Texas loses “food vs. fuel” biofuel feud

How often do you get a clash between two great Lone Star icons? Recently, Willie Nelson, the patron saint of Texas country music, and the Texas & Southwestern Cattle Raisers Association (TSCRA), the voice of Texas ranchers, have been wrangling over the future of biofuels in Texas.

Willie backs the use of biofuels and helped to start the company that produces the alternative fuel named “BioWillie,” which is sold mainly in Texas. According to the company’s web site, this is a blended fuel comprising petroleum diesel and biodiesel, which is an “organic fuel made from domestic feedstock including soybeans grown by U.S. family farmers.”

In contrast, TSCRA is on the record as being against the federal Renewable Fuel Standards (RFS) that mandate the use of biofuels in gasoline throughout the U.S. The current standards require that 9 billion gallons of biofuels, such as ethanol made from corn, be introduced into the U.S. fuel supply this year, and 11.1 billion gallons in 2009.

According to TSCRA President Jon Means, “The RFS contribute to high grain costs, which are severely impacting our industry in a negative way.” Means further emphasizes that the federal government is “putting food and fuel in competition with one another, which is a dangerous gamble.” (In the interest of full disclosure, my family’s cattle business in Henrietta, Texas, has been a TSCRA member for decades. However, we’ve also been long-time fans of Willie’s music.)

Texas tries to corral the feds

In April, the Texas governor jumped into the middle of this debate. Responding to what some observers thought was strong pressure from TSCRA, Texas Governor Rick Perry (R) submitted a formal request to the Environmental Protection Agency (EPA) that Texas be allowed to cut by 50% the amount of ethanol that must be used in gasoline under the RFS mandate. Specifically, he asked the EPA for a waiver of RFS requirement because he thinks the mandate, which is intended to ease the nation’s reliance on fossil fuels, is driving up food prices by cutting too far into supplies of corn.

Ironically, President George Bush, a Texas former governor, was the primary backer of establishing the RFS program in the first place.

In August, the EPA announced that it found no compelling evidence that the RFS mandate was causing severe economic harm in Texas and denied Perry’s request for a waiver. “The RFS is strengthening our nation’s security interest and supporting the American farming community,” said EPA Administrator Stephen Johnson.

Department of Energy Secretary Samuel Bodman backed the EPA’s decision and stated that the RFS program is a crucial tool for cutting U.S. dependence on foreign oil. In June, the DOE estimated that gasoline prices would be 20 cents to 35 cents higher per gallon without ethanol.

Putting biofuels on a diet

Despite Texas’ recent setback, the debate over biofuels isn’t over. In early September, the Republican National Committee made the surprising move of calling to have the RFS requirement thrown out. In blunt language, the GOP platform states: “The U.S. government should end mandates for ethanol and let the free market work.”

Despite its rejection of the RFS mandate, the GOP platform did show support for a new type of biofuel. It urged the more rapid development of cellulosic ethanol, a next-generation fuel that can be made from a variety of nonfood plant materials such as wood waste and wheat straw.

Along the same lines, the Democratic Party’s 2008 platform, which was published in August, proclaimed: “We will invest in advanced biofuels like cellulosic ethanol, which will provide American-grown fuel and help free us from the tyranny of oil.”

After overriding a presidential veto in May, Congress passed a new farm bill that will speed up the commercialization of advanced biofuels, including cellulosic ethanol. The Food, Conservation, and Energy Act of 2008 (Public Law No. 110-234) provides for federal grants up to 30% of the cost of planning and constructing demonstration biorefineries for producing advanced biofuels that are not produced from corn kernel starch.

Moving ahead

Given the destructive gridlock that so often plagues Washington, it is encouraging that there is growing bipartisan support for the development of cellulosic ethanol.

To quote Willie, biofuels appear to be “on the road again,” despite their recent bumpy ride caused by sharp criticism about their negative impact on food prices. Cellulosic ethanol seems to offer a solution that both Texas ranchers and alternative fuel advocates can embrace. We need to move away from ethanol based on food crops such as corn and develop this new generation of biofuels as soon as possible.