Governor Ernie Fletcher has signed a bill into law that's aimed at protecting coal in the face of ever-increasing environmental constraints.
The bill was recently approved by Kentucky's General Assembly.
It will provide hundreds of millions of dollars in financial incentives to companies that build plants in Kentucky to convert coal to cleaner-burning alternative fuels.
The initiative also encourages energy companies to build plants that would convert corn and other Kentucky products into clean-burning fuels.
Legislative leaders developed the proposal behind closed doors after executives from St. Louis-based Peabody Energy said they were considering building a coal-gasification plant in the state.
U.S. Senator Mitch McConnell calls the Energy Bill the beginning of exciting new ways to use coal.
Kentucky's senior senator said even though the Commonwealth hasn't yet been chosen for the Peabody Plant, he said legislation signed by the governor allows us the chance to compete with Indiana and Illinois.
"It's coal to natural gas--exciting technology. It makes sense in western Kentucky with a lot of natural gas lines going around the state and of course we have a significant coal field," McConnell explained.
He also added that the Peabody Plant did not require federal money.
A decision is expected in the next few months.