Finding the Cost of Coal
Two reports try to measure the cost of coal. They both find that the “black gold” of Appalachia causes more problems than it solves.
What does coal cost mining communities?
More than it gives in return, according to two new reports. The studies, from Kentucky and West Virginia, both conclude that the benefits of coal mining don’t come close to matching its costs.
One of the reports, in fact, finds that coal mining is responsible for lower levels of education, increased outmigration from coal communities, and thousands of premature deaths each year.
The Kentucky study measured the cost of coal to state government. The Mountain Association for Community Economic Development (MACED) counted the revenues to state government from coal mining and coal employment. And it calculated what the coal industry costs the state government: MACED added state-funded benefits, such as tax incentives, and the costs of regulation and road maintainance (repairs to the roads damaged by the large trucks that haul coal).
MACED’s analysis concludes that in 2006 coal mining cost the Commonwealth of Kentucky $115 million more in subsidies and expenditures than the state collected in taxes and fees.
MACED included taxes paid by the industry (mostly sales and corporate income) and taxes paid by individuals who were either directly or indirectly employed by the coal industry. (For instance, because a cook at a restaurant in a coal community earns part of his or her salary from mine-industry diners, a portion of the cook’s state income taxes were included as a benefit to the state from coal.)
Coal industry taxes amounted to nearly $528 million in revenues to the state in 2006. But the cost of coal — including $239 million to maintain and repair coal haul roads — came to $643 million.
“The estimates presented here suggest that while direct employment in coal by itself is a net benefit both to those employed and to the state of Kentucky, this benefit comes at a significant cost,” the MACED report concludes. “The industry itself costs the state more than the industry contributes to public funds and the indirect employment impact, while important, is concentrated in lower wage work such that we do not see a net increase in state revenue.”
The full report can be downloaded here.
A spokesman for the Kentucky Coal Association trade group said that he hadn’t read the study but was sure it was inaccurate. “I’ve got a lot of choice words that I could offer on this, but it would sound pretty bad,” Bill Caylor told the Lexington Herald-Leader’s John Cheves. “It’s voodoo economics.”
The second study comes from researchers at West Virginia University in an article published in the latest issue of Public Health Reports, a scholarly journal. Michael Hendryx and Melissa Ahern examined mortality rates in Appalachian coal mining counties between 1979 and 2005, an attempt to calculate the cost of coal in the shortened lives of mining community residents.
They concluded that the “human cost of the Appalachian coal mining economy outweighs its economic benefits.”
The full West Virginia report can be downloaded here.