Biofuels industry should heed advice to diversify

Agriculture Secretary Tom Vilsack has some smart advice for biofuel producers in the United States, evolve or risk obsolescence.

Of course, he didn't say that quite so bluntly in an interview with the Houston Chronicle's Jennifer Dlouhy. He provided plenty of happy talk and platitudes in the interview post this morning. And we've also provided a question and answer post here.

In my experience, though, folks with a dog in the hunt focus with laser-like precision on the parts of an interview that either supports or challenges their point of view. And there is plenty here for all sides of the debate on biofuels.

A few weeks ago I made clear that I think lawmakers need to overhaul the federal ethanol requirement. Ethanol production is bad for the environment, may potentially damage motor vehicle engines and creates perverse economic incentives.

Notice, though, that I did not say that ethanol does not have a role in the mythical "all-of-the-above" energy mix of the future. I simply argued that the current policy is flawed, and ethanol use is not helping the nation the way we thought it would.

Vilsack also recognizes that things need to change.

"I think the industry has to evolve. And I think it is evolving," Vilsack said. "At least internally in the D.C. area, the focus has been on numbers and equations and calculations and (we) need to understand that there's a broader marketing opportunity here."

Vilsack makes a good argument that the biofuels industry is not yet mature, even after 30 years. I hope that's true. We are just beginning to move from ethanol based on corn, which is an important food product, to rape seed and switch grass. Either of those alternatives requires less fertilizer, which has been creating havoc in U.S. rivers and the Gulf of Mexico.

Distilleries are finding ways to use less water and energy to make ethanol, and higher quality biofuels can replace jet fuel and diesel in more applications. And greater efficiencies should mean less reliance on federal subsidies and mandates to compete with petroleum products.

Biofuels are at an interesting inflection point in their development. The government did the right thing to spur their development and to create a market, but the renewable fuel standard for gasoline has reached its logical maximum.

Vilsack disagrees, but that's because he does his job is to make sure American farmers have a place to sell their products.

Perhaps a better way to serve those farmers would be to stop subsidizing a market that is unsustainable. When Vilsack talks about new technologies and new markets, I hope he means to steer biofuels toward places where they can help the environment, give consumers better fuels and lower government subsidies.

Any other direction is a disservice to everyone.