Subsidies for coal 'a cynical and dangerous move'

Many Kentuckians now acknowledge that the mining and burning of coal is neither cheap nor clean. Increasingly, we understand that the true costs of coal are unacceptably high, especially in terms of the harm done to our mountains, streams, forests, health, global climate and political process.

There is a growing movement here and around the country to demand good jobs and a healthy environment through greater investments in energy efficiency and clean, renewable energy. It is past time that Kentucky's elected officials realize this.

That's why the current push by Gov. Ernie Fletcher and other political leaders to pass new subsidies for coal is such a cynical and dangerous move in the wrong direction.

For the past two weeks, a group of lawmakers, many with close ties to the coal industry, has met behind closed doors to draft an energy bill containing numerous new tax-breaks for companies that build "coal-conversion" plants in Kentucky. These facilities would turn coal into diesel fuel or synthetic natural gas at enormous public expense and damage to our water, air and climate. These fuels produce twice the carbon dioxide pollution (a major contributor to global warming) as conventional fuels. A recent report by the Natural Resources Defense Council calculates that replacing just 10 percent of America's transportation fuels with liquid coal would increase mining in the U.S. by 43 percent.

Their proposal would award $300 million in precious tax dollars to Peabody Energy, the world's largest coal company whose profits increased by 342 percent between 2004 and 2006. But the bill will offer the same level of tax breaks to any company that seeks to build a coal-to-liquid or coal-to-gas plant in Kentucky in the future. *The Wall Street Journal* recently called a similar proposal in Congress "the biggest corporate welfare scheme in U.S. history."

Let's be clear. Providing hundreds of millions of taxpayer dollars to highly profitable coal companies is not in the interests of Kentucky's under-funded schools or health care system. It is not in the interests of our communities already under assault from mountaintop removal and other forms of radical strip mining. It will not create a more diverse or sustainable economy in the coalfields. And it is not in the interest of our children or grandchildren who desire to live and work in healthy and viable communities.

If anyone needs additional reasons to oppose the proposed subsidies, I suggest they look closely at the games being played with the coal severance tax. A bit of history is helpful here. The severance tax was established by the legislature in 1972 out of recognition that extracting coal, a finite resource, comes at a huge cost to the public. The proceeds from this tax were supposed to go back to coal-producing counties to help repair infrastructure and provide resources necessary to develop a diverse economy. Over the years, coalfield communities have received scant little of what was initially promised to them from this fund.

In recent years, the coal industry has been successful at recapturing severance tax dollars for its own benefit. For example, tens of millions of severance tax dollars now flow back to the coal industry each year to subsidize its workers' compensation and road repair bills. The energy bill now under consideration by the legislature is expected to contain a provision that will redirect 80 percent of severance taxes back to the industry for any coal burned in a coal conversion plant. As a result, there could be tens of millions of dollars less to help restore and rebuild Kentucky's coalfield communities over the next 25 years.

The final insult of this special interest session is the way that public input and involvement have been shut out. In July, political leaders cut a deal with Peabody Energy's CEO at a closed-door meeting. They emerged to announce that more closed sessions would take place to hammer out a bill, which they promised to rush through the General Assembly in just five days. As always, the ones who benefit most from making public policy decisions in the dark are those who have the most to hide.

Some legislators are seeking to assure the public that the final bill will contain many good provisions, including improvements in energy efficiency and incentives for renewable energy. That may be. I applaud those measures and appreciate the efforts of legislators and advocates working to include them. But those positive steps are no reason to pass massive additional subsidies for coal. And all of these items can wait until January for the chance to do this process with greater public input, more sunlight and less coal.

*DOUG DOERRFELD* Chairman Kentuckians for the Commonwealth Elliottville, Ky. 40317