"Politics, policy and pay-outs

Editor’s Note: This is the third and final installment of a series examining Indiana Gov. Mitch Daniels’ new energy plan. The first installment examined the contents of the plan itself, available at www.energy.in.gov. The second installment examined the inherent problems with “clean-coal” technology and the vast amounts of carbon dioxide even the cleanest coal plants produce. The previous articles are available at www.nuvo.net.

Coal consumption has been on the decline in recent decades, primarily due to the vast amount of pollutants it produces when burned. Indiana is the sixth largest emitter of carbon dioxide because of steel and coal production in the United States, and recently the Environmental Protection Agency found 17 Indiana counties in violation of air quality standards, requiring the state to form a cleanup plan for its coal production and consumption.

In a letter of response to the EPA, Gov. Mitch Daniels opposed some of the violations and their subsequent penalties, saying the Environmental Protection Agency could do better to balance economic growth and development with environmental safety. A few weeks later, Daniels announced his own initiative for Indiana energy consumption and production, based in very large part on innovative new technologies for using coal championed by Peabody Energy, the largest coal company in the world and owner of Black Beauty Coal, the largest coal company in Indiana.

After winning the 2000 presidential election, George Bush named three Peabody Energy executives to his transition team as advisors for the new administration’s energy policies. Steve Chancellor, president of Black Beauty Coal, was named as an advisor to the Bush-Cheney energy policy transition team; Irl Engelhardt, Peabody Energy chairman of the board, was named to the transition advisory team for the EPA and for a while his name was in the running for secretary of energy; John Wootten, Peabody Energy VP served with Chancellor on the energy advisory panel.

In addition to serving as policy advisors, Peabody and its executives were also some of the Bush-Cheney team’s biggest campaign contributors. Since 2000, Peabody Energy has donated nearly $2 million, Irl Engelhardt has personally donated $350,000 and Steve Chancellor has donated another $350,000. So generous are the Peabody executives that Engelhardt has been called “a major player” by the Republican National Committee, and Chancellor was invited to go on a golf trip to Spain with George Bush Sr. and other “friends” of the campaign.

While the Bush Administration was forming its energy policy based on recommendations from Peabody executives, Engelhardt filed with the SEC for an initial public stock offering. When President Bush abandoned his support of carbon-dioxide regulations, effectively killing the Kyoto treaty on global warming, no one was happier than Engelhardt, who has reportedly said on numerous occasions, including a congressional hearing on emission requirements for coal manufacturers, that global warming is “an environmentalist PR tool” with “no science to back it up.” Had the treaty been signed, coal-burning plants would have been required to adhere to pollution controls they claimed would put them out of business.

Five days after the president announced his energy plan, one that did not commit the U.S. to the global Kyoto treaty and eventually reduced pollution regulations for coal, Peabody Energy stock went public. Opening at $28 a share and closing at $36, Engelhardt’s personal stake of more than 633,000 shares of Peabody stock was worth more than $23 million by day’s end. On July 31, 2006, Peabody stock closed at $48.89, an increase of over 260 percent over the past two years.Peabody Energy is the world’s largest private sector coal company, fueling nearly 10 percent of all U.S. electricity and 3 percent worldwide. The company had $4.6 billion in revenue in 2005 from the sales of 240 million tons of coal, up from $2.7 billion in revenue from 198 million tons of coal sold in 2002.And just like at the federal level, Peabody Energy and its executives are both shaping energy policy and financing campaigns in the state of Indiana. Because corporate donations in Indiana are more strenuous than federal ones,

Peabody Energy has limited its direct donations to the Indiana Coal Political Action Committee, which in turn makes its unlimited contributions. But Steve Chancellor, as an individual, has not been under the same restrictions.

While Mitch Daniels was running for governor of Indiana, Chancellor donated a total of $80,000 to his campaign. During the same time period, Chancellor donated an additional $100,000 to the Indiana Republican State Committee. He made no contributions to Democratic candidates. Combined, Chancellor has given more than half a million dollars to the Republican Party and Republican candidates in Indiana over the past three years.

And Peabody Coal is as active on the state level as it is on the federal. In 2005, Wayne Parke, Black Beauty Coal VP, became a member of Gov. Daniels’ energy advisory panel that helped shape the “Hoosier Homegrown” plan, particularly the clean-coal technology components. Parke himself donated $2,000 to Daniels’ campaign, as well as contributions to Indiana Coal PAC.

On Dec. 29, 2005, while still putting together his new energy plan for the state of Indiana, Daniels received a $150,000 campaign contribution from Chancellor, more than two years after he won the last election and two years before his next. It remains the single largest individual donation the governor received since taking office.

In April of this year, Gregory Boyce, the president and CEO of Peabody Energy, the largest coal company in the world and owner of Black Beauty Coal, the largest coal company in Indiana, presented the key findings of a study conducted by the National Coal Council, a study Boyce himself chaired.

The presentation was made at a conference for utility company owners, and Boyce was there to outline “an eight-point plan to dramatically enhance U.S. energy security, reduce reliance on foreign oil and natural gas, and lower energy costs.” According to Boyce and the National Coal Council, the plan is based on innovative new technologies for using coal.

With clean-coal technology, the coal industry believes it has found the key to reviving its dominance in American energy. According to Boyce, this is not only good for corporate profit margins, but good for America as a whole. “Substantial coal reserves to meet these growing needs are available in more than 25 states, allowing for widespread coal production, liquefaction and gasification,” Boyce said. “As a result, the standard of living for all Americans will increase due to lower energy prices, a surge of industrial activity and creation of wealth. America has enough coal reserves to support this robust use of coal for more than a century.”

In his “Hoosier Homegrown” energy plan, Daniels outlines a plan to dramatically enhance Indiana’s energy security, reduce the state’s reliance on imported oil and natural gas, and lower energy costs — primarily through the use of new technologies for using Indiana’s massive coal reserves. And just like the executives at Peabody Energy, the governor promises that the standard of living for all Hoosiers will increase due to lower energy prices, a surge of industrial activity and creation of wealth. His plan also highlights the fact that Indiana has enough coal reserves to support this robust use of coal for more than a century.

Coincidence or not, Peabody Energy and its executives have been major financiers of Republican politicians and are now championing a revitalization of the coal industry through lower pollution controls, increased production and generous federal and state funding. The recipients of those donations, like Gov. Mitch Daniels and President George Bush, are now pushing the same agenda. Clean coal is, perhaps, an oxymoron in more ways than one.



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