Peabody had promised that it would limit the site selection for a possible coal-to-natural gas plant to Kentucky, if the state would approve legislation making them eligible for up to 250 million dollars in incentives. That's what happened today. The Kentucky legislature passed the energy bill, KDFA approved up to a quarter billion dollars in tax breaks last week and today Peabody said it would only consider a five county region of western Kentucky for its possible $3 billion plant. Peabody may spend up to $60 million to do a feasibility study before making a final decision. Peabody president Rick Bowen says the company wouldn't sink that kind of money into a study if it didn't think there's a viable and profitable market for synthetic gas. But there are plenty of skeptics who don't believe Peabody will be able to take care of the CO2 that's a byproduct of the process and won't be able to convince investors that it's a good idea.

Meanwhile, there was a political element to today's announcement. Governor Fletcher hopped on his campaign bus immediately after the news conference at U of L. Fletcher said he would have liked to make the Peabody announcement "much earlier. But it doesn't hurt that it's a couple of days before an important event." The election is next Tuesday. Fletcher was campaigning with U.S. Senator Mitch McConnell who ignored reporters' requests to stop for an interview. We wanted to ask McConnell about his compromise on the S-Chip bill but he apparently was in no mood to talk, having been burned by his comments on his office's involvement, or lack of involvement, in the Graeme Frost fiasco.