Renewables' Future a Ways Off

May 21, 2001

Much of the future for renewable fuels depends on oil prices. USDA chief economist Keith Collins says biomass fuels used to produce electricity now total only 1.5%, but an increase is "possible" over time depending on oil prices. Renewable fuels, he notes, cost more to produce than fossil fuels.

The comments came Friday at a news conference Agriculture Secretary Ann Veneman held with agricultural reporters at USDA headquarters in Washington. Veneman said that renewable fuels employ new technologies that promise opportunities for conservation, development and incentives for innovation. She also said the new farm bill should address energy resources and new uses for renewable fuels.

Veneman said a decision on whether the Bush administration would grant California a waiver from the renewable fuels requirements of the Clean Air Act will be made "soon," but there was no "date certain." A REUTERS report from Des Moines, IA, quoted Iowa Gov. Tom Vilsack saying President Bush had signaled that his administration may turn down a request from state of California for an exemption.

Vilsack, a Democrat and a strong supporter of using ethanol made from Iowa corn as a fuel additive, met privately with Republican Bush and his Environmental Protection Agency Administrator Christie Todd Whitman during a presidential visit to Nevada, IA, to promote his energy plan, the news agency reported.

California has requested a waiver after MTBE (methyl tertiary butyl ether), an oxygenate additive for gasoline, contaminated groundwater in the state. Veneman said the administration had no positive on yet on phasing out the use of MTBE.

The REUTERS report said Vilsack, speaking to reporters late Thursday, said he raised the issue of California's request in his meeting with Bush and Whitman. He quoted Whitman as responding: "You will not be disappointed and upset with us once this all works out."

Speaking to reporters, Veneman said USDA had no intention to let down its guard on a possible outbreak of foot and mouth disease from imported products or from people coming to the United States from Europe where the disease reached epidemic proportions in some countries.

She indicated there would be "some regional" lifting of the department's current ban on imports. She noted FMD cases in the United Kingdom appeared to "be leveling off" and that no new cases were being reported in other countries.