Coal Economics
The Division of Reclamation employs a staff of 63 people in the mining Regulatory ( 50% federally funded) and Abandoned Mine Lands (100% federally funded) Restoration programs.
A study conducted by the Western Economic Analysis Center in 1999 concluded that coal mining's impact on the Indiana economy as follows:
- $489 million in direct economic gain
- $199 million in direct personal income gain
- $ 94.5 million in direct business income gain
- $ 24.5 million to state and local government revenue
- $ 78.4 million in direct contribution to federal revenue
The 1999 study estimated a total direct and indirect economic gain of $5.4 billion was generated by the Indiana coal mining as a whole.
Coal mines in Indiana directly employed more than 2,500 people in 2001 with an average salary of $46,428 per year. That is $116 million impact on the State's economy in salaries alone.
More than 82% of the coal produced in Indiana is used to generate electricity. With an ample supply of coal in the state, Indiana has consistently been blessed with inexpensive and reliable electrical energy.
The 2000 state average rate of $51.30/MWh was 24 percent below the national average retail rate. Indiana has the 9th lowest retail electricity prices in the nation (CEED-Center for Energy and Economic Development).
Indiana power rates are low because of high proportion of low cost coal generation. Ninety five percent (95%) of State power generation comes from coal. By contrast Illinois, Ohio, Michigan have the 20th, 21st and13th highest retail electricity prices in the nation. In addition to coal, these states also rely on nuclear based generation of electricity: more than 50%(IL), 11%(OH) and 20%(MI). (CEED).
Indiana clay and shale mines, also regulated through the Division of Reclamation, produced products valued at $1.5 million in 2001.
The Division collected $1.7 million in reclamation fees on coal produced. The fees provide matching funds to leverage $7.5 million in federal grants to support the regulatory and AML programs.
Indiana ranks ninth in coal production compared to other coal producing states. The state has consistently ranked between 7th and 11th in annual production over the life of the regulatory program.
Indiana coal mines have increased production during the life of the Indiana mine regulatory program to an average production of 35 million tons per year.
In 2001 coal mined in Indiana had a production value of $759,374,460.00 from 33 producing mines. Today there are 25 producing mines with production of approximately 34.2 million tons with a production value estimated at $ 706,914,000.
The Division of Reclamation Abandoned Mine Land program received approximately $5.5 million in federal funds last year to reclaim health and environmental hazards that resulted from un-reclaimed coal lands abandoned before current laws took effect. This provides cleaner water, less risk to life and usable lands for the citizens.
Since 1982, the Restoration Program has completed more than $102 million in construction projects on over 6000 acres in 17 southwestern Indiana counties.
| County | No. of Sites | Construction $ |
|---|---|---|
|
Clay |
119 |
$5,710992.20 |
|
Daviess |
27 |
$4,271,660.48 |
|
Dubois |
16 |
$1,336,936.08 |
|
Fountain |
5 |
$248,822.88 |
|
Gibson |
8 |
$422,493.47 |
|
Greene |
90 |
$6,221,302.80 |
|
Knox |
26 |
$13,339,505.28 |
|
Martin |
10 |
$1,536,487.95 |
|
Owen |
8 |
$134,849.65 |
|
Parke |
15 |
$417,959.75 |
|
Perry |
8 |
$399,749.17 |
|
Pike |
92 |
$24,786,094.87 |
|
Spencer |
35 |
$3,435,070.94 |
|
Sullivan |
68 |
$7,128,455.57 |
|
Vermillion |
21 |
$1,031,091.05 |
|
Vigo |
83 |
$11,291,610.54 |
|
Warrick |
115 |
$20,647,523.43 |
|
Total |
746 |
$102,288,606.11 |
Of the $102 million in construction that has been completed, more than $96.5 million was directly funded through annual grants from the federal government.
The Lynnville AML site was recently completed and is an example of what the AML program was designed to accomplish. It consisted of 90 acres of gob, pits, a slurry area and spoil. Approximately 40 acres of wetlands were constructed in order to reduce the significant impact to nearby "Big Creek". This project, costing more than $5.4 Million is the single most expensive construction project ever undertaken by the AML program.
During the 24 months from 10/31/01 to 11/1/03 more than $11.8 Million in construction funds were spent in Southwestern Indiana. One hundred and twenty three (123) AML sites were either reclaimed or had maintenance activities performed on them. $270,000 of this construction was on 28 emergency sites, where serious and immediate safety threats were abated. These funds not only reclaimed serious safety and environmental hazards left from past coal mining, but also created jobs and stimulated local economies within the region.
The Division of Reclamation's Regulatory program receives approximately $2 million federal funds to assist funding regulatory activities on a matching basis each year.
There are 93,000 acres under reclamation bonds in regulatory program jurisdiction with about 5000 more acres affected by coal mining each year. More than 300,000 acres have been permitted since 1982. All of the acreage is monitored by Reclamation staff to assure that it is reclaimed to productive uses in the same balance as the pre-mining uses. All acres are reclaimed to a condition supporting the uses before mining. Typically 6000 acres are returned to productive use each year.
The Indiana regulatory program conducted 2200 compliance verification inspections on coal mines in 2002-2003 preventing significant environmental problems on or off-site. Permitting, inspection and bond requirements assure that lands and people are protected from the adverse effects of mining while assuring Indiana of a stable affordable energy supply.
Reclamation performance standards were fully achieved on 4,750 acres in the last fiscal year. Those acres were returned to the control of the owners to manage. The final land uses achieved on the acres were:
| Prime Cropland | 1568 acres |
| Fish and Wildlife | 1134 acres |
| Non-prime Cropland | 319 acres. |
| Pastureland | 1133 acres |
| Forest | 307 acres |
| Water | 174 acres |
| Residential | 7 acres |
| Roads | 37 acres |
| Industrial / Commercial | 49 acres |
| Other | 22 acres |
All of the lands again will provide a contribution to the Indiana economy.
In 2001, Indiana supplied more than 32 million tons of coal to electric utilities.
Indiana electric utilities use approximately 56 million tons per year.
