THE GRIP OF BLACK GOLD: The Natural Resource Curse, Jobs Crisis, and Appalachian Coal Country's Struggle for Economic Survival

Abstract

Coal has long played an immense role in fueling the American economy and meeting individual lifestyle needs. Since the late 18th century, workers have been mining coal in Appalachia’s hills. For nearly 250 years, the sector has served as both a strong source of employment and a key cultural cornerstone in Appalachian communities. Today, coal faces a crisis. Confronted by declining public opinion, poor relative economics, climate change concerns and an unfriendly regulatory regime, Appalachian mining employment has decreased by over 100,000 jobs since the mid-1980s with more than 30,000 jobs lost in the past decade alone. As the energy transition in the US accelerates, it will continue to decimate Appalachian mining. This thesis first examines the historic role of coal in America’s energy mix and the dynamics that long helped it dominate and serve America’s electricity generation needs. I then investigate the current demise of coal more broadly, followed with an introduction to the natural resources curse theory. This theoretical assumption posits that counties with an abundance of natural resources tend to over-allocate employment into this sector. Additionally, a strong natural resources sector in a community tends to crowd out educational, entrepreneurial and other labor opportunities which will stunt long-term growth. Then, this thesis presents an analysis of the specific losses – jobs and otherwise - within the Appalachian region. Applying the natural resources curse framework to Appalachia through a Difference-in-Difference analytical approach, I find evidence that strong natural resources sectors did stifle total economic growth and limit specific labor sector growth in the first decade of the 21st century. Thus, I find reason to confirm the natural resource curse theory applies to Appalachia’s coal country. Building off these findings, I attempt to analyze recent policy implementation at federal, regional and state levels that aim to diminish the impact of coal mining closure in Appalachian. Identifying the significant barriers that may inhibit these policies, I engage with the ability of existing policies to overcome these barriers. Finally, I include two sections to help inform cultural aspects of mining and the energy transition that might be overlooked when simply considering data. First, the Foreword discusses my time in Illinois working in the new energy economy. Second, a section in Chapter 4 discusses two coal counties in Appalachia in which I performed in-person interviews during the fall of 2021.