ABSTRACT
This chapter analyzes the regional economic impact of back-to-contour surface mining regulations on the dominant coal market and its coal suppliers. It considers the effects of the surface mining regulations on the regional competitive position of underground mining. An equilibrium solution across all regions is attained through an iterative procedure which interfaces the set of demand equations by electric utilities with the convex programming model. The transportation sector in the model attempts to determine the actual routes that would be followed in coal shipping. The main importance of surface mining reclamation requirements for underground production may be for new investment on steep slopes in Appalachia, since reclamation costs are the highest for steep slope surface mines. In particular, the problem of soil stability after mining and levels of reclamation is generally considered to be extremely difficult to deal with. The long-run effects from indirect impacts of unreclaimed, scarred surface mined lands should be minimized by the reclamation requirements.
