COMMENTARY

New Energy Sources:
Big Deal for Rural America

Renewable energy is the oldest new idea to come along in a long, long time. The dream of harnessing the power of the wind and the energy of the sun is as old as mankind. A hundred years ago, Rudolf Diesel was running engines on peanut oil. About 80 years ago, Henry Ford predicted that ethanol was the fuel of the future.

For many years, cheap and abundant fossil fuels priced these and most other alternatives off the market. Today, however, the potential of renewable energy is finally ready to be harvested.

On Oct. 12 in St. Louis, Mo., I had the privilege of listening as President Bush addressed 1,500 leaders from agriculture, the renewable energy, automobile and oil industries, the railroads, state and local governments and investment bankers on the urgency of diversifying America’s energy supply (see page 8).

The occasion was the “Advancing Renewable Energy: An American Rural Renaissance” conference. Sponsored jointly by USDA and the Department of Energy, the conference marked a new era. The old phrase “alternative energy” needs to be retired. Why? Consider this: Yesterday’s niche “alternatives” are going mainstream. Across the spectrum — ethanol, biodiesel, wind, solar and cellulosic ethanol — technological advances are reducing costs and improving production efficiencies. While fossil fuels will continue to provide the bulk of the nation’s fuel supply for decades to come, the outlines of a new energy economy are taking shape. For rural America, this is a historic opportunity.

It’s not always possible to put a price tag on opportunity, but this time we can. Americans this year will spend more on imported oil than on every ear of corn, bushel of wheat, bale of hay, cow, hog, tomato, apple and orange combined. USDA currently projects the total value of U.S. agricultural production in 2006 at $273 billion, while U.S. oil imports for the year will exceed $300 billion.

If we can replace 1 billion barrels — about 20 percent of total oil imports — with biofuels, that is a new market for America’s farmers greater than this year’s projected net farm income of $54 billion. Wind and solar power add even more potential.

USDA is committed to helping rural America realize this potential. Since 2001, USDA Rural Development has invested in excess of $482 million in more than 1,000 ethanol, biodiesel, wind, solar, geothermal and other energy and energy- efficiency projects. USDA as a whole has committed more than $1.7 billion to renewable energy, bio-based products and energy-efficiency investments.

The best news is that private investment is soaring, markets are taking over and the renewable fuels industry is beginning to move under its own power. America is blessed with abundant energy resources. Once the price is right, these will find their way to the market. That is beginning to happen now.

The transition to a new energy economy will take decades. But as President Bush has said on many occasions, America can beat its addiction to imported oil. We have, in fact, made more progress on renewable energy in the last six years than in the previous 30.

That’s no accident. It directly reflects the incentives provided in the 2002 Farm Bill and the Energy Policy Act of 2005, as well as the continuing commitment outlined in the President’s Advanced Energy Initiative announced early this year.

This is important for our national security. It’s good for the economy and the environment. For rural America, it is the greatest opportunity for new markets, new investment, new jobs and wealth creation in our lifetimes.

It is exciting to be a part of it, and at USDA Rural Development we look forward to working with you to turn renewable energy into economic opportunity and an improved quality of life in rural communities across America.

Thomas Dorr,
USDA Under Secretary for Rural Development




November/December Table of Contents