Document Type

Article

Publication Date

1-2018

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.

Comments

Prepared for the Appalachian Regional Commission under contract # PW-18673-16.

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