Tom Witt of WVU, right, and Cal Kent of Marshall University discuss the coal industry economic impact study they performed for the West Virginia Coal Association. The study was released this afternoon at the annual Coal Symposium, an industry meeting in Charleston, W.Va.
A while back, the West Virginia Coal Association retained business research centers at West Virginia University and Marshall University to “provide an economic impact analysis of the coal industry in West Virginia.”
Today, Tom Witt of WVU and Cal Kent of Marshall released the product of their work during the annual Coal Symposium, a coal association meeting here in Charleston. Here’s how the report (available online here) describes itself:
The purpose of the study is to provide the public and policy makers an unbiased and reliable determination of how important the coal industry is to West Virginia.
OK … It might have been nice — especially since Witt and Kent promote themselves as academics — if they had made it a little more clear what they weren’t going to do. Because this study is pretty one-sided, looking only at positive impacts of coal — jobs, tax revenues, etc. — and totally ignoring any potential economic costs of this major industry. It’s hardly a cost-benefit analysis and it most certainly is not what Kent called it — the “definitive study on the coal economy in West Virginia.”
More on that in a moment … first, here’s the summary of what Witt and Kent report:
— Coal provides more than 63,000 direct and indirect jobs
— Coal provides a total business volume of $25.53 billion
— Total employee compensation from coal was nearly $3.6 billion
— Total value added was $7.6 billion.
Preliminary estimates released by the U.S. Bureau of Economic Analysis indicates that for 2008 mining, which includes coal mining, oil and gas extraction and support activities for coal, accounted for $5.7 billion or 9.2 percent of GDP in West Virginia.
Updated: With a link to a Gazette print story on the study.
The report concludes:
Probably there is not another industry more vital to West Virginia’s economy than is coal. This report documents that statement. As it spread throughout the state, the loss of coal production or even its substantial reduction in use would have serious consequences.
West Virginia is a low income state. Reduction in the use of coal would worsen an already bad situation particularly in those areas which are most in need of jobs and income. At the same time, the demands placed on state government would accelerate for public assistance, support of schools and medical services. But the reduced income received by the state would leave it without the fiscal resources to respond.
And, the report outlines what it calls the major threats to West Virginia’s coal industry: Legislation to limit greenhouse gases and deal with global warming, efforts by the Obama administration to reduce the water quality and other damage from mountaintop removal coal mining, and EPA’s proposal to regulate carbon dioxide emissions.
If you read the report, and if you listened to Witt and Kent describe it to their coal industry clients at today’s meeting, you would think environmentalists or other enemies of coal are about to shut down all mining. Kent, for example, after rattling off coal’s financial contributions to local little leagues, schools, fairs and festivals and other community projects said all of that “would disappear if coal were to disappear.”
But oddly enough, talking to reporters after the formal presentation, Tom Witt made this remark:
Coal is not going to leave this state. We’re not going to have a shutdown tomorrow of the coal industry in West Virginia.
And perhaps that’s what is most disappointing about this major report from respected economists at West Virginia’s two major institutions of higher learning … it falls into the same old trap, setting up a straw man argument, violating Sen. Robert C. Byrd’s rule that West Virginia leaders should act as “honest brokers” on coal issues in order to forge a future for the state and its people.
At the end of the report, Witt and Kent wrote:
It was not our intention to make the coal industry appear to be more important than it is. But its value to the state should not be underestimated.
OK, I got the part about not underestimating coal’s importance But by totally, completely and blatantly ignoring any and all negative impacts, Witt and Kent have certainly made coal appear to be more important than it is. You can’t do a cost-benefit analysis without working the costs in there somewhere.
You have 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) to document the fact that coal costs Appalachia more in adverse health-impacts and premature deaths than it provides in economic benefits.
— The recent study (also published in a peer-reviewed journal) that documented the scientific consensus that mountaintop removal’s environmental impacts are “pervasive and irreversible.”
— Another study (not peer reviewed) commissioned by the Sierra Club that found that limits on mountaintop removal would not shut down the entire West Virginia coal industry or kill the state’s economy.
— A study in Kentucky that concluded coal there takes $115 million more annually from the state in services and programs than it contributes economically.
— A National Academy of Sciences study that documented $62 billion in hidden costs — in the form of health impacts — from the nation’s coal industry.
I asked Cal Kent after the meeting why the report didn’t include any discussion of these sorts of things … here’s what he said:
There are other issues that may be related to coal production. That was not what we were asked to do.