Kentucky: Alternative Energy Pioneer or Corporate Lackey?

The AP reported that:

An energy bill loaded with hundreds of millions of dollars in tax incentives for coal and power companies breezed through the Kentucky House Wednesday.

Legislative leaders, who developed the bill behind closed doors this summer, hailed the proposal as a "visionary" plan designed to help reduce both Kentucky's and the nation's reliance on foreign oil. It includes incentives for companies to build coal gasification plants in Kentucky.

Gov. Ernie Fletcher called a special legislative session, which began Monday, for the sole purpose of passing the energy plan. The measure is directed at St. Louis-based Peabody Energy, which is considering building a $3 billion coal gasification plant in Kentucky, but it would provide incentives for any qualifying company. Early estimates put the value of the proposed Peabody incentives at $300 million.

The bill, however, is not rosy for all:

State Rep. Jim Wayne, D-Louisville, voted "no" and called it a "deeply flawed bill." Wayne said the energy bill would give coal companies "unprecedented and excessive tax breaks" and doesn't do enough to limit the release of carbon dioxide and other pollutants.

"How can we ask a Kentucky worker to pay their state sales and income taxes if we are going to turn around and give Peabody back all of their own taxes and the taxes of their suppliers and the taxes of their own employees?" Wayne said during a floor speech.

Source: The Cincinnati Post, via AP

Courting Peabody

It seems as if everybody wants Peabody Energy's $3 billion coal gasification plant--and Peabody wants incentives, among other basic logistical considerations. The St. Louis-based company is considering locations in Indiana, Illinois, and Kentucky to build a joint coal-to-natural-gas plant with ConocoPhillips. Apparently, executives at the company promised to recommend Kentucky sites if lawmakers approve tax breaks over $300 million. The governor of Kentucky wants to hold a special legislative session on Monday to approve the incentive package.

Peabody as said that they are looking for a location in the Midwest with large reserves and an existing infrastructure, that would be designed to produce between 50 billion to 70 billion cubic-feet of pipeline quality natural gas from 3.5 million tons of Midwest coal. Peabody is the world's largest private-sector coal company, fueling 10% of all U.S. electricity generation and more than 2% worldwide.


Sources: Forbes, CNN, Peabody

The Biggest Piece of Coal in China

The Xinjiang Province, a huge, sparsely populated region in Northwest China, began hosting China's largest coal chemical project this month. Xinwen Mining Group, based in the Sandong Province, has invested $327 million (2.6 billion yuan) in the facility, which will have estimated annual sales of $183 million, or 10 million tons a coal.

This large plant is a needed response to small, dangerous, and sometimes illegal mines are scattered throughout the region, 80 of which were closed this year. China, the world's largest coal producer and consumer, saw 4,746 deaths in coal mine accidents last year--an average of 13 deaths per day. The hope is that larger projects will have tighter regulations on mines.

Xinjiang, sometimes referred to as East or Chinese Turkestan, is home to majority of Muslim Turkic groups. Historically, Xinjiang, like its neighbor Tibet, has fought to separate itself from China. Since the fifties, however, a Chinese propoganda movement known as "Go West" has encouraged Chinese people from the East to settle in the region and transform the frontier. Human rights advocates have historically scorned China for is work prisons (Laogai) and involvement of the World Bank in Xinjiang.

In addition to the new mine, he Xinwen Mining Group plans to invest more than $3.8 billion for coal chemical development in the Yili Rive Valley of Xinjiang.

Sources: China Daily, Industrial Info Resources, Times of India, Tibet Environmental Watch, Interfax China