Abstract

Stretching from Tennessee northeastward through southwestern Pennsylvania, the Central Appalachian Basin’s economic fortunes have long depended on coal production. However, as the U.S. has increasingly turned toward new forms of energy to generate electricity, the region’s economy has faced inexorable headwinds. Yet, what is clear is that the extractive industries are likely to play a key role in shaping the basin’s economy in the years to come. Taking this assumption as a starting point, this paper discusses how well current transportation infrastructure can support expanded us of the basin’s carbon ore, rare earth, and critical minerals (CORE-CM), other minerals, and waste streams as well as considerations policymakers should take under advisement when making decisions about future transportation planning and infrastructure investments. One of the primary challenges associated with building and maintaining infrastructure that supports the extractive industries is accounting for potential boom-and-bust cycles. Sharp economic downturns that reduce industry footprints shrink tax revenues and imperil state and local governments’ ability to pay for the maintenance of roads and bridges. Within the Central Appalachian Basin, states have funded the expansion and maintenance of infrastructure primarily through the establishment of commodity networks (and associated permitting fees) and levying severance taxes. Based on an evaluation of revenue generated by these mechanisms and the condition of key infrastructure assets throughout the region, this paper concludes that commodity-specific freight networks offer a viable model for growing industries around CORE-CM in the basin. However, policymakers should undertake detailed reviews of existing fee and tax structures to determine if they are sufficient to promote future extraction activities, support economic development, and insulate transportation networks from the negative effects of an economic downturn.

Report Date

3-2023

Report Number

KTC-23-15

Digital Object Identifier

https://doi.org/10.13023/ktc.rr.2023.15

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