Weighing coal’s costs and benefits

June 20, 2009 by Ken Ward Jr.


Sunday’s Gazette-Mail includes a story I did on the latest study by West Virginia University researcher Michael Hendryx,  who has over the last couple of years been doing fascinating and important work about coal’s impacts on Appalachia.

As I explained in the story, this latest study:

…Questions the idea that coal is good for West Virginia and other Appalachian communities, and recommends that political leaders consider other alternatives for improving the region’s economy and quality of life.

hendryxpic1.jpgHendryx and his co-author, Melissa Ahern of Washington State University in Spokane, compared age-adjusted mortality rates and socioeconomic conditions across Appalachian counties with varying amounts of coal mining, and with other counties in the nation. They converted the mortality figures to something called the Value of Statistical Life (VSL) estimates, and then compared that to accepted numbers for the economic benefits of the coal industry to our region.

The result?

The coal industry generates a little more than $8 billion a year in economic benefits for the Appalachian region. But, they put the value of premature deaths attributable to the mining industry across the Appalachian coalfields at — by a most conservative estimate — $42 billion.

The authors conclude:

The human cost of the Appalachian coal mining economy outweighs its economic benefits.

And, they recommend:

In response to this and other research showing the disadvantages of poor economic diversification, it seems prudent to examine how more diverse employment opportunities for the region could be developed as a means to reduce socio-economic and environmental disparities and thereby improve public health.

Potential alternative employment opportunities include development of renewable energy from wind, solar, biofuels, geothermal, or hydropower sources; sustainable timber; small-scale agriculture; outdoor or culturally oriented tourism; technology; and ecosystem restoration.

The need to develop alternative economies becomes even more important when we realize that coal reserves throughout most of Appalachia are projected to peak and then enter permanent decline in about 20 years.

The study, “Mortality is Appalachian Coal Mining Regions: The Value of Statistical Life Lost,” is published in the July-August issue of Public Health Reports, the peer-reviewed journal of the U.S. Department of Health and Human Service’s Public Health Service.  The journal is available here,  but it is subscription only, and I apologize to Coal Tattoo readers that I have not been able to secure permission to post it on the blog or on the Gazette’s Web site. I expect WVU to be promoting this study’s publication with a news release, and perhaps they’ll find a way to post the actual study online for free.

Updated: I’ve gotten permission to post the entire paper, so here it is.

Hendryx and Ahern have published a series of other related articles over the last two years, some of which are summarized here.  One study in particular that received a lot of attention last year found that residents of coal-mining communities were more likely to suffer a variety of chronic health problems, even when the data was adjusted for other factors. Here’s a story I did that described that study and other work by these researchers.

My buddy Scott Finn at West Virginia Public Broadcasting did a nice piece last year on Hendryx’s research for the great show Living on Earth.

The National Mining Association, the West Virginia Coal Association, and coalfield politicians love to throw around numbers about coal-mining economic impacts.  And the folks at Marshall University’s Center for Business and Economic Research have over the years produced several studies promoting how great coal is for the regional economy (see here and here).

But the work by Hendryx is a more sophisticated (and difficult) analysis, which tries to do what a lot of political conservatives and folks in the coal industry say needs to be done: Weigh coal’s costs and benefits against each other when considering government policies that would impact the industry.

Oddly, this research hasn’t been cited much by Friends of Coal, like West Virginia Gov. Joe Manchin. After Hendryx published one of his papers last year, I asked the Manchin administration if they planned to look into the issue, and this is the response I got:

Gov. Joe Manchin plans no immediate state review of coal pollution’s impacts on public health following the release of four studies that raise questions about the industry’s effects.

Manchin asked two state agencies to look at the studies, but any serious follow-up investigation should be left to the federal government, state officials said.

“If what they are saying about coal, if you follow that assessment, that’s not just a West Virginia issue,” said Lara Ramsburg, Manchin’s communications director.

Interesting, given that these days, the Manchin administration’s position is that federal officials ought to keep their noses out of West Virginia’s coal industry.

As I pointed in my story, this new study is not a definitive cost-benefit analysis of coal. As the authors explained:

“They do not consider reduced employment productivity resulting from medical illness, increased public expenditures for programs such as food stamps and Medicaid, reduced poverty values associated with mining activities, and the pros and the costs of natural resource destruction,” the study says.

Natural resources such as forests and streams have substantial economic value when they are left intact, and mining is highly destructive of these resources,” the study says. “For example, Appalachian coal mining permanently buried 724 stream miles between 1985 and 2001 through mountaintop removal mining and subsequent valley fills, and will ultimately impact more than 1.4 million acres.

Coal generates inexpensive electricity, but not as inexpensive as the price signals indicate because those prices do not include the costs to human health and productivity, and the costs of natural resource destruction.

You have to kind of wonder why more research like this hasn’t been done across the Appalachian region. Isn’t this the kind of information our state leaders really need, as they try to sort out the controversy over mountaintop removal, figure out what kind of green jobs could make our state’s future bright, and generally look for A Better West Virginia?

32 Responses to “Weighing coal’s costs and benefits”

  1. Anonymouse says:

    And don’t forget, Hendryx also contributed to the study comparing the long-term costs and benefits of wind power versus mountaintop removal for Coal River Mountain, which readers can find here: http://www.coalriverwind.org/?page_id=143

    Conducting a similar analysis to the one he conducted in the study discussed in this blog post, Hendryx concluded in the Coal River Mtn study that:

    When externalities such as public health and environmental quality are factored in, a mountaintop removal mine ends up losing $600 million over its expected 17 year life. The costs of these externalities are taken in by the public in the form of health expenses and environmental clean up costs as well as lost resources, like ginseng and wild game. A wind farm would remain profitable over its life, forever.

    So this new study well complements the Coal River Mtn study, given the quote you include in this post:

    In response to this and other research showing the disadvantages of poor economic diversification, it seems prudent to examine how more diverse employment opportunities for the region could be developed as a means to reduce socio-economic and environmental disparities and thereby improve public health.

    Thanks to Michael Hendryx and Melissa Ahern for showing us one more solid reason for transitioning away from coal in the “coalfields” of West Virginia. It was proven with the CRM Wind study that there are better economic alternatives for local economic development, and now Hendryx and Ahern have built upon that by showing that the economics go beyond just taxes and jobs, they relate to human health as well.

  2. Casey says:

    I have not yet read the study but I can not understand the article’s headline in the paper reading “Coal’s costs outweigh benefits, WVU study finds” when the study is quoted with “Despite the significant associations between coal-mining activity and both socio-economic disadvantage and premature mortality, it CANNOT be stated with certainty that coal-mining causes these problems,” the new study says. Ken, how can you then use that headline?

    So I guy educated in psychology is writing an economic study. And it looks like from the quote “Next, Hendryx and Ahern calculated a number of excess age-adjusted deaths in coal mining areas, compared to non-coal areas of the region, at between 1,736 and 2,889. Using accepted scientific estimates for the “value of statistical life,” that translates to a conservative cost for the region of $41.8 billion a year”, it looks like a “statistical” life is worth $24MM. I bet my wife would like to see that out of me! But even if that was correct for a person’s whole life, can you use that number for a life cut short if you were trying to estimate an economic cost even if it can’t be stated with certainty the cause and effect. I guess I need to read the study.

  3. E. CLAY says:

    coal is w.va as a 39 year coal miner i know w.va would close down without coal malls would dry up for no one buying things we need to think hard as shell president said shell would not get in that for there is no money in it. The LORD put coal in the ground for us to make a living and we have done so many years true we have many accidents and black lung but we still need the jobs coal gives sure not all answers but we got to eat and provide a living for our families. GOD WILLING WE WILL.

  4. Brian Russell says:

    Sadly, or realistically, the answer to this entire question has been the 800 POUND GORILLA in the room – for decades!!
    We trade one source of energy for another.

    Both types mean economic stability, both mean jobs, both mean huge tax revenues, and both mean providing energy to the
    BOTH have their environmental drawbacks, both have safety issues, both have long term effects (good and bad) we may not fully realize for several more generations.
    It is far to complex an issue to debat on a “blog”; but the answer is simply do we, as West Virginians, want to give the country power via coal or controlled nuclear collision/reaction?

    It takes 7 to 10 years to build a fully operstional nuclear plant.
    It also takes alot of water. We have plenty of the water needed running through our river systems in WV. We are also centrally located to easily provide power to nearly two-thirds of this country’s population.
    Twenty to thirty nuclear plants in West Virgina would EASILY provide tens of thousands of jobs directly, and possibly hundreds of thousands indirectly.
    But,…. so does coal.

    A case of pick yer poison, huh?

  5. Matthew Cook says:

    As usual a well reasoned post with numbers. The headline at best seems misleading. If the value of each life is 24 million dollars than what is the value to the state of the thousands of people who are here now who would have to leave if coal mining suddenly ceased?

  6. Matthew Cook says:

    As a further note, cigarette smoking is commonly cited as causing 400,000 premature deaths a year. At $24 million per person that is $9.6 trillion per year. I guess if we banned smoking we could do away with the deficit in no time.

  7. […] opportunities for the region could be developed as a means to reduce … Read more here: Blogs @ The Charleston Gazette – » Weighing coal's costs and benefits Share and […]

  8. eastwood78 says:

    Mr. Clay: As you stated in your comment, you are a 39 year old coal miner. You did not say you worked for a MTR mining operator, or was a underground coal miner. (1) West Virginia would not close down (2) The malls would not close down. There will always be a Wal-Mart as well as other stores. (3) Yes, God did put the coal here for it to be used for a source of energy, but not just for the making of electricity. It is used by the steel mills as well as various other industries. The way you mention Black Lung and accidents, I get the impression that you are a underground coal miner, which is more dangerous than a Mountain Top Removal operation. There is enough coal reserves in underground coal mining in West Virginia that will last for over a 100 years. Coal will always have a place in West Virginia and it will provide jobs for you and your fellow workers for many years to come. I hope that you live far away from MTR mining and are not bothered by the daily blasting that destroys homes, the mountains, the water, and when the rain comes; so comes the flooding of nearby homes. May you continue to work in the underground mines, and work safely and be careful, for your family depends on you coming home to them after your shift is over. Also, please remember and cherish the beautiful green mountains of West Virginia which God created for all to enjoy. Remember West Virginia’s birthday which was June 20, 2009, which makes West Virginia 146 old, and God willing it will be standing for another 146 years. Let’s not give this great state too bad a name, and say that coal is everything, and West Virginia would close down without it. God bless all sides in this ongoing battle for the removal of some types of mining, and may they come to a reasonable agreement that both sides can live with in the future without all this name calling and threats against one another. Let us live in peace. Let us love thy neighbor. Let us be friends and talk to each other in a Godly matter. To all the fathers may you have a wonderful and Happy Father’s Day. Enjoy it with your family and friends.

  9. Ken Ward Jr. says:


    I’d encourage you to seek out a copy of the study and read the whole thing — I’m sure any university library can provide a copy. Unfortunately, as I mentioned, I do not yet have permissions from the journal to publish the entire thing on my blog.

    But, I can say that the headline is pretty close to a direct quote from the study — and that direct quote appears in my story:

    “The human cost of the Appalachian coal mining economy outweighs its economic benefits.”

    In addition, the study focuses on excess deaths that are associated with coal mining — by that, I meant excess deaths in coal-mining counties compared to non-coal-mining counties, with other factors (smoking, for example) adjusted for. While this does not PROVE that coal-mining causes these deaths, the associates are statistically significant, and tell scientists that there is something there that should be considered.

    Finally, your math is right, but you’re not understanding how a study like this works … and I will admit to not being an expert on these Value of Statistical Life calculations.

    But, Casey, your straight division isn’t the way it works. Instead, the researchers perform a calculation on the value of life and how many years were lost by premature death. I’m oversimplifying to try to explain…but in reality, the numbers they used for the value of a life were much less than $24 million — they used government-accepted figures more in the range of $3.8 million to $6.3 million, with some adjustments.

    I’ll try to post something tomorrow that quotes this section of the study so folks can understand it a little more clearly.


  10. ids says:

    FDR from the FDR memorial:

    “Men and nature must work hand in hand. The throwing out of balance of the resouces of nature throws out of balance also the lives of men.

    “I propose to create a civilian conservation corps to be used in simple work. More important, however than the material gains will be the moral and spiritual value of such work.

    If only 44 could combine these guidelines of 32 and the science of 2009. Instead, it’s a “clean coal” hoax.

    I’ve seen economic studies touting coal’s community benefits that appear to have a multiplier that results in economic benefits from increased health care expenditures (more emergency room jobs).

  11. rhmooney3 says:

    I always like benefits/costs ratios — politics at its finest.

    It’s a 10-page article about a study by WV University professor (a state employee) – http://www.rri.wvu.edu/vita/hendryx.htm

    His work and its results are publicly funded.

    Where’s the actual study itself?

    (Also, such acamdemic publications required peer review; those are also public records.)

    I’m not saying this is good or not — the actual study needs to be seen to make that determination.

  12. Danawv says:

    If you assume that the value of a human life is “priceless” that number goes up even higher than $42 billion. However, I would urge people to hear “human life” over “money” when they think about the consequences of this study — ok, maybe you don’t think that the people of Appalachia aren’t worth $42 billion — but do you think their lives are worth preserving at any price? What value would you give to the live of a loved one living in a coal county?

    For those who argue that citizens of the Appalachian coalfields lives are an acceptable trade off for $8 billion, I suppose you learned that from the same people who felt that mules were more valuable than men in a coal mine.

  13. Michael Hendryx says:

    I’d like to thank Ken Ward for covering my research in the newspaper and Coal Tattoo. But I would like to correct a couple of misstatements in the news article (Sorry Ken.)

    To try to come up with one single estimate of mortality costs is very difficult, because the answer depends on several questions. Mortality in coal mining areas compared to WHERE? Over what period of TIME? What is the right VALUE for a human life?

    So, we came up with a set of different estimates based on some different possible answers to this question, a total of 24 estimates. 23 of these 24 estimates showed that the costs of coal were greater than the benefits. The one estimate that is in the newspaper article ($41.8 billion) is a conservative reasonable choice for the best estimate. It is not the “most” conservative estimate as the article states, but it is conservative.

    The estimate of the number of deaths in the article, 1,736 to 2,889, is not the estimate we used to arrive at the $41.8 billion. The number of deaths in the article is based on some VERY conservative estimates (the details are hard to describe in a blog post), but the number of deaths we used was 10,923. This number was multiplied by a LOW estimate of the value of a life, approx. $3.831 million. (10,923 x 3.831m = 41.846b).

    It’s also true that the research article says we can’t say with absolute certainty that a coal economy causes these problems. We academics are trained to make conservative statements like that. But my view is that a coal-dependent economy is a weak economy, not a strong one (higher unemployment, higher poverty, lower income levels, higher death rates) and that to create a strong economy for West Virginia we should create an economy not based on coal. To me this seems incredibly obvious.

    Finally, I am not a formally trained economist but my co-author, Melissa Ahern, is. My background is in research methods and data analysis, which is what I did for this paper and others on this topic.

    Thanks everyone for your interest in this.

  14. Ken Ward Jr. says:

    Dr. Hendryx,

    I’m the one who should be apologizing to you for the errors in my news story — I’m terribly sorry about that. We will get them corrected, and run a correction in next Sunday’s paper.

    And let me assure readers than any inaccuracies in the story or my blog are my mistakes, and not those of the study authors’.


  15. Ken Ward Jr. says:


    My Gazette news story on the study has been corrected:


  16. […] Weighing coal’s costs and benefits […]

  17. E. CLAY says:

    eastwood 78 . No i’m not a thirty nine year old miner if you reread it you’ll see i’m a 39 years in the coal mines . Yes i worked underground but remenber nothing is free except the LORD and through sweat and tears miners have worked and will still work if people quit having people like in w.va university making bad surveys against them. No i have not worked for a number of years , you noticed i signed my letter with my name you should to because the truth set us free. GOD BLESS ALL COAL MINERS.

  18. Ken Ward Jr. says:

    Posted on behalf of Carol Raulston, media spokeswoman for the National Mining Association:

    The study really documents the health costs of being poor. This is not new information. The Robert Wood Johnson Foundation (RWJF) in its 25-year national program Investigator Awards in Health Policy Research found that, “income loss had the greatest impact on mortality among middle-income individuals, persistent poverty was the strongest predictor among low-income persons.” The researchers even took into account behavioral risk factors such as smoking, alcohol drinking, sedentary lifestyle and obesity—all of which accounted for only a small proportion of differences in mortality. They concluded by saying, “It’s deadly to be poor.”

    The RWJF researchers say raising the incomes of the poorest among us would have the greatest impact on reducing premature deaths. Somehow I cannot reconcile Michael Hendryx’s assumptions that without coal mining jobs low income communities would be healthier. Rather, putting thousands of coal miners out of work would seem to make these counties poorer and, thus, less healthy.

    Interestingly, some of the RWJF work focused on Detroit and the causes of premature deaths there. To carry Hendryx’s recommendations a step further, we should be attempting to disband the auto industry rather than spending billions to prop it up. I’m sure many of your readers oppose this public policy but not because they think the U.S. auto industry is the cause of premature deaths in Detroit. Proximity is a coincidence—not a determinate factor—both in Detroit and in Appalachia. To suggest otherwise is to contort the data beyond recognition.

  19. Clem Guttata says:

    Carol Raulston of the National Mining Association is conveniently ignoring the fact were it not for mining in those communities, there would be different economic development.

    That’s what Michael Hendryx’s study is showing–people in similar communities elsewhere in W.Va. are better off. The clear implication is coal mining drives out higher value economic development.

    As difficult as it is to accept, this study is putting local $$ figures to a global phenomenon: the resource curse of extraction industries. Appalachia is hardly alone in this tragedy. See this Wikipedia entry (Resource curse) for an introduction to the concept.

  20. […] against each other when considering government policies that would impact the industry,” Ward writes on his Coal Tattoo blog. “You have to kind of wonder why more research like this hasn’t […]

  21. […] has co-authored a study showing that coal is bad for the state's economy and people. From Ken Ward's excellent blog at the Charleston Gazette web site:Hendryx and his co-author, Melissa Ahern of Washington State […]

  22. […] anyone who believes that Appalachian coal mining is economically beneficial, you’ve got to read this. Key conclusion of this study: “The human cost of the Appalachian coal mining economy […]

  23. randy says:

    what we need to recognize is that the COST is paid by the communities in the coalfields , they pay with theur health.. and the BENEFITS are realized by the owners and coal executives

  24. […] there’s much more to the story than you are unlikely to get from the Charleston Gazette or simple-minded bloggers such as Blue […]

  25. […] in Appalachian Coal Mining” and has made a pdf of the study available through his blog, Coal Tattoo.  The authors are Michael Hendryx, associate director of the WVU Institute for Health Policy […]

  26. […] initierat om kolindustrin pÃ¥ bloggen Coal Tattoo. I juni bÃ¥de skrev han i tidningen och bloggade om en undersökning frÃ¥n University of West Virginia som visar att kostnaderna för […]

  27. […] in Appalachian Coal Mining” and has made a pdf of the study available through his blog, Coal Tattoo.  The authors are Michael Hendryx, associate director of the WVU Institute for Health Policy […]

  28. […] Kentucky environmental attorney Sanders says West Virginia blog has great articles and links on the true cost of coal mining to Appalachia. A blog that looks at the overall socioeconomic values of coal mining in Appalachia has caught my eye and I would like to give everyone an opportunity to look at it.  The web address is: http://blogs.wvgazette.com/coaltattoo/2009/06/20/weighing-coals-costs-and-benefits/ […]

  29. […] on the list like Michael Hendryx, the WVU professor whose research shows that coal costs Appalachia more than it provides in economic benefits, or from the Sierra Club, which published a report showing that limits on mountaintop removal […]

  30. […] of things aren’t mentioned, though … There’s the WVU study that found coal costs Appalachia more in premature deaths than it provides in economic benefits.  […]

  31. […] to wonder why some other things weren’t at least mentioned in the study … – The work of WVU’s Michael Hendryx (which — unlike Witt and Kent’s report — was published in peer-reviewed journals) […]

  32. […] … apparently, I thought, a professor at a respected university has “debunked” the work of West Virginia University’s Michael Hendryx and concluded the Hendryx studies were […]

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