LOUISVILLE, Ky. — It took more than 90 days from the original special session called because of what Gov. Ernie Fletcher said in July was an imminent decision by Peabody on where to locate a goal-to-substitute natural gas facility, but the governor and Peabody officials announced Monday if Peabody builds such a plant it will be in a five-county region of western Kentucky.



Fletcher and Rick Bowen of Peabody Energy made the announcement Monday morning at the University of Louisville’s J.B. Speed Engineering school. The $3 billion coal-to-synthetic natural gas facility will be built on a site in one of five counties: Henderson, Muhlenberg, Ohio, Union or Webster counties. Peabody owns huge coal reserves in the area but had said it was considering sites in Illinois and Indiana in addition to western Kentucky.



The plant – if constructed – would employ about 175 people but the state Economic Development Cabinet projects as many as 1,200 construction workers will be needed to build it and when operational, the plant will produce another 375 mining jobs. It would be operational sometime around 2012,



Bowen said Peabody hasn’t decided in which of those counties the plant will be built – or if it will be built for sure – until a feasibility study already underway is complete.



The announcement came after the Kentucky Economic Development Finance Authority (KEDFA) last week approved $250 million in state tax incentives authorized by House Bill 1, named the Energy Independence Act, an energy policy bill approved in the second special session in August. The July session ended in disagreement between House Democrats and the Senate.



The measure was sponsored by House Majority Leader Rocky Adkins, D-Sandy Hook, and pushed by leaders of both legislative chambers. Senators Tom Jensen, R-London, and Bob Stivers, R-Manchester, pushed it in the Senate. The bill also includes incentives for other alternative forms of energy, including ethanol, bio-diesel, wind, water and solar, although most of its provisions apply to coal.



“I think this is a great moment for Kentucky,” Adkins said. “This is what I and a lot of others envisioned when we passed House Bill 1, the Energy Independence Act. And I expect we will see even more announcements because of this legislation.”



Alltec last week announced it would build a $40 million bio-refinery in Springfield using $8 million in incentives approved by KEDFA at the same time the Peabody incentives were approved. It will employ around 90 people and convert agricultural products into ethanol.



Adkins said he has been in contact with the Economic Development Cabinet whose staff have told him several other companies have shown interest in locating in Kentucky, not all of them interested in coal technology.



“From what I’m being told, they are getting a lot of interest from energy companies in a lot of energy fields,” Adkins said. “They can’t tell me any names, but they do tell me there are a lot of companies looking at Kentucky, including looking at eastern Kentucky.”



The legislation also requires new coal conversion plants to be capable of capturing carbon emissions because the federal government is widely believed to be moving toward mandated reductions of pollution in response to climate change concerns.



The incentives for Peabody allow the company to recoup sales taxes from construction costs, employee income taxes, and coal severance taxes from purchases of Kentucky coal – in this case, likely coal already owned by Peabody, the world’s largest coal company based in St. Louis.



Fletcher has touted the energy bill in his re-election campaign as he and his Democratic opponent Steve Beshear have both said they want to pursue “clean-coal” technologies which they say will make Kentucky a national leader in energy independence. Bowen touched on that theme Monday.



“Kentucky is on the nation’s leading edge in developing a new, clean alternative fuels industry using its abundant supply of coal to create hundreds of jobs and billions of dollars of investments in the state,” said Bowen.



“Today marks a historic day in Kentucky’s path toward energy security,” said Fletcher. “The project will create hundreds of jobs and provide extraordinary long-term economic benefits for the citizens of Kentucky,”



His campaign wasted little time sending out a press release praising Fletcher for bringing “hundreds of new jobs for Kentucky” and claiming Beshear opposed the special session.



Ronnie Ellis writes for CNHI News Service and is based in Frankfort, Ky. He may be contacted by email at rellis@cnhi.com.