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UNITED TRANSPORTATION UNION AFL-CIO State Legislative Board, Suite 200 1010 Lavaca, Austin, TX 78701 Coal will be coming to Texas in huge amounts within the decade. This fact, more than any other, projects a stable future for existing railroads which Texas. It also means steady work for railroad employees. A coal slurry pipeline, which would provide few jobs once it were built, would divert coal hauling business from marginal railroads which operate in this state and place them in financial jeopardy. That concerns us. But we’re concerned equally as much about the extraordinary power that two bills pending before the Texas Legislature grant to the pipeline promoters. If the bills become law as drafted, the private pipeline promoters would be granted the power of eminent domain without regulation of any kind. Yes, railroads and privately owned utility companies do have the power of eminent domain. The difference is they are regulated. The pipeline promoters would not be. Therein lies the danger to the public. Without regulation of the coal pipelines, the Legislature is sending an open invitation to the pipeline promoters to create another situation such as the one experienced by South Texans two years ago when Coastal State Gas, and its subsidiary Lo-Vaca, held three million Texans at its mercy. Without regulation Houston Natural Gas, the principal promoter of the coal slurry pipeline legislation, could create a subsidiary like Lo-Vaca to operate the pipeline and then jack up prices to suit its fancy. The public would have no recourse without regulation. The cost of coal transportation will be passed through to the consumer no matter who hauls it. The consumer has a say-so if railroads are allowed to transport the coal because all railroad rates are regulated. That would not be the case if pipelines were delivering the coal. It’s charged that the railroads are afraid of competition. That’s simply not true, as long as the competition is fair. The fact is, though, that the pipeline promoters will need to raise $300 million to build the pipeline, and there are not many people who would loan the company the money if they have no assurance that the finished product will bring in revenue. They will have that assurance, of course. Houston Natural Gas would have the power to say which mode hauls the coal and Houston Natural Gas certainly is not going to leave their bondholders holding a $300 million bag. If the pipeline is built, you can bet your last dollar it will be used no matter how much it costs the consumer. A railroad network exists today which can bring all the coal Texas will need for the next 30 years. Let’s give the railroads and their employees a chance to show that they can handle the load at a price you can afford. Write your legislators opposing the Coal Slurry bills. We would appreciate it very much. Existing Railroad Network Coal is Coming Whether There’s a -‘Pipeline. Or Not.