Wind vs. MTR for Coal River Mountain: The Economic Debate
“The timing of these costs and benefits are important. The benefits of mountaintop removal mining would end after 17 years when the mining ends, but the costs of mountaintop removal mining are projected to continue due to the expected deaths and illnesses caused by the coal mining. In contrast, the benefits from the wind scenarios continue indefinitely.” 
[Photos on left of Kayford Mountain courtesy of Rory McIlmoil. Wind turbine photo taken in Tucker County, West VA, provided courtesy of B. Mark Schmerling, Schmerling Documentary Photography]
Click on the image to the left to hear Chuck Nelson Talk about the connection between environmental protection and economic development.
When the Coal River Mountain Wind campaign was started in early 2008, one of the main goals was to prove that developing a wind farm on the mountain was a better economic land use option than the proposed mountaintop removal (MTR) mining operations. For years, the West Virginia Coal Association had argued that anti-MTR activists never proposed an alternative, and it had seemed that representatives of the public interest - such as the Governor, state legislators and county commissions - had come to believe the same thing. Throughout the first eight months of the campaign, residents and activists used their own models and calculations to present that argument, but it was understood that only a professionally conducted study had the chance of being considered as a legitimate economic comparison.
The hope was that such a study would show state and county officials that there was actually a viable economic alternative to coal and mountaintop removal in the southern part of West Virginia, and further, that once the alternative was proven, those officials would do what was in the best interest of the public. As was concluded in the research, what is in the best interest of the public is to put a halt to the pending MTR mining on Coal River Mountain and support the proposed wind farm. Unfortunately, this hasn't been the case, but Coal River residents continue building their campaign, hoping that one day they will see a wind farm on Coal River Mountain, and knowing that wind development will not be possible if the mountain is mined.
Wind Power versus Mountaintop Removal
The purpose of this page is to present the results of the economic study commissioned by Coal River Mountain Watch and conducted by Downstream Strategies (DS). The study was released on December 9th, 2008. The data included below and the representative charts illustrate the Wind vs. MTR comparison for Coal River Mountain in relation to both economic costs and benefits, and to social and environmental impact.
Perhaps the most significant finding of the study, and the most relevant
for understanding the nature and importance of the wind campaign, is summarized by the following quote:
"As demonstrated by these calculations (in the report), a wind farm on Coal River Mountain combined with a new local wind industry would provide the greatest long-term economic benefits to the citizens of Raleigh County. In contrast, mountaintop removal coal mines would provide larger short-term economic output and greater profits to the landholding companies that own the coal and the mining company poised to begin mining. But these profits would come at the cost of generating human health and environmental externalities...
In short, the private interests of the landholding companies and the leaseholders suggest one course of action (MTR), while the long-term benefits to local citizens and the county suggest an alternative (wind).”
What this quote also illustrates is the clash between the interests of the private coal and land companies and those of the Coal River residents. Mountaintop removal is the best economic choice for Massey Energy and the large private land owning companies, because the profits and royalties these two interests would gain from strip-mining Coal River Mountain far exceed those they would gain from the wind farm (indeed, Massey's share of the wind revenues from wind would be zero, but they could still extract some of the coal through underground mining). However, neither of these companies will have to bear the social and environmental costs of the mining. That will be left to the nearby residents.
The following charts, produced by Downstream Strategies, help illustrate the private vs. public conflict on Coal River Mountain (and anywhere where natural resource extraction occurs) as related to economic impact. Each chart is accompanied by a summary description and points to consider. Each chart also compares not only the direct "wind farm vs. MTR" scenario, but also includes a hypothetical scenario desribed by the development of an actual wind industry in Raleigh County, complete with a growth in wind development and the siting of a wind manufacturing plant.
In other words, the Downstream Strategies study examines the general question: What would the economic benefits be of diversifying the economy of Raleigh County (and by extension, southern West Virginia) through the development of a wind industry?
More specific to Coal River Mountain, it asks: If the development of a wind farm on Coal River Mountain could spur the creation of a local wind industry, how would the economic benefits of that wind industry compare to strip-mining the mountain?
Finally, it indirectly asks the more thematic and important question: Which option is more "sustainable," meaning, which option will provide the greatest economic stability for Raleigh County and the Coal River Mountain area? Which will generate the longest lasting benefits and the least amount of negative impacts?
**To note, in each wind scenario, the economic impact of new underground mining is also considered. This is because in the Appalachian coalfields, any economic transition will require a continuation of coal mining while other industries are developed. What the Coal River Mountain Wind campaign has been proposing is an economic development strategy that combines wind power with underground mining. The result is that even when the coal has been mined out, the jobs and revenues associated with the wind farm would still exist.
Think about these three questions as you examine the charts, and decide for yourself which is the better economic land use option for Coal River Mountain.
Economic "Earnings" (Revenue)
Annual Earnings without Externalities
The following chart shows that over the course of the proposed mining, mountaintop removal would generate more total earnings (not accounting for external costs) than the development of a wind farm on Coal River Mountain. In these charts, the earnings for the "Conservative Wind" scenario represent the combined earnings from the wind farm and from new underground mining that would occur if Massey were prevented from strip-mining the mountain.
In the chart above, and in all charts to follow, the staggered nature of the red bars represents the fact that not all three proposed MTR permits will be operating at the same time, and the spikes in the two wind graphs represent periods where the wind turbines have to be constructed, thus generating more earnings than in non-construction periods. In relation to underground mining, the DS study estimated that the underground mining would end after 15 years, so that's why the blue bars drop somewhat around year 15.
The chart also shows that after the mountaintop removal mining is completed in year 17, the earnings associated with the mining will decline to zero. By comparison, the earnings from a wind farm - while not as great as those from MTR during the first 17 years - would likely continue indefinitely, and would experience periodic spikes every time wind turbines need to be replaced, or about every 20-25 years.
Finally, the green bars in the chart show the earnings that would be generated if a local wind industry were to develop. As shown, in certain years a local wind industry would compete strongly with the strip-mining of Coal River Mountain, exceeding the potential earnings from the MTR scenario by about 100% during turbine construction periods.
Overall, this first chart shows that without accounting for the external costs of both mining and wind development, the mountaintop removal option represents the better economic option in the short run, while the wind farm represents the better long-term option. By definition, which option is more "sustainable"?
Annual Earnings - with Externalities
The following chart makes the same comparisons, but accounts for the external social and environmental costs related to the three options (and remember, this includes the external costs of the new underground mining that could occur in combination with the wind farm):
This chart shows that when external costs are considered, the net earnings associated with mountaintop removal would be negative in all years except three, and that in all years except two, the net earnings associated with a wind farm and underground mining would exceed those from mountaintop removal. The net earnings in the two wind scenarios are also negative for a number of years. This is because the external costs of the associated underground mining would exceed the total earnings of the "wind + underground mining" combination due to the excess deaths and illnesses associated with coal mining. This is a reflection on coal mining, not on the development of the wind farm.
The following two charts compare the Wind and MTR scenarios in terms of "cumulative" economic impacts:
As this chart shows, without accounting for externalities, the earnings associated with the development of a local wind industry would exceed those stemming from MTR in only 25 years. The combination of a wind farm and underground mining without the development of a local wind industry would not surpass the MTR earnings for approximately 100 years.
Based on the fact that Coal River Mountain may offer Raleigh County the last chance it has to develop a wind industry, and on the fact that a wind industry would provide more earnings than MTR in a relatively short time period, is it economically logical to allow the wind resources on Coal River Mountain to be destroyed?
The answer to that question may be clearer with the consideration of externalities.
This chart offers the most telling comparison of the true economic impacts related to the Wind and MTR options for Coal River Mountain. It offers two main conclusions:
1) That the cumulative economic benefit for both wind scenarios is greater than that with mountaintop removal for every single year; and,
2) That in every single year, the net earnings associated with mountaintop removal would be negative - meaning that the cumulative social and environmental cost of destroying Coal River Mountain by mountaintop removal mining methods is greater than the economic benefit Massey Energy and the land owning companies would receive.
**Note: The earnings calculations also include the income that the coal miners would receive, which is important, but it represents a very small portion of the total earnings. This illustrates another important point - that the total income earned by those who mine the coal accounts for a small proportion of the income and profits earned by the coal and land companies. Miners often have no other choice, due to the lack of job alternatives, than to impact their own homes or the homes of their friends and family by working on strip-mines above their communities, while the coal and land company executives most often live out of the way of the mining operations.
Conclusions about Earnings
To summarize the results of the DS study in relation to "Earnings," when the true costs of coal extraction are included, the costs of mining Coal River Mountain far exceed the economic benefits that would result. The external costs of wind development on their own are nearly negligible, and only the inclusion of underground mining in the economic transition plan results in net negative earnings in any given year. However, even with the inclusion of underground mining, the transition scenario of Wind and underground coal would have a far lesser impact on the land and people of Raleigh County than MTR.
Given this, the above charts would suggest that wind development on Coal River Mountain - or the development of the wind farm plus the creation of a local wind industry - even when combined with new underground mining, offers the best economic option in terms of net revenue generation. However, "Earnings" represent only one measure of economic benefit. In the Appalachian coalfields and the halls of state government, "Jobs" are often the most important marker of economic development.
"We need coal, but I don’t like the strip-mining that goes on to get it. I spoke against the Eagle II permit for Coal River Mountain because it would allow Massey to destroy the mountain, and eventually we're going to have to travel to Tennessee to see beautiful mountains. I'm 100% for coal, but I'm 100% against strip-mining. It's destroying the potential for any other potential for jobs such as tourism and wind power. We don’t have to destroy West Virginia to get the coal." – Phil Pettry, Jr., Colcord, WV.
What about jobs?
When talking to a resident of the Coal River Valley, jobs are almost always a sensitive issue. Everyone either works for the coal industry or has family members or friends who do, and for over a century the coal industry has been the biggest employer in the valley. There has been little else for someone to make an income off of, except perhaps in other extractive industries such as timbering or natural gas production.
When the Coal River Mountain Wind campaign started, the idea of a new industry coming into the valley was new and in many ways foreign and almost unthinkable for some. However, over the past year, the idea of creating new jobs with wind power has caught on, and many folks are hopeful that those jobs will be available someday.
The topic of Jobs is also important to think about in terms of "Which Job is Better??" Underground mining jobs are dangerous, and have long-term impacts on the health of those who mine the coal, including Black Lung disease, cancer and battered backs and limbs. At the same time, underground miners - new and old - are some of the most proud workers in the nation. Many understand the importance of their work for providing energy to the rest of us, and they also share a bond among them that is unmatched in most other jobs in our country.
Surface mining jobs, while supposedly less dangerous, also have long-term health impacts on surface miners in the form of silicosis, another harmful form of lung disease. Jobs related to the construction, operation and maintenance of wind farms, on the other hand, are not nearly as dangerous, and have few if any long-term health impacts.
[Kayford Mountain, West Virginia. Photo Courtesy of Rory McIlmoil]
Another issue to consider when comparing coal and wind jobs relates to psychological impact. As noted, just about everyone living in the Coal River Valley knows someone working for a coal company. Therefore, someone living in Colcord, for example, might have a son-in-law who would get a good-paying job blowing up Coal River Mountain. That son-in-law may not like working on that mine, but he has a family to take care of and has no other alternative for work. This is a common situation in the coalfields of Central Appalachia, and has a real impact on preventing many folks from speaking out against the destruction of their mountains.
Wind farms, since they don't result in the destruction of the land, (relative to surface mining) would not create the same tension, and the development of a local wind industry and wind-related jobs would help break the psychological stranglehold on Coal River residents, and so more may be likely to stand up against mountaintop removal. However, many strip-miners have come to believe that developing wind farms on the ridges would detract from the number of available strip-mining jobs, and so they have come to oppose wind development fas a "pre-mining" economic land use for that very reason.
Finally, coal-related jobs pay significantly more than wind-related jobs. This is also important to consider, because the idea of more money in an area with very little of it creates a powerful resistance against the prevention of any coal-mining jobs. However, as many activists fighting against mountaintop removal say, "Your job is not worth my life."
Also, as coal reserves dwindle and mountaintop removal expands, the jobs related to coal production decline, meaning that while coal mining jobs pay more, there are less and less of them available. This trend would suggest that any opportunity to create new and lasting jobs in the coalfields should be promoted, and that the resources necessary for creating those jobs should be protected. The other side of the argument though is that with so few mining jobs available, there should actually be more mining in order to create the needed employment opportunities, and that anything that might prevent that should be perceived as killing jobs.
However, when talking about Jobs, the conversation usually comes down to absolute numbers -- How many jobs will be created?? So, in terms of absolute numbers, the following charts compare the jobs that would be created with mountaintop removal mining on Coal River Mountain, versus developing a Coal River Mountain Wind Farm and a local wind industry. Again, the two wind scenarios include job numbers for new underground mines.
The above chart shows that during the 17 years of operation for the proposed MTR mining, the mining would generate more jobs (nearly twice as many) on an annual basis than either of the wind scenarios - except for during the construction periods in the Local Industry Wind scenario. However, once the mining is completed, no more jobs will exist with coal mining on Coal River Mountain. This coincides with the time period estimated to be when most of Raleigh County's economically recoverable coal reserves have run out, meaning that there will be few coal mining jobs left in the whole county.
With both of the wind scenarios, however, the wind-related jobs will exist for as long as the wind turbines are replaced and the wind farm stays in operation. Further, with the preservation of the existing wind resources and the development of a local wind industry in Raleigh County, wind could provide a sustainable and lasting source of both jobs and revenue that will still be there when the coal is gone.
The following chart presents the cumulative jobs created with wind and MTR:
This chart shows that the jobs created by the combination of wind and underground mining on Coal River Mountain would create an equal amount of jobs in about 70 years as the mountaintop removal operations would. This fact favors MTR, but remember, the MTR operations will last for only 17 years, beyond which no more MTR jobs will be available. The creation of a local wind industry would create more jobs in the short term (1 to 8 years), and then more jobs in the long-term (beyond year 28) than the MTR operations.
Overall, the main conclusion again is that for long-term job creation, wind power appears to be the best option for Coal River Mountain. The following quote, taken from the Downstream Strategies economic study, summarizes this point more succinctly:
“As shown (in the study), should a local turbine manufacturing (plant) be available, the number of jobs and the associated earnings and economic output would be much more significant (than the proposed MTR) for the Coal River Mountain wind farm. In the long-term (five investment cycles), the wind farm will generate 28% more jobs than the mountaintop removal. Jobs in the local wind industry scenario will generate 314% more jobs than the mountaintop removal.... " 
The final comparison drawn from the Downstream Strategies report regarding the economic development benefits between wind power and mountaintop removal for Coal River Mountain relates to the generation of local/county tax revenues. This is important because tax revenues are spent by the county on things like social services, infrastructure improvements, teacher salaries, and business development.
In relation to the wind campaign, the study found that a Coal River Mountain Wind Farm would generate nearly 50 times more county tax revenue for Raleigh County than the county would receive in coal severance taxes related to strip-mining the mountain. The property taxes stemming from the wind farm would average $1.74 million per year over the first 20 years, while the annual severance taxes from the MTR scenario would amount to only $36,000. By comparison, Raleigh County received $1.65 Million in TOTAL coal severance taxes in the 4 quarters leading up to the end of 2008. So a wind farm on only one single mountain in the whole county would generate more annual tax revenues for Raleigh County than all of the coal mining occuring within the county.
This is significant because for the county, a wind farm on Coal River Mountain - and to a much greater extent, the development of a local wind industry - would result in far more opportunities for diversifying the county economy and improving the quality of life for Coal River residents than the proposed mountaintop removal operations would - and it would do so while imposing far fewer social and environmental costs.
To conclude, the following is one last reference to the Downstream Strategies study, which offers some insight as to how state and local leaders should have received the conclusions of the study. Unfortunately, as of yet, this hasn't happened, but residents of the Coal River Valley hold on to the hope that one day, they will elect a leader who stands up for their interests, protects their livelihood, and helps promote and develop economic alternatives to coal and mountaintop removal in the Coal River Valley, and for all of Appalachia.
So, Wind or MTR? Here's What the Numbers Say...
"Based on the findings of this report, state and local leaders should reconsider their singular focus on the extraction of coal resources in southern West Virginia and chart a common path forward with local citizens that not only preserves private profits, but also strives – as a central objective – to sustain the local economy over the long term.”
For more information on sources used in this theme, please see the Notes on Sources page.