Economics of Strip Mining

Chris Irwin at United Mountain Defense just delivered one of the most awesome point-by-point refutation of every coal industry talking point ever.
Stat-by-stat, and state-by-state, Chris refutes Congressman Duncan’s (R TN-1) silly hogwash about “jobs and economics and helping poor people” as the reason for continuing mountaintop removal and strip mining. Everyone, by now, should know that WV is the poorest state in the country, mining jobs have been cut 90% (from a high of about 150,000 to currently about 15,000) with just as much coal output as before, and that the coal counties of Appalachia are some of the poorest in the country. C’mon congressman. Listen to Chris Irwin! He knows his stuff…

Thanks Chris!

…

“We are not burdened by below market long term pricing contracts and because our workforce is not unionized we do not have the extensive union pension and health care liabilities, including black lung liabilities and post-retirement medical
benefits, that impact many of our competitors.”

National Coal Corporation SEC filing1

This is an economics article about strip mining in Tennessee. I begin by showing data about the common economic effects in other Appalachian States, and Counties other than Tennessee, in that order. From that I will compare Tennessee and Tennessee counties–with data on Campbell, Scott, Anderson and Claiborne Counties.

“When you consider this petition, I hope you will keep in mind that when we drastically limit domestic energy production, it both destroys jobs and drives up prices. When this happens, it hurts the poor and low income and working people most of all.”

Jimmy Duncan
Congressmen
To OSM in Support of Strip miner
National Coal

Unfortunately for Congressmen Duncan his argument is incorrect in regards to the destructive practice of strip mining which he is supporting with this statement.
Mining data from both the industry and the regulatory agencies in West Virginia, Kentucky and Virginia demonstrates one thing–as strip mining increases, jobs decrease.

Hundreds of thousands of mining jobs have disappeared while more coal is removed from the Appalachians than ever. Why is this? Dynamite is cheaper than
people. Modern strip mining is heavily mechanized and employs as few people as possible. Strip mining companies do not hire nearly as many miners as traditional deep mining 300 ton drag scoops and town-house sized bulldozers now do the jobs that used to employ miners. Here is the economic data on coal and coal jobs on a state by state basis.

West Virginia

In 1949 West Virginia produced 122,913,540 tons of coal. At this time 121,121 people were employed by mining in West Virginia. Contrast those numbers with 2004 when only an estimated 16,037 were employed in mining. That’s a drop of over 105,043 mining jobs in West Virginia in a 56 year period. How much coal was produced in West Virginia in 2004? 153,631,633 tons. That’s 30,714,093
more tons of coal that were produced in 2004 than 1949, with 105,043 fewer workers. Additionally membership in the mining unions plummeted during
this period undermining miners’ ability to collectively bargain for items such
as wages, health insurance and safe mining conditions. The reason for the plummeting of the membership is apparent: fewer miners.2

Kentucky

In Kentucky in 1979 there were 47,190 people employed in mining. In 2002 that number had dropped to 17,042 people. That’s a loss of over 30,148 mining jobs!3
And coal production during that period? In 1979 Kentucky produced 67,067,653 tons of coal. In 2002 Kentucky produced 131,402,797 tons, almost double the amount of coal, with close to 1/5 of the jobs. How is this possible? It is the nature of strip mining. Strip mining by its very nature erodes and destroys miners’ jobs; it is the death knell for mining unions and more traditional deep mining techniques. Strip mining does not generate coal jobs, it destroys them. As coal from strip mines begins competing against coal from deep mines, the earth
is stripped of its coal and the miners are stripped of their jobs.

Mountain top removal and other forms of destructive strip mining don’t even have to pay for dynamite anymore; they use diesel fuel and ammonium nitrate – the same fertilizer that was used to blow up the Alfred P. Murrah Federal Building in Oklahoma. With this fuel and fertilizer, strip mine companies manage to avoid even the cost of more expensive explosives. With this mix, strip miners blow off
entire ridge tops one shot (detonation) at a time.

Most of the strip mine companies are not unionized. National Coal, in the quote above, bragged about their low labor cost because they don’t have to provide their
employees with health insurance, black lung “liabilities”, and post retirement benefits. By “liabilities” they mean if any of their miners get black lung they are on their own and the state will eventually have to pick up the tab. Will
TNCARE cover black lung? Strip mining companies also externalize their costs. Maintenance for sediment dams for all eternity is on the state, so it’s cheap. After the bonds are returned, there is no one for the state to turn to for payment to repair massive landslides like those occurring all over the New River Watershed in East Tennessee. Downstream it is municipalities that have to pay to remove the sediment from the water. Toxic run-off and bright orange streams become the responsibility of either the future, or those who live downstream. Of course it’s cheap to mine when strippers don’t have to worry about blowing up streams, clear cutting entire mountainsides and wholesale destruction of watersheds– or taking care of their workers.

Virginia

In the year 2000, the Virginia coal industry was the nation’s eighth largest, in terms of tonnages produced. In Virginia the three largest coal counties are Buchanan, Dickenson, and Wise. In 1950 Virginia produced approximately 20,000,000 tons of coal. In 2000 that number was close to 40,000,000.4
The numbers of miners plummeted following the same trend as Kentucky and Virginia during that period. In 1990 10,265 miners were employed in Virginia–in 2004 that number had dropped to 4,001. Additionally, wages and amount of hours worked also dropped.5 The drop in employment was in deep mining during the same period while strip mining increased.

The Coal Counties

It is illuminating to look at the poverty rates of various coal producing counties in West Virginia, Kentucky, Virginia, and even in Tennessee. What becomes apparent is that the counties most heavily mined are often the poorest. Strip mining companies often use this to argue that the jobs they provide are important to the regions they strip. But given the billions of dollars worth of coal that has been torn and sold from these counties the poverty should not be so dire. If even
a 10th of the value taken from the counties in coal were reflected in tax dollars, income for county residents and other income these counties should be some of the richest in America–but the reality is the opposite.

West Virginia
Coal Counties

As of 2002 West Virginia was ranked # two in coal production in the nation second only to Wyoming. In 2002 WVA produced 150.1 millions of tons of coal according to the U.S.DOE Coal Industry Annual 1993-2002.

As of 1999 Clay county was the 5th poorest in West Virginia, Lincoln was the 4th
and Mingo was 3rd with over 29.7 percent of that county’s population living in poverty. McDowell is the poorest county in West Virginia and 28th poorest county in America with an average income of $10,174. Over 37.7 percent of the people in this county live in poverty.6 What do these West Virginina
counties have in common? Strip mining. These counties are some of the most
heavily mined in West Virginia.

Tennessee

West Virginia is 2nd in the nation in coal production; Kentucky is 3rd. Tennessee isn’t even in the top ten. Of non-farm jobs, what is number one in Tennessee? Tourism. Of the top five industries in the State of Tennessee, tourism – not strip mining, is king. Mining isn’t even in the top five. Travel and Tourism employs over 177,100 people in the state of Tennessee.7 Tourists do not come to see
strip mines. Decimated streams that are bright orange as a result of strip mining do not attract fishermen. Tourists come to Tennessee because of our state’s natural beauty, with good cause. Blasting the tops off of our tourist-drawing mountains for an industry that does not bring long term jobs to our state, undermines the number one sustainable employer in our state: tourism. Tennessee is 12th in the nation overall in tourism.8 This holds true even on a
county by county analysis of Tennessee counties now catching the brunt of strip
mining in Tennessee. These counties are Campbell, Claiborne, Scott and a
chunk of Anderson county.

Campbell County

“Coal production is an important segment of our local economy.”
Jerry E. Cross
Campbell County Mayor To OSM
.
No coal company is among the top 10 employers in Campbell county. In fact no coal company is even among the top 31 employers of Campbell county.9 Campbell is the 5th poorest in Tennessee with 22.8 % in poverty. The poverty rates in these Tennessee counties is similar to the poverty rates in other Appalachian counties that have had the “benefits” of King Coal. The state of Tennessee estimates that if you combine agriculture, forestry, fishing, hunting and mining as one sector it totals 2.4% of the economy in Campbell county.10 This suggest that if you substract fishing, hunting, forestry, and agriculture from Campbell county’s economic base you get what is left of 2.4%. Given that some of the best hunting in Tennessee is in Campbell county and the Cumberland Plateau, it is safe to suggest that hunting alone is a significant bite out of that percentage. Arts, entertainment, recreation and food services represent over 7.1
percent of Campbell county’s economic base. That’s over triple the short term
money that strip mining brings in.

Retirement communities are a big industry moving into Campbell county.
Rarity Mountain Resort, is near Jellico, a small town located on the Tennessee-Kentucky state line. The project will combine a residential retirement community expected to include 1,000 new homes with first-class resort
facilities.11

Retirees are not moving to Tennessee counties so they can look out their window and see coal trucks, orange streams, and strip mines. Campbell county is part of the Governor Bredesen’s Three- Star Program for Community Economic Preparedness. As a basic unit of this plan is a community beautification program. Blasted mountain tops and striped clearcut hills are not conducive to a beautification program.

Scott County

Scott county is the 9th poorest in Tennessee with 22.2 % of its citizens in poverty. In Scott county, combined mining (deep and surface) with fishing, hunting and agriculture is at 2.5% while the Arts, entertainment, recreation, accommodation and food services, bring in 4.8% of the economy. Again, if you subtract hunting, fishing and agriculture from the percentage–and then substract deep mining–you see how little strip mining contributes to the county. Additionally, it is predictable how much damage strip mining is doing to the larger
economic contributers like hunting, fishing and tourism.

Anderson County

“Coal production is an important segment of our local economy. We support National Coal’s initiative and will do what we can to ensure our region’s economic contributions of the mining industry are preserved.”

Rex Lynch
Anderson County Mayor. Letter to OSM

In Anderson county the agriculture/mining group is less than 0.7% of the county economy, while the Arts, entertainment and recreation is over 6.6% of the local economy–thats over 6 times the employment generated by this short term industry.12 Mining employed 231 people in Anderson county in 1990. If the experience of West Virginia and Kentucky repeats itself in Tennessee this number can be expected to DROP in Anderson, as well as Claiborne, Scott and Campbell counties as the strip mining accelerates.

Conclusion

The ultimate cost to both the state of Tennessee and the counties most impacted by destructive surface mining, is more than the short term loss of jobs, and the unsightly clearcutting and blasting that tourists are now seeing from planes as they fly into our state.

Additional cost include damage to roads from coal trucks, destruction of the natural beauty which attracts retirement communities and predictable detrimental effect that blowing up mountains and streams has on tourism. And when an industry that isn’t even in the top 10 starts eroding the number one employer in a state its time for people to take a serious look at the economic consequences of strip mining.

There are additional downstream costs such as water purification to remove sediment, loss of habitat where people hunt, and destruction of highland watersheds; these details need to be taken into account when looking at the true cost of strip mining. When you look beneath the surface of strip mining it is not only destructive environmentally– but it has a destructive impact on the hard nosed economics of the counties it strips. The coal companies may help a school out for PR–but beneath that there is a true cost, in jobs and dollars and cents, that the strippers are hoping Tennessee doesn’t wake up to.

About JW Randolph

Raised on the banks of the Tennessee River, JW's work to create progress in his home state and throughout Appalachia has been featured on the Rachel Maddow Show, The Daily Kos and Grist. He served first as Appalachian Voices’ Legislative Associate and then Tennessee director until leaving to pursue a career in medicine in 2012.