Abstract
This article discusses whether U.S. society should invest in large-scale coal port development and examines specifically financing the deep-draft dredging of coal ports on the East and/or Gulf Coasts (Baltimore, Hampton Roads, Mobile, and New Orleans) so that fully loaded, large coal-carrying colliers can export coal to Western Europe. By assuming a society-wide perspective, no costs and benefits are attributed to various parties. Although the multifaceted nature of the coal port issue is acknowledged, the core of this study is a large number of different simulations. Each simulation “optimizes” the United States-Western Europe coal trade for a given demand, ocean transportation cost structure, and cost of capital. This relatively simple model focuses on the key tradeoff: the cost of dredging versus lower ocean transportation costs. The study supports those recommending caution in coal port development. The most striking conclusion is the robustness of two solutions - no dredging or dredge only Hampton Roads - depending on the assumptions. Our conclusions also generally do not support simultaneously dredging all deep-draft options, the concurrent dredging of more than one port, or dredging either of the Gulf ports before the two East Coast ports.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Akinc, U. and Khumawala, B. (1977). “An efficient branch and bound algorithm for the capacitated warehouse location problem,” Management Science 23: 585–594.
Evered, J. E. (1983). “Statement before the U.S. House Committee on Merchant Marine and Fisheries,” Subcommittee on Merchant Marine, April 21.
“For coal the recovery is heating up slowly,” Business Week, August 1, 1983, pp. 89–90.
Gellici, J. (1983). “Marketing western coal - WCEC conference review,” International Bulk Journal, Nov., pp. 67–69.
Geoffrion, A. and McBride, R. (1978). “Lagrangean relaxation applied to capacitated facility location problems,” AIIE Transactions 10: 40–47.
Greer, B. I. (1983). The Effect of Port User Fees on U.S. Coal Exports, #E-83–04. Cambridge, MA: Energy and Environmental Policy Center, JFK School of Government, Harvard University.
“A gritty future for U.S. coal exports,” Business Week, February 27, 1984, pp. 57–60.
H. P. Drewry Ltd. (1981). Ocean Shipping of Coal: Sea Transportation Methods, Constraints and Costs. London: HPD Shipping Publications.
ICF, Inc. (1981). Potential Role of Appalachian Producers in the Steam Coal Export Market: Task #1- International Steam Coal Trade Analysis, prepared for the Appalachian Regional Commission. Washington, D.C.: Appalachian Regional Commission, November.
International Coal Review, National Coal Association, February 12, 1982.
Long, R. A. (1982). Constraints on International Trade in Coal, Draft Report, #G3/92 London: IEA Coal Research, May.
Madison, C. (1981). “Money for deeper U.S. coal ports - needed or just more pork barrel?” National Journal, Feb. 7, pp. 225–228.
Merrow, E. W., Chapel, S. W., and Worthing, C. (1979). A Review of Cost Estimation in New Technologies: Implications for Energy Process Plants, #R-2483-DOW. Santa Monica, CA: The Rand Corporation, July.
New York City and New York Port Authority, discussions with various officials in the spring and summer of 1982.
R. S. Platou, various slides and discussions at MIT in 1982.
Shell Coal International, Telexes of May 6 and June 5, 1982 and discussions in London in June, 1982.
“Unveil coal industry plan which may end impasse over port user fees,” WWS/World Ports, April/May, 1982, p. 49.
U.S. Congress, House (1982). Port Development, 97th Congress, 2nd Session, Report 97–454, Part I. Washington, D.C.: House Committee on Merchant Marine and Fisheries, March 9.
U.S. Congress, Senate (1981). National Harbors Improvement and Maintenance Act of 1981, Report of the Committee on Environment and Public Works, 97th Congress, 1st Session, Calendar No. 418, Report No. 97–301. Washington, D.C.: Government Printing Office.
U.S. Corps of Engineers, discussions with officials at district offices for Baltimore, Mobile, New Orleans, and Norfolk-Hampton Roads in the Spring and Summer of 1982.
U.S. Department of Energy, Energy Information Administration (1984). Coal Distribution: January–December, 1983, #DOE/EIA-0125(83/4Q). Washington, D.C.: Government Printing Office, April.
U.S. Department of Energy Information Administration, Office of Coal Nuclear, Electric and Other Fuels(1983). Historical Overview of U.S. Coal Exports, 1973–1982, #DOE/EIA-0413. Washington, D.C.: Energy Information Administration, November.
U.S. Department of Energy, Energy Information Administration, Office of Coal Nuclear, Electric and Alternate Fuels (1983). Port Deepening and User Fees: Impact on U.S. Coal Exports, #DOE/EIA-0400. Washington, D.C.: Energy Information Administration, May.
U.S. Department of Energy, Energy Information Administration, Office of Coal, Nuclear, Electric and Alternate Fuels, personal discussion with Ms. Mary Hutlzer, head of Data Analysis and Forecasting Branch on January 13, 1983.
U.S. Department of Energy, Energy Information Administration, Office of Coal, Nuclear, Electric, and Other Fuels (1982). U.S. Coal Exports: Projections and Documentation, #DOE/EIA-0317. Washington, D.C.: Energy Information Administration, March.
U.S. Department of Energy, Interagency Coal Export Task Force (1981). (Draft) Interim Report of the Interagency Coal Export Task Force, January. (Also known as the “ICE Report”.)
U.S. General Accounting Office (1983). Prospects for Long-Term Steam Coal Exports to European and Pacific Rim Markets, #GAO/NSIAD-83–08. Washington, D.C., General Accounting Office, August 4.
U.S. Maritime Administration (1982). “Loading terminals: existing and potential,” WWS/World Ports, April/May, pp. 61–65.
U.S. Office of Technology Assessment (1981). Coal Exports and Port Development: A Technical Memorandum. Washington, D.C.: Government Printing Office, April.
World Coal Study (1980a). Coal-Bridge to the Future. Cambridge, MA: Ballinger.
World Coal Study (1980b). Future Coal Prospects: Country and Regional Assessments. Cambridge, MA: Ballinger.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Graves, S.C., Horwitch, M. & Bowman, E.H. Deep-draft dredging of U.S. coal ports: A cost-benefit analysis. Policy Sci 17, 153–178 (1984). https://doi.org/10.1007/BF00146926
Issue Date:
DOI: https://doi.org/10.1007/BF00146926