Because we don't have unlimited resources, we pit one against the other. We don't look at overall policy. We say we don't have enough money, we don't have the resources, so a representative has to get enough votes for wind, or enough votes for battery oxide cells for hydrogen, or whatever it is. Because of this, we have fractured the focus so much that we don't get an overall public policy.

I think it's going to take some real strong leadership to say, "This is the overall policy; we're not choosing one or another, we're not trying to pit one against the other or take away from one to advance another. We're not going to trash the coal industry, and were not going to champion wind energy at the expense of coal. This is the direction that this country needs to take." 

HAI: In 2005, Natural Resources Research Journal published a study that suggested ethanol production requires more fossil fuel energy than the yield we get from the output fuel. Was that evidence of 2005 technology? Do you think that present-day technology increased energy yields? Where do you see the technology going from here?

Schafer: You know, it's hard to focus on one study. There are so many. Most studies I've seen confirm that there is positive energy generation from the production of ethanol. It's not a big advantage, though. It's a 1-to-1.2 ratio, certainly not as high as some other biofuels.

At USDA laboratories, we're working on a better fermentation process, better feedstocks with a lower-energy-cost profile to grow, collect and distribute. Certainly as the technology moves forward, we're going to see more production per acre of ethanol, which then drives down the cost of production and the energy cost per gallon produced.

I'm convinced that the technology is moving so that while we develop the infrastructure and pursue this important public policy for our country, we will see increases in efficiency as we move forward.

And exciting things are happening with cellulosic ethanol. The POET plant in Scotland, South Dakota, is going to be turning out 20,000 gallons of cellulosic ethanol made from corn fiber and corn cobs later this year. Next year, they will start to produce cellulosic ethanol on a commercial scale at an Iowa plant. That's a joint effort between POET and the U.S. Department of Energy called Project Liberty. Also, the KL Processing plant in Wyoming is starting to turn woody biomass into ethanol as well.

I have to tell you, one of the exciting projects I've seen recently is in our USDA citrus biomass laboratory in Florida, where they are generating ethanol out of peels left over from the huge orange juice industry. It's fun to see that creative use of orange peels, an often discarded by-product. It smells pretty good, you know.

HAI: You mentioned costs. Are there actual savings to be realized with corn-based ethanol now?

Schafer: The Department of Energy calculates that blending ethanol into gasoline cuts the price of a gallon of gas by 20 to 35 cents. That's a savings to American drivers of $28 billion to $49 billion. And if you split the difference, it's about a $200 annual saving for the typical family in the United States today.

HAI: Mr. Secretary, thank you so much for your time.