The Bluegrass and Beyond

There was a remarkable public forum at the University of Kentucky on Thursday. The moderator began by saying it reminded him of the old song Which Side Are You On?

Florence Reece, a miner’s wife, wrote that song about the economic controversies surrounding coal in Harlan County in the 1930s. Thursday’s forum, sponsored by UK’s College of Engineering, focused on the global controversies surrounding coal today.

What made the forum remarkable was that it might have been the first time that so many coal executives, environmentalists and community activists sat together in the same room and discussed those controversies openly and, for the most part, honestly.

Some speakers on both sides fell into the old traps — misrepresentations, oversimplifications and emotional appeals. But most stuck to facts. Things are different when you’re addressing your biggest critics, rather than preaching to your choir.

Historian Ron Bryant noted that coal’s effects on human health and the environment have been controversial since mining began in Kentucky in the 1820s. “But the need for coal stopped all arguments,” he said.

Coal powered the industrial revolution, and it fuels our modern lifestyle. But the global debate over climate change is making people realize that the future will be much different than the past.

Most of the world’s scientists and policy makers agree that climate change is real and that burning coal poses a threat to civilization. Meanwhile, there’s increased public opposition to surface and mountaintop-removal mining in Appalachia and the environmental damage it causes.

“We can no longer in this state maintain the status quo,” said Joe Blackburn, a regulator for more than three decades who heads the Lexington field office of the U.S. Office of Surface Mining.

“Dealing with change is never easy,” he said. “But change is a normal part of life.”

Some coal executives seemed surprised when economists outlined their industry’s declining influence in Kentucky.

Coal employment has fallen sharply since its peak in 1980 as mining has become more mechanized. Coal accounts for only 1 percent of statewide employment — and only 3.5 percent when spin-off jobs are included.

Mining creates some good-paying jobs, but it also crowds out other economic opportunities in coal-producing counties, some of which are among the nation’s poorest.

Coal production accounts for only 1.45 percent of gross state product — and it’s falling. Kentucky coal production peaked in 1988, and the market has shifted to cheaper coal from Western states.

Coal has kept Kentucky’s electricity rates among the cheapest in the nation. But those rates are rising and will continue to rise in a carbon-conscious world that will require coal to bear more of its true cost.

And here’s the rub: Coal now provides about half the nation’s electricity — and 92 percent in Kentucky. Renewable energy sources aren’t commercially advanced enough to replace coal, and they won’t be for years, if not decades.

Renewable energy and perhaps nuclear power must be developed soon, because we’re running out of coal. Kentucky might have only 20 years of coal left — or maybe 100 years, with improved mining technology and the right market conditions. But everyone agrees that coal is a finite resource whose end is in sight.

The forum wasn’t all doom and gloom; there was encouraging news. UK researchers talked about what they’re doing to develop renewable energy and lessen the environmental damage of mining and burning coal, and to reforest and reclaim mined land.

The unmistakable takeaway from this daylong “fair and balanced” discussion of coal’s future was that the solutions aren’t simple and the trade-offs won’t be painless, either for the coal industry or for the energy-consuming public.

But Kentucky is at a crossroads.

The coal industry can continue to deny climate change, fight regulation and use scare tactics to delay the inevitable. Or it can work with scientists and its critics to find more responsible ways to mine and use the coal we have left.

Kentucky’s political and business leaders can try to preserve the status quo, as they did for years with tobacco. Or they can focus on energy conservation. They can support research. And they can develop the energy technologies and industries that must eventually replace coal.

If last week’s public forum showed one thing, it’s that there’s only one logical path, no matter which side you’re on.

There’s no zealot like a convert, and when it comes to believing in Kentucky’s potential, there’s none like Pearse Lyons.

The energetic Irishman, who moved to Lexington three decades ago and built his Alltech nutrition supplement company into a global giant, has a few thoughts about how the future could shine brighter on his new Kentucky home.

Lyons shared some of those thoughts Thursday with the Lexington Forum, telling the monthly gathering of business folks that the keys are education, innovation and building on Kentucky’s existing strengths and resources.

Lyons hopes to showcase many of those resources next fall, when his company sponsors the 2010 Alltech FEI World Equestrian Games at the Kentucky Horse Park.

But he’s getting a head start in Britain this month at the Alltech FEI European Jumping and Dressage Championships, Aug. 25-30.

More than 60,000 spectators and 150 competitors from 32 nations are expected to attend the games at Windsor Castle. One thing they’ll find, a short walk from the arena, is a Kentucky oasis.

The Alltech Kentucky Village, a tented area inside a white-plank fence, will give visitors a literal taste of Kentucky: burgoo, hot Browns, Maker’s Mark bourbon, Dippin’ Dots ice cream and, of course, Alltech’s Kentucky Ale and Bourbon Barrel Ale.

Everett McCorvey from the University of Kentucky’s Opera Theatre program will direct a vocal ensemble. There also will be displays promoting Kentucky tourism and products.

Muhammad Ali and Pearse Lyons announced creation of the Alltech Muhammad Ali Center Global Education and Charitable Fund in Lexington in May. Alltech Photo

Lyons is taking Muhammad Ali to Windsor, thanks to the Alltech-Muhammad Ali Center Global Education and Charitable Fund. After that, Lyons and Ali head to Dublin for a fund-raising dinner and a visit to the Irish town one of Ali’s great-grandfathers left for America in the mid-1800s.

Lyons said he gets dizzy sometimes thinking about how an Irish lad of modest means could grow up to earn a Ph.D. and create a company with annual revenues of $500 million and a 35 percent profit margin — much less hobnob with people such as Ali and Queen Elizabeth II.

It all came down to education, entrepreneurship and taking advantage of opportunities. The same formula can work for Kentucky, too, he told the Lexington Forum.

Lyons noted that Kentucky and Ireland have many similarities. They’re both beautiful, mainly rural places with about 4 million people, rich heritage and a history of seeing their smart young people leave for opportunities elsewhere.

Ireland reversed its fortunes by focusing on education and innovation, and Kentucky can do the same.

This time of economic transition is when Kentucky should look for new opportunities and new ways of doing things, Lyons said.

For example, Kentucky should neither ignore its rich coal reserves, nor expect to continue mining and burning coal the old way, given environmental concerns and climate change. Instead, he said, Kentucky should be at the forefront of figuring out how to make coal more valuable “within the new rules and regulations.”

One way to do that is by focusing on carbon-capture research. Lyons thinks one solution could be algae — the fast-growing slime that produces two-thirds of the world’s oxygen by soaking up carbon dioxide.

Another opportunity is aquaculture, because Kentucky has enormous reserves of fresh water, much of it underground.

“Fish is an incredible opportunity for Kentucky,” he said. “Where the poultry industry is today, the fish industry will be tomorrow.”

Algae and aquaculture are two of many things Alltech researchers are working on.

“The possibilities for innovation are enormous,” Lyons said. But innovation requires education.

Lyons said Kentucky universities must develop programs that will retain the state’s own students and attract those from elsewhere. And he challenged Kentucky businesses to invest in education.

He said Alltech donates laboratories to schools and pays graduate students to earn Ph.D.s, do research for the company and stay in Kentucky after graduation.

While looking for new opportunities, Kentucky should continue developing signature industries such as bourbon and horses that already have infrastructure and international reputations. For example, one thing that led Alltech to develop its popular Bourbon Barrel Ale was Kentucky’s ready supply of used bourbon barrels.

Along with more focus on education, Lyons said, Kentucky needs leaders.

“The leader’s job is to bring uncertainty out and certainty in,” he said. “That’s what our state needs. Because in 20 years’ time the whole world is going to change. Which way? I’m not sure. But it’s going to change. And please God it will change, because therein lies our opportunity.”

HAZARD — The keynote speaker at the 22nd annual East Kentucky Leadership Conference was Ron Eller, a leading authority on the history of modern Appalachia.

The University of Kentucky history professor also was given the East Kentucky Leadership Foundation’s annual “private individual” award, which comes with a beautiful, handmade wooden chair.

By the time Eller finished speaking Thursday evening, I suspect many in the audience of 250 were ready to break the chair over his head.

Eller, an eighth-generation Appalachian who was the first member of his family to go to college, said the region will never catch up with the rest of the nation economically as long as it is defined by industries that abusively extract natural resources, especially the dwindling supply of coal.

“We must begin, I think, by abolishing surface mining, including the radically destructive practice of mountaintop removal,” Eller said. “Mountaintop removal isn’t necessary to the region or to the national economy. It’s just cheaper.

“We can continue to mine coal, gas and other mineral resources. But the impact of extraction on the land, on our water resources, on our forest resources and other sensitive ecosystems must be strictly regulated and enforced. In the long run, we will have to move away from an extractive economy, especially one based upon coal.”

The final speaker of the two-day conference at Hazard Community and Technical College was House Speaker Greg Stumbo, a Prestonsburg Democrat who serves on the board of a coal company. He revised his planned remarks to respond to Eller.

Some of what Stumbo said was defensive: Why do people who no longer live in the mountains think they know what’s best for them? Subdivisions built on Lexington farmland are just as bad for the environment as surface mining in the mountains.

Some of it was matter of fact: We must move beyond coal, which will eventually be gone. We also must understand that coal produces half the nation’s electricity — and more than 90 percent of Kentucky’s electricity — and nothing can change that anytime soon.

And some of what Stumbo said was new and interesting: Rather than abolish surface mining, which he said isn’t economically practical, leaders in Eastern Kentucky must become more creative and demanding about how mined land is reclaimed and reused.

Stumbo cited several examples where mined land has been turned into airports, subdivisions, parks, golf courses and commercial development. But he also acknowledge that much other mined land has been poorly reclaimed as useless “pasture.”

Stumbo said he has begun talking with Gov. Steve Beshear about creating a state master plan for engaging landowners, regulators and community leaders to require better plans for post-mining use before land can be mined. If done properly, he said, more mined land could become an asset for the region instead of a liability.

I’ve been attending the East Kentucky Leadership Conference off and on since 1998, and it gets more interesting every year. That’s because the people who come seem more willing to discuss controversial subjects, question the way things have always been done and embrace new ideas.

A growing theme of the conference has been entrepreneurship and how digital technology could be harnessed to reduce the region’s economic isolation. More leaders in Eastern Kentucky now understand that their economy won’t be fixed by attracting big, outside employers so much as by educating and enabling creative, hard-working locals.

Jerry Rickett of the Kentucky Highlands Investment Corp., one of the oldest and most successful organizations working to develop home-grown businesses, noted that there are more than 82,000 “micro enterprises” in Kentucky’s Appalachian counties. Imagine, he said, how many jobs could be created if some of those businesses could grow enough to hire just one more person?

Entrepreneurship and a more diverse economy are vital to Eastern Kentucky’s future. But another key will be the willingness of the region’s people to better manage their bittersweet, century-old relationship with the coal industry.

Kentuckians must find ways to make the coal industry a better environmental steward, community partner and contributor to the quality of life in the mountains — either by Eller’s way, Stumbo’s way or intelligent combinations of both.

A couple hundred leaders from academia, politics and business gathered Thursday in Lexington to talk about energy and Kentucky — where we are, where we need to be and how we might get there.

It was the third Energizing Kentucky conference, organized by the universities of Kentucky and Louisville and Centre and Berea colleges. The keynote speaker was Carol Browner, President Obama’s assistant for energy and climate change.

First, some bad news:

Coal provides 92 percent of Kentucky’s electricity, at some of the nation’s cheapest rates. But dealing with coal’s environmental problems could raise those costs dramatically, turning a big asset into a big liability.

Rising power rates will hurt Kentucky, the nation’s fourth-poorest state. Kentucky ranks 6th nationally in gross state product from manufacturing, much of which depends on cheap power. We’re the nation’s third-largest automaker. We produce 40 percent of the nation’s aluminum and 30 percent of its stainless steel.

Kentuckians waste a lot of electricity. We have the nation’s fifth-lowest power rates, but 20 other states have lower average monthly bills.

Since America first became alarmed about its dependence on foreign oil in the 1970s, that dependence has nearly doubled. Gasoline prices will shoot back up as the global economy recovers and demand increases.

Now, some good news:

Everyone at the conference seemed to be singing from the same songbook, more or less. Nobody was saying the solution to our energy challenges is “drill baby, drill” — or “dig Bubba, dig.” That’s a significant change.

Recent announcements about the state’s new role in developing high-tech automobile batteries had everyone in a hopeful mood.

Both Rocky Adkins, a legislative leader who works for a coal company, and Tom Fitzgerald, one of Kentucky’s most ardent environmental activists, had mostly good things to say about how state leaders are now approaching energy issues.

Gov. Steve Beshear’s state energy plan, announced last November, is a progressive document. The first three of its seven points note the need for more conservation and renewable energy. The next three deal with developing more environmentally friendly ways to use coal.

The last point in the state plan suggests reconsideration of Kentucky’s ban on nuclear energy, which remains controversial. (To read the energy plan, go to: www.governor.ky.gov and click on the Energy Independence tab.)

“It is, on balance, a sound and thoughtful plan,” said Fitzgerald, director of the Kentucky Resources Council. “But we have our work cut out for us.”

The reality is that Kentucky must continue to rely on coal for many years to come. While the state is investing heavily in research for commercial carbon capture and “clean coal” technologies, they are now more dream than reality.

Interesting work is being done by Alltech and other Kentucky companies on bio-fuels. And there’s a lot of potential for small-scale solar power, especially for such things as home water heating. Kentucky’s rivers could produce a lot more hydro power.

Browner said the keys to energy independence will be developing new technologies and using energy more wisely to create both a strong economy and a clean environment.

“If you look at our history, you can see that we can have both,” said Browner, whose previous federal job was heading the Environmental Protection Agency during the Clinton Administration.

One creative approach is a new public-private partnership called Kentucky’s Clean Energy Corps, which state Treasurer Jonathan Miller described as “weatherization on steroids.”

The program will use federal stimulus money to create jobs and improve energy efficiency in the homes of 10,000 modest-income Kentuckians. It also will try to engage young people in energy efficiency and conservation efforts.

In a ballroom at the Hyatt Regency, where the conference was held, there were a couple of dozen exhibits of energy-related projects by Kentucky students.

On one side of the room were displays of high-tech research by university students. On the other side were school science projects. Students from Russell High School in Greenup County showed photos of their school’s solar collectors. Excited first graders from Hannah McClure Elementary in Winchester told about their recycling campaign.

My favorite was a project from Chenoweth Elementary in Louisville. It was a box lined with aluminum foil and covered with plastic wrap. On a sunny day, the solar-powered oven can cook a s’more in about 15 minutes.

OK, so a solar-powered s’more oven won’t do much to solve Kentucky’s energy challenges. But the kind of creativity those two fifth-grade girls put into it just might.