outlay of $28.7 million, twice the cost of a similarly-sized Montana mine with a 3:1 stripping ratio.

In addition to the estimated investment cost of these hypothetical strip mines we have data on a projected strip mine designed to supply coal for a large coal gasification plant. This information is especially useful in view of the possibly expanded role that coal gasification may play in the energy picture. A strip mine in New Mexico to be developed by El Paso Natural Gas Co. to supply the coal feed for its proposed gasification plant would cost $45.7 million, (excluding leasehold costs) or $5.17 per ton for a mine with a capacity of 8.84 million tons. This total includes $4.5 million as an allowance for funds used during construction. This operation has incurred substantial leasehold costs in excess of normal. When these are included the original capital investment total rises to $64.6 million, or $7.31 per ton of annual capacity. Costs are those in effect in 1972. These figures are perhaps more useful than the Bureau of Mines' model mine investment data in Table C-3, since they represent figures for an actual mine, whereas the Bureau of Mines' data represent estimates for hypothetical mines. Nonetheless, the $5.17 per ton capital investment figure for the El Paso operation comes close to the estimates per ton of capacity for the 5 million tons-per-year mines in Table C-3 for the Southwestern U.S. and North Dakota, after adjustment for the cost inflation between the two dates used for the estimates (1969 and 1972) and for the difference in the mines' stripping ratios. The El Paso mine will experience an average ratio of 5.53:1 compared with 8.8:1 for the Southwestern U.S. model mine and 5:1 for the North Dakota lignite mine.

From the standpoint of analyzing the level of entry barriers in coal mining, the size of the El Paso and other proposed coal gasification plants is significant. The initial coal gasification plants are scheduled to produce 250 million cubic feet a day (cfd) of synthetic natural gas. Both the proposed El Paso plant and a Texas Eastern Transmission Co. plant in New Mexico call for an initial capacity of 250 MM cfd. The Texas Eastern operation may be expanded later to a total of four plants of similar size. Coal requirements would similarly increase four-fold over the initial requirements. Northern Natural Gas Co. and Cities Service Co. have announced plans to study the possibility of a joint coal gasification and pipeline venture that would involve four coal gasification plants, each with a capacity of 250 MM cfd daily. Peabody Coal Co. would supply the coal from its reserves in southeastern Montana. Other studies which analyze the feasibility and cost of producing synthetic natural gas, figure the minimum scale plant to be rated at 250 MM cfd. The only existing or proposed S. N. G. plants using coal as feedstock which are smaller than this size are experimental or pilot plants.

Plants rated at 250 MM cfd require different tonnages of coal depending on the coal's heating value. Plants of this size, producing at a 90 percent operating rate, have the following annual coal requirements for the coal feeds: