Special Subcommittee on Energy


Minutes of the<MeetNo1> 5th Meeting

of the 2010 Interim


<MeetMDY1> October 22, 2010


Call to Order and Roll Call

The<MeetNo2> 5th meeting of the Special Subcommittee on Energy was held on<Day> Friday,<MeetMDY2> October 22, 2010, at<MeetTime> 10:00 AM, in<Room> Lexington, Kentucky. Representative Keith Hall, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Brandon Smith, Co-Chair; Representative Keith Hall, Co-Chair; Senators Ray S. Jones II, John Schickel, Robert Stivers II, Gary Tapp, and Johnny Ray Turner; Representatives Rocky Adkins, Eddie Ballard, Dwight D. Butler, Leslie Combs, Tim Couch, Jim Gooch Jr., Thomas Kerr, Martha Jane King, Fred Nesler, Sannie Overly, Tanya Pullin, Tom Riner, and Fitz Steele.


Guests:  House Speaker Greg Stumbo; Steven F. Leer, Chairman and CEO of Arch Coal; John Snider, VP External Affairs, Eastern Region, Arch Coal; Mahendra Sunkara, Director for the Institute for Advanced Materials and Renewable Energy, University of Louisville; Rodney Andrews, Director, Center for Applied Energy Research (CAER); Secretary Len Peters and Deputy Secretary Hank List, Energy and Environment Cabinet.


LRC Staff:  D. Todd Littlefield, Taylor Moore III, and Susan Spoonamore, Committee Assistant.


The September 17, 2010 minutes were approved, without objection, upon motion made by Rep. Fitz Steele, and seconded by Rep. Tim Couch.


America’s Energy Future:  The Essential Role of Coal

Mr. Steven F. Leer, Chairman and CEO of Arch Coal, Inc. spoke about America’s Energy Future: The Essential Role of Coal.  He explained that Arch Coal is the second largest coal producer in the United States, and employs approximately 600 people in Kentucky.  The world’s need for energy is increasing. Electricity consumption, based on the world average, is 3,427 kWh per person, per year.  Based on current production levels and proven reserves, coal should outlast both gas and oil reserves by more than 3 times. Coal has been the world’s fastest growing fuel source for the last 9 years and continues to grow.  China consumes more coal than the United States, Japan and Europe combined.  Mr. Leer said that countries around the world are building coal plants to fuel electricity needs.  Globally, a new coal-fueled generation is planned to come online by 2015 and will be fueled by more than 1 billion tons of coal.


Mr. Leer also asked where the United States would get its future power if not from coal.  Renewables can play a role in the future for power, but stressed that renewables face enormous hurdles achieving baseload status.  Coal is the dominant fuel source for electricity generation in the United States, and it provides low-cost electricity that enhances the standard of living and global competitiveness.  As an example, he said that electricity prices in Kentucky are 34 percent lower than the national average.  With funding, time, and new clean coal technologies, coal will become cleaner and more climate friendly.  The United States and other countries must work together to find solutions to climate challenges. To meet the federal greenhouse gas reduction (GHG) targets by 2050, it will be essential to capture GHG emissions from both coal and natural gas.


In response to a question from Rep. Gooch, Mr. Leer stated that another 10 years of investing in carbon capture technologies would be needed.


In response to questions from Sen. Stivers, Mr. Leer stated that the federal regulations regarding emission levels would impact coal and utilities. If the Environmental Protection Agency passes new regulations, there will be a moratorium on building plants that will affect all Americans.  Mr. Leer also said that state renewable portfolio standards have better tax incentives than the federal proposals.


Comments from legislators indicated that a good way to spur the economy in Kentucky would be to build new coal-fired plants, employing thousands of people, investing in technology.


Argonne Battery Project

Rodney Andrews, Director, UK Center for Applied Energy Research, and Mahendra Sunkara, Director, UL Conn Center, gave a brief presentation on Kentucky’s Argonne Battery Manufacturing Research and Development Center. The Center’s mission is to assist Argonne and other materials developers to bench mark their new lithium technology by fabricating commercial-style cells to quantify performance of their new cell chemistries.  It would position Kentucky and the U.S. industry as competitive, cost effective players in the battery marketplace. One of the program’s goals is to establish the Kentucky-Argonne Battery Manufacturing Research and Development Center as a home of new technology and expertise.


In response to questions from Rep. Adkins, Mr. Andrews stated that the new Center for Applied Energy Research laboratory facility should be completed by November 2011.   He also stated that the demonstration coal-to-liquid refinery should be able to produce 40 gallons a day. 


Meeting adjourned.