How natural gas plays into Ky.'s energy portfolio and why that troubles the energy secretary

05/12/2014 10:01 AM

With cutbacks in the coal industry, Kentucky’s energy portfolio could soon put more stock in natural gas to supply the energy needs of a transitioning state. But that could lead to “troubling” increased energy costs, said Len Peters, Kentucky’s energy and environment cabinet secretary.

The unusually cold winter in Kentucky provided some “ anxious moments” for utilities across Kentucky and highlighted “how close they are” to running out of energy once coal plants start shutting down, Peters said in an interview with Pure Politics.

“We are looking at some rather dramatic changes. We have seen some changes already in the shift from coal to natural gas we project that by 2020 we probably be less than 20 percent coal and almost 15 – 17 percent natural gas,” Peters said.

The reason Kentucky’s energy portfolio will swing towards natural gas, Peters said, is because it’s currently cheaper and many power companies are opting to shut down aging coal plants rather than invest in expensive pollution control equipment to help them meet new federal standards.

Natural gas is a “just-in-time energy,” meaning the fuel is burned as it comes through the pipe. Part of transitioning to natural gas would also mean building more pipeline infrastructure, which Peters said the rest of the states will also need to do.

Peters described the shift to natural gas as “troubling. “ While the costs for natural gas are currently low if cost of the fuel increases to the prices of several years ago, “we’re going to be locked into a much more expensive electricity than we see today,” he said. (3:20)

The energy decisions made today will influence the next half a century’s power landscape and economy, Peters said.

Another fuel source that’s divided the General Assembly is the prospect of building new nuclear power plants. State law effectively blocks the construction of a new power plant until the question of storing radioactive waste is solved. But Peters said lawmakers should debate lifting the effective moratorium.

“When you look at base load generation here at this part of the country you really look at coal, natural gas, and nuclear,” Peters said.

“If we’re going to begin restricting in a significant way, and we’re already seeing it, building of a new coal burning power plants. We have a ban on nuclear. That leaves us one option and we’re not in any way diversifying our portfolio.” (4:17)


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