Obama announces federal biofuels initiative

PEOSTA -- President Obama's announcement today of a $510 million investment by three federal agencies to produce advanced drop-in aviation and marine biofuels to power military and commercial transportation is a great opportunity for rural America, Secretary of Agriculture Tom Vilsack said this morning.

Obama announced that the U.S. Departments of Agriculture, Energy and Navy will invest the funds over the next three years in partnership with the private sector to produce new fuels from a variety of sources.

Obama, Vilsack explained, is embracing a “simple formula that the president knows and rural American has actually has proven.”

“Here's the plan," the former Iowa governor told reporters before Obama spoke at a White House Rural Economic Forum at Northeast Iowa Community College in Peosta. “You got a government that spends less, but invests wisely. You've got an economy that again gets into the business of making, creating and innovating, which is precisely what agriculture has done.

Then, because American agriculture is so productive, it can export its goods.

“You export it and you bring the wealth of another nation into your nation and create jobs,” he said.

The announcement is a direct response to an Obama directive that was part of his Blueprint for A Secure Energy Future, the administration's framework for reducing dependence on foreign oil. The biofuels initiative is being steered by the White House Biofuels Interagency Work Group and Rural Council, both of which are enabling greater cross-agency collaboration to strengthen rural America.

“Biofuels are an important part of reducing America's dependence on foreign oil and creating jobs here at home,” Obama said in the announcement. “But supporting biofuels cannot be the role of government alone. That's why we're partnering with the private sector to speed development of next-generation biofuels that will help us continue to take steps towards energy independence and strengthen communities across our country.”

The joint plan calls for the three departments to invest up to $510 million, which will require substantial cost share from private industry – of at least a one to one match. The partnership aims to reduce U.S. reliance on foreign oil and create jobs while positioning American companies and farmers to be global leaders in advanced biofuels production.

The United States spends more than $300 billion on imported crude oil per year.

The federal agencies are “challenging the private sector to step up and tell us what they are willing to do in a competitive process and then let's partner and get it done,” he said.

Vilsack has been in discussion with the Council on Foundation, an association of non-profit foundations, about using their combined portfolio approaching $1 trillion to leverage the federal effort by investing in rural America.

Vilsack explained the Department of Energy will help develop pilot projects with research to make sure the feedstock will work. Feedstocks could include woody biomass, landfill waste, municipal waste or algae. The USDA will help reduce the cost of the feedstock to the point it is competitive with petroleum, “which creates a whole new market opportunities,” he said, and the Department of Navy will purchase will the end product.

“It's a great opportunity. It's exciting,” Vilsack said. “I hope people understand this is unique.”

The goal is to show that the biofuels work and “show that it's made in America that we don't have to import oil from foreign countries that don't like us and the great job opportunities here,” Vilsack said.