State of Mississippi: Strategy for Energy-Based Economic Development

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State of Mississippi

Strategy for Energy-Based Economic Development

Simon Tripp, Drew Bond, Anthony Gillespie, Deborah Cummings, Martin Grueber, and Ryan Helwig Battelle Memorial Institute Technology Partnership Practice

PREPARED BY:

Battelle

Technology Partnership Practice

PREPARED FOR:

The Mississippi Energy Institute

2012

Battelle is the world’s largest non-profit independent research and development

organization, providing innovative solutions to the world’s most pressing needs through its

four global businesses: Laboratory Management, National Security, Energy, Environment

and Material Sciences, and Health and Life Sciences. It advances scientific discovery and

application by conducting $6.5 billion in global R&D annually through contract research,

laboratory management and technology commercialization. Battelle’s Technology

Partnership Practice (TPP) assists local, state, and regional organizations, universities, nonprofit

technology organizations, and others in designing, implementing, and assessing technology-

based economic development programs.

The Mississippi Energy Institute (MEI) conducts research to assist in the development of

state policies that support a reliable and expanding energy portfolio that is environmentally

responsible. MEI also works to understand and engage in the national energy debate while

taking advantage of market opportunities that will assure Mississippi's economic

development competiveness. MEI operates with the following key objectives:

Develop: To support and seek the development of policy recommendations that will

enhance the energy infrastructure and industry in Mississippi.

Foster: To encourage innovation in energy production to enhance the economic vitality

of Mississippi and provide national energy solutions.

Support: To support educational initiatives to meet the present and future workforce

needs of the Mississippi energy infrastructure and industry.

Communicate: To communicate Mississippi's commitment to national leadership

through responsible energy production and use.

CONTENTS:

Executive Summary ............................................................................................................................................................. ES-1

A. Mississippi’s Current Energy-Based Economic Development Status ......................................................................... ES-1

B. Mississippi Energy-Based Economic Development Opportunities............................................................................. ES-2

C. Recommended Energy-Based Economic Development Platforms ............................................................................ ES-4

D. Recommended Strategies and Actions for Mississippi Energy-Based Economic Development ................................... ES-6

E. Summary ............................................................................................................................................................. ES-10

I. Introduction ................................................................................................................................................................... 1

A. Defining the Energy Sector ......................................................................................................................................... 4

B. Structure of This Report ............................................................................................................................................. 6

II. Current Status of the Energy Sector in Mississippi .......................................................................................................... 7

A. Mississippi Energy Profile ........................................................................................................................................... 7

B. Energy Employment by Leading Energy Sub-Clusters ................................................................................................... 9

C. Employment Compensation Levels in Mississippi Energy ............................................................................................13

D. Research and Development in the Mississippi Energy Cluster .....................................................................................15

E. Conclusions: ..............................................................................................................................................................20

III. Strengths, Weaknesses, Opportunities and Threats Assessment ...............................................................................22

A. STRENGTHS – Mississippi Strengths and Assets ..........................................................................................................22

B. WEAKNESSES – Mississippi Weaknesses and Gaps ......................................................................................................26

C. OPPORTUNITIES – Mississippi Opportunities ...............................................................................................................28

D. THREATS – Threats to Mississippi ...............................................................................................................................31

IV. Opportunity Areas Identified, and Linkages to Suggested Platforms .........................................................................33

A. Opportunities Based on Mississippi Core Competencies ..................................................................................................33

B. From Opportunities to Platforms: Suggested Thematic Energy Platforms for Focused Development in

Mississippi .........................................................................................................................................................................39

V. Future Energy: Frontier Technologies for the United States ...............................................................................................44

A. Federal Funding of Frontier Energy Science: ARPA-E ..................................................................................................45

B. Federal Funding of Frontier Energy Science: Energy Frontier Research Centers ...........................................................47

C. The Battelle TPP ”Take” on Energy Technology Frontiers ............................................................................................50

D. The World of “The Jetsons”: Energy Technologies with a Long-Term Perspective ........................................................54

VI. Strategies and Actions for Energy-Based Economic Development in Mississippi .......................................................58

A. Introduction ..............................................................................................................................................................58

B. Cross-Cutting Strategies and Actions for Mississippi Energy-Based Economic Development ........................................59

C. Platform-Specific Actions for Advancing Energy-Based Economic Development in Mississippi .....................................81

D. Summary ..................................................................................................................................................................85

Appendix A: Identified Mississippi Energy Opportunity Areas – Summary Tables ......................................................................89

Appendix B: Examples of Energy Areas Not Selected as Core Opportunities for Mississippi ..................................................... 133

Appendix C: Draft Strategies and Actions Presented to Focus Group Participants.................................................................... 134

ES-1

Executive Summary

Because of the reliable nature of demand for energy moving into the future, energy provides a relatively

secure asset for those states that have robust energy resources or the infrastructure and know-how

needed to drive the further development of energy technologies and solutions to meet global and

domestic needs. Energy exploration, extraction, conversion, distribution and use represent a value-chain

with substantial opportunities for advanced technology deployment and innovation and for traditional

economic development based on industry growth.

Mississippi enjoys significant economic activity rooted in the energy sector, and has the assets and

resources to realize further economic growth from energy and associated energy-related technologies.

Leaders in the State have shown foresight in forming the Mississippi Energy Institute (MEI) as an

organization to study the energy opportunity, to advise State leaders on policies and programs to

maximize benefits from energy in the State, and to develop strategies and action plans to maximize the

development opportunities for Mississippi.

In some regards, Mississippi faces an “embarrassment of riches”, having so many energy-related assets

and opportunities that it is a challenge to understand them all, prioritize them based on development

potentials, and formulate strategies to optimize their enhancement and growth to benefit Mississippi

and Mississippians. Recognizing this challenge, MEI retained the services of the Battelle Memorial

Institute, the nation’s foremost non-profit R&D institute and specialists in the energy sector, to provide

guidance for Mississippi’s growth and development across the energy value-chain and recommended

strategies and actions for leveraging Mississippi’s key energy and associated-technology assets and

addressing any gaps in this energy development ecosystem. Battelle performed both quantitative (data

analysis) and qualitative (in-depth interviews and focus groups) research to identify the strengths,

weaknesses, opportunities and threats for the energy cluster in Mississippi, identified the State’s energy

core competencies in terms of assets, capabilities and R&D strengths, and determined key energy

economic development platforms upon which further economic development in the State may be built.

Specific strategies and actions are recommended to drive energy-based development in general and

specific to each platform.

A. Mississippi’s Current Energy-Based Economic Development Status

Energy in Mississippi is a sector that “punches above its weight” for Mississippi. Jobs in energy and

energy-related subsectors of the Mississippi economy paid an average salary of $63,456 in 2010, a figure

89.3% higher than the average private sector wage in the state of $33,524. It is also a “specialized

industry” for the state, demonstrating a location quotient of 1.63 (when a location quotient of 1.0 would

be expected, to be in parity with the national ration of energy employment to total employment). It is

also a diverse industry for Mississippi that is not overly dependent on any individual subsector, with five

out of six macro energy sub-clusters having location quotients higher than 1.2. The energy sector in

Mississippi has also outperformed the national energy sector in terms of growth rates for the past

decade and employment retention during the recent recession.

ES-2

Mississippi thus benefits from a diverse, high wage and specialized industry, in energy, that has strong

prospects for the future considering U.S. Energy Information Agency global demand projections.

Based on quantitative data analysis, it is evident that, at the present time, Mississippi primarily has an

energy resource-based economy, as opposed to an energy technology development economy.

Mississippi has abundant and diverse energy resources (including natural gas, oil, coal and biomass) and

a comparatively diverse base of industry engaged in generating energy, distributing energy, and (to a

more limited degree) manufacturing energy systems. While the state has significant economic activity

from this suite of traditional energy assets, it is relatively weak in the actual development of R&D based

innovations and the pursuit of technology-based economic development within the energy cluster.

While, Mississippi’s energy industry may be using advanced technologies in the identification,

extraction, conversion and distribution of fuels and energy, there is relatively limited activity in the

development and commercialization of such technologies at the present time. In the near-term the

primary implication of this finding is that energy-based economic development in Mississippi will need

to continue to emphasize traditional economic development activity (focused on industry recruitment,

business retention and expansion strategies, and a concentration on sustaining a competitive business

climate). The more modern technology-based economic development strategies, focused on fostering

advanced technology R&D and leveraging R&D innovations for new business development and existing

business growth via new product pathways, need to be the subject of further development in

Mississippi and are addressed in the strategy.

B. Mississippi Energy-Based Economic Development Opportunities

Through triangulating the findings from existing reports and data, in-depth field interviews and the

resulting SWOT analysis, multiple energy opportunity areas were identified by Battelle for Mississippi.

There is considerable variability, however, in the time horizon for development of these opportunities,

the scale of the opportunities, and their job and income generation potential for the state. The Battelle

team identified 16 energy opportunity areas for Mississippi, as shown on Table ES-1 below.

These 16 opportunity areas vary in potential time-frame for opportunity realization, and fall under five

broad “energy group” themes of: Oil/Gas Energy Exploration & Production; Nuclear Energy; Clean

Technology; Applied Environmental Science for Energy, and Electric Power Production and Power

Systems.

Many states are struggling to find opportunities for economic development and new job generation.

Mississippi, however, has multiple opportunities for energy-based economic development in the near-,

mid- and long-term time horizons. Rich in natural resources, benefiting from a low-cost operating

environment, and supported by State government that is aggressive in winning competitive economic

development projects, Mississippi is relatively well positioned to build upon its already significant

presence in energy and associated industries.

ES-3

Table ES-1: Listing of Identified Energy-Based Economic Development Opportunities for Mississippi

ENERGY GROUP

ENERGY OPPORTUNITY AREA

NEAR-TERM (Present–3 years)

MID-TERM (4–8 years)

LONG-TERM (8+ years)

Oil/Gas Energy Exploration & Production

• Shale Gas and Shale Oil

• Enhanced Oil Recovery (EOR)

• Energy Exploration Technology

• Near-Shore Conventional Natural Gas

• Offshore Gas Hydrates

Nuclear Energy

• Interim Storage • Used Fuel R&D

• Nuclear Storage and Reprocessing

• New Reactors

Clean Technology

• Biobased Liquid Fuels & Chemicals

• Solar/PV Energy Production Systems and Components

• Biobased Fuels for Electricity Generation

• Alternative Vehicles and Fueling Infrastructure

• Energy Applications of Polymers (including Electric Energy Storage Systems)

Applied Environmental Science for Energy

• Advanced Coal/Lignite Utilization Technologies

• Geologic Storage of Energy Resources

• Carbon Dioxide Capture, Storage and Utilization

Electric Power Production and Power Systems

• Energy Monitoring & Management Systems

• Electric Power Generation and Transmission Equipment

ES-4

C. Recommended Energy-Based Economic Development Platforms

With Mississippi having such a diverse variety of potential energy opportunities to pursue, it is necessary

to refine these opportunities into broader development “platforms”. A platform forms a focus around

an energy theme that comprises:

A logical clustering of businesses with interests in similar feedstocks, processes, manufactured

products or markets

A theme around which core commercial, academic and government laboratory research

capabilities can be applied

A theme around which collaborative public/private partnerships may be developed to promote

shared interests and encourage the development of a favorable operating environment for

platform growth.

Should be associated with a significant potential market with an achievable line-of-sight for the

sale of resources, new technologies, services and value-added products.

Based on the above, Battelle has identified four ENERGY PLATFORMS for Mississippi that can encompass

the majority of the identified opportunity areas. Three of these four platforms meet the full-criteria

above and represent opportunities for near-term job growth in Mississippi. A fourth platform “nuclear”

is a special case, with a significantly longer-term development horizon. These four platforms are shown

on Figure ES-1, and include:

Gas Platform: Focused on the use of conventional natural gas, shale gas, and syngas from

biomass, petcoke and lignite gasification for low-cost and reliable electricity generation (which

may attract and retain energy intensive industries to Mississippi) and for the production of

value-added gas and syngas-based products such as fuels, chemicals and plastics.

Biomass Platform: Focused on the use of Mississippi’s abundant supply of biomass (especially

lignocellulosic biomass) for application to power generation and, more importantly, as feedstock

for integrated biorefinery operations in production of liquid fuels, chemicals and biobased

materials.

Advanced Manufacturing of Energy Systems, Components and Energy-based Products:

Primarily a recruitment platform, focused on the attraction of manufacturers to the state of

Mississippi in energy fields in which the state has proven capabilities and assets, or a nascent

research base upon which commercialization of energy technologies may occur.

Nuclear Platform: A longer-term platform leveraging the nuclear industry friendly

characteristics and geology of the state. Over the long-term this platform may involve

Mississippi providing solutions to a national need for spent fuel storage/disposal and nuclear

fuel reprocessing. This is listed among the platforms because, while long-term for job

development, actions need to be taken in the near term to position Mississippi with key

regulatory/government agencies as a state open to opportunities in this arena.

Figure ES-1 illustrates the platforms and their connectivity to the various energy-based opportunities

identified for Mississippi. Color coding and connected lines show the relationship of opportunity areas

ES-5

and resources to each platform. It should be noted that there will also be interaction across platforms,

since both biomass and natural gas provide a pathway to certain similar products (fuels and chemicals

for example) and the production of these relates to the advanced manufacturing platform.

Figure ES-1: Recommended Platforms for Mississippi Energy-Based Economic Development and Their Linkages to

Key Energy Opportunity Areas in Mississippi

The identification of Energy Platforms is not an end in itself, but rather a starting point for Mississippi to

move ahead in overall energy-based economic development. The platforms align with specific identified

core competencies, industry capabilities (established and emerging) and energy-resource assets in

Mississippi and they have the potential to drive significant job growth in the state. In order to guide and

realize the potential of these platforms for Mississippi, it is essential to advance bold but also realistic

development plans that incorporate “outside the box” thinking about how best to create the strong,

systematic linkages across Mississippi’s industry, academic and public sector institutions.

To guide the substance of these development plans, Battelle and the Mississippi Energy Institute

convened industry executives, research leaders from universities, government leaders, and non-profit

Shale GasCoal

(Lignite) Gasification

Off-shore Gas

Hydrates

Near-shore Natural Gas

EOR and Shale Oil

Solar/PV Systems

EnergyGeneration& Dist. Tech

Smart GridSystems

Batteries/Energy Storage

Energy Exploration

Tech

ElectricityProduction

LiquefiedNatural Gas

AgriculturalChemicals

Chemicalsand

Plastics

Biomass

Salt DomeUsage

Carbon Dioxide for EOR/EGR

Petcoke

Spent FuelReprocess.

Spent FuelStorage/Disposal

Carbon Capture/Storage

BiomassPlatform

AdvancedManufacturing

Platform

NuclearPlatform(longer term)

GasPlatform

Conv. Nat’l Gas & Gas

Distribution

Natural GasVehicles

Forest Products

ES-6

and foundation representatives to participate in focus group discussions facilitated by Battelle in the

four energy platform areas identified:

• Gas Platform

• Biomass Platform

• Energy Products & Systems Advanced Manufacturing Platform

• Nuclear Platform

The key topics framing the discussions at each of these technology platform focus group meetings

included:

• Validating the assessment of the particular platform area prepared by Battelle, in

consultation with the Steering Committee, to ensure that it was complete and fully

reflected the core competencies found in Mississippi;

• Gathering participant insight and recommendations into crosscutting strategies and actions

designed to support energy-based economic development in Mississippi.

• Gathering participant recommendations regarding specific actions needed to address

development challenges and opportunities facing Mississippi in its efforts specific to each

platform.

D. Recommended Strategies and Actions for Mississippi Energy-Based Economic

Development

While each of the energy platforms had its own specific set of development issues and opportunities,

there needs to be a core focus for MEI on cross-cutting strategies and actions that will support energy-

based economic development in the state across each of the platforms and beyond.

Based on all preceding steps in the quantitative and qualitative SWOT evaluation for energy in

Mississippi, the identification of core competencies, and needs and challenges identified during project

interviews, and the input of focus group participants, five primary strategies, with 24 associated actions

are recommended.

Table ES-2: Summary of Final Recommended Strategies and Actions

Timing Designation Definition

Immediately Action should be initiated as soon as feasible Short-Term Action should be initiated within 12 months Medium-term Action should be initiated within the next 12–36 months Long-Term Action should be undertaken more than three years hence

ES-7

Strategy Actions Timing

STRATEGY ONE: Grow the energy R&D base in the state and accelerate commercialization of R&D-based innovations

1.1 – Develop a multi-university collaborative energy research institute, comprising key faculty from across MS research universities and industry experts with energy interests and expertise.

1.2 – Prioritize recruitment of new/replacement faculty to be focused on enhancing capabilities in key energy platforms.

1.3 – Develop an energy technology networking and scientific interest group comprising industry and academic representatives to generate and sustain collaborative dialog.

1.4 – Coordinate inventory and marketing of university testing capabilities and instrumentation for materials and chemical characterization to service Mississippi industry

1.5 –Develop an energy-technology seed capital initiative for Mississippi, bringing high net-worth individuals, venture capitalists and energy corporations together for syndicated investments.

Immediate

Medium-term

Short-term

Short-term

Short-term

STRATEGY TWO: Grow the state energy industry base through targeted marketing and business recruitment

2.1 – Form partnership between MDA, MTA and MEI for energy-based economic development marketing.

2.2 – Form an energy business leaders advisory cabinet to provide contacts, advice on messaging, and to participate in key business meetings with prospects.

2.3 – Build a marketing prospects database and dataset of key energy thought leaders and industry influencers. Develop targeted communications strategy using e-newsletters linked to Web content.

2.4 – Support State of Mississippi government business location incentives packages, including private R&D incentives, and engage advisory cabinet in providing advice to State on energy-specific incentives.

2.5 – Utilize university GIS capabilities in combination with State Geological Survey and other information resources to develop centralized information source on Mississippi geology, water resources and other key assets. Make this Internet accessible.

2.6 – Organize an Energy Summit to launch the MEI Roadmap, and foster early dialog with diverse audiences on implementation of strategies and actions.

Immediately

Short-term

Medium-term

Immediately

Medium-term

Short-term

ES-8

STRATEGY THREE: Support state energy sector growth via supply chain and partnering facilitation activities

3.1 – Inventory capabilities of energy-companies and companies supplying and servicing the energy industry in Mississippi.

3.2 – Identify gaps in the local energy-industry supply chain based on inventory and advice from companies.

3.3 – Identify opportunities for strategic partnering based on inventory of capabilities.

Medium-term

Medium-term

Medium-term

STRATEGY FOUR: Promote Mississippi and the advantages of Mississippi as a location for energy projects to key government entities (Federal and State)

4.1 – Build and sustain close relationships with the U.S. Department of Energy in relation to nuclear storage, carbon sequestration and other projects and initiatives relevant to Mississippi assets.

4.2 – Provide ongoing commentary and advice regarding legislation and public policy likely to benefit or impede energy-based economic development.

Immediately

Immediately

STRATEGY FIVE: Assure supply of workers with skills required by targeted energy industry sectors

5.1 – Engage leadership of existing industry in the four energy platforms to identify key workforce needs and insight on positions expected to expand and those proving challenging to fill.

5.2 – Engage community college system across Mississippi to provide vocational career training pathways for high school and post-secondary students focused on energy industry career opportunities.

5.3 – Evaluate opportunities to establish Energy Career Academies within selected high schools and to integrate energy case studies within STEM education

5.4 – Develop informational materials on energy careers and opportunities in Mississippi and provide online Webinar to high school guidance counselors to introduce these materials for their use.

5.5 – Engage MEI member companies and other energy industries in Mississippi with the MDA job fair program

5.6 – Increase industry engagement with Mississippi universities via industry advice on electives, co-ops and internships, and on-line course offerings for continuing education and non-credit courses.

5.7 – Leverage university alumni associations to indentify engineers, scientists and technologists working in energy-industries outside of Mississippi, and use e-communications to highlight job opportunities, openings and career paths in Mississippi.

Medium-term

Medium-term

Medium-term

Short-term

Short-term

Medium-term

Medium-term

ES-9

Chapter VI of the full report provides specific details regarding each of the strategies and actions,

including rationale for each, details on the recommended action, timing for the actions and

recommendations for entities to lead implementation.

In addition to discussing the cross-cutting strategies and actions, focus groups also directed attention to

platform specific actions that should be considered for the Mississippi Energy Institute and its

collaborating partners. For each of the platforms it is advised that MEI form a platform advisory board

comprising industry representatives, university research leaders with key work in the platform and other

relevant key stakeholders.

Specific platform actions, recommended include:

Gas Platform Actions

Action GP-1. Leverage High Availability of Low Cost Natural Gas for Energy Intensive Industry Growth.

Action GP-2. Pursue Development of Value-Added Chemicals from Gas Resources, and Re-shoring of Agricultural Chemicals Industry.

Action GP-3. Encourage Development of Shale Gas Resources on an Optimized Timeline.

Action GP-4. Encourage Reinvestment in Geological Survey.

Action GP-5. Reach Out to Gas Industry Research Groups.

Action GP-6: Include Land Fill and Biodigester Gas in Platform Work.

Action GP-7: Pursue Opportunities for Independent Power Plants.

Action GP-8: Investigate LNG Export Potential and Infrastructure Repurposing

Action GP-9: Combat Public Misinformation and Use as an Advocacy Platform.

Biomass Platform Actions

Action BP-1: Accelerate Commercialization of University Technologies and Processes.

Action BP-2: Leverage Large Companies for Biomass Purchasing Power.

Action BP-3: Evaluate Disruptive Effects of Biomass on Existing Mississippi Industry and Phase-In Accordingly.

Action BP-4: Consider Other Biomass Beyond Only Forest Resources.

Advanced Energy Systems Manufacturing Platform

For the most part, the cross-cutting actions cover necessary actions for the Advanced Manufacturing

platform. Focus group participants did suggest, however, the following additional action:

Action AMP-1: Sustain Fast, High Level Responsiveness Mississippi Inward Investment Services

ES-10

Nuclear Platform

E. Summary

It is clear that Mississippi has considerable opportunities to achieve enhanced wealth and job creation

in the State based on existing and emerging energy core competencies. Through both cross-cutting

and platform specific strategies and actions, Mississippi has great potential to generate energy-based

economic development.

Taking advantage of these opportunities, and implementing the recommended strategies and actions

will require collaboration between multiple entities—non-profit economic development bodies (such

as MEI and MTA), the State’s economic development agency (MDA), industry partners and

Mississippi’s research universities. The Mississippi Energy Institute, with just three staff at the present

time, is too small to run with all the strategies and actions on its own, but does not need to. MEI

should take a coordinating role, working with other strategic partners (including MDA, MTA,

universities and private stakeholders) to assure implementation of recommendations.

Action N-1: Develop MEI Nuclear Industry Advisory Committee to Pursue a Small Modular Reactor Project.

Action N-2: Develop “Shared Voice” for Mississippi on Nuclear Energy.

Action N-3: Build Relationships with National Laboratories.

1

Figure 1: Global Energy Demand Predictions by Source

Source: U.S. Energy Information Administration

Liquids

(including biofuels)

Nuclear

Renewables

0.0

50.0

100.0

150.0

200.0

250.0

1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 2020 2024 2028

Natural Gas

Coal

Quadrilli

on B

TU

s

Year

“We need energy solutions with unbelievable scale and reliability.”

Bill Gates TED Conference 2010

I. Introduction

The State of Mississippi has identified “energy” as an area of focused opportunity for economic

development. Blessed with a diversity of energy resources (such as oil, natural gas, coal and biomass)

Mississippi has a robust energy supply to leverage for potential job growth and economic development.

Likewise, Mississippi has significant infrastructure in power generation (incorporating nuclear as well as

fossil fuel based power generation) and is a hub for the distribution of natural gas, oil and refined

petroleum products. Major port access on the Gulf of Mexico, in combination with the Mississippi River

and Tenn Tom Waterway, rail infrastructure, high capacity pipelines and other core infrastructural assets

round-out the suite of assets that may further energy-based development.

As shown in Figure 1,

global and U.S. demand

for energy and fuels, in

all their forms, will not

abate. Demand is such

that more energy, in all

its forms will be needed

to meet demand

projections. Both

developed and

developing nation

economies absolutely

rely on a steady stream

of energy to power

economic and societal

activity. Because of the

reliable nature of

demand for energy moving into the future, energy may be seen as providing a relatively secure asset for

those nations, regions and states having robust energy resources or the infrastructure and know-how

needed to drive the further development of energy

technologies and solutions to meet global and domestic

needs.

Energy is, however, a highly dynamic sector influenced by

global economic trends, U.S strategic concerns over

dependence on foreign fuel imports, environmental concerns over emissions, and the policy decisions of

governments. In addition energy extraction, conversion, distribution and use represent a value-chain

with substantial opportunities for advanced technology deployment and innovation. Opportunities for

technology-based economic development exist for those states able to attract and grow R&D activity

and innovation commercialization in energy and energy-related technologies. There are, therefore,

multiple pathways that a state may follow in pursuing energy-based economic development: 1) a state

2

may exploit its natural fuel assets (such as oil, gas or biomass) to generate power, 2) it may export

unrefined fuels or energy, 3) it may further convert fuels into higher value-added liquid fuels, chemicals

or materials for export, 4) identify manufacturing and service sector opportunities related to energy and

5) leverage intellectual and research assets to develop new products energy-technologies and solutions

for sale in the domestic and international marketplace.

Mississippi enjoys significant economic activity rooted in the energy sector, and has the assets and

resources to realize further economic growth from energy and associated energy-related technologies.

Leaders in the State have shown foresight in forming the Mississippi Energy Institute (MEI) as an

organization to study the energy opportunity, to advise Mississippi leaders on policies and programs to

maximize benefits from energy in the State, and to develop strategies and action plans to maximize the

development opportunities for Mississippi. In some regards, Mississippi faces an “embarrassment of

riches”, having so many energy-related assets and opportunities that it is a challenge to understand

them all, prioritize them based on development potentials, and formulate strategies to optimize their

enhancement and growth to benefit Mississippi and Mississippians. Recognizing this challenge, MEI met

with the Battelle Memorial Institute, the nation’s foremost non-profit R&D institute and specialists in

the energy sector, together with Battelle’s technology-based economic development arm (Battelle

Technology Partnership Practice), to request consulting and strategic planning services that would

provide analysis and guidance towards maximizing Mississippi’s growth and development across the

energy value-chain and a strategy for optimally leveraging Mississippi’s key energy and associated-

technology assets and addressing any gaps in this energy development ecosystem.

Mississippi has the potential to stand out in energy-based economic development. Doing so, however,

requires prioritization of activities, backed by an understanding of energy assets, opportunities and

challenges in the State, thus serving to guide state actions. To advance effective public and private

actions in Mississippi focused on energy-based economic development, it is critical for the state and key

stakeholders to have reliable information, identifying the near term growth opportunities in energy

development for Mississippi, together with a detailed and objective understanding of its assets and

gaps. Based on this objective analysis a strategic action plan can then be developed to promote the

growth and development of specific energy-based platforms most likely to benefit the Mississippi

economy in the near-term (present–3 years).

The energy opportunity for Mississippi is so diverse that Battelle had to take care to root an energy

strategy and associated action recommendations in a firm base of knowledge regarding energy

strengths, weaknesses, opportunities and threats in the State. Effective policies and actions need to be

focused where they will do the most good—reinforcing the states strengths, enhancing growth in

technological energy-related core competencies and filling any identified gaps in assets, infrastructure

and resources for energy-based development across the value-chain. Battelle’s work thus comprised

several work elements:

Developing a definition of the energy sector and related economic sub-sectors and performing

quantitative analysis to establish the current position of the state in terms of key economic

indicators for these sub-sectors.

3

Gathering information on energy and energy-related R&D activities and assets in Mississippi,

and determining key R&D core competencies in the state that may drive new technology-based

energy development or provide support for the further development of existing Mississippi

energy sectors.

Interviewing energy industry leaders, academic researchers, policymakers, thought leaders and

other key stakeholders, both within Mississippi and outside, to gain insight and perspective on

Mississippi’s strengths, weaknesses, opportunities and threats in regards to energy-based

economic development.

Assembling the quantitative data and qualitative insights on Mississippi strengths and assets, in

combination with market assessments, and an understanding of the line-of-sight of various

energy resources and new technologies to commercial application, in order to identify specific

energy fields or technology focus areas (aka “platforms”) that represent the best opportunities

for Mississippi’s further economic development.

Developing a series of strategies, with specific associated action recommendations, designed to

guide MEI’s and other key stakeholders’ work, in achieving statewide development in the

recommended focused platforms. And, providing recommendations regarding cross-cutting

strategies and actions required for optimizing the energy-based economic development

environment within the State of Mississippi.

4

A. Defining the Energy Sector

In performing this analysis, Battelle has defined the energy sector quite broadly, to encompass a wide

range of energy and energy-related subsectors across a value chain (see Figure 2).

Figure 2: The Energy Value-Chain, Associated Technology Areas and Key Location Factors Impacting Value-Chain

Development

As Figure 2 shows, the research and resulting strategy performed by Battelle seeks to take into account

multiple components of the energy value-chain and a broad variety of potential energy and associated

technology fields that may generate technology-based economic development for Mississippi. Breaking

this down in more detail, Battelle defines the Mississippi Energy Cluster in terms of the specific NAICS

codes listed in Table 1. The study also seeks to examine Mississippi’s strengths and weaknesses in the

business location factors that matter to industry in the energy production value-chain and energy

technology R&D and manufacturing.

Multiple

Technology &

Innovation

Opportunities

• Efficiency

• Distribution

• Smart-grid

• Value-added chemicals

and materials

• Energy systems and

equipment components

manufacturing

• Co-generation

• Renewables integration

• Enhanced recovery

• Carbon capture/use and

sequestration

•Etc…..

Physical

Infrastructure

R&D Capacity and

Competencies

Education and Workforce/

Talent and Skills

Resource Base, Assets (&

Gaps)

Policies, Incentives and

Regulatory Environment

Business Development,

Marketing and Recruitment

Energy Business

Location Factors

Value-Chain Energy Technology

Development

Exploration

Intermediate

Processing

Electricity

Generation

Distribution

CoalNatural

GasOil

Nuclear

Biomass/

Renewables

Chemicals &

Materials

Fuels

Manufacturing

Extraction/

Mining

Biomass

production

5

Table 1: NAICS Included in Definition of Energy Cluster in Mississippi, and Sub-Clusters to which these NAICS are

Assigned

Industry Code Industry Title Energy Sub-cluster

211111 Crude Petroleum and Natural Gas Extraction Extraction/Resource Development

211112 Natural Gas Liquid Extraction Extraction/Resource Development

212111 Bituminous Coal and Lignite Surface Mining Extraction/Resource Development

213111 Drilling Oil and Gas Wells Extraction/Resource Development

213112 Support Activities for Oil and Gas Operations Extraction/Resource Development

213113 Support Activities for Coal Mining Extraction/Resource Development

424710 Petroleum Bulk Stations and Terminals Petroleum Products & Wholesale

424720 Petroleum and Petroleum Products Merchant Wholesalers (except Bulk Stations and Terminals) Petroleum Products & Wholesale

454311 Heating Oil Dealers Petroleum Products & Wholesale

454312 Liquefied Petroleum Gas (Bottled Gas) Dealers Petroleum Products & Wholesale

454319 Other Fuel Dealers Petroleum Products & Wholesale

221111 Hydroelectric Power Generation Power Generation

221112 Fossil Fuel Electric Power Generation Power Generation

221113 Nuclear Electric Power Generation Power Generation

221119 Other Electric Power Generation Power Generation

221121 Electric Bulk Power Transmission and Control Power Transmission/Distribution

221122 Electric Power Distribution Power Transmission/Distribution

221210 Natural Gas Distribution Power Transmission/Distribution

221330 Steam and Air Conditioning Supply Power Transmission/Distribution

237120 Oil and Gas Pipeline and Related Structures Construction Power Transmission/Distribution

237130 Power and Communication Line and Related Structures Construction Power Transmission/Distribution

335311 Power, Distribution, and Specialty Transformer Manufacturing Power Transmission/Distribution

324110 Petroleum Refineries Refineries

325193 Ethyl Alcohol Manufacturing Renewable Energy & Storage

333611 Turbine and Turbine Generator Set Units Manufacturing Renewable Energy & Storage

334413 Semiconductor and Related Device Manufacturing Renewable Energy & Storage

335911 Storage Battery Manufacturing Renewable Energy & Storage

335912 Primary Battery Manufacturing Renewable Energy & Storage

6

B. Structure of This Report

This report takes a straightforward approach to describing and delineating the energy and associated

economic development opportunities for Mississippi.

In Chapter II, which follows, Battelle reviews the current status of the energy sector and associated

value-chain in Mississippi—presenting baseline statistics that may be used in the future in evaluating

progress. In addition to addressing the basic statistics that define energy in Mississippi currently,

Chapter III outlines the findings from a Strengths, Weaknesses, Opportunities and Threats (SWOT)

assessment regarding Mississippi’s energy production, energy technology and energy business location

factors position.

In Chapter IV, summaries are presented for energy technology and/or energy sectors that stand-out

from the data, qualitative interviews and other information resources as being potential opportunity

areas for further development in Mississippi. Chapter IV first presents a series of summary tables for

each of the potential areas, and then narrows these down into a set of Battelle recommended platforms

representing robust opportunities for development in Mississippi in the near-, mid- and long-term time

horizons. Chapter V provides a broad view of emerging energy technologies.

Chapter VI presents recommended strategies and actions for advancing the individual recommended

platforms and more cross-cutting recommendations for actions that will support development across

multiple platforms.

The report also includes a technical appendix. The appendix presents additional detailed data tables and

other information relevant to the study.

7

For comparison purposes it is useful to note that Mississippi

comprises 0.96% of the total land area of the United States, and

is home to 1.33% of the U.S. population.

II. Current Status of the Energy Sector in Mississippi

An energy strategy needs a starting point, a baseline measure of the energy sector in Mississippi against which expectations for growth can be set and metrics for measuring development progress calibrated. Battelle accessed a broad range of information and data resources in order to develop a data-driven profile of Mississippi’s current energy profile and key assets.

A. Mississippi Energy Profile

While Mississippi has a broad range of fossil fuel reserves, abundant biomass, and a diversified value-added energy production base in terms of electricity production and refining, the state is a net importer of energy. Mississippi consumes more energy than it currently produces (see Table 2) and, based on this energy balance, imports more raw energy than it produces.

Table 2: Mississippi Total Energy Consumption and Production 2009 Data from U.S. Energy Information Administration

MS Consumption MS Production Difference1

Total Energy 1,139 trillion Btu 456 trillion Btu 683 trillion Btu

While Mississippi is not yet one of them, there are several U.S. states that have total production that exceeds total consumption, including: Alaska; Colorado; Kentucky; Louisiana; Montana; New Mexico; North Dakota; Oklahoma; Texas; Utah; West Virginia, and Wyoming. From an economic development standpoint, it may be concluded that:

Conclusion 1: Mississippi currently consumes more raw energy than it produces, and imports more raw energy than it produces. Thus, from a basic economic policy standpoint, increasing energy production in Mississippi will enhance Mississippi’s balance of trade and benefit the Mississippi economy. In terms of energy production, Mississippi has a relatively diversified production profile. Table 3 shows production statistics from the U.S. Energy Information Administration (EIA)

Table 3: Mississippi Energy Production Data from U.S. Energy Information Administration

Source Production Amount Share of U.S. Period

Total Energy 456 trillion Btu 0.60% 2009 Crude Oil 23,642 thousand barrels 1.20% 2010 Natural Gas (Marketed) 73,721million cu. ft. 0.30% 2010 Coal 4,004 thousand short tons 0.40% 2010

In terms of total energy production,

Mississippi currently produces 0.60% of

U.S. production—a lower amount than

1 Total consumption minus total production; represents interstate flows, net imports, and stock changes.

8

might be expected given that Mississippi comprises 0.96% of total U.S. land area. In terms of share of

U.S. production, Mississippi’s oil production has the highest number with 1.20%, followed by coal at

0.40% and natural gas at 0.30%.

Conclusion 2: In terms of raw energy sources, Mississippi benefits from having in-state resources in the three major fossil fuels of oil, natural gas and coal.

In terms of electricity generation, Mississippi produced 54,487 thousand MWh in 2010 (1.37% of U.S.

production) with the largest proportion of this electricity production coming from natural gas-fired

power plants (54.4% of Mississippi’s electricity production). The next highest proportion of generated

electricity within Mississippi comes from coal power (25%) and nuclear (the Grand Gulf power plant)

which generated 17.7% of Mississippi’s electricity production in 2010. Renewables-based electricity

generation has not yet gained much penetration into the Mississippi generation portfolio, comprising

just 2.8% of production in 2010.

Table 4: Mississippi Annual Electricity Generation (2010) - Megawatthours Data from U.S. Energy Information Administration

Net Electricity Generation Amount Percent of MS Generation

Total Net Electricity Generation 54,487,260 MWh 100%

Natural Gas 29,618,922 MWh 54.4%

Coal 13,628,997 MWh 25.0%

Nuclear 9,643,241 MWh 17.7%

Other Renewables2 1,504,270 MWh 2.8%

Petroleum 81,500 MWh 0.1%

Other Gases3 1,635 MWh 0%

Hydroelectric -- --

Other4 8,696 MWh 0%

Conclusion 3: Renewable energy production has achieved only limited penetration in Mississippi currently. Less than 3% of Mississippi’s electricity is generated via renewable resources, compared to 14% nationally (5% nationally from non hydro-electric renewables).5

2 “Other Renewables” includes biogenic municipal solid waste, wood, black liquor, other wood waste, landfill gas,

sludge waste, agriculture byproducts, other biomass, geothermal, solar thermal, photovoltaic energy, and wind. 3 “Other Gases: includes blast furnace gas, propane gas, and other manufactured and waste gases derived from fossil

fuels. 4 “Other” includes non-biogenic municipal solid waste, batteries, chemicals, hydrogen, pitch, purchased steam,

sulfur, tire-derived fuels and miscellaneous technologies. 5 Source: U.S. Energy Information Administration 2011.

9

B. Energy Employment by Leading Energy Sub-Clusters

Table 1 shows the full complement of NAICS used to define the overall energy cluster in Mississippi.

Battelle assigned each of these individual NAICS to one of six sub-clusters for analysis purposes:

Power Transmission and Distribution

Extraction and Resource Development

Petroleum Products and Wholesale

Refineries

Power Generation

Renewable Energy and Storage.

Table 5 summarizes most recently available establishment and employment data (2010) for these six

sub-clusters. In total the state includes 1,146 establishments in the energy sector overall, with a

combined employment of 22,035 (2.6% of Mississippi’s total private sector labor force). Energy

represents a “state specialization” since the location quotient (LQ)6 for this volume of energy

employment is 1.63 (a state specialization requires an LQ of 1.2 or higher). At an LQ of 1.63, the energy

cluster in Mississippi employs approximately 63% more personnel than would be expected, given the

energy sector’s overall share of employment in the national economy. It is also notable that Mississippi

enjoys a specialized level of location quotient in five out of the six energy subclusters. Particular

employment strengths are found in the value-added activities of power transmission and distribution,

and refinery operations.

Table 5: Mississippi Establishments, Employment and Location Quotients for the Total Energy Cluster and Individual Subclusters Battelle analysis of Bureau of Labor Statistics, QCEW data and enhanced file from IMPLAN.

Energy Subcluster Mississippi Establishments,

2010

Mississippi Employment,

2010

Location Quotient,

2010

Mississippi Employment

Percent Change, 2001–10

U.S. Employment


Total Private Sector 65,138 833,480 n/a -5.8% -2.9%

Total Energy Cluster 1,146 22,035 1.63 2.9% -4.1%

Power Transmission/ Distribution

364 11,002 2.40 7.8% 11.5%

Extraction/Resource Development

440 5,229 1.39 18.0% 38.5%

Petroleum Products & Wholesale

278 2,156 1.58 -21.2% -20.1%

Refineries 14 1,951 3.42 29.2% -3.0%

Power Generation 42 1,598 1.20 -34.1% -39.2%

Renewable Energy & Storage

8 99 0.05 -12.2% -31.4%

6 Location Quotient = (State Employment in Energy Cluster in Year T / Total State Employment in Year T) / (National

Employment in Energy Cluster in Year T / Total National Employment in Year T)

10

Conclusion 4: Energy, overall is a specialized industry for Mississippi, with a higher concentration of

jobs in the sector in the State than would be expected given national averages. The sector employed

22,035 Mississippi workers in 2010, but this represents only 2.6% of Mississippi’s private sector

workforce.

Overall energy sector employment growth in Mississippi, as benchmarked against national employment

growth, has outperformed both the nation overall, and the average private sector industry growth

performance in Mississippi over the decade. Both energy and non-energy clusters of the economy saw

employment declines during the recessionary period 2008–2010 (Figure 3). Between 2001 and 2007, a

period of economic expansion, energy sector employment in Mississippi grew 11.3%, whereas it

declined by 1.1% nationally. During the period 2007–2010, from the peak of the expansion through the

recession and first year of the recovery, Mississippi’s energy sector employment declined by 7.6%,

whereas again, nationally, energy sector employment contracted by 3.0%. Over the entire decade,

energy sector employment in Mississippi increased 2.9% while U.S. energy sector employment

contracted by 4.1%.

Conclusion 5: Energy has been a growth sector for Mississippi in the past decade. It has consistently

outperformed national energy industry growth levels.

Figure 3: Total Energy Cluster Employment Trends for Mississippi and the U.S. for 2001 through 2010

By analyzing the energy subsector location quotients and comparative energy subsector employment

growth rates versus the nation, we are able to see which energy subsectors are performing most

strongly for Mississippi. The bubble chart (Figure 4) is divided into four quadrants with quadrants to the

11

right of the vertical axis in the center of the chart representing areas of employment growth over the

time period evaluated (2001–2010) and the quadrants to the left containing sectors that saw

employment decline. Quadrants above the horizontal line represent state specialization industries,

defined by their location quotient. Clearly, the ideal place from a state perspective for a sector to be is

the upper right quadrant (specialized and growing), while the bottom right quadrant represents

promising areas in which the state is experiencing growth, but not yet achieved specialization status.

The size of each bubble is proportional to the level of employment in that energy subsector.

As Figure 4 shows, Mississippi enjoys three robust “star” energy subsectors that are specialized and

growing—“power transmission/distribution” (11,002 employees in 2010), “extraction and resource

development” (5,229 employees) and “refineries” (1,951 employees). The “power generation” and

“petroleum products and wholesale” subsectors are both still state specializations for Mississippi, but

experienced employment declines over the 2001–2010 period. As mentioned previously, renewable

energy production continues to underperform in Mississippi.

Figure 4: Mississippi Energy Employment Size, Degree of Specialization (LQ) and Employment Trends by Energy

Subcluster for 2001 through 2010.

Conclusion 6: Within the energy field, “refineries,” “power transmission and distribution” and

“extraction and resource development” are the high performing sub-sectors for Mississippi.

In breaking the data down to a finer level of granularity, it is evident that seven of 28 energy NAICS are

large (>600 jobs), specialized (LQ>1.2) and growing in terms of employment (Table 6).

12

Table 6: Employment Metrics by Energy NAICS Code, 2001 through 2010—NAICS that are Large, Specialized and Growing in Mississippi Battelle analysis of Bureau of Labor Statistics, QCEW data and enhanced file from IMPLAN.

NAICS Title

Establish-ments, 2010

Jobs, 2010

Location Quotient,

2010

MS Employment


U.S. Employment

Percent Change, 2001–10 Energy Subcluster

Total Mississippi Private Sector

65,138

833,480 1.00 -5.8% -2.9%


Support Activities for Oil & Gas Operations

306

2,895 1.83 34.9% 63.4%


Petroleum Bulk Stations & Terminals

88

895 3.59 0.6% -14.9%


Nuclear Electric Power Generation

3

656 1.59 5.9% 15.5%

Power Generation

Electric Power Distribution

77

4,071 2.56 31.5% 57.7%

Power Transmission/Distribution

Oil & Gas Pipeline & Related Structures Construction

104

1,572 2.18 71.2% 20.1%

Petroleum Refineries

14

1,951 3.42 29.2% -3.0% Refineries

An additional four NAICS are large and specialized, but experienced varying levels of employment

decline during 2001 through 2010. These are as follows:

Table 7: Employment Metrics by Energy NAICS Code, 2011 through 2010—NAICS that are Large, Specialized but not Growing in Mississippi Battelle analysis of Bureau of Labor Statistics, QCEW data and enhanced file from IMPLAN.

NAICS Title

Establish-ments, 2010

Jobs, 2010

Location Quotient,

2010

MS Employment


U.S. Employment

Percent Change, 2001–10 Energy Subcluster


65,138

833,480 1.00 -5.8% -2.9%


Drilling Oil & Gas Wells

48

1,084 1.85 -23.5% 20.0%


Liquefied Petroleum Gas (Bottled Gas) Dealers

147

926 3.01 -30.6% -18.7%


Power, Distribution, & Specialty Transformer Mfg

6

3,034 16.12 -14.6% -30.3% Power

Transmission/Distribution Power & Communication Line Construction

141

1,732 1.67 -4.8% -4.0%

13

C. Employment Compensation Levels in Mississippi Energy

A goal of economic developers is not just to help promote the creation of jobs, but also to particularly

encourage the generation of “high quality” jobs—jobs paying above average, family-sustaining wage

levels. Bureau of Labor Statistics data confirm that energy jobs are quality jobs—in Mississippi paying at

average annual wage of $63,456 in 2010 which is considerably higher than the $33,524 average private

sector wage across Mississippi in 2010. Jobs in the “refineries”, “power generation” and “extraction and

resource development” energy subsectors are particularly high paying, at an average of $100,870,

$91,962 and $67,337 in Mississippi respectively.

From an economic development marketing perspective pay levels in Mississippi are still at levels

considerably below those for the national economy overall. That is, employers do not have to pay as

much in Mississippi for labor as in other U.S. locations on average. Mississippi energy wages, on average,

are only 72.5% of the national level.

Table 8: Averages Wages for Selected Industries, 2001–2011 Battelle analysis of Bureau of Labor Statistics, QCEW data and enhanced file from IMPLAN.

Industry Cluster MS Average Wages, 2010

U.S. Average Wages, 2010

Average Wage Difference

Refineries $ 100,870 $ 112,960 -11%

Power Generation $ 91,962 $ 98,516 -7%

Management of Companies & Enterprises $ 70,636 $ 98,215 -28%

Extraction/Resource Development $ 67,337 $ 98,992 -32%

Total Energy Cluster $ 63,456 $ 87,524 -27%

Paper Manufacturing $ 57,738 $ 58,610 -1.5%

Power T/D $ 55,856 $ 75,819 -26%

Renewable Eng & Storage $ 52,511 $ 100,591 -48%

Professional, Scientific, & Technical Services $ 50,576 $ 77,313 -35%

Wholesale Trade $ 47,273 $ 63,628 -26%

Finance & Insurance $ 46,366 $ 84,516 -45%

Information $ 40,547 $ 74,382 -45%

Manufacturing $ 40,482 $ 57,511 -30%

Construction $ 40,218 $ 49,588 -19%

Petroleum Products & Wholesale $ 38,335 $ 55,874 -31%

Transportation & Warehousing $ 37,872 $ 44,198 -14%

Health Care & Social Assistance $ 37,695 $ 43,732 -14%

Total Private Sector $ 33,524 $ 46,451 -28%

Real Estate & Rental & Leasing $ 29,438 $ 43,779 -33%

Agriculture, Forestry, Fishing & Hunting $ 28,119 $ 26,626 6%

Retail Trade $ 22,622 $ 26,655 -15%

Arts, Entertainment, & Recreation $ 21,026 $ 32,278 -35%

14

Conclusion 7: The energy sector in Mississippi pays higher wages in comparison to the private sector

overall in the state. It provides the sort of high quality, family-sustaining jobs that economic

developers seek to grow.

In terms of labor productivity in the energy sector (measured by value-added per worker7), Mississippi

lags behind the nation. Latest data, for 2009 (Table 9), shows that the energy sector in Mississippi

produces $274,716 in value-added activity per employee, versus $358,259 for the nation. Thus

Mississippi’s energy productivity level runs at about 77% of the national level. However, taking into

account the fact that Mississippi energy wages are, on average, only 72.5% of the national level it is

evident that the Mississippi workforce is effectively still good value for money.

Table 9: Value-Added per Worker in the Energy Cluster (2009)—Mississippi Versus the Nation. Battelle analysis of IMPLAN data.

Industry Cluster Mississippi Productivity 2009

U.S. Productivity, 2009 Mississippi Productivity as a Percentage of U.S.

Productivity

Total Private Sector $61,348 $83,128 74% Energy Cluster $274,716 $358,259 77%

It is obvious from these data that the energy sector, in general is highly capital intensive—i.e., it is an

industry in which the infrastructure required to produce its product (drilling rigs and pipelines, power

stations, distribution infrastructure, etc.) require high levels of investment in comparison to the total

number of jobs generated. This is clearly evidenced by the fact that the energy cluster produces

$274,716 in value-added per worker, versus just $61,348 per worker in the private sector on average

within the state. In highly capital intensive industries, relative wage rates for workers can be a relatively

minor location factor and, in this regard, the comparatively lower levels of wages paid in the energy

cluster in Mississippi may not be a particularly strong comparative advantage.

Conclusion 8: While Mississippi energy wages and productivity levels are lower than the national

average for the sector, the relationship between wages and productivity is slightly better than the

national average.

7 Value-added represents the difference between an industry’s total output and the cost of its intermediate inputs; a

measure of the cluster’s contribution to GSP. The measure of value-added per employee is often used as a measure of overall industry Productivity. Source: Battelle analysis of IMPLAN Input/Output Model for MS and U.S.

Note: Some industries do not map directly 1:1 from NAICS to the IMPLAN-specific industry sectors and therefore

some are left out of this analysis as including the full IMPLAN sector would be overly inclusive (e.g., Energy-

related sectors in Wholesale, Retail, and Construction aren’t included in this calculation).

15

D. Research and Development in the Mississippi Energy Cluster

Research and development (R&D), and the innovation it brings, represents a critically important driver

of the modern U.S. economy. Technology-based economic development (TBED) is seen as key to state

competitiveness, leveraging the United States’ strong track record of investment in basic through

applied R&D to generate advanced technologies and innovations that launch new commercial products,

new industries, or provide the means to enhance productivity in existing industries.

The current R&D ecosystem in the U.S. is multi-dimensional, with core participants being the private

sector (through in-house and subcontracted commercial R&D), the academic sector (R&D at research

universities), and federal government laboratories. These R&D organizations, working individually or in

collaboration, generate innovations in the U.S. leading to national and state economic growth.

Energy is increasingly a high-technology driven sector relying on advanced R&D to drive growth and

efficiency, and to reduce environmental impacts. Complex instrumentation and research algorithms are

used in the geotechnical exploration for fuel resources; highly sophisticated drilling technologies are

used in energy extraction; and the refining of resources into end products is capital intensive, high-tech

and computer controlled. Generation of electric power is performed by highly refined and automated

combustion (or in the case of nuclear, fission) processes and advanced technologies are used to control

plant emissions. Modern renewable power generation is driven by technological advancements in

photovoltaics, composite materials, high-efficiency turbines and specialized biomass conversion

technologies. Increasingly the energy distribution grid is using advanced technology to become “smart,”

leveraging R&D developments in fields such as electrical and electronics engineering, computer science

and information analytics to significantly enhance system reliability and energy use efficiency utilizing a

bi-directional information flow. Likewise, in the transportation sector, advanced power and propulsion

R&D is aimed at achieving increasing levels of energy efficiency. At every level in the energy value-chain,

R&D is being performed and applied to position the U.S. on the leading edge of innovation, to improve

efficiency, and to generate new products of value in the domestic and international marketplace.

Part then of a strategy to advance Mississippi’s future prospects for energy-based development must be

an evaluation of the state’s current R&D capabilities, assets and shortcomings. If R&D, and the

innovations it brings, is an integral component of a successful energy-based economy, then Mississippi’s

current capacity for energy R&D is directly relevant to strategy development.

Patents are one measure of R&D driven innovation—indicative of a novel finding or technology. Data for

2001 through 2011, however, show that Mississippi produced only 17 patents in energy and energy-

related technologies over the course of the recent decade (Table 10), with one company (SmartSynch)

accounting for 7 out of the 17.

16

Table 10: Energy and Energy-Related Patents in Mississippi by Patent Class Areas and Recipient, 2001–2011

Thomson Reuters, Delphion Patent Analysis Database. Issued Patents 2001–2011

Patent Class SmartSynch, Inc. Siemens Power Transmission and

Distribution

Other Mississippi Inventors

Data Processing: Control Systems

6 1

Communications: Antennas

1

Electricity: Systems or Components

1 5

Selective Visual Display Systems

1

Other Related Patents

2

Totals

7 2 8

Conclusion 9: Over the past decade, Mississippi has seen limited patent activity in energy and

associated technologies.

Venture capital investments and SBIR financing for early stage energy start-ups have also been quite

limited in Mississippi. In the ten years from 2001, data show only three companies in the energy space

receiving VC investments (SmartSynch, VMI Marine and Friede Goldman Halter) and only one receiving

SBIR funding Semisouth Laboratories (receiving $5.3 million for work in electronic components that

reduce energy consumption, increase efficiency and enable the use of renewable energy sources).

Conclusion 10: The small amount of new technology-business formation in the energy space in

Mississippi means that there has been a very limited venture capital and SBIR funding activity in the

sector.

Research and development activities are the driver of innovation. The National Science Foundation

(NSF) maintains statistics on total R&D expenditures for each U.S. state, with the latest full published

data series being for 2008. While Mississippi ranks 35th in the nation in terms of total gross domestic

product (GDP), the state has a lower rank in terms of total R&D performance – ranking 41st with $838

million in R&D expenditures. Mississippi’s lower ranking in total R&D is, to a significant degree, the

result of limited industry R&D activity in Mississippi (where the state ranks 43rd, with $279 million in

2008 expenditures). In comparison, Mississippi’s academic research institutions are “punching above

their weight”, ranking Mississippi 33rd in academic R&D expenditures (with $417 million expended in

2009).

The NSF also records the amount of funding received from federal funding agencies for research.

Intotal, Mississippi ranks 32nd in federal R&D obligations. Table 11 shows Mississippi’s federal R&D

obligations by major funding agency – indicating that the state does disproportionately well (relative to

17

GDP) in funding from the U.S. Department of Agriculture (ranked 5th in the nation), Homeland Security

(14th), NASA (17th) and U.S. Department of Defense (29th). However, the state is underperforming

relative to GDP in funding from the Department of Health and Human Services (which includes the

National Institutes of Health) with a ranking of 44th, and in funding from the NSF (45th). Notable in its

relevance to this energy strategy for Mississippi, the state ranks 47th in U.S. Department of Energy

research funding.

Table 11: Federal R&D Funding Obligations to Mississippi, by Major Funding Agency

Federal Agency Funding Obligation (thousands of

dollars)

Mississippi Rank among U.S. States

Rank Above or Below MS GDP

Rank of 35th

All Agencies 433,902 32 Above

Dept of Agriculture 89,946 5 Above

Dept of Homeland Security 9,301 14 Above

NASA 31,915 17 Above

Dept of Commerce 5,167 21 Above

Dept of the Interior 3,893 27 Above

Dept of Defense 227,290 29 Above

Dept of Transportation 1,153 31 Above

Environmental Protection Agency 200 37 Below

Dept of Health and Human Services 50,881 44 Below

Dept of Energy 2,084 44 Below

National Science Foundation 12,072 45 Below

Obviously, the data above cover all major federal funding agencies, and only some of this research

would be energy related. NSF data are also available (and more recent) by individual engineering and

science discipline for each state. Table __ shows the findings for Mississippi for those science and

engineering disciplines that may contain energy and energy-related R&D activities:

Table 12: Federal R&D Funding Obligations to Mississippi, by Major Funding Agency

Discipline Funding Obligation (thousands of dollars)

Mississippi Rank

among U.S. States

Rank Above or Below MS GDP Rank

of 35th

Potential R&D Relevance to Energy (Examples)

Agricultural Sciences 104,516 7th Above Biomass, Biofuels, Biobased Chemicals

Computer Sciences 11,705 28th Above Energy Process Modeling and Simulation, Smart Grid

Engineering, All Disciplines 74,062 30th Above --

Aeronautical & Astronomical Eng.

4,131 24th Above Power and Propulsion, Materials

Chemical Engineering 5,870 34th Above Fuels, Petrochemicals, Biobased Chemicals

18

Electrical Engineering 23,689 20th Above Power Systems, Generators, Transformers, Transmission, Use

Efficiency Mechanical Engineering 12,333 22nd Above Power and propulsion,

combustion systems, infrastructure

Metallurgical & Materials Eng. 4,189 31st Above Materials for energy applications

Civil Engineering 7,456 34th Above Energy infrastructure, waste treatment

Physical Sciences --

Chemistry 23,021 24th Above Basic processes (thermal, catalytic), Materials

Physics 21,022 26th Above Combustion, Nuclear Power, Waveforms, etc.

Earth & Environmental Sciences --

Atmospheric Sciences 2,926 25th Above Climate change, Atmospheric Emissions, Biomass

Earth Sciences 4,315 44th Below Exploration and Sequestration Geology

Oceanography 20,984 13th Above Ocean Resources

Environmental Sciences 199 45th Below Environmental Protection, Ag/Forest Production Ecology

It is evident from Table 12 that Mississippi’s research institutions perform relatively well in federal R&D

funding for research in science and engineering disciplines that may have direct relevance to energy and

associated issues. Indeed, in fully 12 out of the 14 disciplines listed above, Mississippi ranks above its

GDP ranking, and in some cases “far above” (e.g. Agricultural Sciences 7th, Electrical Engineering 20th and

Mechanical Engineering 22nd.

Because Mississippi contains relatively few commercial companies operating R&D centers in the state

(especially in the energy space), the role of Mississippi’s research universities as innovation engines is

critically important. Attracting funding from external sources, such as the National Science Foundation,

U.S. Department of Energy, U.S. Department of Agriculture, and private industry, Mississippi’s university

research directly generates economic impacts via attracting funds into the state and supporting high

skill, comparatively high wage job development on campuses across the state.

In terms of energy and related R&D activity, four Mississippi universities stand out as having notable

research programs: Mississippi State University, the University of Mississippi, the University of Southern

Mississippi and Jackson State University. Battelle evaluated publications data, and data provided by the

universities, in combination with undertaking multiple interviews on each campus, in order to identify

academic energy and associated-technology strengths within Mississippi. Evaluating overall academic

research output in the energy space is challenging because available statistics on publishing in refereed

academic journals only tells a partial story in engineering and computer science disciplines, where

refereed conference proceedings carry considerable weight but are largely not recorded in the datasets

of independent reporting firms such as Thompson-Reuters.

19

What Battelle finds to notable in Mississippi research, is not just the above avareg performance of the

university community in terms of science and engineering R&D, but that in energy and associated

disciplines there are evident clusters of R&D focus in specific areas, for example:

Biomass, Biofuels and Associated Products. Significant research taking place in biomass

production (from forest and agronomic environments), technologies and processes for biomass

conversion to energy and liquid fuels, and advanced biobased chemicals and polymers

development. This is a cross-cutting strength, incorporating multiple departments and

programs covering agriculture, forestry, chemical engineering and environmental sciences.

Advanced Modeling and Simulation. Mississippi is recognized as a leading high performance

computing state – by most measures, generally around 7th in the nation. These computing

assets and the research centers involved with them the expertise and resources for advanced

modeling and simulation for energy applications, visualization tools for better understanding of

data models, and advanced technology testing and simulation. Computational analysis and

information technology expertise is also evident in the area of spatial data analysis and

geographic information systems directly relevant to both fossil and bio-based resource

utilization.

Materials Science. The exploration, extraction and processing of energy resources (particularly

fossil resources) requires the use of tools and technologies capable of working in harsh and

demanding environments (in terms of pressures, temperature, friction and chemicals).

Specialized materials are also needed for enhanced conductivity and insulation applications in

energy transmission, while energy efficiency in transportation is a special emphasis in

Mississippi in terms of materials for lightweighting and for power and propulsion applications.

Ecology and Environmental Sciences. Building an energy economy requires that careful

attention be paid to the sustainability of the supporting resources such as production

agricultural and forest land and water resources. Similarly, there is significant need for

technologies for the capture of emissions from energy operations and the mitigation of legacy

impacts of past operations.

While there is clearly significant research activity (most notably university-based research activity) in

Mississippi in energy and associated fields of inquiry, a notable gap exists in the commercialization of

research and its transfer into on-the-ground business development in Mississippi. As noted above,

patent generation and the formation of start-up business enterprises in the energy space are very

limited in the state.

Part of the challenge for Mississippi moving forward will be to strategically increase R&D activity at

Mississippi’s research universities and to then leverage that research for in-state commercialization of

innovations.

Conclusion 11: Mississippi’s research universities perform relatively well in science and engineering

disciplines relative to the size of the Mississippi economy, and there are some distinctive clusters of

university research activity that directly relate to energy and associated technology development.

There is, however, room to grow further and a need to address relatively limited commercialization of

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university R&D via better connectivity to Mississippi industries and enhanced support for knowledge

translation and intellectual property commercialization.

E. Conclusions:

Mississippi currently consumes more raw energy than it produces, and imports more raw energy than it produces. Thus, from a basic economic policy standpoint, increasing energy production in Mississippi will enhance Mississippi’s balance of trade and benefit the Mississippi economy.

In terms of energy sources, Mississippi benefits from having in-state resources in the three major fossil fuels of oil, natural gas and coal. While the state does have abundant biomass, so far renewable energy production has achieved only limited penetration in Mississippi. Only 2.8% of Mississippi’s electricity is generated via renewable resources, compared to 14% nationally (5% nationally from non hydro-electric renewables).8

Energy overall is a specialized industry for Mississippi (as measured by location quotient), with a higher

concentration of jobs in the sector in the State than would be expected given national averages. The

sector employed 22,035 Mississippi workers in 2010, but this represents only 2.6% of Mississippi’s

private sector workforce. Importantly, however, energy has been a growth sector for Mississippi in the

past decade and it has consistently outperformed national energy industry growth levels. Within the

energy field, “refineries”, “power transmission and distribution” and “extraction and resource

development” are the high performing sub-sectors for Mississippi.

The energy sector in Mississippi stands out as paying high wages in comparison to the private sector

overall in the state. It provides the sort of high quality, family-sustaining jobs that economic developers

seek to grow. Mississippi energy wages are lower than the national average for the sector (which might

be a useful recruitment message), but the state does not really have much of a comparative advantage

on the labor front because productivity levels are also lower in Mississippi.

The energy sector in Mississippi is mostly characterized in terms of leveraging natural resource assets

(predominantly fossil fuel reserves)—probably using off-the-shelf technologies to find, extract and

convert these fuels into energy and electricity. The state also has a robust energy distribution

infrastructure. Where Mississippi seems to be underperforming in the energy space is in R&D-based

energy innovation and energy technology development. Over the past decade, Mississippi has seen

limited R&D-based innovation in commercial energy technology areas as measured by patent activity.

The small amount of R&D-based innovation in the energy space in Mississippi means that there has also

been only limited venture capital and SBIR funding activity in the sector. While Mississippi universities

and research institutions generated 908 publications in energy and associated fields in the 11 years of

2001–2011, this averages only 82 papers per year, and except in the discipline of Polymer Science, there

is generally quite limited R&D activity taking place. Because of the limited amount of R&D activity taking

place, technology transfer statistics for universities in the state are below national averages and actually

have been trending downwards.

8 Source: U.S. Energy Information Administration 2011.

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Overall, it is evident from the quantitative data analysis that, at the present time, Mississippi has an

energy resource-based economy, as opposed to an energy technology development economy.

Mississippi’s energy industry may be using advanced technologies in the identification, extraction,

conversion and distribution of fuels and energy, but the state has quite limited activity in the

development and commercialization of such technologies at the present time. In the near-term the

primary implication of this finding is that energy-based economic development in Mississippi will

need to comprise traditional economic development activity (focused on industry recruitment,

business retention and expansion strategies, and a concentration on sustaining a competitive business

climate). The more modern technology-based economic development strategies that are focused on

fostering advanced technology R&D and leveraging R&D innovations for new business development

and existing business growth via new product pathways need to be the subject of further

development in Mississippi and are addressed in the strategy.

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III. Strengths, Weaknesses, Opportunities and Threats Assessment

Multiple information resources have been used to identify key strengths, weaknesses, opportunities and

threats (SWOT) pertaining to energy-based economic development for Mississippi. Key information

resources include:

Quantitative economic analysis findings using various government and private sector data

providers.

Reference to existing research reports and analytical documents focused on Mississippi, its

assets, challenges, opportunities and needs (such as the Blueprint Mississippi report).

Reference to existing Mississippi reports on energy and associated opportunities (such as the

MEI report).

Reference to specific technical articles, scientific papers, industry market research reports, etc.

providing in-depth subject matter information on specific energy related topics, technologies

and fields.

Seventy-two interviews with industry representatives, university leaders and researchers and

other key stakeholders to discuss specific SWOT subjects relating to energy, specific energy

fields and the general operating environment for energy-based economic development in

Mississippi.

A. STRENGTHS – Mississippi Strengths and Assets for Energy and Energy-Based

Economic Development

Table 13: Strengths

Natural Resource Strengths

Natural Gas: Mississippi has large-scale natural gas reserves that are relatively untapped presently. This includes near-shore natural gas and onshore conventional and shale gas deposits.

Oil: Untapped oil potential may exist within the Tuscaloosa Marine Shale formation and in other deposit pockets within Mississippi. Enhanced oil recovery techniques, now producing 50% of Mississippi’s oil, are being used to maximize extraction potential.

Biomass: A diverse agricultural environment coupled with a high density of forest production provides a rich production environment for biomass in all forms (woody/lignocellulosic, sugar crops, starch crops and oil bearing crops). Existing large industry expertise in contracting for forest resources may be applied to assist in biomass sourcing for energy applications.

Coal: Mississippi has large-scale deposits of economically minable lignite (a low grade coal).

Salt Domes: The salt dome geology in parts of Mississippi provides a natural geologic feature suited to multiple potential applications, including: oil/petroleum/natural gas storage, carbon dioxide sequestration, or spent nuclear fuel disposal.

Carbon Dioxide: Natural geologic deposits of pressurized carbon dioxide provide a path for the “mining” of CO2 and its shipment via pipeline to areas requiring the gas for use in enhanced oil

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recovery operations. Additionally, anthropogenic CO2 from the Kemper County Lignite IGCC beginning in 2014 will add to CO2 supply.

Water: Mississippi is blessed with abundant water resources, something important for a number of industrial applications (and as a transportation medium).

Industry Strengths

Biofuels and Biorefining: Mississippi has attracted several major biofuel and biorefinery operations to establish manufacturing plants within the state and these are employing a broad diversity of biomass conversion technology platforms, including: acid hydrolysis, catalytic cracking, gasification and traditional enzymology/distillation.

Solar/PV Companies and Associated Materials (including Polymers): Mississippi has been successful in attracting multiple solar/PV systems and component/raw material producers to establish manufacturing operations within the state.

Carbon Dioxide/Enhanced Oil Recovery expertise: Multiple companies, led by Denbury and Tellus maintain expertise in carbon dioxide mining, transportation and use in enhanced oil recovery. With oil prices at projected high levels for the foreseeable future, the prospects for enhanced oil recovery are likely to remain attractive.

Electric Power Transmission Equipment: Mississippi is home for multiple companies that manufacturer electric power transmission equipment. The state is headquarters for Howard Power Solutions, one of the world’s largest electric power transformer manufacturers and SmartSynch, a leader in smart grid technology. A number of other electric power equipment manufacturers such as, Siemens Energy, Inc., a producer of high-voltage circuit breakers, and ABB Kuhlman, a manufacturer of power transformers, have one of their primary manufacturing facilities based in the state.

Crude Refining. Mississippi has large-scale refining operations (most notably those of Chevron),

A regulated electric utility environment allows for predictability and long-term investment and decision-making needed in the unique electric power business. Additionally, three of the nation’s largest utilities converge in Mississippi

Forest Products: Mississippi has an abundance of both small and large scale forest products operations that utilize biomass residuals and byproducts to produce highly efficient cogenerated electricity and thermal process energy.

Infrastructure Strengths

Existing pipeline infrastructure: Mississippi is traversed by large capacity natural gas, oil and refined products pipelines. Particularly in natural gas, there may be capacity changes in the future if gas demand from the Northeast U.S. diminishes as Marcellus and Utica shale increases in local availability.

Direct port access on the Gulf of Mexico provides convenient and cost effective shipment and import of bulk commodity and container transported freight. Port expansions are ongoing in anticipation of the opening of the expanded Panama Canal.

Navigable waterways in Mississippi provide avenues for the efficient transportation of bulk materials and energy resources. Waterways are located on all three sides of the state and goes through the woody areas in the state.

Energy in Mississippi is supplied with a high level of reliability for users due to its transmission and distribution infrastructure and diverse mix of power generation supplied by power

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generation plants throughout the state.

Vehicle infrastructure in Mississippi is diversified consisting of roadways with strong rankings (fourth best in the U.S. and best in the South according to the Mississippi Development Authority) that can handle additional vehicle capacity from shipping products. From a rail standpoint, the state has a Mississippi-Tennessee rail line that can accommodate 7000 PDUs and other major rail lines that cross the whole state.

Gas processing capability in Mississippi with a number of companies that have grown to help serve offshore supplies from the Outer Continental Shelf (OCS). One of the largest natural gas processing plants is located in Pascagoula, MS.

Business Environment and Supports Strengths

The State of Mississippi is cited as being extremely business friendly and proactive in its work to meet the needs of new industry seeking to locate operations in the state.

Government is highly accessible in Mississippi, with industry representatives citing good access to the Governor, senior administration officials, and representatives of the Mississippi House and Senate. Mississippi’s federal government delegation is also viewed as responsive and accessible.

Energy companies cite state government regulatory agencies and boards as being responsive, predictable and generally industry friendly. These bodies are generally viewed as facilitating business rather than opposing business.

Mississippi has been proactive in providing competitive loan funds and other incentives to win projects for the state.

Mississippi is independently cited as having a positive business environment by Area Development and site location consultants. Recent industry entrants into Mississippi confirm the attractiveness of the state for certain forms of new investment.

Formation of Mississippi Energy Institute, with its public/private board, demonstrates high-level commitment to the needs of the energy sector in the state. Likewise, state commitment is demonstrated by the House and Senate in Mississippi forming energy committees.

Blueprint Mississippi represents a statewide effort, comprising the input of a very broad spectrum of Mississippi private and public sector leaders in reaching agreement on strategic priorities and action items to enhance the state economy moving forward.

Mississippi is a state with large tracts of land available to be developed by industry.

Mississippi has developed the Mississippi University Research Authority (MURA), which under state law allows faculty members at the universities to have their own companies and lease university infrastructure to support them. Approximately 45 companies have formed as a result of MURA.

The state of Mississippi has a low cost manufacturing environment (i.e. a combination of low cost energy, non-unions, good tax rate, etc. to foster manufacturing) that has led to energy and energy intensive companies in the solar/PV, biofuel/biomass, aerospace, steel manufacturing, and auto industries establishing major production facilities in the state over the last five years.

R&D Strengths

Biomass, biofuels and bio based products is an area in which industry has invested in pilot and production scale facilities based on advanced and novel technologies. In addition, Mississippi’s research universities, especially Mississippi State University, have directly relevant activities

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focused on the biomass, biofuels and bio-based polymer industry opportunities.

Within industry (Entergy) there is ongoing work to investigate nuclear plant life extension and to optimize nuclear plant maintenance, output, and safety operations.

SmartSynch, recently acquired by Itron, has sustained R&D operations in smart grid technologies, particularly focused on management of grid resources over cellular infrastructure.

Mississippi Power is implementing advanced proprietary R&D-based gasification processes into a unique new gasification facility using Mississippi mined lignite as the feedstock. Ongoing R&D will take place at the facility to refine processes and technologies.

Polymer Science is an area of research strength in the state lead by the University of Southern Mississippi with one of the top ten polymer science programs in the country. This program distinguishes itself from others because it’s one of the few with end to end capability. Additional expertise can also be found at the University of Mississippi and Jackson State in this area.

The presence of the Center for Advanced Vehicular Systems (CAVS) is a strength for automotive related technology activity. Assets include a world-class power train test facility to accommodate both electric and internal combustion engine drives.

Workforce and Education Strengths

Fifteen Community Colleges are distributed across Mississippi, with good geographic access for all residents in the state (no person is beyond 30 miles distance from a community college).

Community Colleges and Mississippi’s state affiliated universities maintain good articulation agreements, facilitating credit transfers and recognition of qualifications and courses between institutions.

Mississippi research universities collaborate with one another, with the collaborations facilitated by the research vice presidents of the four primary research universities through a group called the Mississippi Research Consortium, with a 30-year track record.

Industry cites Mississippi university engineering graduates as being highly competitive with other institutions across the country in terms of skills and educational quality.

Comparatively low cost labor compared to U.S. national averages.

Companies cited generally good retention of their Mississippi workforce.

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B. WEAKNESSES – Mississippi Weaknesses and Gaps for Energy and Energy-Based


Table 14: Weaknesses

Natural Resource Weaknesses

Very low current market prices of natural gas make it difficult to justify exploration and production expenses for certain types of gas deposits in Mississippi, such as near-shore natural gas development.

Coal in Mississippi is of the lowest general coal grade, constituting lignite (a soft brown coal) that is not good for transporting to sites over long distances because of its high moisture content.

Lack of economic incentives, at a national level, for carbon dioxide capture and sequestration limit the present usefulness of Mississippi’s potential sequestration assets.

Industry Weaknesses

Mississippi contains comparatively few companies that add value to the raw fossil energy resources extracted in the state. As such, Mississippi fails to maximize the economic potential of the resources that are extracted (such as natural gas, oil and coal). While electricity generation does add value to these resources, it tends to be generated for consumption inside of Mississippi and does not represent a value-added export.

Mississippi’s electric utilities are perceived as being conservative and slow to adopt new technologies. The public utilities regulatory environment and the uncertain global economic environment make it challenging for the utility industry to invest in new technologies or ventures.

Infrastructure Weaknesses

Low numbers of flights from Jackson airport and relatively limited air connectivity for the state.

Low comparative weight limits on many roads and highways in the state serve to increase the relative cost of shipping for some products and industries.

While Mississippi contains excellent trans-state pipeline infrastructure. Incentive programs are not yet available, as they are in other states, to support infrastructure connection resulting in higher tap fees.

There is variability across Mississippi in the size of utilities and their capacity to work with industry to provide customized solutions and competitive electricity rates.

Shipping channel depths limit opportunities associated with expansion of the Panama Canal.

Business Environment and Supports Weaknesses

Resistance to issue major bonds also hampers the states competitiveness versus states that are far more aggressive in terms of leveraging bond financing to invest in technology-based economic development, focused education and other strategic areas.

Technology start-up enterprises note that incentives in the state are more geared to the attraction of larger existing firm operations into the state, as opposed to the support of

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entrepreneurial business ventures. This is especially noticeable in regards to tax incentives, which are largely irrelevant to early stage ventures that have non profits to tax.

Property taxes were cited at being uncompetitive versus surrounding states, in particular the taxation of inventory under property tax.

R&D Weaknesses

Mississippi is not home to the headquarters or R&D operations of major Fortune 500 corporations. Generally, Mississippi is a branch plant environment for companies and is not the home of their R&D operations.

The volume of commercial R&D undertaken in the State of Mississippi is extremely low, and unlike in almost every other state, academic R&D volume exceeds commercial R&D volumes in Mississippi

Performance on commercialization of research metrics (such as technology transfer statistics, SBIR awards, patent awards, etc.) is weak in Mississippi.

Industry and economic developers cite challenges in accessing IP from universities and in negotiating competitive agreements for IP and for industry sponsored R&D performance.

University researchers cite inconsistencies in how expenses are paid for their patent costs. At some institutions the expenses for the researcher’s patent comes from the department overhead, which creates a need for these individuals to have seed funding from outside of the university to get their research legally protected and help advance the technology.

Workforce and Education Weaknesses

Qualified workforce availability is highly variable in the state, For the most part, companies in the Jackson metro area and Northeast Mississippi report adequate labor availability, but elsewhere in the state it can be highly challenging to find appropriately skilled labor. Technical jobs, in particular, are cited as hard to fill with low numbers of qualified applicants.

Companies cite it as being challenging to recruit skilled personnel (such as engineers) and mid to upper level personnel to Mississippi. Perceptions regarding standard of living and K-12 education quality are limiting factors in external staff recruitment.

K-12 education is perceived as being a serious problem in Mississippi (especially in the Delta region and in the southwest part of the state), with high dropout rates among students, comparatively low ACT scores, and Mississippi’s universities noting that incoming freshman students from Mississippi high schools need a disproportionate amount of remedial education.

Current skilled workforce is noted to be aging with insufficient volumes and insufficiently skilled younger replacement workers coming in to the workforce.

Workforce training capabilities and programs around the state are said to be quite variable in quality and in the ability of community colleges to customize job training in more rural areas where the volume of demand is difficult to meet economically.

The overall health of the people in Mississippi is poor due to obesity and obesity related disease, which can create high healthcare costs for employers. This factor can drive employers away from the state or make it difficult to recruit companies to the state.

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C. OPPORTUNITIES – Mississippi Opportunities for Energy and Energy-Based


Table 15: Opportunities

Natural Resource Opportunities

Generally, increasing global competition for scarce energy resources places states such as Mississippi that have natural energy assets in an advantageous position.

New technology development in near-term areas (such as hydraulic fracturing and horizontal drilling for shale gas and oil, or conversion of biomass into value added chemicals and fuels), for mid-term applications (such as carbon capture and sequestration) and long-term areas (such as offshore gas hydrates) present opportunities for application to a wide range of Mississippi fossil and biomass natural resources.

Industry Opportunities

Energy is a rather unique space in which a state does not necessarily have to develop the latest advanced technologies in order to reap economic development rewards from them. This is because, for the most part, new and novel energy technologies have to go to where the energy resources are for application. Thus, Mississippi being relatively rich in biomass and fossil energy resources may be able to “import” the latest technologies and processes to the state, and the companies that come with them, without having to invest in their original development. This phenomenon is already observable in Mississippi, with novel biomass conversion technologies coming into the state attracted by high biomass availability in Mississippi.

The emergence of gasification technologies for the conversion of lignite and biomass into value-added energy, liquid fuels and chemicals bodes well for Mississippi which has a high potential supply of these natural feedstocks. In addition, petroleum coke (petcoke) from Gulf Coast refineries (including the Chevron Pascagoula refinery in Mississippi) provides a potential economic feedstock for gasification and conversion into methanol and building block chemicals.

High general availability of biomass, in combination with Mississippi’s highly flexible agronomic environment for various oil, starch, and sugar crops presents multiple opportunities for value-added industrial bioprocessing/biorefinery operations across multiple conversion platforms.

Growth in global demand for agricultural products (for both food and biomass/industrial applications) requires productivity increases to occur in agriculture and is likely to drive increasing demand for fertilizers and other agricultural chemicals. Much of the agchemicals industry is rooted in the use of natural gas as the feedstock—and thus the high availability of natural gas in Mississippi may be attractive to this industry, together with the Gulf Coast track record in successful chemical operations. This may represent a re-shoring opportunity with much agchemicals production having shifted overseas in recent decades.

Reliable energy supplies, competitive energy rates, and the potential for carbon sequestration (or use in enhanced oil recovery) may provide strong incentives for the location of energy intensive industries in the State of Mississippi.

Mississippi contains a number of independent power operations, mostly natural gas powered, that are idle at the present time. Low natural gas prices may encourage the operationalization of these generation assets and encourage re-hiring of operations workers.

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Infrastructure Opportunities

Mississippi’s natural gas pipeline infrastructure may have its ability to accommodate Mississippi local inflows and outflows enhanced because the demand for its carrying capacity from the northeast United States could be reduced as a result of northeast shale gas supplies coming online.

Expansion of Mississippi’s port infrastructure, and the widening of the Panama Canal, improves Mississippi’s freight handling situation for energy inputs and value-added exports.

Entergy spinning off their transmission assets into independent transmission company with regional operations in Jackson, MS may create opportunities for growth because this will better enable energy companies (including Entergy) to have open access to the grid and help facilitate the buying and selling of power to each other.

Business Environment and Supports Opportunities

Mississippi’s business friendly government is more likely than most to adopt policies, procedures and enact incentive programs that may enhance the attractiveness of the State for energy investments.

R&D Opportunities

The collaborative environment between Mississippi’s research universities presents an opportunity to form a shared Energy Research Center in Mississippi—leveraging the skills and infrastructural assets of the university, and coordinating the application of these resources to meeting the needs and demands of Mississippi and Gulf Coast energy and associated technology companies. The collaborative/corporative research environment between the universities means that scarce resources can be directed to building-up shared infrastructure and avoiding costly duplication of resources that Mississippi can ill-afford.

MEI could serve an expanded coordinating role in evaluating industry R&D needs and coordinating or forming university/industry partnerships to meet these needs,

The four major research institutions in the state have established research centers that may be used to attract and retain energy and energy-related industries through its infrastructure of technology, facilities, and talent, which can help support these company’s research and project efforts. Examples of some of the most prominent centers at the universities in the state with near-term potential in this area are the following:

o University of Mississippi Center of Manufacturing Excellence – focus on manufacturing products; working

with automotive companies on batteries for plug-in electrical vehicles. National Center for Physical Acoustics – basic and applied research center in the

area of physical acoustics; has the potential to use their acoustic research to aid exploration of oil and gas by industry.

o Jackson State University Power Systems laboratory – power systems modeling lab that possesses some

of the best equipment in the state; works with Entergy to train students and have performed a few collaborative projects with Entergy in the power area.

JSU E-Center – Testing and characterization lab that can test desktop sized equipment—could be further leveraged for potential application of energy

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materials being developed by industry. o Mississippi State University

Energy Institute – Single organization for all of the numerous energy research activities on campus with centers focused on distributed generation, biofuel development/biomass production, clean energy technology, and energy efficiency.

Hi Voltage Capability Lab – one of few university high voltage lab in the U.S.; performs lightening characterization and testing on equipment for utilities, equipment manufacturers and other agencies.

o University of Southern Mississippi Mississippi Polymer Institute – located at the University of Southern Mississippi

(USM), this group provides outreach to help connect polymer companies with the infrastructure (i.e. facilities and expertise) at USM’s School for Polymer Science and High Performance Materials. The institute has brought in 42 polymer companies.

Workforce and Education Opportunities

A focus on key near-term energy-based economic development platforms (as outlined in this report) provides a pathway for post-secondary education initiatives and workforce development programs targeted to the specific needs of these platforms.

Mississippi may be able to customize its support of higher education in the state by incentivizing student enrollment in key strategic disciplines (such as engineering, chemistry, physics and agriculture/forestry) that relate to the workforce needs of key energy platforms. Such incentives could take the form, for example, of higher state tuition support for these strategic disciplines, or lower tuition costs for these disciplines.

As focused energy platforms emerge, the universities should expand the use of sandwich courses and internship programs to link students to companies within these strategic energy sectors.

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D. THREATS – Threats to Mississippi in Energy and Energy-Based Economic

Development

Table 16: Threats

Natural Resource Threats

Some perceive the extraction of fossil fuels can blight otherwise natural landscapes with the machinery and pollution risk associated with these activities. Some perceive near-shore drilling and production platforms, for natural gas, for example, may impact tourism through impinging on views.

The use of natural resources for a new use (such as biomass used for biofuels) serves to increase the demand for that resource and can result in price increases for traditional competing users of the same resources. Such was the experience with soybeans and soybean oil when competition occurred for the beans for both food/feed and biodiesel production. There is a risk, therefore that similar demand-led price escalations, say with wood, could occur with the growth of biofuels potentially harming the economics of production for other users such as paper mills and other wood product industries.

Much of the oil and gas bearing shale strata in Mississippi is unproven in terms of economic production capabilities. Much of the resource may prove to be nonviable due to being too finely laminated with very shallow production zones.

Industry Threats

Anti-competitive dumping and other trade practices within foreign nations can distort market economics and lead industries in the U.S., that play fair, in a non-sustainable position. This is already proving to be the case in the solar/PV industry, where China has a national policy of support for this industry and is seeking to dominate the sector. Already several U.S. producers of solar components and systems have had to close operations in the face of Chinese competition.

Some of the early experience with investors in biofuels has been negative, for example, as biodiesel plants closed due to feedstock price increases. Likewise, some investors have been “burned” in the solar sector due to unfair international competitive practices. This has resulted in a relatively gun-shy investment climate in which it can be difficult to secure the necessary risk capital to fund start-up enterprises and later expansion of projects.

With uncertainty involving the long-term extension of solar tax incentives for projects in the U.S., Mississippi’s ability to retain and recruit solar companies could be negatively impacted in the future,

Infrastructure Threats

Declining national refining capacity limits the ability to add value to domestic oil and may lead to domestic oil being exported overseas for further refining.

Business Environment and Supports Threats

Many of the energy opportunities for Mississippi entail the use of natural resources and the

32

construction of major infrastructure projects that often invoke opposition from citizen groups in affected areas and from environmental advocacy organizations. Such oppositional forces are likely to be particularly challenging in projects involving strip mining of lignite, near-shore natural gas platforms, shale-gas and shale-well facilities (especially those engaged in hydraulic fracturing), and opportunities in spent nuclear fuel disposal or nuclear fuel reprocessing.

Some view that the development of many energy resource opportunities in Mississippi will require the construction of additional pipeline infrastructure (carrying oil, natural gas, refined products, CO2 or process water) and this opens issues pertaining to the use of eminent domain and right-of-way laws.

R&D Threats

Federal budget pressures may cause significant tightening of budgets at agencies such as the Department of Energy, National Science Foundation, NASA and U.S. Department of Agriculture that may negatively impact research funding for Mississippi projects.

Salaries at Mississippi’s research universities are comparatively low and, thus, high performing faculty conducting leading edge research may be attracted to institutions outside of the state with higher pay scales.

Workforce and Education Threats

Mississippi may be unable to affect significant positive change in its school districts and public education performance. In an increasingly human capital driven, knowledge-based economy this may put Mississippi at a significant competitive disadvantage versus states where education statistics show higher performance.

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Evaluation Resources Used Include:

Quantitative economic analysis

findings using various government

and private sector data providers.

Reference to existing research

reports and analytical documents

focused on Mississippi, its assets,

challenges, opportunities and

needs (such as the Blueprint

Mississippi report).

Reference to existing Mississippi

reports on energy and associated

opportunities (such as the MEI

report).

Reference to specific technical

articles, scientific papers, industry

market research reports, etc.

providing in-depth subject matter

information on specific energy

related topics, technologies and

fields.

Seventy-two interviews with

industry representatives,

university leaders and researchers

and other key stakeholders to

discuss specific SWOT subjects

relating to energy, specific energy

fields and the general operating

environment for energy-based

economic development in

Mississippi.

IV. Opportunity Areas Identified for Energy-Based Economic

Development in Mississippi, and Linkages to Suggested Platforms

Battelle TPP reviewed multiple information sources and conducted a series of in-depth interviews with

industry representatives across a broad spectrum of energy and associated fields in Mississippi. The

Battelle team also conducted interviews on the campuses of Mississippi’s research universities,

gathering insight from faculty in energy and associated fields in regards to Mississippi energy

development opportunities, institutional R&D core

competencies, and linkages with industry.

A. Opportunities Based on Mississippi Core

Competencies

Through triangulating the findings from existing reports,

data and interviews, and the resulting SWOT analysis,

multiple energy opportunity areas have been identified for

Mississippi. There is considerable variability, however, in the

time horizon for development of these opportunities, the

scale of the opportunities, and their job and income

generation potential for the state. The Battelle team

identified 19 energy opportunity areas for Mississippi, as

shown on Table 17 below.

These 19 opportunity areas vary in potential time-frame for

opportunity realization, and fall under five broad “energy

group” themes of: Oil/Gas Energy Exploration & Production;

Nuclear Energy; Clean Technology; Applied Environmental

Science for Energy, and Electric Power Production and

Power Systems.

Many states are struggling to find opportunities for

economic development and new job generation. Mississippi,

however, has multiple opportunities for energy-based

economic development in the near-, mid- and long-term

time horizons. Rich in natural resources, benefiting from a

low-cost operating environment, and supported by state

government that is aggressive in winning competitive

economic development projects, Mississippi is relatively

well positioned to build-upon its already significant

presence in energy and associated industries.

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Table 17: Listing of Identified Energy-Based Economic Development Opportunities for Mississippi

ENERGY GROUP

ENERGY OPPORTUNITY AREA

NEAR-TERM (Present–3 years)

MID-TERM (4–8 years)

LONG-TERM (8+ years)

Oil/Gas Energy Exploration & Production

• Shale Gas and Shale Oil

• Enhanced Oil Recovery (EOR)

• Energy Exploration Technology

• Near-Shore Conventional Natural Gas

• Offshore Gas Hydrates

Nuclear Energy

• Interim Storage • Used Nuclear

Fuel R and D

• Nuclear Storage and Reprocessing

• New Reactors

Clean Technology

• Biobased Liquid Fuels & Chemicals

• Solar/PV Energy Production Systems and Components

• Biobased Fuels for Electricity Generation

• Alternative Vehicles and Fueling Infrastructure

• Energy Applications of Polymers (including Electric Energy Storage Systems)

Applied Environmental Science for Energy

• Advanced Coal Utilization Technologies

• Geologic Storage of Energy Resources

• Carbon Dioxide Capture, Storage and Utilization

Electric Power Production and Power Systems

• Energy Monitoring & Management Systems

• Electric Power Generation and Transmission Equipment

In the near-term (defined as immediate to 3 years out) Battelle finds there to be several areas of energy opportunity that Mississippi may pursue to enhance job generation and economic development in the state. Areas with the most promise in this time horizon include:

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Table 18: Summary of Predicted Near-Term Opportunity Areas for Energy-Based Economic Development in Mississippi

Near-Term Opportunity Area

Description of Opportunity Job Generation Potential

Shale Gas and Shale Oil

Hydraulic fracturing and horizontal drilling techniques have advanced to make hydrocarbon bearing shale deposits a highly valuable resource. Mississippi contains multiple shale formations with significant promise for shale gas (most notably) and oil production. While further characterization study is needed, and the resources may be more challenging to access than in other shale areas (such as Pennsylvania’s Marcellus Shale zone), the experience of other states is that shale gas projects can move quickly and be large-scale job generation engines. With an opportunity to generate employment in multiple geographies in Mississippi, and Mississippi’s gas transmission pipeline access, the shale play for the state should be assessed as a near-term opportunity both for gas and oil.

Unknown since the economics of Mississippi shale-gas production are not yet established. Assuming economically viable then experience of other states suggests several thousand jobs could be generated

Enhanced Oil Recovery

Enhanced oil recovery (EOR) includes techniques and technologies for increasing the volume of oil that may be recovered from wells. Gas injection is presently the most-commonly used approach for EOR. In addition to the beneficial effect of gas pressure, this method sometimes aids recovery by reducing the viscosity of the crude oil as the gas mixes with it. Carbon dioxide, abundant in Mississippi, is a favored gas for EOR application (as is nitrogen). Mississippi companies are already actively engaged in using CO2 for EOR, with 50% of the State’s oil production utilizing this technique.

Significant in terms of increasing the life of wells and the jobs involved in injection wells and the transfer of Co2 for injection.

Biobased Liquid Fuels and Chemicals

Mississippi’s flexible growing environment, water resources and high biomass availability have already attracted some of the latest generation of cellulosic and alternative biorefinery projects. Biomass availability in the state is such that many more projects can be accommodated, meaning that as various biorefinery technologies are piloted and proven, Mississippi’s biomass will be a strong attractor for these proven new technologies to expand within the state.

Substantial. Depends on the scale of plants developed, but a 40 million gallons per year refinery would generate circa 40 jobs and Mississippi’s biomass could support multiples of these.

Solar/PV Energy Production Systems and Components

Mississippi’s state and local economic development agencies have performed well in attracting major photovoltaic equipment, components and raw materials manufacturers to locate in the state. The market for PV solutions is growing significantly and new technologies (and companies) are presenting new project opportunities. There is, however, the risk that international competition (especially Chinese competition) is making this an increasingly difficult industry in which to make a profit.

Recent PV project successes in Mississippi have generated between 500 and 1,000 jobs per plant.

Advanced Coal Utilization Technologies

Coal is the least “clean” fossil fuel and has multiple negative environmental issues attached to it in its mining and combustion. Coal is, however, an extremely abundant domestic fuel resource and American energy security will depend, for the foreseeable future, on its use for electricity generation. In Mississippi there

Substantial job generation in both mining of lignite, construction jobs for power plants,

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are substantial deposits of lignite coal and Mississippi Power is at the forefront of applying new gasification technologies to render this coal a far cleaner source of fuel for power generation. A need to move coal plants to a cleaner power production, in combination with gasification technology and Mississippi’s lignite coal may prove to be a significant opportunity for further development in the state.

and operational jobs in power generation.

Energy Monitoring and Management Systems

Mississippi has a variety of companies that are developing and deploying technology to help monitor, control and conserve energy in a building or organization. SmartSynch, a Mississippi based company that recently became a part of Itron through an acquisition, has become one of the leaders in developing smart grid technology that enables utilities to interact with any device on the smart grid. Entergy is spinning out their transmission organization, which will be based in Mississippi to perform regionally based transmission operation and monitoring. Other organizations such as Electric Power Association of Mississippi have deployed 751,000 smart meters in their service territory. With an increasing number of energy suppliers and consumers seeking technology solutions to save costs and become more energy efficient, Mississippi should continue to build off of the presence of SmartSynch as well as the Entergy transmission spinoff to meet the growing needs in this area.

Potentially hundreds of jobs in Mississippi if companies, such as SmartSynch and the Entergy Transmission spinout continue to grow and successfully recruit the skilled engineering and IT talent to enable these organizations to meet the growing needs of their customers.

Electric Power Generation and Transmission Equipment

Mississippi enjoys a very high location quotient in this industry, anchored by the presence of major manufacturing firms. Increases in global population and wealth mean increasing electricity generation demand across the globe and Mississippi’s low cost of doing business in combination with its established know-how in this industry, could make it a location for further investment in these industries.

Potentially substantial if Mississippi can assist its domestic manufacturers in securing further international contracts, and if other sector manufacturers can be recruited to the state.

In addition to these near-term (current to 3-year opportunity areas), Mississippi also is presented with

multiple opportunities in the mid-term time horizon of 4 to 8 years. For the most part these opportunity

areas are considered mid-term either because further technology development is required to achieve

commercialization potential, further feasibility analysis is required to assess viability, or current market

price conditions are unfavorable to the present development of the resource. These mid-term

opportunities include:

• Near-Shore Conventional Natural Gas: As with surrounding states bordering the Gulf of Mexico,

Mississippi has significant near-shore natural gas deposits. To-date these deposits have not been

exploited in Mississippi, but new regulations now allow/govern near-shore mineral leasing in

Mississippi waters. The size of the Mississippi deposits is substantial, with an estimated 350

37

billion cubic feet of natural gas in the 186,000 acre leasable area which comprises a strip of

water along the border with Alabama, and a broad band of water along the southern side of the

barrier islands. The main reason for placing this as a long-term opportunity is that the currently

low price of natural gas makes drilling and production from the near-shore zone uneconomic.

Gas prices are projected to stay low because of the large-scale national shale gas plays, and thus

near-shore gas in Mississippi may remain an untapped resource for the foreseeable future. • Energy Exploration Technology: Mississippi’s research universities have capabilities in

engineering, especially in the acoustics (relevant to seismology) field, that may be applied to

technology-based economic development via commercialization of new technology. • Biobased Fuels for Electricity Generation: Abundant Mississippi biomass presents an

opportunity for using biomass or torrefied biomass for direct combustion power generation.

This is presently feasible (an being done within the state), but Battelle views this as more of a

mid-term economic development area mostly because the low present price of natural gas has

shifted market conditions.

• Alternative Vehicles and Fueling Infrastructure: Electric vehicles, natural gas vehicles and other

alternatively fueled vehicles are receiving increasing attention as pathways to a cleaner,

domestically fueled transportation future for America. With automotive plants already located

in Mississippi, the state already has a footprint in the manufacturing side of the industry.

Likewise, the state’s natural gas resources and biomass-for-biofuels resources lend themselves

to application in this industry. This is, however, a mid-term opportunity because further

technology development is required to move the alternative vehicle to a competitive economic

platform. Significant vehicle refueling infrastructure is required for some of the alternative fuel

options, and its development requires substantial expenditures in terms of financial and political

capital to achieve. • Geologic Storage of Energy Resources: The U.S. government has determined that the strategic

petroleum reserve should be expanded. Mississippi has been selected as the next location for

SPR expansion, utilizing salt strata. This is likely a mid-term opportunity, however, because of

delays in the project status generated by environmental impact assessment requirements. In

addition, private sector fuel storage projects may also have potential within Mississippi.

Also identified are several long-term (opportunities with a gestation period of eight years or longer).

These long-term opportunities include:

• Offshore Gas Hydrates: A gas hydrate is a crystalline solid consisting of gas molecules, usually

methane, each surrounded by a cage of water molecules. Methane hydrate is stable in ocean

floor sediments at water depths greater than 300 meters (1,000 feet). The U.S. Department of

Energy has determined that the Gulf of Mexico contains large-scale deposits of gas hydrates.

The commercial use of gas hydrates is, however, a long-term prospect with much process and

technology development, and further study, required for economically accessing and using this

resource.

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• Nuclear Storage and Reprocessing: The U.S. needs a solution to the storage, disposal or

reprocessing of spent nuclear fuels. Currently spent fuel is held in interim storage at nuclear

reactor sites, awaiting federal government development of a permanent repository site. A

partial alternative to storage is reprocessing, whereby reusable fissionable plutonium and

uranium are recovered from spent nuclear fuel rods. At the present time the U.S. has neither

reprocessing nor permanent storage solutions in place. The nuclear industry has been in a long-

term holding pattern awaiting federal action. Mississippi has salt dome geologic formations that

may be suited for storage of high level nuclear waste. Feasibility analysis would be required to

determine the favorability of a Mississippi salt-dome nuclear fuel depository. Nuclear fuel

reprocessing uses well-proven technologies that are already deployed in nations outside of the

U.S., such as France, the United Kingdom and Russia. In the U.S. it only occurs for nuclear

weapons activity. • New Nuclear Reactors: As a “nuclear friendly” state, and a state that is home to major utility

companies (such as Entergy, Southern Company and TVA), Mississippi may have potential for

new reactor development. In the long-term this may involve next generation reactor designs or,

perhaps, small modular reactors. Were Mississippi to be the first state to successfully put into

production new reactors there would likely be significant economic development potential

around a “first mover” advantage and associated knowledge. • Energy Applications of Polymers (Including Electric Energy Storage Systems and Fuel Cells):

This area represents an R&D-based, technology development and commercialization

opportunity for Mississippi based around research university polymer expertise in the state.

Polymer technologies are currently used in certain forms of batteries and further R&D is ongoing

in the use of polymers in fuel cells and advanced battery designs. This represents a long-term

opportunity since efforts will be required to coordinate and fund research within Mississippi and

move technologies from the laboratory bench through piloting and scale-up prior to

commercialization.

• Carbon Dioxide Capture, Storage and Sequestration: Mississippi has present industrial activity

occurring in the mining of geologic CO2 deposits and transfer of the gas to sites for use in

enhanced oil recovery. Substantial national R&D is taking place in technologies and processes

for capturing CO2 from power plants and other high carbon emitting point source locations, and

for transferring CO2 and compressing it for injection into geologic formations for sequestration.

It should be noted that energy and associated technologies embrace such a broad range of industries

and technological fields that the 16 near-, mid- and long-term opportunities for Mississippi, identified

above, have been drawn from a far larger universe of potential opportunity areas. Several areas of

energy and associated technologies receiving considerable attention in other geographic locations are

not included and Appendix B provides notes on each of these areas and why they were not selected as

Mississippi-specific opportunities.

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B. From Opportunities to Platforms: Suggested Thematic Energy Platforms for

Focused Development in Mississippi

With Mississippi having such a diverse variety of potential energy opportunities to pursue, it is necessary

to refine these opportunities into broader development “platforms”. A platform forms a focus around

an energy theme that comprises:

A logical clustering of businesses with interests in similar feedstocks, processes, manufactured

products or markets

A theme around which core commercial, academic and government laboratory research

capabilities can be applied

A theme around which collaborative public/private partnerships may be developed to promote

shared interests and encourage the development of a favorable operating environment for

platform growth.

Should be associated with a significant potential market with an achievable line-of-sight for the

sale of resources, new technologies, services and value-added products.

Based on the above, Battelle has identified four ENERGY PLATFORMS for Mississippi that can encompass

the majority of the identified opportunity areas. Three of these four platforms meet the full-criteria

above and represent opportunities for near-term job growth in Mississippi. A fourth platform “nuclear”

is a special case, with a significantly longer-term development horizon. These four platforms are shown

on Figure 5, and include:

Natural Gas Platform: Focused on the use of conventional natural gas, shale gas, and syngas

from biomass and lignite gasification for low-cost and reliable electricity generation (which may

attract and retain energy intensive industries to Mississippi) and for the production of value-

added gas and syngas-based products such as fuels, chemicals and plastics.

Biomass Platform: Focused on the use of Mississippi’s abundant supply of biomass (especially

lignocellulosic biomass) for application to power generation and, more importantly, as feedstock

for integrated biorefinery operations in production of liquid fuels, chemicals and biobased

materials.

Advanced Manufacturing of Energy Systems, Components and Energy-based Products:

Primarily a recruitment platform, focused on the attraction of manufacturers to the state of

Mississippi in energy fields in which the state has proven capabilities and assets, or a nascent

research base upon which commercialization of energy technologies may occur.

Nuclear Platform: A longer-term platform leveraging the nuclear industry friendly

characteristics and geology of the state. Over the long-term this platform may involve

Mississippi providing solutions to a national need for spent fuel storage/disposal and nuclear

fuel reprocessing. This is listed among the platforms because, while long-term for job

development, actions need to be taken in the near term to position Mississippi with key

regulatory/government agencies as a state open to opportunities in this arena.

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Figure 5 illustrates the platforms and their connectivity to the various energy-based opportunities

identified for Mississippi. Color coding and connected lines show the relationship of opportunity areas

and resources to each platform. It should be noted that there will also be interaction across platforms,

since both biomass and natural gas provide a pathway to certain similar products (fuels and chemicals

for example) and the production of these relates to the advanced manufacturing platform.

Figure 5: Recommended Platforms for Mississippi Energy-Based Economic Development and Their Linkages to Key Energy Opportunity Areas in Mississippi

The Gas Platform

The gas platform leverages a range of Mississippi natural gas resources, together with the potential for

synthesis gas production from resources such as biomass and lignite, to build a platform of industries

that should be job generators with good sustainable growth prospects for the foreseeable future.

Existing assets, including pipelines and port facilities further serve to reinforce natural gas as an

economic engine for the state. Economic development opportunities based on this platform may come

in multiple forms:

Shale GasCoal

(Lignite) Gasification

Off-shore Gas

Hydrates

Near-shore Natural Gas

EOR and Shale Oil

Solar/PV Systems

EnergyGeneration& Dist. Tech

Smart GridSystems

Batteries/Energy Storage

Energy Exploration

Tech

ElectricityProduction

LiquefiedNatural Gas

AgriculturalChemicals

Chemicalsand

Plastics

Biomass

Salt DomeUsage

Carbon Dioxide for EOR/EGR

Petcoke

Spent FuelReprocess.

Spent FuelStorage/Disposal

Carbon Capture/Storage

BiomassPlatform

AdvancedManufacturing

Platform

NuclearPlatform(longer term)

GasPlatform

Conv. Nat’l Gas & Gas

Distribution

Natural GasVehicles

Forest Products

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Extraction-Based Development: Jobs in exploration, drilling and extraction operations for shale

gas, near-shore natural gas (and in the long-term, potentially offshore gas from hydrates or

conventional sources). Also jobs in the growth and harvesting of biomass for use in syngas

production and in the mining of lignite for gasification operations.

Distribution-Based Development: Jobs in pipeline construction and distribution operations

including gas processing and compression for pipeline transfer. Also the potential for jobs

generated in an LNG exports industry using Mississippi’s ports infrastructure.

Syngas-Based Development: Jobs in the development and operation of synthesis-gas production

plants, providing the production of syngas for power generation or as a feedstock for value-

added chemicals, fuels and plastics manufacturing purposes.

Value-Added Manufacturing Development: Jobs generated through the conversion of gas into

value added products, including fertilizers and agricultural chemicals, liquid fuels, bulk and

specialty chemicals, and plastics/polymers.

Natural Gas Vehicles: Jobs generated in the R&D and manufacturing of technologies for natural

gas vehicles and refueling infrastructure for natural gas vehicles.

Energy Intensive Industry Recruitment: Jobs in industries that would be high consumers of

natural gas or synthesis gas attracted to the state because of low cost, high reliability energy

supply.

Gas Storage: There exists the potential for jobs in the operation of natural gas storage

reservoirs, which may be developed in Mississippi salt domes or use strata from which natural

gas has already been extracted.

The Biomass Platform

Biomass represents a renewable, flexible resource for energy production across a range of technology

pathways. Biomass provides feedstocks that can be used in the production of liquid fuels, chemicals and

various forest products. Primary biomass feedstocks include: oil (plant oils/triglycerides from plants such

as soybeans, canola, camelina or algae); starch (glucose and polysaccharide from plants such as corn,

barley, grain sorghum and rice); sugar (disaccharides, glucose and fructose from plants such as sugar

cane, sugar beets and sweet sorghum); and lignocellulose (lignin, cellulose and hemicelluloses from

wood, crop residues, some forms of municipal waste, and dedicated energy crops such as switchgrass

and miscanthus). Mississippi currently produces biomass in all of the above categories. Biomass can be

sourced from agricultural land, forestland or organic municipal and industrial waste streams. Biomass

can be used directly for heat and electric power generation, but it is also a unique renewable energy

resource in that it can be used to produce liquid fuels, chemicals (building block chemicals,

intermediates and specialty chemicals) and materials. Processing into higher value liquid fuels, chemicals

and polymers uses three broad technology platforms—thermochemical processing (gasification),

biochemical (e.g., fermentation), and chemical/oleochemical (catalytic reactions primarily).

The “food vs. fuel” debate has an impact on the emerging biofuels industry and is driving R&D focused

on the conversion of woody, lignocellulosic biomass into fuels and chemicals to supplant the use of food

and feed biomass such as corn kernels (used to produce ethanol for example) or soybeans (used in the

production of biodiesel). The economic use of lignocellulosic biomass will increase farm incomes

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through adding value to crop residues and the production of dedicated biomass crops on marginal land

unsuited to food crop production, and provides a pathway for value-added use of forest slash, thinnings,

branches and tops and other lower value wood resources.

As commercial processes and technologies for biomass conversion are refined and advanced, it is likely

that significant volumes of fossil-resource based liquid fuels, chemicals and polymers may be replaced

with green and renewable biobased alternatives. The main constraint on sector growth is a relative lack

of a “green price premium” in the marketplace, dictating that biobased chemicals have to compete on

price with established petrochemicals with their sunk infrastructure costs.

Economic development opportunities based on this platform may come in multiple forms:

Biomass Production: Jobs in agriculture and forestry in the production and harvesting of

biomass for industrial applications.

Biomass Preprocessing: Jobs in on farm/forest settings for the preprocessing of biomass into

higher bulk density forms. This may take the form of compressing biomass, shredding biomass,

or preprocessing biomass into an alternative form of “product” such torrefied wood or pyrolysis

to bio-oil.

Biomass and Biobased Products Transportation: Jobs in the transportation and distribution of

biomass to conversion sites, and the transportation of finished value-added biofuels, biobased

chemicals and other products.

Biorefineries: Jobs in the conversion of biomass into value-added fuels, chemicals or materials

via catalytic, thermochemical or biochemical processes. Other industries that may be require

the refinery products or byproducts may be attracted to co-locate near the biorefineries

generating further jobs.

Energy Production: Jobs in the development and operations of biomass-fired or co-fired

electricity generation plants or combined heat/power units at industrial sites.

Value-Added Manufacturing of Biomass Harvesting, Processing and Biorefinery Equipment: As

the southern region develops its biobased economy it may become a preferred location for the

actual development and production of equipment and technologies used in this growing

industry.

The Advanced Manufacturing Platform

This platform integrates with the Gas and Biomass platforms in terms of encouraging job creation

through the manufacturing of value-added products based on gas and biomass resources. It also

represents, however, a platform for advancing a portfolio of other energy and energy-related

technology areas in which Mississippi has opportunities. Manufacturing of energy systems is already

occurring in clusters within Mississippi, with a focus on:

Solar and Photovoltaic Products, Systems, Components and Raw Materials

Electricity Generation Equipment and Transformers

Smart Grid Technologies (Energy Monitoring and Management Systems)

Energy Exploration Technologies.

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The Nuclear Platform

Nuclear power plants currently produce just under 20 percent of U.S. electricity and one of the largest

nuclear power stations in the nation is located in Mississippi. An upgrade to Entergy’s Grand Gulf

Nuclear Station will make it the largest single-unit nuclear plant in the United States, and the fifth largest

in the world. The project will bring Grand Gulf up to a production output of 1,443 megawatts. In the

near-term, nuclear jobs are being generated in Mississippi through Entergy and contractor employees

focused on the plant expansion. Over the long-term, there are additional opportunities for MEI and its

partners to pursue in the nuclear industry:

As a nuclear “friendly” state, Mississippi may serve as a location for further nuclear

development, perhaps in the deployment of next generation reactors and small modular

reactors. However, the timescale for the approval of such expansion projects would be quite

lengthy.

Separate from nuclear power production itself, there is a defined national need for solutions to

the storage and disposal of commercial spent nuclear fuel from nuclear power plants across the

nation. As noted previously, spent fuel is currently being held in interim storage at nuclear

reactor sites, awaiting federal government development of a permanent repository site, and at

the present time the U.S. has no permanent storage solution decided upon. The nuclear industry

has been in a long-term holding pattern awaiting federal action.

Mississippi has salt dome geologic formations that may be suited for storage of high level

nuclear waste (similar to the low level Waste Isolation Pilot Plant (WIPP) site in New Mexico

which only accepts low level transuranic waste). The use of salt deposits dictates that deposited

spent fuel would be deposited and would, over time, encapsulate the deposited material.

Feasibility analysis would be required to determine the favorability of a Mississippi salt-dome

nuclear fuel depository.

A partial alternative to storage is reprocessing, whereby reusable fissionable plutonium and

uranium are recovered from spent nuclear fuel rods. Storage would still be required, since

reprocessing does not reuse all radioactive spent fuel material. Nuclear fuel reprocessing uses

well-proven technologies that are already deployed in nations outside of the U.S., such as

France, the United Kingdom and Russia. In the U.S. it only occurs for nuclear weapons activity.

Reprocessing has been politically controversial because of the potential to contribute to nuclear

proliferation, potential vulnerability to nuclear terrorism, the political challenges of processing

plant siting, and because of its higher cost compared to the once-through fuel cycle.

Compared to the gas platform and the biomass platform, the near-term prospects for job generation

from the nuclear platform would likely be smaller. However, in the long-term, if Mississippi can be

successful in positioning itself as the location for spent fuel storage and nuclear fuel reprocessing, the

job generation potential attached to these (especially reprocessing) would be significant.

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V. Future Energy: Frontier Technologies for the United States

The Mississippi Energy Institute is tasked with both developing near-term opportunities in energy

development within Mississippi, and with visioning for the long-term development of Mississippi’s

position within an advanced energy future. Battelle’s analysis of opportunity areas and platforms has, at

the direction of the project steering committee, heavily emphasized identification of nearer-term

opportunities for energy-based development and job growth in Mississippi. As such the recommended

energy platforms primarily focus on leveraging existing assets, core competencies and energy resources

that exist in Mississippi to achieve growth in a one to five year time horizon.

In this chapter of the report, however, Battelle focuses more on the long-term future of energy and the

R&D frontiers that are driving energy futures. Advanced energy R&D is relevant to Mississippi energy-

based economic development for multiple reasons:

Advanced energy technologies may be identified that would improve the efficiency and

competitiveness of existing Mississippi energy industries, thereby helping to sustain or expand

existing energy operations.

Evolving companies in advanced energy technologies will need locations in the future for their

expanding R&D centers and production facilities, and these may represent an inward

investment opportunity for Mississippi (a realistic scenario given the State’s recent success in

attracting solar/PV sector manufacturers).

Mississippi may choose to invest in building up its research university capabilities in areas that it

perceives to be best suited to the capabilities and aspirations of these institutions and likely to

generate commercializable innovations for building technology-based economic development in

the State.

Since energy is of strategic importance to the United States it has long been the subject of intensive

federally performed research (primarily conducted within the U.S. Department of Energy national

laboratories system) and federally funded research taking place within major research universities. In

addition, since energy represents such a huge global market, industry also sustains intensive research

efforts. Within this chapter, Battelle profiles for MEI key themes and focus areas in energy research—

especially those in frontier energy science (as opposed to just incremental improvements to existing

processes and technologies). Specifically profiled are:

ARPA-E initiatives and scientific focus areas

DOE Office of Science programs undertaken through Energy Frontier Research Centers

Industry perspectives on energy R&D derived from Battelle TPP’s work with R&D Magazine

Battelle TPP perspectives on “out there” energy technologies from a long-term perspective.

45

ARPA-E aims to: Enhance U.S. economic security by

identifying technologies with the potential to substantially reduce energy imports from foreign sources; cut energy-related greenhouse gas emissions; and improve efficiency across the energy spectrum.

Ensure the U.S. remains a technological and economic leader in developing and deploying advanced energy technologies.

ARPA-E focuses exclusively on high risk, high payoff concepts – technologies promising genuine transformation in the ways we generate, store and utilize energy.

Source: ARPA-E

ARPA-E concentrates on “high risk,

high reward programs aim to

substantially reduce foreign energy

imports; cut energy-related greenhouse

gas emissions; and improve efficiency

across the energy spectrum.”

Source: ARPA-E

A. Federal Funding of Frontier Energy Science: ARPA-E

ARPA-E (The Advanced Research Projects Agency – Energy) is a U.S. Department of Energy operated

agency, authorized by congress to “fund projects that will develop transformational technologies that

reduce America’s dependence on foreign energy

imports; reduce U.S. energy related emissions

(including greenhouse gasses); improve energy

efficiency across all sectors of the U.S. economy and

ensure that the U.S. maintains its leadership in

developing and deploying advanced energy

technologies.”9

ARPA-E evaluates funding submissions and provides

funding for creative “outside-of-the-box technologies

that, if successful, show promise for transforming areas

such as energy generation, energy storage and energy

use. It is an agency taking on the funding of high risk,

but potentially high return, projects—projects in early

stage technologies that could be strategically extremely

important for the U.S. economy but that represent such

a high risk that they would be difficult to fund via

conventional risk capital or investment capital avenues.

As Battelle’s recent impact assessment of the DOE and the National Institutes of Health funded Human

Genome Project (HGP) show, such intelligently informed frontier science risk taking can produce truly

high rewards. The HGP, for example cost $3.8 billion to perform, but spurred the launch of an advanced

genomics and genomics-enabled industry that in the ten years following the publishing of the draft

genome generated 310,000 jobs in the U.S. economy and $796 billion in business output. ARPA-E aims

to engender similar results if some of its technology plays find commercial viability.

Battelle raises ARPA-E in this report chapter for Mississippi because ARPA-E is one organization standing

in an ideal position to monitor key energy challenges

and review potential technology solutions to them. It

works to identify and fund applied R&D into concepts

that may be far from commercial reality but present a

sound rationale for further investigation and a

potentially high economic impact if proven successful.

ARPA-E has already provided a structure for

segmentation of technologies, and divides its

operations into the energy theme areas highlighted on Table 19:

9 ARPA-E Website. Mission. Accessed at http://arpa-e.energy.gov/About/Mission.aspx

46

Table 19: ARPA-E Program Areas

Program Name ARPA-E Program Description Battelle Comments

ADEPT ADEPT explores materials for key advances in soft magnetics, high-voltage switches, and reliable, high-density charge storage that will reduce energy costs and consumption.

Technologies to achieve more efficient conversion of electricity between different currents, voltage levels and frequencies.

BEEST BEEST (Batteries for Electrical Energy Storage for Transportation) focuses on generating better batteries that will encourage public adoption of electric vehicles and shift transportation energy reliance from oil to the domestically-powered U.S. electric grid.

Substantially higher performing batteries for electric vehicles.

BEETIT BEETIT (Building Energy Efficiency Through Innovative Thermodevices) seeks to develop energy-efficient building cooling technologies that will reduce energy consumption and GHG emissions.

High efficiency/low emissions HVAC systems for built environments.

ELECTROFUELS ELECTROFUELS seeks to use microorganisms to harness energy and convert carbon dioxide into liquid fuels. Theoretically, this could be10 times more efficient than current approaches.

Biofuels production via microorganisms.

GENI GENI will fund innovative control software and high-voltage hardware than can reliably control the electric grid, specifically cost-optimizing sporadic energy sources and resiliently control power flow in real-time.

Electric grid efficiency technologies.

GRIDS GRIDS (Grid-Scale Rampable Intermittent Dispatchable Storage) explores new technologies that enable widespread use of cost-effective grid-scale energy storage and balance the short-duration variability in renewable generation.

Flexible and large, grid-scale energy storage systems to allow intermittent renewable energy generation to match time of supply to demand.

HEATS HEATS will develop revolutionary cost-effective thermal energy storage technologies that if successful, would dramatically improve performance for a variety of critical energy applications.

Advanced thermal energy storage to improve energy efficiency.

IMPACCT IMPACCT aims to revolutionize technologies that prevent carbon dioxide produced by coal-fired power plants from entering the atmosphere and contributing to global warming.

Technologies to lower the cost of carbon capture from coal-fired power plants.

PETRO PETRO is targeted at optimizing the biochemical processes of energy capture and conversion, enabling crops that deliver more energy per acre with less processing.

Biofuels focused, but with potential application to biobased chemicals and polymers also.

REACT REACT will fund early-stage technology alternatives that reduce or eliminate the dependence on rare earth materials by developing substitutes for electric vehicle motors and wind generators.

Lower cost materials for electric generator/motor applications.

Solar ADEPT Solar ADEPT will focus on integrating advanced power electronics into solar panels and solar farms to extract and deliver energy more efficiently.

Improved solar energy generation levels and efficiency.

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Other Projects In addition to targeted solicitations, ARPA-E funds discrete projects to accelerate the development of key energy technologies.

Catch-all category for innovative programs that do not fit in the other categories.

To the above program areas, ARPA-E is adding additional focus areas, for which applications for funding

are currently being accepted. These include:

Program Name ARPA-E Program Description Battelle Comments

AMPED AMPED (Advanced Management and Protection of Energy-Storage Devices) focuses on technologies to improve battery systems management, including areas such as: sensing and monitoring, measurement and prediction of performance, and battery control systems.

Improving energy storage in batteries via enhanced battery management and control systems.

MOVE MOVE (Methane Applications for Vehicular Energy) focuses on technologies to enhance the economics and acceptance of natural gas vehicles (NGV’s), particularly in terms of lower cost and higher density on-board vehicle natural gas fuel storage, and in terms of cost-effective at-home natural gas refueling systems.

Development of cost-effective technologies for at-home refueling and more efficient on-board storage of natural gas in NGV’s.

ARPA-E also has a solicitation out that is requesting information from potentially interested parties for a

program focused on chemo/electro-autotrophic synthesis of liquid-fuels at scale. This initiative will focus

on piloting and scale-up investigations of this process for commercial Biofuels production.

B. Federal Funding of Frontier Energy Science: Energy Frontier Research Centers

The U.S. Department of Energy (DOE) has long-recognized that America’s economy runs on a

fundamental platform of energy, and that energy-security in a competitive World has to be achieved

through scientific and technological advancements. Expanding global populations and wealth are

increasing energy demands to levels in which demand cannot be met by supply via traditional energy

resources. If more energy, and more cost effective energy resources are not developed, increasing

demand will drive energy cost inflation and seriously dampen the global economy. In addition, the DOE

seeks to find solutions to the environmental and global climate challenges associated with expanding

global energy demand and consumption.

The DOE national laboratory system is unique in the world and a “jewel in the crown” of American

scientific leadership. Of fundamental importance to the development of technologies such as nuclear

power and renewable energy systems, the work of the DOE’s national lab system continues. In late

2009, the Office of Basic Energy Sciences in the DOE’s Office of Science, in addition to the national lab

system, established 46 Energy Frontier Research Centers (EFRCs). The EFRCs involve universities,

national laboratories, nonprofit organizations, and for-profit firms, singly or in partnerships, and were

selected by scientific peer review. The Centers are funded with between $2 million and $5 million per

year for a five-year initial award period.

These integrated, multi-investigator Centers add to the already intense national laboratory scientific

structure, and provide an additional conduit for conducting fundamental research focusing several

48

“grand challenges” and use-inspired “basic research needs” recently identified in major strategic

planning efforts by the scientific community. These grand challenges include (See Table 20):

Table 20: DOE Energy Grand Challenges

Grand Challenge Challenge Description

How do we control materials processes at the level of electrons?

Direct manipulation of the charge, spin, and dynamics of electrons to control

and imitate the behavior of physical, chemical and biological systems, such

as digital memory and logic using a single electron spin, the pathways of

chemical reactions and the strength of chemical bonds, and efficient

conversion of the Sun's energy into fuel through artificial photosynthesis.

How do we design and perfect atom—and energy-efficient synthesis of revolutionary new forms of matter with tailored properties?

Create and manipulate natural and synthetic systems that will enable catalysts that are specific and produce no unwanted byproducts, or materials that operate at the theoretical limits of strength and fracture resistance, or that respond to their environments and repair themselves like those in living systems.

How do remarkable properties of matter emerge from complex correlations of the atomic or electronic constituents and how can we control these properties?

Orchestrate the behavior of billions of electrons and atoms to create new phenomena, like superconductivity at room temperature, or new states of matter, like quantum spin liquids, or new functionality combining contradictory properties like super-strong yet highly flexible polymers, or optically transparent yet highly conducting glasses, or membranes that separate CO2 from atmospheric gases yet maintain high throughput.

How can we master energy and information on the nanoscale to create new technologies with capabilities rivaling those of living things?

Master energy and information on the nanoscale, leading to the development of new metabolic and self-replicating pathways in living and non-living systems, self-repairing artificial photosynthetic machinery, precision measurement tools as in molecular rulers, and defect-tolerant electronic circuits.

How do we characterize and control matter away—especially very far away—from equilibrium?

Discover the general principles describing and controlling systems far from equilibrium, enabling efficient and robust biologically-inspired molecular machines, long-term storage of spent nuclear fuel through adaptive earth chemistry, and achieving environmental sustainability by understanding and utilizing the chemistry and fluid dynamics of the atmosphere.

Source: U.S. Department of Energy, Office of Science.

As Table 20 shows, the grand challenges are questions of a basic science nature. To a degree the Energy

Frontier Research Centers (EFRCs) that focus on these challenges are performing fundamental work that

tends to be (but not exclusively so) upstream of the types of projects being funded by ARPA-E (with

ARPA-E projects focused on technology development with a distinct eye to commercial application).

The DOE notes that the purpose of the EFRCs is to:

Integrate the talents and expertise of leading scientists in a setting designed to accelerate

research toward meeting our critical energy challenges.10

10 U.S. Department of Energy, Office of Science. Accessed Online at http://science.energy.gov/bes/efrc/

49

And that:

The EFRCs are intended to harness the most basic and advanced discovery research in a

concerted effort to establish the scientific foundation for a fundamentally new U.S. energy

economy. The outcome will decisively enhance U.S. energy security and protect the global

environment in the century ahead.11

Thus EFRCs, and the scientific areas in which they work, provide a view towards the emerging frontiers

of energy research and point the way towards potential discoveries, innovations and technologies that

may be important to our national and global energy future. Tracking EFRC projects, and more broadly

major DOE national laboratory basic R&D programs, can provide MEI with a broad overview of the

genera spectrum of “bleeding edge” science and technology investigations in the energy space. To this

end, the focus areas of the EFRCs show that the frontiers of energy science lie in:

Inspired basic energy research in the areas of advanced nuclear systems, catalysis, clean and

efficient combustion, electric energy storage, geological sequestration of CO2, materials in

extreme environments, hydrogen science, biofuels, solar energy utilization, solid state lighting,

and superconductivity is required to create advanced energy technologies for the 21st century.12

It should be noted, that at the present time, despite the broad range of Centers and participating

institutions across the nation, there is no Mississippi institution engaged in the DOE EFRC program.

Figure 6 illustrates this, showing the distribution of Centers around the nation and the fact that neither

Mississippi nor its neighbors in Alabama or Arkansas have operating Centers.

Figure 6: DOE Office of Science, Energy Frontier Research Centers. Mississippi Stands Out in Having No Centers.

11 U.S. Department of Energy, Office of Science. Accessed Online at http://science.energy.gov/bes/efrc/ 12

U.S. Department of Energy, Office of Science. Accessed Online at

http://science.energy.gov/bes/efrc/research/http://science.energy.gov/bes/efrc/

50

C. The Battelle TPP ”Take” on Energy Technology Frontiers

Just as the National Institutes of Health (NIH) and its research grants are generally regarded as the “gold

standard” of biomedical research, so also is DOE funding of energy research a “gold standard”, looked

up to in the world of science and technology development. That said, in a global economy that runs on a

fundamental platform of energy consumption, government agencies, national laboratories and funded

university researchers are only part of the energy R&D equation. The scale of the market opportunity in

energy and energy-related systems and technologies is such that it contains some of the largest global

corporations, and attracts large-scale investment in commercial R&D and the commercialization of

innovations by existing energy sector companies and new start-up enterprises. Thus, there may be seen

to be an entire energy R&D ecosystem that comprises performing entities (corporations, individual

entrepreneurs, free-standing research institutes, national laboratories and academic institutions) and

funding entities (corporations, governments, the investment community, industry associations and

philanthropic organizations). This energy R&D ecosystem is consistently putting forward new

innovations, technologies and concepts—trying to find the next breakthroughs for the multi-billion

global energy marketplace.

The sheer number of R&D programs occurring in the United States, let alone globally, renders it

impractical to do any kind of synthesis of the full energy research spectrum. However, Battelle does

perform the annual Global R&D Funding Forecast, in conjunction with R&D Magazine, and specifically

covers the world of energy R&D within the forecast. The forecast provides direct input from R&D leaders

within energy industries and national laboratories—people who are in the forefront of understanding

energy R&D directions and opportunities for the U.S. and globally. The aggregate perspective of the R&D

Forecast respondents is shown in Figure 7.

Figure 7 shows energy R&D leader projections for the U.S.A.’s position in each energy R&D area, divided into three categories:

Areas of current U.S. leadership in which the U.S. will likely maintain its leadership for the next five years (2010–2014)

Areas of current U.S. leadership in which the U.S. will likely lose leadership in the next five years.

Areas in which the U.S. is not currently a leader.

51

Figure 7: Projected U.S. Leadership in Selected Energy R&D Fields. Source: Battelle TPP/R&D Magazine 2010

It is important to note that there is a relatively good match between the areas of opportunity for

Mississippi in energy identified and discussed in Chapter IV and the areas in which the U.S. has

leadership and is anticipated to sustain that leadership by either the majority or plurality of

respondents. Likely, the highest chance for Mississippi to gain jobs and employment is in those energy

areas where the U.S. has competitive advantage and is predicted to sustain it. As such the R&D areas for

Mississippi to pay particular attention to include (Table 21):

17.0%

22.8%

24.0%

28.1%

30.0%

35.0%

36.2%

42.4%

45.1%

52.0%

52.0%

53.3%

66.1%

71.6%

74.4%

25.0%

22.8%

19.0%

25.8%

23.1%

29.3%

35.2%

25.3%

23.0%

30.1%

25.2%

28.0%

21.2%

20.2%

15.4%

58.0%

54.3%

57.0%

46.1%

46.9%

35.8%

28.6%

32.3%

31.9%

17.9%

22.8%

18.7%

12.7%

8.3%

10.3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Ocean Wave/Current Generated Energy

Geothermal Energy

Hybrid Engine Technology

Water Capture/Desalination/Conservation Technologies

Wind Turbine Technologies

Next Generation/Generation IV Nuclear Power

Solar Photovoltaic Technology

Solar Thermal Technology

Advanced/High Energy Density Batteries

Fuel Cells for Transportation Applications

Biofuels

Portable Fuel Cells

Clean Coal/Zero Emission Technologies

Smart Grid Technologies

Carbon Sequestration

Current U.S. leadership - Will likely maintain leadership over the next five years

Current U.S. leadership - Will likely lose leadership over next five years

U.S. not currently a leader in this technology

52

Table 21: DOE Energy Grand Challenges

Energy R&D Areas With Predicted Sustained U.S. Leadership and

Competitive Advantage (Battelle Global R&D Forecast)

Findings from Mississippi Opportunity Assessment and Platform Identification

Carbon Sequestration CO2 capture and storage/sequestration identified as opportunities, but likely a long-term development horizon from R&D (current) to commercialization (future). CO2 utilization for enhanced oil recovery identified as current asset for Mississippi.

Smart Grid Technologies Identified under the Energy Monitoring and Management opportunity area which is categorized as a near-term opportunity. Incorporated under the recommended Advanced Manufacturing Platform.

Clean Coal/Zero Emission Technologies

Gasification of lignite identified as near-term opportunity area, currently being pursued in Mississippi. Incorporated under the recommended Gas Platform.

Portable Fuel Cells Identified as a potential component related to Mississippi strengths in polymer science. Would be a logical fit within the Advanced Manufacturing Platform once R&D moves towards commercialization. Likely to have a long-term development-to-commercialization horizon.

Biofuels Identified as near-term opportunity area with current advanced R&D-based production and scale-up taking place in the State. Recommended as one of the four primary energy based development platforms for Mississippi.

Fuel Cells for Transportation Applications

Similar conclusions as for Portable Fuel Cells above. Could leverage major automotive manufacturer presence in Mississippi.

Advanced/High Energy Density Batteries

Similar conclusions as for Portable Fuel Cells above. Could leverage major automotive manufacturer presence in Mississippi.

In the new December 2011 Battelle/R&D Magazine “Global R&D Funding Forecast”, Battelle TPP

received survey responses from 514 survey respondents regarding what they see as the top energy

technology areas by 2014. Figure 8 shows the survey results, with the percentage of respondents who

cited specific technology areas.

53

Figure 8: Key Energy Technology Areas through 2014. Source: Battelle TPP/R&D Magazine, December 2011

On this list, there is a match to leading areas of technology development and several of the leading

areas of energy opportunity identified by Battelle for Mississippi, including:

Fuel Cells (identified as a longer term opportunity for Mississippi based on polymer science

expertise), but also an advanced manufacturing platform component for recruitment into the

state as fuel cell technologies developed around the nation move towards commercialization.

Hybrid Systems were not specifically called out as an opportunity area in the Battelle analysis of

Mississippi opportunities. However, with both Nissan and Toyota present in Mississippi, the

relevance of hybrid technology to Mississippi automotive production should be noted.

Biofuels are identified as a recommended primary platform for Mississippi energy-based

economic development

Photovoltaics are noted as a current opportunity that has been generating significant new

employment via inward investment projects in the State. Recognized as a component of the

recommended Advanced Manufacturing Platform.

54

Chemical Batteries represent a potential manufacturing recruitment potential for Mississippi,

incorporated under the Advanced Manufacturing Platform.

Natural Gas is called out as a specific recommended Platform for Mississippi.

Several additional areas identified on the Battelle/R&D Magazine, albeit with lower numbers of

respondents citing them, are also highlighted as opportunities in Mississippi, including clean coal (lignite

gasification) and nuclear power. Both of these areas are incorporated in specific platforms, the former

in the Gas Platform and the latter in the Nuclear Platform.

D. The World of “The Jetsons”: Energy Technologies with a Long-Term Perspective

A scan of research at U.S. Department of Energy National Laboratories and within the engineering,

physics and chemistry laboratories of leading research universities will reveal an incredibly diverse range

of projects. From the most fundamental basic science investigations into the nature of matter, particle

physics and quantum theory through to applied work in developing materials for harsh environments,

improving combustion efficiency, discovering catalysts and developing new processes for converting

biomass into energy and liquid fuels. It is trite, but true to say that if Battelle TPP staff could identify the

winners among these thousands of projects and the potential innovations they may produce we would

be rich and famous. There are, however, certain energy technologies and R&D themes that are starting

to stand-out in terms of attention being paid in the literature, investment community and

scientific/technological press. The energy technology areas listed below(Table 22) represent the current

Battelle TPP “take” on particularly interesting areas of energy technology development that have

potential to be large in scale if proven successful. As such, they represent areas of technology that MEI

staff, and MDA economic developers, may want to keep an eye on for emerging investment projects.

Table 22: Emerging, Radical and High Risk Technologies in the Energy Space. (Please note that these are not presented in any order of likelihood of success, nor does Battelle TPP feel qualified to make such an evaluation (which at the current stage of development for many of these technologies would represent “wild speculation”)

Emerging or Long-Term/

High-Risk Technology

Description Examples of Companies Working in this Area

Small Modular Nuclear Reactors

Small Modular Reactors (SMRs) are in development to provide an alternative to the large, very expensive, 1000+Mw utility scale reactors that are used today. SMRs would be in the 25Mw to 300Mw output range and sized for manufacturing in a production plant and shipped in modules to the usage site. They are also intended to be scalable via tying modules together for increased output.

Gen4 Energy (CO) NuScale (WA) mPower/B&W (VA) Westinghouse (PA) General Atomics (CA) Toshiba (Japan) CAREM (Argentina)

Advanced Nuclear Reactors (Thorium, Traveling Wave Reactors, etc.)

The next generation of nuclear reactors may be divided into three categories: 1) evolutionary designs based on existing reactor technologies; 2) novel advanced reactor technologies that are

TerraPower (WA) – Traveling Wave. Flibe Energy (AL) – Thorium BARC (India) – Thorium

55

already in development, and 3) Generation IV reactors that are theoretical designs being actively researched. New reactor designs are primarily being developed to improve nuclear safety, reduce proliferation risk, minimize waste and natural resource utilization, and to decrease the cost of constructing and operating plants.

GE Hitachi Nuclear Energy (NC) – evolutionary design Westinghouse (PA) – evolutionary design

The Hydrogen Economy

Hydrogen is the world’s most abundant element and holds promise as a clean, independent energy source. Despite its abundance, hydrogen is always combined with other elements, and must be separated through reforming or electrolysis, each of which holds environmental challenges. Research is under way to determine methods for the economical and sustainable production, transportation, distribution and storage of hydrogen.

Ballard Power Systems (Canada) BMW (Germany) UTC Power (CT) myFC (Sweden) Honda (Japan) Horizon Fuel Cell Technologies (Singapore) Hydrogenics (Canada) IdaTech (OR) Daimler AG (Germany)

Energy Harvesting

Energy harvesting technologies capture and store ambient energy from renewable and electromagnetic sources. Wasted electromagnetic energy from devices such as cell phones, computers and televisions can be used by energy harvesting devices to generate electricity. In addition, human-generated kinetic energy and light, heat and motive power from the sun, tides and soundwaves represent a vast amount of energy that if captured could provide electrical energy for an endless number of applications including automatically recharging electrical devices, enabling wireless sensors, and power backup.

Voltree Power (MA) Innowattech (Israel) EnOcean (Germany) Bionic Power (Canada) Micropelt (Germany) Advanced Cerametrics (NJ) MicroStrain (VT) Tellurex (MI)

Superconductivity

Superconductive metals and ceramics allow electricity to flow with no resistance when stored at very cold temperatures, creating large gains in the efficient transfer of energy. For example, new superconductive wires can transfer 100–150 times more energy than traditional copper wire while achieving perfect efficiency.13 Energy applications for superconductivity are extensive and include: power transmission, smart grid technology, motive power and storage devices.

Superconductor Technologies, Inc. (TX) American Superconductor(MA) General Cable Superconductors (New Zealand) SCI Engineered Materials (OH)

Space-Based Solar Power

Space-based solar power (SBSP) harnesses energy from the sun and transmits it to Earth. Different from traditional solar power, SBSP would utilize specially outfitted satellites to

Space Energy (UAE) Solaren Corporation (CA) Innovative Management Solutions (TX)

13 Renewable Energy World, Superconductors Are Finally Coming of Age, 2011.

56

collect and store solar power 36,000 km above Earth. At this distance, solar power could be collected regardless of time of day or weather conditions. Electrical energy supplied by the satellite would be sent to Earth via wireless transmission.

Osmotic Power

Osmotic power systems use the energy created when salt and fresh water combine to create electricity. Traditionally, salt water and fresh water are placed side-by-side and the fresh water is drawn through a membrane into the salt water. The pressure caused from this action creates enough energy to drive a turbine for electricity generation. Recently, researchers at Stanford created a battery that would allow even greater amounts of energy to be captured from osmotic power.

Statkraft (Norway) Kyowakiden (Japan) Energy Recovery Inc (CA) Hydration Technology Innovations (AZ) Oasys Water (MA)

Algae

Biofuel derived from algae has the potential to create 30 times more energy per acre than other types of biomass, and has the additional benefit of that it can be harvested from marginal lands or water. Another advantage of using algae as a biofuel feedstock is that algae use common water pollutants as a nutrient source, yielding a net positive effect on the environment. Current research is aimed at developing economic methods for large-scale production and cost effective harvesting.

Sapphire Energy (CA) Solazyme (CA) Algenol Biofuels (FL) Parabel (FL) Exxon Mobile (TX) Chevron (CA) Phyco Biosciences (AZ) Diversified Energy Corporation (AZ)

Biotech Fuel Crops (Plant Transgenics)

Biofuels production has been challenged by competition from global food supply and economical production. Biotech crops, or transgenic crops, would help address both those challenges. Not only can biotech fuel crops be genetically modified to improve yields, genes can be suppressed or encouraged to improve conversion efficiency, thereby reducing the cost of production.

Monsanto (MO) Mendel Biotechnology (CA) DuPont (DE) Bayer Crop Science (Germany) Syngenta (Switzerland)

High Altitude Wind Power

Although wind has long been an energy resource, the intermittent nature of wind has presented a challenge to renewable energy adoption. At altitudes of 20m to 200 km, high altitude wind power technologies can take advantage of high velocity and stable wind currents to produce abundant, reliable and renewable energy. There are many proposed designs to harness kinetic energy from high altitude winds including: kites, aerostats, gliders and tall offshore technologies.

Sky Windpower (CA) Kite Gen (Italy) Makani Power (CA) Magenn (CA) Altaeros Energies (MA)

57

Hydrokinetics

Hydrokinetic power utilizes the energy that results from the motion of water for power generation. While much research has focused on the energy potential of tidal waves, many other hydrokinetic sources are available as renewable energy resources including: near-shore and off-shore wave energy, ocean currents, free-flowing rivers and man-made waterways. Currently, more than 100 marine and hydrokinetic technologies are in development. 14

Pelamis Wave Power (UK) Ocean Power Technology (DE) Oceanlinx (Australia) Marine Current Turbines (UK) Openhydro (Ireland) Verdant Power (NY) Hydrovolts (WA) Ecomerit Technologies (CA)

14 Pike Research, Hydrokinetic and Ocean Energy, 2012.

58

VI. Strategies and Actions for Energy-Based Economic Development

in Mississippi

A. Introduction

The identification of Energy Platforms is not an end in itself, but rather a starting point for Mississippi to

move ahead in overall energy-based economic development. The platforms align with specific identified

core competencies, industry capabilities (established and emerging) and energy-resource assets in

Mississippi and they have the potential to drive significant job growth in the state. In order to guide and

realize the potential of these platforms for Mississippi, it is essential to advance bold but also realistic

development plans that incorporate “outside the box” thinking about how best to create the strong,

systematic linkages across Indiana’s industry, academic and public sector institutions.

To guide the substance of these development plans, Battelle and the Mississippi Energy Institute

convened industry executives, research leaders from universities, government leaders, and non-profit

and foundation representatives to participate in focus group discussions facilitated by Battelle in the

four energy platform areas identified:

• Gas Platform

• Biomass Platform

• Energy Products & Systems Advanced Manufacturing Platform

• Nuclear Platform

There were a total of 25 participants attending one of the four focus groups, including representatives

from industry, from higher education, and other stakeholders such as from state government, economic

development agencies and the foundation community. These focus group meetings were held over two

days at the MEI offices in Jackson.

The key topics framing the discussions at each of these technology platform focus group meetings

included:

• Validating the assessment of the particular platform area prepared by Battelle, in

consultation with the Steering Committee, to ensure that it was complete and fully

reflected the core competencies found in Mississippi;

• Gathering participant insight and recommendations into crosscutting strategies and actions

designed to support energy-based economic development in Mississippi.

• Gathering participant recommendations regarding specific actions needed to address

development challenges and opportunities facing Mississippi in its efforts specific to each

platform.

59

B. Cross-Cutting Strategies and Actions for Mississippi Energy-Based Economic

Development

While each of the energy platforms had its own specific set of development issues and opportunities, a

significant part of each two-hour focus group comprised a discussion of cross-cutting strategies and

actions that will support energy-based economic development in the state across each of the platforms

and beyond.

Based on all preceding steps in the quantitative and qualitative SWOT evaluation for energy in

Mississippi, the identification of core competencies, and needs and challenges identified during project

interviews, a series of five macro level cross-cutting strategies, with 16 associated actions were

developed by Battelle for consideration by the focus group participants (Appendix C).

Each of the draft strategies and actions were, in general, very well received by the focus group

participants. Some refinements were made however, based on focus group and advisory board input,

resulting in the final strategies and actions list below (Table 23):

Table 23: Summary of Final Recommended Strategies and Actions



Strategy Actions Timing


1.1 – Develop a multi-university collaborative energy research institute, comprising key faculty and industry experts from across MS research universities with energy interests and expertise.


1.3 – Develop an energy technology networking and scientific interest group comprising industry and academic representatives to generate and sustain collaborative dialog.

1.4 – Coordinate inventory and marketing of university testing capabilities and instrumentation for materials and chemical characterization to service Mississippi industry

1.5 – Develop an energy-technology seed capital initiative for Mississippi, bringing high net-worth individuals, venture capitalists and energy corporations together for syndicated investments.

Immediate

Medium-term

Short-term

Short-term

Short-term

STRATEGY TWO: Grow the state

2.1 – Form partnership between MDA, MTA and MEI for energy-based economic development marketing.

Immediately

60

energy industry base through targeted marketing and business recruitment

2.2 – Form an energy business leaders advisory cabinet to provide contacts, advice on messaging, and to participate in key business meetings with prospects.


2.4 – Support State of Mississippi government business location incentives packages and engage advisory cabinet in providing advice to State on energy-specific incentives.

2.5 – Utilize university GIS capabilities in combination with State Geological Survey and other information resources to develop centralized information source on Mississippi geology, water resources and other key assets. Make this Internet accessible.

2.6 – Organize an Energy Summit to launch the MEI Roadmap, and foster early dialog with diverse audiences on implementation of strategies and actions.

Short-term

Medium-term

Immediately

Medium-term

Short- term




3.3 – Identify opportunities for strategic partnering based on inventory of capabilities.

Medium-term

Medium-term

Medium-term

STRATEGY FOUR: Promote Mississippi and the advantages of Mississippi as a location for energy projects to key government entities (Federal and State)



Immediately

Immediately




5.3 – Evaluate opportunities to establish Energy Career Academies within selected high schools and to integrate energy case studies within STEM education

5.4 – Develop informational materials on energy

Medium-term

Medium-term

Medium-term

Short-term

61

careers and opportunities in Mississippi and provide online Webinar to high school guidance counselors to introduce these materials for their use.

5.5 – Engage MEI member companies and other energy industries in Mississippi with the MDA job fair program

5.6 – Increase industry engagement with Mississippi universities via industry advice on electives, co-ops and internships, and on-line course offerings for continuing education and non-credit courses.


Short-term

Medium-term

Medium-term

Each of these crosscutting strategies and actions is discussed in further detail below:

STRATEGY ONE: Grow the energy R&D base in the state and accelerate

commercialization of R&D-based innovations

Rationale: Mississippi’s prospects for home-grown technology-based economic development in energy

is limited by its comparatively low base of industry R&D activity in the State and very limited

commercialization of energy and associated research via Mississippi’s research universities. There are

certainly several pockets of energy and energy-related R&D expertise in the Mississippi (such as in

biomass production, emerging biorefinery technologies, polymer science, modeling and simulation, and

advanced acoustics), but so far the pathway from basic research to commercialization of Mississippi

energy technology innovations has been extremely limited.

R&D-based technology-based economic development (TBED) requires development of a complete and

chain of R&D activity (as illustrated in Figure 9). Mississippi needs to increase its R&D activity and better

connect industry in the state and surrounding states to its non-profit research engines. Mississippi does

benefit from the presence of the Mississippi Technology Alliance, a non-profit institution dedicated to

promoting TBED in Mississippi, and in combination with MTA and the Mississippi Development Authority

(MDA) there is opportunity for MEI and its board to be active in coordinating activities to further

reinforce Mississippi’s performance in R&D as focused on energy.

Increasing and reinforcing the base of energy R&D in Mississippi will bring multiple benefits:

Enhanced levels of federal R&D funding for Mississippi research institutions brings fresh dollars

into the state of Mississippi.

Start-up business enterprises may be formed in Mississippi based on in-state energy

innovations, and attract outside funding for growth (from federal and private capital sources).

62

Innovation is a key factor in sustaining the competiveness of existing Mississippi industry in the

face of expanding international competition, and a source for new products and technologies

that may be commercialized by existing Mississippi business enterprises.

Figure 9: Components of a Comprehensive Technology-based Economic Development and Cluster Development

Value Chain

Existing Cluster Businesses

Cluster BusinessExpansion

Cluster BusinessAttraction

Technology-Based Business ClusterOperations and

Internal Industry R&D

AppliedR&D

Piloting &Demonstration

BasicScience

TechnologyTransfer

New EnterpriseDevelopment

Strong academicresearch communityable to attractcompetitiveexternal grantfunding

State and privatesector commitment tobuilding robustbase of high-qualityscience and technologyfaculty and supportinginfrastructure

Academic researchcommunity and keypartners committed totranslating discoveryinto application and movingit towards commercialization

Investment in infrastructureand personnel forapplication testing, technologypiloting and scale-up activities

Financial and personnel commitment to intellectual propertyprotection, technologytransfer and in-state commercialization

Presence of entrepreneursand skilled humancapital for business start-ups

Public and privatesector risk capital forpre-seed, seed and venture funding rounds

Commitment to targeted recruitment(domestic and international)of cluster businessesand supportingbusinesses

Integration of existingbusinesses into the cluster,and support for additionalbusiness growth fromthese enterprises

Infrastructure andfacilities to housescience andtechnology-basednew and expandingbusiness enterprise, production and R&D.

Facilitation andcoordination ofnetworking andcluster supportactivities

Long-term, sustained commitment to development of the cluster by all parties

Education andworkforcedevelopment tosupport clusterpersonnel needs

Generation of positivegovernment, regulatory and business climate to meet competitive cluster needs

Cluster industries supporting R&D atuniversities. Ongoing industry/universitydialog on industry needs and challenges.

Strategy One thus calls for attention to actions that will serve to grow the base of energy R&D in

Mississippi and accelerate the commercialization in Mississippi of R&D-based innovations—thereby

providing an enhanced base of TBED in the state. The specific actions recommended for implementation

under this strategy are as follows:

63

Action 1.1: Develop a multi-university collaborative energy research institute, comprising key faculty

from across Mississippi’s research universities with energy interests and expertise.

Description and Rationale: While Mississippi’s research universities certainly have R&D and technical

expertise in many aspects related to energy (see write-ups by area in Appendix A), there is still a

relatively limited number of faculty dedicated to energy R&D at individual universities. Taken together,

however the faculty skills and infrastructural resources of the research universities in Mississippi may be

assembled into a collaborative energy research institute model that would provide shared access to

resources, faculty skills, and a single point of access to these resources for external industry.

Responsible Party/Parties: There is an existing collaboration between the Vice President’s for Research

at Mississippi’s research universities, and it is logical to coordinate development of a shared

collaborative energy research institute through this body, together with the chairs of relevant university

academic departments and existing single-university energy-related centers and institutes.

Timing: Short-term (Action should be initiated within 12 months)

Action 1.2 – Prioritize recruitment of new/replacement faculty to be focused on enhancing capabilities

in key energy platforms.

Description and Rationale: It is important to build a critical mass of faculty with research skills covering

the central disciplines and research foci needs of platform industries. Such a critical mass of faculty

excellence would better assure industry engagement with Mississippi’s universities on research needs

and challenges. Ideally additional state funds should be made available to support the recruitment of

faculty into positions deemed to be critically important based on consultation between industry and

academic leaders (see Action 1.3). While not requiring new funding, it is challenging to direct the

recruitment of replacements for departing or retiring faculty since often these positions need to be filled

by someone with a similar expertise in order to round-out required teaching coverage for specific

subject matter in departments. Battelle recommends that initially a goal be set of hiring two new faculty

for each of the three primary platforms (Gas, Biomass and Advanced Manufacturing) with the specific

skills of recruited faculty identified through consultation with platform industries in Mississippi.

Responsible Party/Parties: Support for such recruitment focus needs to come from the top through the

Mississippi Institutions of Higher Learning (IHL), and should ideally come with additional state financial

support to support the recruitment of high profile faculty and research teams. Model programs such as

the Georgia Eminent Scholars Program and the Kentucky and West Virginia Bucks for Brains programs

may be reviewed for options on structuring focused new hires.

Timing: Medium-term (Action should be initiated within the next 12–36 months)

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Action 1.3 – Develop an energy technology networking and scientific interest group comprising

industry and academic representatives to generate and sustain collaborative dialog.

Description and Rationale: Networking between industry representatives and academic R&D leaders

has been a proven staple of technology-based economic development for multiple states. Whether

formalized through collaborative institutes (such as those formed under the Ohio Third Frontier

program), via special non-profit groups (such as Biowa guiding Iowa’s biobased products sector

development), through general industry technology councils (such as the Pittsburgh Technology

Council), or more ad hoc, there should be little doubt that regular contact and dialog between industry

and academic researchers and research leaders can be the spark that ignites significant collaborations

and shared research projects.

Responsible Party/Parties: The Mississippi Energy Institute already enjoys participation of a substantial

number of key energy industry stakeholders in the state. MEI should coordinate networking events and

opportunities in collaboration with the multi-university energy research institute to be established

under Action 1.1.


Action 1.4 – Coordinate inventory and marketing of university testing capabilities and instrumentation

for materials and chemical characterization to service Mississippi industry

Description and Rationale: This action was specifically suggested by multiple participants in the

platform focus groups and was considered a “must do” action that should be relatively simple to

implement with a potentially high impact for industry. Mississippi’s research universities contain

instrumentation, test facilities, and skilled faculty and technicians that can provide in-state support for

energy industry testing needs. Capabilities in areas such as analytical chemistry, materials

characterization, biomass characterization, imaging, modeling and simulation (including high

performance computing), constitute a suite of infrastructural and intellectual capacity across the

universities that it would be extremely difficult and expensive for industry to duplicate. Providing access

to industry at competitive rates through the multi-university collaborative energy industry research

institute (Action 1.1) should be a priority. The Mississippi Energy Institute may assist in the process by

developing a standard “inventory of assets and capabilities” form that each university VP Research office

would use in the inventory process. It should be noted that this process will likely have an additional

benefit in serving to identify critical gaps in capabilities, equipment or infrastructure that Mississippi will

need to fill in order to best serve the needs of platforms and energy-based development in general.

Responsible Party/Parties: Mississippi Energy Institute, University VP’s for Research and the Mississippi

multi-university collaborative energy research institute (once formed). MEI, MDA and MTA should help

coordinate marketing of these important resources to industry in Mississippi and surrounding states.


65

Action 1.5 – Develop an energy-technology seed capital initiative for Mississippi, bringing high net-

worth individuals, venture capitalists and energy corporations together for syndicated investments.

Description and Rationale: The ability of Mississippi to start-up new local business enterprises based on

R&D is exacerbated by a comparative lack of readily available pre-seed and seed capital in the state. This

is not an unusual situation for states (outside of California and Massachusetts), but it has to be

addressed. Referred to as the “Valley of Death” (see Figure 10), a lack of early-stage capital resources

will sink Mississippi’s prospects for homegrown energy-technology business growth—restraining the

ability of enterprising individuals and entrepreneurial start-ups from securing the investment required

to launch and grow new ventures.

Figure 10: The Risk and Early-Stage Capital “Valley of Death”

There are, however, multiple examples of states and organizations taking a proactive approach in raising

availability of early-stage capital. Examples include organizations like MTA focusing on building networks

or syndicates of individual angel investors to increase the critical mass of funds available. Some states,

such as Utah, for example have adopted state “fund of funds” to help support capitalization of

investment groups, while others (for example Iowa) have provided state matching funds or investment

guarantees to attract external capital. The University of Arkansas for Medical Sciences represents

another example of an organization (UAMS BioVentures) aggressively building relationships with outside

investors and venture capital groups to the extent that they can regularly hold well-attended venture

events presenting innovations, technologies and new venture concept to qualified investors. A recent

and very novel organizational development is Renewable Manufacturing Gateway, formed in Pittsburgh

as a non-profit investment bank to assist new business ventures in accessing non-traditional capital

Concept

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66

sources. These various models should be evaluated by MEI, in consultation with MTA and MDA, to

determine options that may be a best fit for Mississippi. With Mississippi having a base of high net

worth individuals with direct experience in the energy sector, there is certainly logic in attempting to

form a formal angel network or syndicate with an energy investment focus.

Responsible Party/Parties: Mississippi Energy Institute in collaboration with the Mississippi Technology

Alliance and Mississippi Development Authority.

Timing: Long-term (Action should be undertaken more than three years hence). Battelle characterizes

this as long-term because we did not identify a significant volume of R&D-based innovation currently

moving towards commercialization in Mississippi. In the event that the other Strategy One actions result

in increasing potential deal flow, Action 1.5 may need to be accelerated into a medium-term action.

STRATEGY TWO: Grow the state energy industry base through targeted

marketing and business recruitment

Rationale: Mississippi has achieved considerable economic development success over the past decade

through proactive marketing and business recruitment activities. Mississippi’s success has been

achieved through the dedicated work of the Mississippi Development Authority in marketing and the

management of business recruitment projects, skilled packaging of incentives to achieve a competitive

offering versus competing states for mobile projects, the Governor and senior administrative and

legislative leaders being personally engaged in dialog with inward investor prospects. Companies credit

Mississippi with being highly responsive and flexible during their investigations of Mississippi as a

potential location and during specific project negotiations.

Mississippi’s recruitment success is specifically evident in the energy sector, where there have been

relatively recent wins of major projects in the solar/photovoltaic systems and materials industry, and in

the next-generation biofuels and biorefinery industry. Given Mississippi’s recent track record in

recruitment, it is logical to continue to emphasize this as a key component of the energy-based

economic development strategy. Also, because R&D in the energy space in the state is relatively limited,

it is likely that near-term economic development projects will occur through a business recruitment and

expansion approach, as opposed to TBED pathways.

Strategy Two thus calls for attention to actions that will serve sustain and enhance Mississippi’s activities

in the recruitment and expansion of energy-sector business enterprise. The specific actions

recommended for implementation under this strategy are as follows:

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Action 2.1 – Form collaboration between MDA, MTA, research universities and MEI for energy-based

economic development marketing.

Description and Rationale: The Mississippi Development Authority (MDA) is chartered as:

The state of Mississippi’s lead economic and community development agency, with

approximately 300 employees engaged in providing services to businesses, communities and

workers throughout Mississippi. The agency works to recruit new business to the state and retain

and expand existing Mississippi industry and business.15

MDA has a well-recognized track record in business recruitment (and in business retention and

expansion), and has dedicated staff focused on energy-based economic development via its Energy

Services Division. While MEI has a mandate to enhance the energy sector in Mississippi, and MTA has a

focus on technology-based economic development in energy (for example its dedicated operations in

biobased development via Strategic Biomass Solutions), these organizations should coordinate any

external marketing and recruitment activity through MDA under a shared memorandum of

understanding. All too often, states confuse the market with multiple agencies, communities and

development bodies trying to communicate with a limited base of external companies, and it is

imperative that recruitment activity and marketing in energy remain coordinated through the

professionals at MDA. MTA and MEI can facilitate this marketing by providing specialized assistance as

requested by MDA, and support MDA in the provision of information for their clients. In addition, MEI’s

board will be a valuable resource for MDA to access for specialized industry knowledge and contacts (see

Action 2.2)

Responsible Party/Parties: MDA should hold the leadership and coordination function for business

recruitment and marketing, with support provided by MEI and MTA as required/requested by MDA. It is

important that Mississippi have its marketing centrally coordinated to avoid conflicting messages and

working at cross-purposes—hence the importance of central coordination by MDA.

Timing: Immediately (Action should be initiated as soon as feasible)

Action 2.2 – Form an energy business leaders advisory cabinet to provide contacts, advice on

messaging, and to participate in key business meetings with prospects.

Description and Rationale: With a diverse base of energy industries and companies supplying into the

energy sector, there is an excellent base of specialized industry knowledge within Mississippi. In

addition, the industry contacts and networks of energy-sector leaders in Mississippi can provide an

extremely valuable resource for MDA in marketing the state and assisting in meetings or information for

specific inward investment inquiries.

MEI’s board of directors already forms a logical core for such an energy business leaders advisory

cabinet that would provide insight, contacts and support for Mississippi’s coordinated approach to

energy-based economic development marketing. Current MEI Board members should be consulted to

15 http://www.mississippi.org/about-the-mississippi-development-authority/

68

solicit input on additional business people and energy industry advisors and stakeholders who may be

valuable additions to a marketing advisory cabinet.

Responsible Party/Parties: The Mississippi Energy Institute in collaboration with MDA.


Action 2.3 – Build a marketing prospects database and dataset of key energy thought leaders and

industry influencers. Develop targeted communications strategy using e-newsletters linked to Web

content.

Description and Rationale: Mississippi may not be first come to mind as an energy leader outside of the

state, yet Mississippi has a great story to tell. MEI has recently developed an e-newsletter and this

informational resource should be distributed to as wide a distribution list of energy insiders, thought

leaders and media outlets as possible. Regularly working via e-newsletter to keep Mississippi energy

activities, news and announcements in front of energy leaders is a simple and effective marketing tool.

In addition to building an internal list of contacts based on MEI board contacts and other Mississippi

sources, MEI’s contacts database should be supplemented via purchasing e-mail contacts, by industry

segment of interest, from commercial database providers (such as InfoUSA, US Data Corporation, or

Hoovers D&B). MEI should produce content for the newsletter in collaboration with other key

stakeholders, including MDA, MTA and the proposed multi-university collaborative energy research

institute.

Responsible Party/Parties: Mississippi Energy Institute


Action 2.4 – Support State of Mississippi government business location incentives packages and

engage advisory cabinet in providing advice to State on energy-specific incentives.

Description and Rationale: A key element of the mission of MEI is to engage in evaluating and advising

public policy in Mississippi in relation to energy. This should extend not only to regulatory policies, but

should also embrace comment and advice regarding business incentives offered by the State of

Mississippi. MEI board members and advisers can provide valuable advice regarding the appeal of

various incentive structures, and MEI should be proactive in benchmarking incentives versus competing

states.

Responsible Party/Parties: Mississippi Energy Institute in consultation with MDA


Action 2.5 – Utilize university GIS capabilities in combination with State Geological Survey and other

information resources to develop centralized information source on Mississippi geology, water

resources and other key assets. Make this Internet accessible.

69

Description and Rationale: Focus group participants noted that there is presently no one-stop resource

in Mississippi for companies or other inquiring entities seeking information on the state’s geology, well

locations, log data, water resources, etc. Geoscientists at the universities receive some inquiries, the

State Geological surveys others, but focus group respondents suggested that there needs to be

consolidation of informational resources via a one-stop access point, and that the access point needs to

be Web enabled. Gathering required collaborations and negotiating access to data will take effort and

multiple organizations will need to be engaged in the effort, such as: the Mississippi Geospatial

Clearinghouse, the Mississippi State University Geosystems Research Institute, Geology and Geological

Engineering at the University of Mississippi, the Office of Geology (under the Mississippi Department of

Environmental Quality) and the Mississippi Geological Society (to name a few).

Responsible Party/Parties: The task should be pursued by MEI, MDA and MTA in collaboration. It is

likely that specific funds would need to be raised for this, with the Geosystems Research Institute at

MSU a potentially suitable contractor for assembling the desired system.


Action 2.6– Organize a Governor’s Energy Summit to launch the MEI Roadmap, and foster early dialog

with diverse audiences on implementation of strategies and actions.

Description and Rationale: On September 21, 2011 Ohio Governor John R. Kasich brought together a

diverse group of leaders to discuss the future of Ohio’s energy policy and lay the foundation for a

comprehensive Energy and Economic Development Policy that will allow Ohio’s substantial assets to

propel the State’s long-term economic growth and job creation. The speakers and panelists were

carefully selected to represent a diverse cross-section of highly qualified experts from energy producers

and distributors, manufacturers, conservation nonprofits, business associations, universities and

colleges, and R&D organizations throughout Ohio and from other states. 28 major sponsors from

industry, academe and the non-profit community sponsored the Summit which was hosted at The Ohio

State University. A similar summit event is recommended for Mississippi, to be organized by MEI in

collaboration with the Office of the Governor and MDA. A Mississippi event will differ, however, in that

it may form the platform for the launch of this MEI/Battelle Energy Strategy, helping to build support for

strategies and actions implementation (in addition to securing further insight and input from

participants). It is further recommended that the summit have tracks for the key energy platforms

proposed by Battelle.

Responsible Party/Parties: Mississippi Energy Institute and the State of Mississippi


70

STRATEGY THREE: Support state energy sector growth via supply chain and partnering

facilitation activities

Rationale: Individual companies often take a path of least resistance in securing supplies, components

and business services. Name brand, national or international suppliers may be used simply because they

are well-known, rather than consideration given to local Mississippi suppliers who may well be able to

compete successfully for the business. What economists term “imperfect knowledge” typically exists in

the marketplace, with individual Mississippi companies and manufacturing plant operations being

unfamiliar with the full range of materials, suppliers, products and services that may be provided cost-

effectively by Mississippi-based vendors.

The Mississippi Energy Institute can contribute to increasing the retention of business expenditures in

Mississippi, and the resulting economic multiplier effect, by supporting the development of energy and

energy-related industries supply chain information system and state supply network dedicated to

improving business-to-business activity in Mississippi. This activity may be accomplished in partnership

with existing organizations that have been focusing on supply-chain information, including the

Mississippi Development Authority and individual major companies.

Strategy Three thus calls for actions that will help support business-to-business activity between

Mississippi based business enterprises. The specific actions recommended for implementation under

this strategy are as follows:

Action 3.1– Inventory capabilities of energy-companies and companies supplying and servicing the

energy industry in Mississippi

Description and Rationale: This is a substantial task, and it is recommended that it be tried for one of

the recommended platforms first before attempting to do for the entire Mississippi energy sector. The

biomass platform may be a logical starting point, leveraging work already done in evaluating the

potential supply chain in Mississippi by Mississippi Power for the new Kemper facility. IN planning for

the project, Mississippi Power developed a database of Mississippi suppliers, including minority and

disadvantaged business enterprises. In addition, it should be noted that MDA also has staff focused on

supply chain management and informational resource assembly. The biomass platforms will also likely

benefit from the resources contained in the forthcoming TetraTech biomass study for MDA and the

excellent work of the Mississippi Institute for Forest Inventory.

Responsible Party/Parties: It is recommended that MDA take the lead in this action.


71

Action 3.2– Identify gaps in the local energy-industry supply chain based on inventory and advice from

companies.

Description and Rationale: MEI and MDA should work with major Mississippi energy enterprises to

evaluate their supplier lists and provide information on Mississippi suppliers who may be able to provide

products and services that are currently accessed from vendors located outside of the state. This action

should be piloted with the biomass platform, if the biomass platform is selected as the first inventoried

sector under action 3.1.

Responsible Party/Parties: MDA and MEI in collaboration with major energy companies in Mississippi.


Action 3.3– Identify opportunities for strategic partnering based on inventory of capabilities.

Description and Rationale: As Mississippi further develops its R&D capacity and innovation base in

energy and associated technologies, opportunities will start to emerge for commercialization of new

technologies. While technology may be commercialized by a single new start-up enterprise, Mississippi

has a limited track record in this regard within the energy space. Opportunities to successfully

commercialize technology in Mississippi may be improved by using existing Mississippi companies

(either alone or in strategic partnerships with each other) to examine prospective technologies and form

new ventures for their commercialization. The inventory of supply chain companies will provide a

valuable resource for identifying potential candidate companies in Mississippi for technology transfer

and commercialization of R&D-based innovations.

Responsible Party/Parties: Mississippi Energy Institute and MTA in collaboration with technology

transfer offices of Mississippi research universities.


STRATEGY FOUR: Promote Mississippi and the advantages of Mississippi as a location

for energy projects to key government entities (Federal and State)

Rationale: Certain industries have particularly strong connections to government—either in terms of

being highly regulated or strategic in nature and the focus of major government R&D activity and

investment. The energy industry certainly is one of these industries—with energy-utilization

underpinning most U.S. economic activity, energy production and distribution comprising a major part

of U.S. economic output, energy security being a key strategic issue for the nation, and energy R&D

being a signature focus of the U.S. national laboratory system operated by the U.S. department of

energy. Energy is also a highly regulated industry—with federal and state agencies wielding considerable

influence in areas such as access to fossil resources, processes and procedures for accessing fossil

energy resources, regulatory oversight of environmental impacts of energy operations, health and safety

aspects of industries such as mining and nuclear energy production, distribution of energy, specifications

72

for liquid fuels, incentives for renewable energy development, and rate control over public utilities (to

name a few).

A number of the opportunities for energy-development identified during the Battelle project have

significant connections to federal and state government actions and oversight. The Mississippi Energy

Institute and its partners need to be proactively engaged sustaining positive relationships with

government agencies that will be making or influencing forthcoming decisions on major energy

initiatives and projects that may benefit or impact Mississippi. Specific examples include DOE and

Nuclear Regulatory Commission activities in relation to a long-term solution to the nations spent nuclear

fuel storage issues, nuclear fuel reprocessing, and the licensing of next generation nuclear reactors and

small modular reactor. Likewise, government activities in terms of incentives in renewable fuels

development and deployment (particularly relevant to Mississippi in the biofuels and solar/PV

components industries) wield considerable influence over renewable energy development and

economics.

Strategy Four thus calls for actions that will build upon MEI’s existing track record in engaging with

federal and state government on energy issues and policy. The specific actions recommended for

implementation under this strategy are as follows:

Action 4.1– Build and sustain close relationships with the U.S. Department of Energy in relation to

nuclear storage, carbon sequestration and other projects and initiatives relevant to Mississippi assets.

Description and Rationale: Strategic, highly regulated and political energy is a sector of the U.S.

economy in which the United States Federal Government is deeply entrenched. Federal legislators and

agencies have a wide-ranging impact and influence on energy technology development, energy

exploration, fossil energy use, nuclear energy, renewable energy development, interstate transportation

of energy, and environmental impacts of energy (to name a few). With gas, biomass (renewable energy)

and nuclear as key energy industries for Mississippi, it is critically important that Mississippi be

proactively engaged with Federal agencies to provide advice and guidance on the impacts of policies and

regulations. Furthermore, the Federal government is the leading sponsor of major new programs to pilot

advanced energy technologies and has the responsibility for site seeking for projects in advanced areas

such as nuclear storage, spent fuels reprocessing, carbon sequestration, first selected sites for advanced

reactors or small modular reactors, etc. Mississippi needs to be sure to build relationships with federal

regulators, agencies, national laboratory teams, and others in government who will influence projects of

importance to Mississippi.

This action item has already been acted upon in the nuclear storage and reprocessing arena during the

course of the Battelle project. Battelle team members facilitated a meeting between MEI members and

the U.S. Department of Energy to discuss Mississippi’s interests in being considered for future nuclear

storage and reprocessing projects.



73

Action 4.2– Provide ongoing commentary and advice regarding legislation and public policy likely to

benefit or impede energy-based economic development.

Description and Rationale: Originally established as the Mississippi Energy Policy Institute, MEI has as

part of its mission a focus on providing advice and guidance to the Mississippi Legislature and the

Executive Branch regarding policies, procedures, rules and regulations that may positively or negatively

impact energy operations and development prospects in the state. This should continue to be one of the

key functions of MEI, performed in consultation with partner entities such as MTA, MDA, universities,

and the corporate community in the state.



STRATEGY FIVE: Assure supply of workers with skills required by targeted energy

industry sectors

Rationale: In a global economy where jobs are outsourced from one continent to another, it is

appropriate to ask whether workforce is a relevant competitive factor. Is labor a commodity and thus

unable to create any competitive differentiation or advantage, or can it be unique to a firm or state, like

location or intellectual property, and confer a significant competitive advantage? Workforce can and

must be an essential part of any strategy by a firm or state to create a competitive advantage. If a firm

does not use its workforce as anything more than a low-skill, low-wage, and high-turnover commodity,

then it will not generate or retain any type of enduring market advantage in a marketplace that is

increasingly emphasizing the use of high-tech tools that add value for suppliers and end customers. It is

a market truism that cost-based commodity factors of production do not generate any advantage

among domestic competitors.

In a landmark report by the National Governor’s Association, State Strategies for the New Economy, it

was noted that the traditional approaches to worker preparation are rooted in the supply side of the

labor market, building the skills of job entrants with minimal input from employers or regard for how

these skills are further developed and used in the workplace. A wide gap has emerged between the

public training and employment services system and the human resource development strategies and

operations of firms. There is growing consensus that the nation’s public workforce development system

needs to:

Be more closely aligned with the standards and practices that are part of firms’ internal human resources systems;

Move beyond initial job preparation and placement to include ongoing skill development and career progressions for employed workers;

Provide post-employment training closely linked to employers’ needs; and,

74

Create career pathways to further education and upward mobility for all workers.16

Mississippi must ask itself if it is willing and able to transition to a different workforce business model.

This transition implies moving beyond a business model that sees workforce as primarily a low-skill, low-

technology commodity unimportant to their current and future competitive advantage to a model

deeply rooted in a highly skilled workforce making extensive and intensive use of technology. The global

economy is littered with firms and states that believed that using workforce as a commodity was a

successful long-term strategy. By all indications, the energy industry is moving into a powerful paradigm

change that will reward those firms and states that see workforce as a high-leverage, high-skill resource

that complements their substantial investments in technology and infrastructure.

The energy sector requires specialized education, skills and training for the majority of its jobs. Energy

exploration requires highly trained geoscientists and engineers. Energy extraction requires skilled

personnel across the spectrum, from field workers managing complex processes (such as mining or

hydraulic fracturing) to production engineers with graduate engineering degrees. Refinery operations

require specialized training (for example Chevron in Mississippi works closely with the community

college system to secure the specialized workforce they require), and the growth of a biorefinery model

will need these specialized skills. Electric energy production and distribution, likewise is a skills-driven

industry where specialized training is needed for jobs as diverse as line workers to nuclear engineers.

Any efforts to scale the pipeline to assure a supply of suitably skilled energy-related workers must ideally consider “systemic” changes that reach across the full knowledge supply chain from K-12 to higher education to workforce development. It is not possible to effectively increase college-level energy graduates if at the high school level, students are not being properly prepared. Similarly, high schools depend on lower grade levels to ensure basic numeracy skills. The solutions posed below are focused at achieving cross-cutting education and training improvements that will help enhance workforce supply as energy expands as an economic driver in Mississippi.

Action 5.1– Engage leadership of existing industry in the energy platforms to identify key workforce

needs and insight on positions expected to expand and those proving challenging to fill.

Description and Rationale: As a first step in being a catalyzing systemic change in the workforce

pipeline, the energy industry sector in Mississippi must be able to analyze and then communicate its

current and future workforce requirements so that the larger workforce system, as represented by the

educational community and public workforce agencies, can support an adequate workforce response.

Without this proactive analysis, the energy sector workforce needs will be at the mercy of general labor

market dynamics and probably overshadowed by the more articulated workforce demands of other

sectors such as healthcare, finance, and the general service sector. Furthermore, a general lack of

awareness of energy workforce opportunities and demand will further exacerbate the employment

recruitment barriers. The communication of workforce need is a prerequisite to mount an effective

career awareness, marketing, and recruiting campaign.

An annual energy workforce survey is advisable for many reasons. Without knowledge of the energy

jobs that currently exist in the state, it is impossible to market energy as a career, to construct attractive

16 “State Strategies for the New Economy.” The National Governors’ Association, Task Force on the New Economy.

75

career paths, to convince educational institutions to dedicate scarce resources to education and training

programs, to help career counselors and parents to understand and encourage careers in this sector, to

raise resources to support further workforce development, and to comprehend the workforce needs of

the firms in the state. A consistent and underlying issue hindering the energy industry is that it is, in

many ways, a relatively invisible sector that is taken for granted. An annual workforce and occupational

survey is an important element in a campaign to make this sector more visible, more defined, and more

attractive to many important audiences.

Such a survey can be implemented using the Internet, focus groups, secondary labor market

information, and a quarterly sample of personal interviews. The role of the survey is multiple, in that the

audiences that it will inform and the policies that it will shape are far ranging. Understanding the volume

of job openings predicted for each type of position, projected growth, and age profile of the current

workforce (indicative of likely retirement-related openings) will help inform the development of

educational and training programs. Understanding the different types of positions and their positive and

negative aspects will help with recruitment, career counseling, and developing appropriate career paths

between different jobs. Understanding their economic impact will help secure public support for this

and related energy initiatives.

Responsible Party/Parties: Mississippi Energy Institute in collaboration with MTA and the community

college system.


Action 5.2– Engage community college system across

Mississippi to provide vocational career training

pathways for high school and post-secondary

students focused on energy industry career

opportunities.

Description and Rationale: As the economy becomes

more complex and competitive the labor market

becomes more complex and confusing—for students,

parents, job seekers, employers, and educational

leaders. For younger and many middle-aged

employees and employees-to-be, the rules of job

success and likely career paths in the economy they

are entering are significantly different than the

economy that shaped their parents’ experience and

careers. This is one place where it is difficult for older

generations to pass on experience and knowledge to

the next generation. Previous education and career

Aligning Regional Resources via Career Pathways

“Career pathways” is a term for a framework by which regions can better align publicly supported [education and workforce] systems to build a workforce customized to the needs of local labor markets. A career pathway is a series of connected education and training programs and support services that enable individuals to secure employment within a specific industry or occupational sector, and to advance over time to successively higher levels of education and employment in that sector.

Career pathways target jobs in industries important to local economies. They are designed to create both avenues of advancement for current workers, jobseekers and new and future labor market entrants and a supply of qualified workers for local employers. They also serve as a strategy for strengthening the “supply chains” that produce and keep a region’s knowledge workforce up to date. The specific form and content of a career pathway will depend on the particular industries targeted, the requirements of employment and advancement in the target sectors, and the existing infrastructure for education and workforce development in those sectors.

Jenkins, D. “Career Pathways: Aligning Public Resources to

Support Individual and Regional Advancement in the Knowledge Economy.” Workforce Strategy Center. August 2006.

76

paths do not work as well, or in some cases are not

even available, in the global economy.

This substantive change in labor market

expectations and pathways has very significant

implications for Mississippi’s energy sector. When

there is confusion and lack of knowledge in any

marketplace, people will fall back on the tried-and-

true “certainties” that they believe they know, and

they will avoid areas that are unfamiliar to them (or

their parental or educational advisors). This risk-

avoiding behavior is natural, and the labor market is

no exception. In this case, it means that students,

parents, employees, and institutions will tend to

gravitate toward educational activities and careers

in “known” fields with clear career paths and

industry awareness, such as healthcare, public

administration, teaching, and finance. In contrast,

energy, particularly newer areas of renewable or

advanced energy, as a career field and industry is

not well known.

On an institutional level, the educational and

workforce training career structures, linkages, and job advancement practices that served to provide

skills and knowledge to a past generation are now no longer effective for a new generation of

employees, and a new set of economic challenges. The labor market rules of success and failure have

been and are continuing to be reinvented by the forces of globalization. Because of this, there is an

important need to reinvent not only individual knowledge of how the labor market now works (“career

literacy”), but also to create a new set of structural relationships between students, employees,

educational institutions, and industry. Many would argue that it is misleading to put students through an

education and training process designed for the economy of the 1960s to 1980s, and expect them to

succeed in the dramatically reinvented global economy of 2010 and beyond.

One relatively new tool essential in helping Mississippi adapt its energy workforce to this new economy

is the creation and support of “career pathways.” Career pathways is a new and somewhat

multipurpose term covering activities focused on more effectively coordinating a community’s or state’s

educational institutions with the workforce needs of the economy. If the energy sector aspires to build a

competitive advantage based on its workforce and human capital assets, then developing a set of

defined career pathways with local high schools, community colleges, and 4-year institutions is a critical

action step.

In addition, the ability of students to move seamlessly from one level of education to the next in their

chosen field of study without missing a beat in obtaining their ultimate educational goal, whether it be

Common Features of Career Pathways

Career pathway programs and structures vary greatly, given the variation between industry and job targets; however, common elements are as follows:

Jointly produced occupation “road maps” that

show how education and industry intersect for

occupation and advancement potential

User-friendly linkages between remedial,

educational and occupational training

Heavy reliance on specific occupational data,

job progression patterns, and job requirements

Course content defined in terms of

competencies required for jobs and, where

possible, tied to industry skill standards and

certifications

Training and education offered in modules that

represent clear stepping stones to

advancement

Training offered at times, places, and with

support services to enable maximum

participation

Outreach and bridge building to middle, high,

and vocational schools

Blending of private and public funding

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an associate’s degree, bachelor’s degree, or advanced degree, is critical. This seamless integration is

achieved through enhancing real partnerships between all educational institutions in Mississippi across

the various levels that result in students achieving their long-term learning goals.

Responsible Party/Parties: Such widespread changes in educational structure in regards to career

pathways and vocational training are obviously beyond the primary influence of MEI. MEI needs to

engage with K-12 and higher education leadership in Mississippi to communicate the importance of this

type of education to realizing energy-sector career opportunities and growth. MEI should also

encourage its member companies to engage with areas schools and community colleges in this regard.


Action 5.3– Evaluate opportunities to establish Energy Career Academies within selected high schools

and to integrate energy case studies within STEM education

Description and Rationale: A high-quality public education system is a prerequisite for growing a

technology-based economy. If Mississippi is to compete in today’s knowledge-based economy, the state

must commit to investing sufficient resources in K-12 and holding schools accountable for excellence. In

addition to adequately funding education and holding schools accountable for performance, a special

effort must be made to improve math and science education at all K-12 levels.

Engaging students in scientific or technological careers is seen as a difficult challenge across the country.

It is recognized that a child should be introduced at an early age to mathematics and the sciences;

otherwise, he or she will quickly fall behind and be unprepared to enter post secondary engineering or

scientific curricula. Many State Boards of Education and others are extensively studying the issues that

currently face the nation’s K-12 system, and their efforts should be supported. As various

recommendations are developed, potential initiatives to improve education should be examined.

Included among areas to be examined and further reviewed are the following options:

Alignment of Standards, Curriculum, Assessments, and Accountability. Through a standards-

based approach, significant strides have been made to increase student achievement and meet

the expectations of the 21st century. The new English/language arts and mathematics

standards, the promising science standards, and the technology standards are an essential

foundation for the state’s workforce. In addition, an entrepreneurial curriculum can be

“extracted” from Mississippi’s academic and technical standards. Project-based experiences and

senior capstones bridging both sets of standards provide students an entrepreneurial

environment. Other promising practices and professional development must focus on the

entrepreneurial “spirit” and the need to integrate mathematics, science, and technology in the

elementary and high schools.

Developing programs and initiatives designed to interest students and parents in technology. It

is generally agreed that students choose early in their educational careers to take the necessary

math and science classes to prepare them for advanced work in technological fields. Therefore,

it is very important that technology careers are promoted so that students can see the benefits

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of pursuing a scientific course of study. Schools should have “invention” laboratories supporting

broad career exploration, authentic strategies for academic instruction, and opportunity for

student creativity in solving problems. Student experiences (technology competitions,

technology mentors, higher education summer enrichments, etc.) contribute to a climate of high

expectations and opportunities. The energy sector should support middle, junior, and high

school student and teacher experiences in relevant technological fields.

Using distance education technology to bring high-quality math and science instruction to

students in all parts of Mississippi. While it may be unrealistic for every community in Mississippi

to provide advanced science and math courses, students should be given the opportunity to

take such courses via distance learning technology.

Instituting a differential pay scale or incentive system that allows science and math teachers to

be more highly compensated. It can be difficult to recruit math and science teachers given the

opportunities available to people with scientific and technical degrees. Yet, improving math and

science education will require the ability to recruit teachers with math and science credentials.

Consideration should be given to providing a salary differential or other financial incentives for

math and science teachers.

Magnet high school programs and vocational technical education can provide important specialized

education alternatives for students interested in specific fields of study. However, it does not appear

that, in general, Mississippi’s vocation technology high school or traditional high school programs have

revised their curriculum offerings to be current with modern needs of the energy sector. Therefore, one

definitive action that could be pursued would be the development of new school designs and deliveries

(science and technology academies/magnet schools, small learning communities, technology cluster

programs) to support Mississippi’s economic development vision.

College Tech Prep is a very viable means to expand a vocational through college articulated curricular

pathway for high-tech careers. Beginning in the junior year of high school, College Tech Prep students

begin a seamless, nonduplicative pathway with rigorous academic preparation aligned with advanced

technical skills, culminating in at least an associate’s degree at a community or technical college with

articulation provided through the baccalaureate degree. The product of a College Tech Prep program is

a highly skilled technology worker ready for a career in business and industry. Preparation is focused on

high-skill, high-tech occupations. Mississippi could be a national leader by developing an energy specific

curriculum-based program.

Responsible Party/Parties: Such widespread changes in educational structure in regards to career

pathways academies and STEM education are also beyond the primary control of MEI. But, MEI needs to

engage with K-12 and higher education leadership in Mississippi to communicate the importance of this

type of education to realizing energy-sector career opportunities and growth. MEI should also

encourage its member companies to engage with areas schools and community colleges in this regard.


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Action 5.4– Develop informational materials on energy careers and opportunities in Mississippi and

provide online Webinar to high school guidance counselors to introduce these materials for their use

Description and Rationale: At the middle school and high school level, it is very important that energy

careers are promoted so that students can see the benefit of pursuing an energy-related course of

study. One activity would be to work collaboratively through the science and technology related teacher

associations to bring exciting role models, mentors, speakers and other resources before the students

and engage them in practicum that fit their life and learning styles. Another key activity would be to

work with school guidance counselors to help them understand the range of career opportunities

presented by energy fields and the types of schooling required, and possibly, include more state

financial support to give guidance counseling a stronger set of functions in the public school system of

the state.

Responsible Party/Parties: Mississippi Energy Institute, member companies and selected high schools.


Action 5.5– Engage MEI member companies and other energy industries in Mississippi with the MDA

job fair program

Description and Rationale: From interviews with industry energy executives, many of the employers

have difficulty navigating the job placement services of Mississippi’s higher education institutions and

workforce development system. For others, their interest in hiring new graduates or others seeking

employment due to displacement is not strong, and so without an aggressive outreach it is highly

unlikely that they will seek out these individuals for employment.

Many recognized the need for a one-stop approach for employers to reach into the higher education

system and workforce development system to identify individuals for hiring. To meet this need, the

Governor's Job Fair Network was created to aid all Mississippians in finding safe and secure

employment. This statewide program, managed by MDA, serves to facilitate interaction for those

seeking employment as well as for companies seeking qualified employees. The energy sector needs to

be aggressively pursued and informed about this Network so that they can begin to actively participate

in the Job Fair efforts and view the Network as a viable resource for qualified candidates.

Responsible Party/Parties: MDA with supporting assistance, where required, from the Mississippi

Energy Institute.


Action 5.6– Increase industry engagement with Mississippi universities via industry advice on electives,

co-ops and internships, and on-line course offerings for continuing education and non-credit courses.

Description and Rationale: One way to build and retain talent is to establish personal relationships with

students while they are still in school. Experience shows that efforts such as internships and co-op

programs can be effective in increasing the retention rate of graduates, reducing their out-migration to

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other states and regions. Mississippi’s energy firms need to increase the level and scale of efforts of

these types of programs. Such an effort not only will keep students in Mississippi, but also will expose

firms to new skills and approaches as they address their product development needs.

A structured internship/co-op initiative could provide a matchmaking service to link energy firms with

students at Mississippi’s higher education institutions.

These co-ops and internships should be viewed as an

integral part of the curriculum. Active training

collaborations between educational institutions and

energy companies in Mississippi should underpin

these co-ops and internships through (1) use of

industry professionals who serve as adjunct faculty to

help teach courses and (2) active industry involvement

in the curriculum to meet the demands of the

workplace. The state needs to develop its co-op and

internship programs to encourage students to stay in

the state upon graduation; to entice students leaving

Mississippi for college to come back; and to otherwise

increase partnerships between industry, higher

education, and students.

Many benefits could accrue from an enhanced internship/co-op function, including the following:

Increasing the perceived value of a Mississippi education, to both prospective students and

parents. Parents increasingly desire evidence that their child is receiving both a theoretical and

practical set of experiences and an education that will prepare him or her ultimately for the

world of work.

Providing important real-world feedback to curriculum and instruction, helping to ensure that

course content, programs of study, and laboratory experiences are high quality.

Increasing graduate retention rates.

Responsible Party/Parties: Mississippi Energy Institute and its corporate members.


Action 5.7– Leverage university alumni associations to indentify engineers, scientists and technologists

working in energy-industries outside of Mississippi, and use e-communications to highlight job

opportunities, openings and career paths in Mississippi.

Description and Rationale: Many Mississippi natives have undertaken successful energy careers

elsewhere, yet a number of these people may wish to return to the state if an opportunity to do so was

presented. It is proposed that MEI work with the state’s universities to identify alumni that might be

interested in joining a firm, starting a firm, or encouraging their employee to consider Mississippi as a

Drexel University’s Ultimate Internship

Drexel University in Philadelphia has long been known for its co-operative education/internship programs. "The Ultimate Internship" is a key component in Drexel's career-oriented majors, and it is part of a larger program of career preparation for all students. A co-op is an extraordinarily valuable enhancement to academic studies, and it sets Drexel apart from other universities. It is an option or a requirement in almost every undergraduate major. Students graduate with up to 18 months of career-related experience gained in up to three different jobs. Drexel has established relationships with over 1,600 hundred companies and have almost 5,000 co-op opportunities available for its students.

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location in which to expand. The goal of these efforts should be to help ensure that energy companies

can attract technical workers from both within the state and nationally.

To help achieve this goal, it is proposed that a single, user friendly and accessible web site that would list

most, if not all, energy positions within Mississippi be created. It is even possible that the website could

utilize software that would allow it to enter a subscribing employer’s web site and “scrape” or “wrap”

vacant position announcements and simultaneously post these positions on the web site by discipline

using key work search and title match. National job seekers could access and apply for jobs through the

web site. The system would be designed to remain current since filled positions are automatically

removed from the system. This eliminates the confusion over applying for already filled positions and

the redundant work that it necessitates. This system will also ease the "trailing spouse" issue that many

employers have pointed out is a key issue in attracting talent to the state.

Responsible Party/Parties: Mississippi Energy Institute in collaboration with Mississippi energy

employers and higher education institutions.


C. Platform-Specific Actions for Advancing Energy-Based Economic Development in

Mississippi

In addition to discussing the cross-cutting strategies and actions, focus groups also directed attention to

platform specific actions that should be considered for the Mississippi Energy Institute and its

collaborating partners.

For each of the platforms it is advised that MEI form a platform advisory board comprising industry

representatives, university research leaders with key work in the platform and other relevant key

stakeholders.

Specific platform actions, recommended include:

Gas Platform Actions

Action GP-1. Leverage Likely High Availability of Low Cost Natural Gas for Energy Intensive

Industry Growth. MEI should hold discussions with gas pipeline companies to evaluate potential

future availability of natural gas for value-added application in Mississippi industry. It is predicted

that pipeline transmission volumes destined for the Mid-Atlantic and Northeastern U.S. states will

decline because of the high volume production in those regions coming from regional shale gas

industry development. It is anticipated that regional pipeline/distribution companies will have

excess capacity and be able to execute favorable deals for supply of natural gas to high volume

users in Mississippi and surrounding states.

Action GP-2. Pursue Development of Value-Added Chemicals from Gas Resources, and Re-shoring

of Agricultural Chemicals Industry. MEI and MDA should evaluate opportunities for natural gas

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intensive industry growth in Mississippi focused on value-added chemicals (especially agricultural

chemicals) using natural gas as an affordable and high availability feedstock. High past gas prices

shifted significant production of chemicals to overseas locations, but the low comparative cost and

high availability of natural gas supplies within the U.S. may attract production back to U.S. shores

and Mississippi has an established chemicals industry sector, excellent transportation facilities and

workforce skills in this sector.

Action GP-3. Encourage Development of Shale Gas/Oil Resources on an Optimized Timeline. MEI

should be engaged in discussions in Mississippi pertaining to the development of policies and

regulations that will encourage development of Mississippi shale gas resources in concert with

shale oil plays. It should be noted, however, that Mississippi need not rush into developing its shale

or near-shore gas resources, since natural gas prices are currently relatively low and it may be in

the state’s interests to hold reserves for later development. Given the higher price of oil and

natural gas liquids, development of these resources for liquids will likely occur sooner than the

development of gas resources. It should also be noted that the experience of other states and

drilling companies in hydraulic fracturing is accelerating development of reliable tools, hydraulic

fluids and techniques for deep shale access.

Action GP-4. Encourage Reinvestment in Geological Survey. MEI should encourage investment in

the State Geological Survey. In recent years it was noted that the Survey has been operating with

significantly reduced resources. As demand for geological services and information increases, in

areas such as unconventional natural gas, CO2 mining, etc. it is imperative that the state be able to

provide reliable and timely responses to state data needs and industry inquiries.

Action GP-5. Reach Out to Gas Industry Research Groups. Once the multi-university Mississippi

Energy Research Institute is formed, introductions should be made by Mississippi member

companies to major industry associations that sponsor research, such as the Gas Technology

Institute and Electric Power Research Institute.

Action GP-6: Include Land Fill and Biodigester Gas in Platform Work. In additional to conventional

and unconventional natural gas from fossil resources, and syngas (from biomass, coal and petcoke)

the gas platform should also examine and incorporate opportunities for waste-to-energy using

methane gas from landfills and gas from bio-digester applied to recycled organic materials.

Action GP-7: Pursue Opportunities for Independent Power Plants. Investigate opportunities to

reopen independent power producer gas-fired electricity generating stations within Mississippi.

Action GP-8: Investigate LNG Export Potential and Infrastructure Repurposing. Investigate

opportunities to convert LNG importation facilities in Mississippi to export operations based on

high availability of relatively low cost natural gas in the United States.

Action GP-9: Combat Public Misinformation. MEI should be proactive in terms of combating

misinformation in Mississippi regarding energy exploration, hydraulic fracturing, biofuels energy-

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balance, etc. MEI should act as a voice for data-driven, fact-based dialog to provide rational

decision making regarding energy opportunities and challenges in Mississippi.

Biomass Platform Actions

Action BP-1: Accelerate Commercialization of University Technologies and Processes. Biomass and

biobased fuels and chemicals represents one energy arena in which Mississippi’s research

universities have significant technology and process development programs. As university

technologies progress through piloting and scale-up tests towards commercialization, MEI should

bring together biofuels and biorefinery companies to provide a technology review and evaluation

service for the universities and to provide advice, built upon hard won experience, regarding

forming and capitalizing new commercial entities in the biorenewables market space.

Action BP-2: Leverage Large Companies for Biomass Purchasing Power. Leverage the experience

of companies like Weyerhauser and Georgia Pacific for providing purchasing services for woody

biomass as feedstock for the biorefinery industry. Companies like Weyerhaeuser have the ability to

certify the chain of custody of sustainably produced biomass.

Action BP-3: Evaluate Disruptive Effects of Biomass on Existing Mississippi Industry and Phase-In

Accordingly. Engage agricultural economics and economics departments of Mississippi research

universities to evaluate potentially disruptive effects of biomass utilization for biofuels and

biorefinery operations versus traditional lumber consuming industries (such as the construction

lumber and pulp and paper industries). Work towards phasing approaches that maximize benefits

from new uses while mitigating disruptive effects on important industries already present in the

state. It was also noted by focus group participants that government needs to take care that

subsidies to biofuels do not unfairly distort market economics and harm existing feedstock users.

Action BP-4: Consider Other Biomass Beyond Only Forest Resources. While Mississippi likely has

multiple opportunities for using forest biomass, assessment of biobased opportunities should also

take into account opportunities for dedicated energy crops, utilization of conservation reserve

program land, and “unconventional” biomass resources (such as shrimp shells).

Advanced Energy Systems Manufacturing Platform

For the most part, the cross-cutting actions cover necessary actions for the Advanced Manufacturing

platform. Focus group participants did suggest, however, the following additional action:

Action AMP-1: Sustain Fast, High Level Responsiveness Mississippi Inward Investment Services. A

key advantage for Mississippi, noted by inward investors, has been the speed and efficiency with

which the State of Mississippi (including MDA) has responded to inquiries and put together a

competitive deal structure. In particular it is noted that Mississippi does an excellent job in

engaging its leaders at the highest levels in projects, providing companies with assurance that

everyone from the Governor on down is supportive of their project and able willing to respond to

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company needs. The recommended action is simply to sustain this attention to detail and senior

leadership access.

Nuclear Platform

Battelle presented a two phased approach to realizing economic development from a nuclear platform:

1) a long-term emphasis on securing spent nuclear fuel storage and reprocessing operations within the

state; and 2) a short-term focus on services in support of nuclear plant life extension and safety. The

nuclear focus group, comprising experts in the industry, disagreed with the latter opportunity—feeling

that for the most part the services in Mississippi are actually being provided by external vendors and

represent only a minor export potential. However, focus group participants suggested an alternative

nearer-term opportunity to focus on building relationships with small modular reactor developers—with

an emphasis to be placed on trying to secure the first small modular reactor project for Mississippi.

Specific recommendations for platform actions include:

Action N-1: Develop MEI Nuclear Industry Advisory Committee to Pursue SMRs. Recruit a

Mississippi Energy Institute nuclear energy advisory team to help establish early communications

and relationships with developers of small modular reactors (SMRs). It is likely that the first site in

the United States to gain approval and construct an SMR will gain significant first-mover advantages

and be able to build a small cluster of expertise relating to installation, testing, and operator

instruction around the reactor installation. Mississippi should be promoted as a potential

manufacturing site for SMRs, based on existing fabrication and manufacturing capabilities in the

state and the excellent port access for shipment of SMRs to overseas customers. Investigate the

opportunity to form a nuclear energy generation consortium which would include several of the

largest energy companies (Entergy, Southern Company and TVA) under which a joint venture may

be established to pursue a first-in-nation small modular reactor or next-generation reactor project.

Action N-2: Develop “Shared Voice” for Mississippi on Nuclear Energy. Establish a collaboration

including industry, academicians and political leaders to generate a unified voice for Mississippi

with the federal government in regards to Mississippi’s interest and opportunities surrounding

spent nuclear fuel storage and reprocessing opportunities. Develop a basic prospectus on

Mississippi opportunities and capabilities to work on a solution to the long-term national spent

nuclear fuel challenge. Investigate Mississippi’s apparently excellent fit to the recent Blue Ribbon

panel findings in regards to storage sites in salt, clay and shale geologic formations).

Action N-3: Build Relationships with National Laboratories. Examine opportunities to develop

closer relationships with key national laboratories engaged in nuclear power—such as Idaho

National Laboratory and Oak Ridge National Laboratory.

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D. Summary

It is clear that Mississippi has considerable opportunities to achieve enhanced wealth and job creation

in the State based on existing and emerging energy core competencies. Through both cross-cutting

and platform specific strategies and actions, Mississippi has great potential to generate energy-based

economic development. Taking advantage of all these opportunities, and implementing the

recommended strategies and actions will require collaboration between multiple entities—non-profit

economic development bodies (such as MEI and MTA), the State’s economic development agency

(MDA), industry partners and Mississippi’s research universities. The Mississippi Energy Institute, with

just three staff at the present time, is too small to run with all the strategies and actions on its own,

but does not need to. MEI should take a coordinating role, working with other strategic partners

(including MDA, MTA, universities and private sector stakeholders) to assure implementation of

recommendations.

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Appendices

Appendix A: Identified Mississippi Energy Opportunity Areas – Summary Tables Appendix B: Examples of Energy Areas Not Selected as Core Competencies for Mississippi Appendix C: Draft Strategies and Actions Presented to Focus Group Participants

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Appendix A: Identified Mississippi Energy Opportunity Areas –

Summary Tables

Tables A1.1 through A1.16 below summarize each of the identified Mississippi energy opportunity areas,

grouped by the five energy group themes, and ordered by near through long-term. Multiple sets of

information are presented on each table comprising:

Description: A general description of the energy field or technology area and the current status

of Mississippi in the sector.

Market Size Potential: Categorization of the total market size for this industry or technology

(globally) and a brief description of the market. A categorization scale is used as follows:

o Moderate = <$5 billion

o Large = $5–50 billion

o Very Large = More than $50 billion

Export Potential: Categorization of the potential for exporting product from Mississippi, thereby

bringing fresh dollars into the Mississippi economy. Scale used is as follows:

o Moderate = <$1 billion

o Large = $1–5 billion

o Very Large = More than $5 billion

Job Generation Potential: Categorization of potential additional job creation opportunity for

this sector in Mississippi during estimated development time horizon (near-, mid- or long-term).

Scale used is as follows:

o Moderate = <500 jobs

o Large = 500–1,000 jobs

o Very Large = >1,000 jobs

Mississippi Natural Resource Utilization: Categorization of the likely use or consumption of

Mississippi’s natural resources (such as biomass, fossil fuel deposits, water resources, etc.).

Categorization is subjective, as follows:

o None = Zero or very low volumes of natural resource consumption

o Moderate = Some natural resource consumption, such as use of manufacturing

process water, or use of geological strata for storage

o Large = Significant use or extraction of Mississippi natural resources

o Very Large = Large-scale mining or extraction of resources or bulk biomass use.

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Table A1.1

Opportunity Area: Shale Gas and Shale Oil Description:

Technological advancements in hydraulic fracturing and horizontal drilling have made extraction of natural gas, and to a lesser extent oil, from shale economically viable. In natural gas there has been especially intense investment in land acquisition and mineral rights leasing, drilling and gas extraction in areas of the U.S. with proven shale gas reserves.

Mississippi has significant shale and other geologic formations containing hydrocarbons. In eastern Mississippi the Black Warrior Basin (which spans the border with Alabama) contains the Floyd and Neal Shale deposits. Western Mississippi is being explored for extension of the productive Louisiana Haynesville play into the Buena Vista area of Mississippi (again for natural gas). Also in western Mississippi is the large Tuscaloosa Marine Shale opportunity with prospects for both oil and natural gas production.

The state of development for shale oil and gas extraction in Mississippi is current “early stage”. More basic work is needed to characterize the geologic framework of these deposits in terms of composition, thickness, geometry, fracture architecture, etc. in order to determine the scale of the potential resource and the economic feasibility of resource extraction. While Mississippi is transected by major natural gas pipelines, significant infrastructure investment would be required in gathering and transmission pipelines, gas processing and compression facilities in order to realize the opportunities from these potential shale-based hydrocarbon resources. The upside potential of these resources, however, for economic development may be significant. The fast developing Marcellus Shale development in Pennsylvania, for example, has 214,000 Pennsylvania jobs associated with it (according to State of Pennsylvania data) and just in the first half of 2011, 27,000 new hires were made by the Marcellus industry in Pennsylvania, with an average wage of $76,036 per worker.

Mississippi is already producing 50% of its oil using enhanced oil recovery techniques. And it is the high value liquids that represent the prime target of wells in the State at the present time. Carbon dioxide availability in the State provides a valuable resource for EOR.

Market Size Potential

Export Potential Job Generation Potential

Mississippi Natural Resource

Utilization

Potential Timeframe

Very Large. Between 2006-10 2010 dry shale gas production increased from 1.0 Tcf to 4.8 Tcf, accounting for 23% of total U.S. dry natural gas production. Wet shale gas reserves are at their highest level since the early 1970s and currently account for 21% of

Large to Very Large For natural gas the potential for exports is significant, facilitated by existing pipeline infrastructure transecting the state,

Large to Very Large Data from shale developments in Texas (Barnett), Louisiana (Haynesville) and the Marcellus zone (NY, PA, WV and OH) show that substantial job generation comes with major shale gas exploration and extraction operations.

Large. Both natural gas and oil resources in Mississippi geologic strata would be used. Water resources would be required for fracturing operations.

Near- to Mid-Term Timeframe will depend on findings of exploration and ongoing technological advancements in fracturing and horizontal drilling. Exploration is currently occurring.

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all U.S. natural gas reserves.17

Mississippi Strengths: Shale gas is potentially located in multiple regions in the state such as the Mississippi interior salt basin and Brown Dense Formation in the southern part, Blackwater in the northern part, and the Tuscaloosa Marine Shale/Delta region in the southwest corner of the state. The Tuscaloosa Marine Shale is the region that is currently getting the most attention because of its potential to hold oil and gas. In Mississippi, the Tuscaloosa Marine Shale spreads across the following counties: Adams, Amite, Franklin, Pike, Walthall and Wilkinson – current drilling is occurring in Amite county. Examples of Current Mississippi Industry Presence: Encana is a North American energy producing company that is drilling about a dozen wells in the Tuscaloosa Marine Shale in Mississippi along with four other sites in search of liquid rich gas and oil. According to the Encana website, the early test results from this drilling have been encouraging and the current exploration drilling will help determine the company’s capital investment in this site and the others in 2012.

Goodrich Petroleum Corporation is an independent gas and oil company that is engaged in exploration and production of oil and gas and has explorations ongoing in the Tuscaloosa Marine Shale as one of the geological formations that it targets. The following is an excerpt from a Feb. 22, 2012 press release on the company’s website regarding its Tuscaloosa Shale activities in Mississippi: “The Company has participated for a 4.5% non-operated working interest in the Anderson 17H-1 well in Amite County, Mississippi. The well, which was drilled with an approximate 7,300 foot lateral, is in completion phase with initial production expected early in the second quarter. For the remainder of 2012, the Company currently expects to participate in one to five additional non-operated wells for a small working interest and two to five operated wells with an approximate blended average working interest of 60%. The first operated well is expected to commence in early May. With continued success, the Company will accelerate development in the play at the appropriate time.” Examples of Mississippi University Assets: At Mississippi State University there are faculty with background in hydraulic fracturing of coalbed methane and other geologic reservoirs. They are authors of several publications and a book on coalbed methane, which is similar to the shale reservoirs presently being exploited.

The University of Mississippi is performing research at its Mississippi Minerals Resources Institute and the department of Geology and Geological Engineering utilizing geographic information systems and other decision support systems to perform geotechnical analysis of rock properties related to secondary well recovery methods such as hydraulic fracturing.

At Jackson State University, a small number of faculty in the Geoscience Department have a research focus on subsurface energy systems for gas and oil.

Mississippi Issues or Challenges to Address: Mississippi will need to maintain a balance and assure shale exploration does not destroy traditional oil and gas exploration that is occurring in the state due to pricing. Shale leases prices can increase to a point that drives out traditional oil and gas exploration.

17 EIA, Review of Emerging Resources: U.S. Shale Gas and Shale Oil Plays, July 2011.

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Overall Rating of Opportunity for Mississippi Scale = Near-Term Platform, Long-Term Platform, Moderate Opportunity, Not Recommended

Near-Term Opportunity Mississippi should closely monitor the experience of other U.S. states in shale-based economic development and job generation. Recent experience in states such as Pennsylvania suggests that shale gas exploration and extraction can be a substantial job creation engine. Mississippi should collaborate with energy companies to characterize shale gas and shale oil opportunities in the state and encourage development of these resources.

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Table A1.2

Opportunity Area: Energy Exploration Technologies Description:

The identification and characterization of geologic fossil fuel deposits is a high stakes activity, and the cost of getting it wrong intense. Deep water drilling can cost upwards of $400,000 per day, shallower water $150,000 to $250,000 per day. Even though onshore drilling is less expensive, it is still an expensive prospect. The financial impetus is such that high technologies employed by geophysicists and petroleum geologists are used in the search. Areas anticipated as containing hydrocarbons are first explored using a gravity survey, magnetic survey, passive seismic or regional seismic reflection surveys to detect large scale features of the sub-surface geology. Leads are then subjected to more detailed seismic surveys which work on the principle of the time it takes for reflected sound waves to travel through rock of varying densities and using the process of depth conversion to create a profile of the substructure.

Seismic surveying deploys acoustic technology, and this is an area in which R&D is active within the Mississippi university system. Physical acoustics is a particular focus at the University of Mississippi, with some of the research in the field directly relevant to the energy space. This may, therefore, represent a technology development and commercialization opportunity for the State of Mississippi.




Utilization

Potential Timeframe

Large. In 2011 global spending on advanced oil and gas exploration technologies reached nearly $10.2 billion.18

Moderate. Energy exploration is a ubiquitous need across the globe, and novel exploration technologies could experience significant domestic and international demand.

Moderate to Large. Should public policy allow for opening access to regions currently closed to oil and gas development, the U.S. could see an additional 1.4 million oil and gas exploration and production jobs added to the economy by 2030.19

None. None anticipated

Mid-to-Long Term. This is a mid- to long-term play. Potentially high risk in terms of the need for basic R&D, translational research to assess commercial potential of technologies, and the need to capitalize start-up enterprises to commercialize any potentially viable technologies.

Mississippi Strengths: The state of Mississippi is open to traditional oil and gas exploration which is much cheaper than shale exploration.

The State of Mississippi is 12th in the nation in oil exploration and #20 in gas exploration.

Mississippi has a good physical infrastructure for oil and gas distribution consisting of a pipeline system

18 Visiongain, The Advanced Oil & Gas Exploration Technologies Market 2011-2012, September 2011 19 Wood Mackenzie, U.S. Supply Forecast and Potential Jobs and Economic Impacts 2012-2030, September 2011.

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with access to two different pipelines and a transportation system with close access to water and rail. There is also a hydrogen sulfite facility in the southeast portion of the state that has the ability to clean this poisonous gas from the oil – this is a distinct advantage because type of facility is not readily available in other oil producing areas.

Current Mississippi Industry Presence: The Pruet Companies has two of its subsidiaries with operations in Mississippi:

Pruet Oil Company is an oil and gas exploration and development company in the southeast part of the United States with core operations in Mississippi and Alabama. Pruet Oil focuses on drilling onshore oil and gas wells for its own production and provides this service as a contractor for others. Across the State of Mississippi, Pruet Oil has both oil and gas wells with a higher frequency of oil wells found in the southeast part of the state and gas wells found more often in the south central part of the state.

Pruet Production is the company that sells the oil and gas that is produced by Pruet Oil. Pruet Production sells its oil products to an oil refiner and marketer, such as Plains All American Pipeline, for distribution, while it sells the natural gas to a gas refiner that markets the product, such as Tenneco/El Paso Gas, for distribution.

Plains All American Pipeline is a provider of transporter storage, terminalling, and marketing of crude oil, refined products, and liquid petroleum gas (LPG) and other natural gas related petroleum products for oil and gas producers. Plains has operations in the state of Mississippi and primarily works with companies to move large quantities or heavy types of crude oil.

Ergon is an oil and gas production and transportation company with operations in Mississippi. The company has six business segments in the following areas: 1) Refining and marketing; 2) River transportation/tow; 3) Asphalt and emulsions; 4) Oil and gas production; 5) Embedded computing; and 6) Real estate. Their primary area of focus is refining and marketing where they buy and sell crude oil. Ergon is also the largest producer of transformer oil, which they sell to utilities and transformer manufacturers.

Mississippi University Assets: The National Center of Physical Acoustics (NCPA) at the University of Mississippi is one of the largest physical acoustics research programs in the United States with over $7m in funding and 100 associated employees. NCPA in partnership with the geosciences program at the University has applied sound and vibration techniques from NCPA’s acoustics research to help detect where oil/gas is located in an area.

Mississippi State University is using computational simulation to refine hydraulic fracturing technologies. Its high performance computing center has the ability to model the impact of fracturing.

The University of Southern Mississippi Marine Science program performs research focused extensively on the ecological impact from marshes to the deep waters – some of the projects in this area have looked at the ecological impact of oil spills.

The Polymer Science department at University of Southern Mississippi has developed an oil disbursement technology that is based upon the application of surface science in an absorbent material to keep oil off of organisms.

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Mississippi Issues or Challenges to Address:

Shale exploration can destroy traditional oil and gas exploration because the price to lease shale can increase dramatically, which drives out traditional exploration.

Basic geologic formation information is very inefficient from a state level in Mississippi with no statewide base maps to facilitate exploration, but surrounding states such as Texas, Louisiana, and Alabama have established a good base of information. The state geological group could play a role to help facilitate future activities for the state of Mississippi in this area.

Mississippi research universities are lean in terms of experienced faculty in oil and gas because most of these institutions have stopped performing research focusing on this area. None of the Mississippi research universities have a program focused on petroleum engineering – Mississippi State previously had the only petroleum engineering program in the state.


Mid-Term Priority Platform This is an area of science and engineering in which Mississippi has academic R&D strengths. Achieving technology-based economic development based on academic strengths alone, however, is hard to achieve. This platform would require a concerted effort be deployed in funding the development, piloting and commercialization of technologies. Without a base of existing Mississippi industry in the sector, realizing economic growth in this space for Mississippi will require investing in start-up business enterprises (with all the usual associated risks).

Additional Comments: The State of Mississippi Oil and Gas Board has regulatory authority for oil and gas exploration.

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Table A1.3

Opportunity Area: Near-Shore Conventional Natural Gas Description:

Natural gas is a fossil fuel hydrocarbon gas mixture consisting primarily of methane, with up to 20% other hydrocarbons (usually ethane) together with a small volume of impurities such as carbon dioxide. After extraction it must typically be further processed to clean the gas and remove impurities (including water) in order to meet the specifications of marketable natural gas. Processing produces by-products of value which may include ethane, propane, butanes, pentanes, and higher molecular weight hydrocarbons, hydrogen sulfide, and sometimes helium and nitrogen.

As with surrounding states bordering the Gulf of Mexico, Mississippi has significant near-shore natural gas deposits. To-date these deposits have not been exploited in Mississippi, but new regulations now allow/govern near-shore mineral leasing in Mississippi waters. The size of the Mississippi deposits is substantial, with an estimated 350 billion cubic feet of natural gas in the 186,000 acre leasable area which comprises a strip of water along the border with Alabama, and a broad band of water along the southern side of the barrier islands.




Utilization

Potential Timeframe

Large. Increased natural gas production, largely resulting from shale plays, is challenging the market for near-shore conventional gas. To be cost competitive, gas prices need to be in the $5-7 range. The current price of natural gas is $2.08 and could drop to below $1.20

Large. Mississippi has existing pipeline infrastructure that would facilitate export sales of the natural gas.

Moderate. The number of U.S. natural gas drilling rigs has decreased 27% in the past year.21 Interestingly, gas rig workers are being shifted to higher value oil exploration and production rigs.22

Large. Estimated 350 billion cubic feet of natural gas in near-shore Mississippi deposits.

Near Term. May be near-term, but immediate exploitation likely delayed by low current pricing of marketed natural gas.

Mississippi Strengths: Excellent potential for natural gas exploration on the Mississippi near shore area, but these resources have remained untapped in order for the state to minimize impact on casinos along the coast, and gas prices currently remain too low for this area to receive pressure from industry to be targeted for exploration.

Current Mississippi Industry Presence: None – This is an emerging area

20 Citigroup, 2012. 21 Baker Hughes, April 2012. 22 Jonathon Fahey, Natural Gas Glut Slows Drilling Boom, April 2012.

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Mississippi University Assets: Mississippi State University leads the Northern Gulf Institute, a NOAA funded Cooperative Institute, that develops, operates, and maintains an increasingly integrated research and transition program focused on filling priority gaps and reducing limitations in current Northern Gulf of Mexico awareness, understanding and decision support.

University of Mississippi’s Law Research Institute is a Federally funded center that provides support to universities in Mississippi, Alabama and around the country on coastal sea legal issues.

The University of Southern Mississippi has a number of efforts focused on the coastal research:

The Gulf Coast Research Laboratory has an coastal ecosystems research group that performs research on the coastal environment such as methods to restore coastal habitats; and

The Center for Gulf Studies is in the development stages at the University of Southern Mississippi to focus on the ecological impact from the oil spill.

Mississippi Issues or Challenges to Address: No natural gas exploration is occurring within the near shore area in Mississippi (i.e. between the shore and the barrier islands) because of the concern of losing tourists at casinos, but this type of gas exploration does occur in Alabama. This type of drilling does not require a large footprint (production platforms established for these types of wells are approximately as big as a boat dock).


Near-Term Priority Platform The opportunity is characterized as “near-term” because the technologies for exploration and extraction of near-shore natural gas are mature and the Gulf Coast contains the industry assets, human capital resources, and transmission infrastructure required to exploit the available resources. The actual timing of drilling and extraction of Mississippi near-shore natural gas will depend on private-sector driven investment decisions based on the economics of production and prevailing natural gas commodity pricing.

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Table A1.4

Opportunity Area: Offshore Gas Hydrates Description:

A gas hydrate is a crystalline solid consisting of gas molecules, usually methane, each surrounded by a cage of water molecules. Methane hydrate is stable in ocean floor sediments at water depths greater than 300 meters (1,000 feet). The worldwide amount of carbon bound in gas hydrates is conservatively estimated to total at least twice the amount of carbon to be found in all known fossil fuels reserves.

On May 6, 2009, the U.S. Department of Energy (DOE) National Energy Technology Laboratory (NETL) in collaboration with the U.S. Geological Survey (USGS), the U.S. Minerals Management Service, an industry research consortium led by Chevron, and others completed a landmark gas hydrate drilling expedition in the Gulf of Mexico. The objective of the expedition was to confirm that gas hydrate can and does occur at high saturations within reservoir-quality sands in the Gulf of Mexico. This objective was fully met, with highly saturated hydrate-bearing sands found to be occurring in resource quality accumulations.

Market Size Potential Export Potential Job Generation Potential


Utilization

Potential Timeframe

Very Large.

The U.S. is estimated to have a total natural gas resource base of 2,074 trillion cubic feet (Tcf). In 2008, the U.S. Minerals Management Service estimated there to be 6,700 Tcf of methane hydrate in producible reservoirs in the northern Gulf of Mexico. Such a supply represents three times the natural gas resources for the entire U.S. To date there has been no commercial production of methane hydrates, although R&D projects have been aimed at determining the economic viability of this resource.

23

Very Large.

The majority of the gas produced could be exported via Mississippi’s access to natural gas pipelines. Could also be compressed for export via seaports.

Moderate-to-Large.

Job generation could be significant if Mississippi were to be a primary location for businesses engaged in offshore hydrates exploration and extraction, and if gas comes ashore in Mississippi.

Moderate.

Deposits would be in the deep waters of the Gulf of Mexico, outside of Mississippi state waters.

Long Term.

Much work is required to further assess the feasibility and economics of methane hydrates extraction.

23

U.S. Department of Energy, Energy Resource Potential of Methane Hydrate, 2011. Congressional Research Service, Gas Hydrates: Resource and Hazard, May 2010.

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Mississippi Strengths: Access to large-scale natural gas pipeline distribution network.

Collective research strength at the University of Mississippi in the design, development and operation of geophysical and geotechnical systems and services for marine minerals resources such as methane hydrates and other hydrocarbons.

Current Mississippi Industry Presence: None – The market has yet to develop for this area.

Mississippi University Assets: The University of Mississippi’s Minerals Mines Resources Institute (MMRI) serves as the program manager of the Gulf of Mexico Hydrates Research Consortium through its Center of Marine Resources and Environmental Technology (CMRET) program. MMRI leads 20 universities, 8 federal agencies and 19 private companies.

A Mississippi State University researcher has a patent for gas hydrate recovery and exploitation specifically focused on those existing deep in the Gulf of Mexico. An experimental facility also exists at MSU.

University of Mississippi scientists are engaged with NETL and other parties in research pertaining to gas hydrates utilization.

The University of Mississippi access to MC118, which is the only research reserve in the Gulf of Mexico. This hydrates observatory on the seafloor is located less than 10 miles from the Deepwater Horizon and can provide access to existing hydrates at the surface and in the sub-surface. This access for the University of Mississippi researchers to MC118 has led to a great deal of published research (77 journal articles, 127 abstracts and conference proceedings, and 2 books from 2005-11), technology development, and technology transfer.

Mississippi State University is studying the interactions of microbial communities with natural methane gas hydrates to better utilize this asset as an energy source.

Offshore research activities that are occurring at the University of Mississippi are the following: 1) seafloor mapping using multi-beam and geophysical methods; 2) new techniques for processing and analyzing geophysical data; and 3) development and integration of sensors and platforms for seafloor investigations.

Mississippi Issues or Challenges to Address: Mitigating the high risk environment associated with producing energy from gas hydrates – i.e. potential drilling hazards associated with gas and hydrates, and the chemical fluxes from the seafloor to the seawater and the atmosphere are some examples of the areas that must be controlled or instability will occur in this environment.


Long-Term Platform Scale of gas hydrates opportunity, and geographic assets of Mississippi (proximity to offshore gas hydrate deposits, access to natural gas pipeline infrastructure, port facilities) suggests that, while long-term in development potential, MEI should be actively engaged in monitoring developments in the field and evaluating opportunities for Mississippi to assume a leadership position in the exploitation of this resource.

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Group 2: Nuclear Energy

Near-Term (Present to 3 Years): Nuclear Energy Servicing and Maintenance (Table 18) (includes safety

and service life extension).

Mid-Term (4-8 Years): None

Long-Term (8+ Years): Nuclear Storage and Reprocessing (Table 19)

Table A1.5

Opportunity Area: Nuclear Energy Servicing and Maintenance Description:

Nuclear energy servicing and maintenance is a complex and diverse market where vendors provide a variety of services for owners of NPPs (nuclear power plants) to help minimize outages and keep the plant running efficiently and safely. A variety of companies are active in this space ranging from the major NPP vendors to a wide range of specialist nuclear engineering companies. The market tends to favor larger companies that have been the original equipment manufacturer because many of these activities require proprietary knowledge as well as the ability to maintain certification (such as N-type stamp certification to manufacture nuclear components in the U.S.) to have the ability to supply products and services. Companies are always developing and improving their offerings to gain a competitive advantage because there are many competitors in each subsector of this market. Some of the key services offered by companies in this market are maintaining, back-fitting and upgrading existing nuclear reactors and equipment.

Mississippi is home for the nuclear business of Entergy Nuclear, which is the nuclear business for Entergy Corporation, an integrated energy company. Entergy Nuclear has the seventh largest nuclear power generation fleet in the world and leverages their nuclear operations experience to provide services across the full life cycle of a nuclear plant (including design, build, operations management, maintenance, life extension, and decommissioning) to companies in the U.S. and throughout the world.

The lack of orders for new nuclear power plants have caused many nuclear engineering companies and vendors to look at this area of extending the life and refurbishing nuclear plants and equipment for growth. Global demand for nuclear life extension and refurbishing services is anticipated to continue to grow in the future due to ageing nuclear plants that are expected to be kept in operation, uprating of existing nuclear plants, and regulatory changes requiring nuclear plants to be retrofitted with updated equipment. Typically, there are few trade restrictions that limit the products and services for the life extension and refurbishing of nuclear plants from being procured internationally. The market is highly fragmented with a high degree of product differentiation across the subsector. These factors make this area a prime market for Mississippi companies with expertise in this space such as Entergy Nuclear to pursue because of the potentially strong growth opportunities.




Utilization

Potential Timeframe

Large. The U.S. market for nuclear materials, fuels and services is

Large. There are over 400 nuclear power plant reactors that are in

Moderate to Large. Each U.S. nuclear power plant creates an average of 135

None. None Anticipated

Near Term Nuclear energy servicing and maintenance is

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valued at $14 billion annually, with the average state procuring $270 million worth of goods and services. The global market for nuclear products, services and fuel is expected to reach up to $740 billion by 2021. 24

operation globally and it is expected that global nuclear operators will look to extend the life and refurbish their existing ageing plants instead of making a huge capital investment to build new nuclear plant units.

full-time equivalent jobs in operations, maintenance, repair and inspection services as well manufacturing replacement components and supporting plant modifications and upgrades.25

already being offered by Entergy Nuclear.

Mississippi Strengths: Pro nuclear energy community in the State of Mississippi. A cluster of experienced nuclear energy talent at the Entergy Nuclear Headquarters in Jackson, MS and the Grand Gulf plant in Port Gibson, MS. Current Mississippi Industry Presence: Entergy Nuclear is the nuclear business for Entergy Corporation, an integrated energy company engaged primarily in electric power production and retail distribution operations. Entergy is the second largest nuclear generator with about 30,000 megawatts of electric generating capacity in supplied to 2.7 million customers Mississippi, Arkansas, Louisiana, and Texas. The headquarters for Entergy Nuclear is in Jackson, Mississippi and provides business services in the following areas: 1) license renewal (i.e. plant life extension); 2) decommissioning; 3) operation management; 4) new nuclear; and 5) next generation reactors. Mississippi University Assets: The University of Mississippi is collaborating on research with the Fermilab to develop a high energy amplifier (or a proton beam for thorium fuel) to create thorium fission in a reactor to generate nuclear power. This may be a long-term, fail-safe solution for nuclear generation since the thorium fission stops when the particle beam stops.

Mississippi State University is performing research to examine the impact of radiation on nuclear materials, which is a major factor on lifespan costs for nuclear facilities. Its researchers have models of strength for various compounds used in nuclear power plant construction. Mississippi State University is recognized internationally as having the most robust capability to evaluate the full range of nuclear containment filters. MSU recently determined a design flaw of ASME AG-1 radial flow HEPA filters slated for use in the Hanford Waste Treatment Plant. The High Performance Computing Collaboratory at Mississippi State University has one of the largest super computers in academia. This computational resource enables the modeling and simulation of long term effects on materials subjected to years of irradiation and stress.

24 Nuclear Energy Institute, Nuclear Energy’s Economic Benefit-Current and Future; December 2011. 25 Battelle analysis of the Nuclear Energy Institute’s report, Nuclear Energy’s Economic Benefit-Current and Future; December 2011.

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Mississippi Issues or Challenges to Address: Mississippi is not an economically rich state, which creates some challenges for retaining nuclear talent in the state.

Currently, the natural gas prices are so low where new nuclear power plants are not competitive with natural gas power plants – states will need to be strategic to have nuclear as part of their overall energy portfolio.


Near -Term Opportunity This is a near-term opportunity for Mississippi with many global nuclear operators electing to extend the life through servicing and maintenance of their nuclear plants instead of making the capital investment to build a new plant. Entergy, one of the world’s top ten nuclear power generators, is example of this servicing and maintenance strategy with the Entergy Nuclear partnering with one of leading nuclear energy power suppliers, Areva, to perform upgrades at all nine of the Entergy nuclear power plants (including an uprate of their Grand Gulf plant in Mississippi from 1300 to 1500 MW). It is projected that Entergy Nuclear can continue to leverage this experience to pursue additional servicing and maintenance opportunities with global nuclear power operators as they look to upgrade their plants going forward.

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Table A1.6

Opportunity Area: Nuclear Storage and Reprocessing Description:

Nuclear power provides electricity generation that does not generate greenhouse gases. As such it is often referred to as an “alternative” power source – a power source which provides an alternative to CO2 producing fossil carbon fuels. In the U.S. a key issue for nuclear power generation is the storage, disposal or reprocessing of spent nuclear fuels. Currently spent fuel is held in interim storage at nuclear reactor sites, awaiting federal government development of a permanent repository site. A partial alternative to storage is reprocessing, whereby reusable fissionable plutonium and uranium are recovered from spent nuclear fuel rods. Storage would still be required, since reprocessing does not reuse all radioactive spent fuel material. At the present time the U.S. has neither reprocessing nor permanent storage solutions in place. The nuclear industry has been in a long-term holding pattern awaiting federal action.

Mississippi has salt dome geologic formations that may be suited to disposal of high level nuclear waste (similar to the low level Waste Isolation Pilot Plant site in New Mexico which only accepts low level transuranic waste). The use of salt deposits dictates that deposited spent fuel would be permanently deposited (as opposed to stored for potential reuse) since rock salt has plasticity and would, over time, encapsulate the deposited material. Feasibility analysis would be required to determine the favorability of a Mississippi salt-dome nuclear fuel depository.

Nuclear fuel reprocessing uses well-proven technologies that are already deployed in nations outside of the U.S., such as France, the United Kingdom and Russia. In the U.S. it only occurs for nuclear weapons activity. Reprocessing has been politically controversial because of the potential to contribute to nuclear proliferation, potential vulnerability to nuclear terrorism, the political challenges of processing plant siting, and because of its higher cost compared to the once-through fuel cycle.




Utilization

Potential Timeframe

Large. At the end of 2009, the U.S. had accrued 62,683 metric tons of commercial spent nuclear fuel, and each year U.S. nuclear power plants add another 2,000 to 2,400 tons to the inventory. The vast majority of spent fuel, 78%, was in pools while the remainder was stored in dry casks.26

Large. By taking in and storing spent nuclear fuel or reprocessing it, Mississippi would receive payment from the federal government or spent fuel generators, and reprocessed fuel purchasers, from outside of the state.

Large. Both a storage site and a reprocessing site would likely be significant job generators. The Waste Isolation Pilot Plant in New Mexico employs 500 personnel, while Yucca Mountain was projected to employ 2,000. A reprocessing plant would also generate significant employment.

Large. The storage option would use Mississippi’s natural salt deposit formations. Some spent nuclear fuel is generated in Mississippi currently at Entergy’s nuclear power plant.

Long Term. Storage would be a long-term opportunity requiring considerable analysis and federal action. Reprocessing would also be a longer-term potential opportunity

26 United States Nuclear Regulatory Commission, FAQs

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Mississippi Strengths: Salt deposits and the salt dome facility located in Mississippi present an opportunity for the long-term storage of nuclear waste in the state. Current Mississippi Industry Presence: None in the State of Mississippi, but Areva which is the largest player in dry cask storage is based in Maryland and has interfaced with Entergy Nuclear to help provide engineering, procurement and construction services for capital projects to perform plant upgrades of nuclear equipment and components. Mississippi University Assets: Mississippi State University has hosted an international workshop with representatives from the DOE WIPP and Yucca Mountain plants, and industry and government leaders from France and Germany in May 2011 focused on nuclear waste storage.

At the University of Mississippi, high energy proton beam research is being performed in collaboration with researchers at particle accelerators throughout the world where this technology could be potentially used in the future to reprocess nuclear waste.

At the Energy Institute at Mississippi State University, the Institute for Clean Energy Technology (ICET) has a performed research at DOE facilities involving the remediation of nuclear waste that resulted from defense activities conducted at the Hanford and Savannah River sites.

Mississippi State University is conducting research involving the design of casks for nuclear waste storage.

Mississippi State University has developed a double salt thermodynamic database to much more accurately predict the composition and behavior of nuclear tank waste. Mississippi Issues or Challenges to Address: The State of Mississippi does not have a high energy lab. Therefore, the state may need to make a multimillion dollar capital investment to establish this type of lab, or collaborate with an existing site such as Oak Ridge National Lab or Fermilab to reprocess the nuclear waste using a high energy beam and ship the waste to the long-term storage site in the state.

No used nuclear fuel is being transported in the United States to support a market for reprocessing, but transportation of used nuclear fuel is very active globally.

The state must be strategic instead of tactical and political in looking at nuclear reprocessing and how nuclear energy will fit in their overall energy mix.


Long-Term Priority Platform Mississippi may be able to meet an important national need, leveraging its geologic resources and its relatively low population density, to be a preferred location for these nuclear opportunities (which could bring significant outside income into the state). This is, however, a quite long-term opportunity area because it requires federal government study and legislative actions to realize, plus this is an arena of economic activity likely to be significantly delayed by environmentalist and citizen concerns and legal challenges.

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Group 3: Clean Technology

Near-Term (Present to 3 Years): Biobased Liquid Fuels and Chemicals (Table 20); Solar/PV Energy

Production Systems and Components (Table 21)

Mid-Term (4-8 Years): Biobased Fuels for Electricity Generation (Table 22); Alternative Vehicles and

Fueling Infrastructure (Table 23)

Long-Term (8+ Years): Energy Applications of Polymers (including Electric Energy Storage Systems)

(Table 24)

Table A1.7

Opportunity Area: Biobased Liquid Fuels and Chemicals Description:

Biomass (see below definition) provides feedstocks that can be used in the production of liquid fuels and chemicals. Primary biomass feedstocks include: oil (plant oils/triglycerides from plants such as soybeans, canola, camelina or algae); starch (glucose and polysaccharide from plants such as corn, barley, grain sorghum and rice); sugar (disaccharides, glucose and fructose from plants such as sugar cane, sugar beets and sweet sorghum); and lignocellulose (lignin, cellulose and hemicelluloses from wood, crop residues and dedicated energy crops such as switchgrass and miscanthus). Mississippi currently produces biomass in all of the above categories. Biomass can be sourced from agricultural land, forestland or organic municipal and industrial waste streams. Biomass can be used directly for heat and electric power generation, but it is also a unique renewable energy resource in that it can be used to produce liquid fuels, chemicals (building block chemicals, intermediates and specialty chemicals) and materials. Processing into higher value liquid fuels, chemicals and polymers uses three broad technology platforms – thermochemical processing (gasification), biochemical (e.g. fermentation), and chemical/oleochemical (catalytic reactions primarily).

The “food vs. fuel” debate has an impact on the emerging biofuels industry and is driving R&D focused on the conversion of woody, lignocellulosic biomass into fuels and chemicals to supplant the use of food and feed biomass such as corn kernels (used to produce ethanol for example) or soybeans (used in the production of biodiesel). The economic use of lignocellulosic biomass will increase farm incomes through adding value to crop residues and the production of dedicated biomass crops on marginal land unsuited to food crop production, and provides a pathway for value-added use of forest slash, thinnings, branches and tops and other lower value wood resources.

As commercial processes and technologies for biomass conversion are refined and advanced, it is likely that significant volumes of fossil-resource based liquid fuels, chemicals and polymers may be replaced with green and renewable biobased alternatives. The main constraint on sector growth is a relative lack of a “green price premium” in the marketplace, dictating that biobased chemicals have to compete on price with established petrochemicals with their sunk infrastructure costs.

Biomass may be defined as any non-fossil, energy containing form of organic carbon and includes all land and water-based vegetation such as trees, aquatic and marine plants, crops, organic components of municipal solid waste, forestry and agricultural residues, animal wastes, and industrial wastes derived from any combination of those substances. (Source: Mississippi Biomass and Renewable Energy Council).

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Utilization

Potential Timeframe

Large. North American bio-diesel and bio-ethanol consumption reached 327 million barrels in 2010 with market revenues reaching $61.5 billion. By 2015, the market for biofuels will reach $116.8 billion, having increased at a CAGR of 13.7% from 2015. The market for biobased chemicals will increase dramatically with worldwide revenues growing from $36.9 billion in 2009 to $76.2 billion in 2015.27

Large. High levels of biomass availability could support a significant industry in Mississippi if economics dictate viability.

Moderate-to-Large. In the past few years Mississippi has attracted several biorefineries each bringing more than 100 permanent jobs and creating hundreds more construction jobs.

Large. Development of a Biobased chemicals and polymers platform could use various Mississippi biomass resources and provide new income streams to farms and rural communities.

Near-to-Mid Term. This is a developing space with much R&D taking place. There is a nascent biobased chemicals industry in the U.S. but lack of a significant “green price premium” in the marketplace is a constraining factor on sector growth.

Mississippi Strengths: Mississippi is part of the pine belt area with an abundant supply of a biomass (such as Southern White Pine) that can be used to produce biofuel oil as well as other products, such as absorbents and sugars for plastic products. The availability of biomass has already resulted in the attraction of several high-profile projects to Mississippi (see below). Current Mississippi Industry Presence: Ergon has a joint venture with Bunge North America, an agribusiness firm, to produce ethanol at a plant in Vicksburg, Mississippi. Bunge buys the corn and possesses the distiller grain facilities, while Ergon refines and markets the ethanol.

KiOR, a Texan company, has selected Mississippi for up to five plants (with Columbus and Natchez the first two announced locations. KiOR uses a catalytic conversion process using multiple biomass feedstocks (including lignocellulosic woody biomass) to produce a renewable crude oil. If KiOR fulfills their five Mississippi plant plan, they predict up to 1,000 jobs being generated.

27

Research and Markets, A Guide to Biofuel Consumption in North America, July 2011. Markets and Markets, July 2011. Markets and Markets, Renewable Chemicals Market by Geography, Feedstocks, Prices, Applications Trends and Global Forecasts (2010-2015), May 2011.

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Elevance Renewable Sciences purchased the Delta BioFuels facility in Natchez and is converting the facility into an integrated biorefinery and chemical derivatives operation. The company has announced investment of$225 million for plant repurposing and anticipates generating 165 full-time equivalent jobs at the facility.

BlueFire Renewables has selected Fulton Mississippi for construction of a demonstration plan t using a patented acid hydrolysis process for the conversion of cellulosic biomass into ethanol. The operation is one of four DOE funded pilot cellulosic ethanol facilities.

Enerkem Corporation, another recipient of DOE integrated biorefinery financing, selected Mississippi (Pontotoc) for their waste-to-ethanol/green chemicals plant. The plant will focus on ethanol and biobased chemical production from sorted municipal waste and wood waste. Mississippi University Assets: Mississippi State University is a significant university system in the production of microbial oil with activities in the following areas:

Researchers in the Sustainable Energy Center are looking at a number of areas involving the generation and testing of biobased fuels such as the upgrading bio oil/pyrolysis oil to jet fuel and gasoline; using syngas from agricultural residues to pelletize biomass; generating bio crude oil from the micro-organism breakdown of sludge from wastewater treatment plants; and testing engines using biofuels

Mississippi State is building a pilot scale biofuels lab that should be ready by the end of this year to help support the biofuel platforms (such as bio oil, syngas, microbial waste to biodiesel) that are in development.

Jackson State University has some researchers in their Department of Chemistry and Biology that are looking at using waste vegetable oil as a feedstock for biodiesel production. As a second stage to this research, they are planning to make value added chemicals from the waste of the biodiesel. To help facilitate work in this area, the university is looking at potentially establishing a pilot plant on campus. Mississippi State University has developed converters for solar/photovoltaic energy systems that make each panel a standalone source of energy for connection to the electrical grid. The Center for Advanced Vehicular Systems (CAVS) at Mississippi State University has facilities to assess efficacy of new biofuels and new drives for energy efficiency and pollution. The KIOR product has been assessed in the CAVS engine test facility. Mississippi State University has developed a number of patents for biofuel energy processes/products. Mississippi Issues or Challenges to Address: Logistics of the transportation operation for many of these processes (such as the wastewater to oil or woodchips to make oil) still needs to be developed to transport the oil.


Near-Term Priority Platform Biomass availability, and the flexibility of Mississippi’s environment for the growth of a wide variety of plants, makes this sector an attractive prospect.

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Table A1.8

Opportunity Area: Solar/Photovoltaic Energy Production Systems Description:

Under the “photovoltaic effect” photons of light excite electrons into a higher state of energy, allowing them to act as charge carriers for electric energy. Photovoltaics (PV) take advantage of this effect to convert solar radiation into DC electric energy using semiconductors. As of the end of 2011 approximately 0.5% of the World’s electricity demand was met by solar (67.4 GW, representing a substantial growth versus the 5.4 GW extant in 2005).The growth of the industry has generated demand for the PV cells, panels and arrays themselves, and for the specialized silicon, glass and other raw material and technology inputs required for their fabrication.

Mississippi has achieved notable recent success in attracting companies in the PV space and its supply-chain. Several notable project wins point to Mississippi’s ability to assemble competitive incentive packages and provide a competitive operating environment for the industry. Key PV/solar projects won for Mississippi include Calisolar’s facility in Lowndes County producing solar grade silicon (a $600 million plant anticipated to generate 1,000 jobs at its peak), Twin Creek Technologies’ plant in Senatobia producing thin wafers for solar cells ($175 million company investment with 500 jobs), and Stion in Hattiesburg manufacturing thin film solar panels ($500 million and a projected 1,000 jobs in 6 years). These project wins for Mississippi point to the state’s ability to attract clean manufacturing jobs to the state via competitive loan and tax incentive packaging, customized job training, and the comparative low cost of land and labor in the state.




Utilization

Potential Timeframe

Very Large. Between 2010 and 2011, solar PV (including modules, system components and installation) increased nearly $20B. With the installed costs of PV expected to drop to approximately one-third of current costs in the next decade, the solar PV market is anticipated to reach $385.8 billion worldwide by 2021

28.

Large. This is an advanced manufacturing industry producing raw materials and completed PV assemblies for export.

Very Large. Each of the projects won by Mississippi have been significant generators of jobs (ranging from projections of 500-1,000 peak jobs per plant).

None. The industry is not primarily reliant on MS natural or geologic resources for its growth.

Near-to-Mid Term. Demand for PV assemblies, and the materials to fabricate them is anticipated to continue to grow – generating ongoing demand for new production plants. Mississippi’s track-record of successfully competing for these projects (and the global recognition of these wins) places the state in a strong position for further near-term projects and growth of an emerging PV cluster.

28 Clean Edge, Clean Energy Trends, 2012

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Mississippi Strengths: The combination of energy materials expertise at the research universities (e.g. Polymer Science research at University Southern Mississippi and Silicon carbide research at Mississippi State) and the low cost of manufacturing are helping to attract solar/PV companies to the state. Current Mississippi Industry Presence: Stion is a Hattiesburg, MS company is producing commercial thin-film solar panels. One of the main reasons that it located in this area because it is interested in partnering with University of Southern Mississippi for its polymer science research expertise.

Twin Creeks Technologies, a solar technology company, is building a state of the art wafer and solar cell facility in Senatobia, MS where they plan to use this site as a commercial demonstration plant where Twin Creeks and its customers can optimize manufacturing and production processes using its wafer production system called Hyperion. Hyperion is a system that can reduce the cost of solar modules and semiconductors buy decreasing the amount of silicon and substrate material by up to 90 percent used to produce the product.

Soladigm Inc. a supplier of electronically tintable glass has located their manufacturing operations in Olive Branch, MS investing $130 million and creating 300 jobs. The manufacturing is line is operational and the company expects to be sending commercial shipments from this site during the first half of this year.

SemiSouth Laboratories is a Starkville, MS manufacturer of high voltage silicon carbide devices such as high voltage diodes and junction field effect transistors (JFETs) that provide efficient power conversion for solar and wind inverters and other applications requiring high energy efficiency.

Silicor Materials Inc. (formerly CaliSolar Inc.) is a manufacturer of solar and aluminum products, which includes producing silicon for PV panels, or master alloy or polyaluminum chloride of aluminum products. Silicor is building a large scale manufacturing facility in Lowndes County, MS to help expand its silicon production capacity. Silicor’s first customer for the silicon from the Mississippi plant is Suntech Power Holdings, the world’s largest maker of solar panels (according to a press release on the Silicor Materials website). Mississippi University Assets: Mississippi State University researchers have the capacity (expertise and labs) to support the production of PV technologies at the wafer level for Mississippi industry. These researchers are the same faculty who spun out SemiSouth Corporation.

At the University of Mississippi, research is being conducted in the area of organic photovoltaics where new molecules are being developed that can be turned on and off. The new molecules could be used for applications such as mobile devices where the molecules could take in the energy of light and store it in the battery for later usage.

The JSU-E Center at Jackson State University is a 1500-2000 square foot advanced lab that can perform accelerated testing such as corrosion, humidity and UV rating on equipment and material no larger than desktop size – this facility has the capacity to test and characterize thin film materials used in the solar/photovoltaic areas.

Mississippi State University is developing modeling tools to create new energy materials and structures for energy systems.

Jackson State University has researchers in their Center for Nanoscience and Nanotechnology that are

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looking at how to improve solar energy conversion through the use of plasmonic (or plasmonic energy) nanomaterial and growing their own carbon nanotubes for alternative energy use.

The University of Southern Mississippi Polymer Science department and Mississippi Polymer Institute is performing research that involves that application of nanoparticles to solar cells to improve the solar efficiency.

Mississippi Issues or Challenges to Address: The labs at the research universities in Mississippi are not equipped to make the devices that use synthesized material such as the organic photovoltaics or organic light emitting diodes (OLEDs) from new molecules. Therefore, all of the applied research work and industry projects that can lead to job development will likely occur outside of the state.

Currently, Jackson State does not have the in-house testing capabilities to help develop their carbon nanomaterials and other nanomaterial research for applications

Dependency of the photovoltaic market on government incentives – some renewable energy solutions such as the Soladigm product is not eligible for government incentives, which makes its challenging for them to compete against the existing products.

MDA notes that while it has achieved considerable success in attracting PV and associated industry plant to come to Mississippi, the flow of such projects has slowed considerably. It should be noted that he aggressive actions of China, which has set a national plan to dominate the solar/PV industry, has led to considerable competitive challenges for U.S. operations and may dampen the longer-term prospects for growth of this industry.


Near-Term Priority Platform Mississippi’s state economic developers, in collaboration with local economic developers, have achieved significant success in attracting PV and associated technology manufacturers to the state. This is a track-record that may be built upon to attract further companies and build a cluster PV manufacturing expertise in the state. To further anchor the cluster it would behoove the state to consider investing in university R&D capabilities related to PV technologies that would help enhance advanced manufacturing capabilities for the sector within the state.

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Table A1.9

Opportunity Area: Biomass Fuels for Electricity Generation Description: Biomass (see definition below) provides a generally carbon-neutral pathway to the production of power (because the CO2 was previously captured from the atmosphere by the plants being combusted). The application of biomass to renewable electricity production may be through co-firing of biomass with coal, combustion in dedicated biomass-only power plants (or combined heat and power CHP plants), and via gasification (typically through a fast thermo-chemical pyrolysis process) whereby the biogas is used as a feedstock for combustion engines or gas turbines. Biogas may also be generated through anaerobic digestion of organic matter (the process by which landfill gases are generated) which may be used in smaller scale power generation operations. Bio-oil (renewable crude) may also be generated via biomass pyrolysis/gasification processes – but the renewable crude is more likely to be used for the production of liquid transportation fuels or chemicals (rather than as an electricity generation feedstock).

Biomass may be defined as any non-fossil, energy containing form of organic carbon and includes all land and water-based vegetation such as trees, aquatic and marine plants, crops, organic components of municipal solid waste, forestry and agricultural residues, animal wastes, and industrial wastes derived from any combination of those substances. (Source: Mississippi Biomass and Renewable Energy Council).




Utilization

Potential Timeframe

Large. Scale is currently being assessed by TetraTech under contract to MDA. Expected to be significant. In 2009, the North American market for biomass for electricity generation stood at $3.4 billion. Driven by the need for energy security, environmental awareness and volatility in fossil fuel prices, the biomass market is expected to increase at a CAGR of 8.9% through 2016 – reaching revenues of $6.2 billion.

29

Moderate. Power that would be generated would mostly be consumed in Mississippi. Economic gains, however, via substitution for imported fossil fuels.

Large. Jobs in the growth, harvesting, transportation, preprocessing and conversion of biomass into energy.

Very Large. TetraTech study will quantify, but it is logical to assume that the overwhelming majority of biomass produced would come from domestic Mississippi sources.

Near-to-Mid Term. Biomass is already being used in Mississippi for power production. Further expansion anticipated because technological improvements are enhancing efficiency.

29 Frost and Sullivan, North American Biomass & Waste-to-energy Market, March 2010.

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Mississippi Strengths: The Mississippi Biomass and Renewable Energy Council, founded in 1998) serves an important coordinating and information provision role in guiding biomass utilization in Mississippi. Council membership includes representatives from agriculture, forestry, utilities, government agencies, higher education and research institutions and manufacturers. MSU has established a strong research focus on second generation biofuels (i.e. the manufacture of biofuels from inedible biomass). Current Mississippi Industry Presence: Kior – renewable fuels company in Columbus, MS that has developed technology to convert biomass to generate renewable crude oil. This company has developed the ability to leverage the infrastructure of former paper mill sites. Renewable crude could be used for electricity generation, although it is likely more valuable as a feedstock for chemicals and liquid fuels production.

New Biomass Energy LLC is operating a torrefied wood pellet operation in Quitman Mississippi employing 25 personnel. The plant uses torrefaction of wood to produce fuel pellets for co-generation with coal at existing coal-fired power stations.

Southern Company, the parent of Mississippi Power, has been active for more than a decade in researching feasibility and processes for co-firing biomass at their power plants.

London, UK based Meridian Power has announced an intent to construct multiple biomass fueled electricity generating plants in the southeast U.S, with its first plant planned to be located in Mississippi.

Industrial companies which require on-site power, process heat/steam, have made investments in biomass fueled power plants within Mississippi. Masonite Corporation, for example, operates a fluidized bed biomass combustion power plant at its Laurel Mississippi location.

Mississippi University Assets: The University of Mississippi has had a research focus on microbial pre-processing of biomass for the last 10 years. They have a holistic approach to this research covering the process from when the biomass is produced by farmers through to the point where biomass can be processed by industry. The advantages of this process is that it requires decreased transportation cost because it could be performed at the farm where the biomass is created and less energy is used for conversion of the biomass since it is pre-processed.

As part of Mississippi State University’s (MSU) Energy Institute, the Sustainable Energy Research Center performs renewable energy research focused on biofuel development and biomass production – some of the research conducted in this area at the MicroCHP and BioFuel Center has involved distributed electricity generation with waste recovery using biomass as a fuel.

Mississippi State University has also performed biomass research in collaboration with Entergy. This research has involved Mississippi State working with Entergy to use biomass on a test basis to burn as a replacement for #6 fuel oil at an Entergy power plant.

Mississippi Issues or Challenges to Address: Large-scale supplies of cheap natural gas and coal continue to make the use of biomass somewhat challenging economically.

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Mississippi (like most Southern U.S. states) does not have a state Renewable Portfolio Standard that would require utilities to generate a defined percentage of their electricity from renewable generation. One exception is Louisiana, which require 300 MW to be renewable.


Moderate Opportunity Mississippi has substantial biomass resources and the use of these resources for biobased electric power generation/co-generation could be expanded. The primary constraint on this opportunity for Mississippi relates to the comparative economics of biomass-to-power given low cost and increasingly abundant natural gas fuel.

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Table A1.10

Opportunity Area: Alternative Vehicles and Fueling Infrastructure Description:

Today, oil meets 37 percent of U.S. energy demand, with 71 percent directed to fuels used in transportation – gasoline, diesel and jet fuel. As the Institute for Energy Research notes “petroleum is the main mover of our nation’s commerce. It is the transportation fuel, as almost all of our nation’s transportation is dependent upon its concentrated liquid form.” While oil-based transportation fuels have much going for them (high energy density, readily transported from location to location, sunk costs in national fuel station infrastructure) they also present challenges – not the least of which is the fact that 49% of the petroleum products consumed in the U.S. are foreign import (U.S. Energy Information Administration). With the Middle East and Africa supplying 41% of U.S. imported petroleum products, the U.S. economy has a major component of its economic destiny dependent on somewhat unpredictable international governments.

There is clear strategic and economic interest in developing domestic sources for transportation fuels and in broadening the transportation infrastructure in the U.S. to support alternatively fueled vehicles. An alternatively fueled vehicle is any vehicle that runs on a fuel other than gasoline or diesel – with the primary technology platforms being electrics, biofuels (e.g. ethanol E85, biodiesel), compressed natural gas, propane (liquefied natural gas) and hydrogen (fuel cells). The size of domestic natural gas reserves (especially now that shale gas is coming on-stream), in combination with the comparatively low cost of natural gas and mature distribution infrastructure has raised its profile as an alternative fuel. Electricity has the same mature distribution infrastructure benefits. While several of these alternative platforms are advancing, key impediments to faster growth are the lack of refueling infrastructure (except in the case of biofuels where they can slot into the existing petroleum fuels infrastructure fairly easily) and cost to convert the existing fleet of vehicles to an alternative fuel (or cost of replacement vehicles in a phase-out model).

Economic development via alternative fuel vehicles may come in many forms. For those states engaged in vehicle manufacturing (Mississippi being one) there is the opportunity to manufacturer these vehicles and component systems. There is also a need to develop and manufacture cost-effective technologies for vehicle conversion, natural gas compression/fueling, rapid vehicle recharging systems, etc.




Utilization

Potential Timeframe

Large to Very Large Worldwide the NGV market will grow at a CAGR of 9.1% from 2010-16. The U.S. will experience the largest increase in NGVs growing at a CAGR of 25.4% through 2016, however the number of NGVs sold in 2016 will still be small – 32,219.

Large. Manufactured rapid refueling systems and cost-effective conversion technologies would be exported products. Mississippi could potentially export electricity and natural gas also.

Large. Statistics regarding employment related to the adoption of NGVs is limited give its nascent stage of market development. However, NGVsNow reports that converting 350,000 18-wheelers from diesel to natural gas would create

Large. Mississippi has natural gas and biomass availability for focusing towards alternative fuel vehicle fueling applications

Mid to Long Term. While there is some market penetration by alternative fuel vehicles currently, the growth of the market is moving quite slowly.

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According to the U.S. Department of Energy, there are currently 1,216 NG fueling stations, of which 467 are open to the public. Pike Research anticipates the number of North American NG fueling stations to reach 1,972 by 2016.30

420,000 direct jobs and 1.2 million indirect jobs.

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Mississippi Strengths: The current infrastructure in Mississippi is very good for importing and exporting fuel – according to Mississippi’s Governor Bryant, “more natural gas flows through Mississippi than any other state….” Current Mississippi Industry Presence: Mississippi has a number of companies that are involved in the automotive industry, but alternative vehicle technology remains a secondary focus for the following companies:

Nissan – One of Nissan’s three U.S based production plants is located Canton, MS. This $1.4 billion plant produces the Nissan Altima, Nissan Armada and Nissan Titan with and annual production capacity of 400,000 vehicles.

Toyota – the Toyota Motor Manufacturing, Mississippi auto manufacturing facility is an $800 million investment in the state that is located in Blue Springs, Mississippi. This facility will produce Toyota Corollas with annual capacity of 150,000 vehicles and is projected to create 2000 jobs.

PACCAR – At their Columbus, Mississippi factory, this company manufactures engines for their commercial vehicle diesel trucks. PACCAR is a global technology leader in the design and manufacture of high quality light, medium and heavy duty trucks under the Kenworth, Peterbilt, and DAF nameplates.

SemiSouth Laboratories manufactures high voltage silicon carbide devices such as high voltage diodes and junction field effect transistors (JFETs) that provide efficient power conversion for hybrid electric vehicles and other applications that need high energy efficiency.

Mississippi University Assets: Mississippi State University has two facilities that have the ability to test and evaluate vehicle engines –

Center for Advanced Vehicular Systems has a mobility vehicle focus. This is an interdisciplinary center at Mississippi State University that has research, engineering, and technology transfer teams that can provide solutions to issues that industry and government face in the mobility vehicle area.

Raspet Flight Research Laboratory has an aerospace and flight engine focus. This research lab is

30

Pike Research, Natural Gas Vehicles, 1Q 2011. 31 NGVsNow, Get the Facts.

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part of the Bagley College of Engineering at Mississippi State University. This lab partners with industry and the government to use the lab’s aircraft and facilities to perform aeronautical research.

Mississippi State University, in conjunction with the Mississippi Energy Institute , conducted a state-wide PEV Awareness Day in October 2011 in Jackson, MS. MSU also conducted a Movin’Maroon Day on campus to highlight research on advanced fuels and green energy technologies. Mississippi State University Center for Advanced Vehicular Systems has also been funded by the EPA to look at battery powered auxiliary power units for Class 8 trucks to provide cab power so idle times can be reduced. Mississippi Issues or Challenges to Address: Lack of an infrastructure in place to support natural gas vehicles – light reserves of natural gas is not in place and natural gas fueling stations is not readily available in Mississippi for retail purchase.

High cost of natural gas vehicles due to a lack of demand – Mississippi would need to build a concentration of these vehicles (such as initiating government vehicle use and supply incentives for consumers to buy) to help increase the demand and lead to a decrease the costs for natural gas vehicles.


Moderate Opportunity This is a challenging sector for an individual state to build development momentum because so much of the sector’s prospects depend on national government incentives and decisions, and the need for very large-scale infrastructure decisions and investments to be made. Mississippi may be able to gain an early lead in a specific area, such as natural gas vehicles or electric vehicles, if the state were to make a commitment to converting state owned vehicles to alternative fuel sources, or other fleet operators in the state. However, the relatively low population density of Mississippi does not lend itself well to development of the sector versus high density locations elsewhere in the U.S.

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Table A1.11

Opportunity Area:

Energy Applications of Polymers (Including Electric Energy Storage Systems)

Description:

Polymers are macromolecules composed of repeating structural units typically connected by covalent chemical bonds. Commonly occurring as synthetic plastics (such as PVC, polystyrene, polyethylene and polypropylene), there are also natural polymers (for example natural rubber and shellac). Able to be custom engineered for characteristics such as conductivity resistance, ion transfer, light weight, high wear and even high temperature applications, polymers are an advanced material deployed in multiple energy applications. Examples of some polymer applications in energy include battery and fuel cell membranes (such as in Li-ion polymer batteries), as key materials for the fabrication of photovoltaic modules, as insulation for electric wiring and cables, and in structural applications such as wind turbine blades.

Mississippi has well-established, internationally recognized R&D in polymers within its research universities. Expertise in the polymer arena may well be leveraged into the future in advanced energy applications. Energy storage systems may be one of the highest volume advanced applications for polymers. The development of improved electric energy storage solutions is an imperative for achieving enhanced energy sustainability. Some key renewable energy generation sources are intermittent in their power output (for example wind and solar) and thus advanced energy storage technologies are required to store generated electricity for release during times of peak demand. Similarly, advanced electricity storage solutions are needed for mobile applications (such as electric and hybrid vehicles). Batteries are the primary storage medium and are the focus of significant R&D activity. Batteries also represent a high volume manufacturing opportunity for widespread application in stationary and mobile power. Current R&D is focused on the use of polymers as membranes within batteries, providing advantages in terms of resiliency, weight and form factor.



Utilization

Potential Timeframe

Very Large. The U.S. battery market is expected to reach $12 billion by 2016, increasing 4% from its 2011 market value of $9.6 billion. Rechargeable batteries, energy harvesting and thin-film batteries will all experience impressive growth in the coming decade. Although fuel cell technology has been available for many years, the commercial market

Large. If (and it is a rather big “if”) Mississippi’s polymer R&D expertise can be applied to the production of novel commercial innovations in the energy space (such as battery technologies) and a manufacturing base can be built on the technology then this would be an export industry.

Large. This is difficult to project. However, were batteries or fuel cells or other advanced energy storage systems developed using polymer technology the potential market would be very large and significant manufacturing capacity would be required to meet demand.

Limited. Limited, unless the polymers are biobased or use oil extracted from Mississippi locations.

Long Term. This is a long-term play. High risk in terms of the need for basic R&D, translational research to assess commercial potential of technologies, and the need to capitalize start-up enterprises to commercialize any potentially viable technologies.

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is still emerging. The period from 2005-2009 saw rapid growth with market revenues increasing from $353 million to $498 million. Through 2014, the market will grow at a CAGR of 20% to reach $1.2 billion32.

Mississippi Strengths: Deep expertise at the University of Southern Mississippi, Mississippi Polymer Institute (an industry outreach organization at the University of Southern Mississippi), and other Mississippi research universities in the area of polymers that can potentially attract companies and help start as well as grow the number of companies in the state that are interested in applying the research and expertise in this area to develop commercialized products. Current Mississippi Industry Presence: GE Aviation, a global leader in the production of jet engines and aircraft systems production, currently has one plant in Batesville, Mississippi and is in the process of opening a second plant in Ellisville, Mississippi, which is projected to start production in 2013. Both of these locations will manufacture advanced composite components for GE aircraft engines and systems. The Batesville facility currently employs 300 workers and is growing, while the Ellisville facility is expected to employ 250 employees by 2016. GE Aviation is an operating unit of the General Electric Corporation (GE). Mississippi University Assets: Mississippi State University has been developing multi-scale physics based methodology for polymers. This research can directly impact the selection of new materials for a wide variety of applications by providing a means to accurately predict polymer behavior for structural design.

The University of Mississippi is performing research on the membrane for polyelectric, anhydrous fuel cells

Mississippi State University are using polymer gels and polymer films to design better batteries, high-efficiency flexible solar cells, and low energy-intensive water purification membranes.

Jackson State University has a strong department of chemistry and biochemistry that produces published research that is comparable with larger institutions such as Stanford and Georgia Tech and is one of three HBCUs (Historically Black Colleges and Universities) that offers a PhD in Chemistry. At Jackson State University, one of the areas of research for this group is faculty performing materials research to improve energy storage in batteries to achieve better energy output, improve the efficiency, or make the battery itself more lightweight.

Mississippi State University is designing bioplastics (renewable polymers) as a sustainable alternative to petrochemical-derived polymers that are also biodegradable in landfills.

Multi-scale modeling and design work at Mississippi State University is evaluating nano-reinforcement

32

IBISWorld, Battery Manufacturing in the U.S., 2011. SBI Energy, Fuel Cell Technologies, 2010.

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technologies of fiber-reinforced composites for automotive structural applications.

The University of Southern Mississippi Polymer Science department is performing research to develop alternative membranes for the fuel cell by synthesizing the polymers to improve the mechanical and temperature limits of these membranes.

The Center for Advanced Vehicular Systems at Mississippi State University has created a multiscale modeling and simulation methodology for accurately predicting polymer behavior for structural design. Mississippi Issues or Challenges to Address: This is an emerging opportunity area, which will need local and state supported resources (such as gap funding, pre-seed funding, access to entrepreneurial services and business services, etc.) to help foster the technology transfer of university technology to established companies, or commercial development of the university technology by entrepreneurs.


Long-Term Priority Platform This is an area of science and engineering in which Mississippi has acknowledged academic R&D strengths. Achieving technology-based economic development based on academic strengths alone, however, is hard to achieve. This platform would require a concerted effort be deployed in funding the development, piloting and commercialization of technologies. Without a base of existing Mississippi industry in the sector, realizing economic growth in this space for Mississippi will require investing in start-up business enterprises (with all the usual associated risks).

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Group 4: Applied Environmental Science for Energy

Near-Term (Present to 3 Years): Advanced Coal Utilization Technologies (Table 25)

Mid-Term (4-8 Years): Geologic Storage of Energy Resources (Table 26)

Long-Term (8+ Years): Carbon Dioxide Capture, Storage and Utilization (Table 27)33

Table A1.12

Opportunity Area: Advanced Coal Utilization Technologies Description:

Coal is the largest source of fuel for the generation of electricity worldwide. The U.S. is the world’s second largest producer of coal, and the U.S. generated 42% of its electricity from this abundant domestic resource in 2011. Unfortunately, coal is also the largest generator of anthropogenic carbon dioxide emissions at the global level. Demand for coal is increasing significantly as a result of global economic growth.

At the present time almost all coal is directly combusted to generate heat and steam for electric power generation (some high quality coals are converted to coke for metals production). Various pre-treatment and scrubbing technologies are deployed in attempts to reduce atmospheric release of contaminating chemicals. While coal is typically combusted to generate power, it is also a flexible resource that can be converted via gasification processes into syngas or via liquefaction processes into liquid fuels. Lower grade coals can also be “refined” prior to use as a fuel to remove contaminants and moisture.

Mississippi contains 5 billion tons of coal reserves, all in the form of lignite (a soft, brown, low quality coal with relatively high moisture content). This equates to about 13% of total U.S. lignite reserves. Lignite has been mined since 1999 in Choctaw County to supply lignite to a co-located electric generating plant (combustion fluidized bed) that supplies electricity to the TVA. This plant consumes 3.5 million tons of lignite annually. Mississippi Power in the construction phase in Kemper County of a 582 megawatt plant converting lignite to electricity using a new advanced Syngas technology termed Transportation Integrated Gasification (TRIG) developed by the DOE and Southern Company. This new Syngas technology reduces carbon dioxide emissions to the level of an equivalently sized combined cycle natural gas plant, and will consume 4.1 million tons of lignite annually at full production. An anticipated 300 jobs will be produced in the lignite mining and power plant operations in Kemper County via the Mississippi Power Project. The use of lignite in Mississippi provides a local fuel for use in electricity and syngas generation (which can also be a process for producing various chemicals) and helps to diversify Mississippi’s energy portfolio leading to increased reliability of supply and insulation against price swings in individual fuels.




Utilization

Potential Timeframe

Large.

Large.

Moderate-to-Large.

Significant.

Near-to-Mid Term.

33 Note that in terms of carbon utilization this is a present area generating economic development in Mississippi via

the mining of geologic carbon dioxide resources, their use in enhanced oil recovery to produce 50% of the State’s

oil, and carbon dioxide transfer, via pipeline, outside of the state for use in enhanced oil recovery in the region. This

opportunity area has generally been categorized as “long term” in terms of carbon sequestration time horizons.

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With 5 billion tons of Mississippi lignite coal reserves, there is a significant market opportunity for this coal if cleaner coal technologies are feasible. Technologies piloted and produced in Mississippi would likewise find significant global markets.

For electric power generation the power will primarily be consumed in Mississippi, not exported. However, the use of domestic lignite may reduce requirements for MS to import fuels from outside of the state. Longer term, conversion via syngas into chemicals could produce value-added products for export.

Kemper County mining and syngas power plant operations projected at 300 jobs. Volume of lignite in the state can readily support multiple projects of this scale.

5 billion tons of lignite reserves distributed in a broad band across Mississippi.

Lignite already used in MS power generation and advanced Kemper plant in construction. Mid-term to longer-term for chemicals from Syngas opportunity.

Mississippi Strengths: The nation’s largest producer of lignite coal, North American Coal Corporation (a subsidiary of NACCO Industries, Inc.) has one of its four coal mining operations, Red Hills Mine, located in the state of Mississippi, and one under construction, Liberty Mine that will be located in Mississippi. Lignite is a low cost fuel because it is a surface mined fuel and typically supplied near the customer since its moisture content make it infeasible in most situations to ship by rail. Lignite coal has the lowest energy content out of the four main types of coal, but it has low sulfur, carbon, and nitrogen content. Current Mississippi Industry Presence: Mississippi Power’s Kemper County Plant is a clean coal project under construction in Kemper County that uses the integrated gasification combined cycle (IGCC) technology to reduce the air pollutants (such as carbon dioxide, sulfur dioxide and nitrogen oxide) emitted when compared a traditional coal-fired power plant. As part of the Kemper Plant design, these pollutants can be captured and stored to aid in other energy production processes such as enhanced oil recovery using carbon dioxide. Mississippi University Assets: The Department of Chemical Engineering at the University of Mississippi has previously performed some research focused on nitrogen oxide (NoX) reduction by deriving methods (such air mix or fuel mix) to change the carbon reactivity on the surface of the coal when it is burned. Some patents have been derived from this research, but this research has been deemphasized over the last five years as the focus has moved towards carbon capture.

The Institute for Clean Energy Technology in the Energy Institute at Mississippi State University has performed research on a coal to liquid effort where North America Coal Corporation has supplied the coal and a third party is helping to develop the technology.

Mississippi State University has developed computational predictive tools to predict ageing of materials and structures.

Mississippi Issues or Challenges to Address: This opportunity area is dependent upon the amount of Federal funding that will be allocated for future

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applied research and projects by industry – should the Federal funding allocation significantly decrease or in the worst case is completely halted, then all current efforts and future efforts will not go forward in the state because industry will not accept the full financial risk.


Near-Term Priority Platform Assuming legal challenges are overcome, this platform represents a job generating engine for Mississippi – a project using Mississippi fossil resources (lignite) in a value-added electricity production model that may be replicable elsewhere within the state. This also provides a pathway to build further experience and R&D capabilities in advanced gasification technologies that may not only be relevant to lignite resource development in the state, but also to biomass resource utilization and the biobased chemicals platform (and perhaps extension into coal-to-chemicals).

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Table A1.13

Opportunity Area: Geologic Storage of Energy Resources Description:

The U.S. Strategic Petroleum Reserve (SPR) was established in 1975 in response to the Arab oil embargo. It currently (as of March 31, 2012) contains 695.9 million barrels of oil (262 million bbls of sweet crude and 433.9 bbls of sour) stored at four storage sites in the Gulf of Mexico. Maximum capacity of the current system is a total of 727 million barrels.

Under a mission to expand the SPR, the DOE, In February of 2007, announced the selection of a site in the Richton Salt Dome in Perry County Mississippi as the next expansion site. The Energy Policy Act of 2005 directed the DOE to build out the SPR to a full capacity of 1 billion barrels. Development of the site would require drilling down and injecting water to dissolve the salt (solution mining) to create an encapsulated cavern within the salt dome to receive the oil (the resulting brine would be transported offshore by pipeline for disposal in the Gulf. If it moves ahead the DOE projects the Richton Mississippi project to create 100 permanent jobs (with an annual payroll of $5 million) at the storage site and an additional 10-20 jobs at two terminal facilities that would need to be developed within Mississippi. Construction of the facilities is projected to cost $4 billion, and require 4-5 years to complete with a total of 500 construction jobs at its peak ($400 million in wages). The project has not yet moved forward because of a requirement for supplemental environmental impact studies to be performed and the current administration’s review of SPR policy.




Utilization

Potential Timeframe

Moderate. The U.S. government is seeking to expand the SPR by one storage site at the present time.

Moderate. Federal jobs on a federal payroll with the oil imported from outside of Mississippi. Therefore, this is an effective export project, bringing in fresh dollars to Mississippi.

Moderate. Up to 120 permanent jobs if new MS SPR site and terminals are constructed. Peak of 500 temporary jobs during 4-5 year construction period.

Significant. Project utilizes specific characteristics of MS salt dome geology. Also requires use of water for solution mining, construction of upwards of 300 miles of pipeline for water, brine and oil transport.

Mid Term. Richton MS site has been selected but impact analysis is delaying the project in the near-term.

Mississippi Strengths: Multiple geological formations (i.e. saline formations in the Mississippi Salt Basin) have been identified in the state that can be used as primary storage option for carbon dioxide.

The Geological Engineering department at the University of Mississippi is the 2nd largest in the U.S. Current Mississippi Industry Presence: DuPont Titanium Technologies has a plant site in DeLisle, MS that purifies titanium for use in applications such as paint, plastics and vinyl with 70% of their product exported overseas. One of the primary reasons that DuPont located a plant in Mississippi is because of the geological formation in the state allows them to safely inject the underground waste stream from their purified titanium product.

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Mississippi University Assets: The University of Mississippi is conducting research at its Mississippi Minerals Resources Institute and the department of Geology and Geological Engineering utilizing geographic information systems and other decision support systems to conduct basin analysis of potential and historic hydrocarbon producing areas and to analyze and archive historic oil and gas data.

Mississippi State University hosted an international workshop with representatives from the DOE WIPP and Yucca Mountain plants, and industry and government leaders from France and Germany in May 2011.

Mississippi State University has developed computational predictive tools for aging of materials and structures. Mississippi Issues or Challenges to Address: Complete geological formation base maps for the state to facilitate geologic storage activities is proprietary and not available at the state level – this situation makes it difficult for new entrants or smaller companies to participate in this area.


Moderate Opportunity This is a near- to mid-term opportunity with significant construction jobs (500) and moderate long-term operational jobs (120) associated with it. It is not, however, an industry being built with significant expansion potential for Mississippi, and thus represents a one-time single project without cluster building potential.

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Table A1.14

Opportunity Area: Carbon Dioxide Capture, Storage and Utilization Description:

Governments across the globe are, therefore, working towards finding solutions to reduce CO2 build-up. Doing so requires the development of alternative (non fossil) fuel sources, the deployment of technologies designed to capture and sequester (store) CO2 thereby preventing its release into the atmosphere, or applications that would recycle the CO2 generated from fossil fuels for an economic purpose such as injection for enhanced oil recovery or as an input to algae bioreactors.

Before CO2 can be sequestered, it first has to be captured. Considerable technology development activity is being directed to improve capture solutions. Post combustion systems seek to remove CO2 from flue-gas streams. There is also the alternative solution of using gasification to produce Syngas from which high pressure CO2 is more readily removed. For CO2 geologic sequestration there is likewise considerable ongoing research and pilot programs are underway to investigate characteristics of the most suitable strata and tools and technologies for ongoing monitoring. Technology development opportunities exist across the areas of pre-combustion CO2 removal, post combustion removal, transportation, and sequestration.

The value of CO2 as a tool for enhanced extraction of oil is such that geologic deposits of CO2 in Mississippi are currently being accessed and the CO2 moved by pipeline to oil drilling sites in locations such as Texas. Both Denburg and Tellus have leading-edge expertise in this and see potential (long-term) in carbon sequestration.



Utilization

Potential Timeframe

Large. The carbon capture, storage and utilization market is in the formative stages because of cost and efficiency challenges. Frost & Sullivan expects CCS technologies to reach large commercial scale in North America by 2020 increasing from

3 Mt CO2 sequestered in

2009 to 55 Mt CO2 sequestered in 2020. Optimistic market forecasts predict that the North American maximum market for

Large. Technologies that provide a cost effective solution for carbon capture and sequestration would see significant global demand. Mississippi’s natural reserves of geologic

CO2 are currently being used and exported.

Moderate. Operating a sequestration or storage site for carbon dioxide would be unlikely to be a high job generator in the long-run. There could be significant employment in the construction phase.

Significant For enhanced oil recovery applications, Mississippi’s natural reserves of geologic

CO2 are currently being used (to produce 50% of the State’s oil) and exported for regional enhanced oil recovery projects.

Near- Term and Long-Term Near term for carbon dioxide use in enhanced oil recovery, but long-term for carbon dioxide sequestration.

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CCS could reach 110 Mt CO2 in 202034 and global revenue of $221.5 billion by 2030

35

Mississippi Strengths: In 2011, the state of Mississippi established the Carbon Sequestration act which established standards for the Mississippi Oil and Gas Board and the Mississippi Department of Environmental Quality to supervise and monitor the geological sequestration used in enhanced oil recovery. Current Mississippi Industry Presence: Denbury is a company with an enhanced oil recovery (EOR) process that is completed by injecting carbon dioxide obtained from a stored underground location to oil reservoirs – this process allows 17% of the original oil in place (OOIP) to be recovered. Denbury has the ability to deliver carbon dioxide for EOR from the Jackson Dome (a natural source) via their extensive CO2 pipeline infrastructure.

Tellus is a Mississippi based oil and gas exploration and production company which, like Denbury, has significant experience in enhanced oil recovery using carbon dioxide. The company even owns a compressor company. Tellus perceives there to be considerable opportunity for carbon dioxide storage in Mississippi, but the financial market and regulatory market to facilitate this has not yet developed.

Mississippi Power Company’s Kemper Plant is a $2.4-billion clean integrated gas combined cycle (IGCC) plant under construction that is planned to capture 65 percent of its carbon dioxide emissions and could be potentially sold to companies for enhanced oil recovery. Mississippi University Assets: The University of Mississippi is performing research in the following areas involving carbon dioxide, capture and utilization –

The Chemical Engineering department is performing research focused on carbon capture through a process where carbon dioxide is converted to a photovoltaic conversion.

The Geology & Geological Engineering department is performing research in the Geospatial Information Science and Technology (GIS&T) area involving the use of remote sensing techniques to monitor carbon dioxide sequestration and injection activities.

The University of Southern Mississippi’s Marine Science Department is performing research examining how mass culture of microalgae could be used to help reduce carbon dioxide emissions. Mississippi Issues or Challenges to Address: Long-term storage of geological sequestration of carbon dioxide will not grow as an industry in the state until either the Federal government or the State of Mississippi provides protection against liability should the gas leak out of the storage areas. The State of Louisiana has already provided this type of protection for storage operators in their Carbon Sequestration bill.

Carbon dioxide can be found in either a solid, liquid, or gaseous state and it has high expansion properties, which makes carbon dioxide pipelines expensive since it must have its own infrastructure

34

Frost & Sullivan, North American Carbon Capture and Storage Market, 2011 35 Pike Research, Carbon Capture and Sequestration, 4Q 2009.

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separate from natural gas pipelines.


Near-Term Priority Platform In terms of geologic carbon dioxide extraction and shipment for applications in enhanced oil recovery, this is a present economic activity within Mississippi – generating new jobs and income for the state. Carbon dioxide capture and storage/sequestration is a longer-term play – since the feasibility, economics and legal liabilities associated with sequestration have yet to be resolved and are presently being assessed in multiple national analysis projects and pilot projects.

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Group 5: Electric Power Production and Power Systems

Near-Term (Present to 3 Years): Energy Monitoring and Management Systems (Table 28); Electric

Power Generation and Transmission Equipment (Table 29).

Mid-Term (4-8 Years): None

Long-Term (8+ Years): None

Table A1.15

Opportunity Area: Energy Monitoring and Management Systems Description:

An energy monitoring and management system is a technology that is used to help monitor, control, and conserve energy in a building or an organization. Factors such as the downward economy, a desire for cost savings, and other variables have caused customers to become more sensitive to the prices charged by their energy suppliers and resulted in a growing market from businesses, public sector organizations, and homeowners to help monitor and manage their energy use. Some of the most prevalent technologies offered in this area to consumers to monitor, control and conserve energy are smart meters, smart thermostats, lighting controllers, motor controls, smart appliances, and energy information tools developed using proprietary and open source software.

With the increasing production of renewable energy along with traditional sources of power generation offered by energy suppliers, new technologies are being formed to handle this change in the power mix and help provide a quality, stable and efficient power supply that can be transmitted and distributed to their customers. These methods and technologies that are being developed are called smart grid technologies (such as advanced controls, smart communication networks, sensors and measurement devices, decision support systems) to better monitor and manage the transmission and distribution of energy production to customers.


Export Potential

Job Generation Potential


Utilization

Potential Timeframe

Large. The U.S. market for smart grid integration and related technologies is anticipated to increase from $5.6 billion in 2010 to $9.6 billion in 2015.

36

Large. Mississippi already is an exporter of manufactured products in this sector.

Moderate to Large. Job generation could be very large as Mississippi becomes one of the major regional offices for Itron after the SmartSync acquisition and the regional office for the Entergy Transmission Group Spinout to ITC Holdings. The gap in skilled software developers would also need to be filled to help facilitate growth


Near Term. Energy monitoring and management systems are already being deployed by energy producers and by energy consumers.

36 GTM Research, US Smart Grid Market Forecast: 2010-2015, September 2010.

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Mississippi Strengths: The state regulatory environment is not too burdensome, which it makes it easier for full deployment of energy monitoring and management systems by energy suppliers and consumers. Current Mississippi Industry Presence: Entergy is in the process of spinning out their transmission assets to ITC Holdings, a Michigan based company formerly part of Detroit Edison. This will create a new company with regional offices located in Jackson, MS that will primarily consist of the former 750 Entergy employees that worked in transmission. Entergy will become an open access customer to ITC when this spinout of their transmission area is completed in 2013.

Smartsync is a Mississippi based company with 85 employees that has developed a smart grid technology using cellular networks to enable utilities to communicate and interact with any device on the transmission grid. Smartsync was recently acquired by Itron, but will continue to maintain operations in Mississippi.

Electric Power Associations of Mississippi consists of 25 rural electric cooperatives that distribute electric service and one generation and transmission cooperative that deliver electricity to greater than 751,000 meters (most are smart meters) in their service territory. Mississippi University Assets: Mississippi State University is developing more efficient and effective power management systems using the university’s high performance computing and simulation infrastructure. Its Critical Infrastructure Protection Center has developed tools and techniques needed to secure power grid applications and operations from cyber attack.

The University of Mississippi Geology and Geological Engineering department has leveraged its geospatial information science and technology research (GIS&T) to perform projects involving the monitoring of the energy infrastructure using remote sensing and mapping and assessment of the energy transmission infrastructure.

The Southeastern Center for Industrial Energy Intensity Reduction at Mississippi State University is developing waste-heat reduction systems and energy saving assessment systems.

Jackson State University has leveraged its research focus in computer engineering to collaborate with Entergy on a number of efforts in the power systems area – 1) Jackson State has 3 faculty and 5 students working with the Entergy transmission group to develop a database to automatically determine transmission relays settings; 2) Jackson State has also received funding support from Entergy to establish a state of the art power system laboratory where they can model electric power systems to help educate their electrical engineering students in this area.

Energy forecasting and modeling capability in the Department of Atmospheric Science at Jackson State University.

The Mississippi State University High Voltage Lab is the largest lab of its type at a university in the United States and only one of three in the nation. This university research center performs high voltage engineering and dielectric research, evaluation/testing, and educational activities to support the transmission system.

As part of a smart grid workforce development project funded by the Department of Energy, Mississippi State is installing a wind turbine and 2 solar panels on their engineering building to train people from industry on smartgrid technology.

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In the area of energy monitoring and management systems, Mississippi State has research strengths with faculty focused in power analysis, cybersecurity for the smartgrid, and wide area monitoring to evaluate the power system stability.

Mississippi Issues or Challenges to Address: Companies focusing in this area are reporting that they have found it challenging to find the software development talent in the state to help them develop and maintain their products and many are looking outside the state and overseas to resolve this issue. This situation could have a major impact on the number of companies that form, remain, or relocate to the state with a focus on the energy monitoring and management system area in the future.


Near Term Opportunity SmartSync has already created a presence for Mississippi and its acquisition by Itron should continue to create opportunities for the state in this area as well as the spinout of the Entergy Transmission group to ITC Holdings. The amount of growth will be dependent upon the ability to bring in the skilled technical and professional talent to the state such as skilled software developers and engineers to help facilitate growth in these organizations.

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Table A1.16

Opportunity Area: Electric Power Generation and Transmission Equipment Description:

The electric power generation equipment industry is growing, led particularly by growth in the demand from smaller-scale, industrial and non-utility generators, in addition to the traditional utility generators. The growth of wind turbines and other generating assets is driving demand for the generators, gearing, power transformers, distribution and specialty transformers, switch-gear relays, fuses, etc. required for power generation and connectivity to the grid. Trends in systems automation, power trading, voltage conversions and equipment upgrades each favor the electric power generation equipment and associated technologies industries. Global population and wealth increase trends will also increase the demand for additional electricity generating capacity and associated equipment.

Mississippi exhibits a distinct cluster in NAICS 335311 for “Power, Distribution, and Specialty Transformers Manufacturing” with 3,034 employees in 2010 and a location quotient of 16.1 (15X more employment in the sector in MS than expected given national averages). Companies including Howard Transformer, ABB and Siemens are active Mississippi manufacturers in this sector.




Utilization

Potential Timeframe

Large. The North American market for electrical equipment for power generation is poised for rapid growth, increasing from $1.16B in 2010 to $2.16B in 2015 – a CAGR of over 13%37.

Moderate-to-Large. Mississippi already is an exporter of manufactured products in this sector.

Moderate-to-Large. Manufacturers in this sector tend to have fairly large facilities. A single project in this space could generate upwards of 500 jobs.


Mid- to Long Term. Discussions should be held with existing sector manufacturers in Mississippi to discuss expansion potential. Also, may represent a near-term recruitment potential similar to the PV experience for Mississippi.

Mississippi Strengths: Close proximity of the state to an international port (i.e. the port of New Orleans), makes it easy to import/export products from manufacturing facilities internationally.

A wide variety of electric power companies, including integrated electric power companies (TVA, Mississippi Power, and Entergy), rural electric co-op companies (Electric Power Associations of Mississippi) and independent power producers, operate in various regions of the State of Mississippi to provide a broad customer base for manufacturers of electric power generation and transmission equipment. Current Mississippi Industry Presence: Siemens Energy Inc. is a manufacturer of power circuit breakers for high voltage transmission at their

37

Frost & Sullivan, North American Electrical Equipment Market for Power Generation, January 2011.

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Transmission Products Division in Mississippi. This is a standalone business in Mississippi where some of the functions that are undertaken at this location is performance engineering, manufacturing, marketing, etc.

A number of equipment manufacturers for electric power generation are located in Mississippi:

ABB Kuhlman was formerly Kuhlman Electric Corporation. This organization is part of the North American Power Products business division for ABB, the global power and automation technology group. Their facility in Crystal City, Mississippi produces and markets small power transformers for substation distribution and oil-filled instrument transformers products that are in the 600 V to 500 kV range for generator protection to metering power flow.

Howard Power Solutions is a leading manufacturer of electrical distribution transformer equipment for electric utility companies and commercial and industrial companies throughout the world with over 7 million transformers in service. This organization is one of the four separate divisions for Howard Industries, a billion dollar company that manufactures high technology equipment for a variety of markets, and is headquartered in Laurel, Mississippi at the 504 acre Howard Technology Park. Howard Power Solutions has a two million square foot manufacturing facility that is also located in Laurel, Mississippi making it the largest transformer plant in the world.

Mississippi University Assets: Mississippi State University has extensive capacity in cyber-security of the electric power transmission national grid. These include improvements in efficiency, stability, reliability, distribution, and automation of distribution systems, substation automation, and micro-grid applications.

In the aero acoustics area at the University of Mississippi’s National Center for Physical Acoustics, this group has the capability to apply acoustics sound generation from moving fluid to be utilized in determining condition of electric power generation equipment such as turbine-generators and oil pumps, or in applications to optimize the blade design for wind turbines.

Mississippi State University is researching micro Combined Heat and Power systems to generate electricity from biomass fuels.

The Department of Civil and Environmental Engineering at Mississippi State University is performing research in collaboration with the U.S. Army Corps of Engineers, Engineer Research and Development Center (located in Vicksburg, Mississippi) on alternative turbine technology with a low head, low flow system that uses water flow from the Mississippi River to produce electricity Mississippi Issues or Challenges to Address: Companies that are focused on this opportunity area in the state are reporting that they are finding it challenging to fill mid-level and high-level positions with candidates from Mississippi because of the lack of qualified candidates and the negative perception that outside candidates who are being recruited have of the area.


Moderate Opportunity

This platform primarily is a traditional economic development opportunity space, built around existing business expansion in Mississippi and/or recruitment of additional manufacturers into Mississippi (similar to the attraction of industry in the PV space). The industry has growth potential because of

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expanding international markets, domestic alternative power systems coming online, and the need to upgrade aging infrastructure in the U.S.

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Appendix B: Examples of Energy Areas Not Selected as Core

Opportunities for Mississippi

Mississippi has many natural resources and infrastructural assets that lend themselves to energy-based economic development. Indeed, Battelle identified 16 key areas of opportunity that are detailed within the report. These 16 opportunity areas, however, far from encompass all areas of such a diverse economic sector as energy—and the research team was selective in putting forward only those areas as opportunities in which Mississippi has present assets to build from (either energy resource assets, key infrastructural assets, a base of current industry in the field, or identified R&D competencies). Some key areas that did not “make the grade” for Mississippi based on the above criteria: Table B1

Energy Field or Technology Reason for Non-Selection

Wind Power

Limited opportunities based on National Renewable Energy Laboratory projections for Mississippi, plus in wind systems fabrication many states have a significant lead on Mississippi.

Geothermal Power

Limited opportunities based on National Renewable Energy Laboratory projections for Mississippi

Energy Efficiency

Mississippi can integrate existing energy efficiency technologies.

Tidal/Wave/Ocean Power

Major technology development still required to determine economic feasibility. Potentially disruptive to critical port operations.

Algae

Major technology development still required to determine economic feasibility of algae as an energy resource.

Hydroelectric Power

Limited opportunity based on Mississippi topography.

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Appendix C: Draft Strategies and Actions Presented to Focus Group

Participants

Summary of Draft Strategies and Actions Presented to Focus Groups



Draft Strategy Draft Actions Timing


1.1 – Develop a multi-university collaborative energy research institute, comprising key faculty from across MS research universities with energy interests and expertise.


1.3 – Develop an energy technology network/scientific interest group comprising industry and academic representatives to generate and sustain collaborative dialog.

1.4 – Develop an energy-technology seed capital initiative for Mississippi, bringing high net-worth individuals, venture capitalists and energy corporations together for syndicated investments.

Medium-term

Medium-term

Short-term

Long-term

STRATEGY TWO: Grow the state energy industry base through targeted marketing and business recruitment

2.1 – Form a collaboration between MDA, MTA and MEI for energy-based economic development marketing.

2.2 – Form an energy business leader’s advisory cabinet to provide contacts, advice on messaging, and to participate in key business meetings with prospects.


2.4 – Support State of Mississippi government business location incentives packages and engage advisory cabinet in providing advice to State on energy-specific incentives.

Immediately

Short-term

Medium-term

Immediately




3.3 – Indentify opportunities for strategic partnering

Medium-term

Medium-term

Medium-

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based on inventory of capabilities. term STRATEGY FOUR: Promote Mississippi and the advantages of Mississippi as a location for energy projects to key government entities (Federal and State)



Immediately

Immediately





Medium-term

Medium-term

Medium-term

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State of Mississippi: Strategy for Energy-Based Economic Development

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