An Evaluation of the Commerce Department Study on U.S. Steam Coal Imports

NSIAD-86-83BR: Published: Mar 28, 1986. Publicly Released: Jun 2, 1986.

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In response to a congressional request, GAO analyzed the major assumptions of the Department of Commerce's study on the potential for U.S. steam coal imports, to determine: (1) how increased coal imports would affect the U.S. coal industry; (2) the solvency of the Black Lung Disability Trust Fund; and (3) the extent of U.S. energy independence.

GAO found that: (1) Commerce used appropriate methodology and data in carrying out its study; (2) the major assumptions in the study appeared reasonable; and (3) its findings were fairly insensitive to changes in its underlying assumptions. The study included two scenarios showing that: (1) under the first scenario, U.S. coal imports were estimated at 6.4 million tons, or about 1 percent of total utility consumption of coal; (2) under the second scenario, coal imports were estimated at 17.7 million tons, or about 3 percent of total utility consumption of coal; and (3) the mining jobs that would be displaced by coal imports were estimated at 1,120 under the first scenario and 2,780 under the second scenario. The study also indicated that: (1) if U.S. coal imports were to increase, revenues for the Fund would fall, but the effect on the Fund would be relatively small; (2) the effect of increased coal imports on U.S. energy independence appears minimal; and (3) even if U.S. coal imports were to increase, the United States would still have the world's largest supply of coal reserves that could be mined should foreign supply conditions change.

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