Posts Tagged ‘coal’

Key Issues in the 2014 Elections

Tuesday, November 5th, 2013

If you had any doubts that the Affordable Care Act would be an issue in the 2014 elections, they were quickly put to rest during Monday’s edition of Kentucky Tonight. The discussion rapidly and repeatedly turned from next year’s races to health care, as members of our panel tried to see who could best defend the rollout of Obamacare or point out its flaws.

When we were able to talk about political campaigns, much of the discussion focused on what many pundits think will be the most-watched U.S. Senate race in 2014: the contest between Senate Minority Leader Mitch McConnell, Democratic Secretary of State Alison Lundergan Grimes, and Tea Party candidate Matt Bevin.

During the program, Bill Garmer, the former chair of the Kentucky Democratic Party, questioned what Mitch McConnell stands for after three decades in the Senate. Tres Watson, chair of the Kentucky Young Republican Federation, challenged that statement by accusing President Obama of creating a “nanny” state in the nation – which opened the door to more conversation about Obamacare from Jennifer Moore, chair of Emerge Kentucky and a former chair of the Kentucky Democratic Party, and Nathan Haney, chair of the Jefferson County Republican Party. Here’s a look at that portion of the show:

Everyone agreed that coal would be a significant issue in the Senate race, with McConnell and Grimes having to explain their positions on mining as well as on diversification efforts in and economic aid to eastern Kentucky. Fundraising will also be critical, both in terms of the money the candidates will need to raise for their campaigns, and Sen. McConnell’s ongoing efforts to eliminate limits on political contributions.

In the closing minutes of the program, we touched on next month’s special election to fill the state house seat recently vacated by John Arnold. Two female candidates are competing in that western Kentucky contest: Republican Suzanne Miles and Democrat Kim Humphrey.

And we discussed the prospects of first-time Representative Andy Barr winning re-election in Kentucky’s 6th Congressional District. You can watch the full program on our website.

Coal and More on Kentucky Tonight

Tuesday, July 2nd, 2013

We discussed energy and the future of coal on Monday’s edition of Kentucky Tonight, but the conversation quickly turned to President Obama’s new plan to address climate change.

In a speech at Georgetown University last week, the President said we are already feeling the effects of climate change with more severe weather and rising sea levels. As one step to address the issue, Obama called upon the Environmental Protection Agency to develop standards for carbon dioxide emissions from power plants. If enacted, those tougher rules would likely result in Kentucky moving farther away from coal and coal mining.

Over the past two years, a glut of cheaper natural gas has flooded the U.S. energy market. Less coal is being mined, power plants are burning more natural gas, and many environmentalists are pushing for renewable energy sources like solar, wind, and hydroelectric power.

A number of viewers and listeners contacted us Monday night with their comments and questions about the future of coal as an industry and as an energy source for the Commonwealth. Here’s a sample of the conversation.

Tune in Kentucky Tonight next Monday, July 8 at 8 p.m., as we discuss the recently passed Senate immigration bill.

Pro and Con of UPike Joining State System

Tuesday, February 21st, 2012

President Wayne Andrews of Morehead State University doesn’t want to divide the pie and give a slice to the University of Pikeville.

President Paul Patton of Pikeville says he wants to graduate more students from eastern Kentucky who will stay and work in eastern Kentucky.

Monday night’s Kentucky Tonight program heard these views as well as those from two other guests, Rep. Leslie Combs, who supports former Governor Patton, and Bell County Judge Executive Alvey Brock, who opposes a move to make the University of Pikeville a part of the state’s system of higher education. Judge Brock opposes the move based on Patton’s idea to use the twelve-county coal severance tax fund to aid the University of Pikeville’s move into the higher education system.

Governor Beshear has asked for a study from an out-of-state consultant on the issue. The study won’t be ready until the middle of March.

Many of you weighed in with your opinions. Here’s a sample of audience responses:

Steven A. Hicks
We must stop HB 260 now while it is in committee in the Kentucky General Assembly. I am a fifth-generation native eastern Kentuckian and the first generation in our extended family to achieve a college education. MSU graduates have created the middle class in eastern Kentucky.  I have no bias in my decision to oppose the formation of the University of Pikeville. It is simply a matter of economic reality. The proposed budget and agenda for UPike now in front of the education committee is grossly underfunded and can only survive by cannibalizing the limited educational resources of MSU.  

The idea that coal severance taxes will cover the additional costs of UPike is at best a dream. As we all know, eastern Kentucky’s economy has for almost 100 years been tied to the coal industry. Coal has seen numerous boom and bust cycles that have brought almost instant prosperity as well as created ghost towns with equal swiftness. I have spent over 30 years in the coal, electric power and energy industry. I deal daily with energy price analysis that impact coal. I look at forecasts for demand, supply, production, and consumption in both domestic markets as well as international markets. The sad news is that coal has just started its latest down cycle. Eastern Kentucky coal prices have dropped from about $80 per ton as traded on the NYMEX in June of 2011 to less than $60 per ton now. Plus, lay-offs and production cuts are common headlines in local newspapers. At least 1,000 miners will lose their jobs and over 10 million tons of production cuts will be made in 2012 for eastern Kentucky. The estimates for direct coal revenue loss for eastern Kentucky will easily exceed $1 billion. When coupled with the losses from the service and supply industries supporting coal, the loss can be multiplied to $6 to $8 billion in 2012—a staggering blow to the economy of eastern Kentucky. This trend is expected to continue for the next three years. NYMEX futures prices remain under $70 per ton through 2013 and under $75 per ton through 2014.

According to the EIA, in 2011 eastern Kentucky produced about 68 million tons of coal at a value of $5.1 billion. The Kentucky severance tax rate is 4.5 percent of the sales price. The effective rate is somewhat less, but based on initial data, the estimate is about $230 million in severance tax revenues from eastern Kentucky, the highest tax revenues in history. However, 2012 projections for severance taxes from eastern Kentucky are scheduled to drop by 25 to 28 percent. This is a loss of $58 to $60 million and, when combined with the loss from severance tax revenues generated by western Kentucky, the estimated loss will reach $70 to $75 million in 2012.

The primary drivers for the bust cycle in coal are: cheap natural gas due to overproduction, over-regulation by the Obama administration to stop coal mining and prevent its use as a fuel for generation of electricity, the loss of an energy intensive manufacturing base from the economy, and the government subsidy of alternative electric energy such as windmills, solar panels, and biofuels although they are 10 to 100 times more expensive than coal-based energy. Plus, the overproduction of natural gas in Ohio, Pennsylvania, and New York has another negative economic impact on the eastern Kentucky economy: the closure of practically all natural gas drilling activity.  

In summary, eastern Kentucky has provided the Commonwealth with over $1.8 billion in coal severance tax over the past ten years. The University of Kentucky sits on a natural resource base in eastern Kentucky valued at about $1 billion from the gifts designated by the Robinson Land Trust for the students of eastern Kentucky. Yet, the University, because of its environmental loyalties, refuses to develop the resource for its intended use. The socioeconomic divide between eastern Kentucky and the Bluegrass is enormous. Eastern Kentuckians cannot help but champion our programs, and our leadership attempts to return a part, if only in a small portion, of that which has been severed from our region. But, in reality, we are faced with Kentucky politics and its regional economic budgeting bias, existing educational cuts, and the projected decline in coal severance tax revenues. Therefore, the funding of UPike at the expense of our existing MSU facilities and programs simply cannot at this time be justified. Shame on the Commonwealth of Kentucky for pitting two education programs with common goals and the best interest of its students at heart against each other in this upside-down battle for shrinking education funds.   

If the University of Pikeville were to become a state-supported institution, would there be an incentive to draw students from southwest Virginia and West Virginia?

Joshua L. Ball
Paintsville, Ky.
What programs would UPike offer at extended campuses? Would it be education, social work, and nursing? If this is the case, isn’t it a duplication of effort already in place by MSU and EKU at their extended campuses? What are MSU and UPike going to do to bring more programs to eastern Kentucky and keep our educated adults at home working in their desired field of study and not going off to school to come back home and being underemployed?

Levi Castle
As an MSU alumnus and current KCTCS faculty I feel this point is important to discuss. Why is there such an emphasis on rushing the inclusion of UPIKE to the state system? History shows that analysis of data is key to making correct decisions. Why is the time spent considering the addition of UPike so dissimilar to that which was spent considering the addition of Louisville?

Ken Wilson
I think adding the University of Pikeville to the state system is a great idea. It will make it more affordable for the young men and women of the area to go to college and stay in the area, making the area more attractive to new industry. Thanks for your attention. Ken

Thanks to everyone who wrote or called. If you missed the program live or on the radio Tuesday, watch  Kentucky Tonight.

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