Interim Joint Committee on Natural Resources and Energy


Minutes of the<MeetNo1> 1st Meeting

of the 2017 Interim


<MeetMDY1> June 1, 2017


Call to Order and Roll Call

The<MeetNo2> 1st meeting of the Interim Joint Committee on Natural Resources and Energy was held on<Day> Thursday,<MeetMDY2> June 1, 2017, at<MeetTime> 1:00 PM, in<Room> Room 154 of the Capitol Annex. Representative Jim Gooch Jr., Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Representative Jim Gooch Jr., Co-Chair; Senators C.B. Embry Jr., Ernie Harris, Ray S. Jones II, Christian McDaniel, John Schickel, Brandon Smith, Johnny Ray Turner, Robin L. Webb, and Whitney Westerfield; Representatives John Blanton, Larry Brown, McKenzie Cantrell, Matt Castlen, Tim Couch, Jeffery Donohue, Jim DuPlessis, Daniel Elliott, Kelly Flood, Chris Fugate, Dennis Keene, Brian Linder, Reginald Meeks, Marie Rader, Jim Stewart III, and Jill York.


Guests: Secretary Charles G. Snavely, Energy and Environment Cabinet, Sean Alteri, Director, Division of Air Quality, Energy and Environment Cabinet, and Rodney Andrews, Ph.D., University of Kentucky, Center for Applied Energy Research.


LRC Staff: D. Todd Littlefield, Stefan Kasacavage, Janine Coy-Geeslin, and Susan Spoonamore, Committee Assistant.


Air Quality and Reformulated Gas

Secretary Charles G. Snavely, Energy and Environment Cabinet introduced Sean Alteri, Director, Division of Air Quality, Energy and Environment Cabinet to discuss air quality and reformulated gas. Mr. Alteri stated that the mission of the Division for Air Quality is to protect human health and the environment by achieving and maintaining acceptable air quality through a comprehensive air monitoring network; creating effective partnerships with air pollution sources and the public; timely dissemination of accurate and useful information and data; judicious use of program resources; and maintenance of a reasonable and effective compliance program. Mr. Alteri said that Kentucky is currently achieving all the ambient air quality standards with a few exceptions.


Mr. Alteri said that the EPA has proposed to redesignate the Cincinnati/Northern Kentucky Metropolitan Statistical Area as attained in the 2008 ozone standard. He said that the Kentucky Division for Air Quality (KDAQ) is focusing on the 2008 ozone standard and the control strategy currently being used to achieve that standard. According to the data collected from ambient monitors, Kentucky’s air quality is improving. Mr. Alteri said the presentation would focus on the control strategy of nitrogen oxide (NOx) and volatile organic compounds (VOC). Reformulated gasoline (RFG) was implemented in the 1990’s to reduce NOx and VOC. Initially there was a significant difference between conventional gasoline and reformulated gasoline. As a result of the RFG program, there was an initial emissions reduction of approximately 17 percent. In the Cincinnati/Northern Kentucky Statistical area, the KDAQ encourages EPA to limit the scope of the non-attainment area to Boone, Kenton and Campbell counties which have the largest emission rates.


Mr. Alteri said that as of April 7, 2017, the EPA removed Ohio’s requirements for the sale of reformulated gasoline. He said there are no counties in Ohio subject to the 7.8 volatility requirement and dealers can sell conventional gasoline year-round. Because of the retail cost differential, Secretary Snavely petitioned Administrator Pruitt of the EPA to opt-out of the RFG program in Northern Kentucky. In addition, the Energy and Environment Cabinet is in the process of revising the State Implementation Plan (SIP) which will demonstrate that removing RFG requirements will not interfere with any Clean Air Act (CAA) requirement concerning attainment and reasonable further progress, or maintenance, of any current National Ambient Air Quality Standards (NAAQS).


In response to Representative Flood, Mr. Alteri stated that there have been significant improvements in conventional gasoline. There is only a marginal difference in the emissions from reformulated gas and conventional gas. During the last few years, other states have made the same request because conventional gas is now so much cleaner. The EEC feels comfortable with asking for the opt-out.


In response to Representative Gooch, Mr. Alteri stated that there are several formulations of boutique fuels. He said that in the past, some areas have experienced shortages because a refinery may not have been able to keep up with the demand. The Clean Air Act allows a ninety day transition period so the markets will not be disturbed – it cannot be an immediate change.


Representative Meeks stated that Jefferson County has unique concerns with price fluctuation, which does not seem to occur elsewhere in the Commonwealth. He said that citizens are concerned because of decisions by the local Air Quality Board to allow greater flexibility to chemical plants. In response, Mr. Alteri said the EEC has been tracking the fluctuation of gas prices in Louisville. He said it was hard to determine what market force was driving the price fluctuation. He also noted that the air quality in Louisville was continuing to improve.


Representative Meeks stated that even though the air quality seems to be improving, there are still issues related to the health of children. There seems be a rise in cancer and asthma. In response, Mr. Alteri said that their air quality information comes from monitors which show continued improvement.


Representative Meeks asked from a policy standpoint, how does Jefferson County interpret those findings to the constituents who see very real health related problems everyday with their children. In response, Mr. Alteri said that it boils down to the most cost-effective control strategy. He said it would cost approximately $48,000 to remove a ton of NOx, but at a power plant the cost would be around $1,400. Secretary Snavely explained that the presentation is dealing specifically with Northern Kentucky air quality. Each pollutant such as NOx and VOC has certain criteria standards under the ambient air quality standards.


In response to Representative Donohue, Mr. Alteri stated that the petition to opt-out of RFG requirements does not affect Louisville at this time.


Mr. Alteri said that the Cabinet will provide a State Implementation Plan (SIP) revision to the Environmental Protection Agency demonstrating that removing RFG requirements will not interfere with any CAA requirement concerning attainment and reasonable further progress, or maintenance, of any current NAAQs. The SIP revision will be made available for public comment for 30 days and after all the comments have been evaluated, the SIP will then be submitted to EPA for approval.


In response to Senator Schickel, Mr. Alteri said he did not have information regarding damage to small engines from using reformulated gas.


In response to Representative Linder, Mr. Alteri said that the transport of emissions is a regional problem.


In response to Representative DuPlessis, Mr. Alteri stated that the former governor in 1993 mandated that the region opt-in for reformulated gas. He said that using reformulated gasoline served as an air pollution control measure and initially the RFG program reduced NOx and VOC by 17 percent. In response to Representative DuPlessis, Mr. Alteri stated that air quality does have an impact on health, but he was not qualified to comment on what health issues could be related.


In response to Representative DuPlessis, Secretary Snavely stated that opting out of the RFG would not change the ambient air quality standards which are the numerical limits that have to be met.


In response to Representative Flood, Secretary Snavely states that the Cabinet is the delegated authority that implements the Clean Air Act, which is a federal act. The numerical limits that are implemented are from the state plan.


Power Plant Efficiencies and Current Developments

Rodney Andrews, Ph.D. PE, Director, University of Kentucky Center for Applied Energy Research discussed “Why power plant efficiency matters…” Mr. Andrews stated that power plants should be improved to lower emissions per kWh, less fuel per kWh, and lower cost per kWh. He said that there are two methods to improve power plant efficiency: high-efficiency, low-emissions technologies and advanced combustion technologies. He pointed out that the vast majority of the United States coal-fired electricity generating units are pre-1980. Some units are subcritical rather than going to the higher temperature and pressure units that are more efficient. The heat rate for Kentucky’s fleets are clustered around the 10,000 mark, which is typical for the U.S. fleet. If the heat rates can be improved, then it would reduce the amount of carbon dioxide being produced.


Dr. Andrews stated that some technical improvements such as, air ratio, stack gas temperature and steam conditions, could be made to a power plant without ripping it apart and putting in a new boiler. The technical improvements would help to increase the efficiency and therefore the amount of electricity produced per ton coal burned in an existing plant. Increased temperatures and higher pressures in the plant improves the efficiency. The older subcritical units need to install newer equipment. He said that by making the suggested improvements a plant could go from an efficiency of about 36 percent all the way up to 40 percent.


Dr. Andrews said that CAER was working toward improving supercritical plants. By changing the operating parameters, increasing the temperature and pressure cycle, it is possible to achieve 60 percent more efficiency. He stated that newer and better materials were needed to build plants so the plants could take the higher pressures and temperatures. Dr. Andrews said if the newer technical improvements were made to the plants, then the subcritical plants could be moved up to supercritical and see improvements of reductions in fuel and emissions of up to 20 percent. Modernizing and using the new technologies would have a profound impact on the emissions and fuel use of the plants and costs going forward. He noted that three of the advanced combustion technologies are the supercritical carbon dioxide cycle, pressurized oxyfuel or oxycombustion and the chemical looping combustion.


In response to Representative Castlen, Dr. Andrews said that pressure facilitates separation. There is a lot of work being done in membrane-based technologies that will reduce the amount of energy it takes to do the separation.


Dr. Andrews stated the Department of Energy is looking at a CO2 cycle that would allow the plant to use a different energy cycle than is done for straight combustion with oxygen. When this happens, it would allow efficient plants of a smaller size which will reduce capital costs. It would also allow plants to use lower temperatures and allow for the recovery of more heat. In looking at power plants for the future, this cycle would allow for the reduction of water needed.


Dr. Andrews stated that in terms of higher-efficiency, the regulatory framework should be based on increasing efficiency in older plants. The technical roadmap, produced by the International Energy Agency (IEA), shows recommendations for high-efficiency, low-emissions coal-fired power generation (HELE). The IEA recommends increasing the average efficiency by 4 percent by replacing older units with more modern supercritical or ultra supercritical units, improving performance of operating units and building new HELE state of the art power plants. The roadmap also recommends providing support for research, development, demonstration and deployment of advanced combustion and gasification technology including CO2 capture if necessary, improving efficiency of all operating plants, especially on lower rank coals and reducing the amount of water consumption. Dr. Andrews stated that efficiency improvements for reducing CO2 from new coal plants can be achieved through more sophisticated power plant designs. He said that the logical first step in reducing CO2 would be higher efficiency plants. This is a lower cost approach than carbon capture and storage. As an example, he said that today’s new units have 18 percent lower CO2 emissions than the average existing unit.


In response to Representative Flood, Dr. Andrews said that the University of Kentucky does not produce its own electricity. It buys its electricity. Representative Flood stated that from 10 years ago, UK now uses 80 percent gas and 20 percent coal. She said she is interested in other things that the CAER is using as a model.


Chairman Gooch stated that it was important to be concerned about reliable power because some power sources being pushed are not. Other countries are pursuing technology for the ultrasupercritical units that have greater efficiency.


In response to Chairman Gooch, Dr. Andrews said it could be possible once the ultrasupercritical units reach 40 percent or more that the emissions could be closer to what natural gas produces.


In response to Representative DuPlessis, Dr. Andrews stated that, on stack gas, there are programs that are seeking to improve air to air heat exchange.


In response to Representative York, Dr. Andrews said that CAER is not doing work indirectly on the materials necessary to withstand increasing pressures. He said that CAER works closely with the National Energy Technology Lab who is doing a lot of work in that area. He agreed that if alloys existed then there would be discussion about retrofitting some existing plants.


In response to Chairman Gooch, Dr. Andrews stated that CAER advocates for research, development and demonstration funding going to fossil energy particularly toward advanced combustion gas technology.


There being no further business, the meeting was adjourned.