By Charles Young
April 5, 2021 - West Virginia's First Energy’s Harrison Power Station had a direct economic impact of $596.8 million in Harrison County in 2019, according to a study published by the Bureau of Business & Economic Research at the West Virginia University College of Business and Economics.
The power station, located on a 1,400-acre site in the unincorporated community of Haywood, directly employed 414 workers and paid an estimated $73 million in employee compensation in 2019.
Additionally, Harrison Power Station, which is the largest user of coal in the state, was responsible for approximately $23 million in state and local tax revenue, according to the study.
The study estimates the power station generated more than $517.5 million in secondary economic impact and an additional 1,066 jobs, equating to another $105 million in employee compensation.
“This study highlights just how profoundly important mining and coal-fired power facilities are to Harrison County, as well as West Virginia’s workforce, local communities and overall economy,” said Chris Hamilton, president of the West Virginia Coal Association.
Dr. John Deskins, Bureau of Business & Economic Research director, said the total economic impact of coal mining does not end at the mine — it goes far beyond the portal and upstream through the business economy.
“Despite production declines in recent years, coal remains a very important part of West Virginia’s economy, as illustrated in our research,” Deskins said. “Coal continues to support a sizable share of the state’s economic output and thousands of high-paying jobs.”
West Virginia’s eight coal-fired power plants are among the most modern and efficient electricity generators found anywhere in the world, Hamilton said.
“Not only are these facilities responsible for a big piece of our economy, but they also continue to provide low-cost, uninterrupted power to millions of consumers in West Virginia and our surrounding states,” he said. “Given the results of this study and the contribution of these plants to grid security and resiliency and homeland security, it is inconceivable that extreme environmental groups and other organizations, similar to the Biden administration, want to see these facilities close prematurely or transition away from coal.”
The study, “The Economic Impact of Coal and Coal-Fired Power Generation in West Virginia,” found that coal mining directly employs more than 13,000 people in the state, who earn compensation totaling around $1.5 billion annually.
Additionally, estimates indicate that coal mines spend a total of around $6.5 billion in the state’s economy directly each year.
Coal mining generated approximately $9.1 billion in total economic activity in the state in 2019, supported nearly 27,000 jobs, provided around $2.1 billion in employee compensation and generated around $514 million in severance taxes and other state and local tax revenue, according to the study.
During the same period, coal-fired power generation produced approximately $4.8 billion in total economic activity, supported nearly 6,600 jobs, provided around $725 million in employee compensation and produced more than $97 million in select state and local tax revenue.
In total, coal mining and coal-fired power generation combined produced approximately $13.9 billion in total economic activity, supported nearly 33,300 jobs, provided around $2.8 billion in employee compensation and produced more than $611 million in severance taxes and select state and local tax revenue.
The study details how the coal industry in West Virginia and the U.S. has experienced substantial declines over much of the past decade.
The downturn was felt more strongly in West Virginia than the rest of the U.S. through 2016. Total coal production in West Virginia peaked in 2008 at nearly 158 million tons, then declined to less than 80 million tons in 2016, a nearly 50% decline. Over the same period, in the rest of the U.S., production fell from one billion tons to just over 0.6 billion tons, a decline of about 36%.
Contrary to these general trends, coal production in West Virginia increased in 2017 and stayed at around 93 million tons through 2019, or an increase of more than 15%. During the same period, coal production in the rest of the U.S. declined by 5%.
West Virginia’s share of U.S. coal production declined through 2016, as well, but rebounded in the three following years. West Virginia accounted for 15.8% of U.S. coal production in 1995. The share fell to 11.0% in 2016 before rising again in 2017 and to 13.2% in 2019.
West Virginia remains the second-largest coal producer in the U.S., behind only Wyoming, whose share of U.S. coal production in 2019 was around 39%.