Course Introduction: Overview, Format, and Objectives
Laying a Foundation for Economic Modeling
Methods for Researching the Competitive Strengths of a Region
Workforce and Growth: Using Data to Tell Your Region's Labor Market Story
Mapping Industry Clusters, Analyzing Interdependencies, and Identifying Targets
Tools for Evaluating and Communicating Economic and Fiscal Impacts

Case Study: Economic Impact of the Coal Industry in Pennsylvania

Module
Materials


Jim Futrell, the instructor for this unit, has conducted numerous regional economic impact studies. In 2019, he led a study for the Pennsylvania Coal Alliance on the impact of the coal industry on the state’s  economy. Key takeaways from that study are provided below, and the full document (PDF) can be downloaded here: Economic Impact of the Coal Industry in Pennsylvania 2019

Once you’ve reviewed Jim’s analysis, check your knowledge of the methods/components that make up the study. You’ll see these questions again in the multiple-choice knowledge check that follows this module.

  1. What is the value ($) of the coal industry’s total contribution to Pennsylvania’s Gross Regional Product?
    Hint: This is also referred to as “total output.”
  2. According to this study, what is the value ($) of the total production of Pennsylvania’s coal industry?
    Hint: This is also referred to as “total value added.”
  3. What industry sector was used in the model to accurately identify and analyze the coal industry’s contributions to the state’s economy?
    Hint: Refer to Section 2.2: Methodology in the document.
  4. Through what agency did Jim validate his choice of sector in the model, to ensure the accuracy of his analysis?
    Hint: Refer to Section 2.2: Methodology in the document

Summary:

The Pennsylvania Coal Alliance, an advocacy organization, asked the Allegheny Conference on Community Development (ACCD) to perform an economic impact study of the Coal Industry in Pennsylvania. This study looks at the Industry’s annual impact on the Commonwealth’s economy, using 2017 as a baseline year unless otherwise stated.

Measuring the current economic impact of the Coal Industry: Key Findings

In this report, ACCD measures the direct, indirect, and induced employment created by the Coal Industry as well as the more than $6.9 billion in economic output stimulated by the activity of the industry. (For definitions of each type of employment, see p. 9 of the document.)

  • Pennsylvania’s Coal Industry is a vital contributor to the state’s economy, with direct, indirect, and induced impacts responsible for:
    • Approximately 17,728 full-time jobs, about 5,966 of these directly in the Coal Industry.
    • For each direct Coal Industry job, an additional 1.97 jobs are generated throughout the state, for a total employment multiplier of 2.97.
    • Approximately $6.91 billion in economic output is created in Pennsylvania, $4.7 billion of this directly by the Coal Industry.
  • The Coal Industry creates economic value in communities across Pennsylvania, with multiple company locations in more than half of Pennsylvania’s counties. The Industry makes substantial capital investments that increase the economic impact of coal mining on the region by utilizing advanced mining machinery that costs millions of dollars to purchase, operate, and maintain while also investing in a multitude of other goods and services.
    • In 2017, Pennsylvania produced approximately 1.8 million tons of Anthracite Coal and 47.2 million tons of Bituminous Coal statewide from 290 combined mines and refuse sites.
    • This coal was shipped to 23 U.S. States.2 In 2017, Bituminous coal was the largest category of exports, accounting for 6.8% of the state’s total exports at $2.6 billion, a 117.9% increase over 2016.
    • Energy production is the primary end use for PA coal. In 2017, roughly 58% all Bituminous Coal produced in Pennsylvania, went to produce electricity.
    • This coal contributed to the state of Pennsylvania generating 213 million megawatts hours of electricity, which made it the third largest producer of electricity in the United States, beating out California and only behind the high-population states of Texas and Florida.

Summary of coal industry economic impact in Pennsylvania