00-9301. Notice of Intent To Prepare an Environmental Impact Statement for the Kentucky Pioneer Integrated Gasification Combined Cycle Demonstration Project, Trapp, KY and Notice of Floodplain Involvement

AGENCY:

U.S. Department of Energy.

ACTION:

Notice of Intent to prepare an Environmental Impact Statement and Notice of Floodplain Involvement.

SUMMARY:

The U.S. Department of Energy (DOE) announces its intent to prepare an Environmental Impact Statement (EIS) pursuant to the National Environmental Policy Act (NEPA), the Council on Environmental Quality (CEQ) NEPA regulations (40 CFR parts 1500-1508), and the DOE NEPA regulations (10 CFR part 1021), to assess the potential environmental and human health impacts of a proposed project to design, construct, and operate a demonstration electric-power generating plant in Trapp, Clark County, Kentucky. The proposed Integrated Gasification Combined Cycle (IGCC) project, selected under the Clean Coal Technology Program, would be the first commercial-scale demonstration of the fixed bed British Gas Lurgi (BGL) gasification process in the United States. The proposed project would also demonstrate a high-temperature molten carbonate fuel cell and would involve the construction and operation of a nominal 400 MWe (megawatt-electric) IGCC power station. Feed to the BGL gasifiers would be solid fuel briquettes. The EIS will help DOE decide whether to provide 18 percent (approximately $78M) of the funding for the currently estimated $432 M proposed project.

The purpose of this Notice of Intent is to inform the public about the proposed action; announce the plans for a public scoping meeting; invite public participation in (and explain) the EIS scoping process; and solicit public comments for consideration in establishing the proposed scope and content of the EIS. The EIS will evaluate the proposed project and reasonable alternatives. Because the proposed project may affect floodplains, the EIS will include a floodplain assessment and a statement of findings in accordance with DOE regulations for compliance with floodplain environmental review requirements (10 CFR part 1022).

DATES:

To ensure that all of the issues related to this proposal are addressed, DOE invites comments on the proposed scope and content of the EIS from all interested parties. Comments must be received by May 31, 2000, to ensure consideration. Later comments will be considered to the extent practicable. In addition to receiving comments in writing and by telephone, DOE will conduct a public scoping meeting in which agencies, organizations, and the general public are invited to present oral comments or suggestions with regard to the range of actions, alternatives, and impacts to be considered in the EIS. The scoping meeting will be held at Trapp Elementary School, Trapp, Kentucky on May 4, 2000, beginning at 7:00 p.m. (See Public Scoping Process). The public is invited to an informal session at this location beginning at 4:00 p.m. to learn more about the proposed action. Displays and other forms of information about the proposed agency action and location will be available, and DOE personnel will be present to answer questions.

ADDRESSES:

Written comments on the proposed EIS scope and requests to participate in the public scoping meeting should be addressed to: Mr. Roy Spears, NEPA Document Manager for the Kentucky Pioneer IGCC Demonstration Project, National Energy Technology Laboratory, U.S. Department of Energy, 3610 Collins Ferry Road, Morgantown, WV 26507-0880. People who would like to otherwise participate in the public scoping process should contact Mr. Spears directly at: telephone [phone]; toll free telephone [phone] (extension 5460); fax [phone]; or e-mail [e-mail].

FOR FURTHER INFORMATION CONTACT:

To obtain additional information about this project or to receive a copy of the draft EIS for review when it is issued, contact Mr. Roy Spears at the address provided above. For general information on the DOE NEPA process, please contact Ms. Carol M. Borgstrom, Director, Office of NEPA Policy and Assistance (EH-42), U.S. Department of Energy, 1000 Independence Avenue, SW, Washington, DC 20585-0119; telephone [phone] or leave a message at 1-800-472-2756.

SUPPLEMENTARY INFORMATION:

Background and Need for Agency Action

Under Public Law 102-154, the U.S. Congress provided authorization and funds to DOE for conducting cost-shared Clean Coal Technology Program projects for the design, construction, and operation of facilities that significantly advance the efficiency and environmental performance of coal-using technologies and are applicable to either new or existing facilities. The purpose of this proposed agency action, which is known as the Kentucky Pioneer IGCC Demonstration Project, is to establish the commercial viability of the fixed bed BGL gasification process in the United States and the operation of a high temperature molten carbonate fuel cell using coal derived gas. The IGCC plants have long been recognized as being environmentally superior to conventional coal-fired power plants while operating at significantly higher efficiencies. The proposed project would demonstrate the improved economic viability and process flexibility of the BGL technology and promote fuel cells as a viable commercial source of electricity. A slipstream of syngas would be routed to a fuel cell to produce additional electricity in this demonstration project.

Since the early 1970s, DOE and its predecessor agencies have pursued research and development programs that include long-term, high-risk activities that support the development of innovative concepts for a wide variety of coal technologies through the proof-of-concept stage. However, the availability of a technology at the proof-of-concept stage is not sufficient to ensure its continued development and subsequent commercialization. Before any technology can be considered seriously for commercialization, it must be demonstrated. The financial risk associated with technology demonstration is, in general, too high for the private sector to assume in the absence of strong incentives. The Clean Coal Technology Program is a congressionally authorized program designed to accelerate the development of innovative technologies to meet the Nation's near-term energy and environmental goals; to reduce technological risk to the business community to an acceptable level; and to provide private sector incentives required for continued activity in innovative research and development directed at providing solutions to long-range energy supply problems.

Proposed Action

The proposed action is for DOE to provide, through a cooperative agreement with Kentucky Pioneer Energy, L.L.C., financial assistance for the design, construction, and operation of the proposed project. The Kentucky Pioneer IGCC Demonstration Project would be designed for at least 20 years of commercial operation, beginning with a 2-year Clean Coal Technology demonstration, and would cost a total of approximately $432 M; DOE's share would be approximately $78 M (18%).

The proposed project includes the design, construction, and operation of a new 400 MWe IGCC power plant in rural Clark County, Kentucky. Kentucky Pioneer Energy, L.L.C. would use licensed gasification technology to fuel an electric generating facility. The facility would demonstrate the three following innovative technologies: (1) Gasification of fuel briquettes; (2) use of the syngas product as a clean fuel in combined cycle turbine generator sets; and (3) operation of a high temperature molten carbonate fuel cell on coal derived syngas. This project would be the first commercial scale application of the BGL gasification technology in the United States. This would also be the first commercial scale demonstration of a molten carbonate fuel cell operating on coal derived gas. Construction of the proposed plant would be expected to require approximately 30 months.

The project consists of the following components: Briquettes and raw material transportation, receipt, and storage; sulfur removal and recovery; a gasification plant; a combined cycle power unit; and a fuel cell. The IGCC facility would provide needed power capacity to the central and eastern Kentucky areas.

To supply the proposed plant and other potential customers with fuel briquettes, the parent company of the applicant, Global Energy, Inc., would construct a production facility at an off-site location. The briquettes would be made from high-sulfur coal (at least 50%) and refuse (municipal solid waste). The location of the briquette manufacturing facility remains to be determined. However, sources of low-cost high-sulfur coal, refuse availability and supporting infrastructure would be considered by Global in siting the facility. The EIS will consider potential environmental impacts from operation of a briquette facility.

The IGCC technology that Kentucky Pioneer Energy, L.L.C. would be demonstrating consists of the following four steps: (1) Generation of syngas by reacting fuel briquettes with steam and oxygen, creating a high-temperature, chemically reducing atmosphere; (2) removal of contaminants, including particulates and sulfur; (3) combustion of clean syngas in a turbine generator to produce electricity; and (4) recovery of residual heat in the hot exhaust gas from the gas turbine in a heat recovery steam generator and use of the steam to produce additional electricity in a steam turbine generator.

The proposed project site comprises approximately 300 acres located within a 3,120-acre tract, owned by East Kentucky Power Cooperative (EKPC) in Clark County, Kentucky. The tract is 34 kilometers (21 miles) southeast of the city of Lexington. The site can be reached by State Highway 89 and accessed through a gated perimeter fence and access road.

The 300-acre proposed project site was previously disturbed by preliminary construction activities when EKPC began construction of its first-phase power station in the mid-1980s. That project was canceled in the early 1990s when decreased demand for electric power made the project uneconomical. EKPC completed preliminary grading, primary foundations, fire protection piping and rail spur access infrastructure installation before the project was cancelled.

The Kentucky Pioneer IGCC Demonstration Project would be designed to minimize expected or potential adverse impacts to the environment. Advanced process technology, efficient pollution control technology, and effective pollution prevention measures, including extensive reuse of internal process water, would be employed to minimize impacts.

Alternatives

Section 102(2)(C) of NEPA requires that agencies discuss the reasonable alternatives to the proposed action in an EIS. The purpose for agency action determines the range of reasonable alternatives. The goals of the proposed agency action establish the limits of its reasonable alternatives. Congress established the Clean Coal Technology Program with a specific purpose: To demonstrate the commercial viability of technologies that use coal in more environmentally benign ways than conventional coal technologies. Congress also directed DOE to pursue the goals of the legislation by means of partial funding (cost sharing) of projects owned and controlled by non-Federal government 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 the agency must focus on alternative ways to accomplish its purpose that reflect both the application before it and the functions the agency plays in the decision process. It is appropriate in such cases for DOE to give substantial consideration to the applicant's needs in establishing a project's reasonable alternatives.

DOE developed an overall NEPA compliance strategy for the Clean Coal Technology Program that includes consideration of both programmatic and project-specific environmental impacts during and after the process of selecting a proposed project. As part of the NEPA strategy, the EIS for the Kentucky Pioneer IGCC Demonstration Project will tier from the Clean Coal Technology Programmatic Environmental Impact Statement (PEIS) that DOE issued in November 1989 (DOE/EIS-0146). Two alternatives were evaluated in the PEIS: (1) The no-action alternative, which assumed that the Clean Coal Technology Program was not continued and that power suppliers would continue to use conventional coal-fired technologies with flue gas desulfurization and nitrogen oxide controls to meet New Source Performance Standards; and (2) the proposed action, which assumed that Clean Coal Technology Program projects would be selected and funded, and that successfully demonstrated technologies would undergo widespread commercialization by the year 2010.

The range of reasonable options to be considered in the EIS for the proposed Kentucky Pioneer IGCC Demonstration Project is determined in accordance with the overall NEPA strategy. The EIS also will include an analysis of the no-action alternative, as required under NEPA. Under the no-action alternative, DOE would not provide partial funding for the design, construction, and operation of the project. In the absence of DOE funding, the Kentucky Pioneer IGCC Demonstration Project probably would not be constructed. If the proposed Kentucky Pioneer IGCC Demonstration Project were not built, EKPC may use alternative, less efficient sources for electric power to meet future demands of its customers. Alternatives to the proposed project could include purchasing power from other sources, adding generation capacity that does not rely on the IGCC technology, or using some other current technology. DOE will consider other reasonable alternatives that may be suggested during the public scoping period.

Because of DOE's limited role of providing cost-shared funding for the proposed Kentucky Pioneer IGCC Demonstration Project, and because of advantages associated with the proposed location, DOE does not plan to evaluate alternative sites for the proposed project. Site selection was governed primarily by benefits that EKPC could realize. EKPC preferred the proposed project site because the costs would be much higher and the environmental impacts would likely be greater for an undisturbed area.

Under the proposed action, project activities would include engineering and design, permitting, fabrication and construction, testing, and demonstration of the technology. DOE plans to complete the EIS and issue a Record of Decision within 15 months of publication of this Notice of Intent, assuming timely delivery of information from Kentucky Pioneer Energy, L.L.C. that DOE needs for preparing the EIS. Upon completion of the demonstration, the facility could continue commercial operation.

Preliminary Identification of Environmental Issues

The following issues have been tentatively identified for analysis in the EIS. This list, which was developed on the basis of analyses of similar projects and from agency concerns, and is presented to facilitate public comment on the scope of the EIS, is neither intended to be all-inclusive nor a predetermined set of potential impacts. Additions to or deletions from this list may occur as a result of the scoping process.

The issues include:

(1) Atmospheric resources: Potential air quality impacts resulting from emissions during construction and operation of the Kentucky Pioneer IGCC Demonstration Project and the briquette manufacturing plant;

(2) Water resources: Potential effects on surface and groundwater resources and withdrawal of water from the Kentucky River;

(3) Infrastructure and land use, including potential effects resulting from the manufacture, transportation, and storage of the briquettes required for the proposed project;

(4) Solid waste: Pollution prevention and waste management practices, including impacts caused by waste generation and treatment at the proposed project and briquette manufacturing plant;

(5) Noise: Potential impacts resulting from construction, transportation of materials, and plant operation for the proposed project and briquette manufacturing plant;

(6) Construction: Impacts associated with traffic patterns and construction related emissions;

(7) Floodplains: Impacts associated with extension of a water intake structure in the Kentucky River;

(8) Community impacts, including impacts from local traffic patterns, socioeconomic impacts on public services and infrastructure, and environmental justice (Executive Order 12898) with respect to the surrounding community;

(9) Cumulative effects that result from the incremental impacts of the proposed project when added to the other past, present, and reasonably foreseeable future actions; and,

(10) Visual impacts associated with plant structures.

Public Scoping Process

To ensure that all issues related to this proposal are addressed, DOE will conduct an open process to define the scope of the EIS. The public scoping period will run until May 31, 2000. Interested agencies, organizations, and the general public are encouraged to submit comments or suggestions concerning the content of the EIS, issues and impacts to be addressed in the EIS, and the alternatives that should be analyzed. Scoping comments should describe specific issues or topics that the EIS should address in order to assist DOE in identifying significant issues. Written, e-mailed, or faxed comments should be communicated by May 31, 2000 (see ADDRESSES).

DOE will conduct a public scoping meeting at Trapp Elementary School in Trapp, Kentucky on May 4, 2000, at 7 p.m. The address of Trapp Elementary School is 11400 Irvine Road, Highway 89 South, Winchester, Kentucky 40391. In addition, the public is invited to an informal session at this location beginning at 4 p.m. to learn more about the proposed action. Displays and other information about the proposed agency action and location will be available, and DOE personnel will be present to answer questions.

The formal scoping meeting will begin on May 4, 2000, at 7 p.m. DOE asks people who wish to speak at this public scoping meeting to contact Mr. Roy Spears, either by phone, fax, computer, or in writing (see ADDRESSES in this Notice). People who do not arrange in advance to speak may register at the meeting (preferably at the beginning of the meeting) and may speak after previously scheduled speakers. Speakers who want more than five minutes should indicate the length of time desired in their request. Depending on the number of speakers, DOE may need to limit speakers to five minutes initially, and provide additional opportunities as time permits. Speakers may also provide written materials to supplement their presentations. Oral and written comments will be given equal consideration.

DOE will begin the meeting with an overview of the proposed Kentucky Pioneer IGCC Demonstration Project. The meeting will not be conducted as an evidentiary hearing, and speakers will not be cross-examined. However, speakers may be asked questions to help ensure that DOE fully understands their comments or suggestions. A presiding officer will establish the order of speakers and provide any additional procedures necessary to conduct the meeting.

Issued in Washington, DC, this 10th day of April, 2000.

David Michaels,

Assistant Secretary, Environment, Safety and Health.