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Ethanol 'all about national security'

DANIEL LOOKER 01/08/2011 @ 3:04pm Business Editor

To farmers who pioneered the ethanol industry, the goal was creating another market for corn. To retired General Wesley Clark, it’s about patriotism and national security.

Clark, who is co-chairman of the ethanol lobbying group, Growth Energy, told farmers why he supports the industry at a “Be Ready” session sponsored by Case IH during the Ag Connect Expo in Atlanta, Georgia Saturday.

In 1973, Clark submitted a study to the Pentagon that predicted that the U.S. would one day go to war to protect its oil imports.

“Look at it now. Everything bad we thought might happen has happened,” Clark said Saturday.

The Gulf War in 1991 was about protecting oil supplies and, even though the Bush Administration didn’t want to talk about it publicly, so was the invasion of Iraq in 2003, said Clark, who ran for president as a Democrat in 2004.

Clark sees ethanol as a way to increase America’s energy security and to reduce its trade deficit.

In 2009, when oil prices were depressed by global recession, the U.S. still spent $290 billion to import petroleum, said Clark. Last year the tab will likely be $310 billion to $320 billion. In 2011, “I guess it’s going to be back up around $400 billion.”

Clark supports Growth Energy’s plan to shift part of the 45 cents a gallon tax credit for blending ethanol with gasoline to creating infrastructure that will help ethanol compete better in the marketplace. That would include dedicated pipelines for ethanol, more flexible fuel vehicles that can burn up to 85% ethanol, and blender pumps that would allow consumers to choose several levels of ethanol blends.

Tom Buis, Growth Energy’s CEO, argues that the optimum use of ethanol in cars is between 20% to 30%. At those levels, newer engines with smaller cylinders and turbo charging can take advantage of ethanol’s higher octane levels, Buis told Agriculture.com after Clark’s speech.

The U.S. is already close to using ethanol to replace a tenth of its gasoline. Allowing higher blends would potentially increase that share of the market for ethanol.

Clark estimates that a federal program that would help gasoline retailers install more blender pumps might cost $3 billion to $4 billion over several years. But for every 10% increase in the use of ethanol in the nation’s fuel supply, this country would save rougly $30 billion a year in petroleum imports, he said.

“For a three-to-four billion dollar investment, that’s a pretty darned good return,”  Clark told Agriculture.com

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