This article reprinted from The American Prospect

Twenty years ago, on a farm outside my hometown of Aberdeen, South Dakota, I stood with a few dozen local corn growers in a machine shack, huddled around a still. We were trying to show the farmers that their crops could be turned into what we then called gasohol — a liquid fuel that could become our country’s transportation fuel of choice. Farmers immediately understood the power of ethanol, and they have brought us to the point where energy independence is in sight. Now the rest of us need to do our part.

Today, the ethanol industry is responsible for creating 200,000 jobs and reducing our need for foreign oil by 3.1 billion gallons per year. Within a decade, it will achieve twice those amounts — proof positive there are sources of energy right here in America if only we invest in the technology, seize the potential, and innovate our way out of dependence on foreign oil. If we’re serious about that goal, we need to build a “hybrid economy” — one powered by homegrown energy sources, whether it’s gasified coal, ethanol, or wind and solar power.

As we learned in the barn late that night, farmers have done their part. Now it’s President Bush’s turn. In his State of the Union address, the president recognized our national addiction to oil, but his actions since then have spoken louder than his words. In fact, the president’s budget includes more funding for research and development for oil companies — at a time of record profits for those companies — than it does for innovation in non-oil biofuels.

The recently passed Energy Policy Act provides numerous opportunities for the government to support innovation in other American-made renewable fuels, including new forms of ethanol from crops grown not just in the Midwest but across the country. These are opportunities for innovation that, as with genome research, can be accelerated with modest government support to ensure solutions are market-ready long before they would be otherwise. Republican and Democratic governors across the country are now rightly calling on Congress to do what the president did not: to fully fund innovation in next year’s budget.

While the president and Congress can ensure that we invest in innovation, automakers can ensure that we turn that innovation into action. Today, there are about 4.5 million flexible fuel vehicles on America’s roads. Those vehicles are engineered to use “E85”, a homegrown gas blend that is 85 percent ethanol and is equal or superior to conventional gasoline in terms of performance and cost.

The problem is that far too few consumers who own these cars even know they can burn E85. And those who are aware find that they have very few opportunities to actually purchase the fuel: Barely 600 of the nearly 180,000 retail gas stations nationwide offer E85, due largely to major oil company interference. The oil companies must be forced to stop their anti-competitive practice of prohibiting E85 dispensers from being installed at their stations — by federal law, if necessary.

What good is this innovative technology if barriers like this exist? That is why our automakers — who revolutionized manufacturing with the invention of the assembly line — should notify every customer whose vehicle has the technology to use E85. If we can contact customers to tell them something is wrong with their cars, we can surely contact them to tell them something is right.

At the same time, automakers should follow the lead of market innovators like General Motors and each announce now that their entire fleet will be E85-ready by 2010. At present, it costs roughly $50 per car to make sure that automobiles rolling off the assembly line are ready to use E85. I am confident our automakers can soon bring that price down dramatically.

This effort should not fall solely to the government or Detroit. Though traditional investment houses have been reluctant to embrace ethanol, Wall Street is beginning to learn what farmers have long known. In fact, The Wall Street Journal recently reported that the leading salesman for ethanol’s profitability is Silicon Valley’s Vinod Khosla, venture capitalist extraordinaire and founder of Sun Microsystems Inc=

Lastly, our friends in the environmental community have come a long way in recognizing the potential of biofuels, and we need to build on that progress. There is no better option to decrease petroleum use in the nation’s transportation sector and to do it now. At the same time, ethanol has been proven to reduce emissions of carbon dioxide and other greenhouse gases. And at least one recent study demonstrates that we could meet all our transportation fuel needs in 2050 without increasing the amount of land currently in cultivation.

Energy independence is our shared national goal. If we each do our part, we can meet that goal with biofuels from America’s farms — and help the environment, the economy, and our nation’s cherished agricultural tradition in the process.

Tom Daschle, the former Democratic Leader of the U.S. Senate, is currently Special Policy Adviser at Alston & Bird and a Distinguished Senior Fellow at the Center for American Progress in Washington.

Read the full report on The American Prospect’s website.

© 2006 by The American Prospect, Inc.

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Tom Daschle

Distinguished Senior Fellow