An Economic Analysis of the Appalachian Coal Industry Ecosystem: Summary Report

Randall Jackson (), Eric Bowen (), Christiadi (), John Deskins (), Brian Lego (), Peter Jarosi (), Mark Burton (), Rebecca Davis (), Charles Sims (), Matthew Murray () and Peter Schaeffer
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Eric Bowen: John Chambers College of Business and Economics, Bureau of Business and Economic Research, West Virginia University
Christiadi: John Chambers College of Business and Economics, Bureau of Business and Economic Research, West Virginia University
Brian Lego: John Chambers College of Business and Economics, Bureau of Business and Economic Research, West Virginia University
Peter Jarosi: Regional Research Institute, West Virginia University
Mark Burton: University of Tennessee-Knoxville
Rebecca Davis: University of Tennessee-Knoxville
Charles Sims: University of Tennessee-Knoxville
Matthew Murray: University of Tennessee-Knoxville

Working Papers from Regional Research Institute, West Virginia University

Abstract: The decline in the demand for coal has led to significant negative impacts in areas throughout Appalachia. Consider the integrated effects across components of the coal industry ecosystem (CIE). As extraction activity is diminished, there are ripples through the industry supply chain that extends to a wide number of sectors, occupations, and county and multi-county regions of the Appalachian economy. As these suppliers are impacted, jobs are imperiled, and the fiscal health of communities i s weakened. Displaced workers will need to seek alternative employment opportunities that may entail investments in formal education and training, and this takes both time and resources. As the economic base suffers, state and local governments will see their capacity to fund education weaken as well. The decline in natural gas prices and increasing environmental concerns, along with the age of the capital stock, has affected coal-fired power generation in the Appalachian Region. When capacity is replaced by natural gas, the demand for the Region’s coal is further distressed. The shifting structure and spatial location of power generation creates additional impacts on the economic base, tax base, and employment prospects. A vibrant rail transportation infrastructure has developed to support coal-related commerce and this regional asset is now at risk. Retirement of portions of the railroad capital stock may translate into higher transportation costs and diminished opportunities for economic development tied to the movement of bulk commodities, inputs, and final products.

Keywords: Regional Economics; Education; Energy; Coal; Human Capital; Transportation; Appalachia (search for similar items in EconPapers)
JEL-codes: I25 J24 O13 O18 R11 R15 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2018-01
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