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Kentucky Resources Council, PO Box 1070, Frankfort, KY 40602 Phone [502] 875-2428

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PO Box 1070, Frankfort, KY 40602  Phone 502.875.2428, Fax 502.875.2845

KRC Op-ed Questions Special Session To Subsidize Coal-To-Liquid Plants  Posted: June 14, 2007
What is Energy Independence?

by Tom FitzGerald, Director
Kentucky Resources Council, Inc.

As the Governor contemplates a special session, let’s reflect on what Kentucky needs in an energy policy.

There is general agreement that emissions of greenhouse gases need to be cut by 60-80% by mid-century to minimize irreversible effects of climate change. We have a relatively brief period in which to restructure the manner in which we produce and consume energy, before the exigencies of climate change will impose dramatic costs on our communities and our economy and narrow our options to mitigate, rather than adapt, to climate change.

We can continue down a path of combusting fossil fuels and releasing carbon dioxide (CO2) uncontrolled into the atmosphere, and consign our children to a carbon-constrained future in which their quality of life will be diminished. Or we can travel a path to a rational energy policy that will produce a sustainable energy future, reduce carbon emissions, and create good jobs, while mitigating the impacts of climate change.

It is generally acknowledged in business circles that a mandatory cap-and-trade program for reducing carbon dioxide emissions will be adopted by Congress within the next 10 years. Yet Kentucky is poised to move forward not with a plan to invest in low carbon energy strategies, but instead to subsidize coal to liquid (CTL) production plants that produce almost twice the carbon dioxide emissions per gallon of fuel than conventional petroleum-derived fuels.

A 2007 National Energy Technology Laboratory study found a commercial scale CTL plant is feasible at a pricetag of $4.53 billion, NETL did not factor in how or where to dispose of the 32,000 tons per day of carbon dioxide that the process would generate.

Until applied research demonstrates that the carbon dioxide captured can be managed to produce zero additional atmospheric CO2 emissions, the CTL process and resulting fuel is not a solution that provides any degree of real independence. Why should the public rather than the shareholders of the private coal, energy, and banking interests, bear the costs of underwriting a CTL plant, when the capture and sequestration of carbon dioxide, which is the central issue of public importance, is not resolved.

A different path exists. Kentucky is well positioned to expand the production and use of hybrid and electric vehicles, as well as to encourage research and development of new fuels. Ethanol from switchgrass is a promising, lower impact method of producing biofuel using less fertilizer and pesticides, causing less soil erosion, and producing more ethanol per acre than corn while using less petroleum energy. In a marketplace where it is uncertain what the face of transportation and the manner of propulsion of vehicles will be in 10 or 20 years, it is far wiser to invest in research and development (R&D) for an array of low-emission vehicles and fuels that make us less, rather than more, reliant on fossil fuels, rather than hitching our fortunes to a fuel technology known to be expensive and energy intensive, and producing higher levels of CO2 emissions. Some refined variant of coal-to liquids may be part of the energy future, if the process can be made more efficient and carbon capture and disposition can be achieved. Investment in R&D for those aspects of CTL, as part of a larger, balanced portfolio of investments in renewable energy and energy efficiency, is a more prudent course than underwriting the commercial deployment of the current CTL technology that provides neither efficiency nor a carbon solution. House Majority Floor Leader Adkins’ bill from last session presented a more balanced approach, providing incentives for renewables and efficiency as well as R&D support for improving CTL. Energy efficiency offers a way to “mine” inefficiencies in the way that power is generated and consumed. Kentucky’s electricity is relatively low-cost, but our bills certainly are not, because we consume power inefficiently. In 2005, there were 20 states with lower monthly residential electricity bills than Kentucky’s. In that year, Kentucky’s residential ratepayers consumed more electricity than our counterparts in 43 other states; our businesses, more than 19 other states and our industries, more than counterparts in 47 other states. Rather than saddling ratepayers with a new generation of expensive coal-fired power plants, investments in end-use efficiency can moderate demand and delay the need for new base load and peaking capacity.

Efficiency improvements are a key to creating a sustainable Kentucky economy, and generate good jobs, increase disposable income, keep money circulating in the state, and make our industries and products more cost-competitive in the world market. Reducing waste, upgrading building codes, creating incentives for energy efficient home construction and renovation, enhancing demand management programs to encourage utilities to invest in more efficient use of power by customers, and increasing weatherization programs, particularly for rental housing – all of these are bricks on the path to energy independence. Our energy policy should invest in a broad array of creative solutions to our fossil fuel dependency, through enhanced research and development funds to universities and to the private sector, rather than in technologies that add to the carbon pollution burden to be managed.

Tom FitzGerald is Director of the Kentucky Resources Council, Inc., a nonprofit environmental advocacy organization providing legal assistance without charge to low-income individuals, communities, and community groups on natural resources and energy issues.


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