KRS 152.710: Legislative findings and determinations.

The General Assembly finds and determines that:

(1) The United States currently imports almost sixty percent (60%) of its petroleum

needs, and nearly half of these imports come from highly unstable regions and

countries. It is projected that this percentag e will grow to over seventy percent

(70%) by 2025 unless the United States changes its policy on producing liquid

fuels;

(2) Events in the Middle East, Africa, and South America, coupled with China's efforts

to secure world oil reserves and production faci lities, demonstrate that increasing

reliance on foreign sources of petroleum threatens the homeland security of the

United States. America's military is increasingly looking at the potential of alternate

liquid fuels produced from fossil energy resources o r agricultural materials as a

reliable, secure source of fuel;

(3) Petroleum imports are the single largest cause of the nation's negative balance of

trade with the rest of the world and are a major cause of inflation and economic

slowdown;

(4) Experts project that world oil prices will remain very high because production is at

or near its peak while world demand for oil is increasing rapidly. This increase in

demand is due largely to economic growth in developing nations, especially China,

where oil demand grew by twenty percent (20%) in 2004 and is expected to grow by

a similar amount in 2005;

(5) The price of crude oil is the major factor driving up prices for gasoline, as well as

for oil used for home heating in addition to commercial and industrial purp oses.

Natural gas for home heating and other purposes has been driven to record -high

prices as a result of supply constriction and increased demand from the industrial

sector;

(6) Technologies have long existed for producing transportation fuels from indig enous

fossil and biomass energy resources in the United States, and research has

demonstrated that coal-based alternate fuel technologies are cost-effective when the

world price of petroleum exceeds thirty-five dollars ($35) per barrel;

(7) The United Stat es has trillions of tons of indigenous fossil energy resources and

agricultural capacity that rival total worldwide conventional oil reserves. These

domestic resources are capable of producing alternate transportation fuels sufficient

to make the United St ates independent of foreign petroleum imports. Kentucky has

hundreds of years of fossil energy resources, and the Commonwealth's agriculture

produces substantial biomass materials for production of premium -quality liquid

transportation fuels;

(8) The development of an alternate transportation fuels industry in the United States

will create long -term reliable demand for Kentucky's energy and agricultural

resources, stabilizing both the energy industries and the agriculture community;

(9) Coal-based alternate transportation fuel technologies are capable of producing

environmentally superior transportation fuels from near -zero-emission plants with

removal or capture of virtually all pollutants, including sulfur dioxide, nitrous

oxides, mercury, and carbon dioxi de, and from biomass-based technologies that are

very environmentally positive. The United States can set an example for the world

by implementing these technologies, and Kentucky is poised to lead the way;

(10) Coal-based technologies in the United States are capable of producing pipeline -

quality natural gas and industrial -quality natural gas at prices which are below

current annual market prices for natural gas;

(11) Kentucky's universities have for several decades been among the leading entities in

the United States doing research on transportation fuels from coal and oil shale. The

Kentucky Department of Agriculture has provided support relating to development

of transportation fuels from Kentucky agricultural materials;

(12) Although developing an alter nate fuels industry capable of reducing America's

dependence on foreign sources of petroleum requires the large -scale financial and

technical resources of the federal government and private industry, only government

and industry in the states can ensure th e most efficient and productive on -site

joining of technologies, energy resources, and industrial and transportation

infrastructure;

(13) The economic, national security, and environmental advantages of establishing

thriving domestic alternative liquid fue ls and synthetic natural gas industries vastly

outweigh the development costs. In contrast, doing little or nothing subjects

America to continued and repeated energy supply disruptions and to potentially

severe economic consequences;

(14) Embarking on a national mission to achieve energy security and move toward liquid

and synthetic fuels independence will not only reduce risk and lower oil prices,

natural gas prices, and oil price volatility, it will also facilitate an industrial rebirth,

create jobs, foster new technology, and enhance economic growth; and

(15) Kentucky, through its universities, has done the research and testing of these

environmentally responsible alternative liquid fuel technologies. Kentucky has the

natural resources to be the leader in achieving energy security and independence for

the United States.