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Obama coal tax plan concerns industry leaders

November 4, 2008
By JOSELYN KING, special to the Herald-Star

WHEELING - Barack Obama's plan to impose stiff taxes on those who build coal-fired power plants is not being well received by some local industry leaders.

Rob Murray, vice president of business development and external affairs for Murray Energy Corp., sees job losses and higher energy costs as potential results of such a plan. His firm operates the Ohio Valley Coal Co., the American Energy Corp. and Ohio American Energy in Ohio.

In an interview almost a year ago with a San Francisco newspaper, Democratic presidential nominee Obama suggested stiff taxes on those who build coal-fired plants. His words, from an interview with the San Francisco Chronicle, came to light over the weekend just days before today's general election.

"So if somebody wants to build a coal-powered plant, they can," Obama said in the interview. "It's just that it will bankrupt them because they're going to be charged a huge sum for all that greenhouse gas that's being emitted."

In a prepared statement, the Obama campaign said Obama's quote regarding the taxing of coal emissions was taken "wildly out of context," adding that elsewhere in the interview, Obama calls the idea of banning coal burning "an illusion."

"The point Obama is making is that we need to transition from coal-burning power plants built with old technology to plants built with advanced technologies and that is exactly the action that will be incentivized under a cap-and-trade program," according to information provided by the Obama campaign.

But Murray termed the Obama's initiative to tax emissions as "extremely misguided."

"It's frightening that somebody seeking to be president of the U.S. would seek such a policy," he said.

Murray noted that 52 percent of the nation's electricity comes from coal, and that 88 percent of the electricity used in Ohio comes from coal-fired plants.

"Not only would he be bankrupting the coal industry, but bankrupting businesses throughout the U.S. who depend on low-cost electricity," Murray said.

He quoted a study from Penn State University stating that for every one mining job that is created, 11 support jobs are created within the coal industry.

"There are 140,000 coal miners in America," Murray said."If the entire industry were to go bankrupt, that would be 1.5 million jobs lost just in the coal industry."

The figures do not include job losses in other businesses that depend on the mining industry, he continued. And the ability of American businesses to compete in a global marketplace depends on their ability to obtain low-cost energy, Murray noted.

"The products that are most competitive are those made in areas of the world where there is low-cost electricity," he said. "We would basically be exporting jobs out of country. They will go to places like China, where there are lower energy costs."

China has announced the construction of 52 new coal-fired power plants this year one each week.

"We have that same ability in America," Murray said.

Melissa McHenry, spokeswoman for American Electric Power, said AEP was aware that both Obama and his challenger, Republican John McCain, support climate change legislation.

"We know that whoever is elected, he is going to have to balance the economy with reducing emissions," she said. "Coal is going to have to continue to be part of the energy mix. It accounts for more than 50 percent of electricity generated in the U.S."

She acknowledged that AEP has supported climate change legislation but with "reasonable reductions and a reasonable time frame."

Republican vice presidential candidate Sarah Palin made reference to Obama's interview Sunday during a stop in Marietta. The Obama comments on coal had been surfacing throughout the Internet Sunday.

"He said that, sure, if they want to build new coal-fired plants, then they can go ahead and try, but they can do it only in a way that will bankrupt the coal industry," she told the crowd. "And he's comfortable letting that happen."

Palin then questioned why the interview hadn't been discussed by the main stream media, adding, "We think it's something you all need to hear about."

She promised that the McCain campaign would make use of "America's vast supply of coal." She noted that coal reserves in Ohio, West Virginia and a handful of other states are "greater than all the oil wealth in the Middle East."

"We will not let this happen to the industry," she said of taxing coal-fired plant owners to the brink of bankruptcy.

Throughout his campaign, Obama has expressed support for clean coal technology.

But this fall, his vice presidential running mate, U.S. Sen. Joe Biden, D-Del., made comments also posted on Internet sites denouncing the use of "dirty" coal.

"We're not supporting coal," he told media while campaigning in Ohio. "They're building two plants a week in China, and it's polluting America. China's going to burn 300 years of dirty coal unless we figure a way to clean it up."

Though most polls show Obama with a national lead in the race for president, polls also indicate a strong lead for Republican presidential candidate John McCain in the coal-producing state of West Virginia.

Ben Beakes, coordinator for the McCain campaign in the Mountain State, said the remarks of Obama and Biden "clearly show the attitude and view that Obama and Biden have toward coal."

"In this election, we've found that talk is cheap," Beakes said. "What is said reveals one 's intention."

He referenced Obama comments that taxing for coal emissions would "bankrupt" the coal industry.

"It's very clear," Beakes continued. "Obama-Biden is not good for West Virginia, and not good for America."

Mike Carey, president of the Ohio Coal Association and an aid to former U.S. Rep. Bob Ney, R-St. Clairsville, issued a statement in response to Obama's remarks.

"Regardless of the timing or method of the release of these remarks, the message from the Democratic candidate for president could not be clearer - the Obama-Biden ticket spells disaster for America's coal industry and the tens of thousands of Americans who work in it. It's evident that this campaign has been pandering in states like Ohio, Virginia, West Virginia, Indiana and Pennsylvania to attempt to generate votes from coal supporters, while keeping his true agenda hidden from the state's voters."

U.S. Sen. Jay Rockefeller, D-W.Va., has supported Obama's campaign since it began.

"The claims you are hearing from the McCain-Palin campaign are misleading and untrue," Rockefeller said in a news release. "Barack Obama has been very clear with me and with you on his plan for clean coal and it's the most aggressive plan in support of clean coal we've seen from any presidential candidate.

"The idea that the McCain-Palin campaign is alleging the day before the election that Barack Obama's commitment to coal is anything but solid is absolutely ridiculous," he added.

"This is exactly the kind of deceptive politicking voters are fed up with."

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