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Transcript - 1.12.07


Is it possible that America's energy future will come not from a foreign oil field but from a down-home pastoral scene like this one?

This week governor Arnold Schwarzenegger of California ordered a big boost in the use of alternative energy fuels—mainly ethanol made from corn. Now, ethanol isn't the only bio-fuel. There are other ways to feed the energy-from-agriculture equation and a lot of companies are working at it.

But only one has a character like country music star Willie Nelson lending his image and expertise to the enterprise. In the month's ahead, we'll continue to examine what in our world needs fixing now, but we're also going to look at ideas that work. And here's one that's already gone way beyond the lab to a truck stop near you. Prepare yourself for the weird name for this alternative fuel: "Biowillie." Bryan Myers produced our report.

DECKER: This piece of property has been owned by my family since 1889. This farm here is pretty good land, it can grow both corn and cotton.

BRANCACCIO: Wayne Decker works 700 acres in the hill country of central texas. Being a farmer isn't an easy life. There are pests and prices, drought and disease to worry about. Even so, the Decker family has toughed it out for four generations.

DECKER: My great-grandfather settled this place and my grandfather worked it his whole life, and then after he retired, I started working it, and I'm still here today.

BRANCACCIO: But Wayne could be the last Decker to work these fields. Over the years, it's become harder and harder to make ends meet growing crops like corn and cotton.

DECKER: It's getting to the point now where seems like every year things kind of deteriorate far as making a living goes. It gets frustrating to be honest with you.

BRANCACCIO: The culprits—rising expenses and erratic prices. But there is hope. A one hundred year old idea is making a comeback—turning crops into fuel for cars and trucks. That idea could make farming a little more prosperous for folks like decker, and, at the same time, help save the environment.

NELSON: I grew up in a small town. And I hate to see small towns dry up and go away.

BRANCACCIO: Country music legend Willie Nelson was born in the small town of Abbott, Texas 73 years ago.

NELSON: I believe in things small. I think I learned more because I saw and heard almost everything, but on a smaller scale.

BRANCACCIO: We caught up with Nelson and his business partner, Dennis McLaughlin, at Willie's Texas ranch. Nelson's passion for small town life goes way back, as does his musical career.

Nelson wrote that song over 40 years ago. Now, you must know his music, and you may recognize him as one of the founders of the organization "farm aid."

NELSON: I've been working with Farm Aid for almost 25 years now. Trying to figure out a way to help the farmer make a comeback. And I didn't really see any way. Because, it didn't look like the politicians on either side were very interested in saving the small family farmer. Which included the small businessmen in the area I didn't seen anybody actually caring about that.

I've always been taught that the agriculture or farming is the bottom rung of our economic ladder. And once that bottom rung falls out, as it done now, everything else falls in on top of it. So we need to fix that.

BRANCACCIO: The challenge: find a way to encourage farmers to stay on the farm by helping them make a decent living. A few years ago, Nelson had a moment of serendipity, when his wife went to buy a new car.

NELSON: She wanted to know if it was okay if she bought this Volkswagen Jetta that ran on vegetable oil. And I didn't know what she was talking about.

And I really thought she was a little off there on that. I thought she's been in my stash a little bit.

BRANCACCIO: Not quite. It turns out, a local company was making a fuel known as "biodiesel." Biodiesel is not ethanol, but another kind of alternative fuel.

NELSON: So she explained to me that they go around the restaurants and they clean out the grease traps. They take it and recycle it. but it worked.

BRANCACCIO: the idea isn't as crazy as it sounds. Over a 100 years ago, Rudolf Diesel, the man who invented the engine that bears his name, actually designed it to run, not on petroleum, but on vegetable oil. And it doesn't have to be old fryer grease—it can be oil from any plant—soybeans, sunflowers, even cotton.

Today, Nelson is breathing new life into that 100 year old idea. He's launched his own brand of biodiesel called "BioWillie." "BioWillie" isn't pure vegetable oil, but a blend of vegetable oil and regular diesel. That means any car or truck with a diesel engine can run on it straight off the showroom floor. It burns cleaner than regular diesel, too—creating fewer of the emissions that cause global warming and acid rain.

Nelson hopes BioWillie will help farmers by creating new markets for their crops. To sell the idea, he's joined forces with a long-time Texas energy man and entrepreneur, Dennis McLaughlin.

DENNIS: There's nothing like driving through a place that was once prosperous and seeing it just kind of, you know, deteriorate. And seeing the exodus of the town's youth. Because they gotta go somewhere else to make money.

NELSON: We want to keep our young farmers interested in farming and keep them on the land. Let'em make a living off a couple, 300 acres.

And we need to be able to tell them, "Yeah, we can help you make a little more money now. Because, you can not only grow food, you can grow fuel." With or without anybody's name on it, it just needs to be available.

BRANCACCIO: Nelson's home state of Texas has become ground zero for the BioWillie experiment. There's a lot of trucks in Texas, both on the road and on the farm, and, long driving distances. In fact, more diesel fuel is used in Texas than in any other state.

They've been growing cotton for over 100 years in the countryside around Nelson's ranch. We've come at harvest time, and the bales are stacked high in the fields. From here, this cotton will go to a local gin, where the lint is removed to make fabric. But there's a lot left over—tons and tons and tons of seeds. Most of them end up at the Elgin oil mill.

Elgin, Texas is small town America. Around here, it's famous for its bar-b-que. But it's also known for something else: the oil the local mill makes from all those cottonseeds. Brian Lundgren is the owner.

LUNDGREN: This is a sample of raw cotton from the cotton fields. And the part we deal with is the cottonseed. The cottonseed is here inside of this lint, which the gin separates. Pulls it apart with machinery, and you get a seed out of it, and that's what we use.

BRANCACCIO: Locked in those seeds—a future tank of BioWillie. The Elgin oil mill processes about 75 tons of cottonseed a day.

LUNDGREN: This is actually the expeller that does the oil extraction. This is the work horse of the plant right here. This is where the actual work is done.

You can see it actually being pressed right there. I guess it kind of smells like fried chicken, or something like that. We've actually had people come into the office asking for the fried chicken joint, looking for something to eat.

BRANCACCIO: Like a lot of businesses around here, the Elgin oil mill is family owned. It's been in the Lundgren's since the early 1930's. It employs about 20 people, and is exactly the kind of agricultural business that Willie Nelson is hoping to save.

Years ago, this oil was used mostly for cooking. Now, Lundgren sells almost all his oil to the folks at biowillie, including this truck load, nearly 7000 gallons of it. With the biodiesel business creating new markets for this old product, that means more money for Lundgren.

LUNDGREN: We're getting probably ten to fifteen percent more for our oil now than we were six months ago. I mean, any time we have demand for oil or cottonseed oil or anything, it helps.

BRANCACCIO: The hope is Lundgren's new found prosperity won't just be his own. Call it trickle down economics, Willie Nelson style.

DECKER: We're all really happy that Willie has chosen cottonseed as a feedstock and it definitely will help. What I as a producer am after is something that I can market another way, and so that's why cottonseed is very appealing to me.

BRANCACCIO: the next morning, the cottonseed oil arrives at Carl's Corner, Texas, about a 150 miles up the road from Elgin. It's here where it gets refined and actually becomes "biowillie." This plant isn't what normally comes to mind when you hear the word "refinery." It's a small operation, and sells most of its output nearby. That is also part of the plan.

We caught up with Dennis McLaughlin at his corporate office in Dallas.

BRANCACCIO: You don't envision sort of a central place, even in the United States, that develops all the BioWillie and then it would get trucked or piped to far flung parts of the country?

MCLAUGHLIN: You want to have production near feed stock areas and near markets. So it lends itself to creating lots and lots of smaller businesses that can do this. It doesn't have to be a gigantic company or a handful of gigantic companies doing the whole thing.

BRANCACCIO: This refinery is small, and just one of several that make BioWille. It's run by a company called Pacific Biodiesel. In 1996, Pacific Biodiesel opened the very first biodiesel operation in the united states—that one Nelson's wife had learned about. Today, there are over 80 biodiesel refineries nationwide, with another 65 under construction.

Local refineries supplied by local farmers which, in turn, sell the fuel back to the local community—that keeps money in local hands. Contrast that to the big multi-national oil companies.

MCLAUGHLIN: Why should we be importing oil when we can grow it here?

If income can be produced where families can stay on farms, the number of people that would love to live in small towns is pretty large. Now, how great would it be if 500,000 new middle class farms were created? I mean, what would that do for the soul of the country?

BRANCACCIO: And you think biofuels could help produce that outcome?

MCLAUGHLIN: Absolutely. Absolutely.

BRANCACCIO: As for nelson's role, he's more than just a celebrity spokesperson. Nelson is a major shareholder in McLaughlin's firm and sits on the board of directors.

BRANCACCIO: The stereotype of an alternative energy company is something a little bit more granola and Birkenstock wearing. Yet over your shoulder is a big portrait of former President Ronald Reagan. You don't see them as incompatible?

MCLAUGHLIN: Not at all. Not at all. On our board of directors you have Willie Nelson and you have Herb Meyer, who used to work for the CIA under Reagan. Now the idea of those two guys being in the same room together, I mean, who would have ever thought that possible.

BRANCACCIO: And the Willie Nelson image says a lot of things, and one of the things it says is, "American." It says, "Domestic."

MCLAUGHLIN: You have to walk the walk on this deal. There are a lot of temptations to find ways to bring in imported feed stocks and find some other shortcuts. But you have to make sure you are going to do what you say you're going to do, which is get it from here. So your product is American. Always.

BRANCACCIO: But that could change if some of the big corporations getting into the biodiesel business have their way. Chevron is one big player that's started to get into biodiesel, Conoco Phillips another.

This is a Conoco Phillips annual report from 2005. In a section entitled "emerging businesses," it boasts about a vegetable oil refinery the company owns overseas which could supply fuel to the American market. And several months ago, the Bush administration proposed eliminating penalties on the importation of some biofuels. As a result, there are those who worry about a day when supertankers full of vegetable oil may be brought in from foreign countries, just like petroleum is today.

BRANCACCIO: What about the big boys in the petroleum industry? Is there a chance that they could adopt your technology and squash you that way?

MCLAUGHLIN: I think that the large, major integrated oil companies are not going to be the innovators that solve this problem. I mean petroleum companies have very large inventories of petroleum, and they want to make sure that those get sold first.

BRANCACCIO: What is the point of this company? Is it to make the world a better place? Is it to earn a profit?

MCLAUGHLIN: Companies cannot survive without making money. They have to make profits. It's just about what do you do to make the profit. The best companies, the ones that really bring the most benefit, are companies that make money by doing the right thing and making a contribution.

BRANCACCIO: Making BioWillie is one thing, but getting people to buy it, another. A truck is a 100 thousand dollar investment—maybe more—and it's only natural truckers are reluctant to try something new. That's where one close friend comes into the picture.

MACK: Bill Mack with you on XM satellite radio 171, where's it's always fun.

BRANCACCIO: Bill Mack and Willie Nelson go back over 40 years. Nelson too was once a DJ in Fort Worth. Mack and his wife do a show on a satellite radio channel called "Open Road." Every day, truckers from all across the country light up the phone lines, known only by their handles, like "Sneezy," or "Flagwaver," or "Little Tom."

MACK: What can I do for you Little Tom?

LITTLE TOM: Well, I'd like to wish my brother and sister-in-law happy anniversary...

MACK: I was on the air one time and Willie Nelson called me and he said my wife she's using this, it's a biodiesel. He said man, he said it works!

BRANCACCIO: Since then, Mack says, they've been hearing from more and more callers who vouch for the benefits of biodiesel.

MACK: Well, biodiesel and renewable fuels could take Texas right to the lead. We could lead America in this very, very easily by making Willie Nelson our new energy chief...

BRANCACCIO: Mack doesn't get paid for plugging BioWillie, he's just a believer. It's something the country needs, he says. He's even set-up a hotline that tells drivers where to find all brands of biodiesel, not just BioWillie.

CINDY: As Flagwaver told you, It's 866-Bio-Diesel.

BRANCACCIO: There are about two dozen truck stops that sell BioWillie, mostly in the south. It was at a BioWillie pump where we met trucker Tom Porter and his traveling companion Dandy.

BRANCACCIO: How did you hear about BioWillie?

TRUCKER TOM: XM radio. This is the first time I'm trying it. See if my truck runs good on it.

BRANCACCIO: At this truck stop 45 miles north of Dallas, BioWillie is selling at around the same price as regular diesel. About one trucker was buying BioWillie for every two that bought the regular kind. Even so, the owners of this truck stop say that's not enough to make it worthwhile and they plan to stop carrying the BioWillie brand. And the BioWillie company is having other problems. It's been reported it recently fell short of cash to finance a new plant near New Orleans.

We took a ride with trucker Tom Porter and Dandy—they're making a run north, to Joplin, Missouri, hauling a load of scrap metal. The question: why Tom decided to make the switch to BioWillie.

TRUCKER TOM: I'm not a tree hugger, you know, but we got to have some control over the environment. We just can't let things go crazy, or the environment will be in trouble.

BRANCACCIO: As Tom got to talking, it was clear something else was eating at him too—anger at the big oil companies.

TRUCKER TOM: Now, don't get me wrong, I'm for everybody doing good. But you know, whenever a CEO from ExxonMobil retires to get a $400 million retirement package, you know, what's a man gonna do with $400 million at retirement age? That's in my book, that's just not right.

I don't think they can come up with any more excuses to raise the price of fuel. I think they've outdone their self on excuses.

BRANCACCIO: Even President Bush, a former oil man himself, has embraced biodiesel. In October of last year, he made a major speech outlining his plans for developing alternative fuels.

BUSH: Biodiesel is coming. It makes a lot of sense for us to continue to invest in biodiesel technologies to make the production process even more efficient.

BRANCACCIO: But is the government putting its money where its mouth is? According to the non-partisan group Taxpayers for Common Sense, the energy bill signed by the president contains over 85 billion dollars in what it calls "pork" for well-connected energy companies. But how much was put into the research of biofuels fuels? Only two billion dollars.

WEBBER: Go get them Katie! Don't let them score!

BRANCACCIO: Meet Michael Webber—soccer dad, father of three, modern-day consumer.

WEBBER: Stop her Rebecca! Don't let her shoot! Nice job!

For me, thinking about the future factors into all the consumer choices we make. What house we buy, what neighborhood we live in, where we work, where we shop, and what types of products we buy. And a car is a big piece of that.

What could we buy as a car that has the smallest ecological or environmental footprint?

BRANCACCIO: A hybird car is the choice for Webber's family, one that runs partly on gasoline, partly on electricity. But Webber's more than just a concerned citizen. He's also a professor at the University of Texas, specializing in energy policy. He says that when it comes to alternative fuels, you have to consider the big picture. Will making more fuel from farm crops mean more deforestation and, perhaps, make global warming worse?

WEBBER: Every single fuel has its issues. It has its advantages, it has its disadvantages. And we have to be honest about that. Biodiesel has a lot of promising characteristics.

It burns easily in the engine and it burns clean. But it also might have a large environmental footprint if you start growing crops specifically to create this oil.

BRANCACCIO: That's where farmers can help make a difference. To run their farm equipment, they can actually use cleaner burning biodiesel made from the very plants they grow. And whatever emissions do result could be absorbed by those same plants. In scientific lingo, it is called a "zero sum game."

WAYNE: Good morning Ross, how you doing today?

BRANCACCIO: Ross Stromberg is Wayne Decker's neighbor. His farm is three times the size of Wayne's and has a lot more equipment.

ROSS: We run two tractors in a day, burning 200 gallons, so it goes fast.

BRANCACCIO: A few months ago, Stromberg made the switch to biodiesel because it was a little cheaper. Now, he and Wayne are convinced it's the right thing to do for other reasons.

WAYNE: If you can use your own product instead of using something you have to import from overseas, well, it's gonna help you as a producer, it's gonna help the citizens of this country.

NELSON: Once I found out that it would work out in diesel engines, then I started checking out what it would require to put the trucks and all the equipment that we have out here. And it required literally zero. and I've been running my busses and trucks on it for years now.

I bought a Mercedes and did the same thing. And it runs beautiful. And there's a sticker on the window that says, "No war required."

I've heard the President say many times, "We need alternative energy." I hear it all the time everyday from our farmers out there. They say, "Yeah, keep talking about it." It's gonna happen. But it's slow. And every time we get together and talk about it, maybe some else will talk about it. (That's exactly right.)

BRANCACCIO: And that's it for NOW. I'm David Brancaccio. We'll see you next week.

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