Industrial Restructuring and the United States Coal-Energy System, 1972- 1990:

Regulatory Change, Technological Fixes, and Corporate Control

Author(s): Gregory A. Elmes and Trevor M. Harris
Source: Annals of the Association of American Geographers , Sep., 1996, Vol. 86, No. 3
(Sep., 1996), pp. 507-529
Published by: Taylor & Francis, Ltd. on behalf of the Association of American
Geographers

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 Industrial Restructuring and the United
States Coal-Energy System, 1 972-1 990:
Regulatory Change, Technological Fixes,
and Corporate Control
Gregory A. Elmes and Trevor M. Harris

Department of Geology and Geography, West Virginia University

D uring the past three decades the
United States' energy system has re-
sponded to major exogenous and en-
dogenous shocks and pressures by deploying
a variety of technical and spatial fixes. These
fixes stimulated, in turn, fundamental realign-
ments in the geography of electrical energy
production. Major events extending from the
Clean Air Act of 1970 to the oil embargo by
the Organization of Petroleum Exporting
Countries in 1973-1974, the quadrupling of oil
prices during 1978-1979, and railroad deregu-
lation in 1980 have influenced the restructuring
of a coal-energy system that had reached its
nadir in the early 1960s. At that time electric
utilities consumed just 42 percent of the do-
mestic demand for coal. Three decades later,
coal production reached record levels and the
electricity market share of consumption had
more than doubled to 86 percent. Accordingly,
the 1970s and 1980s epitomize a remarkable
period of economic development when elec-
tricity generation benefited from massive
economies of scale, strong vertical integration
by large utility companies, and little inter-fuel
competition. An analysis of intrastate and inter-
state coal flows during this distinctive time
reveals significant geographical and temporal
responses of coal producers and consumers to
rapidly changing conditions in the energy
market.
Understanding the restructuring of the coal-
energy system from the 1970s to 1990 entails
an examination of the interconnected systems
of coal production, transportation, and elec-
tric-utilities that form the coal-energy chain.
Consisting of linked systems of value-added
material transactions, the coal-energy chain is
nested within hierarchical sets of controlling
processes (Dicken 1994). These controlling
processes-technology, research and develop-
ment, transportation, and communication-are
framed in turn by financial and regulatory co-
ordination structures. In the face of changing
markets or crises, industries may attempt to
restructure their material flows, controlling
processes, or coordinating structures, applying
technical and spatial fixes to rectify the uneco-
nom ic conditions. Industrial restructuring
strategies of a heavy industry, such as the coal-
energy system, may differ substantially from
those applied to technologically advanced in-
dustries and the quaternary sector of the econ-
omy. 0 hUallachdin and Matthews (1994)
found, for example, that the restructuring of
the copper-production chain had little in com-
mon with the reorganizations characteristic of
high-technology and quaternary industries-a
difference they attributed to fixed geographical
resources, capital, and economies of scale. Like
copper production, the coal-energy system is
traditionally characterized by an orientation to-
ward raw materials with an emphasis on exclu-
sive control of the commodity chain, produc-
tion and distribution costs, economies of scale,
and vertical integration.
That said, neoclassical industrial location the-
ory provides only an incomplete under-
standing of the restructuring of primary indus-
tries. Geographical restructuring involves an in-
terplay of economic, technological, and corpo-
rate relations in new and existing regions of
capital accumulation, including the stimuli of
technical and spatial rearrangements resulting
from labor relations, regulatory interrelation-
ships, and interfirm networks (Storper and
Walker 1989). While the principles of spatial
interaction may account for regional shifts and

Annals of the Association of American Geographers, 86(3), 1996, pp. 507-529

?1 996 by Association of American Geographers
Published by Blackwell Publishers, 238 Main Street, Cambridge, MA 02142, and 108 Cowley Road, Oxford, OX4 1JF, UK.

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508 Elmes and Harris
shares in terms of the changing geography of
supply and demand, friction of distance, and
intervening opportunities, a full understanding
of restructuring in the coal-energy system de-
pends upon integrating the analysis of material
transactions within the context of the control-
ling processes and coordinating structures. It is
precisely these underlying technological and
organizational dynamics, or fixes, that are un-
derrepresented in quantitative models of spa-
tial interaction and that are specifically inte-
grated in this study.
Geographers have invested a great deal in
interaction models of the coal chain (King et al.
1971; James 1982; Elmes 1985; Kuby, Ratick,
and Osleeb 1991). Premised on neoclassical
economics and underpinned by concepts of
optimization, complementarity, transferability,
and intervening opportunity, these statistical
and mathematical programming approaches
have facilitated model building and the testing
of theories of material transactions. In addition
to their functional explanations of the coal
chain, these studies have simulated complex
technological relationships within the coal-en-
ergy system, such as the roles of different
transportation modes (King et al. 1971), the im-
pacts of pollution controls (Haynes et al. 1983;
Knight and Manula 1978), and improvements
to port facilities (Osleeb and Ratick 1983;
Ratick and Osleeb 1983). Other studies have
emphasized scale in the context of policy de-
cisions about coal production and trade, for
example, at the regional level (Calzonetti et al.
1989), the national level (Gibson 1990; Gordon
1975; 1978; Hudson and Sadler 1990), and the
international level (Spooner and Calzonetti
1984). Most of these quantitative analyses of
coal flows are cross-sectional; longitudinal
studies are regrettably few (for an exception,
see Georgiana et al. 1985). These studies,
however instructive, are partial. Their emphasis
on the empirical estimation of the parameters
of material transactions and flow predictions
comes at the expense of the explanatory roles
of less easily quantifiable controlling processes.
To gain insight into the changing geography
of the coal-energy system, this study focuses
initially on the trilateral relationships within and
between the subsystems of coal production,
transportation, and electric-power generation
as manifested in time series of coal movements
between coal mines and electric-utility gener-
ating plants. The empirical analysis deals first
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with intrastate flows. Next we identify change
and trends in interstate coal movements using
dyadic factor analysis. Subsequently, we place
these material transactions in the context of
Dicken's (1994) notion of controlling processes
and structures, that is, the spatial reorganiza-
tion of coal flows is put within the particular
context of technological, corporate, labor, and
regulatory restructuring in the North American
space economy.
The Coal-Energy System in the
United States
The recent history of the United States coal-
energy system has been characterized by
three broad trends: 1) reduction in the diver-
sity of coal markets; 2) regional shifts in coal
production toward the western states; and 3)
regional shifts in the demand for electricity. Be-
tween 1972 and 1990, U.S. energy use in-
creased by 85 percent to 81 quadrillion BTU
(U.S. Energy Information Administration, An-
nual Energy Review 1992). Although coal pro-
duction has increased steadily since 1961, its
position relative to other fuels has continued to
decline. Petroleum dominates the energy mar-
ket throughout, while coal briefly replaced
natural gas as the second-ranking energy
source in the late 1980s. Neither has coal made
major advances in the export trade. Since
1961, coal exports have remained relatively
steady at about 10 percent of output-with ex-
ports increasingly composed of high-quality
steam coals from Central Appalachia (Kuby,
Ratick, and Osleeb 1991). Export volume had
risen to 100 million metric tons1 (mmt) by the
early 1990s owing to the absolute growth of
coal production.
In 1990, the electric-utility industry ac-
counted for 86 percent of domestic coal con-
sumption while industrial plants accounted for
less than 14 percent (as a raw material input or
as fuel for process heat generation, steam, or
nonutility electricity generation) (Figure 1).
Coal's present alignment with the utility market
has developed over the past half century. After
reaching a peak output of 606 mmt in 1947,
coal production declined to a minimum of 379
mmt in 1961. With the loss of the railroad mar-
ket, coal's market diversification and share of
the industrial and commercial markets began a
 The United States Coal-Energy System 509

U.S. COAL ENERGY SYSTEM, 1990]

| | -* -~~~~~~~~
NUC~~~~~~~~~LEAR (21 %6 _Quadrillion
GENERATIBTU_ON
* ~ ~ ~~(76. 2 % ) _
F Bituminous Underground caer sym 19L0 C

--~~~~~~~~~~ _~~~~29.
(67%) (40%) EH UTILITY

Anthracite (0.3%) Surface |t_-_

Sub-bituminous (60%)

Lignt OLU a l l l

IMPORTS L lI
l (3 mmt) 3l l

Figure 1. Components of the U.S. coal-energy system, 1990. Coal dominates all other energy sources used in
the production of electricity and the utility market dominates all other end uses of coal. The coal-energy system
of this study-domestic coal flows to electric utility power plants-is indicated by heavy arrows and dark shading.
In 1990, domestic coal flows to utilities amounted to 709.4 mmt. Source: U.S. Energy Information Administration
Annual Energy Review 1994.

steep decline (Figure 2). Faced with shrinking
domestic markets, the coal industry turned to
electric utilities as the primary destination for
U.S. coal-and with notable success. As a re-
sult, electric utilities now dominate the coal
market and the fortunes of the two industries
are intricately linked.
The 1970s was a pivotal time in the consoli-
dation of the coal industry's move toward the
electric-utility market. Though only a matter of
months, the oil embargo of 1973-1974 was a
turning point that strengthened the strategic
position of coal vis-a-vis other fuels. Regulatory
legislation was also important. The Natural Gas
Policy Act of 1978, the Power Plant and Indus-
trial Fuels Act of 1978, and the Energy Tax Act
of 1978 increased coal's share in the energy
market by increasing the cost base of compet-
ing energy sources. There were some set-
backs, however. A number of legislative, eco-
nomic, infrastructural, and environmental fac-
tors constrained the rates and extent of coal
production and consumption (Perry 1983).
Federal laws, such as the Coal Mine Health and
Safety Act of 1969, the Federal Coal Leasing
Amendments Act of 1976, the Surface Mining
Act of 1977, and the Clean Air Act Amend-
ments of 1970 and 1977 certainly slowed the
pace of expansion (Gordon 1986). Indeed,
Gordon attributes the doubling of average coal
prices at the mine-mouth between 1969 and
1981 as much to supply factors (e.g., legislative
controls on mine health and safety) as to in-
creased demand for coal. Conversely, Miernyk

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510 Elmes and
1000
800
600
400
: . . ; . . . . . .: ': !:
200
.: ... .. ...: .
.. . . . . . . . .. . .. .... . .. .. ia pit n
0
LO LO)
CO)
Figure 2. U.S. coal consumption by end use, 1935-1990. Source: U.S. Energy Information Administration Annual
Energy Review 1994.
(1977) maintains that coal prices were driven
principally by world petroleum prices, albeit
allowing for regional variations within and be-
tween the major coal basins owing to spatial
variations in coal quality, mining practices, and
labor costs (Solomon and Pyrdol 1986).
Coal's share of the electric-utility market has
also been strongly influenced by regional shifts
in the United States' electricity demand. The
population growth of the South and West at
the expense of the North and East is clearly
reflected in patterns of energy consumption
and generation over the past several decades.
Relative measures of growth conceal, how-
ever, the large contribution of coal to electricity
production in the traditional manufacturing
heartland of Pennsylvania to Illinois. As a con-
sequence of regional changes in the shares of
electricity consumption, the U.S. coal-energy
system has experienced a significant geo-
graphical realignment during the past thirty
years. Whereas in 1970, 93 percent of bitumi-
nous and lignite coal (568 mint) was mined
east of the Mississippi (Figure 3), by 1990 that
proportion had fallen to just 61 percent (566
mmt). Thus in these two decades when coal
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Harris
U.S. COAL CONSUM
LO 1 f) W LO
0 U) 0 0a
production increased by 359 mmt, virtually all
of the net increase came from western surface
mines.
Regional shares of electricity production,
and hence coal consumption, have also been
affected by new arrangements which separate
the business of electricity generation from its
transmission and consumption, for example,
coal-by-wire projects and power wheeling-
institutional contractual transfers of energy
from regions of net surplus production to those
with net deficits (Calzonetti et al. 1989). The
combined effects of internal and external
forces have resulted in marked regional shifts
in coal production and consumption and in
concomitant changes in interregional coal
flows, as well as in employment structure
and capital accumulation. Tracking trends in
coal flows through a pivotal period in Ameri-
can energy economics offers some revealing
hints of the complex variety of forces at work.
These changes in flows are a spatial manifesta-
tion of the latent structural shifts in supply
and demand, regulation, and the changing re-
lations of capital and labor in the coal-energy
system.
 The United States Coal-Energy System 511

U.S. COAL FIELDS

Bituminous coal A

m Subbituminous coal N
U Anthracite 1-Wsemrn Coal Basins
2-Western Interior

3-Eastem Interior KM
4-Apasna 6 320 640

6-Gulf Fields

Figure 3. Major coalfields of the U.S. Source: U.S. Energy Information Administration Coal Production 1992.

Analysis of Coal Movements,
1972-1990
The study begins in 1972 because that year
represents the calm before the storm of turbu-
lent events that buffeted the energy industry
worldwide and because it marks the estab-
lishment of a systematic electronic database for
collating the cost and quality of coal and other
fuels received by electric-generating plants
(these data are available on magnetic tape from
July 1972 to present; U.S. Energy Information
Administration Cost and Quality of Fuels for
Electric Utility Plants 1992).2 Digital data are not
available for earlier years and statistics must be
compiled from individual monthly returns from
power plants. The study ends with the record-
setting coal production of 1990 which repre-
sents the culmination of a distinctive stage of
the coal-energy system. The dataset is reason-
ably complete with the temporal record being
somewhat better than the spatial one. While
the U.S. Energy Information Administration
claims a 100 percent response rate, and other
sources corroborate a high degree of accuracy
(e.g., National Coal Association Steam Electric
Plant Factors 1968-1990), the dataset does
contain errors and omissions with regard to
specific locations of coal sources and delivered
costs. Missing and erroneous entries are
sufficiently numerous as to necessitate the
aggregation of mine-level shipments to the
state level, with a corresponding loss of spatial
detail.
Intrastate and interstate coal flows are treated
separately for several reasons. During the study
period, intrastate coal traffic accounted for be-
tween 40 percent and 50 percent of the total
volume of coal shipped between mines and
electric-power plants. These flows took place
within 24 states and geographical analysis of
these intrastate flows is relatively straightfor-
ward. In contrast, interstate coal flows are con-

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512 Elmes and Harris
siderably more complex. Over the eighteen-
and-a-half-year study period, interstate coal
was transported between 341 individual origin-
destination state pairs. But in any one year, the
number and combination of flows could vary
widely; for example, in 1972, only 127 of the
341 interactions were active. When map analy-
sis of these complex sets of coal flows yielded
limited success in extracting temporal or spatial
trends (Elmes 1984), several other techniques
were explored. Of these, dyadic factor analysis
(DFA) was selected as the most appropriate for
identifying spatio-temporal trends in the coal-
energy system. Because the sheer volume of
intrastate shipments obscured trends in the
more spatially complex set of interstate ship-
ments, a combined DFA of interstate and intra-
state flows was not pursued.
Intrastate Coal Flows
Intrastate coal flows to electric utilities be-
tween 1972 and 1990 fall into a threefold
grouping of the 24 states (Figures 4, 5, and 6).3
Seven states (Group 1) experienced high rates
of production and consumption throughout
the study period (Figure 5); nine states (Group
2) had low rates of both throughout the study
period (these did not exceed 4 mmt per an-
num) (Figure 5); and eight states (Group 3)
demonstrated remarkable expansion in pro-
SMANNERMINRASTAE FLOWS, 1972-1 990
High flows v Km
Expanding flows ' 3 2064
Figure 4. Changes in intrastate coal flows between
1972 and 1990. States are denoted by Zip Code ab-
breviations here and in Figures 5, 11, and 13. Source:
U.S. Energy Information Administration 1992. Form
FPC 423, Cost and Quality of Coal delivered to Elec-
tric Utilities, 1972-1990.
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duction and consumption during the same pe-
riod (Figure 6).
At the beginning of the study period intra-
state coal traffic was dominated by six contigu-
ous states (Group 1) in the traditional coal-
producing region of the United States-Penn-
sylvania, West Virginia, Kentucky, Ohio, Indi-
ana, and Illinois (Figure 5)-along with Alabama
(Alabama's flows are intermediate between
states in Groups 1 and 3; here we add it to
Group 1). Except in the strike years of 1978
and 1981, these seven states reported annual
in-state coal flows greater than 5 mint through-
out the study period. In 1973, Group 1 states
accounted for 77 percent (130 mmt) of total
intrastate coal movement (168 mint), but by
1990 that proportion had fallen to 51 percent
(note, however, that absolute volume had in-
creased to 152 mmt).
This relative decline in the traditional core
can be traced to the rapid development of the
eight states in group 3 (Figure 6). Between 1972
and 1990 intrastate transshipments of coal to
electric utilities grew dramatically in a periph-
eral arc of western states-North Dakota, Wyo-
ming, Utah, New Mexico, Texas, and, to a
lesser extent, Montana, Colorado, and Ari-
zona. In 1973 intrastate flows in these eight
states amounted to only 25 mmt (15 percent
of the total intrastate volume). By 1990, that
figure had increased to 133 mmt (44 percent).
By far the most spectacular growth occurred in
Texas where intrastate flows increased from
less than 0.45 mmt in 1973 to greater than 44
mimt in 1990. From similarly low base rates,
Utah's production-consumption increased by
twelvefold, Montana's by tenfold, North Da-
kota's by fivefold, Wyoming's by fourfold,
Colorado's by threefold, and New Mexico's by
twofold. These western "transition" states thus
challenged the traditional dominance of intra-
state utility-coal traffic in the interior and Ap-
palachian coalfields and generated new re-
gions of capital accumulation and consumption
in the course of the system's restructuring. By
1990, the seven eastern core states and the
eight western peripheral states dominated in-
trastate coal flows to electric utilities, together
accounting for 87 percent (261 mmt) of the
301 mmt of intrastate coal flows.
The rapid rise of the West deserves a closer
look. Within these states, Texas's rise to first
place in intrastate coal flows reflected the
development of sub-bituminous and lignite
 The United States Coal-Energy System 513

I INTRASTATE FLOWS, 1972-1990:

| GROUP 1 - HIGH, AND GROUP 2 - LOW

20

15 ] PENNSYLVANIA

'6 10 INDIANA

I ALABAMA
<< S k~~WESTVIRGINIA|
0

1 990. |~~~~~~~~~~~~~~~~~~~~~~ILN I

Figure 5. Semiannual intrastate coal flows for group 1 and group 2 states, 1972-1990. Source: U.S. Energy
Information Administration 1992. Form FPC 423, Cost and Quality of Coal Delivered to Electric Utilities, 1972-
1990.

INTRATATE LOWS,1972-1 990:

GROUP 3 - RAPIDLY EXPANDING

25-
TEXAS

20-

.- ---ARIZONA
C',

215] -
0

WYOMING

| 10 q / raz?S <i'>' NORTH DAKOTA

I I w gN-Nt-v jzeiv~eo w

5 o &s w;i ...... &..R.' t,9:- R.<;:?,,;ACOLORADO

l w _ bub~l' wS~lqX 63 BS AMONTANA

(0 (0 (0 C0 0

Figure 6. Semiannual intrastate coal flows for group 3 states, 1972-1990. Source: U.S. Energy Information
Administration 1992. Form FPC 423, Cost and Quality of Coal Delivered to Electric Utilities, 1972-1990.

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514 Elmes and Harris
deposits scattered throughout the eastern and
southern parts of the state. Texas coal, while
low in sulfur, is also low in BTU and hence
cannot bear the costs of long-distance trans-
portation. For this reason, Texas coal has been
developed almost exclusively for mine-mouth
electric power generation. Elsewhere in the
West, as at Colstrip (Montana), Navajo (Ari-
zona), and Four Corners (New Mexico), en-
ergy companies invested in integrated strip
mines and generating plants. These develop-
ments typify the new, large-scale institutions
and structures that have emerged in the west-
ern arc of the coal-energy system and that
have stimulated widespread use of local sup-
plies and lessened dependence on the tradi-
tional core of eastern coal-producing states.
These changes have several causes. In Texas,
the large quantity of local coal destined for
electricity generation reflected increased de-
mand for electricity in the sunbelt and the sub-
stitution of coal for oil and natural gas which
ballooned in price during the 1970s. But
Texas's experience does not readily apply else-
where because the Texas Interconnected Sys-
tem (hereafter TIS) for bulk-power transmis-
sion is not well connected to the other two
power grids (interconnected networks) that
serve the rest of the United States and Canada.
Texas is virtually a self-contained coal-energy
system. Conversely, in the sparsely populated
areas of Wyoming, North Dakota, Utah, and
New Mexico, the growth of intrastate flows
has reflected interregional fuel prices rather
than increases in the geography of demand for
electricity in these states. In response to inter-
fuel competition, many western states convert
coal to electricity and export energy to out-of-
state demand centers. National electricity trade
has increased by 77 percent since the U.S.
government began publishing data in 1986. In
this trade, the lead has been taken by the
Western Systems Coordinating Council
(WSCC), comprising all the United States west
of the Rocky Mountains, and by the Mid-Con-
tinent Power Pool (MAPP), a region consisting
of North Dakota and parts of Montana and
Wyoming (U.S. Energy Information Administra-
tion Electric Trade in the United States 1992).
The export of "coal-by-wire" thus comple-
ments the expanding role of these states as
coal exporters. But coal-by-wire developments
are not limited to western states. Electricity
trade statistics indicate that "sales for resale"
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and "transmission agreements" have also
grown significantly in the East (U.S. Energy In-
formation Administration Electric Trade in the
United States 1992). These developments,
which were significantly enhanced by the de-
creasing cost of coal relative to oil and natural
gas, helped to initiate a major transition in the
spatial structure of the U.S. coal-energy sys-
tem-a transition from a coal-fired core sur-
rounded by a mainly oil- and gas-fired perime-
ter to a more geographically dispersed coal-
fired system, one that depends more heavily
on the interconnectivity of the power transmis-
sion system as well as on material flows of coal
for its flexibility.
While this transition may strengthen the U.S.
coal industry as a whole, this trend has created
economic and social stress in regions that had
long-dominated the production of coal-fired
electricity. In the eastern and Interior states, the
continuously high level of group 1 intrastate
flows (Figure 5) conceals a structural reorgani-
zation toward much larger units of production
of both coal and electricity and increased pro-
ductivity via coal-by-wire projects and econo-
mies of scale in power generation (Calzonetti
et al. 1989). Especially in the Appalachian fields
these economies of scale and technical fixes
have been constrained by complex coalfield
geology, uneconomic coal resources, infras-
tructural problems, and entrenched labor-capi-
tal relationships. Neither did electric utilities in
the eastern coalfields keep pace with the ex-
tensive backward corporate integration expe-
rienced in the western coalfields.
Embedded within these regional trends are
many shorter-term fluctuations. Intrastate coal
flows fluctuated dramatically in 1978 and 1981
in response to labor unrest and strikes in the
strongly unionized Appalachian and interior
coalfields (Figure 5). In each case, however,
post-strike production returned to previous
levels, hence it is difficult to estimate strike
effects on the coal industry in the medium- and
long-term from the flow data alone. There
were significant reductions in the post-strike
coal labor force and concomitant increases in
productivity through the substitution of capital
for labor (National Coal Association Coal Data
1986). In West Virginia, for example, as coal's
labor force fell from more than 47,000 in 1972
to 29,000 in 1986, investment increased in
long-wall mining equipment. Moreover, since
1988 the reduced power of the United Mine
 The United States Coal-Energy System 515

Workers of America (hereafter UMWA) has
weakened labor's capacity to bring about ma-
jor stoppages in eastern coal production. In
contrast, the non-unionized western states
have not experienced similar interruptions in
coal production (compare Figures 5 and 6).
The net result is that the effects of spatial vari-
ation in labor relations have diminished as
western, non-union fields provide a competi-
tive and reliable long-term supply of coal.
Interstate Coal Flows
Between 1973 and 1990 the interstate move-
ment of utility coal rose sharply. In 1973, inter-
state flows totaled 170 mimt (about the same
as the intrastate flows) with a mean flow of 1.2
mmt for 143 interstate dyads. In 1990, total
flows had increased to 410 mmt (about 33 per-
cent more than the intrastate flows) and the
mean flow had doubled to 2.5 mmt for 166
dyads. The increased tonnage reflects both the
increased demand for coal and the trend to-
ward larger volume movements. Increased de-
mand by electric-utility companies was accom-
panied by the development of new interstate
linkages. Although trends at the substate level
are obscured by data aggregation to the state
level, evidence from new mines confirms a
relatively steady upward trend over this period
and an incremental build-up to full capacity
(U.S. Energy Information Administration Coal
Production 1994).
The greater complexity of interstate coal
flows invited a quantitative assessment of the
data using dyadic factor analysis (DFA), a rela-
tively little-known yet powerful variant of factor
analysis. DFA permits the examination of flows,
movements, or interactions between a series
of pairs of locations (dyads) for a number of
variables. Previous studies have used this tech-
nique to identify trends associated with inter-
regional and inter-urban commodity flows
(Berry 1968; Black 1973; Davies and
Thompson 1980). Traditionally, the interaction
matrix, observation Y, against observation Xi, is
used to investigate interaction patterns be-
tween pairs of locations (Figure 7). Through a
reorientation of the interaction matrices into a

DYADIC MATRIX CONSTRUCTION j

X 1Y, Z. XI Y. Z2 Xr YI Z3 ..... . XI Y. Z37

Y DESTINATION

z z I IrI X Y
TIME Z XI 2 XIYZ XiYZ2 XiYZ . . . . . XiY2Z37
~2 XIY1 XIY2
z1 XYi IXI Y2
x1Y 1 xY2I
x2Y1 x2Y2 -x1 Y3z IXIY3 z2 XIY3z3 . .....XIY3 Z37
X.
ORIGIN .
X.nYl X.Y2.

X,, 1- nfX J1 2 X"fl Z3. . fl. . , 137

Figure 7. Construction of the dyadic matrix from a series of two-dimensional interaction matrices. Source:
Revised after Davies and Thompson 1980:299.

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516 Elmes and Harris

data array comprising origin, destination, and
time, DFA can be applied to identify spatio-
temporal trends arising from numerous dyads
over a number of time periods (for a more
detailed discussion of DFA, see Davies and
Thompson 1980).
DFA begins with a series of semiannual ori-
gin-destination matrices representing interstate
coal shipments between mines and power
plants. These matrices are aggregated by state
into origin-destination arrays for the period July
1972 to December 1990 (Figure 7) and then
collapsed into a single two-dimensional array.
In the resultant matrix, rows correspond to the
341 origin-destination dyads and columns to
the 37 half-year periods between July 1972 and
December 1990. The cells in the data matrix
record the tonnage of coal transported be-
tween each pair of states for each half year in
any one direction. Depending upon the nature
of the relations between coal-producing and
coal-consuming states, each dyad may experi-
ence a variety of interactions: 1) just one coal
interaction for one six-month period; 2) a se-
ries of intermittent semi-annual flows; or 3) a
continuous series of semi-annual flows
throughout the study period. A principal com-
ponents analysis of the correlation matrix of
dyadic flows (with unity on the diagonal) and
a varimax orthogonal rotation applied to the
solution was used to clarify identification and
structure of the components.
The principal components analysis of inter-
state flows converged after nine iterations and
produced three interpretable components
(Figure 8). These components accounted for
about 97 percent of the total variance; there-
after, the eigenvalues are very small and their
interpretive utility deteriorates. The first com-
ponent, accounting for 81.6 percent of the to-
tal variance, records large positive loadings on
the later years of the study period-hence its
labeling as a "late" component. The second
component, accounting for 13.3 percent of the
variance, records strong positive loadings on
the first five years of the study period-hence
its labeling as "early." The third component is
interpretable as a "middle" period component,
but its significance must be approached with
great caution because of the small eigenvalue.

ROTATED COMPONENT LOADINGS

1 FACTOR 1
(81.6%)

0.8

O 0.6
0
-j

c 0.4
0

E
0 02(13.3%)
002

FACTOR 3
0(1.9%)

-0.2IlllllI
cm LO r- 0 LO 0 co 0 o
C) C) C) co co co c o)

Figure 8. Rotated component loadings of coal movements, 1972-1990. Source: Dyadic factor analysis.

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 The United States Coal-Energy System 517

For interpretive purposes, we focus on dyads
with factor scores that loaded heavily on one
or more components. A dyad with a high posi-
tive loading on a component indicates that
most of its variance had been captured by that
component and hence the dyad itself may be
characterized as "late," "middle,' or "early." Ex-
amination of time-series plots assists in the in-
terpretation of the components and the re-
sponse of individual dyads. Time-series profiles
of the dyads having the highest factor score on
each component are presented as "indicator"
dyads (Figure 9). The Wyoming-Texas dyad,
for example, exemplifies the "late" nature of
component one, while the dyads for Ohio-
Michigan and Wyoming-Illinois, respectively,
exhibit the characteristics of "early" and "mid-
dle" components.
The "late" component is associated with dy-
ads reporting very large volumes of coal flow
during the 1980s (Figures 10 and 11). As is
often the case in the interpretation of principal
components, the first component is a general
size factor, that is, representative of the mag-
nitude of flows. The predominant flows (with
factor scores greater than 3.0) link Wyoming
with five other states-Texas, Oklahoma, Kan-
sas, Arkansas, and Iowa (Figure 11). Other dy-
ads (with factor score loadings less than 3.0)
reinforce the growing importance of the west-
ern coalfields, for example, the presence of
additional flows from Wyoming to the mid-
western states. The growth pattern of Wyo-
ming's rise to become the nation's leading coal
producer is discernible. Beginning in states
relatively close by, then extending farther
afield, Wyoming flows displaced coal from the
Interior coalfield and even from Montana. As
distance from Wyoming increases and compe-
tition from eastern coal intensifies, Wyoming's
dominance weakens. Yet by 1990, western
coal had supplanted eastern coal sources in
Wisconsin, Michigan, and Missouri power
plants. Although Wyoming and Montana flows
are most heavily loaded on the "late" compo-
nent, the persistence of major coal flows from

INTERSTATE INDICATOR DYADS

16 l

14-

Group 1 - "Late"
12 - Wyoming-Texas

CD) (10.8)

F- 10~ Group 2 - "Early"

8 Group 2- Early Group 3 - "Middle"
6 Ohio - Michigan Woig-Ilni
6 ~~(5.8) (8.1) Ilioi
4

0 C~ T t
r'- r'- r'_
LO c1:0 c o o c '~~ O C r'- co o o
r'_ r'- r'- r'- co co co co co co co 0D co 0D 0)

Figure 9. Illustrative dyads for component 1, 2, and 3 interstate flows, 1972-1 990. The semiannual coal flows
for Wyoming to Texas are the exemplar for origin-destination pairs that peak late (component 1) in the study
period from low initial levels. Similarly, the set of flows from Ohio to Michigan is typical of dyads that peak early
and then diminish throughout the period (component 2). Component 3, while not statistically significant, iden-
tifies the flows of dyads that peak in the middle of the study period, e.g., Wyoming to Illinois. Source: Dyadic
factor analysis.

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518 Elmes and Harris

16 INTESTATE FOWS, 1972 -1990:GROUP 1"LAE" WY-TX-

14

12

U10

*D X SMT-I -
KY-
_ S oWY-KS

WY-AK-

0~ . . . . . 0..)
0mU) 0) ) 0)

Figure 10. Semian

show volumes incr
demand (Kentuck
Montana-Minneso

the Appalachian and Interior fields must also
be recognized (e.g., those originating in Ken-
tucky, Illinois, and West Virginia).
In contrast, the "early" dyads (component
two) tended to come from the eastern fields
(Figures 12 and 13). The historically large coal
producers in the Appalachian and Interior
fields-Kentucky, Illinois, and West Virginia-
dominated interstate coal flows in the 1970s,
but their pattern is more disparate after 1976
(Figure 12). Some dyads (Kentucky-Tennessee
and Kentucky-North Carolina) with very large
flows in the 1970s maintained these levels
throughout the 1980s. Others (Illinois-Mis-
souri) increased their volume of coal shipments
after 1976. These dyads appear to illustrate
older mine-to-plant relationships that were
subsequently sustained. In contrast, other early
dyads (Ohio-Michigan and Montana-Illinois)
report peak flows in the early- to mid-1970s
and decline thereafter. The failure of these dy-
ads to extend any initial advantage of in situ
production processes suggests that they
lacked the reserve capacity to produce low
sulfur, low ash, and high BTU coals at the new
levels of economic efficiency. Later, as the sys-
tem began to equilibrate, some flows became
uncompetitive either because other mines had
a competitive advantage or because utilities
took advantage of intervening opportunities as
new mines entered the market, or via policy
or regulatory intervention. In general, "early"
dyads are located in the Appalachian and East-
ern Interior coalfields where the shorter-dis-
tance, low-volume flows typical of the tradi-
tional coal industry tended to predominate.
This region's surplus capacity-a result of the
loss of coal markets before the 1 970s-enabled
coal producing states such as Kentucky to re-
spond rapidly to increased demand for coal
following the oil embargo and the price in-
creases of alternative energy sources.

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 The United States Coal-Energy System 519

- Factor Scores 2.99 < >2.0 KM

* Origin State I I640
F 320 I

Figure II. Interstate dyads loading on component 1 ("late"). Source: Dyadic factor analysis.

Several additional factors influenced coal
flows from the eastern coalfield states. The en-
forcement of the Coal Mine Health and Safety
Act of 1969, the Clean Air Act of 1970, and the
Surface Mining Control and Reclamation Act of
1977 certainly constrained the supply and con-
sumption of coal throughout the period, but
particularly so toward the latter years of this
study (Gordon 1975; 1986). The Ohio-Michi-
gan (Figure 13) and Kentucky-Michigan (Fig-
ure 11) dyads, for example, reflect the sulfur
content of their coals. In these cases, high-sul-
fur Ohio coal was phased out as the Clean Air
Act regulations took effect and low-sulfur Ken-
tucky coal was substituted. The reorganization
of eastern coal suppliers was also influenced
by the increased demand for electricity in the
sunbelt states of Florida, Georgia, and the
Carolinas. Late growth is evident in dyads be-
tween eastern coalfields and southeastern
states (notably from Kentucky to Florida) as
new markets opened up for utility coal. Coal
movements from Kentucky, Illinois, and West
Virginia also have a "late" component, but
these flows are predominantly directed to ad-
jacent states. Because furnaces in most oil- or
gas-fired plants were incompatible with coal as
a fuel, the switch to coal as a direct substitute
for natural gas or oil was modest. During the
1970s and 1980s, however, coal was increas-
ingly used for base-load generation in new and
existing coal-fired stations, indirectly substitut-
ing for oil and gas no longer burned at other
plants.4 An increased demand for this substitu-
tion coal was well within the surplus capacity
of the Appalachian and Interior coal basins and
the transportation infrastructure was already in
place.
In the case of both inter- and intrastate coal
flows, geographical patterns of change are
dominated by the superimposition of an
emerging western and southwestern coal-fired
electric generating industry on to the traditional
Interior and eastern core. Intrastate coal flows
fall into three groups related to the direction
and strength of trends of coal production dur-
ing the study period. In general, trends of in-
terstate restructuring are revealed by "early,"
"late," and "middle" components of the DFA.
Structurally, the Group 3 intrastate flows are

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520 Elmes and Harris

10 5 l |INTERSTATE FLOWS, 1972 - 1990: GROUP 2 "EARLY" 1

KY-TN -
KY-GA-

06
I-~~~~~~~~~~~~~~~~~~~~LM
'C

2 I L - ? E ? I~~~~~~~~~L-O
VA-NC-
KY-AL-

MT-IL-

01 OH-MIl

Figure 12. Semiannual interstate coal flows of component 2 ("early"), 1972-1990. These flows are large for the
first five years of the study period; subsequently, some decline, while others remain at or above their initial
volume. Although the seasonal variation of these flows is less marked than those in Figure 10, the chilling effect
of strikes in 1978 and 1981 is clear. Dyads having factor scores greater than 3.0 are shown. Source: Dyadic factor
analysis.

related to the "late" interstate component, but
similar direct connections are not possible for
the other two intrastate groups. The restructur-
ing of many coal flows, and of the system as a
whole, can only be more fully understood in
the context of the controlling processes and
structures bearing on the industry. The follow-
ing sections of the paper further explore those
controlling processes that acted to reinforce
and realign the organization of the coal-energy
system.
Restructuring of the Coal-Energy
System: Reinforcement and
Realignment
The principles governing spatial interaction
are important in understanding changes in the
coal-energy system but in themselves are in-
sufficient to explain the full range of processes
acting to restructure the system. Geographical
changes in the coal-energy system are embed-
ded within larger controlling processes, most
notably in the spheres of capital mobility, cor-
porate relations, the regional division of labor,
and regulation by state and federal agencies.
None of these processes predominated; each
played important independent and interde-
pendent roles. At times these processes ap-
pear to have reinforced existing spatial and
technological relationships, and, at other times,
triggered radical change and realignment in the
coal-energy system. Some trends identified in
the DFA were amplified by stochastic events
such as the 1970s' oil shocks as certain dyads
in the coal-energy system (e.g., in the northern
Great Plains) responded quickly to changing
domestic and international conditions. But the
dyadic analysis does not tell us why. Were
these responses the result of planning and far-
sighted management? Were existing decisions
fortuitously reinforced by events or a function
of regional or system-wide flexibility that en-
abled a quick response to rapidly evolving cir-
cumstances?
Consider the case of the massive changes in

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 The United States Coal-Energy System 521

DYADS LOADING ON COMPONENT 2, "EARLY"

Factor Scores > 3.0 \ ,=

- -+ Factor Scores 2.99 <>2.0

0 Origin State KM
Fu 320 I40

Figure 13. Interstate dyads loading on component

coal production that took place in Wyoming,
Montana, and North Dakota. The evidence
there suggests that a planned and coordinated
approach by suppliers, shippers, and consum-
ers toward a coal-based energy future was for-
tuitously reinforced by political events (Mis-
souri River Basin Commission 1979; National
Coal Association Coal Data 1985). Decisions
made prior to the oil crises in the 1970s facili-
tated subsequent land acquisition and devel-
opment, the brokering of future coal sales, and
the rapid expansion of the western coal-basin
labor force. Twenty-two of the 25 largest U.S.
mines in operation during the study period had
opened before 1973 and 16 of these were in
the western basins (Missouri River Basin Com-
mission 1979). Moreover, as early as 1968,
Great Plains' coal producers and upper mid-
western utilities had major contracts in place.
Thus sizable investments in large-scale coal
production, transportation, and electric-utility
coal consumption had been made well before
the oil crises of 1973 and 1978 and in advance
of environmental legislation that altered coal
consumption patterns.
But planning and investments did not always
precede market and regulatory changes. In
Texas, for example, a more flexible industrial
strategy was in place. In 1969, Texas utilities
planned to add 33 new power plants over a
21-year time horizon. Only one of these plants
was designed to use low-grade coal from the
Gulf Field, and the remaining 32 were to be
gas-fired (National Coal Association Coal Data
1969; 1975). As oil and natural gas prices in-
creased, however, these plans were funda-
mentally changed. By 1975 all of Texas's pro-
posed gas-fired plants had been replaced by
sixteen new coal-fired plants. The dramatic in-
crease in Texan coal consumption (brought to
light in the discussion of intrastate and inter-
state flows) reflects the considerable speed at
which fuel-energy strategies could be altered
and new coal-fired plants brought on-line.5 By
1978 four new units were producing electricity
from coal. Thus, in Texas, a flexible response
to political and economic events of the 1970s
and 1 980s did not so much accelerate the pace
of change as fundamentally alter the structure
of that state's coal-energy system.

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522 Elmes and Harris
Capital Relations and Corporate Structure
During the 1970s and early 1980s, regional
changes in coal flows were also influenced by
the penetration of international capital and the
extension of multinational corporate control
over the coal-energy system. As the ownership
of independent coal firms came under the
control of diversifying oil and gas companies,
control over the coal-energy system became
concentrated in fewer, multi-sector corpora-
tions. These firms increased the scale of pro-
duction and reduced the number of dyads.
Moreover, the existence of large, new intra-
state and interstate flows toward the end of the
period are indicative of corporate integration
via horizontal and vertical linkages of coal pro-
duction, transportation, and consumption. Ex-
amples of the new corporate geography are
abundant. The largest mine in the United States
in 1990-the Black Thunder mine (25 mmt)
opened in 1977 in Wyoming's Powder River
Basin-was owned by Atlantic Richfield Oil
Company. The next three largest mines were
owned by large energy corporations, Kerr
McGee and AMAX. Moreover, Exxon, Chev-
ron, and Sun, among other giant energy con-
glomerates, gained control of very large coal
production capabilities throughout the north-
ern Great Plains and Mountain coal regions as
well as in traditional coalfield areas. Through
horizontal integration, oil and gas companies
expanded their control over the coal-energy
system from 33 percent of total coal produc-
tion in 1976 to 44 percent in 1986 (U.S. Energy
Information Administration Coal Production
1988). In some cases market entry was
achieved de novo, as with the entry of new
coal-production operations by Cabacol in
Wyoming, a wholly owned subsidiary of
Exxon. In other instances, large, established
coal-mining concerns were acquired outright,
as in the case of Pittsburgh-Midland by Chev-
ron and Consolidation Coal Corporation by
E. I. Du Pont de Nemours and Company
(Du Pont). Foreign petroleum companies also
entered the market through joint ventures such
as that between AMAX and Royal Dutch Shell
(Keystone News Bulletin 1990). In many of
these cases, corporate acquisitions were de-
signed to smooth cyclical fluctuations in cor-
porate revenues by diversifying corporate in-
terests while at the same time earning oligopo-
listic rent in the energy market.
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Oil and gas investment in coal assets peaked
in the mid-1980s and then went into reverse.
By the beginning of the 1990s, oil corporations
had initiated a massive divestiture of coal prop-
erties. American-owned corporations such as
Amoco, Standard Oil Company of Ohio, and
Texaco had already divested their coal assets
by 1987 (U.S. Energy Information Administra-
tion, Coal Distribution 1988 et seq.), and by
1990 the share of oil-company holdings (32
percent of major coal-mine production) had
returned to 1970 levels (Keystone News Bulle-
tin 1990). Yet at the same time, foreign control
over the largest coal producers increased
steadily-from 1.4 percent of coal production
in 1976 to 6.4 percent in 1986 to 20.1 percent
in 1990 (Keystone Coal Industry Manual
1992:632). The acquisition by Hanson plc.
(U.K.) of Peabody Holding Company and
RWE's (Germany) acquisition of Consolidation
Coal Company from Du Pont resulted in sub-
stantial foreign control of two of the top three
U.S. coal producers (U.S. Department of En-
ergy 1993). Despite the ebb and flow of invest-
ment by particular oil corporations, coal-own-
ership patterns remain firmly under the control
of large corporations. The industry has not re-
verted to the status quo ante with its multitudes
of medium- and small-scale independent op-
erators.
Restructuring is also evident in the coal elec-
tric-utility system by the extension of corporate
control from the public-utility sector into coal
production. Investment by utility-power com-
panies in large-scale coal production sought to
guarantee fuel supplies through backward ver-
tical control (U.S. Energy Information Admini-
stration Coal Production 1988). By 1986, utility
companies directly controlled 15 percent of
coal production. The BNI Coal Company, for
example, with 500 million tons of recoverable
reserves in North Dakota, is a wholly owned
subsidiary of the Minnesota Power Company
(Keystone Coal Industry Manual 1992:755)
Similarly, the Rosebud mine in Montana, the
seventh largest mine in the United States, is
owned by a subsidiary of Montana Power. In
addition to their establishment of backward
vertical control, electric-utility companies in-
creasingly coordinated their marketing power
in multi-state markets. Utilities thus benefited
from agglomeration economies and risk shar-
ing in the construction and operation of the
large power plant units characteristic of the
 The United States Coal-Energy System 523
1970s. A case in point is the Four Corners
power plant in Fruitland, New Mexico, which
is controlled by six public or quasi-public or-
ganizations representing cooperation between
four states. But constraints are setting in.
Efficiency caps on generating unit size at
around 600 Mw, decreasing returns to scale,
and uncertainty about investment in additional
generating capacity tended to restrict exten-
sion of these multi- organizational, multi-state
ventures toward the end of the study period.
Increased corporate control extends also to
the coal chain's infrastructure. During this pe-
riod, coal transportation became more of a col-
laborative endeavor between coal user, rail car-
rier, and coal producer, particularly with re-
spect to long-haul coal flows. This is clearly
evidenced in the DFA. Technological advances
in rolling stock and loading and unloading ca-
pability consolidated the predominance of the
unit train. These changes were geared toward
maximizing the use of expensive capital equip-
ment, thereby minimizing the investment re-
quired to handle a given tonnage of coal. De-
troit Edison, for example, designed rolling
stock specifically tailored to maximize the
efficiency of the firm's loading and unloading
facilities. Increased automation and "just-in-
time" coal delivery have substantially reduced
coal stockpiles-in some cases to what is left
over between successive unit train deliveries
(Keystone Coal Industry Manual 1991). Al-
though stockpiles are sensitive to unsettled
conditions between management and labor,
utility companies halved their average size
from 111-days supply in 1982 to 54 days in 1992
(National Coal Association Coal Data 1993).
Given these reduced coal inventories, reliable
electricity generation can only be accom-
plished through greater control over the factors
of production and transportation. The unit train
thus has exerted pressure for backward vertical
integration as well as improved traffic informa-
tion control in the form of geographic informa-
tion systems. Other developments have com-
plemented this strategy, for example, the con-
struction of dedicated railroads as exemplified
by the Black Mesa and Lake Powell Railroad in
Arizona, the Texas Utilities' TUG Railroad in
East Texas, and the American Electric Power's
Muskingum Electric Railroad in Ohio (Keystone
Coal Industry Manual 1991). In each case, the
coal-transport operation is a subsidiary of the
public utility. In sum, technological develop-
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ments have encouraged vertical integration
and control over the coal-supply system.
Nevertheless, control over transportation is
not as easy to implement as it once was. The
merger of the major railroad companies into
transnational corporations has restricted the
potential for backward corporate acquisition of
long-haul transportation, even by large utility
companies. Although railroad deregulation un-
der the Staggers Rail Act of 1980 legally enables
utility companies to extend greater control
over coal supply by permitting long-term con-
tracts with the railroads, the outcomes have
been inconclusive in terms of competition
(FERC 1984). From the coal and utility indus-
tries' perspective, legislative deregulation did
not result in lower rates or increased competi-
tion (Coal News 1985; Coal Outlook 1985).
Conversely the railroad industry has argued
that there was an absence of monopolistic
pricing in the first place and that the increase
in railroad coal rates since the Act were not
high "by any reasonable standard" (Association
of American Railroads 1986:10). As a result,
considerable friction has ensued between the
coal, utility, and railroad industries, not least
because of the Interstate Commerce Commis-
sion's liberal interpretations of the Staggers Act
(Coal News 1985; Fieldston Co. Inc. 1984). This
is particularly a problem in the western
coalfields where longer average hauls, the
lower BTU content of western coal, and the
role of railroad rate-setting procedures, particu-
larly in the case of captive mines, have in-
creased tensions between coal producers and
consumers, on the one hand, and carriers, on
the other. It is also a problem in the traditional
core where small mines claim to be marginal-
ized by monopolistic freight rates.
Labor
The technological and corporate restructur-
ing of the coal-energy system has also resulted
in major stress in the relationships between
labor and capital as the mode of production
changed from an autonomous, diverse, labor-
intensive, multi-firm industry organized by one
dominant union, the United Mine Workers of
America, toward a vertically integrated system
dominated by fewer large corporations. Strikes
and shifts in production brought about by
wage competition show in the coal-flow analy-
524 Elmes and Harris
sis. While a complete exposition of labor rela-
tions in the coal industry from 1972 is clearly
beyond the scope of this paper, a few points
are relevant here.
The loss of mining jobs since the peak em-
ployment of the mid-1970s has been felt
strongly in the eastern fields. West Virginia's
coal work force in 1990 was less than half the
1976 peak of 64 thousand; Pennsylvania's coal
employment was halved between 1979 (39.9
thousand) and 1990 (less than 19 thousand);
and in Kentucky, the comparable figures were
49 thousand (1979) and 30 thousand in 1990.
But job loss in coal mining was not limited to
the East. Although separate figures are not pub-
lished for the coal sector, Wyoming's 38.5
thousand employed in all mining jobs at its
1981 peak fell to 17.4 thousand in 1987. Con-
versely Texas's mining labor force peaked in
1981 at 10.6 thousand and remained at 10
thousand in 1990. Increased productivity has
been achieved in part by steady increases in
the average number of hours worked which
rose from 40.7 hours in 1970 to 44 hours in
1992. Overall, however, total hours worked fell
steadily after 1973 (U.S. Department of Labor
1992). Output during this period rose on aver-
age by 2.7 percent annually as longer hours
worked by fewer employees were comple-
mented by productivity increases due to auto-
mation (U.S. Department of Labor 1993).
The loss of labor's political power is evident
in the erratic decline of mine workers from a
daily average employment of 149,265 in 1972
to 131,306 in 1990-in a period when produc-
tion doubled-as well as in the UMWA's failure
to organize new mines west of the Missis-
sippi.6 Union membership is difficult to ascer-
tain from published sources, but reliable esti-
mates of UMWA membership indicate a fall
from 213 thousand in 1973 to 82 thousand in
1992 (U.S. Department of Labor 1992). The
geographical differences in union participation
between the eastern and western coalfields in
the 1970s are amply illustrated in Table 1. Un-
fortunately directly comparable data for later
periods are not available.
Labor's failure to organize new production
sites is partly attributable to an international
surplus capacity of coal production at low
wage rates and the attendant threat of massive
substitution of imported coal at water-side
plants during the boom years following the oil
embargo (for an Australian case study of capi-
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Table 1. Union Membership as a
Proportion of All Workers in Mining for
Selected States.
1970 1978
Kentucky 27 22
Ohio 36 29
Pennsylvania 37 34
West Virginia 43 37
Colorado 20 15
North Dakota 17 15
Texas 14 11
Wyoming 17 15
Source: U.S. Department of Labor 1980.
tal-labor relations in this context, see Gibson
1990). Under this shelter of offshore labor, the
coal industry has been able to reinforce its
capital accumulation ability in the United States
by shifting its emphasis from labor-intensive
operations in the eastern coalfields to large-
scale, non-unionized, and capital-intensive op-
erations in the West where it also has been
favored by coal geology and seam thickness.
Government Regulation
In addition to the interplay of capital, labor,
and technology, federal regulation has been
influential, if inconsistent, in the restructuring
of the coal-energy system and in the move-
ment of coal to power plants (Gordon 1978;
James 1982; Perry 1983; Rose et al. 1991). In
cases such as the 1977 Clean Air Act Amend-
ments and 1978 Power-Plant Fuel-Use Restric-
tions, strict regulatory control over the direc-
tion of the coal-energy industry resulted in un-
even regional impacts, generally favoring low-
sulfur coal flows previously identified in the
analysis. In other instances, federal policy has
been largely deregulatory in nature, as for ex-
ample in the Staggers Rail Act and the Power
Utilities Regulatory Policies Act of 1978 (here-
after PURPA). Although deregulation in general
tends to favor large production operations and
large transactions, its effect on coal flows has
been more geographically dispersed than that
of regulatory actions.
In a salient paper, Rose et al. (1991) noted
several distinct phases in recent domestic en-
ergy policy-1) interventionist; 2) laissez-faire;
 The United States Coal-Energy System 525
and 3) modified laissez-faire. With the onset of
the energy crisis in 1973, a Democratically con-
trolled Congress promoted an overtly inter-
ventionist policy with national goals of energy
self-sufficiency and the development of new
coal fuel technologies as exemplified by Proj-
ect Independence (Executive Office of the
President 1977) and the National Energy Act of
1978. Encompassing five statutes, the Act en-
sured the dominance of coal over competing
fuels in electricity generation by encouraging
conversion of boilers to coal. A second phase
of government policy began during the 1980s
when a conservative Republican administration
effectively disabled the major regulatory agen-
cies (EPA, DOE, and DOC) and unleashed a
period of unrestrained laissez-faire economic
policy. Tax advantages gained in the 1970s for
energy efficiency were discontinued. These
and similar policies had little immediate effect
on the now well-established position of utility
coal flows, but they encouraged diversification
of assets especially by large energy corpora-
tions. The third policy phase commenced in
1989 with a 'National Energy Strategy" pro-
posed by the Bush administration. This strategy
was committed to improving the efficiency of
energy use, increasing oil production outside
the Persian Gulf, expanding natural gas use,
supporting clean coal technology, and reviving
nuclear power. By permitting new electricity-
generating plants to burn oil and gas, these
policies reversed a quarter-century trend and
injected a new dimension into the reorganiza-
tion of the coal-energy system which princi-
pally affects suppliers at the margin as a result
of coal quality, labor, or transportation costs.
Recently the effects of the national energy
strategy have been bolstered by the Energy Act
of 1992. This act provided new competitive
challenges to the coal-energy system and ef-
fectively set a cap on the reported changes in
coal flows between 1972 and 1990. The 1992
Act reaffirms the one major deregulatory stat-
ute, the 1978 PURPA legislation, which author-
ized the generation and public sale of electric-
ity by nonutility companies. By the end of the
1980s, nonutilities generated 9 percent of U.S.
electricity production and contributed 20 per-
cent of all new capacity. Even though these
small flows of coal to nonutilities are not rep-
resented in the DFA, the coal flows involved
were inconsequential because most of the new
units were small and gas-fired. The seeds of
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nonutility generation sown during a period of
strongly interventionist policy thus carry the
potential for sweeping changes in the structure
of the coal-energy system as it existed in 1990.
Coal Flows and Industrial
Restructuring
Interest in national energy policy in the
United States has tended to be equated with
recurring crises in energy supply. However
short-sighted such perceptions, they have am-
plified the combined effects of short-term cri-
ses and longer-term historical trends. Our
analysis of intrastate and interstate coal flows
has revealed several significant trends, notably
the differential rise and fall of flows in response
to exogenous and endogenous events and
changes in controlling processes. Some inter-
state dyads were able to grow rapidly in the
1970s as events reinforced planned develop-
ments or as the industry realigned to new op-
portunities or mandates. Other dyads, espe-
cially in the West, responded later following
capital investment in mines, transportation,
and power-generation plants. Save for the ex-
pansion in the western states, the effects of the
several energy crises are not readily discernible
from the intrastate and interstate flows. In the
Appalachian coalfields, capital-labor relations
and competition from the West constrained
utility-coal flows, but this largest coal-produc-
ing region was able to meet shortfalls in utility
fuel supply and these flows helped maintain
high levels of production over the entire pe-
riod.
The changing pattern of coal flows has also
been linked to significant changes in coopera-
tive investment in mines, railroads, and power
plants. During the study period, technical and
corporate aspects of coal mining, coal trans-
portation, and power generation became co-
ordinated to a far greater degree than pre-
viously. For a time, coordinated investment by
multiple parties worked in favor of low-cost
production, concentration-the intensification
of large-scale production and shipment-and
the reduction of the industry's traditional bond
to unionized labor and fixed capital invest-
ment. As utilities extended their contractual
control over sources of production and trans-
portation, regions producing less than unit-
526 Elmes and Harris
trainload outputs or mining predominantly
high-sulfur coal (e.g., Central Appalachia) were
forced to the margins, as evidenced by labor
force reductions and mine closings well into
the 1990s. These changes have many of the
hallmarks of flexible accumulation strategies,
for example, reduced labor costs and in-
creased labor flexibility, automation, and crea-
tive means of contracting and subcontracting
to minimize the effects of negotiated labor
agreements. However, vertical integration and
economies of scale still played a major role in
the coal-utility industry until the end of the
study period. This mixed strategy was possible
because the coal-chain comprises many sub-
systems which require, and respond to, differ-
ing management approaches. These seemingly
contradictory trends in the coal-energy indus-
try are not unique as evidenced by 0 hUal-
lachaiin and Matthews' (1994) conclusions for
the copper industry.
But what of the future? There is evidence
that deregulation and diversification are the
outstanding themes of the 1990s. This study
draws to a close precisely when the national
energy industry is again at a critical juncture
because of major changes in political attitudes
toward labor relations, environmental pollu-
tion, fuel sources for power generation, and a
renewed dependency on foreign oil supplies
(Goldstein 1990). Multiple changes are facing
an industry that seems to be reluctant to chart
a clear course. Although coal will continue to
be the primary source of electrical energy for
the foreseeable future, further change in the
industry is inevitable as industrial plants, fuels,
institutions, and controlling processes respond
to new conditions. As much of the steam-elec-
tric generating-plant capacity is approaching
the end of its life cycle, these plants will need
refurbishment or replacement. In spite of this
growing need, cancellations of planned power
plants have been extremely common over the
past two decades (Swindler 1992) and the de-
cision about future base-load generating sys-
tems has continually been put off. As techno-
logical fixes in the form of new modes of pro-
duction are introduced (e.g., smaller power
plants, new fuels, nonutilities, or the divestiture
of utility companies), the spatial interaction be-
tween coal producers and consumers will nec-
essarily change. Developments over the next
20 years will be equally as varied as those of
the preceding two decades. A few examples
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of new elements in the energy space economy
serve to highlight the gamut of potential
change and the difficulties of predicting their
impact on coal flows.
Among these elements are recently re-
scinded restrictions on the use of natural gas
that, when joined with the surging growth of
combined-cycle gas turbine generators, open
new possibilities of fuel sources and plant dis-
tribution. An entirely new mix of generating
facilities may be on the horizon as nonutility
generators proliferate on the strength of low
capitalization costs of the new technology.
Nonutility generators are projected to supply
an increasing proportion of power to interme-
diate and final consumers. Additionally, the po-
tential effects of a market for "pollution credits"
is only now being documented and it is too
early to forecast its potential impacts on coal
flows (Solomon 1994). The uncharted implica-
tions of NAFTA also portend an extended pe-
riod of unpredictability as new markets emerge
and less expensive supplies of electricity be-
come available across national borders, for ex-
ample, Canadian hydropower. Under these
conditions of uncertainty it is as difficult to pre-
dict the degree to which coal will maintain its
regional shares of the electrical utility fuel mar-
ket as it is to forecast changes in the geography
of coal flows. It is reasonable to suggest that
further changes in coal flows are inevitable as
their underlying structures evolve.
Landscapes of industrial processes, modified
by the continuing reorganization of economic,
technological, and political forces, invite inter-
pretations of geographic changes and the
causal relations underpinning them. Faced with
an imperative for change, industries may re-
spond with a combination of technical and
spatial fixes aimed at improving industrial
efficiency and sustaining profitability. As sys-
tems of production are abandoned or trans-
formed and rebuilt, new regional distributions
of capital accumulation emerge as a result of
uneven growth and change (Florida and Ken-
ney 1992). But restructuring transcends the
purely spatial expression of changing patterns
of coal flows. While the principles of spatial
interaction remain important because of the
fixed nature of the natural resource and the
significance of transportation costs, they are
increasingly insufficient to explain the roles and
growing relative importance of new technol-
ogy, mobile capital, corporate restructuring, la-
 The United States Coal-Energy System 527
bor relations, and legislative action upon the
coal-energy system. As the role of bulk elec-
tricity trade grows, it becomes even more
difficult to assign specific movements of coal
to specific locations of demand for power; the
explanatory value of complementarity and
transferability is thus diminished. While DFA
has revealed a variety of regional and temporal
responses to restructuring, these responses
have been placed in the context of controlling
forces at scales ranging from the firm to the
global. Further contextual examination of the
linkage between flows and institutional agents
at the local scale is necessary to confirm the
causal relations implicit in this study.
Acknowledgments
The authors would like to thank Stanley Brunn,
Frank Calzonetti, and Michael Kuby for their time and
constructive comments on previous versions of the
manuscript and Alison Hanham for her cartographic
assistance. We also wish to thank several anonymous
reviewers for their comments on earlier drafts of this
paper.
Notes
1. A short ton of 2000 lb. is the standard unit of
measurement in the U.S. coal industry. A metric
ton of 1000 kg. is 2204.62 lb. The conversion ratio
is 0.9016 short ton to 1 metric ton.
2. Deliveries of coal to each electric-utility plant over
250 Mw capacity are recorded for each shipment
by origin, mode of transportation, quantity, deliv-
ered cost, BTU, sulfur, and ash content on Form
FPC 423 "Cost and Quality of Coal Delivered to
Electric Utilities.' This form is sent monthly to the
Federal Energy Regulatory Commission.
3. For purposes of clarity, the 24 time profiles are
separated into Figure 5 and Figure 6.
4. Base-load power plants operate as close to oper-
ating capacity as is technologically feasible. These
plants contrast peak-load plants which come on-
stream in response to diurnal and seasonal fluctu-
ations in electricity demand.
5. In 1968, the National Coal Association reported
that conventional plants (those burning coal, gas,
or oil) could be on-line four years after the order
was placed (National Coal Association Steam-Elec-
tric Plant Factors 1968:52). In 1978 the Pennsylva-
nia Coal Model adopted twelve years as an aver-
age estimate of the time between order and
on-line status (Knight and Manula 1978).
6. The post-1945 coal mining labor force hit bottom
in 1969 with 124,532 in daily employment and
peaked in 1978 with 242,295 (U.S. Department of
Labor 1991).
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Elmes, Gregory A., and Harris, Trevor M. 1996. Industrial Restructuring and the United States
Coal-Energy System, 1972-1990: Regulatory Change, Technological Fixes, and Corporate Con-
trol. Annals of the Association of American Geographers 86(3):507-529. Abstract.

In the past three decades the coal-energy system in the United States has undergone significant
restructuring in location, technology, and organization. During the 1970s and 1980s the quad-
rupling of oil prices coupled with changing relations of production, legislative action for envi-
ronmental protection, and deregulation in coal transportation initiated major reorganizations of
the movement of coal from mines to electricity-generating plants. In this paper a three-part
analysis examines the corporate and regulatory processes influencing coal flows during restruc-
turing. Part one describes intrastate flows using coal-receipts from power plants. Part two
identifies the changing spatial relationships in the coal-energy system between 1972 and 1990
using a dyadic factor analysis of interstate coal flows. Some origin-destination pairs responded
rapidly to changes in coal demand. Others lagged behind until coal production or consumption
facilities were developed under new financial and regulatory conditions. Drawing on contem-
porary and traditional perspectives of industrial reorganization, part three interprets the varying
geographic responses of the U.S. coal-energy system and links the industry's restructuring to an
emerging coordination of decision making between public and private interests in production,
distribution, and consumption. Beyond the well-established shift to western coal fields and the
rise of utility consumption associated with population growth, the analysis provides evidence of
the grafting of increasingly influential national economic and political forces on to local and
regional control of coal production and consumption. Key Words: coal-energy system, coal flows,
dyadic factor analysis, industrial restructuring.

Correspondence: Department of Geology and Geography, P.O. Box 6300, West Virginia Uni-
versity, Morgantown, West Virginia, 26506-6300.

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