New Mexico Geological Society Annual Spring Meeting — Abstracts

Production statistics compiled during the last 80 years illustrate the fact 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 factos and political events, but these events and factors are quite different prior to and following 1960. Prior to 1960 the factors
are: the war-time 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 railroad--steam locomotive market--has disappeared, the steel industry has been in recession, and electric utilities have grown to completely dominate the coal market.

Within that market framework, coal must compete with other fuels used in steam electric generation. Affecting total coal usage and competiveness are: (1) the declining U.S. industrial base: (2) current low petroleum prices: (3) moderation in rate of 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 of significance to the coal industry.

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