Semester

Spring

Date of Graduation

2022

Document Type

Dissertation

Degree Type

PhD

College

Chambers College of Business and Economics

Department

Economics

Committee Chair

Shuichiro Nishioka

Committee Co-Chair

Arabinda Basistha

Committee Member

Arabinda Basistha

Committee Member

Jane Ruseski

Committee Member

James Scott Holladay

Abstract

The U.S. coal mining industry was once a booming industry which created and defined communities, particularly in Appalachia. The industry has, however, transformed significantly in the last couple of decades with the passage of environmental policies, with competition from the Shale Revolution, from changes in company ownership, and from mine safety regulation. Overall, the coal industry during this time has experienced a massive decline in production and employment. This dissertation is composed of three papers that investigate these mechanisms and their role in understanding market structure, coal transactions and prices, and mine safety outcomes. Motivated by the shutdowns of U.S. coal mines, Chapter 1 uses data from the Energy Information Administration (EIA) and hand-compiled coal parent company data, to conduct short- and long-run coal mine survival analyses using mine-plant transaction data. It hypothesizes that utilities that faced higher delivery coal prices were more likely to replace coal-fired with natural gas powered generators. Conditional on the overall U.S. natural gas to coal price trend as well as proxies for mine and plant exposure to environmental policies, the two-stage least squares results indicate that the mean difference in coal delivery price in 2010 between Appalachian mines and other mines causes the mine-plant survival rate to differ by 12.1 percentage points over the 2010-2020 period. Chapter 1 concludes that the mass exits of coal mines in Appalachia arose primarily because underground mines typical of Appalachia are more expensive to operate than surface mines typical of other regions. Following Chapter 1, Chapter 2 looks more closely at how coal markets for electricity generation are concentrated and localized within the United States, particularly Appalachia. Using mine-power plant transaction-level data over the 2009-2019 period from the U.S. Energy Information Administration (EIA) and hand-compiled data on operating companies’ parent companies and individual owners, Chapter 2 shows that an average power plant sources coal from 4 parents and that around 30% of power plants source coal from a single coal parent. It finds that, conditional on the overall trend, local concentration in Appalachia increased coal delivery prices, with power plants paying up to 9.6% more for coal when sourcing exclusively from a monopolist parent company. Using the same hand-compiled research as Chapters 1 & 2, Chapter 3 investigates coal mine safety and the behavior of coal mine safety violators. This Chapter covers 2002-2018, also using data from the Mine Safety and Health Administration (MSHA) and the United States Energy Information Administration (EIA). It was inspired by the passage of the federal Mine Improvement and New Emergency Response (MINER) Act of 2006, which aimed to improve mine safety in the United States after the deadly Sago mine disaster. It finds that while some underground mines were reported to be less negligent after the Act, safety did not improve uniformly across all mines. Finally, Chapter 3 finds that financially constrained parent companies regardless of listing status are responsible for exposing their miners to more potentially fatal working conditions.

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