Kentucky Coal Facts - 13th Edition - Department for Energy ...

Induced and Indirect Effects
Direct Benefits
The Kentucky coal industry provides direct benefits in terms of coal severance revenue, jobs, and wages to miners. These
direct benefits are as follows:
Employed 18,850 miners in 2009, with 3,703 in Western Kentucky and 15,147 in Eastern Kentucky.
Paid wages of $1.473 billion in 2009, resulting in an average weekly wage of $1,214 per miner.
Produced over 107 million tons of coal with an approximate value of $6.3 billion dollars.
Severance taxes on FY 2009-2010 coal production were $241 million with a total of $270 million being collected
(includes some previous year assessments).
$97.3 million in coal severance tax receipts were returned to coal-producing counties for infrastructure improvements
and economic development projects.
$16.9 million in unmined mineral taxes were collected in FY 2009-2010.
Source: Dr. Christopher Jepsen, Associate Director and Dr. Anna Stewart, Economic Analyst, University of Kentucky Gatton
College of Business and Economics, Center for Business and Economic Research.
Indirect Benefits
The coal industry provides many benefits to Kentucky in addition to the direct benefits mentioned above. Indirect benefits
include new income flowing into the coal industry that is then re-spent creating a multiplier effect. Economic impact models
trace the flow of these dollars for new spending in the economy. Economic impact models are not designed to calculate the
impact for an existing industry. We can, however, gauge the industries that will receive the greatest impact for any new
investment. Below are the top five types of industries that receive the greatest percentage of an indirect impact.
20percent of indirect spending would be spent in industries defined as mining coal and support activities for mining.
This is essentially intra-industry trade that does show up as new revenue.
15 percent would be spent in the transportation industry by rail or truck.
14 percent would be spent in professional services industries. These are typically industries such as architectural and
industrial engineering, management companies, legal services, financial institutions and other industries that provide
services that might not be offered in house.
9 percent would be spent in the petroleum industry, natural gas and electric power transmission.
9 percent would be spent in industries that sell or maintain commercial equipment and structures used to support the
coal industry.
Source: Dr. Christopher Jepsen, Associate Director and Dr. Anna Stewart, Economic Analyst, University of Kentucky Gatton
College of Business and Economics, Center for Business and Economic Research.
Induced Effects
In addition to indirect effects, induced effects also contribute to the economic impact of new spending in the coal industry
in Kentucky. Induced effects occur when money that is received as income by employees and/or owners either at the direct
or indirect level is spent on personal expenditures such as household goods and services.
Source: Dr. Christopher Jepsen, Associate Director and Dr. Anna Stewart, Economic Analyst, University of Kentucky Gatton
College of Business and Economics, Center for Business and Economic Research.
energy.ky.gov
kentuckycoal.com
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