SCR 16-REQ GOV TO INVESTIGATE COAL RESOURCES  3:31:44 PM CHAIR GIESSEL announced SCR 16 to be up for consideration. BRUCE CAMPBELL, staff for Senator Pete Kelly, sponsor of SCR 16, explained that the resolution requests the Governor to keep coal in the dialogue. 3:33:05 PM SENATOR FAIRCLOUGH joined the committee. MR. CAMPBELL said that Alaska is blessed with vast quantities of coal: trillions of tons on the North Slope, billions of tons in the Interior, and tens of billions of tons in Cook Inlet. It is some of the cleanest coal on the planet and a cheap way to create electricity. 3:33:50 PM LORILEI SIMON, Vice President, External Affairs, Usibelli Coal Mine, said Usibelli is the only operating coal mine in Alaska and supplies six coal burning power plants. They appreciate the continued dialogue of coal being part of the energy mix in the state. She said legislators are considering major policy initiatives on energy and potential solutions for the energy problems that Alaskans face, and coal remains one of the cheapest energy sources in the Interior. There is an opportunity for coal to expand and have a greater presence on the Railbelt grid and other areas of Alaska, as well. MS. SIMON said the McDowell Report that came out last year analyzes the energy and economic impacts of coal to the Interior. It focuses on the Interior, because that is where coal is used in Alaska. Coal is half the cost of natural gas, one- third the cost of naphtha and one-sixth the cost of diesel. So, without coal on the grid the Interior ratepayers would see more than a $200 million annual increase in their energy rates. SENATOR MICCICHE asked what that increase would be on a percentage basis. MS. SIMON answered about 20 percent. She said it is also important to understand how coal impacts the region's economy. For example, in 2012 Usibelli spent $72 million with 400 different Alaskan businesses. That's 577 Interior jobs and a payroll of about $44 million a year. The McDowell Report said that would mean 692 jobs and $52 million in payroll statewide. 3:37:40 PM SENATOR FRENCH asked how much coal is mined every year. MS. SIMON replied about 2 million tons per year; this year they will produce about 1.8 million. Half stays in state for the coal burning power plants and the other half is exported to Chili, South Korea, and Japan. SENATOR FRENCH asked how much coal is in the ground at Usibelli. MS. SIMON answered hundreds of years of mining; there are about 700 million tons of known reserves in Healy. SENATOR FRENCH asked how much could be produced there if Alaska suddenly tripled the amount of coal it was using. Could the Healy mine provide that coal? MS. SIMON answered yes. SENATOR FAIRCLOUGH asked if additives have to be put in the coal before selling to different folks. She did a tour of a coal plant at Eielson Air Force Base and was told that the federal government was requiring treatment of coal and that the additives were actually driving the fuel costs up significantly. 3:39:32 PM MS. SIMON said nothing is added at the mine; probably the power plants would be a better source of the information. SENATOR BISHOP asked if coal ash was being trucked to Fairbanks and used in blocks and concrete. MS. SIMON answered yes; coal ash is considered a usable by- product and a quality fill material. Coal ash is used in a lot of the roads and parking lots in Fairbanks. 3:40:29 PM GENE THERRIAULT, Alaska Energy Authority (AEA), Fairbanks, Alaska, explained that AEA prepared the fiscal note on behalf of the administration with the thought that if the resolution were to pass that the direction would probably come to AEA. They anticipate $75,000 at a high level view, but the wording in the resolution is fairly broad and that could be updated as decisions are made. Regarding Senator Fairclough's question about additives, it's very likely she remembered that when the coal is actually pulverized and combusted, in order to meet federal air emissions selected catalytic reduction (SCR) or selected non catalytic reduction (SNCR) agents are injected into the flu stream so the particles that may impact PM2.5 or whatnot could be taken out of the exhaust stream. CHAIR GIESSEL asked if adding the catalyst could be termed the "clean coal process." MR. THERRIAULT answered that he was at the edge of not knowing what he was talking about. With the Healy Clean Coal Plant the method of combustion and the temperatures at which the combustion took place were different. Some of the older power plants have just the injection of urea to help with reduction of "socks and knocks." SENATOR FAIRCLOUGH asked if a Finance Committee referral had been added to this bill. CHAIR GIESSEL answered not that she knew of. SENATOR BISHOP asked if AEA had the in-house expertise to do this or would they have to go to a third party. MR. THERRIAULT replied that it would be a combination of some of the regional planning work they are doing in-house, but with an economic consultant doing some additional work to "really crunch the numbers" to be able to do some comparisons. SENATOR BISHOP asked if he had those people at his fingertips. 3:44:59 PM MR. THERRIAULT replied that they had contracted with UAA Institute of Social and Economic Research (ISER) in the past and are now contracting with the UAA Automotive Service Educational Program (ASEP). Because they are a state entity, that is easier than going out through a competitive process. 3:45:45 PM ALAN PARKS, representing himself, Homer, Alaska, said he had been a commercial fisherman since 1975 and there is no such thing as clean coal. He opposed SCR 16. Healthy fish are important to him as a fisherman and a father; he hopes to pass his fishing business on to his children. Spending $75,000 on studies for more coal-fired plants is going backwards. Science has settled it that climate change is happening and humans are causing a significant part of it. Aside from the climate issue, mercury is a big problem with coal combustion. Governor Palin put fish consumption advisories around certain large halibut and other fish due to mercury contamination. Now the state has a point system for how much halibut kids and pregnant women should eat. While Alaska coal may have relatively lower mercury levels compared to other places, it also has low BTU value, so you need to burn more. He concluded that coal is an energy of the past and Alaska has a lot of opportunity for alternative and renewable energy. It should be a leader in clean energy that protects our wild fisheries and the people in communities who rely on them. 3:48:06 PM SENATOR DYSON asked if it's fair to assume that no matter what information came forward about using coal in an environmentally sensitive way that he wouldn't change his mind. MR. PARKS said it's really the technology and the process of extracting coal [safely] that is a long way out and we should spend our energy and be a leader into renewable resources technologies. 3:48:45 PM SENATOR MCGUIRE joined the meeting. 3:49:27 PM SENATOR FAIRCLOUGH said she serves on the Alaska's Renewable Energy Advisory Board and asked with five active volcanoes, did he have any idea how much particulate matter is ejected in an eruption. MR. PARKS answered that he is not a scientist, but humans are the main cause of CO in the atmosphere. The natural eruptions 2 that occur from volcanoes is really not the issue on the table. SENATOR MICCICHE said he is a big renewable fan going forward. He said that part of the study would likely identify scrubbing coal to compete with other hydrocarbons (natural gas and other cleaner forms of energy) that they both use every day. Would he be more likely to support the resolution if the technologies were otherwise environmentally equal? MR. PARKS said that was an interesting question, but he thought efforts should be geared toward transitioning with natural gas to other fuels (wind, geothermal and tidal energy). Coal has emission problems as well that destroys habitat that fish need. It's not just what gets into the air; it's how it gets into the plants. SENATOR MICCICHE said he agreed with many of his thoughts, but he was truly interested in understanding what it would take for coal to be environmentally neutral with other sources of hydrocarbon as the renewable technologies get further developed. 3:54:06 PM CHAIR GIESSEL said renewable energies are wonderful and certainly winds seem so great; there are 3-5 tons of copper in every wind turbine. 3:54:24 PM SUE MAUGER, Science Director, Cook Inlet Keeper, Homer, Alaska, opposed SCR 16. Her focus had been on salmon streams around Southcentral Alaska for the last 14 years and recently on stream temperatures, specifically how current stream temperature patterns in Cook Inlet might change in the future and how these changes might impact salmon. Based on compelling evidence from the climate scientists around the world and from Alaskan researchers, future climate change will result in not just warmer summer temperatures in Southcentral Alaska, but warmer winter temperatures, which will result in more rain on snow events and a reduced snow pack. With less water stored in our hills during the winter our summer water levels will be lower, and since a little bit of water warms up a lot faster than a lot of water, our summer water temperatures in non-glacial streams will raise that much faster. Based on five years of research in Cook Inlet salmon streams, many of the Kenai Peninsula and Matsu streams are already at temperatures known to be stressful to salmon. When she has talked about these climate change outcomes in the past they seemed very abstract, but we are now experiencing a remarkably warm winter with high winter temperatures, rain, lack of snow, the vagueness of climate change impacts are more tangible. There is still much to learn about basic ocean dynamics and fresh water habitat requirements for salmon, and we now must add ocean acidification and changing ocean and river temperatures into the challenge of obtaining sustainable fisheries. One thing is certain, the release of more carbon dioxide, which will occur from new coal development will fast- forward the timeline for the most drastic and dramatic of climate change impacts. "For Alaskans living in the state disproportionately impacted by climate change, coal is a loser." MS. MAUGER said she had sent some documents as evidence of climate change across the world, some information about how to understand the patterns expected for Alaska, and an executive summary of their five-year statistics report of stream temperatures in Cook Inlet from last fall. 3:57:26 PM SENATOR MICCICHE asked if she sent her studies to the committee. MS. MAUGER said they were faxed. 3:57:48 PM MARGO REVEIL, Jakolof Bay Oyster Co., Homer, Alaska, opposed SCR 16. She and her husband own an oyster farm in Kachemak Bay and are deeply concerned about changes due to ocean acidification, which is directly linked to increased carbon pollution in our atmosphere. And as more carbon enters the atmosphere, our oceans absorb more, which then forms acids that eat away at shellfish. Their spats are especially vulnerable to increased acidity levels. Spending money to study more coal-fired plants strikes her as a very bad idea, because coal is a leading source of carbon pollution. The greatest threat to her and her family is not energy costs; shaving a few dollars off their energy bill will not vastly improve their quality of life, but ocean acidification directly threatens their livelihood. She cited where ocean acidification was implicated in a die-off of 90 percent of the mature stock of scallops at a B.C. shellfish farm. 4:00:22 PM CHAIR GIESSEL, finding no further questions, closed public testimony. MR. CAMPBELL concluded that coal has had a long and bi-partisan support in the state and two weeks ago he met with Governor Cowper in Fairbanks and discussed alternative methods for coal plants that would have no CO emissions. They would actually 2 bottle it up and sell it to Hilcorp for enhanced hydrocarbon removal in Cook Inlet. CHAIR GIESSEL thanked him and said they looked forward to hearing from Senator Kelly on Wednesday and would hold SCR 16 until then.