FRANKFORT, Ky. (AP) - Political leaders in Kentucky, worried
about the future of coal amid ever-increasing environmental
demands, have taken action that they say is critical to protecting
a mainstay of the state's economy.
In a move widely opposed by environmentalists, Gov. Ernie
Fletcher signed a bill into law on Thursday that will provide
hundreds of millions of dollars in incentives to companies that
build high-tech plants to convert coal into cleaner-burning
Lawmakers say the measure is critical to Kentucky's future
because it could keep coal a viable source of fuel for generations
to come despite a push for stricter federal limits on emissions of
so-called "greenhouse gases" from coal-fired generating plants.
"It puts Kentucky in a position to be the national leader in
the energy arena," said House Floor Leader Rocky Adkins, D-Sandy
Hook, a coal executive and one of the chief architects of the new
law. "It puts us in a position to really grow our economy and
expand our ability in research and development in the energy
Public debate of the measure centered primarily around its
effects on coal, a $4.8 billion state industry that employs 15,000
miners. But the measure also provides incentives for developing
wind, hydro, solar and biomass technologies.
Teri Blanton, a member of the environmental group Kentuckians
for the Commonwealth, said promoting renewable forms of energy like
wind and solar power is laudable, but she still disapproves of the
new law because she said it will lead to the destruction of more
Appalachian mountaintops by mining companies in search of coal.
Blanton said she objects to providing tax breaks for companies
that destroy the environment.
Fletcher, who signed the measure at a Louisville hotel on
Thursday, said it will help Kentucky compete with other states in
trying to land new energy projects.
"I disagree with any of the naysayers," Fletcher said. "I
think this is very important. I think it will move Kentucky
Legislative leaders developed the initiative behind closed doors
over the summer after executives from St. Louis-based Peabody
Energy said they were considering building a $3 billion coal
gasification plant in the state. Early estimates put the value of
the proposed Peabody incentives under the new law at $300 million
with breaks on sales taxes, income taxes and coal severance taxes.
Adkins said the law puts Kentucky on equal footing with other
states that already offer incentives for companies that development
cleaner-burning fuels from coal. He said the measure has the
potential to improve national security by reducing dependence on
foreign oil with investment in production of ethanol and biodiesel
plants, even hydrogen fuel cells.
Bill Caylor, president of the Kentucky Coal Association, said he
believes vast U.S. coal reserves, which already supply half of the
nation's electricity, hold the key to cutting dependence on foreign
oil. He said encouraging companies to invest in technology to
convert coal to gas and liquid fuels is crucial.
"This country is in such a rush to satisfy environmental
activists and their perception of environmental doom that it is
jeopardizing our future," Caylor said. "We need to be more energy
Associated Press Writer Malcolm Knox in Louisville contributed
to this story.
(Copyright 2007 by The Associated Press. All Rights Reserved.)