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Plan for natural gas filling station in Pike OK’d by officials here

Would use ‘multi-county’ severance taxes

The Letcher Fiscal Court voted unanimously this week to support a request that multi-county coal severance funds be used to develop a natural gas service station in the Coal Run area of Pikeville.

The station, to be located at the junction where U.S. 119 splits from U.S. 23 and goes toward West Virginia, will serve vehicles powered by natural gas. According to Lisa Daniels of the Kentucky Department for Local Government, it will be the first in the region and one of the first in the United States.

Letcher County Attorney Jamie Hatton said gasoline-powered cars can be converted to using natural gas for about $2,500, and that a market is growing for such cars in the U.S.

The court’s request comes as the abundant supply and low cost of natural gas has helped cause a slump in the market for steam coal and contributed to job losses and mine closings throughout the coalfi elds as energy producers move to replace coal with the natural gas they claim is cleaner.

More than 160 coal mining jobs were lost at one mine in Letcher County this spring when United Coal Company LLC closed its Sapphire Coal operations.

“The decision to idle production at Sapphire was regrettable, but was necessitated by a very poor steam coal market caused in large part by historically low natural gas prices and ramped up production from the Illinois coal basin,” United Coal said in a statement concerning the layoff s which were completed June 16.

According to the U.S. Energy Administration, the warm winter has left the United States with natural gas inventories 927 billion cubic feet above the five-year average near the end of the natural gas storage withdrawal season (which traditionally ends on March 31) and prices continue to hover between $2 and $2.50 per million BTU (MMBTU). Gas was selling at $2.5630 on June 19.

While the commercial truck market has long been leading the way to natural gas conversion for vehicles, the switch for passenger cars has been much slower, partly because of the high cost of vehicles equipped to use natural gas and partly because of the lack of refueling stations like the one proposed for Pikeville.

The Wall Street Journal reported Monday that the only natural gas-powered car in the U.S. is the Honda Civic GX and that it costs $5,200 more than the gasoline version. However, the Journal also reported that Chrysler and General Motors will soon build natural gas versions of their Dodge Ram, GMC Sierra and Chevy Silverado lines of pickup trucks.

Journal reporter Tom Fowler also wrote on Monday that the cost of a natural gas refueling station/convenience store is at least $500,000 more per store than the $2.3 million cost of a normal convenience store.

In a related matter, Judge/Executive Jim Ward told the court he received a call Monday from a business interested in locating a natural gas distribution outlet in Letcher County. Jenkins Mayor G.C. Kincer told the Jenkins City Council at its June meeting that the city has entered into an arrangement to extend lines to provide natural gas to residential customers in the city.

In other business, the court heard a report from Mike Caudill, chief executive officer of Whitesburgbased Mountain Comprehensive Health Care Corporation, concerning a planned gathering of local, state, and federal government agencies as well as banks and other private and non-profit organizations to educate the public on what benefits might be available to people living here, including those who have recently lost their jobs.

Caudill said the various agencies will convene at the new Letcher County Vocational School on June 28 from 10 a.m. until 6 p.m. to provide information to anyone who is interested about unemployment and other benefits available. He said the recent employee layoffs by coal companies have caused a serious situation that is similar to past downturns which caused population losses in the region. He said he is concerned the area might once again suffer an outward migration similar to those that took place during the 1950s as people left the mountains looking for jobs in other places.

“We don’t want our people to leave,” said Caudill. “People are our strength and if we lose people we lose our strength.”

Caudill said the meeting comes on short notice, but that he expects a big turnout. He said the various agencies and organizations will provide information on programs that are currently available to help people who are struggling find out for what they are eligible. He said there will be help available in filling out forms as well.

He said that while older people are aware of the boom-and-bust cycles of the coal industry, the local economy had been relatively stable for enough years that many younger people may not be aware of programs that are available to help them.

Ward said the county would participate any way it can. Magistrate Wayne Fleming said he would like to see federal programs expanded to guide coal mining into more sustainable patterns of extracting coal. He said clean coal technology can help in the actual burning of coal, but that more sustainable and environmentally sound methods of actually getting coal out of the ground have been neglected. Fleming and Caudill both expressed concern about the psychological effects of people who are losing jobs and are concerned about how they will make it in hard times.

Kentucky River Area Development District representative Benny Hamilton, who works with the Letcher County Water and Sewer District in grants and loan management, told Magistrate Codell Gibson that construction on the Pine Creek/Pert Creek/Cram Creek Project should begin within 30 to 60 days. He also told Magistrate Terry Adams the Mill Creek area extension project, which is funded through a line item in the state budget for 2012- 2013, will probably be bid with Phase II of the Deane Water Project when funds for both become available after July 1.

Magistrate Fleming asked about a connector that will tie Fleming-Neon water lines with lines in Jenkins. Ward said the plan was initially turned down by state Division of Abandoned Mine Lands, but said he has spoken with Paul Nesbitt of Nesbitt Engineering about asking AML to re-evaluate the project with new information that is available. Fleming said that with the light rainfall so far this year, the connection could be very important if Fleming-Neon sees its water levels drop in the two wells that supply the city.

The court also heard a report from Letcher County Tourism Commission Chairman David Narramore. Narramore, a Whitesburg dentist, said the commission has entered into the Kentucky Department of Tourism Marketing Incentive Plan and agreed to apply for additional funding in fiscal year 2012-13. He said the commission currently receives approximately $12,900 in funding from the Incentive for advertising and promotion and could qualify for an additional $3,500.

Narramore showed the court a magazine-sized color brochure promoting the Little Shepherd of Kingdom Come Outdoor Drama in Jenkins for the 2012 season. He said the drama is now the only event linked to tour buses in the county, but that the brochure also promotes other tourism opportunities here.

Narramore and artist Doug Adams also presented the court with a report on the most recent progress in the Whitesburg Streetscape project, a public art project funded in part by the Brushy Fork Institute of Berea (BFI). Adams said the initial phase will feature the use of paintings on raised aluminum sheets to be placed over boarded-up windows in some buildings in Whitesburg.

BFI has also awarded the tourism commission a $10,000 grant for the painting of a mural on the old WIFX broadcasting building at the foot of School Hill. Adams, a Kentucky Heritage Artist, will serve as the instructor for a class to teach how to properly plan, design, and paint a mural while establishing proper perspective. The goal of the grant is to train local artists to go back into their own communities to produce public art.

Magistrate Fleming voiced his enthusiasm about the possibilities for tourism promotion in the county and told Narramore he wants to see “more of the same” in terms of effort from the tourism commission. Fleming said he took his grandchildren to Harlan County last weekend to ride their ATVs on the extensive trails Harlan County has developed and was amazed at the number of tourists and the amount of money generated for that county. County Attorney Hatton said he and his brother had ridden the trails and that he, too, had been impressed with the ease of going into town for fuel and lunch.

Narramore told the court the reason Harlan County has gotten so far ahead of Letcher County on tourism promotion is because of a restaurant tax in the City of Harlan that goes to promote tourism. He said the proceeds from the tax paid for most of the Harlan Convention Center as well as promoting the trail system that draws the ATVs.

Fleming said he believes tourism will play a big role in the economic future of Letcher County, but said the county really needs to have its own niche rather than copying the efforts of surrounding counties. Narramore said the artistic themes effort being made in Whitesburg as well as the plans to develop a water park in Jenkins can help provide that niche.

Judge Ward agreed that tourism can play a big role in Letcher County’s economy, but said the biggest problem the county faces is lack of hotel space. Fleming added that the slowdown by natural gas companies at Gateway Industrial Park has led people interested in putting a hotel in Jenkins to reconsider, fearing that the necessary occupancy rates will be harmed.

Narramore, Ward, and Fleming all said the addition of one or two hotels, especially in Jenkins, is crucial to a tourism economy. Ward said he has recently joined with the City of Whitesburg to attempt to rehabilitate the old Daniel Boone Hotel to provide more hotel space and said it looks good for funding prospects for the project.

In other business:

• The court adopted a resolution accepting Saluted Creek as a county road.

• The court voted unanimously to approve the second reading of an ordinance setting the speed limit on Seals Drive at 15 miles per hour and to approve the first readings of ordinances setting speed limits on Harrison Branch and Bartesta Branch at 10 miles per hour.

• The court voted unanimously to approve a resolution establishing Old KY 1697 near the top of Pine Mountain as a county road. The 0.677 stretch formerly served as the entrance to Little Shepherd Trail.

• The court voted unanimously to re-appoint Richard Carter to another term as a member of the Board of Directors of the Letcher County Water and Sewer Commission.

• The court voted unanimously to approve the second reading of the county’s proposed $10.715 operating budget for Fiscal Year 2012-13.



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