Lawmakers hear about state fuel lab problems from ag officials

FRANKFORT—A transportation fuel testing lab that state Department of Agriculture officials say was losing around $900,000 a year under the department’s last administration is on track to save roughly $400,000 this year, according to department officials.

State Agriculture Commissioner James Comer told the Interim Joint Committee on Agriculture on Wednesday that savings have come from reduced expenses on the project which Comer said was billed as a “money maker” to lawmakers by the department when it was overseen by state Agriculture Commissioner Richie Farmer. Farmer’s administration began construction of the lab in fiscal year 2007.

Comer gave Larry Cox, the executive director of the department’s Office for Consumer and Environmental Protection, authority to improve lab operations. That resulted in changes—including sampling fuel based only on complaints beginning about two months ago, said Cox. The lab was unable to randomly test samples under its original concept, he said, creating a large backlog.

“The visual and chemical elements of the analysis moved rapidly, but octane and cetane testing proved to be a choke point, making the entire lab process unable to meet its promoted objective of performing anywhere from 40 to 50 tests per day,” Cox told the committee. “In fact, only 10 tests at most could be performed on an ideal day because of time required for the octane and cetane tests.”

Today, the backlog is eliminated and sampling amounts to one or two tests in a typical week, said Cox, unless there is a problem reported with a barge load of fuel or with fuel from a major supplier. An excess amount of ethanol found in fuel from a major supplier had to be handled by the department early this year, said Cox.
Committee co-chairman Rep. Tom McKee, D-Cynthiana, asked agriculture officials if sampling on a complaint basis is enough, or if more needs to be done. Right now, Cox said, the sampling process is working—although he said the department would have to be prepared to do broader-based sampling should the number of complaints rise.

Talks with officials at the University of Kentucky about turning fuel testing over to the university are also in the works, said Cox, who said Kentucky is burdened by its $200,000 annual rent on the lab building, a $3.1 million investment in underutilized equipment, underutilized staff, and testing costs that outstrip annual fees collected from fuel outlets.

Cox said a testing partnership with UK would be one “in which the Department of Agriculture continues to carry its statutory responsibility for regulation of fuel quality, with the university performing all fuel testing before providing results to the department for administrative action.” 

“If we can work out this arrangement, and once again we’re very early in those discussions, but if we can work them out, we can sharply reduce the cost of fuel testing to the Commonwealth, we can place fuel testing in the hands of a dedicated and respected research institution, and we can conduct testing on a scale that is appropriate to current Kentucky fuel quality issues,” said Cox.

Sen. Paul Hornback, R-Shelbyville, asked what the benefit of working with UK would be over farming out to private industry.  State Agriculture department official Steve Kelly said that was discussed during a recent meeting of a state task force looking into the fuel lab. An attorney representing the state Finance Cabinet at that meeting explained, said Kelly, that “if there was a possibility to do something like this (with the university) then it’s obviously much faster and much cheaper.

“And then from our point of view, if we can do something with the university and its Center for Applied Energy Research (CAER)—they’re the experts in energy right now… We feel like if we can get it in someone’s hands like that, that we’re protecting the consumer to the best of our ability,” said Kelly.