rights for use in connection with the project near Davis Dam, and Utah has the water rights for the Four Corners site. The availability of cooling water will be an important influence in determining the priority of these projects. Obviously coal must compete with its rivalsoil, natural gas, and nuclear fuelsand our coal must compete with these fuels as well as other coal deposits. We have offered to supply coal sufficient to fuel one or two 750,000 KW units at Four Corners, and this is under active consideration by Southern California Edison, Arizona Public Service, and others who would participate in this program. If agreement is reached, the proposed generating facilities would go on stream in the latter half of 1969. Southern California Edison and Arizona Public Service have called for tenders from three engineering construction companies for the design and construction of these power plants and the announcement of this in the Wall Street Journal led some people to conclude that agreement has been reached with Utah. This is not the case, although we are hopeful that these negotiations which have extended over a period of many months will soon be resolved. If this matter is resolved in our favor, the impact on Utah will be noteworthy. To fuel two 750 MW units our present coal production of 2 1/2 million tons would be increased to approximately 8 1/2 million tons annually under a long-term contract that would probably run 30 years or more. Our company earnings would be increased both in quantity and in quality, and the latter point is important. While our profits per ton of coal are modest, domestic earnings tied to public utility demand in areas of rapid growth are in my opinion entitled to a higher price-earnings multiplier than any other earnings that our company has. Kanab While we submitted our original offer for coal from the Navajo mine in August '64, more recently we have been discussing with Southern California Edison the 10 possibility of supplying them with coal for thier Mojave or Davis Dam project from our presently undeveloped coal reserves near Kanab, Utah. Here we have some 165 million tons of coal reserves, of which 65 million tons can be mined by stripping methods and the balance by underground methods. Water still is not readily available at the mine and we are studying the possibility of transporting this coal by pipeline to the proposed generating site. The Mojave project differs from Four Corners project in that the generating station will not be at the mouth of any mine and will be dependent upon the shipping of coal over a considerable distance, while at Four Corners generating facilities, cooling water, and coal are all together. At Mojave, of course, the remoteness from coal is a disadvantage which is offset to some extent by the location of the power plant in closer proximity to the Edison Company's market and the shorter distance that the electricity must be transported. It's too early to appraise the possibilities of Kanab, where negotiations are really just getting under way, and we are in part competing with ourselves, for we have indicated that we can supply from 5 1/2 million to 6 million tons of coal annually from the Kanab deposit. The Southern California Edison 1965 Statistical Review indicates that the company anticipates receiving power both from Four Corners and Mojave. With the growing demands for energy in the Far West I am convinced that any large low-cost coal reserve will sooner or later find its place in the scheme of things and will be mined for future electric power needs. Queensland Coal The third program that we have under way is the possible development of a coking coal property in the State of Queensland in Australia. At the present time Utah controls some 2400 square miles of coal land under an Authority to Prospect. These lands stretch north and south a distance of approximately 170 miles and are inland from the seacoast 100 to 150 miles. 11