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Plan could raise Ky. electric bills

In a move that could be good for the health of the planet but a shock to Kentuckians when they open some future electric bill, the Obama administration said last week that it will consider regulating carbon dioxide emissions from coal-fired power plants.

"The implications of this are tremendous," said John Lyons, director of the state Division of Air Quality. Regulating the gas could be more complicated and expensive than anything yet tried, he said.

Bill Caylor, president of the Kentucky Coal Association, said restrictions on carbon emissions could mean an end to electric rates that are among the lowest in the nation.

"If we had a carbon tax, it would put our electric rates on a par with New England and California," Caylor said. "It would take away the advantage we have in attracting industry."

But Hank Graddy, a Midway attorney and Sierra Club leader, said regulating carbon dioxide ultimately will be good for Kentucky because it will push the state toward efficiency and more diverse sources of energy.

"I think this is extraordinarily good news for the nation, and it's good news for Kentucky because it removes the myth that we can keep on conducting business as usual," Graddy said.

Moving to "a carbon-constrained world" could have a greater effect in Kentucky, West Virginia and Wyoming because most of their electricity comes from burning coal. In Kentucky, it's nearly 93 percent, and almost all of the remaining 7 percent comes from other fossil fuels.

Carbon dioxide, or CO2, is a ubiquitous gas that is released when coal or other organic material is burned or decays. It is in automobile exhaust and the smoke from chimneys. It also is exhaled when humans breathe.

Most scientists think it is a major contributor to global climate change.

Power plant pollutants such as sulfur dioxide, nitrogen oxides and fine particles are regulated under increasingly strict standards. But carbon dioxide is created in much larger quantities, and is not regulated.

In April 2007, the U.S. Supreme Court told the Environmental Protection Agency that it must decide whether carbon dioxide should be considered a pollutant under the federal Clean Air Act. In December's waning weeks of the Bush administration, the EPA said it would not regulate it.

But Lisa Jackson, the agency's new administrator, said last week that she will revisit that decision.

Environmentalists, who had asked Jackson to reconsider the December decision, rejoiced.

"This is another blow to coal-fired plants and other polluters that will help deliver Americans cleaner air," said Patrice Simms, an attorney for the Natural Resources Defense Council.

Jackson stopped short of overturning the Bush administration. But she wrote that a state agency considering a permit for a coal-fired plant should not assume the December action is "the final word on the appropriate interpretation of the Clean Air Act."

Lyons, at the Kentucky Division of Air Quality, said Jackson's actions don't necessarily mean anything will change.

"Until there is a final word and legislation to back it, we will not be looking at CO2 as a regulated pollutant," he said.

Graddy, with the Sierra Club, said it is "too late" for Lyons to hold that position.

EPA Administrator Jackson's action is "a quick, clear signal that this administration is going to go into a different direction," he said.

It also is a signal to Kentucky's leaders that things need to change, Graddy said. Cheap energy has made Kentuckians wasteful, he said, so energy efficiency should be a priority. He also said it is time to start looking seriously at solar energy and other alternative sources.

Caylor agrees that the nation needs more diversified sources of energy. But he notes that Kentucky is not particularly windy or sunny. Extending the power grid to wind farms in the breezy Midwest will be expensive and take time. A reliable energy source such as coal, or perhaps nuclear, will be needed for quite some time, he said.

It's not clear what government regulation of carbon dioxide would look like.

There could be a tax on each ton of coal burned to discourage the use of coal, or a cap and trade program that would require utilities to reduce carbon emissions. Utilities could be required to capture carbon dioxide and dispose of it, probably by injecting it deep inside the earth. That process is called geological sequestration.

Lyons said that capturing carbon dioxide before it spews into the air would require technologies that are not yet fully developed, and would consume a sizable portion of the energy being produced by a power plant.

"I foresee years of study and research to determine if it is viable," he said.

Research into how to deal with carbon dioxide is going on across the country. At the University of Kentucky's Center for Applied Energy Research and elsewhere, scientists are looking at using it to grow algae, which in turn would produce a diesel-like fuel. The center also is researching ways to capture the gas.

The Kentucky Geological Survey is one of a number of places looking into geological sequestration.

For several decades, carbon dioxide has been injected into Texas oil fields to push more oil out of wells. Norway has been disposing of its carbon dioxide by injecting it into rocks deep beneath the North Sea.

In Eastern Kentucky, a project is being planned that would pump carbon dioxide into black shale. The idea is that the carbon dioxide would adhere to the shale, forcing out methane that is there. The methane could be burned to produce energy.

In about six weeks, the Geological Survey will begin drilling a well into dolomite rock 8,000 feet beneath Hancock County in Western Kentucky.

Rick Bowersox, a principal investigator for that project, said lessons learned there could apply to a large coal-to-gas plant in the planning stages for Muhlenberg County. The same kind of rock is found in both places, he said.

That plant, a joint project of ConocoPhillips and Peabody Energy, would be built to be "sequestration ready." Bowersox thinks that if efficient methods can be developed to capture carbon at power plants, sequestration will work well.

It makes sense, he said: Take carbon in the form of coal out of the ground, put carbon dioxide back in the ground in a place where it will stay forever.

But he sees it as a temporary solution until something better comes along.

"To me, sequestration is a way to take care of a problem we have now while we develop those alterative energies," Bowersox said.