Whitesburg KY

Snake oil from the past is not what Kentucky needs

To the Editor:

I remember the last time there was a craze about synthetic fuels. It was in the ’70s. Politicians sold the idea that we could turn coal into gas and oil, and figure out some way to extract oil from the shale found in many parts of Kentucky. Energy independence surely was just a few years down the road.

I was working for the United Mine Workers of America then. The oil embargo had set off a boom in coal and at that time there was still union representation in eastern Kentucky. The workers were happy; we were doing well financially.

There’s a saying among mountain coal miners that it’s either boom or bust. But I remember people talking back then that this time is different, this is a lifetime thing. I can retire with this new prosperity.

Then all of a sudden, boom, it was gone. It was all just a myth. It was a false prosperity.

Not that there wasn’t plenty of money made off the coal. It was reported that there were more millionaires per capita in Pike County than anywhere else in the country. But it wasn’t the workers who had the big bucks, it was the coal operators driving the Cadillacs. The average working guy or gal wasn’t that better off.

And that’s also when the coal companies started methodically breaking the union.

Like the last time, everything that I learn about the new craze over synfuels tells me that this is another Big Lie. Many of the same people are saying the same rhetoric with a much higher price tag, and are still willing to trade tomorrow for a few dollars today.

Governor Fletcher and some state legislators want to give financial incentives to make Kentucky the best – or at least the most profitable – place to build these new coal-to-liquid synfuel plants. On the Governor’s web site it admits that the types of subsidies he is proposing – hundreds of millions of dollars he is talking about – are not legal under current laws. John Hindman, the secretary of the Cabinet for Economic Development, in a letter says that “it is not practical to extend existing Economic Development incentive programs to alternative fuel facilities . . . Even if the language could be statutorily amended or expanded to accommodate these large fuel facilities, the expanded language would not be consistent with current economic development policy.”

That sounds to me like the Governor and the coal companies want a special session to make special laws for special interests.

What makes me mad is that when the state gives people a little help to get their lives back in order its called welfare. But when it comes to helping corporations make a profit it’s called “incentives.”

Here in eastern Kentucky the use of public funds for corporate welfare is an outdated and failing economic development strategy. It’s based on tax incentives and low business costs – cheap energy, cheap land, low taxes and low wages – that have cost Kentucky taxpayers $4.3 billion since 1990 (the state admits this). You can read in the Kentucky Tax Expenditure Analysis that just two of the subsidies coal is already receiving cost $63.3 million a year, including a “Coal Conversion Credit” and a “Thin Seam Credit.” What do we have to show for all of those millions? In 2004, Kentucky’s poverty rate actually rose.

It’s a fairy tale to believe that giving coal companies, or a handful of the Governor’s favorite ones at least, hundreds of millions more is going to be different this time. If subsidizing the coal industry was going to bring us prosperity it should have done so long before now. Public subsidizing of coal to liquid would just tighten the straightjacket that coal has on eastern Kentucky.

I don’t doubt that there will be a lot of money made if the Governor and Senator Bunning are successful at handing out more giveaways to synfuel companies. But helping the same people or companies that already have the money make more is not prosperity. It does not raise our quality of life. And this is not good economic development because of the destruction that it would cause with the 40 percent more mining predicted. They will need a whole lot more coal and will mine it as cheap as they can.

What Kentucky, and eastern Kentucky especially, needs is economic development that puts people ahead of profits and communities ahead of corporations. The coal industry and Kentucky’s economic connection to coal are not going to change overnight. We need to start the transition now, though. And selling the snake oil of the past just doesn’t cut it.


Carl Shoupe is a third generation coal miner (retired), and a member of the Benham (Harlan County) City Council and Kentuckians For The Commonwealth.

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