03-2512. Record of Decision, Kentucky Pioneer Integrated Gasification Combined Cycle Demonstration Project, Trapp, Clark County, KY

AGENCY:

Department of Energy.

ACTION:

Record of Decision.

SUMMARY:

The Department of Energy (DOE) has prepared an environmental impact statement (EIS) (DOE/EIS-0318) to assess the environmental impacts associated with a proposed project that would be cost-shared by DOE and Kentucky Pioneer Energy, LLC (KPE) under DOE's Clean Coal Technology (CCT) Program. The project would provide a commercial scale application of a modified version of the British Gas Lurgi (BGL) integrated gasification combined cycle (IGCC) technology utilizing a co-feed of coal and Refuse Derived Fuel (RDF). The proposed project location is a previously disturbed site owned by East Kentucky Power Cooperative (EKPC) approximately 3.2 kilometers (2.0 miles) west of Trapp, Kentucky. After careful consideration of the potential environmental impacts, along with program goals and objectives, DOE has decided that it will provide approximately $60 million in Federal funding support (about 15% of the total cost of approximately $414 million) to design, construct, and demonstrate the commercial scale operation of the technology proposed by KPE.

FOR FURTHER INFORMATION CONTACT:

To obtain additional information about the project or the EIS, contact Mr. Roy Spears, National Environmental Policy Act (NEPA) Document Manager, U.S. Department of Energy, National Energy Technology Laboratory, 3610 Collins Ferry Road, Morgantown, WV 26507; telephone: [phone]; fax: [phone]; or e-mail: [e-mail]. For general information on the DOE NEPA process, contact Ms. Carol M. Borgstrom, Director, Office of NEPA Policy and Compliance (EH-42), U.S. Department of Energy, 1000 Independence Avenue, SW., Washington, DC 20585; telephone: [phone]; leave a message at [phone]; or fax: [phone].

SUPPLEMENTARY INFORMATION:

DOE has prepared this Record of Decision pursuant to Council on Environmental Quality (CEQ) regulations for implementing the procedural provisions of NEPA (40 Code of Federal Regulations [CFR] parts 1500-1508) and DOE NEPA regulations (10 CFR part 1021). This Record of Decision is based on DOE's Final EIS for the Kentucky Pioneer Integrated Gasification Combined Cycle Demonstration Project (DOE/EIS-0318, December 2002).

NEPA Strategy for the Clean Coal Technology Program

DOE developed a strategy for the CCT Program that includes consideration of both programmatic and project-specific environmental impacts during and after the process of selecting a proposed project. This strategy, called tiering (40 CFR 1508.28), refers to the consideration of general issues in a broader EIS (e.g., for the CCT Program), followed by more focused environmental impact statements or other environmental analyses that incorporate by reference the general issues and concentrate on those issues specific to the proposals under consideration.

As part of the NEPA strategy, the EIS for the Kentucky Pioneer IGCC Demonstration Project tiers from the Clean Coal Technology Programmatic Environmental Impact Statement (CCT PEIS) that DOE issued in November 1989 (DOE/EIS-0146). The CCT PEIS evaluated two alternatives, the No Action Alternative, and the Proposed Action. The No Action Alternative assumed the CCT Program would not continue and that conventional coal-fired technologies with flue gas desulfurization and nitrogen oxide controls that met New Source Performance Standards (NSPS) would continue to be used. The NSPS (40 CFR part 60) were established under the 1970 amendments to the Clean Air Act (CAA) to adopt emission standards for major new industrial facilities. The Proposed Action assumed that the clean coal projects would be selected and funded, and that successfully demonstrated technologies would undergo widespread commercialization by the year 2010.

The CCT Program began in 1986 as a collaborative effort among the federal government, state governments, and industry representatives to develop environmentally friendly solutions for using the Nation's abundant coal resources. The Program's goal is to demonstrate innovative technologies emerging from global engineering laboratories at a scale large enough to demonstrate the commercial merit of the new processes. Originally, the CCT Program was a response to concerns over acid rain, which is formed by reaction of water with oxides of sulfur and nitrogen emitted by coal-burning power plants. Industry-proposed projects were selected for further consideration through a series of five national competitions aimed at attracting promising technologies that had not yet been proven commercially.

The Kentucky Pioneer IGCC Demonstration Project was selected for further consideration under the fifth solicitation (CCT-V) authorized under Pub. L. 102-154. The CCT Program relies on substantial funding from sources other than the federal government, as the participant supports the majority of the project cost. The Department of the Interior and Related Agencies Appropriations Act of 1986, a section of Pub. L. 99-190, introduced and defined cost-sharing for the program. The participant must agree to repay the government's financial contribution, with the basis for the repayment negotiated between the participant and the government, to ensure that taxpayers benefit from a successful project. Congress has directed that projects in the CCT Program should be industry projects assisted by the government and not government-directed demonstrations.

EIS Process

On April 14, 2000, DOE published in the Federal Register (65 FR 20142) a Notice of Intent (NOI) and Notice of Floodplain Involvement for the Kentucky Pioneer IGCC Demonstration Project. The NOI announced a public scooping meeting and invited comments and suggestions on the proposed scope of the EIS. DOE held a public scoping meeting in Trapp, Kentucky, on May 4, 2000, at which 36 individuals signed in and five participants provided a total of 19 oral comments. Three individuals submitted eight written comments during the public comment period, which ended May 31, 2000. The comments helped DOE to establish the issues to be analyzed in the EIS and the level of analysis warranted for each issue.

On November 16, 2001, DOE published a Notice of Availability for the Kentucky Pioneer IGCC Demonstration Project Draft EIS in the Federal Register (66 FR 57717). The original comment period for the Draft EIS began on November 16, 2001, and would have ended on January 4, 2002. To accommodate requests from the public, DOE extended the public comment period on the Draft EIS to January 25, 2002. The total comment period was 71 days. Public meetings were held on December 10, 2001, in Lexington, Kentucky, and on December 11, 2001, in Trapp, Kentucky. DOE received 118 oral comments and 255 written comments, which helped to improve the quality and usefulness of the EIS.

In December 2002, DOE issued the Final EIS and the Environmental Protection Agency published a Notice of Availability of the Final EIS in the Federal Register on December 13, 2002 (67 FR 76740). In the Final EIS, DOE considered and, as appropriate, responded to public comments on the Draft EIS. Among the issues raised in the comments were concerns about (1) The applicability of and compliance with state and local solid waste statutes; (2) the need for more details of the facility and BGL process; (3) the potential of the vitreous frit (a solid waste stream) to be hazardous; (4) the need for power in central Kentucky; (5) the impacts of the related transmission line; (6) impacts to the Kentucky River; (7) impacts of plant operation on air resources, including acid rain and greenhouse gases; (8) impacts of facility discharges on local drinking water; (9) potential impacts from spills; (10) impacts to the aesthetic and scenic resources of the area; (11) impacts to Kentucky Highway 89 and local traffic levels; and (12) cumulative impacts of the proposed project and other potential local developments.

Project Location and Description

The Kentucky Pioneer IGCC Demonstration Project facility will be located in Clark County, Kentucky on a 121-hectare (300-acre) site within the 1,263-hectare (3,120-acre) J.K. Smith Site, owned by EKPC. The J.K. Smith Site is 34 kilometers (21 miles) southeast of the city of Lexington, 13 kilometers (8 miles) southeast of the city of Winchester, and 1.6 kilometers (1 mile) west of the community of Trapp, Kentucky. The plant will be located approximately 1.6 kilometers (1 mile) west of the J.K. Smith Site boundary closest to the community of Trapp. The 121-hectare (300-acre) project site was previously disturbed by preliminary construction activities in the mid-1980s, when EKPC began construction of the J.K. Smith Power Station. EKPC had completed preliminary grading, primary foundations, fire protection piping, and rail spur access infrastructure installation before the project was canceled in the early 1990s, when the projected demand for electricity in the area failed to materialize. The Kentucky Pioneer IGCC Demonstration Project will be built on the portion of the site that was previously cleared and graded. The site is reached by Kentucky Highway 89 and accessed through a gated perimeter fence and access road. The access road is approximately 1.6 kilometers (1 mile) long from Kentucky Highway 89 to the project site. Plant access by rail would be from a freight rail line owned by CSX Transportation, Inc., which crosses the eastern side of the station. An existing railroad loop approximately 5 kilometers (3.1 miles) long will be used for raw material delivery and product transportation around the 121-hectare (300-acre) project site.

To support the project, EKPC plans to construct a new 138-kilovolt (kV) electric transmission line. The proposed line would extend northeasterly from the project site to the Spencer Road Terminal in Montgomery County, Kentucky, where it would interconnect with the existing local power grid. This transmission line would provide additional capacity adequate to accommodate the addition of the Kentucky Pioneer IGCC Demonstration Project and is consistent with the master plan for transmission outlets required for existing and future generation at EKPC's J.K. Smith Site. The proposed new transmission line would be approximately 27 kilometers (17 miles) in length, though the specific route for the line has yet to be determined. However, in the FEIS, DOE has examined, as appropriate, the general impacts that would be expected from this type of line.

The U.S. Department of Agriculture, Rural Utility Service (RUS), has approval authority for the capacity upgrade of the transmission line. Under RUS NEPA policies and procedures (7 CFR part 1794), RUS will prepare appropriate NEPA analysis of the impacts associated with the transmission line.

The proposed project will be comprised of two parts: the “power island” and the “gasification island.” The power island will be comprised of two combined cycle turbine units that would generate most of the electricity at the site. These units could run on a natural gas feed or a synthesis gas (syngas) feed generated from Refuse Derived Fuel (RDF) pellets and coal in BGL gasifier units. The gasification island will consist of the following major facility components: (1) RDF pellet and coal receipt and storage sheds; (2) gasification plant; (3) sulfur removal and recovery facility; and (4) air separation plant. The production of syngas in the BGL process occurs in the gasification plant and utilizes the sulfur removal and recovery facility and air separation plant.

The syngas firing process consists of the following four steps: (1) Generation of syngas from RDF pellets and coal reacting with steam and oxygen in a high temperature chemically reducing atmosphere; (2) removal of contaminants, including particulates and sulfur in the sulfur removal and recovery facility; (3) clean syngas combustion in a gas turbine generator to produce electricity; and (4) recovery of residual heat in the hot exhaust gas produced by the gas turbine. The residual heat will be used to generate steam in a heat recovery steam generator that produces additional electricity in a steam turbine, which is the combined cycle aspect of the plant.

The solid fuel source for the Kentucky Pioneer IGCC Demonstration Project will be high sulfur coal and RDF pellets. RDF pellets will be procured from a RDF pellet manufacturer. The two fuel sources will be shipped by rail directly to on-site storage. At a minimum, 50 percent of the feed will consist of high-sulfur coal from the Kentucky region during the one-year demonstration period.

KPE intends to use high sulfur coal for direct delivery to the project site. Western Kentucky coal is generally considered the high-sulfur coal region; however, Eastern Kentucky may also provide high-sulfur coal supplies. Project economics will determine the supplier and the type of coal supplied. The facility will require approximately 1,125 kilograms (2,500 tons) per day of coal, which equates to about 25 railcars per day. Compared to entirely coal-fired electric generation technologies, this project will require less coal consumption to generate 540 MW.

RDF is manufactured in a process that includes controlled steps for the processing of municipal solid waste (MSW) or common household waste. RDF pellets are stable and durable because they are made with relatively low moisture content. The process results in pellets with a relatively uniform size and shape and generally uniform energy content. RDF pellets also have a relatively low ash content and good handling and storage life before use. The RDF pellets will be procured from an existing manufacturer. RDF pellets are typically extruded into a uniform dense shape that makes them well suited to transportation and storage. The Kentucky Natural Resources and Environmental Protection Cabinet has determined that the pellets to be used in this facility qualify as RDF.

The production of syngas in the Kentucky Pioneer IGCC Demonstration Project facility will occur in a carefully controlled environment. Gasification technology is known to produce a very consistent syngas product, regardless of the variability of the feed. Though the RDF pellet composition is expected to be relatively constant, slight variations in the composition would have no effect on the composition of the syngas produced. The resulting syngas is expected to be 55 percent carbon monoxide (CO), 30 percent hydrogen gas, 10 percent carbon dioxide, 5 percent methane and ethane, with a relatively small amount of sulfur in the form of hydrogen sulfide.

Alternatives

Congress directed DOE to pursue the goals of the CCT Program by means of partial funding of projects owned and controlled by non-federal sponsors. This statutory requirement places DOE in a much more limited role than if the federal government were the owner and operator of the project. In the latter situation, DOE would be responsible for a comprehensive review of reasonable alternatives for siting the project. However, in dealing with an applicant, the scope of alternatives is necessarily more restricted because DOE must focus on alternative ways to accomplish its purpose that reflect both the application before it and the role DOE plays in the decisional process. It is appropriate in such cases for DOE to give substantial weight to the applicant's needs in establishing a project's reasonable alternatives.

Based on the foregoing principles, the only reasonable alternative to the proposed action is the no-action alternative. The EIS includes two no-action alternative scenarios, which are discussed below. Other alternatives that did not meet the goals and objectives of the CCT Program, or the applicant, were dismissed from further consideration.

Proposed Action

Under the Proposed Action, DOE will provide, through a Cooperative Agreement with KPE, financial assistance for the design, construction, and operation of the proposed Kentucky Pioneer IGCC Demonstration Project. All associated facilities for the power and gasification islands, including fuel storage, rail car unloading sites, and air emissions control equipment, will be constructed under the Proposed Action. In addition, EKPC plans to construct an electric transmission line. The proposed project would be designed for at least 20 years of commercial operation, beginning with a one-year CCT Program demonstration period. The proposed project would cost $414 million, of which DOE's share would be approximately $60 million, or 15 percent.

The proposed project includes the design, construction, and operation of BGL gasification technology and associated facilities to provide a fuel source for the two planned turbines. Under the Proposed Action, the turbines would be fired using the syngas product generated by the gasification technology. The Proposed Action would demonstrate the following innovative technologies: (1) Gasification of RDF pellets and coal; and (2) use of a syngas product as a clean fuel in combined cycle turbine generator sets. This project would be the first commercial scale application of this modified co-feed version of the BGL gasification technology in the United States. The facility is expected to be operational for 20 years, with the first year committed to the demonstration of these technologies.

No Action Alternative

An analysis of the No Action Alternative is included in the EIS, as required under NEPA. Under No Action Alternative 1, DOE would not provide $60 million in cost-shared funding for the project and no plant would be constructed as a result. DOE believes that this scenario is unlikely to occur but it is presented in the EIS because it serves as an analytical baseline for comparison of the environmental effects of the project.

Under No Action Alternative 2, DOE would not provide $60 million cost-shared funding for the project; however, KPE would construct a natural gas-fired combined cycle plant, the power island portion of the overall project without the gasification component, at the proposed project location. This alternative includes all associated facilities required for the operation of the power island, including administrative offices, on-site utilities, steam-generating units, required air emissions control equipment, and wastewater treatment equipment. All water for the plant would be supplied from existing EKPC intake structures at the J.K. Smith Site. The EKPC transmission line would also be required to support this action.

Major Environmental Impacts and Mitigation Measures

No Action Alternative 1 would not result in any adverse environmental impacts because no construction or change in activities would occur. Under No Action Alternative 1, however, beneficial socioeconomic impacts (jobs and revenue) would not be created and needs for electric power capacity in the region would not be supplied. This alternative would not meet CCT Program goals.

This section summarizes the expected environmental impacts of the Proposed Action and No Action Alternative 2 on potentially affected environmental resource areas and discusses mitigation measures. The resource areas include: land use, socioeconomics, cultural resources, aesthetic and scenic resources, geology, air quality, water resources and water quality, ecological resources, noise, traffic and transportation, occupational and public health and safety, and waste management.

Land Use

No Action Alternative 2 would disturb approximately 5 to 8 hectares (12 to 20 acres) of previously disturbed land for project construction activities. The foundation of the power island would occupy approximately 4.8 hectares (12 acres). All land use impacts from No Action Alternative 2 would also occur under the Proposed Action. In addition, the Proposed Action would disturb a maximum of 2.8 hectares (7 acres) of previously disturbed land for storage and rail car loading and unloading facilities. No effects are expected on surrounding land uses or local land use plans and policies under either alternative.

Socioeconomics

No Action Alternative 2 would employ an average of 120 workers, with a maximum of 200, during construction. This would indirectly lead to the creation of another 138 to 230 jobs depending on the duration of peak construction levels. The facility operation would require 24 employees for the 20-year life cycle of the plant; an additional 54 jobs would be created indirectly as a result.

The Proposed Action would employ an average of 600 workers, with a maximum of 1,000 during construction. This would indirectly lead to the creation of another 690 to 1,150 jobs depending on the duration of peak construction levels. The 20-year demonstration and operation period would require 120 employees; an additional 270 jobs would be created indirectly as a result. Property values for land tracts in the viewshed of the gasifier units may decrease.

Cultural Resources

The J.K. Smith Site has been previously disturbed and cultural resources were identified and excavated during the initial development of the discontinued J.K. Smith Power Station in the early 1980s. The Kentucky State Historic Preservation Office (SHPO) has confirmed that the Section 106 Review process was completed for the Kentucky Pioneer IGCC Demonstration Project's Area of Potential Effect in December of 1980. The terms of the Memorandum of Agreement drawn up in conjunction with the Advisory Council on Historic Preservation for the J.K. Smith Station have been met under the Kentucky Pioneer IGCC Demonstration Project and no further identification, evaluation, mitigation, and consultation activities are required. In accordance with 36 CFR 800.4(d), the SHPO finds that there is no effect on historic properties from No Action Alternative 2 or the Proposed Action.

Deeply buried archaeological resources, including human remains, could be discovered during construction activities. To minimize the potential adverse effects to unanticipated discoveries during construction, basic information will be provided to workers involved in ground disturbing activities regarding the recognition of archaeological resources and Native American cultural items and the procedures to be followed upon discovery. The construction contractor will be required to assure that discovery procedures are implemented in all applicable cases.

Aesthetic and Scenic Resources

The combined-cycle units that would be constructed under No Action Alternative 2 and the Proposed Action would not be visible from outside the site area and would have no visible plumes associated with them. The gasifier facility stacks installed under the Proposed Action would be approximately 65 meters (213 feet) tall and would be visible from as far away as Winchester, located 13.3 kilometers (8.3 miles) northwest of the project site. Fugitive dust emissions may temporarily affect visibility during construction at the site and would be mitigated with standard dust control measures. The visibility of the plumes associated with the Proposed Action would be dependent on weather and wind pattern; however, they would likely be visible from up to 12.8 kilometers (8 miles) from the facility location.

Geology

Minor impacts on the geologic resources, notably loss of prime farmland soils, are expected from the construction and operation of the No Action Alternative 2 and the Proposed Action. However, the impacts are expected to be minor, because the site has been previously graded and disturbed. The Proposed Action would have a slightly greater impact on geologic resources due to the additional support facilities required for operation. Disturbances associated with construction would be mitigated with runoff, erosion, and dust controls. Geologic hazards are not expected to have any effects on either No Action Alternative 2 or the Proposed Action.

Air Resources

Air emissions would be similar in quantity under No Action Alternative 2 and the Proposed Action. Increases would occur in annual air emissions of nitrogen oxides (NO_X), carbon monoxide (CO), sulfur oxides (SO_X), particulate matter, and reactive organic gases. Under the Proposed Action, the greatest quantity of emissions would be from NO_X (approximately 1,100 tons per year [TPY]), CO (approximately 800 TPY), and SO_X (approximately 500 TPY). The Proposed Action would also result in increases in hazardous air pollutant emissions of approximately 9 TPY for all hazardous pollutants combined. More than half of this figure is attributable to the increase in nickel emissions; however, the overall increase would present little risk to human health and the environment (see Occupational and Public Health and Safety section, below). Pollutant emissions would be well within applicable standards; however, annual average emissions for NO_X and particulate matter would approach the Prevention of Significant Deterioration (PSD) Rule for Significant Impact Level Limits. The levels of particulate matter would also approach the 24-hour PSD limits.

Emission control requirements (equipment design requirements and operational procedures requirements) for the proposed project have been established by the Kentucky Division for Air Quality and the EPA as part of the PSD permit approval process. Emission controls included as part of the PSD permit include enclosed storage of raw materials; fabric filters on limestone storage silos; covered conveyors for raw material transfer; drift eliminators on the cooling tower; and steam injection or other combustion controls on the gas turbines. During construction activities, fugitive dust will be minimized using standard dust control measures such as watering. Railcars will be covered to minimize fugitive dust from coal and RDF pellet transport to the site.

Water Resources

No Action Alternative 2 would require 3.8 million liters per day (MLD) (1 million gallons per day [MGD]) of surface water from the Kentucky River for facility operations and would generate less than 1.5 MLD (0.4 MGD) of wastewater. The Proposed Action would require 15.1 MLD (4 MGD) of surface water from the Kentucky River for facility operations and would generate 1.5 MLD (0.4 MGD) of wastewater. Treated wastewater would be discharged into the Kentucky River. The remaining 13.6 MLD (3.6 MGD) would be used during the operation of the gasifier, turbine condensers, and fuel gas saturation process, as well as for other miscellaneous uses. It is expected that no significant impacts would occur to water levels as the amount of the intake required for the Proposed Action represents approximately 0.1 percent of the average calculated daily flow and 4 percent of the low flow conditions of the Kentucky River near the site. Coal and RDF pellets would be unloaded, stored, and conveyed in enclosed structures with concrete floors and would not impact water resources. No use of or discharge to groundwater resources is expected to occur during construction and operation of either facility.

Potential water resources and water quality impacts for facility discharges will be minimized by pretreatment in a new wastewater treatment facility. Federal and state-issued permits regulating water usage and wastewater discharge would specify site-specific criteria to minimize potential impacts. The facility will be designed to minimize water usage, and any discharges would comply with federal and state wastewater and stormwater discharge permits.

During low flow conditions, potential conflicts could exist between competing users of the river. To help minimize such conflicts, KPE will cease water withdrawals if drought conditions warrant or if requested by the state.

Under the proposed action, minor activity to extend the water intake structure would be required alongside the river channel, however, no impacts to the floodplain would result. No wetlands have been identified in the project area and no impacts to wetlands would result.

Ecological Resources

The construction of the facilities for No Action Alternative 2 would result in the loss of approximately 4.8 hectares (12 acres) while the Proposed Action would result in a loss of 7.6 hectares (19 acres) of old-field vegetation and its respective habitat. No federal- or state-listed protected, sensitive, rare, or unique species have been identified at the project site location and suitable habitat for the federally-endangered running buffalo clover is not present. Therefore, there would be no impacts to any federal- or state-listed protected or endangered species from either No Action Alternative 2 or the Proposed Action. The thermal plume from wastewater discharge into the Kentucky River would likely not have an impact on aquatic organisms.

Post construction mitigation landscaping will consist of a control program for non-native invasive plant species such as non-native thistles, fescue, and mustard. The site will be revegetated with a blend of native grasses and forbs. Due to the height of the emissions stacks, the Federal Aviation Administration requires stack lighting. To minimize bird strike mortality, the U.S. Fish and Wildlife Service (USFWS) has developed a set of voluntary recommendations for tower siting, construction, operation, and decommissioning. The gasifier stacks lighting system will be designed in consideration of the USFWS recommendations.

Noise

The construction and operation of both No Action Alternative 2 and the Proposed Action would result in minor noise increases over existing background noise levels beyond the borders of the J.K. Smith Site. Vehicle and rail traffic associated with both alternatives would cause minor noise increases of less than 2 decibels over background noise levels in the nearby community of Trapp.

Mitigation measures necessary to minimize noise impacts will be implemented for the proposed action. Buildings housing the gas turbine units will be designed to ensure a substantial reduction in noise transmitted to the outside. A reduction of gas turbine noise to 95 dBA or less, adjacent to the outside of the building, is a basic design requirement. In addition, the building housing the gasifiers will be designed to ensure a significant reduction in noise transmitted to the outside. A reduction of gasifier noise to 65 dBA or less, adjacent to the outside of the building, is a basic design requirement.

Traffic and Transportation

Under No Action Alternative 2, approximately 100 to 200 vehicle trips, depending on the level of construction activity, would be made per shift change during facility construction. An additional 40 to 60 heavy-duty truck trips per day would be made to and from the project site and rail cars would move heavy equipment to and from the site as needed. Approximately 48 vehicle trips per day would be made during facility operation, all utilizing Kentucky Highway 89. Since the existing traffic near the project site is light, this would result in little impact to local traffic. No rail cars are expected to be required for facility operation under No Action Alternative 2.

Under the Proposed Action, approximately 500 to 1,000 vehicle trips, depending on the level of construction activity, would be made per shift change during facility construction. An additional 40 to 60 heavy-duty truck trips per day would be made to and from the project site and rail cars would move heavy equipment to and from the site as needed. Traffic congestion may be heavy during afternoons when school buses operate along Kentucky Highway 89. Approximately 160 to 240 vehicle trips per day would be made during facility operation, all utilizing Kentucky Highway 89. This would have a greater impact on local traffic than No Action Alternative 2 and mitigation measures, discussed below, will be implemented to ease the impact. KPE will be responsible for repairing any damage to local roads due to excessive use or overweight vehicles. Approximately one unit train (100 rail cars) would move in or out of the site each day during operation. Existing rail infrastructure onsite is sufficient to accommodate a full unit train, thus removing it from the mainline track. KPE will design and implement an Emergency Response Plan and a Spill Prevention, Control, and Countermeasure Plan that would detail response and clean up measures for any accidents resulting from fuel or waste transportation.

The addition of turning lanes and a traffic signal will assist in regulating traffic flows at the intersection of the site access road and Kentucky Highway 89. Any changes to Kentucky Highway 89 will be made in conjunction with the 7th District of the Kentucky Transportation Cabinet. To facilitate traffic in and out of the project site, the access road would be widened to four lanes, or directional controls would be implemented. Directional controls refer to having both lanes travel in the same direction during peak usage of the road. Appropriate warning signs will be put in place if this method is adopted. Aside from scheduling rail deliveries in coordination with other main rail line traffic, no mitigation is required for rail transportation.

Occupational and Public Health and Safety

Typical worker impacts present in the construction industry would be associated with facility construction under both No Action Alternative 2 and the Proposed Action. All noise and health impacts would be mitigated using standard industry safety measures. The Proposed Action would present a small increase in cancer risks to workers and the public due to hazardous air pollutant emissions associated with operation of the combustion turbines of the power island component. The estimated cumulative lifetime cancer risk, assuming continuous exposure for a 70-year period at the location of maximum annual average exposure which is within the J.K. Smith Site, is 5E-05 (i.e., 50 per one million individuals) or a 0.005 percent increase in cancer risk per person. However, this cumulative lifetime cancer risk is a very conservative estimate due to assumptions and extrapolation procedures used in the analysis.

Waste Management

Facility construction and operation would generate small quantities of hazardous and non-hazardous wastes and wastewater under No Action Alternative 2. The construction of the Proposed Action would generate proportionately more wastes than No Action Alternative 2, as it would take four times as long to build. Operation of the Proposed Action would generate more wastewater and hazardous wastes than No Action Alternative 2. All wastewater will be treated before release into the Kentucky River. The gasifiers would generate vitrified frit and elemental sulfur, which DOE expects would be marketed. KPE will conduct appropriate tests to confirm the expectations that the frit is not hazardous. Ultimately, if the frit is found to be hazardous, KPE could decide to use a 100 percent coal feed, the impacts from which would be essentially the same as the impacts examined under the Proposed Action. Standard industry practices will be used to minimize the wastes produced during construction and operation of either facility. Hazardous wastes will be disposed of in approved hazardous waste landfills.

Environmentally Preferred Alternative

No Action Alternative 1 is environmentally preferable because it would result in no impacts on any of the resource areas in the vicinity of the project site. Under No Action Alternative 1, however, the need for expanded electric power capacity in the region would not be met and beneficial socioeconomic impacts (jobs and revenue) would not be created, nor would the goals of the CCT Program concerning the demonstration of this co-feed BGL technology be achieved. The primary impacts from No Action Alternative 2 and the Proposed Action would be to land use, socioeconomics, visual and aesthetic resources, air resources, and traffic and transportation. The impacts from the Proposed Action generally would be small, and would be relatively greater to socioeconomics (beneficial), visual and aesthetic resources, air resources, and traffic and transportation in comparison to No Action Alternative 2. Unavoidable adverse impacts from No Action Alternative 2 and the Proposed Action would occur to aesthetic and scenic resources (the presence of a new facility and additional transmission line), water resources (withdrawals from the Kentucky River), ecological resources (habitat removal), and traffic and transportation (increase in local vehicle trips taken). No environmental justice impacts are expected under any of the alternatives.

Comments on the Final EIS

The only comments that DOE received on the Final EIS were from the U.S. Environmental Protection Agency (EPA). EPA stated that, in the Final EIS, DOE had resolved in a satisfactory manner EPA's comments on the Draft EIS regarding wetlands, transmission lines and towers, cooling tower discharge, air permitting, wind direction data, and other regulatory matters. However EPA expressed continued concerns about some potential impacts, including water, waste, ecological, and noise components of the project. DOE believes that mitigation measures for the proposed action adequately address EPA's concerns. For example, KPE has agreed to work with the State of Kentucky during extremely low river flow conditions and cease operations if requested. KPE also will test the vitrified frit to determine whether it is a hazardous waste, and will ensure that noise levels are acceptable. DOE will ask RUS to share their NEPA document(s) regarding the electric transmission line with EPA. Further, DOE will prepare a Mitigation Action Plan in accordance with its NEPA regulations (10 CFR 1021.331(a)), which will serve as a tool for monitoring mitigation commitments.

Decision

DOE will implement the Proposed Action of providing approximately $60 million in cost-shared federal funding support to design, construct, and demonstrate the co-feed BGL technology proposed by KPE. The project is intended to demonstrate the combined removal of SO_2, NO_X, and particulate matter in a BGL co-feed technology at a size (540 MW) approximately 40 to 50 percent larger than other currently operating, 100 percent coal-fed gasifier systems. The project is expected to generate sufficient data from design, construction, and operation to allow private industry to assess the potential for commercial application of the larger scale co-feed BGL technology. This decision to provide cost-shared funding for the proposed project was made after careful review of the potential environmental impacts, as analyzed in the EIS.

DOE's decision incorporates all practicable means to avoid or minimize environmental harm. In accordance with Section 1021.331(a) of the DOE NEPA regulations, DOE will prepare a Mitigation Action Plan that addresses mitigation commitments expressed in this ROD. Copies of the Mitigation Action Plan may be obtained from Roy Spears, NEPA Document Manager, U.S. Department of Energy, National Energy Technology Laboratory, 3610 Collins Ferry Road, Morgantown, WV 26507; telephone: [phone].

Issued in Washington, DC on, this 29th day of January 2003.

Carl Michael Smith,

Assistant Secretary for Fossil Energy.