"Peabody Energy has said it is considering building a $3 billion plant to convert coal into synthetic natural gas in Western Kentucky. If lawmakers pass an incentive bill this summer worth hundreds of millions of dollars, Peabody executives have said they will recommend to their partners that Kentucky be the only location considered for the plant." from Kentucky Poll WatchersThe legislation has already passed the Kentucky Senate, and is awaiting passage by the KY House.
There are many concerns that have been raised about this project. Those specifically related to environmental issues include:
a) providing huge subsidies to create plants for the conversion of coal to a liquid fuel (a process that requires huge amounts of water and energy, is very expensive, and largely an unproven process) distracts us from developing alternative sources of energy (e.g. solar and wind);
b) liquid fuels created from coal will put more CO2 (a green house gas) into the atmosphere than burning petroleum fuels does now;
c)developing such a project will put even greater pressure to use destructive methods of coal mining such as mountain top removal, to get the most coal in the cheapest way.
Broader issues include that: a) hundreds of millions of dollars of tax subsidies (currently estimated at about $300,000,000 over 10 years), for a plant that would, at most hire 125 workers full-time; b) most of the tax subsidy would come from that portion of Kentucky coal severance taxes that are redistributed directly to coal producing counties for economic development activities -- which would mean less revenue available to coal producing counties.
The United States Congress has recently rejected two bills to subsidize the use of coal to produce liquid fuels. The only reason that the Kentucky House has not passed this bill is because of political wrangling over who will get "credit" (Republicans through Governor Ernie Fletcher) or the Democrats. The thing that I find so flat out amazing is that any one any where would consider wasting so much tax revenue on such an outright piece of corporate welfare, to subsidize a product that will only damage Kentucky and the planet to be a political bonus. Yet some how, Kentucky politicians, seem to think that getting 125 jobs (at a tax revenue cost of about $240,000 per job per year for 10 years!) is a political plus and will garner them votes.
What really disturbs me is that Kentucky's politicians just might be right -- they just might earn some votes from this environmental and fiscal disaster. Yup! Odiyya is right.
More information about the environmental and taxation issues, you might wish to check out the Kentuckians for the Commonwealth website.