Reclaiming Coal Surface Mines in Central Appalachia: A Case Study of the Benefits and Costs

Regulatory alternatives for the surface mining industry have come under intense public and political scrutiny in recent years. Recent studies have found that the impacts of federal surface mine reclamation regulations' will be noticeable, but perhaps not as substantial as some had expected. Nationwide, coal production from surface mines would be reduced by about five percent, with a similar increase in underground coal production. The federal reclamation legislation, depending on the regulations eventually adopted for its implementation, is unlikely to be a major disruptive influence in the coal industry or a substantial impediment to the long-run national goal of increased utilization of coal. This study has found that the social benefits from surface mine reclamation under existing Kentucky regulations unambiguously exceed the private costs. The incremental benefits of reclamation to satisfy the federal regulations which seem likely to be promulgated are always positive and exceed the incremental private costs under some assumptions, but not under others.