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Texas comes from burning coal or lignite.12 revenues from this coal production.

10 Yet, Texas earns relatively little money for state

Unlike oil and gas production, there is no severance tax on the market value of coal. The absence of such a severance tax encourages its use as a basic fuel in Texas, despite its high environmental costs. Virtually all of the coal mined in Texas is high-sulfur, low-quality lignite.

Texas coal is among the nation’s dirtiest in terms of its sulfur content and the emissions that result from its combustion. (Texas imports about 45 percent of its coal, mostly from Wyoming.) Coal mined in Texas and used to generate electricity has an average sulfur content of 0.97 percent. However, the average sulfur content for all coal -- both imported and Texas-mined -- has an average sulfur content of 0.65 percent. 13

The use of coal in Texas has serious environmental and public health consequences. As mentioned, the top eight polluters in Texas are all power plants or industrial facilities that burn coal or lignite. About 85 percent of all air pollution from power plants in Texas occurs at power plants that burn coal and lignite, directly contributing to the smog (ozone) problems in cities such as Dallas, Houston and Longview.14 In addition, 18 coal-fired power plants in Texas reported releasing more than 9,300 pounds of highly toxic mercury air emissions in 2000, or about 10 percent of all mercury emitted by power plants throughout the U.S. 15

Along with producing criteria air pollutants and mercury, coal-fired power plants in Texas are leading producers of particulate matter that causes respiratory problems when ingested into the lungs. These power plants also contribute to regional haze, which impacts both health and visibility. A 2002 medical study found that long-term exposure to combustion-related fine particulate matter air pollution – such as that emitted by coal-fired power plants – is an important environmental risk factor for both cardiopulmonary and lung cancer mortality.16 Another 2002 study found that more than 1.5 million children in Texas live within 30 miles of a coal-fired power plant, and more than 90,000 of these children suffer from asthma. 17

These power plants also emit large amounts of carbon dioxide, one of the leading contributors to global climate change. A recent profile of the leading utilities in the U.S. found that the two largest utilities in Texas – TXU and Reliance Energy – both ranked in the top 10 in emissions of mercury and of carbon dioxide.18 Texas coal-burning power plants also lead the nation in mercury emissions with more than 9,300 pounds a year, according to the EPA's most recent Toxic Release Inventory.

Coal producers do pay some minimal fees to the state. Texas charges a permit fee for coal mining sites of at least $5,000 for a new permit, $3,000 for a renewal, and $500 for revising a permit. In addition, the Railroad Commission, which regulates the coal industry in Texas, assesses an annual fee for each acre of land from which coal is extracted. The amount cannot exceed $120 per acre. These mining fees raise between $400,000 and $500,000 for the Railroad Commission's fund to

12 EIA, “Electricity Generation by Fuel, 1990-1999 Texas.” Federal Energy Regulatory Commission, FERC Form 423, “Monthly Report of Cost and Quality of Fuels for Electric Plants.” 13

14 15 Calculated by authors from “FY 2003 Air Emissions Fee Data” provided by TCEQ, November 2002. Environmental Protection Agency, 2000 Toxics Release Inventory. Pope III, C. Arden, et al. “Lung Cancer, Cardiopulmonary Mortality, and Long-term Exposure to Fine Particulate Air Pollution,” Journal of American Medical Association, Vol. 287, No. 9 (March 6, 2002). SEED Coalition, “Children at Risk: How Air Pollution from Power Plants Threatens Health of America’s Children,” 2002. Natural Resource Defense Council, Benchmarking Air Emissions of the 100 Largest Utilities in the U.S. in 2000, NRDC, 2002. 16 17 18

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