The 1st meeting of the Interim Joint Committee on Agriculture and Natural Resources was held on Wednesday, June 11, 2008, at 1:00 PM, in Room 149 of the Capitol Annex. Representative Jim Gooch Jr., Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Representatives Jim Gooch Jr., Co-Chair, and Tom McKee, Co-Chair; Senators Ernie Harris, Dan Kelly, Bob Leeper, Vernie McGaha, Joey Pendleton, Ernesto Scorsone, and Brandon Smith; Representatives Royce W. Adams, Johnny Bell, Dwight D. Butler, Mike Cherry, Hubert Collins, James R. Comer Jr., Tim Couch, Mike Denham, C. B. Embry Jr., Jeff Greer, Keith Hall, Richard Henderson, Brad Montell, Tim Moore, Fred Nesler, David Osborne, Sannie Overly, Don Pasley, Tanya Pullin, Marie Rader, Rick Rand, Tom Riner, Steven Rudy, Dottie Sims, Jim Stewart III, Tommy Turner, Ken Upchurch, Robin L. Webb, and Susan Westrom.
Guests: Rodney Andrews, Center for Applied Energy Research; Dr. Leonard Peters, Hank List, Karen Wilson, and Holly Johnson, Energy and Environment Cabinet; David Maland, Fuel Frontiers, Inc.; Tom Bloemer, Department of Agriculture; Mark Reed, Department of Public Health; Joel Neaveill, Angela Blank, Roger Thomas, Governor’s Office of Agricultural Policy; Betsy Bennett, Gary Sparks, and Donna Brown.
LRC Staff: Biff Baker, Lowell Atchley, Hank Marks, D. Todd Littlefield, Taylor Moore, and Kelly Blevins.
Chairman Gooch began the meeting by welcoming the new members to the committee. He also informed the members that subcommittees have been approved and will begin meeting in July.
The first item on the agenda was an update on the recent outbreak of salmonella which has lead to a recall on certain species of tomato (red plum, red roma, and round red). Mr. Mark Reed, Food Safety Branch, Department of Public Health (DPH), informed the members that the FDA has issued a nationwide consumer warning regarding those tomatoes. As of June 10, 167 cases of salmonella poisoning had been reported in 17 states. There have been 23 hospitalizations and 1 death. No cases have been confirmed in Kentucky, though 1 suspect case is being investigated.
Mr. Reed stated that the FDA is conducting an intense investigation to determine the source of the outbreak. In response to the recall, restaurant chains and grocery stores have been removing the suspect species from their inventory. He informed the members that cherry tomatoes, grape tomatoes, tomatoes with the vines still attached, and tomatoes grown at home are not included in the recall.
Mr. Reed said the FDA has recently cleared 19 states from the warning list. Kentucky is currently not on the list, but the DPH hopes it will be included soon.
Mr. Reed pointed out that the DPH recognizes the importance of local farmers markets and has implemented a program to help fruit and vegetable growers minimize the chance of selling contaminated produce. It is called the Good Agricultural Practices program, and teaches best management practices for growers.
In response to questions from the members, Mr. Reed stated that salmonella is a bacteria and is very common. Salmonella and e. coli are the top two contaminants in produce. He also said that suspected salmonella cases are required to be reported to the DPH by the medical community.
The next item on the agenda was from Dr. Leonard Peters, Secretary of the Energy and Environment Cabinet. Dr. Peters explained that the new cabinet combines the Dept. of Environmental Protection, Dept. of Natural Resources, and the Governor's Office of Energy Policy. He explained that as the cabinet looks at energy and the environment, they are following 4 guiding principles:
1. Utilize and protect our resources- Coal needs to be a significant factor in our plans to meet our energy needs.
2. Lead with energy efficiency and conservation- Continue efforts to use clean technology and other conservation measures.
3. Protect access to reasonably-priced energy usage for economically vulnerable citizens- Try to maintain low energy costs.
4. Use energy portfolio as part of our economic development initiative- Utilize innovative practices and energy opportunities.
Sec. Peters next commented on the challenge the cabinet will face as employees retire over the next few months. They anticipate that 10-15% of their approximately 1,500 employees will retire.
Finally, Sec. Peters discussed the impact that climate change will have on Kentucky. It is an important issue that will affect our state as Congress makes decisions that affect the environment.
Upon questioning, Sec. Peters answered that the cabinet is looking at energy efficiency in state government and feels state government should lead by example in energy-saving efforts and in exploring alternative methods such as biomass, solar, and wind. He also recognizes that nuclear energy usage will increase in the future, but is not sure what role Kentucky will play in that arena. He also discussed his desire to reduce delays in granting permits for coal and gas companies and other permitees. He noted that a balance needs to be met between supplying energy needs and taking care of the environment.
Next on the agenda was a presentation by Mr. David Maland relating to a coal-to-liquid facility being considered in Muhlenberg County. This facility is a joint venture between Kentucky Fuel Associates and Fuel Frontiers and will use a coal gasification process that will convert coal to diesel fuel. Initially the facility will use 2,000 tons of coal a day and will make 70 million gallons of diesel per year. The intent is to triple the output over a period of time.
Mr. Maland said that they have contracted with Phoenix Coal, headquartered in Louisville, to furnish up to 2.5 million tons of coal per year for 10 years. He also reviewed the backgrounds of the engineering firm and the gasifier supplier, and discussed the technology involved in the gasification process.
Mr. Maland concluded by reviewing the business concept of the facility, including plant development, job creation, marketing, and the various uses of the by-products that will result from the process.
Next on the agenda was a presentation by Mr. Rodney Andrews, Director, UK Center for Applied Energy Research. Mr. Andrews discussed the technological and economic drivers in current fuel pricing. He reviewed the short-term energy outlook, the cost components for fuel, and crude oil prices and oil futures.
Mr. Andrews discussed some of the factors that influence fuel prices, including the role of the falling US dollar, speculation, and big oil companies. While those factors do influence the price of fuel, Mr. Andrews feels that rising worldwide consumption, declining surplus, declining non-OPEC production, political turmoil and restrictions, and limited refining capacity have a larger influence on the price.
Mr. Andrews did note some potential bright spots, including long-term investing by producers, plans for new US refineries, expanding capacity for heavy oils in Iran and other countries, and overseas refining plans for processing fuel oil and diesel.
Mr. Andrews concluded by stating that most forecasts are predicting lower fuel prices in the long run, but it will be a slow decline.
Upon questioning, Mr. Andrews answered that the US uses approximately 20-21 million barrels of crude oil per day, while producing 8-9 million barrels. He said that as technology improves, we can get a lot more oil from our existing oil fields. He also felt increasing the use of alternative fuels such as biofuels and coal-to-liquid fuels could really decrease our dependence on foreign oil, but he didn't feel we could ever become totally detached from foreign oil.
Next on the agenda was a discussion of the new emergency fuel regulation that was recently filed by the Kentucky Department of Agriculture. The regulation temporarily suspends the requirement that fuel dispensers display the unit price of gasoline on the dispenser. Many fuel pumps can't register more than $3.99 per gallon, and with the price of fuel nearing or exceeding that level, the owners of those pumps wouldn't be able to sell gas above that figure. Pump owners are trying to comply with the law, but there is a backlog of several months before the pumps can be retrofitted. In addition, the upgrades to the pumps cost $400 or more. Mr. Tom Bloemer of the Dept. of Agriculture assured the members that the department will work with gas pump owners if they can't comply with the requirements of the regulation due to circumstances beyond their control.
Chairman Gooch concluded the meeting by offering a green consumer idea. He pointed out that US consumers use 380 billion plastic bags annually, with nearly one third of them being discarded. He suggested using canvas shopping bags such as the ones Kroger has.
There being no further business, the meeting was adjourned.