This post originally appeared on Coal Tattoo on 7/21. Ken Ward's follow up comments on this report, asking the provocative question "If coal is so good, why is West Virginia so poor?" are posted here on today's Coal Tattoo blog. Both are well worth a read.
West Virginia’s boom-and-bust energy economy
July 21, 2011 by Ken Ward Jr.
Just in time to aid in the discussion of whether the Obama administration’s new guidance to limit mountaintop removal is a “job destroyer” — as the National Mining Association claims — the fine folks at the West Virginia Center for Budget & Policy have issued a report called “Booms and Busts: The Impact of West Virginia’s Energy Economy.“
The report concludes:
In the past, West Virginia counties with a concentration in mining saw their economic performance dramatically decline after an energy development boom. Today, their economies are weaker than the rest of the state, and they are ill-positioned to compete and grow. It is uncertain whether today’s energy boom, led by natural gas extraction, will bring the prosperity to West Virginia that it promises. While the potential revenues from this boom seem to be an attractive source of economic growth for communities, history shows that natural resource booms inevitably lead to busts.
Among other things, the report points out:
During the energy development boom in the 1970s, West Virginia counties that focused heavily on mining enjoyed an economic surge. However, when the boom went bust in the 1980s, these mining counties were hit hard. They did worse than the state average on a range of factors, such as earnings and personal income growth, population growth, and employment. Today, these counties have higher poverty rates, lower median incomes, and worse health outcomes than the state average. Despite the rebounds in the energy sector in the 2000s, mining counties continue to struggle in comparison with the rest of West Virginia.
And:
… A boom in energy development, be it in coal mining or natural gas extraction, does not guarantee long-term economic growth and prosperity. Although communities can rely on energy development for economic growth in the short-term, the boom is unsustainable. If trends hold, the boom ultimately leads to a bust, followed by decades of underperformance.
Check it out here.
