May 15, 2008

Taxes help promote mining

Coal industry gets $400,000 a year

By John Cheves
JCHEVES@HERALD-LEADER.COM

FRANKFORT — Kentucky gives about $400,000 a year in tax dollars to the coal industry for public campaigns that promote mining, including the controversial practice of mountaintop removal.

The money is funneled through non-profit groups controlled by the coal industry, such as the Kentucky Foundation, which is run out of the Lexington office of the Kentucky Coal Association and led by Bill Caylor, the association's president, according to tax and corporate records.

The money is used largely for statewide classroom programs designed "to carry a positive message about the coal industry," according to records. A Web site with teaching materials and games describes mountaintop removal mining as "simply the right thing to do Ð both for the environment and for the local economy Ð a true win-win."

State officials ordered the Web site's content altered to sound more neutral this week after the Herald-Leader asked about it.

Gov. Steve Beshear and a legislative committee have approved adding $17,500 to this year's $100,000 contract for the Kentucky Foundation so it can conduct a study showing the economic benefits of coal mining to the state. A retired University of Kentucky economist will be hired for the task, Caylor said.

"The environmentalists throw out a lot of negative stuff, like kids who are suffering from asthma because they breathe particulate matter from living near a coal-fired power plant, or deaths caused on the roads by big coal trucks," Caylor said. "We're trying to counteract that."

Some of those environmentalists said they were shocked to hear that tax money is used this way, especially as education, health and public safety programs are cut. Let the coal industry pay for its own public relations, they said.

"The state should not be in the business of promoting propaganda for the coal industry," said Dave Cooper, chairman of the Bluegrass Group of the Sierra Club. "I drive around the country with a slide show to educate people about the damage caused by mountaintop removal mining. Funny, but I receive no government funding for my work at all."

Education or marketing?

Beshear spokesman Dick Brown defended the funding.

"This is an educational tool for all of Kentucky's school children, who should know about coal," Brown said. "It was never meant to be a P.R. tool for the industry, and (we) are working diligently to make sure that is not the case."

After the Herald-Leader asked about www.coaleducation.org, a Web site run by the Kentucky Foundation, state officials acknowledged that some of its content crossed the line into marketing. One example: a page promoting mountaintop removal mining and attacking what it called "emotional statements in the press about this form of mining."

Mountaintop removal is actually good for the environment and does very little damage, according to the site.

"Only the topmost portion of the mountain is mined and generally leveled for the maximum recovery of coal," according to the site, which claims a daily average of 2,775 page views. "What's left is flatter, more useful land on the top of the mountain."

That is not the sort of objective and balanced information the state intended to pay for, said William Bowker, director of fossil fuels and utility services at the Governor's Office of Energy Policy.

"This coaleducation.org thing, I don't disagree that that's inappropriate. I'll have a talk with the group about that," Bowker said. "All that stuff on mountaintop removal will be removed. I guess I didn't dig deep enough."

In 1994, the legislature voted to fund nature preservation using money from the state's portion of unmined mineral taxes -- the taxes property owners pay on coal, oil and natural gas left underground. To placate the coal industry, which was displeased, lawmakers also directed the governor to use $400,000 from the same source "for the purpose of public education of coal-related issues."

The coal industry created non-profit educational groups to be eligible for the annual grants.

The Kentucky Coal Association runs the Kentucky Foundation. The other major non-profit is CEDAR, or Coal Education Development and Resource, which shares the Pikeville office and leadership of Coal Operators and Associates, another industry group. CEDAR West was founded by the Western Kentucky Coal Association. This year, the Kentucky Foundation is getting $117,500 and the two CEDAR chapters are getting $193,000, Bowker said.

The groups release pro-mining materials to the public, operate pro-mining Web sites and report success in sending pro-mining curricula to Kentucky classrooms.

CEDAR's mission is "to carry a positive message about the coal industry to Eastern Kentucky's children," according to the group. On its Web site, CEDAR includes "human interest stories" about its classroom work. One story involves an elementary school student who enjoyed preparing her entry for CEDAR's regional Coal Fair even as her relatives debated whether to let the family's property be leased by a coal company for mining.

"Other family members were opposed to leasing, but after this student and her family completed her Coal Fair project, they were ... subsequently able to convince the other family members that leasing their property to the coal company for the purpose of mining would be in everyone's best interest," according to the Web site.

Budget balancing

Faced with a tight state budget, then-Gov. Ernie Fletcher diverted money from the coal education program to help balance the books during his four years. The coal industry was irritated but held its tongue, said Caylor at the Kentucky Coal Association. However, Beshear has restored the program to its full strength.

Some money is also going this year to museum exhibits on coal mining, sometimes co-funded by the coal industry directly, Bowker said.

"I do the best I can to make sure this is done by non-profits for an educational purpose," Bowker said. "That's not boosterism."

But environmentalists ask why tax money meant for "public education of coal-related issues" is used exclusively in ways that please the coal industry.

"It's appropriate to educate citizens on their sources of energy," said Tom FitzGerald, director of the Kentucky Resources Council. "But I don't think we should be spending the public's money on industry promotional campaigns that are thinly disguised as educational programs. I would have hoped that there would be some vetting of this material, perhaps some scientific peer review, before it was released to the public."

Cooper of the Sierra Club, said he might apply for one of the coal education grants to help fund his mountaintop removal mining tour.

"I should qualify, shouldn't I?" Cooper asked.