Governor, House leaders at odds over energy policy

The debate over the state’s comprehensive energy policy could be over for this year’s legislative session, or could be taken up in the session’s final two days next week, depending upon who you ask.

House Majority Floor Leader Rocky Adkins, a Sandy Hook Democrat and the chamber’s point person on energy issues, said earlier this week that his House Bill 537, which would help outline the state’s energy policy, is dead for the session.

The announcement came after the Senate tacked on provisions to the bill that would lift the state’s moratorium on nuclear energy production and open up state-owned lands for oil and gas well leases, according to the Courier-Journal.

“The Senate is not willing to recede in those additions they have put onto it, so House bill 537 is dead for this session,” Adkins said in the statement.

But during a sweep through western Kentucky on Thursday to hand out Department of Homeland Security grants, Gov. Steve Beshear urged passage of the bill with the additions, the site KYWordsmith.com is reporting.

Beshear reportedly defended the nuclear energy provisions in the bill, saying that it will allow the discussion to begin about whether the state should allow nuclear power plants during a stop in Paducah, according to KYWordsmith.com.

The remarks apparently received a warm reception in the Paducah area, which is home to a uranium enrichment facility and to Sen. Bob Leeper, the Independent lawmaker who has pushed for the moratorium to be lifted for at least two legislative sessions.

The House and Senate reconvene for the final two days of the session on March 26.

Lawmakers hear plans for coal-to-natural gas plan in Muhlenberg County

Representatives from the two companies planning a multi-billion dollar coal-to-natural gas conversion plant in Muhlenberg County received words of praise from lawmakers Wednesday during presentations to legislative committees. 

The plant being planned by Peabody Energy Corp. and ConocoPhillips is expected to provide 500 long-term jobs once it is operational and should pump $100 million into the local economy, said Sarah Edman with ConocoPhillips said. 

“There was a tremendous amount of work that went in to hopefully get the attention of not only Peabody and ConocoPhillips but other energy companies coming to Kentucky,” said Rep. Rocky Adkins, a Sandy Hook Democrat. “If we really want to stimulate the economy in this country … the energy field is where we can do it.”

But challenges still remain for the project which just began the permitting process in December and is dependent in part on a volatile natural gas market and the possibility of new federal regulations governing carbon emissions. 

At this point, the companies can’t say when construction of the plant will begin because of economic and permitting variables, and declined to offer a specific cost estimate for the project when asked by legislators because of many of those same variables.

The previous project planned at the site outside Central City — the Thoroughbred Energy Campus coal-fired power plant — was dropped last year after a difficult permitting process that included challenges from environmental groups. 

“I think gasification is a promising technology provided that you can address the carbon issues, and that is a great uncertainty,” said Tom FitzGerald with the Kentucky Resources Council. “There are tremendous technical uncertainties and questions about the ability to sequester carbon.”

Read more about the project in Thursday’s Messenger-Inquirer.

Senate panel signs off on lifting nuclear power plant moratorium

The Senate Natural Resources and Energy Committee approved a bill that would lift a 25-year moratorium in Kentucky on nuclear energy production. 

Senate Bill 13 sponsored by Sen. Bob Leeper, an Independent from Paducah, would lift a requirement that there be a means of long-term nuclear waste storage before any nuclear power plant can be built in the state. 

Under the bill, companies proposing to build a nuclear power plant would now only have to provide a plan for storage rather than requiring that a long-term storage facility for the waste be operational. Currently there are no long-term storage facilities in the country for nuclear waste. 

Leeper told the committee that lifting the moratorium would open up the discussion about bringing nuclear energy to the state in the future. Currently 40 states have no moratorium on nuclear power facility construction. 

It has been determined that waste can be stored on-site for up to 100 years safely, which would allow time for the development of long-term solutions, Leeper said. 

The lengthy licensing and construction process of nuclear plant also allows time for plans and solutions to be developed, Leeper said. 

“There’s a long time before the actual removal of this materal to a permanent storage site will occur,” Leeper told the committee. “My effort is to put us on the drawing board.” 

Tom FitzGerald with the Kentucky Resources Council told the committee that there are still too many issues outstanding with nuclear energy, of which nuclear waste storage is one, for the state to lift the moratorium at this time. 

The discussion about allowing nuclear energy generation in Kentucky can continue without changing the current statute, FitzGerald said. 

“I would suggest that changing the statetue is the end of the that discussion and not the beginning of it,” FitzGerald said. 

The bill will head to the full Senate after passing the committee by a vote of 7 to 2, with Sens. Ray Jones and Johnny Ray Turner voting against it.

Update, 10:30 p.m. ….

Gov. Steve Beshear made specific mention of nuclear power in his State of the Commonwealth address tonight. 

Here are his comments – 

It is also time to revisit the issue of nuclear power in Kentucky. 

Kentucky must – in a bipartisan fashion – discuss and decide how aggressively to move forward on an energy source that already accounts for 20 percent of the nation’s baseload electricity generation. Safety, of course, must be the top priority. 

Senate Bill 13, Sen. Leeper’s proposal, provides us a vehicle for starting that dialogue.

Lawmakers to hear about coal conversion plant planned for Muhlenberg County

Representatives from Peabody Energy Corp. and ConocoPhillips will present plans for the Kentucky NewGas Energy Center to a House committee on Wednesday. 

The two companies announced in December their plans to build the multi-billion dollar plant in Muhlenberg County on the 80-acre property that had been set aside for the Thoroughbred Energy Campus, a coal-fired power plant tied up in legal challenges for years and then dropped in favor for the Kentucky NewGas project. 

The Kentucky NewGas plant would convert coal to synthetic natural gas and is expected to create 1,200 jobs during construction and 500 long-term jobs at the site near Central City. That tally includes jobs in the coal industry needed to help supply the plant. 

The project will be eligible for up to $250 million in state incentives thanks to House Bill 1 passed by the General Assembly during a special session in 2007. 

Brian Brau, Peabody Energy director of project development in Btu conversion, and Sarah Edman, manager of gasification project development for ConocoPhilips, will be talking about the project at the House Natural Resources and Environment Committee chaired by Rep. Jim Gooch, a Providence Democrat, at 9 a.m. EST and then again at the Senate Natural Resources and Energy Committe chaired by Sen. Tom Jensen, a London Republican, at 11 a.m. EST.

Coal-to-natural gas plant planned for Muhlenberg County

ConocoPhillips and Peabody Energy announced today that they will be moving forward with plans for a coal-to-natural gas plant in Muhlenberg County near Central City. 

The news came as the partnership filed for an air permit from the state – a first step in the approval process for the facility which the two companies said would produce enough synthetic gas for nearly 750,000 homes. 

The project, called Kentucky NewGas, is expected to require a workforce of 1,200 during its four-year construction and will create 500 long-term jobs, according to a press release from Peabody. 

The facility would be “carbon storage ready,” and the two companies are already helping fund a test project directed by the Kentucky Geological Survey. 

Several lawmakers were quick to offer statements in support of the project. 

From state Sen. Jerry Rhoads – 

“This is an exciting day for our community and our region with the announcement of a state-of-the-art coal-to-natural-gas facility to be located in Muhlenberg County.  The facility is a positive step toward economic revitalization for Muhlenberg County and the entire region and energy independence for our nation.  This-state-of-the-art facility capitalizes on the assets our region offers for clean coal technology — vast coal reserves, water and a strong available workforce.”

And from U.S. Sen. Jim Bunning – 

“America’s energy must be diversified, a coal-to-gas facility is a step in that direction with a direct benefit for Kentucky,” said Bunning.  “Coal-to-gas technology is a clean way to use coal to cure America’s addiction to foreign oil.  I hope that the permit process is expedited, so the estimated $100 million yearly economic benefits could come to the region as soon as possible. In addition to the monetary infusion, 1,200 jobs will be created during the four year construction process as well as 500 permanent jobs once the facility is built.”

Update, 4:12 p.m. …

Plans for the proposed coal conversion plant call for it to be built on an 80-acre site bordering the Green River in Muhlenberg County. 

It’s the same site Peabody Energy had planned to build the controversial, coal-fired Thoroughbred power plant that has been tied up in the permitting process and the courts for years. 

The Kentucky Court of Appeals ruled in September that the state properly issued an air emmissions permit for the power plant, but environmental groups filed a federal lawsuit earlier this month against the Environmental Protection Agency over the plant. 

Peabody spokeswoman Beth Sutton said the permit for the Thoroughbred plant has been withdrawn and the two companies will be moving forward with the coal conversion plant instead. 

“We believe the coal-to-gas will create the most value,” Sutton said. “We believe that demand will continue to grow for this high-value product.”

Read more about plans for the plant in Wednesday’s Messenger-Inquirer.

Update, 8:36 p.m. …

Here is a project fact sheet from Peabody about Kentucky NewGas.

Beshear rolls out “Intelligent Energy Choices” plan for the state

Gov. Steve Beshear rolled out what he is calling the “first-ever comprehensive energy plan” for Kentucky on Thursday that concentrates on alternative energy sources, coal conversion technology and reducing greenhouse gases by 20 percent by 2025. 

“Energy and the production of energy is going to be one of the top priorities in the world over the next few years,” Beshear said Thursday afternoon during an interview with the Messenger-Inquirer. “Kentucky is uniquely positioned to take a leadership role in that.”

The plan includes an exploration of how to promote the development of nuclear power in Kentucky and significant emphasis on building up to eight plants capable of converting coal into transportation fuel. 

Beshear predicts that implementing the plan, which was created with little input from those outside his administration, will also provide economic development jolt for the state and produce up to 40,000 jobs in the state by 2025. 

“That obviously would be a tremendous economic boost for our state,” Beshear said.

Read more about Beshear’s plan, called “Intelligent Energy Choices for Kentucky’s Future,” in Friday’s Messenger-Inquirer.

Governor to announce new energy policy Thursday

In what is a continuing trend in Kentucky state government of increased attention on energy, Gov. Steve Beshear will roll out a “comprehensive energy plan” Thursday morning during a press conference at the state Capitol in Frankfort. 

No word yet on the details of the plan, which the governor’s office is calling the “first-ever” comprehensive energy plan. 

In recent years, the adoption of a more overarching energy strategy has become a front-burner goal for the legislature and the governor’s office.

Gov. Ernie Fletcher released a “comprehensive energy strategy” in February 2005 that was followed during the 2006 legislative session with House Bill 299, which directed the state Office of Energy Policy to look more closely at alternative energy sources. 

During special session in 2007, the legislature adopted House Bill 1– a new system of incentives for coal gasification and alternative energy development – and then came the passage of House Bill 2 this spring which included increased incentives for alternative energy development and put more emphasis on energy efficiency.