coal out - pal page get pm tons. There i plenty of oil i in the but one or more steps may be needed to realize it: rate of ex- stepped recovery. ratio of reserves to rate of output be established at some well below the usual range of 12 to 14. The Nation has the ability to_be self-sufficient in oil if it so wills. Imports could be called on if de- sired, there being no dearth of foreign oil. and so could the oil in oil shale. Oil shale may in fact actually be vielding oil well before 1980, ption ability to supply it yields the prompt and simple answer that there _ ae ifficulties in that re While nuclear wer faces sev- it is an accompli i ct. Conventions! fossil fuels plus shale it and Actionable materials con- tain recoverable energy equivalent to 800 years of usage at the current ble and mele oil beyond ~ _— ort ential of unconventional sources. There is ont because man-day, the 800 million tons of 1980 conceivably could be produced by a labor force even smaller than the force presently at work. ag) ~dpomceomanp been eee — in the energy complex. concern appears exaggerated. Transportation of off and gas is a matter of investment. An aggressive research on extra-high vol transmission almost assures continued economic transportation of electric power. The only real question relates to a . Shortage of railroad cars for the movement of coal. Such shortages great destruction of consuming equi and plants that the supply would be generally gy =" ge - lable as quickly as it is called for by restoration of the economy. For other war or war-related emergency, the national capacity for producing | i : LTTE HH :. He al i ge cdi ep AL z os br H i i ? : i : i | | if . The coal the integral train, mine-mouth generation coupled with extra-high-voltage transmission, pipelines, and developments should hold jon coste 3 Use of coal has been going down in the face of an increasing national ion of The three fuels—coal, il, and gue _compet F 7 & 3 = J ' g; 936 14 NATIONAL FUELS AND ENERGY STUDY severe in ther areas havi Nitin ap no naive query suemeren, me in New England et % ae NEES OSU SE high, compared to the cost of moving oil or ituting on average throughout the United States more than of the delivered price of bituminous coal. which has acted particularly to the detriment of coal. Prime examples are the change from steam to diesel railroad locomotives and the sub- stitution of oi] and gas for coal in home heating. Fuel competition is related also to the propinquity of fuel source to market. which is a shifting circumstance, and of course to the common of consumer preference. A final factor is the framework of policies, laws, and ione within which the competition operates, summarized separately below. ae pa vn be ep a In addition, the of for- to tion. iti ici Serreeenoee tee eaten Laien ee and demand. _ Policies of foreign governments relate to their control over the importation of American coal and to their reaction to U.S. restrictions on importation of oil and oil products. pape soap eee Boe mage he i both i the outflow of both. laws, or regulations tend to limit production and to use. , ih i - i Ze fF : i } to lower price; some specifically restrict end i ; : have been identified as justifying discussion. of natural gas to industrial consumers under i uF interruptible rate schedules, importation of fuel impor- tation of crude oil and Sahar Gin cabbeed foal ot ee tation of natural gas from Canada, development of a domestic shale : ; : i -sponsored research, sufficiency, whether action is necessa to insure that U.S. emergency needs can be met from the Western Hemisphere alone, legislative or regulatory control of the use to which a may be put, Government policy relates to other policies either explicitly or oo wo Laer rpg | — sa nena The three policy issues that are currently of most intense interest are: ’ Interruptible gas pice iambalieimesacotmecigiontnic ont oan this is sold in areas not ically some is sold for noncompetitive uses. In all, about one-fourth (or the equivalent of 22 million tons) is in direct tion with coal. The price charged for int gas is less that charged for firm service and at least covers cost of the gas itself plus the out-of- pocket vosts of and di Thus this type of service makes a toward fixed that would other- The use of residual fuel oil in the United States has remained fairly uniform over the past decade, but on the east coest, where most of it is net imports for domestic consumption have been rising and j it of about 40 million tons of coal. S: ch im- Son EgSvenee Oe te nd es ee of atnte ant half from im t in efficiency of production. For bituminous coal the ions are about one-third due to loss of market and two- a days; at the current work- week at the output per man-day proj for 1965, each million tons would represent the employment of 285 miners. ints of view of 12 groups, each representing either a producer of one or another form of energy or & consumer. These are included _ precisely as received. It would be a disservice to these marize their sta for interpretation ennveldisaty sinuate itself, and therefore we have not done so. 939 INTRODUCTION The scope of this report Senate Resolution 105 (87th Cong.) instructs the Senate Committee ~ on Interior and Insular Affairs to undertake a study of the supply of and demand for fuels and energy in the United States. The study is praetor hat garvetad ante ibn s Are eer Fwy! in- cluding the possibility of new legislation. The inquiry has thres eg) (1) a study of the present and future energy requirements of Nation and of its ability to meet those requirements; (2) a review of existing laws and policies with respect to their effect upon energy supply and demand ; and (3) consideration of policy. The first two parts are factfinding operations and constitute the subject of this report. The instructions given to the authors of it the Senate Committee on Interior and Insular Affairs were simple clear, as follows: 1. To p re for the committee, within the objective of Senate Resolution 105, as accurate a story as possible, in simple and nontech- nical language, about the economic and technical aspects of energy Se ee emi mip oing so, to deal with existing information only or new information as can be assembled in short order. .. . Andits purpose The first instruction constitutes a direction to sift out the fact from transmission, and use; in the potentials of atomic energy; in the pos- sibility yee ae See getting energy from the sun, or wind, or the tides, or of using heat brought up from deep in the earth. t purports to be fact is not always indeed fact. The only bits of information that everyone can agree on are the bald statistics them- selves and even that circumstance does not always hold. Often the so-called fact represents judgment, impression, informed guess, over- statement, prejudice, or sometimes plain fiction. Professional judg- ment and impression are invaluable when facts are short, but they are not a substitute for fact itself. The element of prejudice must be particularly su ~ In relation to this study, there are two. kinds: the honest prejudice generated by & person’s loyalty to his — or his firm, and the biases inherent in professional ’ re are various schools of thought on how to calculate mineral reserves, for example. Those who estimate re- serves of coal, oil, and gas each believe that the occurrence and eco- nomics of his commodity are unique and demand unique definitions and criteria. it pt rs ongress ng the political and social factors that e future rates of icated also are alternative How far into the future should one attem —- an assortment of additional are indicated. Indi in order that Cc y refers to have concluded that 20 I ted St specifica economic situati pear ap studies. clari EB wall as to in Wa & i il te dail Hay : il; Bish we Lea aia ai ih a ie $ Be t ily il 7 Hie eee aie ee Ti Bebiiviyy gavel steiiee gor, Ge a eeu i : must deal with in policy determination. How far into the future? authors of this good compromise between impulse and reality. It is far enough Senate Resolution 105 resources of the Uni ates—and NATIONAL FUELS AND ENERGY STUDY 19 into the future s pputada neapeetiie eoeaiions ok Ate momead ood distant as to ude reasonable assessment o: oan a satisfactory j tas te thateuntinat dhe gectnetea of production. We can judge within reasonable in imi fr example atin oil, and gas by 30d what maybe hn elo thi nog ology on costs of roduction, whereas an: ey apap ally odin deeper into unnecessary ion. At the same 20 years is distant enough to permit necessary adjustments in icy if such “ 1965: rng ta oa * i rket, metallurgical coke, use at mines) ; oi and air transportation, railroad ti PSEEF ti F . * ; . -~ ed See oe y's energy demand is free of interfuel iti is figure represents essentially motive energy now met tively pe te it under preter ery A At other extreme of competition lie those uses in which coal, oil, and gas are immediately priegen orss when dual or three-way equipment is maintained and the switch from one fuel to another can accompli immediately on the decision to do so. About 45 t of the 802 utility stations ing detailed information to the Federal Power Commission in 1960 were ipped to handle two or three frels. In regions I, IT-A, and Til (as ignated by this study), which constitute our “eastern seaboard,” 27 electric utility &. The economy of the United States rests upon a small base of energy. National income originating in the energy industries is only about 4 income. : itures for energy may be classified as “internal” and “transportation.” Internal energy is that used in day-to-day household within the i confines of the home, in the means a nate it as 3 4 feed HINES tile if a : def if 946 24 NATIONAL FUELS AND ENERGY STUDY Tame 2 Expenditures for verious formes of household energy (Deltars in billtens} Internal energy pare tneorce Racetricty| Other fel ‘Total in- | gasoline mee = =| = | si 1990. s70.8 a2 a3 as a5 ae 1040. te m7 Ls ‘4 29 21 se a ot eS ee 1 Estimates by study group. Nore.—Totals may not add due to roundin os itures by the peers y rye, py household transportation, represented 5.4 percent income in 1960, as compared with 5.2 percent in 1930. i By manufacturers ies teed Hin i af i Z Hi Fi EF 1.5 percent of theitgrevenues in 1958 for fuel and eles- percent. i from 3 process industries (chemicals, stone, clay, metals) down to small fractions of a percent other industries where major proportions goto and materials. By the Federal Government : gd aged PRghktine the bei A sag user of energy for heat- \ gt ildings it oceupies, to power its motor fleet, per other oan In fiscal 1961, the General Soden Admin- istration spent about $7 million for natural gas, oil, e>»!, and for steam of Manufacturers’ reports show that manufacturing This z 5 : Hi Hl bi | 947 NATIONAL FUELS. AND ENERGY STUDY 25 as such, and $16 million for electricity. The Post Office Department spent an additional $22 million. The General Seryices Administra- tion, the Post Office Department, and other agencies also lease or rent buildings, the energy requirements for which, while for the use of the a. fee in statistics on the private sector. sry Thee urehases of gasoline are too spotty for meaningful sum- mary. The Post Office t itself spent $13 million for gaso- line and motor oils. In 1960 the Federal Government owned more than 213,000 vehicles that used about 214 million gallons of fuel. In the Government's construction program some of the work is by private concerns so that there, too, energy requirements are in part by the private sector. on pact: = ry of et Gee relates to ™ - Government ® as a supplier o icity. steamplants o the Tennessee Valley Authority in 1960 burned 18.6 million tons of coal for which it — about $83 million, and the TVA operations as a supplied Federal agencies with electricity bearing a price tag 0 A third category of Government en expenditures relates to the military and atomic programs. “Military itures exceed $1 billion a year for petetinae and its products and $20 million a year for coal, but we have found no figures for outlays for and elec- ‘tricity. The Atomic Energy nisison spent million for for fossil fuels, Te ras tho ch ational: but unknown amount fuels. It was the principal reci ° m the Tennessee Valle Authority, Scum It appears that t MM sree of the Atomic Energy Commission’s total expenditures in 1 , and 1 percent of the Post Office ’s expenditures, was for energy. The for the military program, which is less tae than the AEC operation * much more energy intensive than Post Office operations, woul lie somewhere bet ween. Since the remainder of Government probably falls between the mili- and the Post Office in terms of intensity of energy use, One may j that between 1 percent and, say, 3 pervent of the Government's operating expenditures are spent for energy. 948 NATIONAL FUELS AND ENERGY STUDY 79. 6. The ultimate grand total of recoverable gas may be in the neigh- borhood of, say, 1,250 trillion cubic feet. This amount is com as follows: Recoverable from proved parts of known reservoirs: 260 tril- Recoverable from extendjions to present areas and from pools to be discovered : wt weg vey an trillion cubic feet. 7. How much gas will in fact be discovered and recovered is any- *s guess, depending in part on money invested. The above figures . do, ver, give some & iation of future possibilities. Most of the United States is favorable for discovery. : GASIN COAL SEAMS - Most coal seams contain methane of a quality—1,008 British thermal | quite o cuhis tosh-—atuivalust to naturel gra. The gas is contained in 2 nae is recovered commercially from coal seams in Belgium, in coal mining, of course, mechan: in recent years aggravated it. New faces of coal are exposed so rapidly that the quantit yok p- ing fron? the coal] makes ventila- tion increasingly di and thought is being given to removing the tern Bureau of Mines has experi- See ante Sele beret ar neny Ooo out) contain as much as 2,000 300 billion tons of coal in Tass billion tank vecccerehite: axe sen- tion on “Coal Reserves”), may contain 600 trillion cubic feet, The U.S. Geological Survey has on what it calls the “coal reserves of the United States,” but term is defined as meaning estimated quantities within stated limits of bed thickness and depth below the surface without direct economic connotation. The total figure is said to include the in di coal in beds 14 inches or more rface. The figure is obtained coal originally in the ground and then reducing this by production to date and by an estimate of 949 80 NATIONAL FUELS AND ENERGY STUDY coal lost in mining, to yield an estimate of the coal still remaining. The remainder is divided by 2 to give a fieure called “recoverable reserves,” this ratio being based on an an ysis of a wide variety of studies on individual mines, counties, States, and individual coal seams. stricted aneas around: oil and gas wells and under towns, railroads, fying rock, in thin aaeeeet ana fe Pillars to support the over in areas of complex logic folding and faulti and thus too waste. Actua recovery in individual mines has ranged from less than 40 t to as much as 80 or 90 The Geological Survey’s estimate of recoverable coal, as of Jan- uary 1, 1960, totals 830 billion tons* The distribution by regions is as follows: , # | vue | sare Region Ii ape. weer, New Eughad (see map) ee pihataeenenme iv z AN 139, 300 [i aie =e Sip Be haa aay acs i This be Dope rerable reserves has been, and is, quoted as being sgbanet 000 of production at the current rate. The arithematic is faultless but the calculation has little meaning, first be- d, is no indication as to how much it would cost to get the coal produced. more immediate importance is the amount of coal available to support immediate and near-term peednation—the composite national tonnage of coal held by individu producers upon which they have or are willing to commmercial operations. Of even more i concern is the part that has been prepared for mining, the part, that is, into which entries have been drivan or equivalent work a Lh ee a pacer eee a system and await- introduction of labor an uipment roduction to begin. Such information has to be nown foreach meohed oh oe auger . —— underground mi The t of the Interior* re in 1960 that 20 billion tons would be available at 1958 prices and costs over the next 40 years. As indicated below, this estimate a high ~~ of expert judgment, but still it does represent jndgment alone and docs not pro- vide the kind of assured knowledge needed to assess the strengihs and weaknesses of the coal industry, particularly its ability to meet a sus- tained emergency. The n i ide \ files of industry, and the National Coal Policy Conference has circu- larized the independent coal producers in order to get it for this study. * Averitt payeett including top management but excluding the se f-employed offi- cials of unincorporated firms. The first two tabulations are not clear as to the extent to which they include working proprietors. There are about 5,000 mines employing less than 10 men each and in which, pre- ve the owner himself works, The three series differ one from ot ‘According tothe Bureau of Mice ast demands it, and a shortage results when business pickup moves faster than the sang 4 to repair the cars. A Whether or not such car shortages as there have been have im. ired the total onret of coal to the country, or have caused users to turn to competing is a matter of opinion—there are no statistics — or other documented information on the subject. ; 8. While in peacetime barge transportation along the waterways of the country is simply a competitive form of movement, truck haulage is a necessary part of the transportation systems for coal and oil. 9. The low direct operating cost of pipeline transportation, and its ability to deliver a product continuously, is directing attention to the pipeline transportation of coal as a competitor of railroad transporta-_ tion. This development could materially influence the market outlook for coal, but its ultimate success will depend not only on — tech- 7 but also on railroad technology and rates and on the political problem of eminent domain for right-of-way. 958 NATIONAL FUELS AND ENERGY STUDY if i HU iL BEEP GH ue 1 | TL: ag ‘fs. aa 1M] i ie | cia eae ‘ile A a a ean Pa eh fb | age tae Ae ait Heal pall Ul deigee rt yi A ice i ete ie ce ks | fil “ HAL fla Fe Ee at i He He ea HT i ie Hl fF Hil ee aan Eff 5 i ne eH a a3 i i rH inet te Ut : i cn ta ta ipa ie welt ie rate fl i ili Hi i ] | a H top 5 companies precisely is mm by percentage ELECTRIC GENERATION ies and systems of total output, systems account for nearly a fourth (23 percent in 1960) d crude oil lis a e mk Bil Hai up to gas or integrated thon in 961 44 gute em eOrene AH COree sedessa ereeoneon United States TasBE 24—Corporete concentration among energy industries in the : | ! I f i q AN@LNO WOd IWi0L ~———— 039NCOud S3NIW } dO LN3OUSd SIHL dO IN30U3d SIHL 3533 e ¢ ' Producing 100 tons or more a day. Total number of companies is 7,500. / E a a 343s i] ay vil ; Ine Ce Ha i evil basse = mn fl HN, [4 ne Fa cegsa3 nial é ll Tye : producing company’s own sales the following ways: who acts who may ts. y the producing 7 ones age cated pany prod owned either ucers. the the sales de partmen or in & group of 2 sales = Re ay 8 orby ues ‘® By a folate y y & Bs 964 212° _ NATIONAL FUELS AND ENERGY STUDY ca ive mine direct! to the owner’s consuming plants. Ai teehos Nenboas co seaaratiy relies on a in ming ot of tei ba wn vary of in effecting “Guna: a relatively few companies are large to afford a “tak ated sales company. Most d it more econom to us the aries of independent sale orgaizations company. Consumers who have a railroad s and are able to receive at least a full carload of | ory Re are located on navi le an ever-increasing volume of coal moving by truck and barge diet from mine to consumer. eager! pas pom et |e ve plants adjacent to coal mines whe can be delivered by belt con- Se Ne a ee There are other special situations, such as the coal pipeline in ee ee ee ral marketing pattern. The retail market includes, aside a relatively few home users, houses, schools, and tnd office buildings here eonl-b ave ‘ w. - pmen requires the smaller sizes of coal. 1560, fees than 18 percent of the total bituminous coal and 70 0 percent of the anthracite consumed in the United States was classified as retail deliveries. i, ta The patterns of coal competition, and transportation cha pave Be woe Prenat “Th smirked Sates Pennsylvania, and northern West eat Virginia is marketed in the northeastern of the United States (New Sond Middle Atlantic States, including Maryland and the pies "of Columbia), whereas coal pro- uced in southern West Vi +e and Kentucky is marketed toa extent in the Midwest, area around the Great Lakes, - and to tidewater for export. Figure 66 shows the amount of coal sold to electric utilities and the t of the total utility 1 eprom Ae, by nee for 1957 and 1960. year 1957 was selected because that is the i of the statistical series Rea tage to this chapter and @ to the regional breakdown we are using. The figures for regions V to IX are ped in one total. Figure 67 shows the distribution of coal sold through retail dealers, figu. » 68 the coal sold to coke and gasmaking plants (only a few gas plan‘s are still operat- ), and figure 69 to “all others,” which category includes mainly industrial users. “TOGE doquieideg ‘cose ‘On ‘g'W'K 140d0y soqavIE [esoUI vous)¢ Jo Avesng ‘g'Q | sosn0g ‘OOGT DAY LOGT ‘07311190 91470010 03 pioR 1v09 SDOMUINI—gp aunoLg 213 966 NATIONAL FUELS AND ENERGY STUDY 214 “T9GT soqumerdeg ‘cose ON ‘s'A'H 140dey JoqIvA [vI0NT AE Cou; 30 NvOANg “gp : eoANDg ‘O06T PUB LOGT ‘s40]j¥I92 YFN0Ig) Pjos |voo snonjmNI;gT{— 29 aunoIg cae @u03 Jo suo TT. ess +t. SUOFRwUNTGxg em “1OGT 4oquieideg “COEs ON ‘WIN t40dey 30X14 [vseUI TY SoU JO Nveing ‘g] ; eoun0g ‘O0GT PAB LEGT Uf ,S1o8D sHOVUIOH]Y,, VI PLOW [VOI BOUWNIYI—gg wUnOIY Lf NATIONAL FUELS AND ENERGY STUDY 216 larger sizes were sold in substantial smaller tonnages than sly higher ""Thismnade hts Coe of marketing was consider. -. This rice spread between the larger sizes, such as lump and egg coal, and the i of slack. As the market for ee sizes = rae pa ee coal declined—. pene home esting, and some industria Plants—many mines i market was demanding more recise sizing and cleaning, and all told there may have been hundieds of wang. g- Peg inations of sizes .nd oil, natural gas, and hydropower. Thus the price pattern that had devel under be pa of market conditions persisted even after ial pricing situation developed in connection with coal for mgical uss. The steel industry requires coals of special quality for the production of coke. As the stecl indust: w, this require- led to the opening of mines to produce coat he that particular nse. High-quality coking coal commands a higher price than other to keep the mines in o: ration and to minimize losses duri iods of low steel production’ the coking-quality coal is sometimes di into the general industrial market where it must meet the price of the coal normally apts = sete bea. We . and equip or the specific purpose o: supplying electric generating plants. Many of these electric plants are willing to run-of-mine coal, doing their own ing. The avoidance of preparation at the mine makes it possible to quote lower prices to the utilit companies able to use coal in this manner. This petiti three basic methods: S orders, annual contracts, and long-term pA an Spot orders my specity delivery within occasionally the time is extended. Annual implies, provide for the delivery of coal over ogre Government purchases generally embod. regex by ich the suppli satnives leet ie tex oe hic ask a ity drops below that guaranteed in the bid; rity contracts include both premium and pen- clauses, as do also some commercial contracts. i coal industry does not post formal price tions. carriers subject to lation by the ICC. The hering lines head chee are 971 PART IV—INTERFUEL COMPETITION : Intropucrion Competition among fuels is a complex of economic, technologic, and’ forces. The three fuels—coal, oil, and ae Meo as described in the chapter on technology : Production, conversion of raw fuels to energy, transportation, and use. logic-economic complexity is compounded by atomic energy. The subject is Politically complex because it is involved with problems of trade, utility and transportation population, ‘conservation, public versus peste power, and such socia’ problems as unemployment and public fears regarding disposal of atomic wastes, - omy), part of the saathes held by each of the fuels is noncompetitive ith ther fuels. The following pages deal only with the interfuel aspects. wi -Hisrorican PERSPECTIVE Prior to the Civil War, wood was the dominant fuel in this pantry both for home heating and as industria] fuel; more than half of all iron a Produced, for example, was smelted with charcoal. (See figs.. _ When coal to displace wood, it did so a$ a unique energy source that provided services Wood could not. Its flame was found to be more adaptable and controllable; its energy was found to be more concentrated, so that it was more easily and cheaply trans- ported ; it could be handled more readily than wood logs or c rcoal ; and it was available in quantities that wood could never achieve. It invited new and expanded uses. Between 1850 and 1890, consump- tion roughly doubled eve decade, largely the result of increasing use as a metallurgical and locomotive fuel. Then after 1900 came the rapid growth of the electric power industry. None of these markets could have developed with wood. Coal dominates the electric generat- ing market to this day. ie : Coal reached the peak of its growing share of the energy market in 1910, having yielded to a new fuel—oil—unique and necessary to the time in the same way that wood did when it ielded to coal. “Oil initially had a small use for illumination, but after 1900 it began to be used: more and more by railroads and naval vessels. Just as coal d formed a long-lasting union with electric peneration, oil formed a long-lasting union with transportation. The demand for motor 274 i ed Sout Jo B¥eING OOGT ! SIO-TIe 4d .,GL6t-O08T ‘fmoucey Uvojseary oq) ul 4B29uq,, ‘I49qGeN0N POY 4anyeg 4978 o06t-s081 tounge R woItIg PETE oy) BF LB49Ue LavaNjad Jo UH} }luNsUND eApfeduos Jo SPUL4L— 06 wUnurd a | t¢§ &F & F&F S&F &F & F&F + & SK SF} FSF F&F HF CK fF a ”, . Lee 9 —— eee rer r » ae a~7T rs “J mt A uk — ; —— NY / wa 972 RATIONAL FUELS AND EXERGY STUDY Z \ A one By a Hin Behl a a if he if itl Ee 973 NATIONAL FUELS AND ENERGY STUDY iauelt i Hea i ERE a Eh i iat i Hu ip HE ui all i J Hitt sHieacTaled Hi tub eat He ois PHL cH if il Wat spurs in y be an appreciable factor to use. it to i space and railroad of 2 seme wei Sia mae i Hal hie ies tage. now its most distinct advan: around this trait and are constituted ve been built x, Seg Small compact engines theo a rE Hie SGSPesee Epi qi HEL al igs bigsas “Heehale H au Hy Wie aati i i Hit nial at Hie it BH ag ea ta al lien | aifaee Ha Huimin ae all iH ie 4§ a Syageealidis subs ahaa inde in it HEH su ae i if ak “itt figs HAE ati HH Ae fae Ay Fe Hi HE i adel Us A PEER F2R4suauasasere AGAIAAAA AAAS 48282e2n3207222 ek od el nh od od oh 0b ob 0h oh oh ob ob Natural gas! Adsbbrindddganiny S83nR Sgdud 977 At Aruba isan SSLesngssnescng SE ESSrSniddiddd Taste 40.—Prices et point of production Ol—Bunker C—Posted prices At gulf coast NATIONAL FUELS AND ENERGY STUDY by rail, but higher than the cost of moving oil (or coal) ROVISLsReezZRa85 AA i cininirinichebotetoted ocean transport. coal or oil by 280 il Ls nN geese sazsaes igh init sel 4! ciiiiaesi7! tae gisizasts aE sHEegs Be: Hu #7 ii aia bE a AH dl l HPT pha derlegy iH EE PHT hey 978 NATIONAL FUELS AND ENERGY STUDY 281 In there is a degree'of similarity in the pricing of transpor- tation srviocs for all three feake The sale of interru gas repre- in this to the reductions ir rail rates covering the movement 0 eoal to New ¥ i ork Harbor and of residual fuel oil into New Hampshire if order to * a competition. (See Part VII: Policies, Laws, and demand from the steel industry can and does send Tan produced joi f d both are frequently are of course, an are produced from the same e proportions differ. ‘The etext can shift its efforts somewhat between the two, it can never be sure whet tion will result in oil or with byproducts geu enh mannaes pins in its sale is an smoaaly price required in | would otherwise be ar Deer ary dey vig Seay 3 gio grain. Natural gas pipelines sometimes find that they have i capacity in ail bt i deat ii fie He if He aes 3 i fy Bailing Bubs) ee abt; if jelile itl fail y ie | Lh Hi ie sR isi Hint ee jut eli TU a 980 NATIONAL FUELS AND ENERGY STUDY ~~ —-29SB ‘ Government policy has such pervasive influence that a special part of this ay diew to it. It relates to competition in eahy ways: Through its impact on supply, ranging from limitations on production (oil and anthracite) to controls of imports (oil) and control over construction of facilities (gas and electricity) ; through direct competition between Government and industry in electric of the end use of fuels, ie. “inferior use” of gas (the Vil. A point not previously discussed in detail is that different juris- dlaticus of Guravennea unetinas poll te directions thet have op- posite effects. Several different agencies regulate, control, or other- wise influence com ger tlle: Hagges tg ef emane dhe onal hn independently of others within its own interpretation of its charter. We have made no attempt to itemize such occurrences, but the following instance has been brought to our attention. While the of the Interior maintains quotas against the import State. Blocs of have been sold to the Waders Mohawk Power Rochester & Electric Co., and New York State Electric & Gas Co. These companies operate a number of lary coal-burning 981 284 NATIONAL FUELS AND ENERGY STUDY generating stations. Through the distribution facilities of these three etilities, the power authorit “3 arranged also to distribute electricit y to 2.5 million tons while during the same period increasing its pur- f hydropower in coal uivalent to 3.3 million tons. Much public regulation initially had no intention influencing | competition = fuels. islation was for of rotect: i ae prodsca or was related to some other aspect of national interest. Some t actions thus now find t Ives in an environ- sont for Re ma they sa not designed and Og —— ee renere ve an influence not foreseen. or examp’ commodi: ause of the Interstate Commerce Act (1906) prohibits railroate from owni propection that produce the freight the railroads haul, 4 second ¢ — At a time coal ~~ } . = rail- roa: rincipal carriers, and their competitive ition was not ow Phat are Hee hone = additi Aside from the circumstance that fuels are most widel consumed ery ore f production, fuel gonsumption reflects also regional in con 1 ia On hi and Michigan reported vani i ino than for 1958, while foun nian Feport Consumer reference for a rticular fuel is such a common MDespi that need besaida aie ing oi of ite act t nat an t are more ve than coal in some areas, they are preferred by to mock In the industrial market it is technicall possible to conduct numer- ous seeations with any fuel, but often t te user prefers one over the use it makes his task easier, although, to be sure, the choice is influenced also by technical considerstions. } As already indicated, the heat of gas and electricity can be distributed more fp a the tely. heat of coal or oil, and the heat level can be maintained ind the residential market. It is fairly small. In 1960 the market shares verges 0 percent, oil 17 percent, coal 10 percent, and electricity 23 percen The top space in 91 shows the postwar in the de- terioration of the reta coal market ;retail deliveries (i.e., the resi- dential, commercial, and some “offtrack” industrial in 1960 totaled only 30 million tons or 67 million tons less than in 1947. Most of this decline was due to the switch to oil and gas for heating. The use of electricity for residential heating may enable coal to recapture some of this market. oc eee rma amine sso cent Is In west, prima in 18, and Minnesota. Most’ retail coal has mined in the Sethe Ap ian area in the States of Virginia, West Virginia, and Ken- . Even the retail market decli mantis. 20 peasant between 1957 and 1 rena ee Staten seit eapely shot bal of the retail market and any further loss would be mainly by them. The pri market for anthracite is Pennsylvania and in New and adjacent States. price relations involved in the residential market are shown in figure 92, which shows indexes back to 1935 for added perspec- tive. ing this 25 years the a i they reached the competitive ceiling i b Since that time the prices of the cre kote reflected their competitive in lence. In 1948 and again in 1957 oil appears to have tried to push but each time pulled back by the local problem. Figure 93 shows price relationships in Boston, a city for which there are data and tis in a hotly competite area Until 1953 the gas used in Boston was manufactu made locally and its price necessarily reflected the competitive 983 286 NATIONAL FUELS AND ENERGY STUDY \\ ; Un : YY \\ nf f Z = ES if Y \ rd i e io; ‘ = a Ye “Be WiYw "y ; Yj \X 3 i Mh 1 | \Is ai Z fi y @ F ° [| l o. Z \\ j oS re) o °o S ° £ © 0 t 9 nw. = g SNOL 13N SNOIT7IW 26) 8e6l PP cmmare 84 9 NOuswNyIq 14S@WO —_ | Pe ea ence be OU) HO 8seip puo Bujoe} NATIONAL FUELS AND ENERGY STUDY et rye) ods 4103 $09 i $1014U00 891d APIA PUY sTenZ 70 S224 T18I9Y,, ‘“s0quT Jo JWoUNIVde ‘g'f | eounog “(OOT=8F-LFOT) O9-2E6T "823038 PETA O43) UE Jens Jo saojad (peieajlop) 1)¥}e1 Jo Xepul—ZE sunoIy 9v6) o¢ Ov 985 NATIONAL FUELS AND ENERGY STUDY 096! 8S6i *(00T=8-256T) 00-T56r ‘u0js0gq 2S6i SS6I «APT PUL wong 30 sIOIAE WHEY, UF} Tenz Suyjveq Jo seojad zo Sexepul—g¢ aunorg 6v6! 9b6! “20qUT 30 quounaudeg “g'p } eoanog v6 Ob OS 09 OL 308 I $09 |DINjoN ! sD “J fs + 9 Pesnjonsnuoy O06 ef) 002 X3QNI Ht gored ely gee on Ue OE RIS eT (Cents per million B.t.0.) wrnoen xicad aE He Bul SN At IN \ \F SAAN S\ . SSS ara adiIi OAs WS SWAY NN ES > RQ \ WV| x NX... ~‘ \S SS \ W Ss \\ 4 © ‘006T PEP ‘eer ‘BOGT ‘S20I0N4 10mg D21001q-wWeEg ‘BOT TD0ESY [VOD [wAOTIEN | soANOg ‘86 Sandy [Rog [vaeUN on) £4 pougen ,,'vese earpedincs-yeeo,, oq; "sy eopesouss 21479919 10} pown sud puv ‘jo ‘[woo Jo suoj}s0do1g—'gg aunolg 0961 6661 9561 $6 961 $561 W561 £861 7861 (S61 O64, Setete * + + Oo" 2 o : oe } i or - os 3 iit o” * £4 : * ;? - 04 eee sete - Hid {131082 cetiess teerpece: i i i j lea iil ita HEL dll Le Ue ee 542 Big 25426. gees }¢. HHH jie Hf fe iliinial Nain fa iil i Ha & Z ag i ql : i vena futh ith 1a redteettiaa ! Seat leet FU Be fad hiie ata iach Che erp 3 1} en FUEL Lie rae A. jl sail ae : ig1hs PH L Bitar HTL HHL of Ohio, on: or echoed coal sold to customers in New York price same Y cnt his the ew Pinal Phan Tlinois. FUEL costs i Le a eS process heat, boiler heat, or as m thatthe average nur ~ — —— ea nent emeanel mashes bee General industrial Froune 96.—Fuel prices paid by Consolidated Edison Co., 1950-60. ite 50 . ” Nig NOIT IW /> 1809 catbey 20a ene Oe a pen eam en a ‘ Gh all ite 991 *ATIONAL FUELS AND ENERGY STUDY 294 coal’s share r f #1 to 51 percent, ' In TV oil’s share rose from 10 to 15 :2-sent, while tn Peon EX hte © industrial users rose Percent from to ToGo. Wit byveet to sales alone, which is a poi of common dis-szsj comparison are not available on pe et Coal ard o with this type of sale (about ° iler fuel, and one-third for process heat). However, in those coal is a significant factor the average cust «f coal to-electrie is below the equivalent average cost of in.t-rruptible Since 1949, res'dual fue] oll imported into the east coast has ranged between 17 million and This enters jn, and Proportions. Any additional coa) produced would come Pennsylvania, West Virginia, or Virginia, but its entry be slow be: installations to burn onl Jonata jos sould be borne by the Netkerieede Wes Bake Venezuela. Any additional gas would probably come from Tan TRANSPORTATION rnapatle below: gives the latest reliable data on the use of fac! in ton. According to it, oil accounts for over 90 percent of of this \narket, from 110 million tons in 1947 to 2 million in 1960. set ~~ market. The lectrification f railroads uification of coal both provide potential three. ~ sey: lum predate iss oRP peers an squrnbons m un- wou saiebintiliriintbenes wot teneeanenenechbndécnhnel aR w 387 8 wet RO 7,430 5 1.435 CT ge gore ce ee OO 2s b+ 6 H Sr ereed aar7 n & as 100.0 992 PART V. UNCONVENTIONAL SOURCES OF ENERGY Unconventional sources of energy are sources other than coal, oil, gas, wood, ing water, and now atomic energy. They include the sun’s heat and light (solar energy), the wind (windpower), the tides (tidalpower), the heat within the ne deg tom lanr jon energy of the sca, bacterial life processes, and new exotic of generating electricity. The subject is included here for the sake of completeness, and the treatment is brief. SOLAR ENERGY The traditional commercial uses of solar energy are in the evapora- tion of brine in open pans for recovery of the salt, in the drying of fruit, and to hasten plant growth in greenhouses. The attention to unconventional uses is with the intent of trying to capture and app! the heat to various other ends, depending on temperature desired, an for direct conversion into electricity. Low-temperature uses are many, including the heating of water (which then may be used for home heating, for example) and in the conversion of saline to fresh water. Solar conversion of saline water is one of the techniques being inves- tigated by the Office of Saline Water of the Department of Interior. At higher temperatures the heat may be applied to furnaces or to run engines of various p poapg engines, for example—either for direct transmission of power or for generation of electricity. eT ee and focused where wanted. The focused beam can achieve temperatures of thousands rr high enough to melt metals, and solar heat already has in meron metallurgy. Focused sunlight can be used in thermoelectric devices (creating an electric current by heating the junction of two dissimilar conduc- tors). (See below.) A number of satellites are powered by photo- voltaic cells (the kind used_in photographic re meters), which are solid-state electronic devices that convert light into electricity. Other specialty uses are possible. WINDPOWER Windmills for pumping water are well-known devices, and the reference to windpower as an unconventional source of energy is to its widespread use, and mainly to produce electricity. Electric generators run by windmills are in commercial production or operation in Den- mark, Canada, France, Germany, South Africa, the Soviet Union, the United States, the United Kingdom, and elsewhere. Interest is ex- panding. Thousands of generators of capacity of 3 to 4 kilowatts are in use in different parts of the world. A 100-kilowatt wind-driven generator has been operating successfully in Denmark for several years, and a 100-kilowatt generator has been installed also in the fale of Man. 296 NATIONAL FUELS AND EXERGY STUDY A 640-kilowatt generator has Le«:, tested i France. All these larger sori” Uesigned to feed energy into existing allermatinys ses ee TIDAL ENERGY en in temperature between two heat Sources. The temperature differen- oced fs pees to head in a mare of the dif eeee aaat may be pro- is i to reo i so even differences ot eat tae be utilized. In certain One 7 construction is in progress. Pacific Gas & Electric C in 1959 placed a 12,500-kilowatt plant in operation at Sonoma, Calif., north of San Francisco, and has'sines ed the capacity. The steam fields of Iecland have long bose used for heating purposes. THE BACTERIAL FUEL CELL 994 NATIONAL FUELS AND ENERGY STUDY 297 the past 2 years of a bizarre cell fueled with a common and harmless spetes of toner. The bacteria occur in and feed on almost any kind of organi matter and generate electricity in doing so: corncobs, peanut shells, the waste in polluted rivers, occur nag otet in the sea. Cells 2 volts have been model devices have been EXOTIC WAYS OF GENERATING ELECTRICITY Five unconventional conversion methods are attracting considerable attention in scientific laboratories: Thermionic converters, in which electrons “boiled out” of 2 hot metal surface are used to generate electricity. The device may appear soon in solar-power generators in satellites. One of the most i ions, though at least a decade away, is in atomic v the thermionic devices would use heat that is otherwise wast stations, a ing the steam-turbine generator. Thermosactre gnertore dete shove There is considerable talk about specialty applications but not much optimism about the genera- tion of amounts of economic power. Known materials do not offer any of efficiency above 10 percent, but the operation is simple vad - Smeg crials byenl _ indefinitely. pce og to the i passage of an electric current the conductor edly enough of the current in the opposite direction — it. i ing devices are already comme hydrodynamic generators (MHD), which use a hot steam of — (lonized gas) instead of a copper wire as the conductor. t trode material that can withstand the required tem tures for any- ing like the period of time that would make pe gf economic for : usual] talked about. Few special tee have becn sug- gested. The idea is to combine with conventional systems, to achieve higher efficiencies. Most observers judge that is the discussed here, Fuel cells, batterylike devices in which a chemical reacts ped one electricity without flame, or noise. In the fuel one of t chemicals is oxygen (pure or in the form of air , the Cereal een, an obganic material, = he-chemvtale are con- is able therefore electric continuously and bdednteal : — abd al commercial applications. Experimental fuel-cell tractors and Adit tormcks awe bacm tested A small number of fuel cells are Hue a Lidaediiei Comparison of Coal-Fired and Nuclear Power Plants For the TVA System 998 Contract 41-73 0° =——= DHULIZIZ YOs Suzqguo ALNILN ‘S'N 02 o€ Ov SLAVAAOTIN 10 SNOIMMMNW OTT xa 1012 Humsie Om & Rerixinc ComPANY Gere ve Ari the “short fora" merger provisions, USC cculd be nergec directly into the Corporation or into 2 new Delaware subsidiary’ to which -the Corporation would Zirst transfer its UZC shares, in either case by ection of the Board of the parent. Ke stated that if the tender ofies were a success the merger would be _ettectse &s prenptly as possible snd steps woule be taken to provics anasenent for “UEC and to combine USC and Freomen mar keting and other administrative functions and staiis where ef ficienc: es and cost reductions couie be achieved. Ee stetecd, “hewever, that in the first instance the UEC coal properties anc contracts would be held separately frou those of Freeman, most pr ee in the new Deleware subsidiary. Mr. Sargeat then reviewed the varicus cornsideraticns in support of the manigerent view that the minority interest in UEC should be acquired end that Freenan and USo sould be conbined 2S soon as possible, including a review of UEC's limited coal reserves end the resulting probdlexs USC had encountered in ob-~ taining and keeping long tern contracts, the ebility of Freonan to provice e back-up oz reserves over the lonz sera exé finally 1017 PRIVATE Page No. 9 BD 9/30/88, -, O25 the requirement for 2 new chief executive etttees ane other key personnel on which action should be tzken promptly. He also re- ported that the New York Stock Exchange indicated kts intention to celist UEC within the next few weeks. He stated thet, in Seneten, the combination of the two operations made geod business and operating sense and would insure the ability of the enterprise to ‘conpete more eiiectively in its marxst. He stated further that, under all on circumstances, the Corporetioa's’ legal staf? was not aware of any legal reascn why the Corporation should not pro- ceed with the plan. The Directors discussed the natter of a tender ofier price, in the ccurse of which it -was pointed out that it is normal in tenders of this kind to offer = presius over market of between 15% and 20%. Mr. Sargent then reviered the market action of UEC stock over the last zew months in whick ke noted that in July, when the possibility of a tender offer was #irst discussed, VEC _- was sellirg at 39-1/2, and thet on August 3, the day befors the meeting of the Board at whick the tender offer was to be considered, the price of USC kad rissn to action 2s vould be required to effect the "short form" merger on the - basis proposed. Ee stated that it was expected that the defini- tive Plen for the oombingitan of U=C and Freenan would: be Geveloped in time to peraZt its cousimuation by tks end of the year. &fte> further Giscussion, cn motor eCaly mede, secondec, anc unanincusly carried, it was : RESOLYED, that the Corvoration makes cn offer Chereinsiter in tress ~esoluticns called the Sencer Giier) to purckass stares of Connon Stock of The United Electric Co2zl Companies . . Chereinatier in these resclutions called USC) by taviting tenders for such shares at a prices - of $50 per shore in the minzrer and cn the stker~ teres set forth in ths inztruments hereinafter in these resolutions approved; and further RESOLVED, that the forn, terms and provisions of the proposed Invitation for Tenders and end Assignment to be usec in connection with the Tender Offer, copies of which have been subcittec to this msetins, ’ Be, anc hereby cre, approved, with such changes therein es the Presidext or the Vice Presiéen?t. Finince cf the Corporaticn end Counsel for the Corporation may Csen necessary cr ecvisable and Spprove; ane furthes ia ERESCLYSD, that The Chase Manhattan Bark, H.A., be, end hereby is, Gesignated as Tender Agent of —” PRIVATE Page No. the Corgcraticn for the purposes of the Tencor Offer; and furzher RSSOLVYSD, that the President, the Vice Presi- Cent-Finznce or the Secretary of the Corporation be, anc esch of then iereby is, authovizedc to (2) engage The Chase Manhattan Ban, X.4., @s Tencer Assent of the Corporation in connection Ozter: with the Tender Cb) extend the terminstion dzte of the Tender Offe> to such date {not later then Noverbder 2i, 1935S) es they o> fo. of them shall determine; (c) pay comzizsicns or fees to brokers - responsible for soliciting tenders of shares of Common Stock of Uic; Ce) retain solicitors to assist in connection with the Tencer Oiler; . ae oS €e) deliver to the Tender Avent such in- structions ts they or zeny ef then shall deen neces- Sary OF prover in connection with the Tencer Offer. (which instructions skall Cesigzuate the persons euthorized to act for and on beh2i2? of tze Corsora- tion Sn connecticn therewith); and (2) take alk ecch other action es they or eny of then shall csen hecessiry, vrobve> or ad. visadie in conneqticn with the Tender Offer ind the implementation cf these resolutions or any oz them; ana further aeey RESOLVED, that the Presi¢srt, the Vice Presiéent- Finance? cr the Secretiry of the Corpcration be, and esch of them hereby it, autherized to take eli such &ction, in the name anc on behalf of the Corporation, @s shall be necessary or proper to : (2) 2t such tine es the Corperstion shell ‘own not less than £O% of the outstanding steck of ‘2 USC, cause USC to be nergsd into the Cordoraticn = and, in connection wsrewith, set the terms ene : concitions of the rerger {provided that the con- Siceration to be pzid for shares of UES shall rot exceec $50 2 share) and execute and file e cer- tificate of orzership end merger, 211 in eccorcéence. with Section 253 of the. Delaware General Corporation Law; ESE 5 : Saenw P RZ EASE. Page No. 13 D /2D/C4-. 2 “EO a3t {b) forn 2 ney corporation uncer the laws of the State of Delaware (heveinazter calicc Ney Coz. a) cozvorstiens a suds ion agresnent with New Sa poration of E12 the eathoutse ec expitel stock of. - New Corporation for not mete than $2000; bat teraztive to ‘the actions sutho>. . ized to New Cor- poration, s5 a canit ribution, 214 the shar of Comacr Stock of USC cummed & by tee Corrorztion .. (including, but not iinited to, the shares of Con- moz Stock of USC to be surchered by the Corporation pursuznt to the Terder Offer}; ard (e) at szck tine es Kev Ceornoraticn sheil own not less than $0% o2 the outste nding sicck cf USC, Cause UEC to be ne exZed with end into New Cornereticn ,ihn accordance with Section 255 oF the Delaware "Generat Corporation Ley Upson such terms end con. Citiorzs as ssid cliicers or any of them sheli Geen ecvisable, and in co mnecticn treresith te cause the Corporation to sdvince to New Corpsritioxn such funcs 5 may be ee to exzble New Corporation to cA erfect the tera of feic nerger. 1022 THE UNITED ELECTRIC COAL COMPANIES DX 113 Special Meeting. of the Board of Directors October 9, 1959 A special meeting of the Board of Directors of THE UNITED ELECIRIC COAL COMPANIES was held at the office of the Company, 307 North Michigan Avenue, Chicago, Tllinois, on the 9th day of October, 1959, at ten o'clock Ae M., Central Daylight Saving Time, pursuant to waiver of notice, The following directors were present: - constituting a majority of the Board and a quorum. Absent: Paul C. Clovis ‘ J. Sterling Rockefeller Henry A. Rudkin George Spatta | The meeting was called to order by the President, ‘Mr. Frank _ Fe Kolbe, who proastea throughout as Chairman of the meeting, and the minutes were recorded by Mr. O. H. Utterback, Secretary of the The Chairman suggested to the Board that a consideration of the minutes of the meeting of the Board of Directors held on September. 21, 1959, be postponed to a later date, The President then stated that certain large stockholders of the Company whose stock holdings aggregated approximately 50% of the Company's shares were requesting representation on the Board of Directors. He said that in the past he had offered representation 1023 to them but thet they hed declined. H® further stated that in order to meet such current request it would be necessary to eliminate five members of the present Board, He stated thet the members of the present Poard hed agreed emong themselves that Messrs. Frank F, Kolbe, J. M, Morris, John D. Ames and Dudley F, Jessopp should renein on the present Board, and that Messrs. Frank Nugent, Milton Felkoff, Reuben Thorson, Irvirg Crown and Barton R. Gebhart should be the other five nominees to be suggested by the management, and that a proxy statement should be issued by the management to solicit proxies. for the election of such nine sugges ed nominees, Thereupon, on motion duly made by Mr, Jessopp, and duly seconded by Mr. Ames, it was unanimously RESOLVED, that the action taken by this Board of Directors at its meeting held on July 10, 1959, authorizing the Secretary of this Company to mail to stockholders of record on September 30, 1959, a notice and proxy statexent in the forns adopted at said meeting and a proxy namirg Messrs. Rudkin, Ames and Kolbe as proxies therein, be and the same hereby is rescinded, FURTHER RESOLVED, that the Secretary of this Company be and he hereby is authorized and directed to cause the Transfer Agent for the common stock of this Company to mail as soon — as reasonably possible after the date of this meeting, in accordance with the By-laws of this Company and the laws of the State of. Delaware, to all stockholders of record as of the close of business September 30, 1959, addressed to them at their respective addresses as they appear on the books of this Company, a notice and proxy state- ment in substantially the following forms: one 1024 -BXCERP'TS: FROM MINUTES MEETINGS" of May. *13, 1960 A Zhe Chairman brought up for discussion the Company's onner- iran Sn Mconovgh and Schuyler. Counties. At July 32, 1959 the Company owed or had contracts to privhios % $29.10 acres of coad containing en estimated 8 916,117 tons and as of this date these figures have bd3en desmogict. ‘to 3,30 acres of coal containing 11,530,000 tons. ‘Inasmuch as the evelopment of this field is probably Sone ten oe in the future, Rd vas decided” not to purswe en eperessive purchasing policy in that: arez, but ory to accuire .eereago watch right becone avesdoboe. at rbot ‘to seaund normal £ dand Prices $n this arene : - - . Pr murat: FROM MINUTES ‘OF, MEET NG OF JULY 15 1960- Mr. Hepburn was. Anvited into the necting and, referrirg to a _ map that displayed the western paft of Illinois, expadned the Con- pary's plan for acquiring #2 coal reserves in McDonough and Solewer : ‘Counties here some 10 ,000,000 tons are already held in reserve, He stated that about a year ago a mining feasibility, study vas made of “the property, £ study of County records discloses that coal lant ‘options’ are being teken by tio or “three other compantes, It was de- | “cided to. review ana revise the feasibility study to re~exanine the slivioabiasty of ping & moro activo ss tege program in the area... - 1026 axdaet Fics NWI oF MCT BaD sePPran 9, 1950 than for any previous nonth. All minss were in good physical con- dition, with Fidelity being particularly inproved ty "the new loce~ ton with lover ratio ant totter stripping conditions in general, Tere Sones eth A i hangin Wie eiclig Via art oAEII te pregreens nat . * Increaced sales ‘are duc lntgely te greater purchases ty power cexpenies, porttoularly Conom-cclth Biison and T1linoie Pocer. Sone ecditions) strip coc) found at Rery Moore Mine, while of higher stripping ratio, will make 4¢ possilile to keep the mine in operation for another 6 or 8 months end this is being considered. The President stated thet the Conpany is comiimiing to take options and leases on coal in the Beaucoup Ficld, acting as egent for the Aluninen Company of Anerica. At a recent necting officials of Alcoa indicated they planned to make the next expansion so as to use the coal reserve in Beaucoup Field. The total feserve is considerably Greater than the 100 million tons allocated as a proper backlog for alunimn production and the officials expressed an‘interest in the possible developrent of « coal mine‘in the area prior to the need for en aluximm plant, the coal so produced to be sold in the intustrial : market vhen and if such a denand is forthocuing. Hr. Nugent stated teat the engineers. for Prodan Goal Rining Gospery could make a feast bility study for such « project when necessary. . : There being no further business, on motion duly made by Mr. Jescopp, and duly ecconied by Hr; Korris, the reetiig was adjourned. -@uring that tine and which cannot be recouped by hin.’ The Chairman stated because of conversations in the past in ecard to possible consolidation with another coal compamy in this area it might be well to give some consideration to the subjects ding, at was : : RESCLY?FD, that Committee composed of Nossre, Kucent as Chaireen, Pall Morris be and they hereby are Kr. Morris reported that Kidvest Toving Co., Inc. for the first nine months of 1960 had a net dincone of $71,5ib.00 as acainst $k, 235.00 for the corresponding period in 2959. Reveme for this in on, ommend > 1028 Excerpt FROM MINUTES OF MEETING OF MARCH 0, sx Upon motion duly made by Kr. Nugent, and Gly seconded by Nr. ames, the following preambles and resolution were unanimously adopted: WHEREAS, this Company of January 1961 conveyed Deed of Se Jeane C- tueed apprectnatety 3a acres of land in Hopkins County, Kentucky, the total - consideration being %2,500.00; and WEEREAS, this Company ecap]etved its mininz operations in this area scue years ago and has no further use for the land; : NOW, TEEREDO2RS, BE IT RESOLVD,. thet the action of the officers of this Company, for and on its Behal?, in * executing said Deed of Conveyance to James C. Sneed, upon the terms as set forth above, be and the sane herety is in all respects approved, ratified and confirmed. Upon motion duly made by Mr. Nugent, and duly seconded by Kr. Crom, the following preazbles and resolution were unanimously the right to use the surface of approximately 22 acres of land in Vermilion County, Illinois, containing an esti- ma WHEREAS, at a stripping ratio of about 12 to 1 there is an estinated mineable tonnage of 36,300 which at the — royalty of $13,500.00 will cost 35.3¢ per ton; Mr. Nugent raised the question of the Company's reserves of mineable strip coal. After considerable discussion, upon motion duly made and duly séconded, it was FURTEER RESOLVED, that Kr. Frank Nugent be and he here- by is delegated to serve as Chairman of such Committee, — In view of the fact that March is the second month of the third quarter of the fiscal year, Mr. Morris brought up for discussion the Nan- agement. Incentive Bonus for said fiscal year, and it was decided to defer discussion on this subject until the Board meeting scheduled for May 12th. Mr. Morris also raised the question as to whether it would be advisable to transfer to a Chicago bank the Trusteeship of The United Electric Coal Companies Employees' Profit Sharing Trust. fund from The Chase Manhattan Bank in New York. The question was referred to Messrs. Falkof? and Jessopp to report back to the Board at its May 12th meeting. Mr. Falkoff, Chairman of the Audit Committee, requested that, in view of Mr. Thorson's absence, the report of Haskins & Sells detailed audit for the year ended July 31, 1960 be deferred until the Board meet- ing scheduled for May 12th. Mr. Falkoff further requested that the appointment of auditors for the year ending July 31, 1961 be deferred “until the Board meeting on May 12th, Mr. Falkoff also recommended that in the future the detailed audit report be made available to the Audit Committee before the anmal statement is approved for printing. There being no further business, on motion duly made by Mr. Anes, and duly seconded by Mr. Morris, the meeting was adjourned. Arabs baels 1030 EXCERPT FROM MINUTES OF MEETING ON MAY 12, 1961. S$. When and if requested by United Electric, Central Tlinois Light Company will use coal from this storage pile and United Slectric may curtail ship- ments to that extent, and when requested by United Electric, Central Illinois Light Company will put into storage additional coal, and by this arrange- ment, United Electric will be able.to ship at timdés most beneficial to production and sales commitments. 6. On coal withdrawn from storage at request of United Electric, 7¢ per ton will be charged for such with- drawal. Previous contract provided for re-opening of price and anmal tonnage each year and this new contract- gives firm commitment on price and tonnage. NOW, THEREFORE, BE IT RESOLVED, that the action of the officers of this Company, for and on its behalf, in enter- ing into such contract with Central Illinois light Company, upon the terms and conditions as set forth above, be and the same hereby is in all respects approved, ratified and confirmed. Mr. Hepburn was invited into the meeting and he and Mr. Nugent made a report on the Company's stripping reserves, uging maps of Fulton County and Perry County, showing the Company's reserve areas ta relation to the reserve areas of other strip companies, Gnd At han boon deterained that the present reserves provide tonnage for contimming and growing pro- duction for about fifteen to twenty years. After discussion, upon motion duly made by Mr. Nugent, and duly seconded by Mr. Thorson, it was unani- mously : RESOLVED, that the proper officers of this Company, for and on its behalf, be and they hereby are author- ized and directed to begin at once an aggressive pro- gram to option for purchase and/or lease areas for test drilling in the North Canton and South Buckheart areas in Fulton County, and in the area in Perry County and Jackson County immediately south of the property .acquired from Union Colliery Company. The President reported to the Board that the new Bucyrus-Erie 70-yard stripping shovel was expected to be delivered and in operation at Fidelity Mine sometime late in the current year. This machine was 1031 XCERPT FROM MINUTES OF MEETING ON SEPTEMBER 8, 196) cen RnB URaLT PORT Ta Wee Tey ME ot OO? secre held ou Jely 1h, 1961, a resolution was acoptec authorizing the sale of a tract of 17h acres at Mary Moore Mine, said euchorisation subject te appraise? value deing obtaiaed. The President then reported that aa aporaisal was obtained fro: bank in Danville, Illinots, the value being set at $50,002 cash, or possibly $79,200 if sola by contract, Ansther appraisal was obtained from a Peoria anpreisal firs which established the market valce at $55,000. Since the Prise offered by the geeepaclsve purchaser, Niels C. Mielsen, vas $85,000, the sale will be made to hin, the purchase price to be paid as follows: $25,920 on signing of contract, $20,000 on each of the three next successive eaniversaries, with interest on the unpaid baler. at 5% per annux. _ However, Kr. Mielsen has agreed to ‘purchase certair snal tracts adjacent to the 17h acres that will eliminate the need for the Coapany to renove @ haulage road and construct a private brides, thus sav- ing the Company an estimated 312,000 to $15,000, and ad of the sale is contingent on Er. _Melsea so doing. In regard to the anaual report for the fiscal year ended July 32, 1961, a draft of the letter to stockholders and a review of the results were. reag. It vas Pointed out by the President that in previous years only the coal dedosits suitable for strip mining were included in our annua? report. After considerable discussion it was decided that total, coal deposits, both strip and underground, owed aad controled by the Company be shoxn in the annual report. * -Upoa notion duly made Sy Nr. meh, and duly seconded by Mr. mae, the following Breanbvle and ‘eenet tien were unantnously ad >pted: MERA, the proper officers of this Conpaay expended certain sunz for equicment for use at its various mines as follows: 1032 EXCERPT PROM UEC BD. MEETING - SP. MIG. MAY 18, 1962 and ° WHEREAS, the resolutions authorizing and/or approvin,;: - Said coal mining lenses dic not sitate that the acqui- sition of minerals included also “the right to use the surface" for such pursoses as may be necessary in carry- ing.on the strip mining operations; and : WFERSAS, such right is included in the coal mining 3; NOY, THEREFORE, BE IT RESOLV2D, that the wording of the resolutions authorizing and/or apmroving the six coal mining leases cited.in the foregoing preamble should include the phrase "the richt to use the surface", and that said phrase be and the same is hereby made a pari of each of the cited resolutions the same as if it had been included in thé Griginal resolutions. Mr. Nugent, Chairman of the Land Committee, referred to the coal land reserve position of the Company and the-need to add to the operating life of present mines. The Company should continue to pur- sue a vigorous land acquisition progren, not only at existing prozer- ties but. at any location that might provide additional reserves and extension of mining. activities. Management was again instructed to pursue this policy in acquiring additional coal lands suitable either ' for strip or underground mining. Upon motion duly made by Kr. Crown, and duly seconded by Mr. Nugent, the following preamble and resolution were unanimously adopted: WHEREAS, the proper officers of this Company expenced the sum of $66,331.20 for the purchase of 1 Northwest 80-D coal loading shovel for use at Banner. Kine; .NCG#, THEREFORE, BE IT RESOLVED, that the action of the officers of this Company, for and on its behalf, in expending the sum of 366,331.20 for equinment as set forth above, be and the same hereby is in all respects approved, ratified and confirmed. The Chairman advised that’ Midcontinent Barge Compeny, which Company is owned jointly with Truax-Traer Coal Coxpany, desired to 1033 Perchase six 1,500 ton barges te take care of the increase in cos? Shipmeats on the Mississippi River. The Chairman furtier stated that Ingalls Ship Building Company has for sale six new barges, Just recently coxpleted, and of the type now in use by Kidcontineat Rarge Company. The purchase price of the Tngalls' barges is $60,000 Per darce as compared with 361,500 and $63,900 per barge quoted by two other builders, neither of which could make imnediate delivery. At a meeting held on Nay 15, 2962, the Executive Coxittee authorized this Cmpeny, as a stockholder in Midcontinent Barge Coanany, to approve the purchase of the six barges, and that this Conpany purchase 1,000 shares of the no par valus capitel stock of the Barge Company for £150,000, the proceeds of such stock to be used toward completion of such purchase of barges. The 1,000 shares would continue to represent this Company's 50% share of the caital stock of such Berge Coxpany. ~ : After discussion, on motion duly made by Mr. Anes, and duly seconded by Kr. Thorson, the following preambles and resolution were unanimously adopted: WHEREAS, Midcontinent Barge Company has authori zed the issuance of such shares to this Companys act WEESRAS, ‘the Continental Illinois National Bank and Trust Company of Chicago and The Chase Manhattan Rank have agreed in writing that the exoenditure of such money for the purchase of stock of Midcontinent Barge EXCERPT FROM MINUTES OF MEETING ON JULY 13, 1962 The Chairman then presented a resolution approving this Company's action in signing a coal lease with United States Steel Corporation under which the Tite of Mary Moore Mine would be extended some four. years. &fter discussion, upon motion duly made by Mr. Crown, and duly seconded by Kr. Thorson, the follewing preamble and resolution were unani- mously a2opted: WHEREAS, the proper officers of this Company on June 28, 1962 entered into a lease with United States Steel Corpo- ration covering the acquisition of all of the ccal of ° ’ : #7 vein and the right to mine the same — Il ecres in Vermilion County, Illinois WGij, THEREFORE, BE IT RESOLVED, that the action of the efficers of this Company, for and on its behalf, in enter- ing into the coal lease with United States Steel Corporation, upen the terms and conditions as set forth above, be and the same hereby is in all respects acproved, ratified and confirmed. Upon. motion duly made by Mr. Crown, and duly seconded by Mr. Thorson, “the following preambles and resolution were unanimously adopted: WHEREAS, the proper officers of this Company on June 28, I962 entered into a lease with United States Steel Corpo- ration under the terms of which this Company acquired the right. to mine all of the coal contained in the #7 vein on certain premises in Vermilion County, Tllinois; and WHEREAS, Karl Zamberletti and Frances Zamberletti, co- partners doing business as V-Day Coal Company, on October 14, 1960 entered into a lease with United States Steel Corporation under the terms of which V-Day Coal Company acquired the right to mine all of the coal con- tained in the #6 vein on certain premises in Verrilion County, Dlinois; and . WHEREAS, the premises containing the #6 vein leased to V-Day Coal Company are identical with the premises con- taining the #7 vein leased to this Company; and ‘WHEREAS, the #6 vein underlics the $7 vein, being separated from same by scme hO fest; and 1035 Liss ey EXCERPT FROM UEC BD. MEETING MARCH 8, 1963 VHEREAS, Midwest Towing Co. Inc., owned omnes by this another @ decrease KARSRAS, Midwest Towing Co. Inc. needs working cepite) to cperate on the Mississippi River during the sumer FURTHER RESOLVED, that should the exornt lent to Midwest Opening a general discussion on the question of minecble re- serves the President stated that at Buckheart the total possible in- cluding present operating area, North’ Canton and South Buckheart would amount to some 16,600,000 tons, most of which have been acquired or optioned, .At Cuba Mine possibly 1,500,000 tons of #6 are avcileble although not yet accuired; possibly 3,500,000 to 5,000,000 tons of 22, sone of which is under option, and all of which is high ratio stripping; . making a possible estizated total of 7,000,000 or 8,000,000 tons for the Cuba plant, | p In the northwest part of Fidelity field there are som estinated ‘p,000,000 additional tons that will be added, bringing the estinated total to cbout 28,000,000 tons. In the face of the obvious limits in strip tonnage available in the vicinity of the Company's properties now being mined a stucy is being Undertaken to detersine as nearly as possible all of the strippable re- : serves in Illinois, Indjane, West PSI AO Biennale. a0 dap eae method such reserves can be acquired, ~~ 1036 ROARD OF DIRECTORS MEETING HELD SEPTEMBER 13, 1953 * and arransexcnts have been made to do this, After discussion, upon motion duly made by Mr. Gobhart, and duly seconded by Mr. Falkoff, the following preamblo and resolution “wore ‘naninously adopted: WHEREAS, this Company plans to purchase from Truax- Traer Coal Company approximately 83 acres of land in Perry County, Illinois, containing an estimated “ * 600,090 tons of coal, the total consideration boing *$16,191.05; : . NOW, THEREFORE, BE IT RESOLVED, that tho propor officers of this Company, for and on its behalf, be and they here- by are authorized and directed to purchase said tract - from Truax-Traer Coal Company, upon the terns as sct forth above. . . The Chairman reported on the Conpengte activities in cccuir- : ing stripping reserves in Osherede. ‘On Prospecting permits accuired from the Federal Governnont oettioloney drilling indicates sozo | 18,000,000 tons of strippable conl with perhaps additional tonnage available whon a nore conplete drilling progran is undortaken. This tonnaze is located in Routt County near Haydon whore Colorado Uto Zlectric Acsociation is building @ stoan genorating plont, the initial capacity te be 225 megawatts with additional units boing planned for future expansion, this Company is also attempting to acquire both strip and Underground reserves in west central Colorado near Grand Junction where tho Public Service Company of Colorado operates a steam gonerat- ing plant. nes 3a : In Illinois thie Company's reserves incroased $,000,000 tons over production for the year ended July 31, 1963. The proposed Presidont's letter and a report (Review of the Year) for the annual report for the yoar ended July 32, 1963, vere _@iscusced end approved as to cubstanco as drafted.” os Tho Chatrnan then atated thet the next ore ‘of business was 1037 ci dene tT - BOARD OF DIRECTORS MEETING ELD tay 8 The Chairman informed the Beard that. tho Conpany had. Seeufres s eption to purchaso 312 aeres of and in HeDaneuch and Scheyler Counties, Illinois (Industry Field) at a price of NO we Sore eetstnng an esisted600;00 tons of strigptte coal. It was brought out in discussion Yhat recent changes in transpor tation costs | and | inproverent: in underground Fining cost Piso, tte Inactry Field in a smexict dubia peottion dn Planning a stripping development on this acreage, Land acqui- sitions in this ares havo becn Linited to purchases or leascs Which can be nade at approxinatoly faraland prices, The land “tn quostion 4s adjacent to the other acreage that makes up the 0 on nein boty of the Industry Pichd avd will fit into: any future 4 requircrents for developncnt. Tho area is boing actively farsod “and pasturod by the Conpany at present. After tho above discussion, upon motion duly mado by Mr. Nugent and duly seconded by Kr. Thorsoa, oe amble and resolution wore unanizously adopted: WHEREAS, the propor officers of this on Decezber 2,°1963 entered into an Cption with Contract to Purchase with John Cc. Stone- king and’ Bessie M, Stoncking, coverings the sas¢ of approximately 372 acres of land wh and Schuyler Count E20 fone ef 2 at a price of $63,210.00, execution of contract, and 700,00 por vost Senn wtien of contract, agreescat contains the usual provision that this Compeny ray terninate it at any, tine by forfciture of th tho payments previously made; SSCRE; BE IT RESOLVED, that the pro- this Coapany, for and on its behalf, bo ard they horcky ate exthorteed sd directed to exercise said o “Stoncking and Dessie H. $ king upon the terns and conditions as sct forth avovo, 1038 EXCERPT FROM USC BOARD MEETING AUGUST 12, 1966 Mr. Morris outlinsd the need for additional stripping equipment at the Fidelity Mine. Present equipzent will maintain evrrent produe- tion rate in the present pit for approximately eighteen months, at uhich time, with deeper overburden, the 1650-B would nocd holp to maintain production of approximately 180,000 tons per month. After mining all of the coal in the present location (Grecn Pit), the estimated reserves at Fidelity that can be stripped is 23,000,000 tons. This is located in threo difforent areas end shows overburden depths, rock and surface material that would require a machine to help the 1650-B to mine it all out economically. Without a helper, monthly production would be reduced from its current rate of 180,000 tons to approximately 125,000 tons, with resultant cost increase. Also, of this 23,000,000 tons, approximately 10,000,000 could not be minod at all with the one machine (1650-B). The noed for additional help is thus es- tablished as necessary. Mr. Morris stated that after thorough investigation, a wheel, Properly designed for the particular areas involvod, seemed to be the dest solution. The following information and estimates have been developed. 1. Bucyrus-Erie has a standard design and has built a wheel -for Peabody and one for Truax. It is high enough for us, . but for our purpose certain modifications of design seen necessary. They put a price on their standard sign of - $2,500,000, and an estimate on transportation and ercction of $400,000, 3e 1039 While we don't know exactly what the change in design xs would nsed would cost, they have indicated that the en- gincering and other faciore involved would cost somo~ where in the noighborhocd of another $100,000. So it appsers we aro thinling about somthing over $3,000,000 for a Bucyrus machine properly designed and in pleco, ready to op-rate. We Sry Wah Wate aasding, Soares OF satsh vs eee An operation. The W-2 is at Buckheart, tho W-3 at Banner, and the W-l at Cuba. The W-3 was originally at Fidelity Mine but the design of this particular machine did not Properly serve the need at that mins and it was not successful there. It was redesigned and moved to Bannor and our cost and profit rocord there will indicate ite satisfactory performance. ; Seiten eer eS ab Sie gre Seles satisfactory job. We have all of the engineering information end blus prints necessary to build the type of whoel wo nocd at Fidelity. This is quite a cost saving. The machine would be built higher, the digging énd longer, and tho stacker end some longer and higher to place the dirt back far enough in decp overburden to avoid slides. We would use tha basé, motors and quito @-lot of other material from the 5561 Marion shovel “which is now a stand-by at Fidclity. ° - 1040 kh. Utilising our enginecring knowledge, blvo prints, and experience, and. bailding the machine on tho site, would effect considerable savings. Tho ropair parts "dn inventory for the 5561 end also ropaix parts in inventory for Wheels 2, 3 and b would be availablo for tho W-5 machins. S. Our estimate of the total cost, using our om peoplo for the enginecring end supervision, ard contracting for the welding, erection and so forth, is $1,600,000. We feel our estirates are within rossop.end have in- ‘cluded in the above ewe $200,009 for cunthaneshes and uncxpectod difficultics. In our five-year budget for capital. expenditures, vo _ Aneludod $250,000 in 1965 and $1,750,000 in 1967. We can build this machina and havo it in oporation : within fourteen months. The best estimate from Bucyrus | is eighteen months and guctehiy longer. After discussion, upon mo¥jon duly made by Mr. Nugent, and seconded by Mr. Thorson, the follo:ring resolution vas unani- ascly adopted: in he RESOLVED, that management bo authorized to procecd with the necessary purchasing and contractual ar~ to build Wheel No. 5 for uso at the Fidelity Mino at a cost of not to exccod $1,600,000. 1041 THE UNITED ELECTRIC COAL COMPANIES NOTICE OF ANNUAL MEETING OF STOCKHOLDERS The Board of Directors has fixed the close of business on 29, 1954, as the record date for the determination of stockholders entitled to notice of and to vote at Meeting. If you do not expect to be present at the Meeting, please sign and mail the enclosed proxy in the return envelope provided for that purpose. No postage is required if mailed in the United States. PROXY STATEMENT =" intends to present or knows will be presented by others. Should any other matter properly come before the Meeting, it is the intention of the proxies named in the enclosed proxy to act upon it according to their best judgment. 2. The sal vic Malka sik se anic clo wend atint Gnd het Adee When the proxy in such form is properly returned the shares represented thereby will be voted atthe Annual Meeting. Any stockholder giving a Proxy in such form has the power to revoke it at any tine prior to its being voted. of September 29, 1954, the mon stock of $5 par value each authorized, of which 677,920 shares were issued and stockholder has one vote for each share held. In the election of Directors, the holders of stock do not have cumulative voting rights . CONF-660930 \ DX 116 nuclear power briefing for the COAL INDUSTRY September 29-30, 1966 Oak Ridge, Tennessee | ee LS Z % 2 f: — ‘> \ # ayy [ eee ray See ‘did Pellets Fuel Tube Loading - Welding and Assembly Fuel t Market Development for Fuel Fabrication Price Trends I will limit my remarks to a brief discussion of each of these steps related to the fabrication of nuclear fuel for commercial power reactors. Mining and Milling First the uranium ore must be located, the ore body developed and then mined, A major portion of the mines and mills is located in New Mexico, others are located in Wyoming and Colorado. The ore is usually hauled to the mill in large trucks, The purpose of the milling operation is to recover the U. from the ore, The ore that is being mined today contains about four to five pounds of U,0g. The mill that I will describe is designed to process about 3,000 tons of ore per day by the alkaline leach-caustic soda precipitation ne ¥ yy step in the milling operation is the crushing and screen- ing of the in a closed circuit to produce a crushed product of less than alf an inch in size, Some of the ores are wet and must be put through * rotating kiln-type dryer between the crusher and the screens, Next the ore is introduced into « ball mill grinding end classifier circuit in which *t is reduced to the size of extremely fine sand, A slurry and solution of ‘nis finely ground ore is pumped to a large tank with slowly moving rakes 75 1044 in the bottom, The ore slurry settles to the botton and is t. _-umped to a leaching circuit where the uranium goes into solution by reaction with sodium carbonate. The uranium solution is separated from the worthless sands md filtration and is then reacted with sodium hydroxide. It precipitates as Og which we call “yellowcake". The “yellowcake" is filtered from the pF and heated in a furnace. Heating at about 1600°F converts the vanadium in the “yellowcake" to a water soluble compound. The hot material drops into a tank of water and the vanadium dissolves. The vanadium is sold as a by-product. Again the “yellowcake", now free of vanadium and assaying 86% uranium oxide, is filtered, dried, and packed in drums that contain 1,000 pounds of finished product ready for shipment. It takes about 4,000 to 5,000 tons of this material (U30g) to fuel an 800 Mwe reactor over its thirty-year lifetime. The cost of the U30g is about 27% of the total cost of a reactor core. Conversion of U30g to UF, The next step in fuel preparation is the conversion of U,0g into UFg, the feed material for the gaseous diffusion enrichment plants, Two conversion processes have been in general use in this country. The process used in the Government plants involves the removal of impurities from the U30g in nitric acid solution by an organic solvent extraction process. The resultant uranium oxide is hydrofluorinated and converted to a green powder called uranium tetrafluoride (UF4) -- additional treatment with fluorine converts it to UF, The second method, used in industry, is more direct. It eliminates the = gps extraction step and carries the impurities through to the UF, phase where they are remove” hy distillation. The Government UFg plants and the Allied Chemical Company's UF, plant at Metropolis, Illinois have b@en shut down for over two years. Allied indicated recently that it is ready to resume operation. I expect that with- in the next few years other companies will participate in the business of converting U30g to UF,. The cost of conversion of U30g to UFg is about 5% of the total cost of a reactor core, Enrichment of UF, After the U30, is converted to UFg, it is shipped to one of the Government's three gaseous diffusion plants for enrichment. -The natural uranium in the UFg feed contains 0.711% uranium-235, the fissionable isotope. It has to be enriched to about 3% for use in the types of reactors that are being built today. Prior to 1964, enriched uranium could be owned only by the Govern- ment but it could be leased at 4-3/4% interest for private licensed uses, Since the passage of the Private Ownership Act of 1964, it can be either purchased or leased, The purchase price is based on full recovery of Government costs -- $8.per pounc for 030g and S30 per kg unit of separative work in the enrichment service. Beginning in 1969, it will be possible to produce or purchase U30g at competitive prices, convert it to UF, and have 76 1045 it enriched in the Government's plant by paying the $30/kg separative unit tolling charge, Two products emerge from the diffusion plant. One with an in- creased content of fissionable material and Qpe with a decreased content, The enriched material is the fuel; the depleted material is called "tails", The owner of the material will have the option of giving up title to the . depleted material or of taking it by paying handling and shipping charges. Someday these tails probably will be valuable as fuel for breeder reactors but today they have little value, ‘ The cost of enrichment is about 32% of the total cost of a reactor core, Production of U0) and Pellets The next step in nuclear fuel fabrication is to convert the en- riched UFg into the proper chemical and physical form required in the final reactor core. Pressurized Water Reactors (PWR) and Boiling Water Reactérs (BWR) require about the same amount of basic fuel material (U30g) per mega- watt of capacity over a thirty-year plant life. Both are fueled with pellets of UO2 and now the trend is for both to use zirconium fuel tubes. There the similarity in fuel ends. A typical high power PWR uses an initial loading of about 220,000 pounds of UO2 pellets that are about .30 inch in diameter, A typical high power BWR uses an initial loading of about 360,000 pounds of UOp pellets that are about .50 inch in diameter. The initial loading for the BWR is larger than the PWR because the enrichment is lower, However, the PWR requires the production of about twice as many pellets per pound of UO because of the difference in pellet diameter. The chemical and physical operations required in the production of UOp pellets are complicated only by restrictions on equipment and procedures The conversion of enriched UFg to U02 is generally accomplished by either the “ammonium diuranate" (ADU) process or by the “organic reduction" Process. The differences in these two processes occur primarily in their first steps in converting UF, into a [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386414_0099%3A06. Public record. Not legal advice.