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Rural Blog: Study shows how coal’s fall has hurt Appalachian suppliers, may threaten rail network

A 45 percent drop in Appalachia’s coal production from 2005 to 2015 has put other industries in the region at risk, says a study commissioned by the Appalachian Regional Commission. Researchers from West Virginia University and the University of Tennessee and identified the “coal industry ecosystem” in the region, mainly the industry’s supply chain of goods and services.

“As these suppliers are impacted, jobs are imperiled, and the fiscal health of communities is weakened,” says the study’s executive summary. “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 report found the greatest such impact in Mingo and Boone counties in West Virginia; Harlan, Leslie, Martin, Pike, and Perry counties in Kentucky; and Buchanan and Dickenson counties in Virginia.

Appalachian coal, used overwhelmingly to make electricity, has been hurt by cheap and abundant natural gas. That is changing the structure and location of power plants, which “creates additional impacts on the economic base, tax base, and employment prospects,” the summary says. Even more worrisome, “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.”

The report said the impact of all these changes has been greatest in Eastern Kentucky and southern West Virginia, where coal resources are more depleted and thus more expensive to mine. It predicts “a modest recovery” in Central Appalachia” due to higher global demand for metallurgical coal,” used to make steel. “Overall, however, expected improvements will capture only a small fraction of the decline that has been observed over the past decade.”

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The Rural Blog is a digest of events, trends, issues, ideas and journalism from and about rural America, from the IRJCI, based at the University of Kentucky. The Institute for Rural Journalism and Community Issues is an extension program for rural journalists and news outlets. It takes no positions on issues and advocates only for strong news coverage, responsible commentary and things that make them possible, such as open-government laws. For more information see www.RuralJournalism.org.

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