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General Assembly Considers Tax Incentive To Lure Coal Classification Plant To Kentucky

FRANKFORT, Ky. (AP) - As the Kentucky General Assembly considers
tax incentives aimed at luring a coal gassification plant to the
state, interest groups are divided over its benefits.
While some view the proposal as a way of advancing clean-coal
technology, others believe such a plant is likely to cause damage
to Kentucky's environment.
State lawmakers have spent the summer considering a proposal
that calls for $300 million in tax breaks aimed at landing a plant
in Kentucky. Legislative leaders have said they're aiming for a
special session sometime this month to consider the legislation.
But environmentalists and some state officials are split.
Talina Matthews, executive director of the state Office of
Energy Policy, said the country's domestic production of natural
gas is not keeping up with demand.
"Kentucky has a natural resource, coal, that can be converted
into pipeline quality natural gas, and this offers a new market for
that resource, and an economic development opportunity for
Kentucky's coal-producing regions," Matthews said.
Meanwhile, environmentalists claim a proposed plant under
consideration by Peabody Energy and ConocoPhillips could release
more carbon dioxide - a gas that has been blamed for contributing
to global warming. They also question a plan by the companies to
trap the gas is costly and uncertain.
"I don't think it's fair to call it clean," said Sarah Lynn
Cunningham, a co-founder of Louisville Climate Action Network. "We
need to start by trying to figure out how to use energy more
efficiently."
Instead, the state should spend $300 million to help Kentucky
residents pay for insulating their homes or buying new air
conditioning and heating units, Cunningham said.
Kentuckians for the Commonwealth, an environmental group opposed
to mountaintop removal coal mining, calling the proposal "new
subsidies for the coal industry."
Susan Klimchak, a spokeswoman for House Majority Floor Leader
Rocky Adkins, D-Sandy Hook, said what's suggested in the
legislation should be called incentives not subsidies.
Gov. Ernie Fletcher called the legislature into a special
session last month to deal with the proposal. The Senate passed an
energy tax-incentive plan, but the House did not address Fletcher's
legislative agenda and adjourned.
Lawmakers had said they were hoping to ask Fletcher to call a
special session to begin on Monday. House and Senate negotiators
are expected to meet again on Monday to talk about the proposal.
Key lawmakers recently said Peabody Energy officials told them
Kentucky would be recommended for a coal gassification plant if the
state passed certain tax breaks.>


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