It will also be noted from chart III that there is apparently a declining long-term trend in coal consumption in the United States, beginning with 1943, while the trend in industrial production is up. To what may we attribute the two short-term countermovements in coal consumption in the face of rising industrial activity? What lies behind the declining trend in consumption? Does the latter itself exercise any influence on the former? The remainder of this study will be devoted to an inquiry into (1) the apparent declining trend that has now continued for 10 years, (2) the departure from the normally expected cyclical course of coal production in 1948 and 1952, and (3) an evaluation of the importance of residual imports in these movements. The inquiry will be limited to bituminous coal, since anthracite is sold principally for home heating and hence competes with distillate fuel oil, not residual (which is only rarely used for home heating).

The declining trend in United States coal consumption

Since the beginning of this century there has been a long-term declining trend in the percentage of total United States energy requirements that is produced from coal (see chart IV). This decline in the use of coal relative to oil and natural gas does not, however, necessarily imply a decline in the absolute tonnage of coal consumed, such as that shown in chart III beginning with 1943. It is this decline in tonnage, not relative share of the market, in which we are interested here. One way to investigate the causes of this decreased consumption of coal might be to compare consumption by various groups in 1943 with that in 1952. However, data from 1943 might be distorted by peculiar war demands; 1952 data, as will be shown below, are distorted by the steel strike of the past summer. Consequently, in order to determine why there is a declining trend, the peak peacetime year, 1947, will be compared with 1951 (the latest year not affected by a major strike in the steel or coal industries), with some reference to 1948-50 and 1952.

CHART IZ

PERCENTAGE OF TOTAL UNITED STATES ENERGY CONSUMPTION
ATTRIBUTABLE TO COAL AND TO PETROLEUM AND NATURAL GAS
(1910-1951)

1945

1950

Source: U.S. Bureau of Mines

Table I shows tonnages of coal consumed by various sectors of the economy for the years 1947-1952. It will be observed that the principal consuming industries in 1947 were railroads, electric power utilities, and coke manufacturers. Retail deliveries, which are made up principally of sales to households, apartments, etc., for heating purposes, also accounted for an important part of total consumption. In addition, exports and miscellaneous industrial uses were each important enough to represent 10 percent or more of total output. Consumption by the principal industrial consumers and households together accounted for 63.22 percent of total output; exports added another 10.91 percent, giving a total of 74.13 percent for foreign sales and these principal consuming sectors of the United States economy.

Now let us compare the 1947 data with similar information for 1951, also shown in table I. Since 1951 was a period of higher industrial production than was 1947, it would be expected (other things being equal) that industrial consumption of coal would have been higher. Actually, however, total industrial consumption was down 62.2 million tons per year. Why? Coke manufacturing consumed 8.8 million tons more in 1951, and electric power utilities consumed 15.8 million tons more. Railroads, on the other hand, consumed 55.0 million tons less in 1951 than in 1947. Furthermore, examination of table I shows that railroad consumption has decreased steadily every year since 1947. By 1952 it was 71.3 million tons less than in 1947. This is the principal explanation of the declining trend in coal consumption in the face of an increase in economy-wide industrial activity. The reason for this will be examined below.

Table I also shows that consumption by miscellaneous industrial consumers was also off in 1951 relative to 1947-by 30.3 million tons per year. However, much of this decrease seems to have occurred from 1947-49; since 1949, this figure has fallen only 3.1 million tons per year. Consequently, the explanation of this decline must be found in the period, 1947-49, not over all 6 years.

Retail deliveries were also less in 1951 than in 1947, by some 25.6 million tons. Retail deliveries, like railroad consumption, decreased annually from 1947 to 1952, with one minor exception. Retail deliveries, however, would not necessarily be expected to move with industrial activity, since they depend principally on two things: (1) The number of homes and other heating consumers using coal-burning equipment and (2) how much heat is required in a given year, i. e., how cold it gets in the northern part of the country. If the number of heating units which burn coal is declining steadily, then the steady decline in retail deliveries is part of a declining trend in coal consumption. Otherwise, it is simply due to a series of mild winters.

Exports were also down by some 12 million tons per year from 1947 to 1951. Unlike railroad consumption, however, this decrease was not persistent from year to year. Exports are apparently erratic in nature; they decreased for 3 years, then rose, and then decreased again.

In summary, railroad consumption has declined continuously.

Consumption

by miscellaneous industrial users fell off sharply from 1947 to 1949, but has since steadied. Decreased consumption by other sectors of the economy is attributable to a declining trend to the extent that the number of home, industrial, and apartment heating units which burn coal is decreasing continuously. Consumption by electric-power utilities and coke manufacturers is up.

(1) Railroad consumption of coal.-For some years there has been a shift from coal-burning steam locomotives to diesel-electric locomotives (diesel locomotives do not burn residual oil). Since this shift is permanent and progressive, railroad consumption will continue to decline until the substitution of diesels for steam engines has been completed. Once it is completed, coal consumption by the railroads should level off; however, this will be at a very low annual consumption rate compared with that in 1947, since locomotive fuel is by far the principal railroad use for coal. The decline in coal consumption by railroads is compared with the number of diesel locomotives in use in chart V.