maynard's Journal: Governor Vilsack (D-IA) discusses energy security at CFR sym

Democratic Governor Tom Vilsack was invited to speak at a Council on Foreign Relations symposium on energy security. Vijay Vaitheeswaran, of The Economist, presided over the speech and question and answer session. An audio podcast of the event is available, as well as a rush transcript.

Governor Vilsack has a history of supporting alternative energy proposals, particularly those that benefit his home state of Iowa. In his official bio, published at the state sponsored Iowa governor's website, it says:

Governor Vilsack has worked to build a sustainable energy infrastructure within the state. During his two terms, energy generation capacity has increased 20% including the development of the country's largest wind farm. Iowa now leads the nation in producing ethanol, with total production increasing by almost 300% in the past five years. Due to the governor's initiatives, Iowa not only feeds, it also fuels the nation.

But such a statement doesn't offer the nitty gritty details. At the CFR event, however, he does make several specific proposals worth considering.

Given recent high gas prices, interest in alternatives is at an all time high. Thus, it should be no surprise given that "... agriculture accounts for 10 percent of all Iowa jobs and 10.2 percent of the state's gross product ..." (Iowa State University, College of Agriculture), that Governor Vilsack would propose a drastic increase in ethanol production. It benefits a large and important constituency in his home state. Yet beyond the self-serving nature of his proposals, are some fascinating claims and proposals to bolster his argument. In detail, he argues for a multipoint program of scientific R&D, rethinking tariffs and subsidies, increased alternative energy production, and renewed conservation - all toward the goal of energy independence.

Production:

• Transition to switchgrass and waste cellulose from corn, with a more than six-fold increase in per-acre productivity:
   

  "Today, an acre of corn produces roughly 400 gallons of ethanol. Tomorrow, an acre of switch grass can produce 2,700 gallons of ethanol."

Conservation:

• Increase CAFE standards (Corporate Average Fuel Economy):
   

  "The reality is that the national government needs to sit down with the auto industry, and the unions need to sit in a room and suggest and indicate that the CAFE standards of today are not adequate for the challenges of tomorrow."

• A carbon emissions trading policy, as well as carbon sequestration, to promote coal use while meeting the needs to thwart the threat of global climate change:
   

  "... we should embrace what California's doing and what Colorado is considering--establishing a national carbon-trading system and sequestration program--so that we can embrace and utilize coal in a more reasonable fashion ..."

• Governor Vilsack argues that by promoting a wide-ranging set of energy generation and conservation alternatives we could generate a unity of purpose among the American people that does not exist today by:
   

  "... ask[ing] every single American to participate in this--everyone can have a role, everyone can play a significant part. We can establish a sense of community and unity in this country that does not exist today. We can provide common purpose."

E85 Transition Investment:

• Encourage fast transition to E85 (85% ethanol fuel mix) through the use of car conversion kits, rather than waiting out the 14 year life-cycle of most cars:
   

  "We also have to recognize that our fleet is roughly 14 years old. In other words, cars basically cycle through the process about every 14 years. And so that's going to be important for us if we're going to embrace renewables and if we're going to embrace conservation, to encourage folks to convert their engines to engines that can use E85. A small kit, a small amount of labor, could really accelerate our embracing of this opportunity."

Tariffs and Subsidies:

• Rethinking our sugar tariffs with Brazil in order to import ethanol:
   

  "...we should rethink our tariffs in connection with Brazilian ethanol."

• And that, along with that rethinking our agriculture and gasoline subsidies. First, he argues that gasoline is already heavily subsidized, thus to claim excess agriculture subsidies for ethanol production ignores gasoline subsidies already in place. He argues that to solve this the subsidy for both ethanol and gasoline should be given to retailers and not producers:
   

  "I would suggest that we take a look at changing the subsidy on ethanol and renewable fuel production to a subsidy that goes to the retailers."

• Further, to solve the agriculture subsidy problem, he argues for an inverse ethanol subsidy pegged to the price of gasoline - the higher the price of gas the less the subsidy:
   

  "I would suggest that this subsidy be a floating subsidy that would be tied to the value of the price of oil. As the price of oil goes up, there is really no need to subsidize ethanol production. As the price of oil goes down, there may very well be a need in order to maintain and retain this industry as a viable option for energy security."

Research and Development of new technologies:

• Research and development of new super-light and superstrong building materials (for example, new materials based on Metallic Glass or Carbon Nanotubes - though he did not cite these as specific examples):
   

  "We also need to challenge our universities and our companies to embrace and renew and extend research and development on new materials. The fact is that we ought to be doing more in trying to figure out precisely what kind of materials can be created that are lighter, stronger, better, using less energy to transport and propel people. Sixty-eight percent of our energy costs are about transportation. If we can figure out more efficient, better materials for transportation, we can obviously become more energy secure."

• Researching new, safer, nuclear technologies that could be used both here and abroad:
   

  "We should also challenge this country to come up with strategies and technologies that allow us to produce nuclear energy without necessarily producing a byproduct that can be converted to something far more dangerous. I believe that can be done. It may not be done tomorrow, but it clearly needs to be worked on."

A few points to consider:

• Governor Vilsack did not mention several other promising alternative energy technologies such as geothermal; solar tower; ocean wave power; etc. I'm sure these omissions were unintended.
• The claim of a more than sixfold per-acre ethanol productivity increase from corn to switchgrass is unreferenced. It may be true, but I have been unable to verify it.
• Governor Vilsack has an obvious self-interest in promoting ethanol consumption, since his state benefits as an ethanol producer. However, his inverse subsidy proposal would act to reduce overall agricultural subsidies in the long term.

The podcast is well worth a listen, both for the speech and the question and answer session afterward. Give it a whirl!