5.1 INTRODUCTION

In this chapter we summarize the capital demands and dependence on external funds of those sectors of the energy industry not considered in the two previous chapters. We will examine the following sectors: natural gas transmission and distribution, coal production and transportation, and nuclear fuel production, processing, enriching, and reprocessing. Following the National Petroleum Council's lead, we did not treat synthetics (SYNGAS and SYNCRUDE) or natural gas production separately; both were factored into the analysis of the petroleum sector.

While natural gas and coal have a large share of the composition of current energy consumption (32 percent and 17 percent in 1972), their role is expected to be moderated in the future: the NPC's U.S. Energy Outlook projects domestic, synthetic, and imported natural gas to constitute 28 percent of total energy consumption in 1985 under Case II and 24 percent of total energy consumption in 1985 under Case III. Coal use is expected to grow at a rate of 3.5 percent per year—less than the 4.2 percent projected for total energy consumption. The nuclear fuel industry has minimal capital requirements in comparison to the rest of the industry.

To the best of our knowledge, only two capital demand studies have been undertaken for these segments of the energy industry. The NPC's U.S. Energy Outlook is one; the other is the previously mentioned Bankers Trust study. The former is more detailed than the latter, so we will use it here.