Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, January 8, 1995                   TAG: 9501060062
SECTION: BUSINESS                    PAGE: F-3 B   EDITION: METRO  
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE:                                 LENGTH: Medium

1995 LOOKS TO BURN LOTS OF COAL

That kind of good news will be particularly welcome in the region's coal fields where one major company, Westmoreland Coal Co., declared bankruptcy this year and another, Pittston, closed one of its largest mines and an adjoining preparation plant. Pittston has laid off about 600 workers in the past 18 months.

Constance Holmes, vice president for policy analysis with the National Coal Association, said the overall demand for coal should be better this year, but she cautioned, ``We're not talking about a big, enormous increase.''

Coal-fired power plants produce most of the country's electricity, and an increased domestic use of electricity, caused by both a growing economy and more widespread industrial use of electricity, should contribute to the growth in demand for coal, Holmes said.

For the 52 weeks ended Dec. 24, U.S. coal mines produced 1.026 billion tons of coal, an increase of 9.1 percent from a year earlier, according to the U.S. Department of Energy. Virginia mines produced 40.98 million tons for that period, an increase of 4.3 percent from the previous year. The productivity of Virginia coal miners has steadily increased in recent years from 2.2 tons per man-hour in 1987 to 2.75 tons per man-hour in 1993.

Supply and demand for coal is becoming more balanced, said Bill Bales, Norfolk Southern Corp.'s vice president for coal marketing. Demand for the quality coals from the Central Appalachian mines that NS serves is increasing as the economy remains strong at home and improves in Europe, Bales said. And oversupply of coal is less of a problem as fewer companies are producing coal, he said.

Norfolk Southern serves 394, or nearly 97 percent, of Virginia's 407 coal mines, with CSX serving the rest.

Bales said the weather is always an unknown in the forecast for this year's coal business. Last year's harsh winter, for instance, led to a big drawdown in utility company coal stocks that haven't been completely rebuilt. This past summer, however, was hot early on but less demanding of electricity for air conditioning than it could have been, he said.

Other factors, such as new power plants and environmental standards requiring reductions in the amount of sulfur dioxide emitted from power plants that took effect Jan. 1, will increase opportunities for coal hauled by NS, Bales said.

``We're coming into 1995 with greater optimism than we saw in 1994,'' he said.