Interim Joint Committee on Education

 

Subcommittee on Postsecondary Education

 

Minutes of the<MeetNo1> 3rd Meeting

of the 2006 Interim

 

<MeetMDY1> October 9, 2006

 

The<MeetNo2> 3rd meeting of the Subcommittee on Postsecondary Education of the Interim Joint Committee on Education was held on<Day> Monday,<MeetMDY2> October 9, 2006, at<MeetTime> 10:00 AM, at the Kentucky Community and Technical College System headquarters in Versailles, Kentucky.  <Room>Senator David L Williams, Chair, called the meeting to order, and the secretary called the roll.

 

Present were:

 

Members:<Members> Senator David L. Williams, Co-Chair; Representative Mary Lou Marzian, Co-Chair; Senators Alice Forgy Kerr, R. J. Palmer II, Gary Tapp, Johnny Ray Turner, and Ken Winters; Representatives C. B. Embry, Jr., Bill Farmer, Mary Harper, Reginald K. Meeks, Tom Riner, Charles L. Siler, and Kathy W. Stein.

 

Guests:  Dr. M. R. Wilhelm, Dean, University of Louisville Speed School of Engineering; Ms. Alice Trunnell; Ms. Deborah Besser, University of Kentucky College of Engineering; Mr. Don Challman, University of Kentucky Center for Applied Energy Research; Mr. M. B. Susman, Kentucky Community and Technical College System; Mr. Mason Dyer, Association of Independent Kentucky Colleges and Universities; Mr. John Wilkerson, Kentucky Education Association; Ms. Linda Jacob Ellis, Budget Review Office, Legislative Research Commission; Ms. Jo Carole Ellis, Kentucky Higher Education Assistance Authority; Mr. Tom Burgess, Kentucky Community and Technical College System; and Mr. Clyde Caudill, Legislative Agent, Kentucky Association of School Administrators.

 

LRC Staff:  Jonathan Lowe, Sandy Deaton and Janet Oliver.

 

Chairman Williams stated that the topic for this meeting is the engineering pipeline, energy technology and economic development.  He asked James Applegate, Vice-President for Academic Affairs, Council on Postsecondary Education, to make his presentation.

 

Dr. Applegate stated that the focus of his presentation would be on the energy pipeline and in particular the Project Lead the Way program which was funded by the General Assembly in the last session.  He referred to the handout he had prepared for the members to assist them in following his presentation.  He stated that the pipeline issue was part of a larger statewide engineering strategy which the Council on Postsecondary Education (CPE) endorsed in 2000, and that funding for the strategy began in 2001.  Dr. Applegate informed the members that the four key goals of the strategy are to increase the number of engineers in Kentucky; provide for greater regional access and productivity in engineering education;  to improve the integration of the K-12 and baccalaureate college programs in engineering; and to create greater diversity within the profession by increasing the participation of women and minorities.

 

To achieve the goal of increasing the number of engineers in Kentucky, Dr. Applegate stated that CPE used appropriated funding to create joint engineering programs at Western Kentucky University and Murray State University, in conjunction with the existing programs at the University of Kentucky and the University of Louisville.   He stated that three of these programs are now ABET accredited.

 

Dr. Applegate asked the members to refer to the slide (Page 2 of his presentation) showing the number of engineering degrees by field, pointing out that civil, mechanical and electrical are the most popular fields.  He also asked the members to review the slides  on Page 3 which reflect the trends for baccalaureate and associate degree production in engineering technology.  He stated that engineering technology is an important part of the statewide strategy because engineers create jobs for engineer technologists.  He stated that the key area of concern, which will be reported to the entire Council at its next meeting, is the lack of significant growth in baccalaureate degrees in engineering, even though there has been a sixteen percent (16%) increase in the number of students taking the Fundamentals of Engineering Examination, which is the first exam in the licensure process.

 

Dr. Applegate then discussed repairing the pipeline through student preparation and aspiration and teacher preparation.  He related that the 2005 ACT data reflected  only 34 percent or about one-third of Kentucky high school graduates were adequately prepared for college algebra and only seven percent (7%) or less than one in ten were prepared for calculus; and, further, that only three percent (3%) of ACT tested Kentucky students indicated they were interested in majoring in engineering.  Dr. Applegate stated that with the new requirements set forth by the Kentucky Board of Education in math and science, it will be necessary to provide high quality professional development and increase the number of teachers in high schools in these areas.

 

Dr. Applegate stated that to improve the pipeline, funding was provided for the Kentucky Academy of Mathematics and Science at Western Kentucky University which will provide opportunities for dual credit for students interested in math and science, with about 120 students beginning the program in 2007-2008.  He related that the Kentucky Center for Mathematics Achievement at Northern Kentucky University was launched this past spring and that workshops were conducted over the summer, with approximately 2000 students being taught by teachers trained in mathematics intervention.  He stated  that 67 trained math coaches will be working with 830 other teachers to provide this intervention.  Also, he related that the recipients of the Improving Educator Quality grants (formerly known as Eisenhower grants) will be meeting in November to provide for teacher professional development in math, sciences and foreign languages.

 

Dr. Applegate next discussed the Project Lead the Way program stating its purpose is to increase the number of students interested in and preparing for engineering careers.  He explained the program provides a very rigorous pre-engineering middle and high school curriculum and that it has been implemented in about 1300 schools in 45 states.  He related that CPE worked with the Kentucky Department of Education and the Kentucky Association of Professional Engineers in selecting and implementing this program.  Dr. Applegate said that the National Academy of Sciences gave a report to Congress stating that the lack of students prepared for and entering the "STEM" disciplines of science, technology, engineering, and mathematics is a national problem insofar as our global competitiveness is concerned.

 

Dr. Applegate stated, in order to implement Project Lead The Way in Kentucky, CPE issued a Request for Proposals (RFP) and subsequently issued $260,000 in grants from funds appropriated by the General Assembly.  He stated that the teachers in the districts selected to participate in the program are required to take  a very rigorous professional development program which Project Lead the Way operates and oversees.  He stated that a  committee comprised of engineers and representatives of Project Lead the Way, the Kentucky Department of Education and CPE reviewed the proposals submitted and selected the schools who met the criteria.  He related that, in a few years, it is hoped that CPE can demonstrate that significant progress has been made in preparing students for college math and science and that the program will be expanded.

 

Dr. Applegate stated that CPE is aware of the need for more engineers to make Kentucky competitive; but, on the flip side, the state must also create more employment opportunities for those engineers when they graduate.  He referred to Page 7 of his presentation, showing that in a survey conducted on Kentucky college graduates between 1993 and 1995, only 50 percent of graduates in the fields of engineering, information technology and science were employed in Kentucky.

 

Dr. Applegate stated that the state must increase the number of K-12 mathematics and science teachers and that the main focus at the Teacher Quality Summit, which will be held in a couple of weeks in Louisville will be increasing production of math, science and foreign language teachers.  He related that because of the lack of interest and demand, there has been a decline in the pre-engineering courses offered at the Kentucky Community and Technical College System (KCTCS) institutions.  He stated that CPE is working with KCTCS and the universities to improve the course work and that engineering advisors have been selected for the KCTCS districts.  He stated that the General Assembly funded transfer scholarships which may increase enrollment.

 

Dr. Applegate related that the General Assembly funded a program, coordinated by CPE and the Kentucky Science and Technology Corporation, to provide for business startups and job creation.  A slide was provided on Page 8 to show the work going on with the program, particularly in the energy and environmental areas.  Dr. Applegate informed the members that a detailed portfolio of those investments were at CPE offices if any member was interested in reviewing it.  He stated that KCTCS is also heavily involved in this area through their coal academy and other energy initiatives.

 

Dr. Applegate concluded his presentation by stating that CPE's role in the pipeline is not only education related but also helping with job creation.

 

Chairman Williams asked the representatives present at the meeting with the Universities of Louisville and Kentucky if they wish to make any comments.

 

Dr. M. R. Wilhelm, Dean of the University of Louisville Speed School of Engineering, stated that he agreed with Dr. Applegate's comments.  Referencing the report, "Rising Above The Gathering Storm," from the National Academy of Engineering and National Academy of Science, Dr. Wilhelm stated that engineering technology is crucial to the future of the United States and certainly to Kentucky.  He expressed his opinion that Kentucky has a long way to go in competing in the new economy and it is crucial to improve the mathematics, science and engineering basis of our educational system.  He stated that by working together as a team of educators from the engineering society, universities and the school system, progress can be made.

 

Dr. Deborah Besser with the University of Kentucky College of Engineering related that she is working with schools participating in the Project Lead the Way program and using other means to attract students in order to increase enrollment in the College of Engineering.

 

Chairman Williams asked where engineering technology programs are being offered in the state other than UK and U of L.  Dr. Applegate responded that Western Kentucky University no longer offers an engineering technology program since they started their baccalaureate program.  He stated there are engineering technology programs at Morehead and Northern Kentucky University and a variety of institutions around the state.

 

Chairman Williams asked if there was any data available on the career tracks of students who completed the engineering technology programs.  Dr. Applegate responded that there has been modest increases in the number of students enrolling and a dramatic increase in certificates from KCTCS.   He stated that the only data they have is at the national level, which indicates that the number of engineering technologists in Kentucky is above the national average.

 

Chairman Williams stated that in many professions, such as nursing, many who achieve associate degrees seek higher degrees.  He asked if the program is set up in such a way that students with engineering technology certificates can pursue their education in engineering.  Dr. Applegate responded that such a career path is not an easy transition because of the fundamental differences between engineering technology courses versus engineering degree courses.  He stated that the degree program requires much more advanced courses in mathematics and natural science and indicated it would be difficult to obtain a B.S. or higher degree in only four years if the first two years were devoted only to an engineering technology degree.  Chairman Williams stated that it would seem logical to look at students in engineering technology programs to encourage them to proceed in obtaining a degree in engineering.  Dr. Besser agreed relating that   the retention rate for students who transfer from two year institutions is almost double the retention rate for freshmen.  Dr. Applegate stated that CPE is working with KCTCS to find ways to motivate engineering technology students to pursue an  engineering degree.

 

Representative Farmer, referring to Dr. Applegate's previous statement about engineering students needing mathematics remediation, asked if Kentucky's high school  teachers are sufficiently trained to teach students to prepare them for the college courses.  Dr. Applegate responded that the state has two issues in that regard -- one is having enough teachers to even staff the courses, and the other is having them adequately prepared to teach at the level necessary to ensure the student's success.  He further responded that CPE is increasing professional development requirements and is creating a system to track whether the professional development programs are actually improving student achievement.  Representative Farmer stated that it seems you would almost have to have teachers who have been through the engineering curriculum to teach those classes.  Dr. Applegate stated that the teachers in the schools selected to participate in Project Lead The Way are required to take a very rigorous professional development program to  prepare them to teach those math and science classes.

 

Senator Tapp asked what criteria was used to decide which schools would participate in the Project Lead The Way program.  Dr. Applegate responded that the criteria established by the national program was used to evaluate the proposals including computer availability; availability of certified math and science teachers; whether the district was willing to integrate the curriculum in the middle schools; instructional space; and student recruitment plans.  In  response to a question from Senator Williams, Dr. Applegate related that CPE coordinated the project with representatives of  elementary and secondary education.  Also, in response to a question from Senator Williams, Dr. Applegate responded that approximately $8 million would be required to expand the programs to the other districts that wanted to participate in the program.

 

Chairman Williams stated that information provided during this meeting could be taken to the entire Interim Joint Committee on Education in the future and that the upcoming sessions of the General Assembly will continue to focus on math and science education.

 

Chairman Williams asked Rodney Andrews, Acting Director of the Center for Applied Energy Research at the University of Kentucky, to give his presentation.

 

Dr. Andrews stated he would discuss the role Kentucky plays in the energy and energy technology aspects of the engineering pipeline.  He provided a handout to assist members in following his presentation.  He stated he would discuss key technologies in energy for the future; how Kentucky is involved in those technologies; the impact on education, research and development; and thus the need for more engineers, scientists and technicians.

 

Dr. Andrews related that Kentucky has vast natural resources available including fossil, which is coal, oil shale, and some gas; and biomass, which is agricultural and forestry materials.  He stated all of these materials will play an important part in decreasing dependency on foreign crude oil.  He  stated that coal will remain dominant as the most prominent source of electrical power generation for the foreseeable future.

 

Dr. Andrews said that Kentucky can be a dominant energy exporter, both of electrical power and liquid transportation fuels, if we proceed in engineering technology research and development in the key areas of gasification and coal to liquid technology for transportation fuels and chemicals.  He stated that advanced combustion systems utilizing coal will probably be the largest source of electrical power, but with the development of these energy sources, better environmental controls will be required, particularly in the areas of carbon management, sequestration and capture of carbon dioxide.

 

Dr. Andrews stated that there is great interest in liquid fuel from coal as the price of crude oil increases and that waste coal utilization for power generation could play an important role for Kentucky.  He stated that biofuels, both ethanol and biodiesel, is another area where Kentucky will be playing a major role.  Dr. Andrews related that Kentucky has very economical electric power because of its natural resources, which  plays an important role in power intensive industries, such as steel and aluminum production.

 

Dr. Andrews stated that coal can be converted by combustion, gasification (syngas) and liquefaction and briefly explained the processes.  He stated these processes can also be combined in various ways, known as co-generation and poly-generation.  He stated that power generation will remain the largest use of coal, even though there have been few stations built recently because it was assumed that natural gas would continue to be more economical, which has not proven to be true.  He stated that carbon taxes and the need for carbon sequestration as well as reduction in emissions from power plants are also concerns for Kentucky.

 

Dr. Andrews reported that the U.S. Department of Energy has estimated that the need for more coal fired generation plants will increase significantly in the next decade, which will greatly increase the demand for trained and qualified people to build and operate the plants.  He also stated that new combustion technology will be implemented, such as supercritical and ultra-supercritical steam systems, basically making power plants more efficient with fewer emissions.

 

Dr. Andrews asked the members to look at the chart on Page 6 of his presentation,  which showed the multiple uses for syngas.  He stated that one of the issues with gasification and its adoption in this country is that there are very few gasifiers actually in operation around the world.   He related there are approximately 117 operating plants with approximately 300 to 400 gasifiers.   He stated approximately fifty percent (50%) of those are coal fed and the majority of the others use either biomass or petroleum coke.  He stated the use of these plants is split between production of chemicals, production of transportation fuels and power generation.  Dr. Andrews related that there is extensive experience with gasifiers overseas, particularly in South Africa, China and Europe.  He stated that in the United States there have been several demonstrations including Wabash (petcoke), Tampa (petcoke with coal), Great Plains (lignite) and Eastman Chemicals (coal).  He stated that nationwide there are many plants in the planning phase and there have been some announcements in Kentucky as well, and noted that, within his presentation he listed several items for research and development for gasification which are very technology-driven requiring engineering expertise.

 

Dr. Andrews stated that the chart on Page 8 was presented to show what will be necessary to become independent from imported fuels, with the two largest increases being in coal to liquids and biomass.  He explained that coal to liquids (CTL) technology combines gasification with a catalysis program requiring both a gasifier and a refinery at the same site, and that new skill sets will be required for an industry that does not currently exist in this country.  He stated that on Page 9 of his handout was a simple schematic of how the CTL process works.  Dr. Andrews stated there is a great need for research and development in this area as well as many opportunities for deployment and development of new technologies, particularly in supplying the Department of Defense with transportation and aviation fuels.

 

Dr. Andrews asked the members to look at Page 10 of his presentation.  He stated that at the Center for Applied Energy Research, there is currently a research program being conducted on liquid fuels from coal; coal combustion gasification byproduct (ash and char) utilitization; waste coal utilization; carbon materials; advanced combustion; carbon management; and biofuels.

 

Dr. Andrews related that the University of Kentucky's mining engineering activities is an area where there is a need for more mining engineers.  Other areas of research and development occurring at universities in Kentucky are photovoltaics, fuel cells, ethanol production, fermentation technologies, emissions control and the Kentucky Rural Energy Consortium (UK/UL) for production of biomass fuels.  Dr. Andrews stated that several industries in Kentucky are also involved in research and development in IGCC projects and biofuel plants for ethanol and biodiesel.   He stated that E.On has provided $1.5 million in funding to the Center for Applied Energy Research for a carbon management program and although there is significant interest in coal to liquid technology, no program has been implemented.

 

Dr. Andrews stated for Kentucky to be competitive in energy technology, there must be appropriate investment in technology deployment.  He stated that early entrants in research and development are likely to reap the greatest rewards but also assume the greatest risk.  He stated that economic incentives and purchase contracts to guarantee prices would help in mitigating the risks and that siting and permitting would allow more rapid deployment of technologies as well as investment in research and development.

 

Dr. Andrews expressed his opinion that an appropriately skilled workforce is critical in working with new technologies.  He stated that state government can play a role in this by supporting pilot and demonstration projects to enhance both industry confidence and serve as educational platforms for workforce development.  He stated that the slides on Pages 13 and 14 of his presentation depict that the federal government has reduced its role in coal research and education.  He explained that the only existing continuing program at the University of Kentucky is the Coal Research Program, which is still receiving federal funding from the U.S. Department of Energy, but the funding has decreased significantly from $10 million to its current level of $3 million and the proposed budget for next year is $2.7 million.  Dr. Andrews said the program was previously one of the few really open areas for advanced research relating to coal as well as for coal education but it has now been redirected toward advanced materials, sensors and controls, and computational sciences.   He stated it is a program Kentucky needs and the funding needs to be increased.  In response to a question from Chairman Williams about the funding, Dr. Andrews replied that the federal government provides the funding for UK's Coal Research Program as part of the federal fossil energy budget to fund personnel conducting research in coal.

 

Dr. Andrews briefly discussed activities in other states and emphasized that Wyoming and Montana are both actively researching and deploying plans to provide for coal to liquid technologies in their states.  He stated that New York, Ohio and Illinois also have activities occurring in deployment of technologies.  Dr. Andrews also related that West Virginia has the National Research Center for Coal and Energy, Illinois has the Clean Coal Institute, and Purdue University has substantial new investment in its energy center directed toward biofuel and coal to liquid technologies.  He stated that Penn State has the Energy Institute, which is one of the few programs left that offers a fuel science degree.  Dr. Andrews also said that a great deal of the focus in research and development has been in biomass, probably because more states have biomass than coal.  He briefly mentioned some of the programs and facilities involved in that research.

 

With regard to education, Dr. Andrews stated it is critically important to develop a larger supply of students adequately prepared to pursue a degree in engineering.  He stated that in talking with representatives from the energy industry, the most important quote is "No one is going into energy anymore."  He stated industry sees replacing existing staff, as they age and retire, as a key issue in moving their companies forward.  He related that this personnel issue is so important that the electric power and gas industry founded the Center for Energy Workforce Development to increase the number of graduates and training programs to fill critical skilled and craft jobs which is essential for both electric and natural gas utilities.

 

Dr. Andrews stated that power generation companies, in particular, have issues with staffing.  He related that Carnegie Mellon released a survey of utility executives where it was the consensus that workforce aging is by far the industry's most urgent human resource concern.  He related the survey revealed that most utilities estimated that half of their workforce will be eligible to retire in five years and approximately 200,000 U.S. electric power industry employees are expected to reach retirement age by 2011.  He stated they are looking at replacing 10,000 employees per year including plant operators starting in 2010 onward.

 

Dr. Andrews stated that in the coal to liquid industry, as the technology is developed and deployed, one of the major barrier issues will be the lack of a trained workforce, both in the construction as well as operation of the plants.  He referenced information contained in the coal to liquids slide on Page 17.

 

Dr. Andrews informed the members there is also a major role for research and development to play as the industry is keenly interested in having experientially educated students and part of this is due to the cyclical interest in the coal to liquids technology.  He stated that science and engineering capabilities have waned from what they were in the 1980s and 1990s and need to be replaced with new training and research and development.  He explained that the Center for Applied Energy Research does not grant degrees but considers itself a consumer of students.  Dr. Andrews informed the members that the Center plays a strong role in experiential education and provides support to about 75 students a year in the form of scholarships and laboratory work for undergraduates.  He stated that graduate students are drawn from biomedical, biosystems and agricultural, chemical and materials, civil, mechanical and mining engineering; and that all of the students have an interest in energy and how it applies to their particular field.  He stated the Center also has students from chemistry, geology and library science.

 

In conclusion, Dr. Andrews stated that Kentucky has abundant natural resources to allow for an energy driven economy in the future.  He stated there is an increasing interest in alternative fuels and new demand for electric power which increases the need for research and development and particularly a need for engineers, scientists and trained technicians.  He stated the educational programs in these areas need to be expanded and can be integrated with research and development.  He explained that students of all ages need to be excited about energy and energy technology with a state and national focus on solving energy issues and become energy independent.

 

Chairman Williams informed the committee that he recently attended a forum of senate presidents in Wyoming at which one of the main topics was the research and development of energy sources in Wyoming and Montana.  He stated the governments in those two states are very excited and focused on the new technologies, such as coal to liquid.  Chairman Williams asked Dr. Andrews to again discuss the federal line item reductions in energy funding as it relates to Kentucky.  Dr.  Andrews stated there have been reductions over several budgets and related that the Center is currently finishing a project which was funded at a cost of $400,000 per year.  Chairman Williams stated that all members of the General Assembly need to hear Dr. Andrews' presentation and the next presentation from Ms. Talina Mathews with the Kentucky Office of Energy Policy.

 

Representative Stein asked Dr. Andrews if she had heard him correctly when he said that gob piles can be used or reused for energy.  Dr. Andrews stated that was correct and it is one of the topics the Center is exploring now.  He explained that gob piles can be processed into what is called a brick headed fuel, which has a very high fuel value and is very clean when compared regularly processed coal.

 

Chairman Williams asked Ms. Talina Mathews, Executive Director, Kentucky Office of Energy Policy in the Commerce Cabinet, to make her presentation.

 

Ms. Mathews explained that there were fifty-four (54) recommendations in the state's comprehensive energy strategy built around three principles:  to maintain low cost energy; to develop our energy resources; and to preserve our commitment to environmental quality.  She stated that the underlying principle in the plan is to improve economic development in Kentucky.

 

Ms. Mathews stated that advanced technologies, such as coal to liquid, can be used to further develop the state's energy resources and that value-added industries and assets should be utilized so that the wealth created remains in Kentucky.  She explained that another method to improve economic opportunities in Kentucky is to maintain the state's low cost energy.  She said that Kentucky's low cost energy entices industries to locate to Kentucky and has helped keep them here.

 

Ms. Mathews reiterated some of the information already provided, that Kentucky has significant natural energy resources, including coal, natural gas, oil shale, tar, sands, oil, biomass.  She stated that efficiency should also be considered another Kentucky resource.  Ms. Mathews informed the members that Kentucky ranks third in nation in coal production behind Wyoming and West Virginia; that the coal industry provides 15,000 jobs in Kentucky at an average salary of a little more than $50,000 a year; and the industry is estimated to have an additional $9 billion impact on the economies in those areas where it is located.  She related that Kentucky exports about $3.25 billion worth of coal, mostly to other states and the state collected about $183 million in coal severance taxes last year.  She stated that it is expected that this year's taxes will be up 42 percent largely because coal prices have increased 21 percent since 2004.  She said it is estimated that Kentucky has about 88 billion tons of reserves left, although other estimates are higher, at 200 to 300 billion tons.

 

Ms. Mathews stated that Kentucky has the lowest electricity rates in the country;  that 92 percent of all coal that is mined in the United States is used for electricity generation; and that over 90 percent of electricity in Kentucky is generated by coal, which may make the state vulnerable in the future.  She informed the members that Kentucky is one of the few states in the country that has been able to retain the aluminum smelters because they have very high energy needs and that Kentucky has been able to retain its automotive plants because of low energy costs.

 

Ms. Mathews stated that Kentucky needs to remain aggressive in energy production.  She mentioned that Dayton Power and Light and East Kentucky Power are working with Maysville Community and Technical College to develop a training program for power plant operators.  She stated that the Public Service Commission has estimated that by 2025, the state will need 7,000 additional megawatts of electricity.  She stated that more stringent environmental regulations would increase the costs of power generation.

 

Ms. Mathews informed the members that there is a proposal to build a 750 megawatt non-regulated plant in West Kentucky with an estimated employment figure of 1,000 construction workers during the construction phase and 200 operators.  She stated the plant would use two million tons of coal a year, which in turn would support around 200 mining jobs.  She stated that the construction workers used to build a gasifier may need to be much more skilled than typical construction workers and the plant operators would need to be skilled.

 

Ms. Mathews related that a study done by the Southern States Energy Board found that the United States could be energy independent by 2030 if we depend on coal to liquids, oil shale, enhanced oil recovery, biomass and efficiency gains, but the path to 2030 will not be cheap nor easy.  She stated that Kentucky can play an important role in energy independence because of our coal reserves and biomass and the opportunity for enhanced oil recovery.

 

Ms. Mathews stated that if a coal to liquids plant is built in Kentucky, construction workers, miners, and various professionals will be needed and that employment gains in other areas, such as grocers and retail establishments, would experience the ripple effect.  She stated that production of biomass would increase the need for agricultural and forestry workers and that enhanced oil recovery will bring back some of the oil and gas workers that may not be employed.  Ms. Mathews also stated that increased efficiency would help all sectors of the economy because if a company can run its factories more cheaply than it can afford to hire more people to produce more product.

 

Ms. Mathews also discussed the polygen concept.  She stated carbon dioxide is a commodity which can be sold to other states to enhance oil and gas recovery.  She explained that a polygen plant is a combination of power, chemical and refinery processes, which will require new skill sets to build and operate.

 

Ms. Mathews stated that the state needs to research and develop these value added industries and improve efficiency through the use of our natural resources.  She stated that the Commerce Cabinet has used appropriated monies to fund mining engineering scholarships and some of the startup costs for the Kentucky Coal Academy and awarded $830,000 in seed grant money to the universities for research on biofuels, aluminum industry efficiency, coal processing and natural gas exploration.  She further stated that $450,000 in matching grant funds were allocated to the universities which leveraged $2.4 million in federal and private monies as part of the Kentucky Rural Energy Consortium funding for projects.  Projects receiving funds include carbon capture and sequestration research occurring at the Kentucky Geological Survey; some biofuels; energy efficiency; biomass solar energy projects; clean coal research including carbon capture; removing mercury in existing power plants; the development of an IGCC plant; eliminating slurry ponds; and coal bed methane.  With regard to coal bed methane, Ms. Mathews related that this resource has not been extensively utilized because of the issue of who owns the methane, which will probably be decided by the courts.

 

Ms. Mathews stated it is necessary to keep energy costs low to compete with other states, and to also focus on value added industries to keep our wealth in Kentucky and keep our people employed.  She stated that economic, tax or price control incentives may be necessary to reduce risks for companies who build these plants because they have never been built before.  She stated the Commerce Cabinet is looking at a developing a site bank of suitable locations for these types of plants that would have specific needs.  She stated there is an RFP out right now for commercialization projects which are projects that need a little push to get to the either pilot stage or the commercial stage.  She also stated that siting and permitting will also need to be looked at in the next session.

 

Chairman Williams thanked Ms. Mathews for her presentation.  He stated that it would appear that the administration and the legislature will need to collaboratively focus on the issue and suggested that the Commerce Cabinet and Kentucky Office of Energy Policy should recognize the workforce component that has been discussed to coordinate the pipeline.  Chairman Williams stated that he has also discussed the pipeline issue with his counterpart in West Virginia because of the common border between the two states, so as not to duplicate the same services.

 

Representative Siler called attention to the past history of the "boom and bust" cycle in the coal fields, stating that it has created a lost of confidence of investors.  He stated that the workers who need training beyond high school in the field find themselves out of a job during the "bust" period.  Representative Siler also stated that some of the investment opportunity is lost because of extensive fines issued for environmental violations and the costs of environmental cleanup.

  

Chairman Williams asked for approval of the minutes of the September 11, 2006, meeting.  Representative Embry moved for approval of the minutes.  The motion was seconded by Senator Tapp and was approved by voice vote.

 

Chairman Williams stated he appreciated the attendance of all the presenters and assured them that the General Assembly is very serious in elevating the engineering pipeline agenda.  He further stated it is important for the administration to offer some innovative ideas in this area in cooperation with the universities.  He stated the development of cleaner fuel sources should not be looked at as a burden but an opportunity to generate wealth for the Commonwealth.

 

There being no further business to discuss, Chairman Williams adjourned the meeting at 11:25 A.M.