The outlook for coal shipments on the Great Lakes/St. Lawrence Seaway system is mixed for 1992, following on the heels of a disappointing 1991 season.

Although final figures are not yet in, coal shipments on the lakes and seaway are estimated to be down through 1991. Figures compiled by the Lake Carriers Association in Cleveland, Ohio, through October show that coal shipments on the Great Lakes are 10 percent less than they were a year ago.Shipments of coal on the lakes through October totaled 29.1 million tons, down from the 31.9 million tons reported through October of 1990. Shipments of Lake Erie coal were 16.1 million tons through that period, down from 18.8 million tons in 1990. Shipments of western coal from Lake Superior totaled 10.1 million tons through October 1991, up slightly from the 9.9 million tons shipped down the lakes through the corresponding period of 1990.

Shipments of Powder River coal from Midwest Energy Resources Co.'s terminal at Superior, Wis., on Lake Superior tailed off substantially, however, late in the year. The MERC terminal finished 1991 at about 11.2 million tons, down 1 million tons from the record levels reached in 1990.

John Ethen, MERC's president, doesn't think shipments will pick up dramatically in 1992.


"It'll be very similar to last year," Mr. Ethen said, predicting 1992 shipments through his terminal of between 11.2 and 11.3 million tons.

The MERC terminal, which handles rail-hauled, low-sulfur coal from the Powder River Basin of Montana for transshipment down the Great Lakes to coal- burning electric utilities, has an original throughput capacity of 11.5 million to 12 million tons. Mr. Ethen said the fall-off in tonnage in 1991 is due to a general reduction of on-hand inventory by coal burning utilities and by a slight drop in demand.

One ray of sunshine for the seaway, which reported a 4.7 percent drop in total cargo throughput in 1991, following a 1 percent drop in 1990, is the prospect of western low-sulfur coal exports to Europe. Mr. Ethen's MERC terminal was the origination point for a 30,000-ton shipment of western coal to a Spanish electric utility for a test burn this past August.


Seaway coal exports are a high priority for Stanford Parris, new U.S. Seaway Development Corp. administrator, and although no one is saying whether there will be further test shipments of western coal to European utilities through the seaway in the 1992 season, MERC's Mr. Ethen said a contract with a European utility is something his terminal will "actively pursue."

Roger Sindelar, an international trade specialist hired by the Seaway Development Corp. this past spring to beef up the organization's coal marketing presence, said there is strong potential and strong interest in western coal among utility executives in northern, eastern and central Europe.

"It's an untapped resource," Mr. Sindelar said, noting that western coal's attractiveness to domestic utility executives - a function of its extremely low sulfur content at a time when the U.S. government is tightening clean air standards - also makes it attractive as a fuel in Europe.

"Our worries about clean air don't even compare with the situation in Eastern Europe," Mr. Sindelar said. "They just don't have clean coal."


Mr. Sindelar explained that the Seaway Development Corp. has embarked upon an aggressive program of trying to develop the logistics network that can deliver western coal at a competitive price and to introduce European buyers to the advantages of burning western coal.

"We've got to make the product better known," he said. "We have to work with the buyer, the shipper, and the seller."

To that end, Mr. Sindelar represented the Seaway at a major Berlin coal transportation conference in October and will represent the Seaway at CoalTrans in Florida this week. The Seaway participated in a fall meeting in Montreal called by the Canadian St. Lawrence Seaway Authority to discuss marketing the growing trade in western coal.


Mr. Sindelar will also participate in a follow-up meeting with coal port, terminal and carrier officials to develop strategies for the upcoming Seaway trade mission to northern Europe in March.

In February, Mr. Parris and Glendon Stewart, president of the Ottawa-based St. Lawrence Seaway Authority, will visit western coal producers in Chicago, St. Louis, Omaha, Denver and Kansas City.

All the talk about increased marketing of western coal's potential overseas is fostering feasibility studies of expanding or building new coal terminals in the United States. MERC's Mr. Ethen said a review of a potential expansion of the Superior terminal to a 13.5 million ton capacity is under way.

In Quebec City, St. Lawrence Stevedoring, a division of Quebec Stevedoring, is reported to be studying a coal transshipment facility which would allow Powder River coal to take advantage of all-year shipping and the 50-foot draft offered by the Quebec port. A representative for the St. Lawrence Seaway Development Authority in Ottawa, however, said the Quebec ground storage facility is still a project and unlikely to add any cargo to the Seaway totals in 1992.


In Burns Harbor, Ind., on the southern shore of Lake Michigan, Lakes and Rivers Transfer, a division of Jack Gray Transport Co., is studying the feasibility of building either a blending or transfer facility for low sulfur western coal at the Indiana port. Lakes and Rivers Transfer is the terminal operator for the Burns Harbor port.

James Hartung, port director at Burns International Harbor, said coal would arrive by rail from the west, be stored or blended at a 40-acre site at the port and then be shipped by water to domestic utilities or to Europe for the export market.

Mr. Hartung said that the Phase I portion of the study is nearly complete, and it includes site development, including utilization of a rail loop and installation of bottom discharge pits and radial stackers.

"Phase I is the shell of the automobile," Mr. Hartung said, "and then we'll add the accessories." With completion of the Phase I portion of the project this spring, Burns Harbor will be able to handle western coal, Mr. Hartung said.

Still, given all of the optimism for increased coal shipments through the Great Lakes/St. Lawrence Seaway, shippers, producers and port officials caution that ending the recession is of primary importance in turning around shipping on the system.

"Until both our economies recover," said Gay Hemsley, media relations director for the Seaway Development Authority in Ottawa, "I don't think you'll see much recovery on the seaway."