Daily Independent (Ashland, KY)

November 20, 2013

Less of a loss

Sale of fuel lab’s equipment generates $1.65 million

The Independent

ASHLAND — While the Kentucky Department of Agriculture’s operation of its own laboratory to test gasoline and pesticides never lived up to its promise of not only saving the state money but actually earning a profit, it turns out the failed lab was not as costly as some feared.

In 2008, former Commissioner of Agriculture Richie Farmer convinced legislators the state should invest in its own fuel lab. Farmer said the lab not only would save Kentucky the cost of having private companies test gasoline and other chemicals, but the lab also would prove to be profitable for Kentucky by testing fuels for other states.

However, Farmer’s successor, Agriculture Commissioner James Comer, in March closed the lab started by his fellow Republican, saying it was “hemorrhaging” tax dollars. Comer said the lab never generated the outside business Farmer predicted it would. In fact, he said it failed to efficiently handle the number of tests conducted in Kentucky and conducted only a few pesticide tests.

When Auditor Adam Edelen at Comer’s request examined the agriculture department’s finances under Farmer, the audit found the lab had tested only about 3,800 fuel examples during several years of operation, or far fewer than the 20,000 samples it was projected  to test each year.

“I can see where it would seem like a good idea,” Comer said of the lab in announcing its closing. “But there was never a business plan. There was never even any business development. It was just a pie-in-the-sky idea that was funded through the capital projects  and agency funds.”

If you wonder why the agriculture department would even be interested in a lab that tested the quality of gasoline and pesticides, it is because the department is assigned the task of enforcing gas quality standards.

Each year inspectors from the ag department inspect all commercial fuel pumps to ensure they are pumping  a full gallon of gas. It also tests the quality of gas, such as octane rating, from random samples taken from gasoline stations. 

While the agriculture department may seem  like an odd agency to test the quality of gasoline and the accuracy of measurements, it is an important job that protects consumers. If the gasoline pump is inaccurate, and it is giving less than a galloon of fuel for each gallon the pump measures, all consumers who use the inaccurate pumps would be shortchanged and it could cheat consumers out of hundreds of dollars. The ag department also tests the accuracy of scales and other ways of measuring products. Because most farm products are sold by the ton, pounds, bushel or other forms of measurement, that is a job directly related to agriculture.

Comer’s decision to close the lab clearly was the right one, but this story does not end there. Comer last week presented Kentucky Treasurer Todd Hollenbach, a Democrat who is in his second and final term, with $1.65 million generated by auctioning equipment at its now-defunct fuel lab.

At Comer’s request, the state Finance and Administration Cabinet auctioned the lab equipment in September. The state recovered $2.14 million in the two-day sale — more than the original value of the equipment.

Hollenbach praised Comer for overhauling fuel testing. He said the Republican agriculture commissioner deserves credit for “taking a lemon and turning it into lemonade.”

While the fuel lab definitely was a lemon and selling its equipment  may not have generated enough money to turn this project into lemonade, the lab definitely is tasting a lot less sour to taxpayers.

Closing the lab is just one of the many good things Comer has done since the former member of the House of Representatives was elected to the usually low-profile office of agriculture commissioner. Although he can run for a second term in 2015, Comer is an early favorite to be the GOP’s nominee for governor that year.