Transactions A.S.M.E.

650 TRANSACTIONS OF THE A.S.M.E. NOVEMBER, 1940
A wide range of fuel utilization may be had, particularly in
burning fuels in suspension. A combination of pulverized coal,
oil, and gas can be and has been burned successfully in either the
slag-tap or dry-ash types of pulverized-coal furnace.
Changes in coal prices and marketing practices may alter the
natural movement of fuels as it is now known. Therefore, there
appears to be a greater necessity for full investigation and
accurate knowledge of the available fuel supply by the purchaser,
the engineer, and the manufacturer. Design characteristics
of steam-generating equipment and over-all economics
will probably place limitations on fuel purchases for some time
to come. There will probably always be certain characteristic
fuels which will give better over-all performance in certain types
of steam-generating equipment.
A. W. T h o r s o n . 10 In view of the proposed minimum prices
for bituminous coal, everyone concerned with the purchase or
utilization of this type of fuel is vitally interested in and should
make an exhaustive study of this paper. Very little engineering
information regarding the method of developing prices has been
available to date. The paper gives detailed information as to
the method of studying markets and production costs together
with the correlation of the two to set up the price schedules. If
and when these prices become effective, the value of this paper
will become more and more apparent.
Has the author prepared a chart similar to that given in Fig. 4,
but showing delivered prices at the selected destinations rather
than f.o.b. mine prices It would appear that such an exhibit
would be of added value to coal consumers.
A u t h o r ’s C l o s u r e
Mr. Dean and Mr. Thorson in their discussions have touched
upon two factors, transportation and conversion, which together
with the initial fuel cost at its source of supply have a fundamental
and important bearing upon available fuels, sources of
supply, and the markets which they can economically serve.
As I have indicated, the cost of transporting a ton of bituminous
coal by rail averaged, for the entire United States, an amount
equal to or greater than the cost of production. Coal, depending
upon the mine location and the market destination, may and often
does move in whole or in part by other competing forms of transportation,
that is, via lake, tidewater, river, and truck. Competition
between carriers and, what is perhaps even more impor­
10 The Chesapeake and Ohio Railway Com pany, D etroit, Mich.
Mem. A.S.M .E.
tant, the actual transportation rate itself may have an important
bearing upon the available sources of fuel supply. To a large
extent the cost of transportation may and does determine the
producer’s ability to retain or extend his fuel market, and it is not
unreasonable to expect that a reduction in transportation cost
might well result in a substantial increase in gross revenue to the
coal carrier.
The delivered cost per million Btu, other factors being equal,
becomes the consumer’s measure of purchased-fuel value, and of
this transportation forms a substantial part, in fact in many
consuming markets it amounts to several times the actual fuel
cost f.o.b. cars at the mine.
Indications are that in many instances the minimum prices
now proposed will be revised somewhat in the final price schedules,
and that consideration is being given to the modification
of transportation rates. For these reasons it would seem more
appropriate to defer for the present a graphic illustration of typical
delivered fuel prices, those in which the consumer is primarily
interested.
In the past, steam-generating equipment generally has been
geared to the available fuel supply, its characteristics, prices, and
marketing practices. Considerable progress has been made, as
Mr. Dean points out, in widening the range of fuel utilization and
particularly where fuels are burned in suspension, both singly and
in combination. While it is true that design characteristics of
steam-generating equipment and over-all economics may place
limitations on fuel purchases in many cases and for some time to
come, progress in the design of steam-generating equipment, the
technique of fuel burning, equipment maintenance, and ash or
waste disposal has been sufficiently great in the last few years to
indicate that steam-generating equipment having a much wider
range of fuel utilization can now be manufactured and installed
with very little additional effort and expense.
Thus, through improvements in transportation and utilization
of fuel, will the consumer be enabled to take greater advantage
of potential and changing fuel markets and be governed in his
purchases to a greater degree by the actual fuel value as measured
by the delivered cost per million Btu.
The producer, the carrier, the equipment manufacturer, and
the consumer, each have a real interest in the contribution of the
others in the fair evaluation, economical purchase, and advantageous
utilization of available fuels.
The expressed interest of Messrs. Dean and Thorson, as well
as that of many others, is encouraging and very much appreciated.