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Labor Outreach (1)
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Labor Outreach (1)
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Records of the Office of the Chief of Staff (Reagan Administration)
James Cicconi's Subject Files
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WITHDRAWAL SHEET
Ronald Reagan Library
Collection: Cicconi, James W.: Files
Archivist: kdb
9
OA/Box:
Box 10
FOIA ID: F1997-066/$, D. Cohen
File Folder: Labor Outreach (1)
Date: 08/11/2004
DOCUMENT NO.
SUBJECT/TITLE
DATE
RESTRICTION
& TYPE
1. memo
Doug Riggs to Cicconi (w/notations) 1p [Item is still under review
12/29/83
under the provisions of EO 13233]
2. memo
Riggs to Cicconi re Greyhound strike, 3p [Item is still under review
11/30/83
under the provisions of EO 13233]
3. statement
Joint Policy Statement on Energy Cooperation (w/notations), 2p
n.d.
B1
R 3/20/06 NLSF97-066/9 #19
RESTRICTIONS
B-1 National security classified information [(b)(1) of the FOIA].
B-2 Release could disclose internal personnel rules and practices of an agency [(b)(2) of the FOIA].
B-3 Release would violate a Federal statute [(b)(3) of the FOIA].
B-4 Release would disclose trade secrets or confidential commercial or financial information [(b)(4) of the FOIA].
B-6 Release would constitute a clearly unwarranted invasion of personal privacy [(b)(6) of the FOIA].
B-7 Release would disclose information compiled for law enforcement purposes [(b)(7) of the FOIA].
B-7a Release could reasonably be expected to interfere with enforcement proceedings [(b)(7)(A) of the FOIA].
B-7b Release would deprive an individual of the right to a fair trial or impartial adjudication [(b)(7)(B) of the FOIA]
B-7c Release could reasonably be expected to cause unwarranted invasion or privacy [(b)(7)(C) of the FOIA].
B-7d Release could reasonably be expected to disclose the identity of a confidential source [(b)(7)(D) of the FOIA].
B-7e Release would disclose techniques or procedures for law enforcement investigations or prosecutions or would disclose guidelines which could reasonably be
expected to risk circumvention of the law [(b)(7)(E) of the FOIA].
B-7f Release could reasonably be expected to endanger the life or physical safety of any individual [(b)(7)(F) of the FOIA].
B-8 Release would disclose information concerning the regulation of financial institutions [(b)(8) of the FOIA].
B-9 Release would disclose geological or geophysical information concerning wells [(b)(9) of the FOIA].
C. Closed in accordance with restrictions contained in donor's deed of gift.
OPL mems
THE WHITE HOUSE
washington
\
TO Jim Cicconi
FAITH has arwill
RAise this REQUEST with
MR. Baher.
AS to our response CAN YW
Jim, time is g tho essence
Please Move this Along
!or 2 decision (The
teamtres ARE pushing
hard for WIt particopation.)
That
Dava Ryj-
check w/ Waller
THE WHITE HOUSE
WASHINGTON
November 29, 1983
MEMORANDUM FOR FAITH WHITTLESEY
THROUGH: JACK L. COURTEMANCHE
FROM:
Douglas A. Riggs DAR
SUBJECT: Participation of the President or Vice
President at the International Labor
Management Tribute dinner to Joseph W.
Morgan, Sixth Vice President, International
Brotherhood of Teamsters (IBT) and Director
of Southern Conference of Teamsters, who will
be the 1984 recipient of the Eleanor
Roosevelt Humanities Award to be given by the
State of Israel Bonds
I was requested by Paul Locigno, Director, Governmental
Affairs, IBT, to assist in securing the attendance of
either the President or Vice President at the above
referenced dinner to be held on Saturday evening
January 28, 1984 in Miami, Florida. Evidently, an
invitation was extended to the President by a letter
dated November 16, 1983, from a Mr. Trertola, who is
the second Vice President of the IBT and Dinner
Chairman. (I assume that letter is in Fred Ryan's
shop.)
The dinner honors not only Mr. Morgan, but Mr. Presser
who is the first Jewish president of the IBT and
co-chairman of the event. (The other co-chairman is
the president of the employer arm of the trucking
industry and the associate chairmen are the members of
the IBT executive board.) The purpose of the dinner is
to raise funds for the state of Israel through the sale
of Israel Bonds. I have been informed by Mr. Norman
Goldstein, Executive Assistant to Mr. Morgan and
Chairman of the Arrangements Committee, that there will
be approximately 2,000 people in attendance at the
dinner including, according to Mr. Goldstein's letter
to me, "representatives from not only the Teamsters
union on a national level and other International Union
labor leaders as well as representatives of the largest
corporations in America and a number of public
officials. Leading members of the Jewish community
both locally and nationally are
expected to attend this event and the Ambassador of
Israel is to be the key speaker." Mr. Goldstein
further views this "event as one of the most important
fund-raising affairs for the state of Israel as well as
the opportunity to be the stage for a State of the
Union Address by the Administration since several of
the states within the jurisdiction of the Southern
conference of Teamsters such as Texas, Louisiana and
Florida are pivotal states necessary for the reelection
of the President."
Before I proceed further on this matter, I need
direction on two threshold issues:
1. To what extent can the President or the Vice
President participate in a function which has as
its purpose the raising of money for a foreign
country?
2.
Given the dominant involvement of the IBT, to what
extent can the President or Vice President
participate?
It would be appreciated if this request could be
immediately discussed by the appropriate officers of
the White House and a position formulated.
Assuming there are not any legal impediments, I
recommend that the Vice President attend. If not the
Vice President, then Mr. Meese. (The IBT is applying a
full court press and will view White House
participation as a litmus test of its interest in and
support for the IBT.)
Per FF, OK to ask Kirkpatrick.
Pres ! VP. cannot attend
former
THE WHITE HOUSE
WASHINGTON
November 22, 1983
MEMORANDUM FOR JIM CICCONI
FROM:
Douglas A. Riggs BAR
SUBJECT: U.S.'s representatives at the ILO
I wish to amend my response to Mr. Baker as to the
identity of the U.S.'s representative to the ILO. I
indicated Anthony (Tony) Freeman, Special Assistant to
Secretary Shultz and Coordinator of International
Labor Affairs, but, I failed to also include Robert
Searby, Deputy Under Secretary of Labor for
International Affairs.
Thank you.
for memor
THE WHITE HOUSE
WASHINGTON
Jim
This is Nove then
KNW ABW' Acidlein.
you ever wante (to
I will be Seaping over
a I per Memo that
be Raired by Trumha
will Special issues to
and brief background an
ISSA they.
ASSUME you have te
data I an MINE safety
inspectas.
Theak you. Riggs
THE WHITE HOUSE
WASHINGTON
November 1, 1983
MEMORANDUM FOR JIM CICCONI
FROM:
Douglas A. Riggs DAR
SUBJECT: Trumka's visit and acid rain
The issues center on (1) whether there should be a
"control program" for acid rain and (2) if so, what
control program should be imposed. The
Administration's previous position has been that there
was no need to have a "control program" because the
effects of acid rain were still unknown and further
research and study were required. However, upon
Ruckelshaus assuming his position at EPA, the President
made acid rain a priority. Consequently, EPA and the
Administration are looking at options and moving
toward a program that would offer some control of acid
rain.
At the present time there are annually approximately 22
million tons of sulfur oxide residue and put into the
air by utilities and other companies burning coal. The
problem is primarily centered in the midwestern and
eastern part of the United States.
There are presently 12 to 14 different bills pending on
the Hill, most of which favor a "very expensive
solution." The very expensive solution requires
"scrubbing" on all coal burning facilities as a means
of removing the sulfur oxide residue. It is estimated
that the expensive solution would reduce the sulfur
oxide by 50 percent; but, the cost would be $3-4
billion dollars per year for twenty years. EPA is now
focusing on a so-called "option 3", a middle of the
road option, that would remove four to five million
tons per year at a cost of $1.4 billion per year for
twenty years. The most inexpensive solution is for
industry to switch from high sulfur to low sulfur coal.
Trumka met Ruckelshaus in late June or July and took
the position that there is no need for acid rain
control. However, to the extent there is control, the
UMW would align themselves with those proposing the
expensive solution of handling the problem, i.e., the
use of scrubbers. The use of scrubbers would not
eliminate the use of high sulfur coal which is the
mainstay of UMW's membership in Appalachia. (Low
sulfur coal is primarily mined in the western part of
the United States and by people who are not members of
the UMW.)
f OPL memos
THE WHITE HOUSE
WASHINGTON
December 29, 1983
TO:
JIM CICCONI
In due course, I will be forwarding a memo with my
analysis of potential labor problems in 1984. The most
significant threat may be a national rail strike. A
rail strike and others may have an impact on 1984
activities.
At the appropriate time, there may be some value in you
participating in an informal meeting with Kay McMurray,
Chairman, FMCS, and Walter Wallace, Chairman, National
Mediation Board, for the purpose of reviewing their
observations. Both of these men are political savvy,
and friends of mine.
Doug Riggs
Note
Checked w/ Sherrie Cooksey who
advised against This due to
"appearance problems Have
conveyed this to Riggs, who
agreed meeting will not be
held even for purely social reasons.
INC
1/3/84
PRESERVATION
As Big Labor Contracts
Lapse in '84, Both Sides
Expect to Be Tougher
Continued From Page 15
Mr. Horvitz and other labor experts. Such
arrangements typically increase current
workers' pay, but cut scales for newly hired
employees or those recalled from layoff.
The move is palatable to the employed rank-
and-file because their own incomes don't
suffer.
The Oil, Chemical and Atomic Workers
Union, which accepted a wage freeze for
new refinery employees four years ago,
"can't represent the future hires," says
Robert Goss, a top official. But the union op-
poses industry's latest demand to actually
trim new workers' rates. It faces an uphill
struggle because capital-intensive refineries
can operate easily during strikes, and plant
closings have cost the union 17% of its mem-
bers since 1980.
Similarly, in the retail-food industry, "we
hope to slow down" and "eventually stop"
the spread of two-tier wages, says Alan Lee,
director of the United Food and Commercial
Workers Union's retail division. Contracts
covering about 300,000 retail-food employees
expire during 1984. Mr. Lee says the union's
bargaining strength varies greatly from one
area to another, but he adds that strikes in
the industry "have started to pick up" be-
cause jobless levels are dropping. Mr. Lee
says that workers "are simply looking at
some of the demands of employers and say-
ing, 'We won't go that far.
PRESERVATION
WALL street JOUrN/
1.
2
12/28
SECTION
As Big Labor Contracts Lapse in '84,
ts
6.
y
Both Sides Expect to Be Tougher
n
By JOANN S. LUBLIN
less rate still relatively high, more compa-
Mr. Bennett. He found such grumbling wide-
Staff Reporter of THE WALL STREET JOURNAL
nies-such as Continental Airlines and
spread at a mid-November meeting of about
WASHINGTON-After three hard years
Phelps Dodge Corp.-feel free to fire strik-
35 mostly GM locals representing 200,000
of concessions, unions are heading into the
ers and hire cheaper, nonunion replace-
auto workers.
new year's heavy round of contract talks in-
ments.
Negotiations "will be difficult because of
tent on sharing the fruits of the economic re-
A third force is companies' continuing
our profitability," concedes Alfred Warren,
covery. "Restore and More in '84" has al-
concern about controlling labor expenses.
GM's industrial-relations vice president. But
ready become the rallying cry at several
Corporations undergoing an economic recov-
he insists relations with the union "are the
United Auto Workers union locals.
ery still face low-cost competition from
best they have been," and he says he
But leaner and tougher managements,
abroad or, partly because of deregulation,
doesn't anticipate a strike. GM believes
eager to retain gains obtained from workers
from nonunion U.S. rivals. Many companies
greater worker awareness of the company's
during the recession, are equally deter-
in the retail food, oil and rail industries
persistent competitive problems could help
mined to hold down labor costs. As a result,
want small 1984 settlements because they're
limit the settlement's size. That's why GM
says Jack Barbash, a professor emeritus of
smarting over the generosity of their expir-
will probably support extension of a profit-
industrial relations at the University of Wis-
sharing plan won by the UAW in 1982 and in-
consin, 1984 "will be a year of reckoning" in
Union Wage Increases
creased involvement of top union officials in
U.S. labor relations.
Unions representing about three million
Average first-year raises in
corporate decision-making.
collective bargaining agreements
Strike threats will probably be less potent
private workers will negotiate in the auto,
11
in the coal industry because of still-high lay-
rail, coal, construction, retail food and other
(In percent)
offs and the erosion of unionized work.
major industries. Rank-and-file expectations
10
About 55,000 of the United Mine Workers'
are rising as workers see corporate profits
9
160,000 active members are on layoff be-
rebound and the unemployment rate drop.
cause of still-depressed coal production. The
And union members are increasingly willing
8
union controls less than half the nation's
to strike: Federal flgures show strike activ-
coal output, compared with 78% during its
ity is up 50% from last year.
7
heyday.
Federal officials fear that significant
wage gains in next year's bargaining could
6
Yet many miners and construction work-
ers still want their wages improved, which
lead to renewed inflation. "Wage restraint
5
creates a dilemma for UMW President Rich
at this point in the (economic) cycle is a key
Trumka. He thinks the union can avoid a na-
to keeping disinflation going," says Robert
4
tional walkout in 1984, but says he won't ac-
Gay, a Federal Reserve Board economist,
cept a "takeaway" contract. The 1981 nego-
because wages "are two-thirds of total
3
tiations sparked a 72-day industrywide strike
costs."
2
and an agreement that gained mine workers
'Get Their Pound of Flesh'
an estimated 37.5% increase in wages and
National UAW accords covering about
1
benefits.
462,000 General Motors Corp. and Ford Mo-
0
Selective Strike Considered
tor Co. employees expire next fall. With
'73
'75
'77
79
'81
'83"
Mr. Trumka may instead use a selective
their employers again fat with profits, auto
Source: U.S. Bureau of Labor Statistics "First 9 months
strike against one or more coal operators SO
workers being recalled from layoffs Increas-
most miners could remain on the job after
ingly feel dissatisfied with the several billion
ing accords, signed before the recession hit
contracts expire. At the union's earlv-De-
dollars in wage-and-benefit concessions they
and inflation slowed. Gulf Oil Corp., for in-
cember convention, delegates approved a
agreed to in 1982. "There's growing senti-
stance, wants refinery workers to accept a
$70 million selective-strike war chest.
ment to go back and-pardon the expres-
three-year contract with a wage freeze in
In the construction industry, the current
sion-get their pound of flesh," says Michael
1984, a raise of about 1.8% in 1985 and a 2.2%
15% unemployment rate means "you wait"
Bennett, president of the UAW's 2,200-mem-
increase in 1986. A two-year accord that ex-
ber Local 326 in Flint, Mich.
pires Jan. 8 provided increases totaling
to strike, a top AFL-CIO official says. "You
don't fight wars under your opponents' best
Yet opposing pressures could keep all un-
16%.
conditions." The Associated General Con-
ions' 1984 wage increases, on average, to a
The auto industry could suffer the rocki-
tractors, a trade group, projects that union-
modest 5%, several labor analysts believe.
est bargaining in the new year. The UAW
ized construction workers' wages will rise
That would exceed 1983's historically low av-
will probably push to revive the 3% annual
3% to 5% in 1984. About 70% of industry con-
erage increase of about 2%, but would be
pay rise achieved in past negotiations-and
tracts signed during 1983's first nine months
considerably more moderate than in past
to recoup the two such increases its mem-
boom years. The difference in this recovery
bers gave up in the 1982 wage freeze. It will
contained wage freezes.
The combination of an improved eco-
is that fundamental changes may over-
also fight hard for expanded job-creation ef-
nomic climate and organized labor's dimin-
whelm unions' fierce desire to regain lost
forts, such as sweetened early retirement
ished bargaining strength may force some
economic ground.
benefits, tougher limits on overtime and res-
The recession greatly weakened unions'
toration of nine annual paid personal holi-
union leaders to trade wage gains for non-
wage concessions, such as easing restrictive
bargaining clout, not only by forcing "give-
days given up in 1982.
work rules, trimming time off and sharing
backs," but also by permanently thinning
The union's tough stance reflects acrimo-
their ranks in the shrunken smokestack in-
nious feelings in some quarters. Local lead-
more benefit costs, suggests Wayne Horvitz,
a labor arbitrator and former head of the
dustries. Unions now represent about 18% of
ers say relations with GM in particular have
Federal Mediation and Conciliation Ser-
the U.S. labor force, down from 20.5% in
soured. They maintain, for example, the
vice.
1980, a Labor Department economist says.
auto maker has used quality of worklife pro
Management's increased willingness and
grams to abolish jobs.
Two-tier wage structures will become an
ability to operate during walkouts has fur-
"There's strong sentiment that we should
increasingly common tradeoff, according to
ther sapped unions' strength. With the job-
shut down the corporation," says the UAW's
Please Turn to Page 27, Column 4
oplemos
THE WHITE HOUSE
WASHINGTON
November 30, 1983
MEMORANDUM FOR JIM CICCONI
FROM:
Douglas A. Riggs DAL
SUBJECT: Greyhound Strike
I believe the President and the Administration is
taking an undeserved beating in the media concerning
the Administration's role in the Greyhound strike. It
is suggested by the media, both in articles and
editorials and the theme was repeated last evening on
Channel 5, that the Administration, through a
conspiracy of inaction, is assisting Greyhound
management in "busting the union." The evidence is
absolutely to the contrary; and, as such we should
consider a strategy for an appropriate response. I am
concerned that this drum beat which is being
orchestrated by some elements of the AFL-CIO, Congress
and the media flames a "hysteria" that this White House
is against the working union person. I believe it is
critically important that this perception be not
further reinforced.
An outline of the facts concerning the Administration's
activities in this controversy as as follows:
1. On or about November 16, 1983, I received a letter
from the Legislative Director of the Amalgamated
Transit Union (ATU) in which he transmitted to me
the final draft of a telegram, subsequently
received at the White House, which requested the
assistance of the President to help resolve the
dispute. The letter was received in my office on
November 17, a day when I was in Birmingham,
Alabama. Upon my return on November 18, I
reviewed the correspondence with David Waller and
Kay McMurray, Chairman of the Federal Mediation
and Conciliation Service (FMCS).
NOTE: asked that R. prepare
talking pts/guidance on this
for press office.
go
2. Kay indicated that he had one of his best
mediators in Phoenix attempting to assist the
parties in resolving their dispute. Further, he
was personally monitoring the situation on an
hourly basis. In response to my inquiry as to
what, if anything, I should say to the Legislative
Director of the AMT, he suggested that I say the
following:
a. Reaffirm the fact the FMCS was on the
scene in Phoenix with one its more skilled
mediators; Chairman McMurray was personally
monitoring the situation; and, if in the
opinion of the union, his personal presence
would assist he was prepared to immediately
fly to Phoenix.
I conveyed this message to the Legislative
Director on Friday morning, November 18. The
union was pleased that I had called, and
acknowledged the FMCS's presence.
3. Kay, prior to Friday, November 18, had had
informal conversations with Tom Donahue, the
Secretary-Treasurer, AFL-CIO, concerning this
matter. He informed Mr. Donahue that he was
prepared to be of assistance, but did not want to
barge uninvited into a matter. Those
conversations with Mr. Donahue are continuing to
the present date, and have been useful in dealing
with many of the issues involved in this matter.
4. On November 18, Kay had telephonic communications
with Mr. Rowland, President of the AMT. Since
that date, there have been numerous conversations
between Kay and Mr. Rowland leading to a request
that Kay travel to Phoenix. Kay, after consulting
with both Mr. Teets, President of Greyhound and
Mr. Rowland, travelled to Phoenix on Friday,
November 25, 1983.
5.
In Phoenix he met separately with Mr. Teets and
other senior officials of Greyhound and with the
union officials over Saturday and Sunday. Kay's
participation produced a number of positive
results notwithstanding a difficult environment:
a. The bargaining for the union is controlled by
a committee of 33 local union officials. You
can well imagine the difficulty of
negotiating a deal with 33 individuals, each
having speaking parts. However, the union,
nonetheless, agreed to take the last and
final offer to the membership, a position
which they originally had refused to do.
The offer as you know was overwhelmingly
rejected by the membership on Monday,
November 28. Nonetheless, the process had
started.
b.
Kay was able to convince both parties to come
to Washington, D.C. and he is presently
meeting with them.
C.
Furthermore, Kay was able to secure from Mr.
Teets some commitments, which I cannot
describe in this memo, that will enhance the
possibility of a resolution.
6.
Therefore, the assertion that the Administration
is assisting the company in busting the union is
absolute nonsense. Kay has spent substantial
portion of his time during the last two weeks on
this issue and has ably worked with both
sides, even including Mr. Donahue, in an attempt
to reach a resolution.
It is difficult at this date to say with certainty what
will occur this week, but irrespective of the outcome,
Chairman McMurray has performed his statutory duties
and in doing so has properly represented the
Administration. (Kay has gone out of his way in
keeping Donnovan, Waller, Fuller's office and me
informed.) This is certainly not a situation that
requires the "personal intervention" of the President.
Moreover, I am not aware of any legal authority under
which the President could take action other than
through the Chairman of the FMCS.
Those who are pounding on us are doing so for political
reasons and/or because, in contrast to previous
President's or FMCS's Chairmen who have grandstanded on
this type of situation, this Administration has
quietly, but efficiently performed its statutory duty.
Chairman McMurray believes that you cannot conduct
negotiations by newspaper headlines. However, I
suggest that Peter Roussel or some other appropriate
press person might chat with Kay and devise some sort
of response that could be given at an appropriate time.
Thank you.
THE WHITE HOUSE
memor
WASHINGTON
November 18, 1983
MEMORANDUM FOR JIM CICCONI
FROM:
Douglas A. Riggs
AR
SUBJECT: Richard Trumka's visit with Mr. Baker on
Monday, November 21, 1983
1.
Trumka, who is President of the United Mine Workers will be
accompanied by John Banovic, Secretary-Treasurer of the UMW.
2.
Mr. Trumka is a lawyer by professional training, and served
prior to his election as Counsel to the UMW. He is about 38
years old.
3.
Mr. Trumka intends to raise with Mr. Baker the following
issues:
(1) Need for energy policy that places a greater emphasis
on coal.
(DOE has submitted to Congress under a date of
October 1983 "The National Energy Policy Plan")
(It is anticipated that coal use will increase
substantially over the long term)
(Coal leasing program has been revitalized)
(2) Did the President, in his talks with the Japanese,
raise the issue of the importing of U.S. coal by
the Japanese?
Overseas coal
Being
(Yes, see attached joint policy statements on
energy cooperation issued by Japan and U.S.
development by us makes
following the President's visit.)
us coal only due costs competitive to
Why is the export of coal to Japan slacking?
(Price of U.S. coal is substantially more per ton
than Australian coal)
transptin
(Inland Transportation Costs)
favored Byrd, liming , Rohall acceber approach approach, (3)
(However, UMW's productivity is increasing)
The Administration's position on acid rain.
lake interin
(The Administration is considering proposals on
acid rain control. No decision. Shultz's
statement to Canada)
(4) What is the Administration's position on Mine Safety?
(200 additional Inspecter positions. Though budget
request is down, so is number of active mines)
(Lowest incidents of accidents in recent history)
(Major change in philosophy of MSHA that improves
safety)
THE WHITE HOUSE
WAEHINGTON
November 1, 1983
MEMORANDUM FOR JIM CICCONI
FROM:
Douglas A. Rigas DAR
SUBJECT: Trumka's visit and acid rain
The issues center on (1) whether there should be a
"control program" for acid rain and (2) if so, what
control program should be imposed. The
Administration's previous position has been that there
was no need to have a "control program" because the
effects of acid rain were still unknown and further
research and study were required. However, upon
Ruckelshaus assuming his position at EPA, the President
made acid rain a priority. Consequently, EPA and the
Administration are looking at options and moving
toward a program that would offer some control of acid
rain.
At the present time there are annually approximately 22
million tons of sulfur oxide residue and put into the
air by utilities and other companies burning coal. The
problem is primarily centered in the midwestern and
eastern part of the United States.
There are presently 12 to 14 different bills pending on
the Hill, most of which favor a "very expensive
solution.' The very expensive solution requires
"scrubbing" on all coal burning facilities as a means
of removing the sulfur oxide residue. It is estimated
that the expensive solution would reduce the sulfur
oxide by 50 percent; but, the cost would be $3-4
billion dollars per year for twenty years. EPA is now
focusing on a so-called "option 3", a middle of the
road option, that would remove four to five million
tons per year at a cost of $1.4 billion per year for
twenty years. The most inexpensive solution is for
industry to switch from high sulfur to low sulfur coal.
Trumka met Ruckelshaus in late June or July and took
the position that there is no need for acid rain
control. However, to the extent there is control, the
UMW would align themselves with those proposing the
expensive solution of handling the problem, i.e., the
use of scrubbers. The use of scrubbers would not
eliminate the use of high sulfur coal which is the
mainstay of UMW's membership in Appalachia. (Low
sulfur coal is primarily mined in the western part of
the United States and by people who are not members of
the UMW.)
H.Auy
DECLASSIFIED
has in
NLS 897-066/97-19
Mill when? 42" Jor,
as NARA, DATE 3/20/06 thing we Neway inventisated,
Comeback 10hiurs
Joint Policy Statement
undertal commune
on Energy Cooperation
upil-
soultone
includer
12
would be
1. Taking account of the energy prospects for the entire. expended
Pacific Basin, the two countries agree that the sound expansion
of U.S.-Japan enercy trade will contribute to the further
development of the close economic and energy security
relationship which exists between the two countries;
2. They will continue to discuss and find ways of developing
this trade for the mutual benefit of both countries, noting the
importance of long-term cooperation, the central role of the
private sector, and the need for a balance between economic
cost and energy security.
Note
3. Both countries cons der Alaska to be a particularly
promising area for joint development of energy resources. Both
governments will encourage private sector discussions regarding
the possibilities for such development.
4. With regard to trade in oil, gas and coal, we have agreed
on the following next steps:
A. The US and Japan recognize that if legislative
barriers can be removed. the US has the potential to ship
substantial quantities of crude oil to Japan, thereby
increasing economic incentives for U.S. oil production and
helping to diversify jajan's energy sources. The US will
continue to keep under review the removal of restrictions on
exports of domestic crude oil.
b. The US and Japan will encourage private industry in
both countries to undertake now the pre-feasibility or
feasibility studies necessary to determine the extent to which
Llaskan matural ças can De jointly developed by us and Japanese
Interests.
C. The US and Japan will encourage private industry in
both countriss to discuss conclusion of long-term coal
contracts and joint development of mines and transportation
systems to make American coal more competitive in the Japanese
market.
c. In-this regard, the two countries welcome the
examinations under-Ay of the technical and economic aspects of
several steam coal Projects by private companies concerned on
both sides. hs economic recovery proceeds, Japan will
encourage 1:5 indistries to conside: purchase
of rore U.S. stea- coal to meet future demand not already
covered by existing contracts. in addition, Japan will invite
the private sector concerned to explore the possibility of
further increasine
LONE IDENTIAL
-2-
generation.
8.
67 With regard to metallurgical coal, both sides
noted that the depressed state of world steel manufacturing had
reduced demand for traded coal. However, in view of the fact
that the U.S. has been a major supplier to the Japanese market,
Japan will endeavor to maintain the level of imports of U.S.
coal. Japan expects that imports of competitively priced U.S.
metallurgical coal will not continue to decline, and will
encourage its steel industry to increase U.S. coal imports when
conditions in the industry permit. AM
f. As a first step toward developing U.S.-Japan coal
trade from B- mid- to long-term perspective, a mission componed
of representatives of major Japanese coal users and other
appropriate interests will visit the U.S. to meet with major
coal mining and transportation interests. The purpose of this
mission will be to explore the possibility of expanding coal
trade between the U.S. and Japan, and the possibility of
conducting a major study of the opportunities for ređucing the
delivered price in Japan of U.S. coal.
CONFIDENTIAL
ent
slump
in
OCUCL on stems, in part, from a drop in demand
that d comp = ied the
omic slowdown. We are now pulling out of the
recession. strial production has increased steadily over the past 10 months.
The 13.9 percent gain in industrial productivity achieved by this country during
the last year is greater than that of any recovery in the past 25 years. As more
industries are put back into operation and more powerplants brought back on line,
coal's inherent economic advantage will make it an increasingly attractive
alternative to oil. The most important action the Government can take on coal's
behalf, therefore, is to improve the nation's economy. Lowering taxes, reducing
Federal spending, and relying on the private sector to decide which fuel choices
make the most sense will all work to coal's benefit.
GENERAL ENERGY To foster an adequate supply of energy at reasonable costs
POLICY:
by a) minimizing federal control and involvement in energy
markets; and b) promoting a balanced and mixed energy re-
source system.
GENERAL COAL
The U.S. has more than 475 billion tons of recoverable coal
FACTS:
with recent annual rates of coal production topping 800 million
tons (200-300 million tons/yr. of excess productive capacity
also exists). About 80 million tons will be exported in 1983.
The primary user of coal is the electric power industry. In
the U.S., coal-fired generation comprises 53.2 percent of all
electricity generated. More than 80 percent of the coal used
domestically is consumed by the electric power industry. For
coal-fired generation:
0 coal cost is largest single cost component of producing
electricity, averaging about 50%;
o on a national average, the transportation component repre-
sents about 30% of the delivered price of coal, although in
some areas, particularly the West, it can represent as much
as 40-60 percent of coal's delivered price.
COAL-RELATED
The role that coal plays in the Administration's energy policy
ASPECTS OF
and energy mix is important because it is one of the largest
EN RGY POLICY:
domestic fuel resources. The coal-related aspects of the National
Energy Policy Plan include:
Leasing. The U.S. Government is the country's largest land-
lord, holding 200 billion tons of coal on 100 million acres.
Coal leasing was virtually halted during the 1970s (83 percent
of all current federal coal leases were issued in the 1960s or
earlier; only 9 percent were issued in the 1970s.)
The Administration has redesigned and revitalized the coal
leasing program, ayain making federal coal available to energy
markets, and ensuring that an adequate supply of coal reserves
will be available for development when needed.
DAL POLICY (con d)
2
COAL-RELATED Coal Transportation Rates. 65% of U.S. coal moves by rail; 85% of
ASPECTS OF
this coal is captive to a single shipper. On Feb. 24, 1983, the ICC
ENERGY
proposed guidelines that would permit railroads to raise coal rates
POLICY:
15 percent per year above the rate of inflation and charge captive
(con'd)
coal shippers more in order to lower rates where there is competition.
DOE commented on the proposed coal rate guidelines on July 28, stating
that these proposed guidelines may not strike the appropriate balance
among competing policies and interests that the ICC must consider.
The Administration agrees with the fundamental policy of the Staggers
Rail Act of 1980 to maximize the use of market forces to determine
rates on competitive coal traffic. Differential pricing relying upon
the elasticities of demand for each type of traffic carried, coal or
otherwise, is an appropriate pricing principle. The concern with the
ICC guidelines, however, is that in their limited context, applying
only to those rates which remain subject to ICC rate regulation, the
ICC may be permitting railroads to charge more than an appropriate
amount for captive coal shipments in order to achieve revenue adequacy
without distributing this goal among other captive classes of traffic.
Coal Slurry Pipelines. The President, in principle, has been opposed
to the exercise of federal eminent domain, preferring that the rights
of land condemnation for coal slurry pipelines be vested in state and
local governments. The Administration believes, however, that a
slurry pipeline industry is in the national interest and, although
there is no assurance that pipelines will ever be built, the national
interest in promoting competing forms of transportation is paramount.
Although the Administration did not take a strong advocacy position
regarding the slurry pipeline legislation defeated in the House
of Representatives in September, the version of the bills proposed
by Manuel Lujan in the House (and James McClure in the Senate) were
considered to have adequately protected state's water rights and
to have gone as far as possible to preserve individual rights and
the rights of the respective states in eminent domain actions.
Coal Research and Development. Federal R&D efforts in areas such
as advanced coal cleaning, coal combustion and conversion, and
environmental control technology are intended to ensure economic
development and use of domestic coal resources over the long term.
The Federal role in coal R&D is concentrated in areas where the
incentives for and availability of private investment are severely
limited or nonexistent.
In particular, research on coal water slurries, fuel cells, and
coal-fired turbines is intended to open up new markets for coal
in areas now cominated Fv oul and al gas. Federal research
into new combustion technologies, such as fluidized bed coal com-
bustors, has already provided industry with a new, coal-based
technological option that can meet strict environmental standards.
CY 1001'u
3
COAL-RELATED
Acid Rain. In the area of acid rain perhaps the Nation's most
ASPECTS OF
controversial energy-related environmental issue -- the Adminis-
ENERGY
tratton has supported accelerated research to determine how acidic
POLICY:
compounds are formed in the atmosphere and the relationship between
(con'd)
air emissions and acid deposition effects. The Administration,
through the Cabinet Council process, is reviewing recently-released
scientific studies and other research findings and is evaluating
options for mitigating the adverse effects of acid rain.
The national energy policy objective continues to be one of achieving
a scientific understanding of the atmospheric physics and chemistry
and related characteristics of the acid rain phenomenon and of
avoiding premature or excessive regulatory initiatives that might
increase consumer prices and displace miners without providing cor-
responding benefits in controlling acid rain.
Coal Exports. Significant changes in the coal industry in the
last few years have increased the financial options available
to buyers of U.S. coal, including:
0 The Staggers Rail Act of 1980 which limited Government power
to review and approve rail rates and provided for contract
ratemaking between the rail carrier and shipper. Any rail
shipper, including the foreign coal buyer, can now negotiate
with the rail carrier on the price, volume, and terms of
service on long-term or short-term contracts.
0 The Administration supports 5.865, the Deep Draft Navigation
Act, introduced by Sens. Hatfield, Byrd, Warner and 12 others.
S.865 provides for the costs of port dredging to accomodate
deep-draft colliers to be shared between the federal govern-
ment and the local port. The bill would also impose a nation-
wide user fee on the value of cargo to fund 40% of the annual
operation & maintenance costs at coastal and Great Lakes ports.
0 Ongoing terminal and port expansions alone will increase U.S.
coal export capability to more than 300 million tons, roughly
double the capability of two years ago.
The U.S. Government has made a commitment through its national
coal export policy to be a significant and reliable coal exporter
contributing to the economic health and energy security of allies
and trading partners. The President has directed various executive
departments (coordinated by the Commerce Dept.) to assist in
removing any Government obstacles that reduce coal-export volume
or place hidden costs in the way of U.S. exports.
Synthetic Fuels. The Administration has supported the activities
of the U.S. Synthetic Fuels Corporation to put into place a
limited number of first-of-a-kind synthetic fuel plants (several
of which will be coal-based) to provide the technical, financial,
environmental and socioeconomic basis so that future investment
and policy decisions can be made in an orderly, rational manner
if market forces or long-term national security interests warrant.
The metallurgical and steam coal
to danan alling due LO a
variety of economic, technical and
reasons:
0
The general economic recession worldwide has produced a buyers market for
coal in general. Thus, the Aust alians and South Africans have been offering
coal at prices which are considerably below coal from the U.S. The Japanese
have used this oversupply condition to force price reductions of as much as
$14 per ton from Australian and U.S. suppliers;
0
The Japanese have made extensive, long-term commitments and long-term
investments in Australia, Canada, the Peoples Republic of China, and the
USSR;
0 The Japanese have noted to the US/Japan Energy Working Group that the FOB
mine prices are competitive, with Australia, but it is the inland transpor-
tation and ocean shipping costs which make U.S. coal more expensive. The
Japanese have also noted the rising productivity of U.S. mines and the
improved labor/management relations in the U.S. and have expressed a belief
that there will not be any major disruption of U.S. coal supplies.
o
U.S. has been urging Japan, through the Working Group, to increase coal
import
(permitting 0 maintain roughly a 33% share).
Metallurgical Coal
o
Metallurgical coal exports to Japan have decreased due to the economic
downturn in 1983 which has reduced the production of Japanese steel. This
has been heightened by the increase in the use of scrap steel which is
becoming available at distressed prices;
Steam Coal
o
The steam coal market is even in a more difficult position. U.S. steam coal
from the lower 48 states is not competitive with Australian and South
African coals. The coal which appears to be possibly competitive on a "Btu"
basis is from the Alaskan Beluga coal fields;
o
The demand in Japan for electricity has not been increasing at the levels
that were forecasted. In fact, MITI has been reducing the demand for coal
for electric generation on a monthly basis;
JAPANESE IMPORTS (Million Tons/Year)
Metallurgical
Steam
69-73
45-60
62
58
19
16
U.S. share
1°
2-23
in black
5
0.3-23
0.3
0.3
1980
1983
2000
1980
1983
2000
est.
projected
est.
projected