Gov. Steve Beshear on climate rules

7/29/2019 Gov. Steve Beshear on climate rules

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Governor's Conference on Energy and the Environment

Noon

Tuesday, Sept. 17, 2013

Lexington Convention Center

Gov. Steve Besheare

Its great to see such a nice crowd here at the Governors Conference on Energy and the

Environment.

As we in Kentucky continue to address complex challenges whose outcomes will havesignificant impact on our long-term successchallenges like education, a competitiveworkforce and the health of our peoplethe issues of energy, the environment and theeconomy rank near the top of the list.

After all, those three areas are intertwined.

Each affects the others each is conditional on the others and each presents problemswhose solutions cannot be fashioned without taking into account the effect of thosesolutions on the other areas.

To apply that truism to this conference, we cannot in good conscience create an energystrategy without studying closely the impact of that strategy on both the environment andthe foundations of Kentuckys economy.

Thats the message Sec. Peters and I have been delivering to Washington since the day Itook office.

Decisions and discussion on energy production and regulation must not happen in avacuum.

And thats especially true given Kentuckys demographics: With among the highest percapita poverty rates, our people are particularly vulnerable to both fluctuations in jobavailability caused by the health of our manufacturing industry and to increases in energycosts caused by regulation.

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Now, the Presidents announcement of his climate change agenda earlier this summerdidnt take anyone by surprise.

We expected it.

But what it did do was to add urgency to our need to understand the potential impacts ofgreenhouse gas regulations on our state.


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Weve not had our heads in the sand on climate issues.

In fact, a key driver behind the 2008 comprehensive energy plan we designed was the needfor Kentucky to be prepared for eventual federal action on greenhouse gas emissions.

At that time, Congress was considering cap-and-trade legislation.

We knew that even if cap-and-trade legislation did not succeed, there would be some sortof regulatory plan in due time.

So we wrote language into our plan stating quite clearly that federal action on climatechange was a matter of when, not if.

We also stressed that Kentuckys energy sector would become increasingly influenced bynational and global factors in the coming decades.

We are certainly witnessing that influence today.

Were aware that not everyone agrees on the science of climate change and thus onwhether greenhouse gas regulations are even necessary.

I happen to agree with Secretary Peters that climate change is occurring and that humansactually are playing a role in it.

But were not here to argue about whether climate change is happening or not, or to whatextent humans are responsible.

Illleave that to the scientists and we have a few of them here at our conference thisyear.

Regardless of anyones beliefs, the nation is moving forward on addressing the issue, andit will continue to do so, even beyond the current administration.

There will be federal regulations, and Kentucky will be impacted, and what we must donow is chart a course that allows our state to not only survive but also thrive given thereality of pending federal rules.

As most of you know, the federal Environmental Protection Agency will be proposingstandards for new units later this week and these standards will largely inform us as tohow EPA will proceed with rules for existing power plants.

Now the EPA has indicated they will be listening to states throughout the process.

I intend to make sure they keep their word on this.

Because we have a lot at stake.


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As the 3rd largest coal-producing state and one that relies on coal for more than 92 percentof our electricity, we want our voice to be heard.

But for our voice to be taken seriously in the national dialogue, we have to acknowledgeour commitment to addressing greenhouse gas emissions, while stressing the need for a

rational, flexible regulatory approach.

On their part, the feds have to understand that taking coal completely off the table in ournations energy-generation mixto negate it as an energy sourceis not rational, nor willit help us achieve our nations climate objectives.

That is the task we have before usmaking the case for a truly all-of-the-above nationalenergy policy not one that makes people on the West coast happy or in the Northeasthappy, but one that works for all states, given their unique energy strengths and economicbase.

Its important that states retain the flexibility to continue implementing state-drivenpolicies and initiatives under any federal plan to reduce greenhouse gas emissions.

More importantly, policies to reduce greenhouse gas emissions must account for thevarying resource base across states.

As the nation benefits from a return to domestic manufacturing, federal policies must alsobe prudent in recognizing that affordable and stable energy prices are paramount forenergy intensive industries.

Concerns about price are real.

For example, as you will be hearing from one expert at this conference, adding carboncapture to an existing coal plant using current technologies results in an 80 percent increasein the cost of electricity.

It also reduces the power load by 30 percent, meaning 30 percent of the energy output ofthe plant is redirected to the control technology, creating in effect an energy penalty.

Those numbers hurt.

And technologies that would reduce the cost and energy penalty are not expected untilaround 2020seven years from now.

We need flexibility on time to allow technology to catch up.

Some states depend on coal for a large share of their electricity generation, others onnatural gas, and others on nuclear.


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Each state should be able to play to its resource strengths while also achieving importantenvironmental and economic development objectives.

These regional resource differences and differences among the 50 states in their electricitygeneration portfolios must be consideredfor economic, energy and national security

purposes.

One approach will not work for every state, and certain states or regions should not carrythe burden for the entire United States.

Were well aware that Kentuckys per capita carbon footprint is 50 percent higher than the

national average.

So during the last several years, weve initiated a number of policies and programs toreduce our emissions, from all sectors.

As I said earlier, a key driver of our 2008 energy plan was the desire to prepare for federalclimate regulations and policies.

To build on the energy plan, we convened the Kentucky Climate Action Plan Council targeted federal stimulus funding toward effective energy efficiency and renewable energyprojects and more recently launched the Stimulating Energy Efficiency in Kentuckyinitiative.

The energy plan stressed the importance of energy efficiency as the most affordable toolwe have to meet growing energy demands while reducing emissions.

Programs that have focused on K-12 schools have been particularly successful.

For example, in March 2008, Kentucky had only a dozen ENERGY STAR schools.

Today we have 227 schools that have achieved this standard.

One of these schools, Richardsville Elementary in Warren County, is widelyacknowledged as the nations first net-zero energy public school.

Thats impressive.

Here in state government, weve been able to save approximately $1.13 million a yearthrough the Commonwealth Energy Management and Control System.

By design, that system has an ongoing process of monitoring, reporting and refinementwhich has an expected internal rate of return of 20 percent, making it extremely sustainablefinancially, despite difficult budgetary conditions.

We will continue to build on these successes, and expand them in the public sector.


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To illustrate the collective appreciation for energy management, a number of initiativeshave involved a wide range of stakeholders through extensive planning and policydiscussions.

One example is the Stimulating Energy Efficiency in Kentucky initiative.

This 2-year stakeholder process, involving more than 80 people and entities, helped toidentify policies and programs to achieve a 1 percent annual electric energy savings goalper year.

The resulting Action Plan presents 27 recommendations for programs and policyimplementation.

The bottom line is we know that we have an obligation to address greenhouse gasemissions, and our goal has been to do so in a meaningful and affordable manner.

We want to make sure we dont carry the bulk of the burden under federal rules.

Doing so hurts our state, and it wont achieve the Presidents stated goal of reducingemissions from 2005 levels 17 percent by 2020 and 80 percent by 2050.

Since our goal is to reduce atmospheric levels of carbon dioxide and since there aremultiple sources, not just utilities, then we should take a truly holistic approach.

There is a better way to achieve the Presidents goal than merely placing a largelyunachievable target for existing coal-fired plants that will force utilities to close thoseplants and build new natural gas generation.

Thats not in our states best interest, and its not in the nations best interest.

That is the message that Sec. Peters and I will continue to takeaggressively andfrequentlyto Washington.

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Gov. Steve Beshear on climate rules