By Chris Hamilton
August 2, 2018 - As the coal industry continues to rebound, its overall contribution to West Virginia’s economy is nothing short of phenomenal, supporting upwards of 17 percent of the state’s total GDP.
According to John Deskins, director of the West Virginia University Bureau of Business and Economic Research, the coal industry and coal-fired power generates a total of $13 billion in overall economic activity in West Virginia. For context, total economic output for the state as measured by gross domestic product (GDP) was around $77 billion in 2017.
According to Deskins’ newest report, “The Economic Impact of Coal in West Virginia Economy,” which was commissioned by the West Virginia Coal Forum, the coal industry currently employs more than 13,000 miners who on average make $85,000 yearly (twice the average in-state salary) and conservatively support another 25,000 jobs throughout our state. Add in the 2,800 coal-fired power plant and utility workers, and you have a $2.5 billion payroll.
West Virginia’s 100-plus mining operations purchase local supplies, use local contractors and employ a highly complex, technologically advanced loading, handling and transportation system that safely transports base fuel for electric generation and steel production throughout the world.
Total payout for these skilled tasks equates another $6.5 billion annually.
And as it relates to taxes, West Virginia coal contributes a whopping $652 million in overall tax contributions to state and county governments.
Accounting for about 50 percent of all state exports, West Virginia coal is shipped to at least 47 foreign destinations. West Virginia is the leading export state and accounts for upwards of 40 percent of all U.S. coal exports to markets in China, India, Brazil and the European nations.
Most are aware that West Virginia has two major types of coal: steam/thermal coal which is consumed to produce electricity, and metallurgical coal which is relied upon to produce steel. West Virginia has vast reserves of high-grade “met” coal.
While solar, natural gas, nuclear and wind can compete with steam coal to produce electricity, the steel industry requires met coal for the coking process that is part of steel production. There are no substitutes, and West Virginia has more high quality met coal than anyone else, which is why we are currently shipping it around the world.
Even better, volumes of steam coal exports from West Virginia also are on the rise as international demand for coal increases because of its low cost and reliability for electric power generation.
Simply stated, more steel and power is needed to support and sustain the growth we are seeing across the globe as more developing nations grow their economies and infrastructure.
West Virginia coal always has maintained a healthy share in the international marketplace. And the infrastructure is in place to accommodate rising world demand.
World reliance on West Virginia coal should help stabilize this industry for years to come as we continue to make progress with domestic policy and increased production. This underscores coal’s amazing comeback and importance to our state in the past, present and future.
Hearing coal trains, seeing miners going to work and watching full coal barges travel our rivers not only signals coal’s recovery, but also rings as a stark reminder that the beast behind West Virginia’s economic health is ever so present. West Virginia must continue to keep coal in the center of our plans for economic diversification and growth.
Chris Hamilton is co-chair of the West Virginia Coal Forum, an organization representing business and labor in the coal industry. For information, visit www.wvcoalforum.org.
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