By T.L. Headley
In the minds of many Americans, West Virginia is known for its mountains, its coal, its majestic scenery—and its poverty.
There is no doubt that the state’s mountains provide the backdrop for some of the most beautiful scenery in the world. However, the stereotype of people enduring pervasive poverty while barefoot in tar paper shacks is no more true than any other hurtful stereotype.
Poverty exists in West Virginia just as it exists in California, New York and Washington, D.C. What also exists in West Virginia is the untapped potential to radically reduce poverty in the Mountain State simply by diversifying and growing the state’s economy. The potential, not surprisingly, lies within the prized coal industry and its role as an effective partner in an effort to build a new economic profile.
Limiting Economic Factors
It is important to first look at the reality rather than the stereotype of West Virginia’s economic situation.
In terms of average household income, West Virginia’s average is $37,435, which is approximately 75 percent of the national average of just a little more than $50,000. There is a disparity between rural and urban counties in West Virginia that must be noted, with the very rural, very remote areas of the state seeing lower than average household income levels. In these areas, employment choices are few and limited to jobs that are not dependent on population, including mining, natural gas, logging, farming and government-based positions such as teaching and public service. Other jobs, like retail or other service industries, offer much lower pay.
Over the years, West Virginia has engaged in a number of studies to determine what can be done to better develop and diversify the state’s economy. Naturally, these studies begin with a look at the strengths and weaknesses of the state and almost always show many of the same results.
West Virginia is rich in natural resources and is well located in relation to major markets on the East Coast, the Midwest and the South. In addition, the state has good access to major transportation routes to these areas via interstate highways and rail and water transport. These studies show that the state has a good, solid economic foundation in the mining and resource extraction industries, and it is important to note that these industries, particularly the coal industry, have helped the state weather the recent economic downturn with a budget surplus, putting it in excellent position to benefit from the increased demand for energy and manufacturing resources that will happen when the world economy returns to a normal level of growth.
The nine major problems that have been recognized as limiting factors have also been well documented: the lack of infrastructure (i.e., public water and sewer, high-speed Internet, roads and air transport hubs); frequent flooding; the lack of investment capital; the lack of readily developable land; the high cost of site development for residential and corporate sites, roads, bridges and municipalities; the lack of housing choices; the lack of education and education choices; the regressive tax structure and, perhaps the biggest limiting factor, the geography.
In many ways, one of our state’s greatest blessings—our mountains—are also our biggest obstacle. They provide us with incredibly beautiful scenery, a rich heritage, tremendous natural resources and a sense of identity. These same mountains make it difficult to get from place to place and build roads, homes, schools, communities and businesses.
West Virginia’s geography, particularly in Southern West Virginia, can be characterized commonly as a valley at a width of between 100 yards and a half mile with a road, a river and a railroad running along it. Much, if not most, of this valley is in the 20-year flood plain. On either side of this valley are mountain ridges with steep slopes of more than 60 degrees—in other words, flat, easily developable land that isn’t subject to frequent flooding is in very short supply.
It doesn’t make economic sense to put a lot of money into building a home or a business when you are fairly certain that every 20 years or so you will watch it be destroyed by flooding. This same problem contributes to the lack of infrastructure, such as public water, sewer, roads and schools. Where do you locate these community staples to protect them from certain ruin?
In addition, doing site preparation work for these improvements is significantly higher in cost due to the need to move a lot of earth. Building a four-lane highway requires frequent road cuts (cutting a path through the mountain, sometimes hundreds of feet deep) and valley-spanning fills or bridges, and once completed, they require very frequent maintenance. Similarly, building a school, factory or a shopping center first requires moving earth to create a footprint for the facility. Particularly in terms of attracting a business to build a shopping center or factory, this added cost puts West Virginia communities out of the competition for jobs because the companies will simply look at other areas of the country where site costs are not as high.
Communities that want to build and diversify their economies by developing sites and infrastructure are left without access to outside investment and must look for either local sources of funding or for some form of government assistance such as bonds or tax incentives.
Clearly the coal industry’s footprint in West Virginia is a major portion of the state’s current economic profile. The industry can also be a partner in the process of creating a new West Virginia economy—one that is broad-based, diversified and deep and provides a way to create new and vibrant communities, schools, recreational facilities and other resources. In short, the industry is willing to literally move mountains to get to the coal it needs.
Partner for the Future
In the process of moving those mountains, there are five key problems that West Virginia faces that coal mining can drastically reduce. Coal offers a strong economic foundation and can help create readily developable land at low to no cost that lies outside of the floodplain. This land can and is used for industrial parks, roads, airports, recreational facilities, schools and hospitals. In addition, surface mining can provide land for residential and community development, in essence overcoming most of the limiting factors that have impeded growth.
Communities across West Virginia, as well as throughout Kentucky, are beginning to see former surface mines as a resource and the coal industry as a partner in their economic development efforts. The Mingo County Redevelopment Authority is a public organization that promotes and encourages the economic diversification of Mingo County, as well as the development, attraction and retention of business, industries and commerce sources of the county, creating employment opportunities and increasing the area’s tax base.
In fact, the efforts undertaken in Mingo County, which began in 1989, have served as an example and template for the recent bill passed by the West Virginia Legislature that institutionalizes and provides incentives for such cooperation on a broader scale around the state.
According to Authority Executive Director Mike Whitt, the foundation of the authority’s efforts is centered on incorporating the area’s mining industry into development of a diversified and sustainable economy for the area. Prior to implementing the plan, Mingo County lost many economic development opportunities because most of the property mined was put back to its approximate original contour, leaving no land suitable for economic development. The plan provided opportunities to change that situation.
“For the first time in its history, Mingo County has a plan that provides a road map to achieve economic development opportunities,” says Whitt. “Any coal company that volunteers to use our plan up front and before mining commences will be provided with our proposed post-mine land use for the property.”
In order for a company to surface mine coal, it must file a mine plan that includes how the land will be configured after mining is completed—whether it be restored to approximate original contour or used for some stated post-mine land use. If restoration is the plan, then all improvements to the area, such as utilities, water, roads and buildings, have to be removed before the company can reclaim the bond it posted prior to mining the property.
Unfortunately, it is unrealistic to expect a company to lock in development for a site that might not be available to them for 10 or more years, effectively limiting development of post-mine land use as an option for economic growth.
According to the Logan County Land Use Plan, approximately 65 percent of the surface mine sites in the county are within five miles of a four-lane highway. These sites are also close to air transportation and mainline railroads and are within a day’s drive to most of the East Coast. These sites have the potential to be very attractive to economic development, but the post-mine land use also includes residential, educational and recreational uses.
Clearly surface mining, which accounts for some 40 percent of the total production of coal in West Virginia, plays a key role in meeting today’s energy demands and in driving the state’s economy. Also, it can and does play a role in the common goal of a truly diversified and developed West Virginia economy. While much has been done in recent years to coordinate economic development needs with mining, a great deal of opportunity has been lost as many sites have been restored to approximate original contour and improvements such as utilities, roads and buildings have been removed. While the coal industry cannot lead the effort, it is clear that the industry can be an effective and reliable partner in building that new economy.
