Bill could give ethanol preference with feds

WASHINGTON -- The farm lobby could have the upper hand when products such as corn-based fuel compete for the federal government's purchasing power under a little-noticed proposal advancing in Congress.

Federal agencies -- which now spend more than $200 billion a year on a vast array of products and are the nation's largest consumer -- would be required to buy "biobased" products whenever they're found to be comparable in price, performance and availability to traditional products.

The provision would cover any commercial or industrial product other than food that uses biological products or renewable domestic agricultural or forestry materials. It was tucked away in a farm bill that advanced out of the Senate Agriculture Committee earlier this month; a somewhat similar House-approved bill has no such provision.

Among other things, the legislation would require the Agriculture Department to develop a labeling program to help stimulate public demand for the products.

Farmers increasingly see corn in ethanol-blended gasoline, soybeans in biodiesel fuel, and such commodities in plastics and other products, but they see much more potential.

"We can greatly increase the value of the products America's farmers produce by expanding and promoting the use of biobased products," said sponsoring Sen. Tom Harkin, D-Iowa. "It is only appropriate that the government lead the way."

The proposal would assign the Agriculture Department, working with the Environmental Protection Agency and the National Institute of Standards and Technology, the task of developing the list of preferred products.

1.5 percent of sales

Already, the ethanol industry's trade group is hailing the measure as a move that will help build market share for their product.

Ethanol is estimated to represent only 1.5 percent of overall gasoline sales nationwide. Federal agencies buy more than 1.1 billion gallons of gasoline and diesel fuel a year, according to the Agriculture Department.

"Basically, they'd be told, 'Buy it, if you can,'" said Monte Shaw, a spokesman for the Renewable Fuels Association, who said he noticed on a recent trip to Iowa that ethanol-blended, 89-octane gasoline there was selling at the same retail price as non-ethanol, 87-octane fuel.

Carol Warner, executive director of the Environmental and Energy Study Institute, a Washington-based think tank, said the bill would take the government further than President Clinton's 1999 executive order that merely made it U.S. policy to develop and promote biobased products.

"We see this as a very important step forward," she said. "It's really important to kick-start this whole thing."

Earlier this year, the General Accounting Office reported to Congress that there had been "little progress" from federal agencies in purchasing environmentally preferable products. It cited the Agriculture Department for slowness in publishing a list of biobased products for agencies to consider buying -- something the department has now started.