Prospects for British Coal

204 Pages·1991·15.438 MB·English

by  Peter Pearson (eds.)

PROSPECTS FOR BRITISH COAL
Also from Surrey Energy Economics Centre
and published by Macmillan
Edited by David Hawdon
OIL PRICES IN THE 1990s
Edited by Peter Pearson
ENERGY POLICIES IN AN UNCERTAIN WORLD
Edited by Paul Stevens
ENERGY DEMAND: Prospects and Trends
INTERNATIONAL GAS: Prospects and Trends
OIL AND GAS DICTIONARY
PROSPECTS FOR BRITISH COAL
Edited by
Peter Pearson
Director, Surrey Energy Economics Centre
University of Surrey
M
Selection, editorial matter and Chapter I © Peter Pearson 1991
Chapters 2,3,4,5,6,7,8,9,10 © Macmillan Academic and Professional 1991
Softcover reprint ofthe hardcover 1st edition 1991
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claims for damages.
First published 1991
Published by
MACMILLAN ACADEMIC AND PROFESSIONAL L TO
Houndmills. Basingstoke. Hampshire R021 2XS
and London
Companies and representatives
throughout the world
ISBN 978-1-349-11510-5 ISBN 978-1-349-11508-2 (eBook)
DOI 10.1007/ 978-1-349-11508-2
A catalogue record for this book is available
from the British Library.
CONTENTS
Contents V
List of Tables IX
List of Figures X
Contributors xi
List of Abbreviations xiii
INTRODUCTION: PROSPECTS FOR 1
BRITISH COAL - Peter Pearson
1.1 Introduction 1
1.2 Historical Perspective 2
1.3 Recent Events 3
1.4 Reassessments of the Industry and 4
its Prospects
1.5 The International Coal Market, 5
Prices and Subsidies
1.6 New Uncertainties on the 8
UK Coal Scene
1.7 Be's Response 11
1.8 Privatisation 12
1.8.1 The Desirability of 13
Privatisation
1.8.2 Privatisation and 15
Liberalisation
1.8.3 The Order of Privatisation: 18
ESI before Coal
1.8.4 The Delay in Privatisation 19
1.9 Conclusion 22
2 COAL LlBERALlSA TION: RETROSPECT 23
AND PROSPECT - Colin Robinson
2.1 Coal in the Nineteenth Century 23
2.2 The Recent State of the Industry 25
2.3 The Aftermath of the 1984-5 Strike 26
v
vi
2.4 Privatisation in Perspective 27
2.5 The Case for Liberalising the 29
Coal Market
2.6 Ways and Means of Liberalising 31
the Coal Market
2.6.1 Imports 32
2.6.2 Freeing Entry 33
2.6.3 Privatisation 34
2.7 The Options Now 35
3 THE FUTURE OF COAL MINING IN 41
BRITAIN - Gerald Manners
3.1 Introduction 41
3.2 Coal's Market Environment 42
3.3 Responses to an Uncertain 47
Market Environment
3.4 Investment Guidelines and Criteria 51
3.5 Conclusion 55
4 WORLD COAL TRADE - EXPERIENCE AND 60
PROSPECTS - Kenneth Wigley
4.1 Experience 60
4.2 The Current Situation 67
4.3 Prospects for lEA Coal Demand, 69
Trade and Prices
4.3.1 Coal Demand 69
4.3.2 Coal Price 73
4.3.3 Coal Trade 74
4.4 Concluding Remarks 77
5 A PERSPECTIVE OF THE OWNERSHIP, 80
CONTROL AND MANAGEMENT OF THE
BRITISH COAL-MINING INDUSTRY
- Kim Howells
6 THE PRIVATE SECTOR IN BRITISH 86
COAL-MINING - Crispian Hotson
vii
7 COAL PRIVATISATION - THE POTENTIAL 94
AND ESSENTIAL CONTRIBUTION
OF MAJOR (INTERNATIONAL) MINING
COMPANIES - Allen Sykes
7.1 Introduction 94
7.2 The Inevitability of a Highly 97
Competitive Coal Market
7.3 Some Factors to Consider 97
7.4 The Overseas Contribution - 98
the Evidence
7.5 Why Privatise the Coal Industry? 102
7.6 Welfare and Morale of Management 103
and Workers
7.7 Need for Continuous, Major, 104
Capital Investment
7.8 Improved Employee Benefits and 105
Job Security
7.9 Form of Privatisation 106
7.10 UK Coal - Private Small Mines 107
7.11 UK Coal - BC Open-Pit 107
7.12 UK Coal - BC Underground Mines 108
7.13 UK Coal - Environment Factors 121
7.14 UK Coal - The Challenge 125
7.15 UK Coal - Available Information 126
7.16 BC - Ability to Meet the 127
Challenge Unaided?
7.17 The Importance of Structure 129
7.18 Major International Mining Companies 129
- the Essential Intermediaries
7.19 Conclusions 130
Appendix 132
8 BRITISH COAL: TRANSITION AND 136
UNCERTAINTY - John Chesshire
8.1 Introduction and Background 136
8.1.1 Recent Coal Policy in the UK 136
8.2 Summary of Key Points from the Report 138
8.2.1 Terms of Reference and 138
Conduct of Inquiry
8.2.2 UK Coal Demand Prospects 139
8.2.3 Coal Production and Productivity 142
viii
8.2.4 Coal Costs 144
8.2.5 Structure and Ownership 150
8.3 Major Uncertainties Facing British Coal 152
8.3.1 Economic and Market Uncertainties 152
8.3.2 Environmental Uncertainties 153
9 PROSPECTS FOR BRITISH COAL: COMMENTS 158
9.1 BRITISH COAL AND PUBLIC 158
OWNERSHIP - Kevin Barron
9.2 PEOPLE, PROFITS AND BRITISH COAL - 161
Stephen Fothergill
9.3 BRITISH COAL AND COMPETITIVE 165
PRESSURES - Michael Parker
9.4 FUTURE ENERGY PRICES, VERTICAL 167
INTEGRAT ION AND CONSUMER
INTERESTS - Paul Stevens
10 FUTURE OIL AND COAL PRICES: A SURVEY 171
APPROACH - David Hawdon
10.1 Introduction 171
10.2 Track Record of Previous Surveys 172
10.3 Oil Prices and Determining Factors 174
10.4 Coal Prices and Determining Factors 179
10.5 Independence of Forecasts 184
10.6 Summary and Conclusion 188
ix
LIST OF TABLES
Table 4.1: Production of Exports of Hard Coal 61
Table 4.2: International Trade in Hard Coal 62
Table 4.3: Primary Energy Requirement 63
Table 4.4: World Trade Flows of Hard Coal 65
Table 4.5: Financial Support for Coal Production: 68
Producer Subsidy-Equivalent (PSE)
Table 4.6: Actual and Projected Requirements of 70
Hard Coal for lEA Regions
Table 4.7: Actual and Projected Imports of 75
Hard Coal to lEA Regions
Table 4.8: Actual World Hard Coal Exports 76
and Projected Capacity
Table 8.1: Estimates of Total UK Coal Demand 141
Table 8.2: Coal Production in the UK 143
Table 8.3: Summary of British Coal's 146
Financial Results
Table 8.4: Structure of British Coal Colliery 148
Costs
Table 10.1: Expected and Actual Crude Oil Prices 173
Table 10.2a: Crude Oil Price Expected 175
in 12 Months Time
Table IO.2b: Crude Oil Prices in 5 Years Time 176
Table 10.3: Major Factors Affecting 5-year-ahead 178
Price of Oil
Table 10.4a: Steam Coal Price Expected in 180
12 Months Time
Table lOAb: Steam Coal Price Expected in 181
5 Years Time
Table lOAc: Coking Coal Price Expected in 182
12 Months Time
Table lOAd: Coking Coal Price Expected in 183
5 Years Time
Table 10.5: Major Factors Affecting Coal Price 185
Over Next 5 Years
Table 10.6a: Analysis of Joint Price Forecasts 186
- Oil v Steam Coal
Table 10.6b: Analysis of Joint Price Forecasts 186
- Oil v Coking Coal
Table 10.6c: Analysis of Joint Price Forecasts 186
- Steam v Coking Coal