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Lawmakers: State should be proactive in energy production

By Staff | Jul 26, 2013

West Virginia is seeking to diversify its energy portfolio while still taking advantage of its historically important fossil fuels, state officials said Monday.

During an interim meeting of the Joint Commission on Economic Development, lawmakers from both the House and Senate heard from John F. Herdolt Jr., director of the West Virginia Division of Energy, about the state’s five-year energy plan.

The 300-page document addresses West Virginia’s significance as an energy-producing state. It is ranked No. 3 for the amount of net electricity it contributes to the grid, Herdolt said. The state exports about 75 percent of its raw coal domestically and about 38 million tons internationally.

“This is incredibly significant from a West Virginia policy perspective, a domestic policy perspective, given the contribution West Virginia makes to the national energy supply,” Herdolt said.

Coal production has fallen by about 25 percent since 2001. The closing of coal-fired power plants has played a significant role in this decrease, Herdolt said.

“We don’t struggle over whether our state should use coal or not,” Herdolt said. “Other states, that’s not the case.”

Coal’s inability to compete with the price of natural gas has also affected production; however, Herdolt added, there is not a “compelling drive” for utilities to completely abandon coal for natural gas.

Sen. Ron Stolling, D-Boone, questioned why coal isn’t lucrative enough for even power plants inside West Virginia to use the state’s product. Herdolt said price is the problem. About 50 percent of the coal-fired power plants in the state use coal from other places, according to Stolling.

“It’s all price,” Herdolt said. “We had a lot of coal in storage. We had a mild winter last year, (and) we had a storage buildup.”

Some lawmakers were concerned by what they heard at the meeting. Sen. Craig Blair, R-Berkeley, said he wanted to hear more about utilizing coal for energy by way of liquification. Referring to a TransGas coal-to-liquid plant in Mingo County, Blair said he wonders why the state isn’t promoting it more.

“We’re talking about a lot of jobs in West Virginia, but we’re also talking about lower energy prices,” Blair said. “Low energy prices give opportunity for the ability to attract businesses to the state.”

Sen. Art Kirkendoll, D-Logan, said the state should be more proactive with projects like the coal-to-liquid plant.

“We’re sitting on our thumbs waiting for these investors to come in with $2 billion,” Kirkendoll said. “Why don’t we go get the investors?”

The commission also heard from John Christensen, a member of the Berkeley County Economic Development Authority and employee at Mountain View Solar in Berkeley Springs. Christensen was there to make a case for fostering of the solar industry in West Virginia.

Christensen referred to HB3080, which would provide a 1 to 1.5 percent carve-out for solar technology in the state’s energy portfolio.

“All the states that have this carve-out are doing great,” Christensen said. “We want to be big. … We want to be involved bringing more jobs to West Virginia.”

But lawmakers questioned the worth of solar with its lower energy production in the state and its cost. Blair, who said he is supportive of renewable energy, said there should be a significant return on investment from the state, and he said it’s just not there with solar.

“When government gets involved, and they start issuing tax credits … you’re subsidizing something,” Blair said. “It should be cost-effective to start with.”

While the Eastern Panhandle doesn’t have a direct role in much of the state’s energy production, Delegate Paul Espinosa, R-Jefferson, said he believes residents should know about energy issues.

“It’s certainly something I think we need to be informed about and be supportive of an energy industry that can be profitable for our state,” Espinosa said.