The effects of coal related development on communities in the Mendota region
Authors:   , Ahrenholz James R. 
Published: December 2024

Coal related development has been experienced by the two county Mendota coal region of northern Missouri during the 1970's. Coal surface mining has increased until nearly one million tons were mined in 1977. A coal gasification facility is expected to be constructed in the region during the early 1980's. This facility will use 1.4 million tons of coal annually to produce low BTU gas which, in turn, will be used to produce electricity. The anticipated employment and labor income effects from coal related development in the Mendota region are examined. The study objectives embrace the coal related development and include: appraising the potential effects on local employment, population and income; examining the potential community adjustments and the timing of these adjustments; examining the potential economic and social implications for the community. The methodology for this study is applied in the framework of the export base theory of regional growth. The farm, manufacturing and mining sectors of the economy are assumed to be entirely export related and hence the prime movers of the Mendota region's economy. Other sectors encompassed the service industries of the region's economy. Bureau of Economic Analysis (BEA) income and employment data for 1970-1975 are used from the 78 Class I Counties in Missouri. These counties of under 20,000 population in 1970 formed the data base for anticipating the effects of increasing labor income and employment from coal related development in the counties of the Mendota region. Linear regression analysis, along with the group average method of allocating export activity in the service sectors, is used to determine labor income and employment multipliers applicable to the region. Income effects are stated in terms of 1975 dollars. Effects from the coal related development are examined under the categories of surface mining (mining and coal hauling), gasification facility (construction and operation), and industrial development. The direct effects of increased surface mining are expected to be increased employment of 120 persons and increased labor income of $2.1 million. The direct effects from the construction are anticipated to be increased employment of 750 persons and increased labor income of $13.5 million. The operation of the gasification facility is expected to increase direct employment by 125 persons and direct labor income by $2.75 million. Industrial development effects are examined at direct employment levels of 100, 250 and 500 persons. The associated direct income levels are $1.3 million, $3.25 million and $6.5 million, respectively. The indirect effects associated with these coal related developments are examined with the use of the employment and labor income multipliers developed. The effects from mining, operation of the gasification facility and related industrial development will have a permanence for the region associated with the coal resource of the region. The construction phase of the gasification facility will thrust upon the Mendota region stresses of a sizable magnitude for a relatively short period of time. Estimates of the potential effects of coal related development on local employment, population, and income provide planning information to the affected communities.