Rendell, ex-CIA chief Woolsey stress necessity of biofuels

As oil prices hit record highs near $80 a barrel, former CIA Director R. James Woolsey was in Philadelphia yesterday to lend support to Gov. Rendell's goal of producing a billion gallons a year of ethanol and other biofuels in Pennsylvania within the next decade.

Woolsey, a longtime advocate of alternative fuels who now is a consultant in the field, said developing competition for petroleum-based transportation fuels would be crucial if the United States wanted to maintain its strategic independence.

"Ninety-six to 97 percent of the world's transportation runs on petroleum. And that means those who produce it have a major hand in our affairs," said Woolsey, who served as CIA director during the Clinton administration, from 1993 to 1995.

Woolsey spoke during a news conference at the Visitor Center at Independence National Historical Park. He was there at the invitation of Rendell just days before a special session of the Pennsylvania legislature. The gathering, scheduled to begin next week, will consider the governor's biofuels proposal as part of a package of bills Rendell calls his "Energy Independence Strategy."

Rendell's plan eventually would require that gasoline sold throughout the state include 10 percent ethanol - the same proportion federal officials already require, for environmental reasons, in Philadelphia and its suburbs.

Diesel fuel sold in Pennsylvania eventually would have to include 20 percent biodiesel, a fuel made from plant materials such as soybeans.

In each case, the requirement would be triggered by increased in-state production and distribution capacity for biofuels - capacity that Rendell hopes to jump-start through a package of $500 million in "clean-energy" grants and loans to promote alternative-energy industries.

Though Pennsylvania currently produces no ethanol, Rendell said it was well-suited to become a leader in biofuel production. The fuel-content requirements would fully take effect when Pennsylvania production hit 500 million gallons a year; state officials say a billion gallons a year is a reasonable target.

Rendell said at least five ethanol projects were in the works. Developers already are seeking permits for two plants that would produce a total of 180 million gallons a year of corn-based ethanol in Clearfield and Schuylkill Counties, said Charles Young, a spokesman for the Department of Environmental Protection.

Rendell said Pennsylvania, a net importer of corn, hoped to become a leader in producing "cellulosic ethanol," a widely touted alternative to corn ethanol.

Made from such sources of cellulose as wood chips, switchgrass and agricultural waste, cellulosic ethanol is valued because it has a higher energy content than corn ethanol and is less likely to have ill effects on food supplies or prices - two often-cited drawbacks to biofuels.

Rendell said that one producer planned a $70 million pilot project in Clearfield County that would produce cellulosic ethanol, and that Lukoil had agreed to purchase its entire output.

Woolsey often has touted the strategic and environmental benefits of plug-in electric vehicles, which would not rely at all on portable fuels. But he said biofuels were crucial to reducing dependence on fossil fuels while such technology was developed, because they could be used in intermediate technologies such as gas-electric hybrids and so-called "flex-fuel" vehicles that can run on either gasoline or ethanol.

"We're going to need alternative liquid fuels for a long time," Woolsey said. "There's no reason a car can't both be a plug-in hybrid and a flexible-fuel vehicle."

Woolsey and Rendell said the United States faced a growing strategic risk because of dependence on foreign oil - a dependence that has increased since the 1970s, when the economy was buffeted by the 1973 Arab oil embargo and by dramatic price increases imposed by the Organization of Petroleum Exporting Countries (OPEC).

Rendell said that in 1974, the United States imported about one million barrels of oil a day from Middle Eastern producers, and that such imports now totaled about 2.5 million barrels a day - about a quarter of U.S. imports.

He said the United States consumed about 25 percent of worldwide oil production yet controlled just 3 percent of the world's oil reserves. "That is, and has been, and will continue to be a prescription for disaster," Rendell said.

Rendell has put energy at the top of his second-term agenda - even to the point of holding up a budget deal in July until Senate leaders agreed to consider the legislation this fall. That focus has helped fuel speculation that he might be interested in serving as energy secretary if a Democrat wins the White House next year.

At least one of the governor's political allies has been quoted as saying he really wants the post.

Asked yesterday about the speculation, Rendell promised to finish out his term. "When I leave office in January 2011, if somebody wants me in their cabinet, I'd have to consider an offer," he said.