Interim Joint Committee on Natural Resources and Environment


Minutes of the<MeetNo1> 4th Meeting

of the 2010 Interim


<MeetMDY1> September 2, 2010


Call to Order and Roll Call

The<MeetNo2> 4th meeting of the Interim Joint Committee on Natural Resources and Environment was held on<Day> Thursday,<MeetMDY2> September 2, 2010, at<MeetTime> 1:00 PM, in<Room> Room 171 of the Capitol Annex. Representative Jim Gooch Jr., Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Brandon Smith, Co-Chair; Representative Jim Gooch Jr., Co-Chair; Senators David E. Boswell, Ray S. Jones II, Bob Leeper (via teleconference), Dorsey Ridley, John Schickel, Katie Kratz Stine, and Gary Tapp; Representatives Hubert Collins, Tim Couch, Keith Hall, Stan Lee, Reginald Meeks, Tim Moore, Don Pasley, Marie Rader, Kevin Sinnette, Ancel Smith, Fitz Steele, Jim Stewart III, and Jill York.


Legislative Guest: Representative Fred Nesler


Guests:  Dr. Darrell Taulbee, University of Kentucky Center for Applied Energy Research; Mr. Larry Umstadter, KeLa Energy; Mr. Mike Kelly and Mr. Rolando Sanz-Guerrero, CoalTek; Mr. Johnny Greene, Office of Mine Safety and Licensing; Mr. Bruce Williams, Kentucky Conservation Committee; and Sarah Davasher, Army Corps of Engineers.


LRC Staff:  Tanya Monsanto, Stefan Kasacavage, and Susan Spoonamore.


Chairman Smith noted that a quorum was present. After a motion and a second, the minutes were approved.


Beneficial Reuse of Waste Coal

            Dr. Darrell Taulbee, Center for Applied Energy Research (CAER), explained the process of coal agglomeration which is done to increase the fuel-product’s density, lower shipping cost, and add value to waste materials.  Agglomeration is taking the waste products and a chemical binder and applying pressure to keep them stuck together. 


            Dr. Taulbee explained that there are several types of agglomeration: briquetting, extrusion, pan pelletization, and roll briquetting and described some of the energy product options.   One option is briquetting waste coal with biomass.  Fine waste coals are abundant in the nation and turning them into a fuel product is profitable and an environmental improvement.  The United States currently has two or three billion tons in ponds and impoundments.  Coal waste could be burned alone, but one of the principal problems with all the coal waste fines is moisture.  Once wet, the coal waste freezes in the winter.  It is difficult to store, and when it is burned, the water reduces the heat value considerably in the coal fines.


            He noted that blending coal waste fines with biomass resolves some of the environmental problems with the coal, and blending it with biomass does not require considerable investment.  The fuel products are of a quality grade that they can be sold into steam, stoker, and in gasification.  Agglomerating coal waste fines into a fuel product is one way to extend this resource’s value. Additionally, companies engaging in agglomeration are able to tailor the coal waste fuel product to the client’s needs by controlling the content for NOx, SOx and mercury.  There is the potential to reduce emissions and the size of existing impoundments.  Dr. Taulbee noted Kentucky has approximately 650 million tons of coal waste fines that could be clean up using this method.


            Premium fuel can be produced at $17 per ton if the plant for agglomeration is integrated with coal prep plant.  If the plant for agglomeration is located at pond the resulting fuel product would sell at the $40-$50 range.  Dr. Taulbee described a pilot project done in cooperation with KeLa Energy in which they researched three different types of coal and three different methods of agglomeration to determine the best value.


            In response to a question about if one could use ditches to oxidize the coal fines with just sunlight, Dr. Taulbee noted that on a surface like a ditch or ravine, the dried coal would blow away before you are able to recover it.  This method may be done to some extent in France but the quantities needed in the United States are not comparable to France.


            Dr. Taulbee continued with a discussion of a test burn project at a Kentucky Correctional Complex.  The different fuels created with KeLa energy were used to determine terms of emissions values.  These engineered coal waste fuels are premium substitutes for stoker coal.


            In response to a question regarding the use of molasses as a binder for coal waste fuels, Dr. Taulbee said that there were many formulas taken into consideration.  However, a molasses and lime binder was best in terms of cost, transportation, durability, and water resistance.  Molasses and lime are best for stoker fuels, but not suitable for the steam market.  Lime is added to reduce NOx and SOx.  When asked about the cost associated with the molasses itself, Dr. Taulbee explained that high grade molasses is not used.  The product used as a binder is the black strap molasses which is used in animal feed.


            In response to a question about using more biomass in the fuel products, Dr. Taulbee stated that this work is going on and KeLa is one of the companies involved in developing these products.


Waste to Fuel

            Mr. Larry Umstadter, President and CEO of KeLa Energy, explained that their company takes waste of all types such as carpet, plastics, and biomass and turns it into a bendable by-product.  This bendable by-product serves as a binder for recovered coal fines which is finalized as a transportable pelletized coal-based fuel.  KeLa worked on a technology to develop a polymer that is not useable in manufacturing in other recycling projects. 


            When asked about the hesitance of the marketplace to finance projects to recover coal waste fines, Mr. Umstadter explained there is reluctance by utilities to use the products.  The utilities do have regulatory certainty.  For example there is legislation at the federal level and some states have renewable portfolio standards (RPS). They do not want to use biomass until there is a renewable standard.   Also the reliability of the fuel also poses a problem.   Mr. Umstadter stated that coal fines are generated at 700 sites across the nation, most of which are mines and processing plants.  The amount of coal fines nationally is two to three billion tons and 50 million are added each year.


            Mr. Umstadter noted that in using a coal waste pellet, there is no need for boiler modifications and it can be included as a fuel source if a RPS is adopted by the state or nation.  Another improvement is that there is less ash waste created after the pelletized coal is burned which is important because of the greater scrutiny of coal ash impoundments by the United States Environmental Protection Agency (US EPA).


                        In response to a question about the temperature for burning the pelletized waste coal, Mr. Umstadter explained that the temperature needed is determined by the boiler.  Another question regarding the variations in emissions of NOx and SOx, during test burns, Mr. Umstadter explained that it is due to the quality and characteristics of the coal itself.


            In response to a comment about the utility market’s reluctance to embrace this renewable fuel source, Mr. Umstadter explained that KeLa Energy had began working with utilities five years ago to address their concerns.  There were biomass concerns using as storing and transporting and utilities did not want to dual feed boilers.  Utilities must build storage for biomass and there are combustion problems.  These issues with biomass created fears towards use of the product.  Also, utilities are reticent because they are not sure what the future national energy policy will be.  Mr. Umstadter described one situation in Ohio where after adopting an RPS the state forced one coal plant to convert completely to using biomass as a fuel.  The result was that the plant used so much woody biomass that one unintended consequence was that companies supplying the biomass began to clear cut of timber.  The plant was shut down eventually because of the upset the adverse effects had to environmentalist groups.


            One legislator expressed a desire to see a waste coal-biomass project such as this in Kentucky.  Another legislator commented that environmentalists have pushed policies that are not well thought out and resulted in actions such as converting a coal plant to biomass.  Mr. Umstadter responded that jobs are interrupted when such actions are taken, and KeLa Energy is not taking government financing for its projects because the natural market creation is beneficial to the environment and economy.


            In response to a question about the best function of locating the technology to make this coal waste fuel product, Mr. Umstadter replied that the technology can function away from the crusher but only on a coal site properly adjacent to the prep plant.   All products designed for export.


Recombustion Technologies: Pre-Combustion Treatment of Coals and Fines

            Mr. Mike Kelly, Vice President of Governmental Affairs and Mr. Rolando Sanz-Guerrero, Vice President of Marketing for CoalTek discussed how coal is America’s best energy resource.  It can reinvigorate the industrial core of America.   Our national economy depends on coal and the national emissions profile has improved since 1970.  Then he explained that the technology that CoalTek uses is different than KeLa.  CoalTek microwaves the coal fines to remove the moisture.


            Mr. Sanz-Guerrero said that CoalTek produces 120,000 tons of coal waste pellets per year. The microwave facility operates on the site where the coal fines are being dewetted.  The problem with waste coal is moisture, and it needs to come out before it can be reprocessed or sold commercially.  Unlike thermal or heat technology which dries the coal at the surface, microwave does not care about the location of the water molecules.  Therefore, the moisture is reduced throughout the coal waste regardless of how it is placed in the microwave.   There are additional problems with thermal technologies such as unwanted coal combustion.  Non-thermal technologies, like microwave, do not result in unwanted combustion.  CoalTek has looked at the Illinois basin for briquetting or coal sale blending.


            Then Mr. Kelly announced a demonstration project.  Along with the Center for Applied Energy Research, North Dakota, United States Department of Energy, and Duke University, CoalTek has a one million dollar contract to convert waste coal impoundments to a biomass renewable blend fuel product.  The project anticipates using 2.5 billion tons of coal in the Appalachian region.  The resultant fuel is intended to be used by power plants and industrial boilers. 


            In response to a question about locating a plant in China, Mr. Kelly replied that CoalTek is looking at areas where there is no regulatory uncertainty which is the case with locating a plant in China.  In response to a remark that Kentucky will be very supportive of this type of technology locating here, Mr. Kelly stated that CoalTek hopes that the one million dollar project just announced will eventually expand. 


            There being no further business the meeting was adjourned.