--> ABSTRACT: Economics of Coal-Production Cycle, with Special Reference to New Mexico, by Orin J. Anderson and Donald L. Wolberg; #91040 (2010)

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Economics of Coal-Production Cycle, with Special Reference to New Mexico

Orin J. Anderson, Donald L. Wolberg

Production statistics compiled during the last 80 years illustrate that annual coal output varies widely within trends that are periodically reversed, to lend a cyclical nature to the coal industry in New Mexico. Production trends and the trend reversals have been related to national economic factors and political events, but these events and factors are very different prior to, and following 1960. Prior to 1960, the factors were the wartime economy, the Great Depression, and the sudden appearance of low-cost, convenient, natural gas. Baseline coal demand was provided by the steel and smelting industries, the electric utility industry, and the railroads. Since 1960, wartime economies have not been a factor, the steam locomotive has disappeared, the steel industry has been in recession, and electric utilities have grown to dominate the coal market completely.

Within that market framework, coal must compete with other fuels used in steam generation of electricity. Affecting total coal usage and competitiveness are (1) the declining United States industrial base, (2) current low petroleum prices, (3) moderate growth of electrical consumption in the residential sector, and (4) recent completion of nuclear generating stations. In a more extended time frame, Federal coal leasing policy is also significant to the coal industry.

The declining United States industrial base has not directly affected the New Mexico coal industry, although other mining ventures have been affected. Of greater importance to the state's coal industry have been recent events in the uranium-nuclear fuel industry cycle: (1) the disappearance of the uranium mining and milling activities, which were large consumers of the state's coal-generated electric power, and (2) the completion of the Palo Verde nuclear generating station near Phoenix, Arizona. Moreover, these two events outweigh the threats to coal usage posed by low petroleum and natural gas prices because electric utilities in New Mexico and the mountain states have low fuel-switching capabilities.

AAPG Search and Discovery Article #91040©1987 AAPG Rocky Mountain Section Meeting, Boise, Idaho, September 13-16, 1987.