Transactions A.S.M.E.

STONE—PURCHASE AND USE OF FUEL 643
perience and results obtained on the larger units have been and
can be applied, with perhaps less refinement, to the smaller and
simpler combustion units for industrial use, or for the modification
and more efficient utilization of existing equipment.
Large utility and industrial consumers of fuel employ technicians
to check fuels and power-plant operation carefully and
frequently. To the small consumer, who may question the
economic justification of such a check, there are now available
fuel technicians and an extensive array of operating data. The
larger producers of fuel maintain, for the convenience of their
customers, technical staffs thoroughly acquainted with their fuels
and frequently experienced in actual plant operation. The
National Association of Purchasing Agents (9) has also reminded
its membership of the more important factors influencing
the use of fuels.
Heretofore, initial cost has frequently been permitted to influence
the installation and use of steam-generating equipment,
often to the extent of restricting it to a single or a limited number
of types or grades or sizes of fuel.
There appears to be a growing realization among equipment
manufacturers and, likewise, among the users of all kinds of fuel
that, with very little additional effort and expense, steamgenerating
equipment, having a much wider range of fuel utilization,
can now be manufactured and installed.
If this be a correct interpretation of the trend, this increase in
the adaptability and range of use of fuel-burning equipment will
enable the consumer, in spite of the tendency to regulate both
price and source of supply, to purchase fuel at a low average unit
cost and effect the same or even greater efficiencies of conversion
than have heretofore prevailed.
Likewise, manufacturers may, at little added cost, modify their
combustion equipment to make possible the burning of solid,
liquid, or gaseous fuel, and the high- and low-grade fuels of any
type with substantially equal efficiency.
Thus, the consumer will be enabled to take greater advantage
of the potential and changing fuel markets and available methods
of transportation, and in his purchases can be governed to a
larger degree by the actual fuel value measured by the delivered
fuel cost per million Btu.
M a r k e t T r e n d s 8
Natural gas has been marketed in ever-increasing quantity
since 1921, similarly fuel oil, with the increased consumption
more pronounced for domestic heating than for other uses. At
the same time, there has been a definite trend downward in the
use of both anthracite and bituminous coal, this trend being morfe
pronounced since 1926.
Throughout the last 20 years, steam-generated electrical
energy has increased threefold, with but slight increase in the
use of fuel, due to improved efficiency in fuel utilization. Hydrogenerated
electrical energy has increased in substantially the
same proportion, but, if evaluated at the prevailing rate for
steam-generated energy, the coal displacement appears to show
relatively small change since 1918.
Except for the periods during and immediately following the
World War, and during strikes and other abnormal times, all
bituminous coal has averaged to realize at the mine between
$1.75 and $2 (5) per net ton.
The realization at the mine for Pennsylvania anthracite appears
to have declined steadily from an average of 15.35 in 1931
(5) to nearly $4 in 1937. The downward change, which was
greater for domestic sizes, was somewhat offset by a gradual increase
in the realization for industrial and steam sizes.
If we take the tidewater price of bunker C fuel oil at New
* Refer to Figs. 1 and 2.
York, the average price per barrel for the years 1933 to 1939,
inclusive, has ranged from approximately $1 to $1.30 (5), with
the actual price, of course, depending somewhat upon the local
market conditions, the quantities involved, and subject to
greater fluctuation than that of other fuels.
The average annual realization for natural gas, on the other
hand, has ranged within relatively narrow limits, from approximately
211/ 2 cents to 243/ 4 cents per thousand cubic feet at point
of consumption for the years 1925 to 1938 (5), inclusive. Although
the figure for all natural gas has remained substantially
constant, the average for industrial use during the same period
appears to have declined from a high of nearly 13 cents to a low
of 9.7 cents, whereas, the corresponding rates for domestic consumption
appear to have increased from a low of 56 cents to a
high of some 69 cents per thousand cubic feet.
These figures, unless otherwise stated, are merely averages for
the entire United States. They do not indicate the relative
prices at any particular market or destination, where the different
transportation costs will substantially modify the actual delivered
prices for the available fuels.
The better- and not the lower-grade fuels move to the more
distant markets, where transportation is important. From time
to time, strikes, changing business conditions, temporary shortages
of supply, and other varying factors may serve to modify
consumer preference and the relative prices of competing fuels,
but the general parallelism between the costs of the different types
of fuel (solid, liquid, and gaseous) appears to continue.
Recently, producers of bituminous coal have given more
attention to the screening, sizing, cleaning, and possible dust
treatment of their coals, the better to meet changes in market
conditions and in combustion equipment, realizing that thereby
they can substantially improve their opportunities to hold and
possibly extend existing markets.
The use of the finer sizes of slack and double-screened coals,
respectively, for the industrial and domestic trade has substantially
increased. Slack coals, formerly a drug on the market,
selling at ridiculously low prices, have encouraged the introduction
of pulverized-fuel equipment. The introduction of
domestic stokers has made possible and convenient the use of
smaller and less expensive double-screened sizes of coal, tending
to reduce the supply of slacks available for industrial use.
The price differentials between the so-called “prepared” or
double-screened coals, on the one hand, and slack coals, on the
other, tend to diminish, with the mean or weighted average approaching
but not reaching the mine-run figure. This diminishing
differential as to size, coupled with corresponding differentials
as to grade, has accelerated the price leveling-out process,
as indicated by the generally greater increase proposed under
the new price schedules for slacks and industrial coals than for
the large double-screened and domestic sizes.
T r a n s p o r t a t io n
Freight rates are not always proportional to the distance
traveled, in fact those for long hauls often are relatively lower, to
enable newer and more distantly located coal fields to compete in
the larger consuming markets with the older near-by fields.
The cost of transporting a ton of coal via rail averaged; for
the entire United States, an amount equal to or greater than the
average cost of the fuel itself. This cost ranged from $2.15 to
$2.27 per net ton during the years 1929 to 1938, inclusive, with the
actual transportation charge to many consuming markets several
times the actual fuel cost f.o.b. cars at the mine. Approximately
24 per cent of the bituminous-coal production is water-borne
wholly or partly via lake, river, or tidewater, and 7 per cent is
moved by truck from the mine to near-by destinations and usually
at less than rail rates.