OKLAHOMA CITY (AP) – It is in the U.S.’s national security interest to continue developing transportation fuel derived from agricultural products because the country has become dangerously dependent on foreign oil, former CIA Director James Woolsey said.

Woolsey, speaking Wednesday at the Oklahoma Biofuels Conference, said the United States needs to significantly reduce its reliance on foreign oil.

‘The people who produce large amounts (of oil) have a lot of leverage that we don’t want them to have,’ he said.

The two-day biofuels conference has focused on developing alternative transportation fuels by using agricultural products native to the state, such as Oklahoma switchgrass.

Woolsey, a Tulsa native, served as the CIA’s director under President Clinton from February 1993 to January 1995. He is now a vice president and officer for the consulting firm Booz Allen Hamilton.

Woolsey said the fact that so much of the oil used by U.S. consumers comes from the Middle East gives some nations in that volatile region an inordinate amount of power.

He said it is the U.S. consumer that ‘is paying for those little Pakistani boys being taught to be suicide bombers.’ He said a terrorist attack in the right place could cause oil prices to rise as high as $200 a barrel. Light, sweet crude for November delivery settled at $87.40 a barrel Wednesday.

The way to break the stranglehold, he said, is to develop alternative fuels. He predicted the main alternatives would be biofuels, such as ethanol and butanol, and electricity in the form of plug-in hybrid vehicles.

‘Plug-in hybrids, together with alternative liquid fuels like ethanol and butanol — especially if we can make them from prairie grass or switchgrass — that combination would be quite something,’ Woolsey said.

Woolsey said the government should encourage the continued free-market development of alternative forms of energy, including wind and solar power, and not push any one solution over another.
Woolsey said he traces his interest in energy independence to 1973, when he sat in his car in long lines waiting to fill up with gasoline during the oil shortage. He now drives a hybrid car with a bumper sticker reading, ‘Bin Laden hates this car.’

He said cutting back on oil use would not necessarily hurt Oklahoma’s strong energy sector or the state’s economy. Natural gas, also produced in large amounts in the state, is environmentally friendly, he said.

‘What we are talking about in the long run is having rural America and farms be able to supply the raw material for not just some of what we do, but a lot of what we do, in both fuels and chemicals.’

LITTLE ROCK, Ark. (AP) — Trouble is brewing for small beer makers across the country because the prices of hops and barley — two of the essential ingredients in brewing — continue to rise.

Steve Mazylewski, brewmaster at Hog Haus Brewing Co. in Fayetteville, said he was shocked when he called to reorder hops last month and was told they were not available. Yakima, Wash.-based Hopunion CBS LLC, a big international supplier of hops, was not able to fill his order.

The reason for the shortages include storms, increased beer brewing in foreign countries and more interest in domestic craft beers, Mazylewski said. Some farmers also abandoned the hops and barley crops after a glut in the market.

Robert Kort, brewmaster for Little Rock’s Diamond Bear, said the company has bought enough barley and hops in bulk that the brewery does not have to worry yet.

‘We’ll watch the market and we’ll try to move along with the market,’ said Russ Melton, one of the brewery’s owners. ‘We’ll keep ourselves competitive.’

Melton said Diamond Bear’s sales have been growing 25 percent to 30 percent each year since its September 2000 opening. Last year, the brewery produced 2,000 barrels, or about 27,500 cases, of beer. This year, it expects to make 2,100 barrels.

The company says it will be able to wait until next year to start adjusting prices. Mazylewski said prices for a pint of beer at the Hog Haus could rise 25 cents.

He said brewers who do not have hops contracts or who want to start a new business are out of luck.

‘Owners of breweries out in Portland (Ore.), grown men, are almost on the verge of tears,’ Mazylewski said. ‘That’s how dire it really is for us.’

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