Coal Demand, Market Forces, and US Coal Mine Closures

Brett Jordan, Ian Lange and Joshua Linn
Authors registered in the RePEc Author Service: Brett J Watson

No 6988, CESifo Working Paper Series from CESifo

Abstract: Economic transitions have the potential to displace workers and cause social unrest. Coal mine closures in the eastern United States due to the changing electricity system and the resulting employment losses in rural areas have become salient issues for all levels of government. Previous research has not distinguished among the potential causes of recent mine closures, such as rising production costs and decreasing coal demand from the electricity sector. This analysis utilizes unique data on coal mine and power plant operation to estimate the impact of supply and demand factors on mine closure. We model closure as a function of expected profits, which allows us to compare the effects on mine closure of specific demand and supply shocks to expected mine profits. Our results suggest that each shock substantially affected coal mine employment. Increasing costs of producing Appalachian coal have had the largest impact on closures with lower natural gas prices and lower electricity demand each accounting for a substantial number of closures additionally.

Keywords: coal mining; firm exit; fuel procurement (search for similar items in EconPapers)
JEL-codes: L51 L71 Q35 Q53 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-ene and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Coal demand, market forces, and U.S. coal mine closures (2023)
Working Paper: Coal Demand, Market Forces, and US Coal Mine Closures (2018)
Working Paper: Coal Demand, Market Forces, and US Coal Mine Closures (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_6988

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