This one started it all! (Published January, 2008)

My Grandfather


My grandfather was a farmer and a farmer’s son in Logan County. He had a fifth or sixth grade education and could read and write well enough to “get along”. When the Depression hit, he had five children and more on the way. He and two of his brothers emigrated to Toledo, Ohio where they rented a small farm, got day jobs and started providing for their families. My mother was born in Ohio and within two years her mother died in childbirth. My grandfather drove a truck ten hours a day and raised six children under ten, by himself. He insisted everyone of his children finish high school.

In the years to follow his sons served their country during WWII. They returned from the war and were rewarded, under the GI Bill of Rights, with low cost loans for education and housing that they could use when they wanted. One uncle completed college. The others completed technical training or remained in the military. The US government was faced with the prospect of millions of soldiers returning to a job market that was inadequate to support them. The decision to stimulate educational opportunities led to research and professionalism and created a workforce that formed the basis of the greatest economic expansion in the history of this country, establishing the US as a world power.

My grandfather and leaders of that era understood the value of hard work, but knew education was the ticket out of poverty. In one generation my grandfather saw his family transform from working poor to comfortably middle class. His children parented the “baby boomer” generation that continued to support economic expansion.

I make this point, only, to illustrate obvious benefits investing in terms of human capital and research as it pertains to creating a competitive workforce that will assist in stimulating economic growth, as was done in the 40’s and 50’s. Kentucky is facing tough economic times, with little hope of relief from the Federal government. We need to rely on our skills and our resources to meet and beat this challenge. We need to develop a workforce that can compete efficiently in emerging markets and technologies and to meet the future needs of Kentuckians.

A report by the Kentucky Community and Technical College System (KCTCS) unveils a “Plan for a Competitive Kentucky”, is well worth reading. The plan outlines specific steps that must be taken to meet the needs of Kentucky’s changing economy. It recommends strategic initiatives that will expand the workforce programs based on projected needs, make it easier for KCTCS students to transfer to four year schools, develop strategies that will prepare high school students for success in KCTCS, including remediation services, and to reengage the adult population through adult education and literacy programs.

Copies of this report can be requested can be requested by writing Ms. Terri Giltner at 300 No. Main St., Versailles, KY 40383 or by visiting their web site at www.kctcs.edu.

Here are a couple more on alternate energy production and cellulosic biofuels.

Alternate Energy Production as an Agricultural Activity

The State of New Jersey is considering legislation that would classify solar and wind energy generation as agricultural activity. Owners of farmland would be allowed to install and operate solar or wind energy devices on their property for personal consumption and or for sale to utility companies through grid connected systems.

On its face, farm energy harvesting is not a novel idea. Windmills have been used for centuries to pump water and, more recently, solar panels have been used to generate power for barn ventilation, hot water systems and heating pools. What this would do, would be to increase the scope of and to elevate the status of these activities. At a time when the federal government is abandoning incentives for alternate energy research and production, this would give local government more control over the development of energy policy and the diversification of energy portfolios.

Over ninety percent of Kentucky’s electricity is produced in coal burning plants. This leaves a substantial carbon footprint. In fact, Kentucky’s two largest cities, Louisville and Lexington, are ranked in the top five US cities for per capita carbon footprint. Last October, (then) KPS Commissioner Caroline Pitt- Clark addressed the Governor’s Conference on the Environment and stated the reality is that limits on carbon dioxide emissions are a “virtual certainty within the next several years” . She predicts the use of coal to produce electricity is certain to be “one of the first targets of such limits and that no state will feel the limits on carbon emissions from coal combustion more than Kentucky”.

Commissioner Pitt-Clark recommended investing in technologies that would reduce the carbon imprint of coal burning power plants, diversifying Kentucky’s energy portfolio to include more renewable sources and to improve the efficiency of current energy transmission capacity.

Carbon cap and trade activities are, also, an almost virtual certainty in any future US energy policy. Both presidential candidates publically support their use. There will, no doubt, be credits or subsidies for carbon offsetting activities that include renewable energy sources.

Farm energy harvesting is a carbon neutral activity and much more carbon efficient than using corn to produce ethanol. Farm energy harvesting as an agricultural activity would enjoy the benefits of existing agricultural energy policy and the resources of traditional agricultural advocates, such as the Farm Service Agency or the UK Cooperative Extension Service.

If we truly wish to include Kentucky’s rural resources in the future of Kentucky’s energy market, farm energy harvesting should be given serious consideration.


Why not Cellulosic Biofuel?

What if there was a reliable alternative to petroleum? What if there was a renewable, cost-cutting fuel that would lower our dependence on foreign oil? Biofuels are that alternative.

Biofuels are made from plant materials. Currently, the main fuel on the market is ethanol, which is made from corn kernels. Ethanol has three advantages, at least in theory. It’s renewable, it can be domestically produced and it burns cleaner than gas. Critics argue the production of ethanol requires too much energy, that the process is too expensive and that efficiency can only be achieved by increasing crop yield. This is significant because the only way to increase crop yield is through the use of more fertilizers and pesticides. Corn does not absorb these products efficiently and most of what is unused runs off into our waterways.

Currently, domestic ethanol is highly subsidized by the US government and foreign imports are subject to trade tariffs. Most recently, the Republican Party in its national platform called for an end to ethanol mandates, marking the first time a major US party has taken an official stance against publically funded ethanol incentives.

Cellulosic biofuels are made from the leaves, stems and stalks of a plant and open the production process to a larger range of feedstocks, which include wood chips, wood fibers, switchgrass and agricultural waste.

According to the National Resources Defense Council (NDRC), the production and use of cellulosic biofuels can slash global warming pollution, projecting that by 2050 greenhouse gas emissions could be reduced by 1.7 billion tons per year or the equivalent of 80% of current transportation emissions. It is predicted that by 2015 biofuels can be produced at prices equal to, or lower than, average gas and diesel prices.

Biofuels can offer major land-use benefits. Certain biofuel crops can actually improve land that is no longer productive. Switchgrass, a promising feedstock, is a native, perennial prairie grass that doesn’t require a lot of pesticides and fertilizers. It uses water efficiently, has low nitrogen runoff, very low erosion and increases soil carbon.

Biofuels can turn out to be a major new source of revenue for farmers. At $40 per dry ton, farmers growing 200 million tons of biomass in 2025 would make a profit of $5.1 billion dollars per year. At 100 gallons of fuel per dry ton of switchgrass, the production of 20 billion gallons of ethanol would meet the US Renewable Fuels Standard (RFS) for 2022, which requires a minimum of 16 billion gallons of cellulosic ethanol.

This means more jobs, less of a dependence on foreign oil and, ultimately, a stronger economy.

Recently, the Chesapeake Bay Commission released a report on next generation biofuels. Entitled Next Generation Biofuels; Taking the Policy Lead for America, this report addresses cellulosic ethanol as an alternative to corn-based ethanol and establishes a regional strategy to maximize the economic and environmental benefits alternative fuels, like cellulosic ethanol, can yield.

This report can be viewed at http://www.chesbay.state.va.us/summitdocs.html and offers a series of recommendations that will facilitate the transition from conventional biofuels to next generation alternatives, including the production of adequate supplies of reliable biomass feedstocks and the development of appropriate infrastructure and marketing procedures to encourage development in the region. Recommendations include coordinating state efforts to secure federal support for next generation biofuel development, discouraging the use of invasive species, encouraging the local or on-farm use of biomass products, establishing requirements and incentives for purchasing biofuels, using best practices for growing and harvesting feedstocks, providing incentives for creating and implementing forest management plans and supporting the sustainable production of next-generation feedstocks on abandoned or underutilized land.

This is good reading and could be treated as a manual for economic development in central Kentucky.

Got to start somewhere. Here are two pieces I wrote on local leadership and the economic stimulus.

(Ed. Note: I wrote this just prior to the November elections. This is more of an opinion piece and probably better considered a letter to the editor.)

By the time this piece is published, we will have a newly elected line up of officials, some new faces and some old, that will set our agenda for the next several years. It is our responsibility to demand that they focus on a course of action that will benefit our community.

We need a strategy. We need a plan. We have to focus on that.

This is not a time to relax. This is time to get to work.

Most of you know I am a proponent of alternate energy. I am a proponent because I believe alternate energy can contribute to a comprehensive energy policy that will meet our growing demand for energy while maintaining affordable electric rates, promoting regional economic development, creating jobs and protecting the environment.

For the purposes of this discussion I would like to focus on the economics. First, we have to send a message to the rest of the world that we are in control of our economy. We can do that by establishing an energy policy that reduces our demand on fossil fuels. The events of the past eleven months have demonstrated how demand can influence the costs associated with the use of oil. That, of course, coupled with the strength of the dollar. The economies of oil producing countries like Iraq, Iran, Venezuela and Russia have seen incredible economic growth with oil selling in excess of $145 per barrel. Estimates are that theses countries need oil to stabilize at between $70 and $80 dollars per barrel to support their economic agendas. Of course, with oil prices falling below $65 per barrel, we are witnessing them scramble to stabilize the price at a rate that supports their needs. I haven’t been able to determine if anyone has even established what the price of oil needs to be to support our economic agenda. Interestingly, the major US oil companies are beginning to forecast oil prices will stabilize at $70 per barrel and that the price of gasoline will stabilize at $3 per gallon. Ten years ago the price of oil was less than $20 per barrel and gasoline was at $1. Makes you wonder whose interests are being protected here.

So, what does this have to do with alternate energy and our economy? Thirty percent of oil is used for heating residential and commercial properties and for the production of electricity. It is been suggested, for example, that cellulosic biofuels, ethanol and diesel produced from Switch grass and other renewable fuel stocks, can reduce our reliance on fossil fuels by up to twenty-five percent. The less we use, the less we spend. The more we can promote regional economic responses, the better off we are.



(Ed. note: This was written in early January, but not yet published)



Infrastructure and Rural Development

Approximately twelve years ago a group of colleagues and I wrote a position paper on infrastructure and rural development. In 1995, the National Council on Public Works Improvement concluded “the (current) state of America’s infrastructure is barely adequate to fulfill current requirements and is insufficient to meet the demands of future economic growth and development.” Not much has changed since.

David Aschauer, an Economics professor at Bates College, at that time concluded US productivity declined as investment in public infrastructure slipped from 4.3 percent of the Gross Domestic Product (GDP) in the 1960’s to 1.7 percent in the 1980’s and 90’s. He argued productivity declines in tandem with falling investments in core infrastructure components, such as transportation, water, sewer and publically owned facilities. Aschauer determined as much as 40 percent of the slowdown in US productivity could be explained by declining public capital investments and estimated every dollar invested in public infrastructure yields four dollars in return.

In 2005, the American Society of Civil Engineers concluded that 27.1 percent of our nation’s bridges are structurally deficient, that most of our airports are not equipped to accommodate the next generation of jumbo jets or to handle the projected growth in small regional jets and that 257 locks on transportation waterways are functionally obsolete.

In 2007 the New America Foundation (NAF), a relatively conservative economic think tank, concluded investment in public infrastructure continues at less than 2 percent, to date. Economist Jeff Madrick suggests much of the economic growth of the past generation has “depended on previous high levels of public investment in everything from transportation systems to high technology to high school and college education.” Madrick concludes much of the productivity boom of the 1990’s would not have been possible without the earlier government investment in areas like telecommunications and computer technology.

Spending on research and development and on developing intellectual capital has also slowed to less than two percent of GDP, with the US now graduating fewer engineers and scientists than nearly “all other advanced industrialized countries.”

NAF contends “uncertainties about the future reliability of our energy, water and transportation systems are beginning to impede investment in some part of the US.” They also suggest the American economy is also negatively impacted by our failure to stay current in information technology infrastructure, noting the US ranks 16th in the world in broadband access with only 57 percent of US households connected to the internet. The result is rising costs for US consumers who now “pay twice as much, for example, as their Japanese counterparts for connections that are twenty times slower.”

NAF concludes public investment is “the best way to help American companies compete against lower wage economies. By providing businesses with a better high tech infrastructure, more skilled workers, and access to cheaper and cleaner energy, it lowers the costs of doing business and increases the efficiency of investment in the US.”

NAF also contends any program to upgrade our transportation and information infrastructure to world standards and to lay the foundations for a new energy and water infrastructure would alone “create millions of higher skilled jobs that could not be outsourced and would pay above median wages.”

Finally, NAF concludes there are “limits to how much one can redistribute income through … tax (breaks)” and suggests a “robust public investment program” is now an essential tool of public policy.

Of course, even if we all agree public investment is our next step, the problem is delivering it to rural America. The US does not have an explicit national rural policy. There are many state and federal programs that in some way influence rural development, but these tend to be unrelated elements of industry specific programs, such as farm programs, including the Farm Services Association (FSA). There are also general local development funds that are not necessarily targeted for rural development, such as urban enterprise zones. And there are land use programs and regulations that do not have development as their primary objective, such as those of the Interior Department and the Environmental Protection Agency (EPA). Therefore, while a complete assortment of programs and policies has an effect on rural development, they have developed without the guidance of an explicit rural policy.

To be effective, development policy must be region specific, identifying and working within the context of the appropriate development for that targeted area. Regional development hinges on the capacity for change. Regions must build new sources of competitive advantage through innovation and entrepreneurship. Public policies and programs should direct their efforts to help rural areas to improve this capacity.

President-elect Obama campaigned with a rural platform that provided a plan to ensure economic opportunity for family farmers that would support small business development and that would improve the quality of life in rural areas.

In addition to addressing inequities in corporate agribusiness and concentrated animal feeding operations, Obama’s agricultural policies will promote regional food systems, organic farming, fund programs to identify and train the next generation of farmers and will increase incentives for farmers and private landowners to conduct sustainable agriculture and to protect wetlands, grasslands and forests.

In terms of supporting rural economic development, Obama’s plans will provide funds for cooperative marketing initiatives and farmer owned processing plants, to modernize FCC initiatives to provide affordable broadband access, and to continue to develop alternate energy enterprises.


Quality of life issues will be addressed by providing funds for improving education, improving rural healthcare, upgrading rural infrastructure and combating the influence of drugs and other dangerous substances.

According to Obama’s website, his legislative record includes the establishment of rural Empowerment Zones and Enterprise Communities and he has worked on numerous efforts to increase access to and use of alternative fuels. Analysts suggest Obama’s decision to nominate former Iowa governor Tom Vilsak as Agriculture Secretary and for Sen. Ken Salazar (D-Colo.) to lead the Interior Department are considered signs that he intends to fulfill his campaign promises to revitalize rural communities.

The US government is developing an economic stimulus plan that is calling for up to $400 billion in infrastructure investment. This is an opportunity for local and regional communities to come together and to develop local plans for such an investment. This is an opportunity rural communities to get ahead of the curve. This is an opportunity for our leaders to come to the table and plan for our future. If nothing more than a ‘wish list” results, it is at least a start.