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Southern States Energy Board Meets in Virginia

The Southern States Energy Board held a Governor’s Energy Summit in Virginia this morning. Kentucky is a member of the board, and was represented by Energy and Environment Cabinet Secretary Len Peters.

In the board’s mission statement, it stresses both the economy and environment, but there was no evidence of the latter in the day’s agenda. The only speakers were politicians and industry representatives, and the issues covered ranged from nuclear energy to oil and gas production to the economic effects of pending federal pollution rules.

The panel is about the potential effects of pending rules from the Environmental Protection Agency was led by West Virginia Senator Joe Manchin and Kevin Crutchfield of Alpha Natural Resources. The conversation was billed as being about how much money the new rules and regulations will cost states. In the past, the EPA has stressed the cost of inaction, and says the pending rules will save money and create jobs in the long run.

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EPA Responds to Beshear’s Letter

This morning, the Environmental Protection Agency responded to an email asking for comments on a letter Governor Steve Beshear sent to President Barack Obama earlier this week.

In an interview, Energy and Environment Cabinet Secretary Len Peters expressed frustration with the EPA’s requirements for permits. He says Kentucky worked with the regional EPA on a template for future permits and came to an agreement, but the deal was rejected by the EPA headquarters.

In the response, the EPA didn’t respond directly to a question about why the agreed-upon template was rejected. In the statement, the agency said:

 

“EPA appreciates the State of Kentucky’s efforts to work with us to reduce water pollution and public health impacts from coal mining that impact waters used for drinking, fishing, swimming, among other recreational activities.  We have made significant progress with the State of Kentucky in identifying improvements to mining permits that are consistent with the requirements of the Clean Water Act and emerging science.  As we have done in the past, EPA continues to be willing to reach common sense agreements to mine coal while avoiding permanent environmental impacts and protecting water quality. The EPA’s number one priority is to protect the health of all Americans and to allow the people of Kentucky and other states the choice of both healthy waters and a healthy economy.”

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Beshear Calls for Consistency in Coal Regulations From Federal Government

Kentucky Governor Steve Beshear has sent a letter to President Obama asking for more consistency and clarity in regulation of the coal industry. The letter was a follow-up to a brief meeting between Beshear and President Obama at the Cincinnati airport last week.

Since the Environmental Protection Agency announced it would be scrutinizing surface mining permits in 2009, coal companies and regulators have complained about uncertainty. It’s expensive to apply for a permit, and no one was sure what the government would approve.

The questions should have been cleared up by a document the EPA issued earlier this summer that gave final guidance on permits for surface mining. But in his letter, Beshear says the EPA’s policies are still unclear to state regulators.

Energy and Environment Cabinet Secretary Len Peters says part of that is due to inconsistencies in the state’s dealings with the regional EPA and the headquarters in DC. He says Kentucky worked with the regional EPA on a template for future permits.

“We had come to an agreement with Region 4 about a permitting process that we felt was reasonable, we felt was fair and we felt we could use with the coal companies in a meaningful way,” he said.

Peters says the template included substantial concessions on the part of the state, including additions like a biological monitoring requirement. But the agreement was rejected by EPA headquarters.

Peters says the process is frustrating.

“We’re struggling to try to find out what a reasonable permit is, what an acceptable permit is after that template was denied by headquarters,” he said.

A decision is expected soon on 55 Kentucky permit applications that are awaiting federal action.

Requests to the Environmental Protection Agency for comment weren’t returned early this evening.

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Lawsuit Initiated Against Two Eastern Kentucky Coal Companies

Several environmental groups are threatening to sue two eastern Kentucky coal companies for thousands of water violations. They say the state won’t take action. This comes as the Kentucky Energy and Environment Cabinet is lobbying to have even more control over the state’s waterways.

The notice of intent to sue was sent from Appalachian Voices, Kentuckians for the Commonwealth and several other organizations to International Coal Group–recently acquired by Arch Coal–and Frasure Creek Mining. They say the coal companies self-reported thousands of violations at eastern Kentucky mines.

Donna Lisenby with Appalachian Voices says her group is taking action because the state Energy and Environment Cabinet hasn’t.

“And the cabinet continues to shield them, it fails to investigate and make these findings, it fails to prosecute, so we, the citizens’ groups, are left to enforce the Clean Water Act in Kentucky,” she said.

The group intervened in a similar case last year, when the state of Kentucky took action against the same companies for failing to accurately report the amount of pollution their operations were releasing into waterways. Franklin County Circuit Court Judge Phillip Shepherd ruled that environmental groups could intervene in the case, suggesting that the state wouldn’t “diligently prosecute” the coal companies. That case is scheduled for mediation next month.

These suits come at a time when congress is moving to give states more control over the Clean Water Act. Kentucky’s Energy and Environment cabinet head Len Peters even testified before a committee in favor of the measure in May.

“Governor Beshear and I recognize and respect that EPA has a responsibility and obligation to revise and update regulations and program requirements as necessary to protect human health and environment,” he said in his testimony. “However, EPA should not create new regulatory requirements that have not undergone the appropriate Congressional or rulemaking processes.”

The environmental groups point to the number of violations found for ICG and Frasure Creek Mining’s eastern Kentucky mines as proof the Commonwealth isn’t properly administering the program. Kentucky cited just over a tenth of those violations, and asked for about $600,000 in fines.

In this most recent notice of intent to sue, the companies have 60 days to respond to the charges laid out in the letter. If the violations aren’t corrected, the environmental groups can pursue citizen enforcement.

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Biomass Energy Use to Ramp Up in KY

A new report from Governor Steve Beshear’s task force on biomass recommends that the state ramp up biomass production for electricity generation and transportation fuels.  That’s in order not only to meet Kentucky’s growing energy needs but also federal regulations requiring increased use of renewable fuels.  The group laid out several recommendations to give the bioenergy industry a boost in the, although Energy and Environment Cabinet Secretary Len Peters says implementing some of those could require new laws.

“If we can extend incentives into the biofuels industry, that will require some legislative action.  We already have some incentives in place but we feel that is very important,” says Peters.

The task force found that Kentucky is capable of producing at least 25 million tons a year of biomass—from timber product leftovers or agricultural residue, among other organic sources.  It also found that producing and processing biomass could create as many as 10,000 jobs.

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Climate Change Bill Moving Through Congress

Kentucky leaders are watching the Waxman-Markey climate change and energy bill make its way through Congress.  The bill carries provisions that would require utilities to meet efficiency and renewable energy standards.  Kentucky Energy and Environment Cabinet Secretary Len Peters says it would also require emission reductions from businesses such as manufacturers.

“Manufacturing states are probably going to be hit disproportionately large.  And somehow or another we have to recognize that the products we manufacture in Kentucky are not simply being consumed in Kentucky,” says Peters.

It’s not yet clear what kind of economic impact the bill could have on the Bluegrass state.  A U.S. House Committee continues  its consideration of the bill today and sponsors hope to have it ready for a vote before the Memorial Day recess.

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Unclear How State Will Implement Energy Plan

As groups react to Governor Steve Beshear’s energy plan for the state, uncertainties remain about how the plan will be implemented. The plan proposes creating a Renewable Energy and Energy Efficiency Portfolio Standard.  It would require 25 percent of Kentucky’s energy to come from some renewable sources but also from increased energy efficiency by the year 2025.  Energy and Environment Cabinet secretary Len Peters says the emphasis will be on efficiency, and power plants will not be required to meet any particular target.

“We are not breaking it down according to industry by industry by industry. Eighteen percent of it comes from energy efficiency.  We think that’s a reasonable goal,” says Peters.

In contrast, North Carolina is requiring power plants to meet up to 12 and a half percent of their energy needs through renewable sources and efficiency measures.  Peters says it’s unclear whether Kentucky will make the standard law or just use it as a policy guideline.