The Coal and Energy Commission has been in existence since the passage of Senate Joint Resolution No. 109 during the 1975 Session of the General Assembly. Senator J. Harry Michael introduced this resolution to give formal status to an ad hoc group of concerned individuals who were investigating the potential for coal liquefaction and gasification in the Commonwealth and served as Chairman during the last three years.

As of July 1, 1979, the Coal and Energy Commission plans to merge with the Energy Study Commission created in 1973 by Senate Joint Resolution No. 128 to formulate a joint effort in making effective legislative recommendations for increasing utilization of Virginia's coal resources and assisting the Commonwealth in utilizing energy in all forms as efficiently and effectively as possible. The new Commission (See Appendix I of this report) has an arduous task ahead. At the final meeting of the Commission in September, 1978, Dr. Hibbard reported dire predictions for the Commonwealth and indeed this country regarding energy supply and demand during the next decade. A summary of Dr. Hibbard's remarks is as follows:

There are adequate supplies to meet the United States energy demands with the following qualifications:

• Natural Gas: Due to declining reserves and lead times required to develop and deliver new sources, there will be a gap between supply and demand in the 1980's which will result in a 10-20% shortage.

• Oil: Although domestic production will increase to over 10 million barrels/day, imports will increase to 14 million barrels/day, half of which may be refined products. U.S. refinery capacity is inadequate to process this large volume of imports. As a result, the annual costs of imports will increase to $65 billion/year in 1975 dollars.

• Coal: Domestic production will increase to 1.8 million tons/year by 1996; requiring a large expansion of western resources. The use of western sub-bituminous coal which requires scrubbers will be reduced.

• Nuclear: Nearly 230 gigawatts of new nuclear electric power will be required.

• New Technologies: Synfules, solar electric, wind and shale oil will not be available in significant quantities by 1988.

These projections are consistent with actual experience for 1975-78 as follows:

• Gas - production on target

• Oil production and imports - on target

• Coal production - behind because of strikes

• Construction of coal and nuclear plants - behind the projection due to long time requirements for building these facilities which suggests electricity gap in the 1980's resulting in brown outs.

• Newly proposed sulphur dioxide regulations which require scrubbers on new coal-fired plants will swing the competitive balance for new electric power plants from coal and dictate that all new electric power plants be nuclear because of scrubbers costs.

• Unless nuclear siting and permit procedures are accelerated, serious electric shortages will result.

Summary: model studies of U.S. long-range energy supplies suggest that sufficient fuel supplies with imports are available to meet modest U.S. demands until 1988; provided, however, that the facilities are built to produce and utilize them.

Present trends suggest that these facilities are not being installed on time, which may result in gas shortages, brown outs and oil import payments of much more than $65 billion per year.