By Jim Schutze
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By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
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Bob Josserand is bullish on bullshit. It's sexy, he says. As mayor of Hereford, Josserand should know. He lords over a town of some 16,000 people and more than 1 million cattle. Three and a half million chew their cuds within a 100-mile radius of his Panhandle home. "A million head of cattle produces a lot of manure over a day," he says. Josserand's AzTx Cattle Co. owns five feedlots with a capacity of 232,000 head in Texas, Colorado and Kansas. He pays anywhere from $150,000 to $200,000 a year to haul manure from his Hereford lot.
Named for the early herds of Hereford cattle, Hereford is often called the town without a toothache on account of its low incidence of tooth decay, the gift of high levels of natural fluoride in the municipal water supply. More often, Hereford is called the "Beef Capital of the World."
Yet corn is why Josserand is so bullish. In September, he kicked off the groundbreaking celebration for Dallas-based Panda Energy International's $186 million ethanol plant, which will churn out 105 million gallons of the alcohol fuel annually once it's fired up in late 2007. The refinery will be powered not by natural gas, as is common for these plants, but by cattle manure—some 70 tons per hour and more than 1 billion pounds per year.
Refined from corn, ethanol is the hot new energy elixir. It enhances America's energy security by reducing reliance on imported oil. It reduces emissions and helps lower greenhouse gas accumulation. Thus, the Energy Policy Act of 2005 mandates that 7.5 billion gallons of renewable fuels such as ethanol be sluiced into the nation's gasoline supply by 2012, nearly double the 3.9 billion gallons produced in the United States last year. President Bush says he likes the idea of promoting a fuel that relies on farmers. Investors are throwing cash at it.
Enter Panda. Panda Chief Executive Officer Todd Carter likes to call Hereford the Saudi Arabia of manure, and his ethanol plant is the first known project on the globe to use the stuff to fuel an ethanol refinery. Josserand calls Hereford home to the sexiest environmental project in the world, one that will also produce cattle feed as a byproduct. "We're going to take a product that comes out of an ethanol plant called distiller's grain, and we're going to put it back in the mouth of that animal so that it can come out in the back," he says, explaining this revolutionary ecosystem.
Energy executives and Texas leaders such as state Senator Kel Seliger and Kathleen White, chair of the Texas Commission on Environmental Quality, filled the Panda shindig, which included a hoedown with music from country swing band Asleep at the Wheel and complimentary steak, beer and wine the night before. A producer for Geraldo At Large was stalking the refinery site prepping for a segment on the plant. (It ran September 22 on the Fox network.) This just may be the biggest thing Hereford has ever seen.
Still, Hereford resident Jeff See didn't have an invitation to the Panda celebration. He snuck into the hoedown, but his stealthy showing isn't a surprise, because while Panda is launching its "poop-to-pump" ethanol plant in a media glare, three miles away See is quietly overseeing the construction of a 100 million-gallon, $119 million ethanol plant for Dallas-based White Energy. In fact, Dallas energy firms are gambling big on ethanol and other renewable fuels such as soy and waste grease-based biodiesel all over the country, and it's not a bad gamble either, what with high oil prices and taxpayer subsidies and government mandates all but guaranteeing returns.
But are renewable fuels all they're cracked up to be? Maybe not. While they cut down on pollutants such as carbon monoxide, critics charge that ethanol as currently deployed in the nation's fuel supply actually boosts ozone-forming emissions such as hydrocarbons. Then there's the corn itself, a crop that requires intensive amounts of water, fertilizer, pesticides and transport, thus using plenty of fossil fuels in cultivation. While a few studies show that corn-based ethanol doesn't yield as much energy as it consumes to produce it, many more show that ethanol yields about 27 percent more energy than it takes to produce, though much of that comes not from burning the fuel itself but from adding in the value of the cattle feed the ethanol production process generates. Plus, ethanol doesn't pack as much energy as gasoline, so vehicles running on fuels high in ethanol suffer a 30 percent loss in fuel mileage. But none of this may matter.
"Politically, the ethanol program seems to be bulletproof," says Jerry Taylor, senior fellow at the Cato Institute, a Washington-based libertarian think tank. "The real purpose of ethanol is to fatten farmers' paychecks before elections."