6/25/2003

Environmentalists protest mountaintop removal mining

LEXINGTON, Ky. (AP) -- A mostly peaceful protest over mountaintop removal mining resulted in four arrests when one protester scaled a pedway and unfurled two large blue banners.

One of Corrie DeJong's banners read "Stop Mountaintop Removal,'' the other "King Coal is Killing Kentucky.''

About 80 environmentalists gathered to protest blasting off hilltops and bulldozing them into the valleys below, a practice they say has devastated the landscape of Appalachia and could destroy the ecosystem.

Some protesters were met with support of the mining practice from industry officials and others gathered at the "Kentuckians for Coal'' rally at the Kentucky Coal Association's headquarters a couple of blocks away.

Kentucky Coal Association President Bill Caylor said his group brought together about 50 ralliers "to set the record straight.''

"They say we're destroying streams,'' he said amid the honks of passing cars. "It's easy for them to say that, but facts don't bear them up.''

The pedway banners slowed southbound traffic on Broadway for more than an hour. Firefighters used an extending ladder to retrieve DeJong, of Knoxville, Tenn., and then police arrested him.

"Mountaintop removal is killing communities and the environment in eastern Kentucky,'' said a handcuffed Joshua Martin, of Bloomington, Ind., as police took him in a waiting squad car.

Martin was one of three assistants who helped DeJong climb the pedway. DeJong was charged with trespassing. Martin and the other two -- William Gorz of Candor, N.C., and Kent Mettle of Asheville, N.C. -- were charged with disorderly conduct, Lexington police Sgt. Eddie Hart said.

6/25/2003

IRS questions tax credits to energy company

CHARLESTON, W.Va. (AP) -- The Internal Revenue Service is looking into whether Progress Energy should be receiving lucrative coal synfuel tax credits for two of its facilities in eastern Kentucky.

The North Carolina-based energy company has claimed about $1 billion in federal tax credits -- also known as Section 29 or synfuel tax credits -- during the past four years from seven synfuel plants in Kentucky, West Virginia and Virginia.

Section 29 of the Internal Revenue Code was passed into law during the early 1980s to encourage less domestic dependence on foreign oil by providing tax credits to entrepreneurs to develop new kinds of fuel, such as oil from shale or ethanol from corn.

The IRS's current investigation into whether the company deserves all the credits it receives is focusing on two plants in eastern Kentucky run by Colona Synfuel Limited Partnership, a Progress subsidiary.

According to a report the company filed Tuesday with the Securities and Exchange Commission, IRS field auditors are questioning whether synthetic fuel made at the company's Colona plants undergoes the chemical change required by Section 29.

Investigators are looking at the testing process used by Progress Energy to verify that a chemical change has been taken place.

The investigation arose out of a Pre-Filing Agreement program the company is participating in with the IRS. That program allows taxpayers to speed up the IRS review process and resolve specific issues.

The company said in a Tuesday press release that the IRS had previously reviewed and approved its methods.

"We would be very surprised if the IRS reversed course on an issue they have already ruled on time and time before, especially one that could potentially affect so many taxpayers,'' said Bonnie V. Hancock, Progress Fuels president, in the release.

Progress operates three synfuel plants in West Virginia: Ceredo Synfuel, on the Ohio River in Wayne County; Sandy River Synfuel, on the Big Sandy River in Wayne County, and Black Hawk Synfuel in Quincy. The company's three Kentucky plants are Colona Synfuel in Belfry; Colona Synfuel on the River in Catlettsburg and Kentucky May on Yellow Creek in Knott County.

There are 55 coal synfuel plants operating in the United States.

Section 29 synfuel tax credits are scheduled to expire in 2007, unless Congress decides to extend them.