Kentucky's top climate policy official warns EPA 'one size doesn't fit all here'

03/05/2014 12:29 PM

Kentucky officials are lobbying the U.S. Environmental Protection Agency to take into consideration the commonwealth’s enormous reliance on coal when making new rules aimed at cutting down CO2 emissions from existing coal-fired power plants.

John Lyons, Kentucky’s assistant secretary for climate policy, said he has had sit-down meetings with EPA officials to explain that if the agency imposed strict requirements, it would effectively shut down power plants in Kentucky. And the state gets roughly 90 percent of its power from coal.

Power companies don’t have the money or technology to retrofit existing plants with mechanisms to block the spewing of carbon dioxide the way rules the EPA proposed last fall for future plants would.

“It would essentially shut down our coal-fired power generation in very short order and that is where I’ve come into the game and make the EPA see that there’s maybe a different way to do this than a strict limitation that would eventually damage economies like Kentucky’s through less generation and higher electricity rates,” said Lyons (at 2:20), who became Kentucky’s first climate policy official last fall after spending 15 years in the state’s division of air quality.

The EPA is expected to unveil its proposed rule for existing plants in June.

To make Kentucky’s situation even more complicated is that there’s not a clear path to diversify the commonwealth’s power supply. Many electric companies have been changing coal plants to natural gas-burning plants as the price of that fuel has fallen in recent years. But that’s not exactly a long-term solution, Lyons said.

“If you’re just trading one fossil fuel for another, i.e. coal to gas, long term that probably puts us at greater risk than we might have ever been with coal due to natural gas price volatility that we’ve seen over the years,” Lyons said (at 3:40).

Lyons said the state is currently feeling the pain of not having diversified energy sources. But Kentucky’s options when it comes to renewable energy sources are limited.

In terms of the economics of a weakened coal industry, Lyons said it could affect one of other big employers of the state, such as aluminum smelters and potentially even car manufacturers. A state study showed up to 30,000 jobs could be lost by sudden and long-lasting increases in electric prices.

“You’ve got to look at the economics of this much more than you would from a health-based standpoint,” Lyons said (at 9:30). “EPA’s process in the past is to assign ‘we are going to avoid this many hospitalizations or this many deaths’ and they’ll probably do the same with CO2 but they need to look deeper and look at the economic impacts because one size doesn’t fit all here.”

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