Page 21


nual meeting this year, for instance, Exxon executives acknowledged that for the first time “we will spend more money [in 1978] on research on nonpetroleum energy forms than we do for research in oil and gas technology.” Though it has gone unreported in the Texas press, practically every major energy firm that operates in the state has either created or bought at least one coal subsidiary. Today, of the 20 largest holders of U.S. coal reserves, only two are coal companies, while 11 are big oil refiners. The pattern is the same in Texas’ growing lignite industrysince the early ’70s, it has been giant, non-coal companies that have been buying up lignite leases at a breakneck pace. Leading the pack are the state’s utilities, and their favorite mode of operation is to strip-mine the coal and establish large lignite-fueled power plants right on the mining sitethe Grimes County mine and plant planned by the Texas Municipal Power Agency \(see Much bigger and much further along in the game, though, is Texas Utilities, a holding company that is The Electric Company for one-fourth of all Texans, who paid about $1.4 billion to the firm last year. This giant system, whose major stockholders are New York and Chicago banks, owns Dallas Power & Light, Texas Power & Light, and Texas Electric Service Company. TU operated lignite-fueled plants in the early years of this century and, though it switched to cheaper, cleaner natural gas, the company never gave up its lignite leases. It is by far the biggest lignite user in the state, with working mines and plants at three sites and plans for four more. When the fourth and final unit of its Martin Lake operation is finished in 1983, that plant will generate 3,000 megawatts of electricityeven more than the South Texas Nuclear Project at Matagorda Bay, which will be the biggest nuclear power plant in the United States. Several other large utilities also have plans for lignite-fueled plants; there will be at least 14 multi-unit facilities on line by 1985 take it seriously. Industries along the Texas Gulf Coast already are making a transition to coal as an energy source, and if this trend continues there would be incentives to locate new or expanded facilities at the source of the fuel supply. Much will depend on whether companies are forced by Railroad Commission orders and national energy policy to switch from oil and gas to coal as boiler fuel. At present, only two companies are strip-mining Texas lignite for industrial purposes. Imperial Chemical Industries miles southwest of Marshall. It was converted from an underground mine to a strip mine in 1944, and the lignite is used to produce activated carbon, a chemical filtering agent. The Aluminum Company of America opened the Sandow mine near Rockdale in 1954. The lignite is burned to provide power for an Alcoa aluminum smelter. But the rush is on, and these two pioneers will soon have plenty of company. There is no requirement for a company to inform the state that it is buying lignite leases, so it is impossible to compile a complete list of industrial concerns that are currently active, but among those known to be exploring and leasing Texas lignite deposits are Dahlstrom Industries, Dow Chemical, Energy Limited, Exxon, Getty Oil, Montana Power Company, North American Coal Company, Phillips Petroleum, Shell Oil, Sunoco, Tenneco, and Union Carbide. How big a boom? Mining industry boosters are making big claims for the impact lignite development will have on Texaseconomic growth, lots of new jobs, and abundant, low-cost energy. The Governor’s Energy Advisory Council estimates that Texas’ coal industry will make a capital investment of $11.4 billion between 1975 and 1985, and at least half of that will be for lignite development \(the rest will go for power plants to be fueled by Western That sounds like a lot, but a big chunk of the money will be spent out-of-state on the heavy equipment used in the mining. And the benefits must also be weighed against the loss of income from land taken out of agricultural production. Agriculture is now the state’s leading industry, and according to a conservative 1975 estimate, Texas could lose $122 million a year in agricultural income once proposed lignite mines are operating at full capacity. The investment in lignite is expected to yield a great deal of economic growth in the state’s rural areas, where most of the surface mining will take place. Some small towns have already seen what happensboth the good side and the bad. In Mount Pleasant, for example, some landowners who had never made The coal rush How did this switch to coal happen so quickly and quietly? Because the longrange planners at big utilities, oil corporations, and chemical firms knew the pinch of oil and natural gas prices was coming long before the public and politicians did, and had been busy preparing for it at least since the late ’60s. Their basic response has been to diversify as fast as they can into other forms of energy and into entirely unrelated businesses \(Obs ., 8 AUGUST 11, 1978 The Texas Ruhr Industrial demand for lignite is harder to predict but it certainly is going to be substantial, and some of the nation’s largest industrial firms are following the utilities into the lignite fields. Indeed, Fred Benson, vice president of Texas A&M University, recently made the unsettling prediction that so much American industry would be drawn to Texas’ lignite belt that it will resemble Germany’s Ruhr Valley. \(If you like the Houston Ship Channel, you’d love the Ruhr Valleysmokestacks and factories co . Though some scoff at Benson’s predic tion, many knowledgeable observers