Sep. 2--SOMERSET -- The secretary of the Kentucky Energy and Environment Cabinet says the state and nation are in a dilemma trying to balance needs for affordable energy and protecting the environment.

Len K. Peters, speaking Tuesday to the Somerset-Pulaski County Chamber of Commerce, called this a "particularly challenging time." He predicted energy needs will increase about 40 percent between now and 2025 and estimates are that energy costs could jump anywhere from 20 percent to 100 percent.

Peters expressed the importance of protecting the environment " ... for our children and grandchildren ..." by reducing the greenhouse gas effect of burning coal. Ninety percent of Kentucky's electricity is generated by coal.

"How will we supply our electrical needs at a reasonable rate ... when you look at where we are and what we will need to be?" Peters asked.

"We are a manufacturing society," he continued. Factories in Kentucky produce about 30 percent of the nation's stainless steel; Kentucky is the third largest automobile maker in the country; and 30-40 percent of aluminum made in the United States comes through Kentucky

Most of this, Peters said, is due to reasonable rates for electricity generated by coal. A large increase in electrical rates could result in outsourcing of manufacturing and a loss of jobs, he predicted.

Comparing today with the mid-1990s, Peters pointed out that home are now full of gadgets; more computers, and four or five color television sets. He said a clock on a microwave oven, running 24 hours a day, burns more electricity than use of the oven.

"We have an obligation to produce a reliable source of electricity," Peters said. "But we can't get from where we are today to where we need to be in 2025 without coal," he said.

Peters mentioned agriculture products as a source of energy and remarked: "We have to make nuclear power a part of our conversation ... there are pros and cons."

"Coal is and will continue to be a major source (for generation) of electricity," Peters declared. He said forward movement is being made to reduce greenhouse gases.

The energy and environment secretary noted that cap-and-trade systems have quickly surfaced as the focus of climate policy discussions across the country. In short, the "cap" is a legal limit on the quantity of greenhouse gases that a region can emit each year and "trade" means that companies may swap among themselves the permission -- or permits -- to emit greenhouse gases.

President Obama has made it clear that establishing a bold cap-and-trade program is a priority, and the American Clean Energy and Security Act H.R. 2454 (Waxman-Markey) is rapidly moving through Congress. The legislation has passed the House of Representatives, but Peters expressed doubt the bill will be approved in the Senate.

Gov. Steve Beshear is working very hard to develop an energy plan," Peters said.

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