Reader talkback: "Why is the USDA the lead agency on biomass?"

By Walt Palmer

Recently, President Obama announced over $US500M in spending to finance up to 50/50 financing for privately developed initiatives leading to ‘drop-in’ diesel and aviation jet fuel. This inter-agency project sees three departments coming together to make it happen: Energy for technology; Agriculture for biomass and the Navy buys the stuff.

Cool!

There are lots of things in our economies that rely wholly on portable liquid fuels. It will be decades before most large commercial aircraft can run on anything else. The US military is the largest single user of such fuels anywhere in the world. If they provide a market, it could work wonders in making sustainable (important qualification) alternatives to petroleum-based liquid fuels a commercially viable proposition.

But here’s what I’m wondering: Why is the USDA the lead agency on biomass? Far be it from me to question why the US government does things the way that they do but it does seem odd. The announcement makes it clear that the new program will pour funds into the rural US. But doesn’t that imply foreclosure on alternative fuel options that don’t exploit agricultural resources like land and water? Why is an agricultural bias driving the Navy’s boat?

When we make decisions like this, it creates a political constituency. The investments in the particular infrastructure, farm equipment, and technologies create segments of the population that depend on that particular economic set-up and then immediately start lobbying against anything that replaces it – including anything better!

I think that the state has an important role to play in managing our affairs. I think that there is a place for public incentives and regulation in virtually everything. But I think that crafting such things properly is devilishly complex. I also think that the whole ‘mandates’ and ‘quotas’ game is badly flawed.

Incentives should be about ultimate goals not specific pathways, specific constituencies, qualified successes and limited failures. Incentives should be about identifying and supporting the direction in which we want to move. They should not be about getting to a place but about getting better … constantly.

The market cannot perceive, and therefore it cannot clear, all of the value in changing our liquid fuels regime; incentives are required. But they shouldn’t be farm-oriented or ‘Big Ag’-oriented or rural-oriented or anything-else-oriented. They should be best-of-all-possible-liquid-fuel incentives. This is the only way to provide some hope that a new, vibrant, creative fuel industry(s) will develop as a result rather than some bureaucratically hidebound, vote-harvesting machine (ultimately rusty). Could some solutions come from rural regions in the US? Sure, maybe. But that shouldn’t be the goal.

Farming needs an overhaul. Farmers are not valued. Rural communities are disintegrating. Food security is as important as energy security. All of these things are true. Take those issues on in their own right.

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