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Coal Scores With Wager on Bush Belief

Mineral is part of "balanced" energy policy lifts industry outlook

Dan Morgan / Washington Post 25mar01

Here's what's behind the Bush Administration's newly declared war on the environment.

Few businesses placed as big a bet on Republicans in the last election as the coal industry, which gave 88 cents out of every dollar in campaign contributions to GOP candidates or organizations. Two months into the Bush administration, that wager has begun to pay off.

President Bush has jettisoned a campaign promise to require coal-burning power plants to reduce emissions of carbon dioxide, after heeding industry warnings that such action could "kill coal." Now, industry officials who worked for this week's Environmental Protection Agency decision to revoke a Clinton administration crackdown on arsenic in drinking water are taking aim at more than two dozen pending rules regulating substances from coal mine dust and ozone to diesel particulates.

In the GOP-controlled Congress, lobbyists for coal companies, railroads and electric utilities are mobilizing behind tax credits, subsidies and regulatory exemptions for coal-burning utilities.

The emergence of coal from the political shadows is due in part to Bush's conviction that the mineral, which is used to generate half the nation's electricity, is crucial to preventing the spread of the California energy crisis.

Coal "didn't have a very friendly forum in this town" during the Clinton administration, an environmental official said. The Clinton administration favored rigorous enforcement of clean air controls on emissions by coal-burning utilities and encouraged expansion of power plants using cleaner natural gas. The Bush administration, in a tilt back the other way, contends that an expansion of coal-generated power must be part of the "balanced" energy policy needed to provide ample electricity at reasonable prices.

But coal's new strength also rests on the enhanced influence, in the aftermath of last year's election, of a network of interests, such as electric utilities and railroads, that strongly oppose lessening the country's dependence on coal.

In late February, senior executives of coal, utility and railroad companies descended on Washington under the auspices of an informal group, the Coal-Based Generators, to lobby for legislation providing tax credits and other subsidies for utilities using experimental "clean coal" technologies.

Among them were Irl Engelhardt, chairman of the Peabody Group, the nation's largest coal enterprise, whose holding company contributed $250,000 to the Republican National Committee in July. Engelhardt himself served as an energy adviser to the Bush-Cheney transition team.

Meanwhile, coal, rail and power companies such as Peabody Holdings Inc., Burlington Northern/Santa Fe, and Southern Co., provided funding last year to start Americans for Balanced Energy Choices, to develop grass-roots support for coal. "The market realities have changed, and the political dynamics have changed in Washington," said the group's president, Steve Miller, a Democrat who was Bill Clinton's campaign organizational chairman in Kentucky in 1992. "People have no idea of the environmental improvement the coal industry has made."

To get that message across, Americans for Balanced Energy Choices has set up a Web site and prepared a media advertising budget of several million dollars to finance what Miller says will be "a longtime conversation with opinion leaders across the country." The purpose will be to counter the influence of environmental organizations.

Separately, the Coalition for Affordable and Reliable Energy, made up largely of trade associations, has been set up to lobby in Washington and has begun running advertisements in Capitol Hill publications. Electric utilities and their executives and employees last year gave $18.4 million to candidates and parties, of which $12.4 million went to Republicans, according to the Center for Responsive Politics, a campaign research group. Southern Co., one of the nation's largest coal-burning power producers, opposes the Kyoto protocol, under which signatory nations, including the United States, agreed to reduce greenhouse gas emissions to 1990 levels. The Senate has never ratified the agreement. Southern Co. is represented in Washington by the lobbying firm headed by former Republican National Committee chairman Haley Barbour, a close associate of Senate Majority Leader Trent Lott (R-Miss.).

In the House, Rep. Joe Barton (R-Tex.), chairman of the subcommittee with jurisdiction over clean air and energy, has vowed that legislation containing such restrictions will "never" pass through his panel. Until Barton's northeast Texas district was reconfigured in 1994, it contained strip mines and coal-burning power plants belonging to Texas Utilities Co., the third largest electricity producer in the United States. Barton has continued to receive funds from its political action committee.

The coal industry itself has made use of its own extensive network of connections. The Interior Department's newly appointed deputy secretary is J. Steven Griles, who has lobbied for coal and gas companies ranging from Pittston Coal Co. to Dominion Resources.

The Bush-Cheney transition team was sprinkled with industry officials, including Engelhardt and Steven Chancellor, president and chief executive of Indiana-based Black Beauty Coal Co. Chancellor and his company were major Republican contributors, and he hosted a fundraiser in August at his home attended by former president George Bush and vice president Dan Quayle, according to the Indianapolis Star.

West Virginia coal executive James "Buck" Harless raised more than $100,000 for President Bush and chipped in $100,000 to the Bush-Cheney Inaugural Fund, as did Peabody Holding Co. and Southern Co.

The coal industry may enjoy even better connections in Congress. Along with Sen. Robert C. Byrd (D-W.Va.), Sen. Mitch McConnell (R-Ky.) has advanced legislation providing billions of dollars in tax credits for utilities, and indirectly benefiting contributors to GOP campaign committees he has headed.

In the debate over global warming, coal interests have prevailed over environmental organizations and corporations that have been moving toward acceptance of the threat of carbon dioxide emissions. This small but growing group now includes BP Amoco PLC, Enron Corp., Entergy Corp. and American Electric Power, an Ohio-based coal-burning utility.

Enron's chief executive, Kenneth Lay, one of Bush's most generous campaign supporters, has urged the president to create a trading system for carbon as a way of limiting emissions into the atmosphere. But Lay was not given advance notice of Bush's decision ruling out mandatory carbon controls, sources said.

A spokesman said Lay was "somewhat disappointed that we don't have a process in place to deal with what he thinks is going to be a significant issue."

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