Kentucky official warns of higher energy prices under Obama's plan

bmusgrave@herald-leader.comJuly 9, 2013 

Carbon Well

Len Peters, Secretary of the Kentucky Energy and Environment Cabinet talked before a tour of the 8,300-foot-deep carbon dioxide test well near Hawesville, Ky., Thursday, May 14, 2009. The well is being drilled to test storing carbon dioxide deep underground to lessen the impact of global climate change. The tour today was for state and energy industry officials.


FRANKFORT — Kentucky's top energy official told a legislative committee Tuesday that President Barack Obama's climate change policy could increase electricity prices significantly and hurt the state's coal and manufacturing industries.

Many legislators at Tuesday's Joint Committee on Natural Resources and the Environment said they believe Obama unfairly targets the coal industry in his policy to battle climate change and questioned whether it was necessary to curb carbon dioxide emissions.

"We're not blind. We know there is a war on coal," said Rep. Fitz Steele, D-Hazard. "There has been climate change since the beginning of time ... There is not but one fellow that can control it ... It's going to change no matter what."

Energy and Environment Cabinet Secretary Len Peters told Steele and other lawmakers who questioned global warming that scientific evidence suggests the climate is changing.

"When you look at the overwhelming evidence and factor everything into consideration ... and there are hundreds of thousands of scientists looking at various aspects of this ... there is indication that climate change is in fact happening," Peters said.

Obama's policy includes new standards for carbon dioxide emissions, an additional $8 billion in loan guarantees for research and development for new energy technologies and no U.S. foreign aid to build coal-fired power plants in developing countries.

Under Obama's plan, the federal government is supposed to have final rules on carbon dioxide emissions for existing and new energy sources by June 1, 2015. The state will have to adopt and implement its own plan by June 30, 2016.

Peters told the committee that it's likely those deadlines will change. There may be legal challenges, Peters said.

Whenever they take effect, many believe the new rules will mean no new coal-fired power plants get built in the country.

"We don't know what the new rules will be," Peters told the committee. "You can't turn the entire energy fleet around in a year."

Having fewer coal-fired power plants will undoubtedly mean less coal mined in Kentucky, officials said. Eastern Kentucky already has seen a dramatic drop in coal production and jobs as the price of natural gas plummeted in recent years.

Kentucky gets more than 90 percent of its electricity from coal-burning power plants, making it one of the largest producers of carbon on a per-capita basis in the country. It was one of 18 states where emissions went up from 2000 to 2010, according to federal statistics.

Peters said he expects many utility companies to switch from coal — which produces the most carbon dioxide — to natural gas and other power sources that have lower or no carbon dioxide emissions.

George Siemens, vice president for external affairs at LG&E and Kentucky Utilities, told lawmakers that power companies will have to spend large sums to add technologies that reduce carbon emissions or to build new natural gas plants.

No technology now available would reduce carbon dioxide emissions to the level that many believe the administration will propose.

"The scale here is just beyond anything that we've ever dealt with — to be able to capture the carbon, to inject it into the ground and ensure that it stays there. We simply don't know how to do that at this stage," Siemens said. "This will take time to figure out ... This is still in the (research and development) stage."

Peters said many studies have shown that large reductions in carbon dioxide emissions could increase the price of electricity by 30 to 100 percent in some parts of the country.

"Every regulation costs customers money," Siemens said.

Legislators from coal-producing counties expressed anger and frustration at the Obama administration during Tuesday's meeting.

"His approach doesn't make sense," said Sen. Brandon Smith, R-Hazard.

Smith said coal-producing counties have long realized that the coal industry would not be around forever.

"What we didn't expect is that there would be an administration knocking the bridge out behind us when there is no way to go forward," Smith said.

Other legislators questioned whether there was a need to curb carbon dioxide emissions and whether global warming could be blamed on the coal industry.

"The climate's always going to change," said Rep. Stan Lee, R-Lexington. "We're not in control of this world. ... There is one who is in control but it ain't any of us. And to think that we can change what he created I think is short-sighted and foolish."

Beth Musgrave: (502) 875-3793. Twitter: @BGPolitics. Blog:

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