High energy prices, conflict in the Middle East and concerns over our national security and greenhouse gases have pushed energy and environmental issues to the top of the political agenda.

While the media have focused on the increased cost of energy -- from the price of gasoline at the pump to increases in electric rates and its effect on consumer spending -- far less has been said about how our local economy can benefit from higher prices.

		Carolyn Pengidore is president and chief executive officer of Comperio Energy Inc.

This region is well-positioned to benefit from high energy prices by developing our natural resources, leveraging our intellectual capital and researching ways to produce clean energy through our region's many environmental sciences firms.

Pennsylvania and West Virginia together produce nearly 20 percent of our nation's coal. Six Western Pennsylvania counties produce the majority of the state's bituminous coal, and five of these six counties are among the poorest economically in the state and country.

With high prices for natural gas and the need for new electric generation capacity, many investors are focusing on the country's vast coal reserves as the solution to high energy prices. New environmental standards make the region's high sulfur, high BTU content coal a preferred fuel for producing electricity since scrubbers are virtually mandatory anyway.

Through today's BTU conversion technologies, the region's coal can be turned into not only electricity, but also jet and diesel fuel.

The federal Energy Information Agency reported that Pennsylvania produced 67 million tons of coal in 2005, while West Virginia produced another 154 million tons. At a price of $40 per ton, this combined production of 221 million tons translates into $9 billion of revenue. Converting this coal into electricity and selling it into the market at $50 per megawatt hour more than triples the value of our natural resource, generating revenue of more than $30 billion. If we instead turned our coal into diesel fuel to be sold at $3 per gallon, that same coal production now generates more than $55 billion in revenue, an increase of more than 500 percent!

The Energy Policy Act of 2005 provides economic incentives for converting coal to electricity and liquid fuels (a process known as coal liquefaction) through the development of environmentally friendly technologies. This region contains some of our country's premier energy research institutions. Two national energy labs run by the Department of Energy sit in the region, one in Pittsburgh and the other in Morgantown, W.Va.

Our universities also have funded energy research. Both the University of Pittsburgh and Carnegie Mellon University perform energy research, as does Penn State and West Virginia University. WVU's National Research Center for Coal and Energy and the DOE are participating in a coal liquefaction study in China as part of the China-U.S. Bilateral Agreement for Fossil Energy. The conversion of coal to liquid fuel is cost competitive today with oil prices at record highs.

Along with technology research, the region's commercial knowledge of the coal markets provides an opportunity for wealth transfer through coal trading. Goldman Sachs, Morgan Stanley, Bank of America and a number of hedge funds have recognized this opportunity and are staffing up coal trading desks. We have the same opportunity to participate in this market and the skills to profit from it.

Our regional leaders also should work together to identify and resolve constraints in the coal supply chain to provide increased market opportunities for our energy resources. Railroad capacity and electric transmission both face constraints in moving coal east. The lack of rail capacity has resulted in East Coast coal deliveries from Appalachia to be uncompetitive with foreign imports. Electric power prices in the eastern half of the PJM Interconnection, which operates the electricity grid for 13 states, also reflect constraints in transmission capacity with real-time pricing differentials between east and west PJM averaging $20 per megawatt-hour.

Earlier this year, the PJM Interconnection requested that the DOE designate two electric transmission paths in the mid-Atlantic region as National Interest Electric Transmission Corridors under powers granted in the Energy Policy Act of 2005. Allegheny Energy's new proposed 500 kv transmission line to be run 210 miles from Weirton, W.Va., through Washington and Greene counties to the Baltimore-Washington area runs along one of these proposed transmission corridor. Support of this new transmission line and others like it increases the ability to move power to the East Coast, where electricity is more expensive, and fosters development of clean coal-fired generation within Appalachia, which will bring new jobs and economic growth to the region.

While high energy prices certainly have a downside, let's not miss the opportunity to help move the country toward energy independence, clean up the environment, and expand our regional economy by leveraging our intellectual capital and maximizing the value of our natural resources.