This article originally provided by The Courier-Journal

February 3, 2007

Warming puts region's coal in the cross hairs

Latest report has utilities looking for new solutions

By James Bruggers
jbruggers@courier-journal.com

The headlines in newspapers across the country yesterday were dire: A new report by international scientists found that global warming is "unstoppable" -- and humans are to blame.

It's a message expected to have economic repercussions in coal-dependent Kentucky and Indiana, because coal already is the target of environmentalists globally and a new Democratic-controlled Congress says curbs on climate change are a priority.

In Kentucky and Indiana, one result could be higher electricity rates for consumers who traditionally have enjoyed among the lowest costs in the nation.

"It can be done," said Don Challman, associate director of the Center for Applied Energy at the University of Kentucky. "It's just going to cost more" in the form of higher electric bills.

Electricity rates could rise as much as 11 cents per kilowatt hour, or nearly three times current rates, using what's called carbon capture and sequestration technology, said Challman, explaining one of the options available to keep coal in the nation's energy mix if Congress wields a global warming pollution ax.

Others said carbon constraints would be a small price to pay to help curb the higher temperatures and rising sea levels that the Intergovernmental Panel on Climate Change has concluded will "continue for centuries."

"I don't have much money, so obviously I don't want to pay more for electricity," said Aloma Dew, a Sierra Club representative based in Owensboro, and a former member of the Kentucky Environmental Quality Commission. "But we are paying (more) in the long run (because) the world we are leaving to our grandchildren and great grand-children is very frightening."

In a summary of a series of scientific updates that will be released in the coming year, the panel of hundreds of scientists from 113 governments concluded with greater than 90 percent certainty that humans were causing global warming.

The report also calls carbon dioxide "the most important (human-produced) green gas," and noted that its levels are higher in the atmosphere than they have been in at least 650,000 years.

It said global warming was, "more likely than not," already causing heavy rains, droughts, heat waves -- even more intense hurricanes. In the future, people can expect more extreme weather, according to the report, the first from the panel in six years.

"It provides an even stronger foundation for the need for action to reduce greenhouse gas emissions, and action at every level -- local, state, national and international," said Art Williams, director of the Louisville Metro Air Pollution Control District, and co-chair of a climate change committee of the National Association of Clean Air Agencies.

Williams argued that the state's overall economy stands to improve through increased energy efficiency and the development of new technologies.

"If we do this smart and right, we will remain among the lowest cost providers" of electricity compared to other regions, keeping an important economic edge, Williams said.

Both Kentucky and Indiana rely on coal for more than 90 percent of their electricity. Kentucky and Indiana are ranked third and eighth in coal production.

Because of that dependence, the report's conclusions could be "huge" for the two states, as well as the entire nation, which gets more than half its electricity from coal, said Vince Griffin, who follows environmental issues for the Indiana Chamber of Commerce.

"What are we going to do? What are the options? Renewables are a great idea, but the technology is still evolving," Griffin said, adding that he suspects nuclear power might make a comeback because its plants produce no carbon dioxide emissions.

Bill Caylor, president of the Kentucky Coal Association, downplayed the report's conclusions. "Nature's wrath is nothing new," he said of extreme weather.

But he acknowledged that Congress will likely slap limits on greenhouse gas emissions that eventually could affect the coal industry, the result of "political knee-jerk" action "precipitated by public perception and public pressure."

He said it is frustrating "to those caught in the cross hairs."

E.On U.S. hopes research will reveal answers, and the UK energy center is spending about $2 million a year looking into how to keep coal in Kentucky's economy.

That includes studying how to make existing power plants more efficient and how to capture and store carbon in a project largely funded by the Louisville-based power company, Challman said.

"We are really working hard to address this issue," said Vic Staffieri, the chief executive officer of E.On U.S., the parent of LG&E and Kentucky Utilities. "It's coming down the pike, and we cannot put our heads in the sand."

The company is also a partner in a consortium working to develop a large-scale coal gasification plant that will allow for carbon storage.

"Our biggest concern right now is we don't have the technology and it has not been tested adequately to capture and sequester carbon," Staffieri said. "Until we have that technology, it's difficult to invest in large plants."

Reporter James Bruggers can be reached at (502) 582-4645.