Frankfort – In my Senate district in central and northern Kentucky, when we think about coal, we consider its role in the economy of the eastern and western parts of the state. We don’t realize how important coal is to the economic growth of our local communities, but without coal and the cheap electricity it provides, our household budgets and small businesses would be in trouble.
Kentucky relies on coal for 92% of all its electricity needs, giving us the fourth-cheapest energy rates in the nation. In fact, our home energy bills are about half that of people living in New York and New England.
That cheap energy is also a powerful incentive for out-of-state businesses to locate in Kentucky. Utilities make up a sizeable chunk of any company’s non-labor costs, so being able to save money on heat and light goes a long way toward luring them here. Industrial energy in Kentucky is 16% cheaper than in Indiana, and 31% cheaper than in Ohio. If a company wants to locate in this region of the country, Kentucky can reduce their costs considerably.
Even beyond locally-created jobs, coal helps our statewide economy. Nearly 18,000 miners work to bring coal out of the ground, and there are more than 50,000 jobs as a result of those miners’ spending their income, whether it be at the local grocery or clothing store or at the doctor’s office. The miners alone make more than $1 billion in wages every year, and their tax dollars are important to keeping our roads and schools the best they can be. That’s not even mentioning the $270 million in taxes the coal companies pay for the privilege of taking the coal out of the ground in the first place or the corporate income taxes they pay on their profits. It’s obvious that coal not only keeps the lights on in your home it also keeps the lights on across the Commonwealth.
As oil prices go up, coal is increasingly becoming an important resource to keep America safe. More than a third of all U.S. oil imports com through OPEC — mostly countries like Nigeria, Venezuela, and Saudi Arabia whose leaders don’t have Americans’ well-being in mind. The more energy we can produce at home, the less money that will be funneled to those regimes. Coal-togas and coal-to-liquid technology, along with clean-coal technology and carbon capture, has the potential to revolutionize our national economy. Not only could gas be developed from Kentucky coal rather than Middle Eastern oil, but the prices could go down as well. That’s a win-win for everyone in the country.
While national leaders are looking at cap-and-trade and other schemes to tax energy production, Kentucky officials have focused on encouraging the research and development that could restore Kentucky’s coal production to the center of our national energy economy. It’s a return on investment that’s sure to pay dividends for the taxpayers of today, and tomorrow.
Thank you,
Senator Damon Thayer
