Full of Beans

Products from Mother Nature get a boost, beginning this year.

That pen at your fingertips, or the cloth on your chair, or even the plastic fork you used to eat lunch today soon could be replaced with similar products made from soybean and corn oils. Plant and animal products are made of carbon chains formed much more recently than millennia-old oil reserves. That means they are much easier to replenish. With oil prices climbing and the finite amount of oil constantly dwindling, soybean and corn oil are looking like appealing substitutes for anyone who buys plastics and other petroleum-based products-including the federal government.

Federal agencies are about to become one of the biggest markets for the bio-based industry, which makes products that are renewable as opposed to petroleum-based. The 2002 Farm Security and Rural Investment Act called for the Agriculture Department to set up a federal procurement program that gives preference to bio-based products, and agencies must begin complying with the new regulations early this year. For companies that sell bio-based products, it can't happen quickly enough.

"If they ever get that thing going, it will really help us. It's unbelievably slow-shame on the USDA," says Jacqueline L. Garmier, president of Renewable Lubricants Inc., a bio-based product manufacturer in Hartville, Ohio.

Agriculture released the final program guidelines in January 2005. They require agencies to establish their own bio-based preference programs in 2006. But agencies are likely to drag their feet until Agriculture selects specific products. The program allows agencies to stick with petroleum-based products if there are no available bio-based alternatives, if the bio-based products don't meet standards, or if they are unreasonably priced. Many bio-based and petroleum products are competitively priced, however, as innovations have driven down prices for the former and oil prices have risen.

In July, Agriculture proposed six bio-based product categories and asked for public comment. Those categories are hydraulic fluids, roof coatings, water tank coatings, diesel fuel additives, lubricants and linens.

Kim C. Kristoff, president of Gemtek Products, a bio-based product manufacturer in Phoenix, says those categories are far too limited. "No one uses or cares about them," he says. Gemtek already offers bio-based cleaners, lubricants and chemicals to federal agencies through the General Services Administration, but wants to sell more. Kristoff cites four main advantages to replacing petroleum-based with bio-based products:

• Reducing U.S. dependency on foreign oil.
• Supporting the rural farm community.
• Lowering the cost of petroleum by minimizing demand.
• Protecting the environment and renewable resources.

Bio-based products also tend to be gentler on eyes and skin.

Sen. Tom Harkin, D-Iowa, one of the biggest proponents of bio products, says, "USDA has been far too slow in doing its part to make bio-based procurement a reality."

Officials at Agriculture say they're moving as fast as they can, but the new requirements involve a lot of paperwork and didn't come with enough funding. Roger Conway, director of Agriculture's Office of Energy Policy and New Uses, says he plans to propose additional categories soon, but because of their breadth, changes will take time. "This is not like your father's USDA regulation. This affects all of the federal government," he says.

Iowa State University's Center for Industrial Research and Service in Ames is assisting Agriculture. Steven Devlin, industrial specialist at the center, has identified about 500 companies that manufacture more than 3,200 bio-based products. Devlin's team collects information on product availability, quality and cost.

Part of the preference program's goal, says Marvin Duncan, senior agricultural economist at Agriculture, is to increase the market for bio-based products. Manufacturers already have introduced new products, such as roof coatings, because of the proposed rule. The program also will serve as a model for state and local governments and will encourage consumers to buy more bio-based products, Duncan says.

"[The federal government] can provide a real arena for a lot of those fledgling technologies that have not previously had the scope and size to expand," says Jessica Adelman, director of U.S. government solutions for Cargill Inc., an international bio-based manufacturer headquartered in Minneapolis.

The commercial sector also is boosting its bio-based purchases. In October, Wal-Mart's Sam's Club division said it will switch to bio-based packaging for its fresh fruit, herbs, strawberries and Brussels sprouts. Glenn Johnston, manager of global regulatory affairs for Minne-tonka, Minn.-based NatureWorks, the arm of Cargill that makes corn-based plastics, points out that there's nothing stopping procurement officials from buying bio-based products even before the governmentwide program starts. At Defense and Agriculture, buyers already have been purchasing bio-based products.

Agriculture's Beltsville Agricultural Research Center in Maryland is replacing petroleum with bio-diesel fuel, a blend of diesel and plant oils or animal fat, in the 150 motorized vehicles it uses to manage the facility's farms and other outdoor areas. "Everybody's been happy with it. Soybean oil is actually a lubricant, so if it gets on your hands, it's almost like having hand creamer on," says Ron Korcak, the center's associate. The center also requires its janitorial services contractor to use bio-based soaps and hand cleaners.

Agencies haven't always had positive experiences with bio-based products. When a research lab at Wright-Patterson Air Force Base in Ohio experimented with bio-based de-icing fluid for airplanes, it turned into a syrupy mess during field testing. The product was shelved.

So far, petroleum companies have paid the federal procurement program little attention, for two reasons. First, it's not big enough to hurt their sales, and second, these vendors have plenty of loyal nongovernment customers. Al Mannato, fuels issue manager for the Washington-based American Petroleum Institute, says, "If you look into the future at realistic projects, it will be petroleum-based products that will continue. That's not to say [bio-based] products won't gain market share, but it takes a significant amount of time for infrastructure to go into place."

Many large petroleum companies have started small units that sell bio-based fuel and other products. The energy company BP, previously known as British Petroleum, now uses the tagline "Beyond Petroleum." Cleaning chemicals that double as hand cream are hard to resist.

Bio-Friendly Purchases

• The Defense Logistics Agency buys bio-based hydraulic fluid for helicopters and bio-based cutlery instead of plastic forks, spoons and knives for service members overseas.
• The Interior Department's national parks use bio-based fuels that mix ethanol with gasoline for snowmobiles, and at headquarters it uses plates and bowls made of potato starch and limestone in the cafeteria.
• The Agriculture Department's Beltsville Agricultural Research Center uses plant-based cleaners, hydraulic fluids and lubricants on farm equipment and soy-based diesel to power equipment.

Source: Government Accountability Office