**[PLENARY SESSION I]{.underline}**

**RENEWABLE ENERGY: REFLECTIONS FROM THE PRIVATE SECTOR**

**INTRODUCTION: MR. TOLMAN**

The Archer Daniels Midland Company is one of the largest processors of
agricultural commodities in the world. The company takes raw commodities
like corn and soybeans and processes them into food ingredients, animal
feed ingredients, naturally derived alternatives to industrial chemicals
and of course, renewable energy. ADM is a leader in the development of
renewable energy, both in the United States and across the globe.

Ms. Patricia Woertz was recently named as Chief Executive Officer,
President and a member of the Board of ADM. Prior to being named to this
position Ms. Woertz served as Executive Vice President of Chevron. Every
year since the year 2000, [Fortune Magazine]{.underline} has named Ms.
Woertz one of the ten most powerful women in business. Please join me in
welcoming Ms. Patricia Woertz.

**[FROM VISIONARY TO VIABLE-]{.underline}**

**[THE FUTURE OF RENEWABLE FUELS]{.underline}**

**PATRICIA WOERTZ**

Thank you Rick and good morning everyone. I am delighted to be here
today. First of all, I would like to thank Secretary Johanns and
Secretary Bodman for inviting me to participate in what I think is a
ground-breaking conference for bringing together so many distinguished
participants and such diverse perspectives on our shared mission of
advancing renewable fuels. I am also honored to be sharing this
morning\'s Plenary Session with two old friends, Red Cavaney and Chad
Holliday, and two new friends, Bob Lane and Vinod Khosla, who I have met
since coming on this job. I look forward to also hearing from Senator
Talent, whose leadership on our nation's first Renewable Fuel Standard
for ethanol has been so important to our industry.

I think it is both fitting and encouraging that the Departments of
Agriculture and Energy jointly sponsor this conference. It is fitting
because the future of renewable fuels rest in the intersection of
agriculture and energy and it is encouraging because this conference
symbolizes the cooperation and shared commitment that will be required
to advance renewable fuels from the visionary to the viable. And it's
that transition from visionary to viable, which is the topic that I
would like to discuss with you this morning.

Now, it might be well to go back, to begin observing that the journey to
this day when we can realistically talk about a viable, sustainable
biofuel industry has been marked with fits and starts. Actually the
start, if you will, goes back to the 19th Century when Samuel Morley
developed the first engine to run on ethanol and turpentine. By late in
the century Rudolph Diesel had produced the first engine to run on
biofuel peanut oil. And as many of you probably know, Henry Ford had
built his first engine, the Quadricycle. It ran on either pure ethanol
or gasoline, sort of the first flexible fuel vehicle. It's interesting
to note that at that time crude oil was available, but it was not
plentiful and what was available was distilled, not into gasoline, but
into kerosene for lighting, heating and cooking.

At the start of the 20th Century biofuels and fossil fuels shared the
transportation fuel market more or less equally. In fact, the car that
launched the automotive revolution, the Model T, was actually, again, a
flexible fuel vehicle, running on gasoline, ethanol or a combination of
both. Ford envisioned a biofuel future. He famously said, and let me
quote,

> *\"We can get fuel from the fruit, from the Sumac by the roadside,
> from apples, weeds, sawdust, almost anything that can be fermented. It
> remains for someone to find out how this fuel can be produced
> commercially\".*

Well, many someones went on to produce ethanol. During World War I,
demand for ethanol reached 60 million gallons a year. And during World
War II, ethanol supplied a broad array of non-transportation wartime
uses, but after the war ethanol essentially disappeared. By the late
\'40(s) until the late \'70(s) there was no commercial ethanol virtually
available in the United States. So what happened? Why are we discussing
today the need to advance the development of alternative fuels, rather
than celebrating a half century of innovation that has unlocked the
potential of nature to produce both food and fuel? Well of course, the
answer lies beneath the sands of Saudi Arabia.

In the years just prior to World War II, the first oil was struck in the
Middle East, followed quickly by an era changing discovery of the
world's largest oil reserves. Biofuels could not compete in a market of
wash and inexpensive oil. And actually today, some may say that history
may yet repeat. But I believe that fundamental shifts in the globe, the
global conditions, suggest otherwise. The biofuel industry may continue
to be buffeted by the price of oil, but an array of economic, political,
environmental and actually resource-related factors, point to a new era
of bio-energy. An era in which renewable fuels will play a vital and
sustaintial role to supply expanding energy needs. Economic growth is
driving both of these developments.

Global Real GDP, is expected to average 3.8 percent annually through
2030. But it's economic growth in Asia particularly, which is projected
to average 5 1/2 percent per year that is shaping a lot of world
scenarios. In particular, China has a 6 percent GDP expectation,
followed by India at 5 1/2 percent. As incomes are rising in Asia and in
other pockets of the developing world, societal change is following a
somewhat familiar path. People are migrating from rural to urban areas.
Diets are transitioning from primarily plant-based to more protein
intensive. And of course, energy consumption is rising.

China's already the second largest oil importer in the world and
represents over 30 percent of the annual increase in oil consumption.
And most of that growth is happening in the transportation sector.
Again, China is leading the way. Car sales there are topping 5 million
last year. It's already the third largest car market in the world, after
the U.S. and Japan, and some auto experts actually expect China to
surpass Japan in the next two or three years.

There are of course, mitigating factors, factors that can mitigate this
growing demand. Political turmoil, economic recession, a natural
disaster, could all put the brakes on this accelerating demand and they
could do so very quickly. But China's automobile market alone, suggests
while growth may be variable, I think ultimately it is inexorable. Any
parent knows that once they give their teenager a set of car keys,
they're not going to go back to their bicycles.

These global trends, they give rise to two projections of enormous
importance. And to those who have gathered here today, one is from the
Department of Energy and one is from the Department of Agriculture.

First, by the middle of the century the demand for food will double. And
second, by the middle of the century, energy from traditional sources
will be insufficient to meet projected global demand. And traditional
refining capacity, both in the U.S. and globally, will also be
insufficient to meet global demand in motor fuel.

Now, at ADM we come to this challenge as a global company. We believe
we're uniquely positioned to address the world's need for more fuel and
more food and as we know that, we know that some people are predicting
an eventual conflict between those needs and are advocating a
hierarchial approach to that fulfillment. I believe a more holistic
approach is much more fruitful. Because if you think about it,
hierarchial thinking always relegates some need to the bottom of the
list and where on the list of food and fuel would you put the need for
security; the need for a clean environment? Where would you put the need
for a robust agricultural sector? Clearly, food, heat, light, mobility,
security, a healthy environment, are all fundamental human needs and we
believe the best solutions will come from seeing them more holistically
and recognizing they have interconnections.

Last year, the Gulf Coast hurricanes delivered a, blistering example of
just how interconnected these needs are. Mobility became a life or death
factor in the evacuations. And when the storms passed the most pressing
needs were clean water, food, transportation, medical supplies, and
electricity. None of which could be adequately served until the fuel
tanker trucks rolled in.

Perhaps it's easier here in the U.S. to understand or make a case for
this holistic view of human needs. But I would suggest that it's a view
that is also vital to the developing world. In a developing world's
well, energy is fundamental to the economic progress and the alleviation
of poverty, which is at the root of hunger. It is key to an improved
standard of living.

Over the course of my career I have had my work take me to some of the
most challenging places in the world. I have seen mothers who had
sufficient food to feed their family, but they lacked the mobility to
get to a health clinic when their children were sick. I have also seen
school children who filled the aisles of a tiny market because it's
powered by a generator and it was the only place on the whole island
that reliably supplied light so they could study. So, as we explore the
opportunities and the responsibilities of bioenergy, I believe we will
all be best served by taking the broadest, most holistic view possible.

Now, in the short term there may be price volatility, there may be
market disruptions; it's typical of an emerging growing industry. But we
must and we will address those, particularly those of us with global
companies, serving markets and customers worldwide. I believe we will
address these issues best if we view the long term development of this
industry as an opportunity to produce more food and more fuel and
potentially even better prices for consumers. It's not a food or fuel,
it is and, or it is both. Simply put, I think in the big picture we will
not meet the growing demand for food in this world, unless we also
supply the growing demand for energy.

Meeting global energy demand, as I stated, will be challenging. So
today, we are consuming oil faster then we're finding it. Many of the
established oil and gas fields or outside of OPEC, are maturing or they
are in decline. And new resources are in technologically challenged or
difficult to access areas, like the Arctic or very deep water. And
others are in some of the most complex and socially, politically
perhaps, unstable places in the world; Nigeria, Venezuela, Indonesia,
Russia, the Middle East.

We are also facing restrained refining capacity. To meet the EIA's
projected demand for fuel through 2015, the world would need to add nine
and a half million barrels a day or the equivalent of four new
refineries every single year for nine years; as big as the world's
largest refineries, every year for nine years, to meet that goal. And we
know in this country there has not even been a new refinery built in
thirty years. So, these are factors that lead to the projection that by
the mid-century conventional sources and conventional refining will not
be sufficient to meet that global demand. Alternative energy, including
biofuels, which are already helping to fill that gap, will be needed in
greater quantities in the years ahead.

So, I think the question is not whether there will be a sustainable
market for biofuels, but rather how big can or should that market
become?

The answer to that question, I think, will significantly be influenced
by the desire for energy security, for strong agricultural economies and
for environmental improvement. Already these desires are shaping world
policies and driving market growth.

In just this year we have seen some ambitious public and corporate
policies. Of course, President Bush announced the Advanced Energy
Initiative. China enacted an energy policy calling for doubling the
percentage of renewable energy it consumes by 2020. And Wal-Mart set a
goal of making E85 available across their entire system in the U.S. So
when you have the world's largest energy consumer, the fastest growing
energy consumer and the largest retailer in the world, all committed to
ambitious sizable change, you have the foundation for a new era of
energy. And I think one that is marked by greater diversity and
renewability of supply.

We believe we are just at the start of this bioenergy era. And I say
this with some measure of irony, because at ADM we have been building
towards this start, so to speak, for almost thirty years. We entered the
ethanol business here in the U.S. in 1978 and the biodiesel business in
Europe in 1995. We actually remember when the entire ethanol market in
the U.S. consisted of five stations in rural Iowa. Today, the U.S.
ethanol capacity is at 5 billion gallons annually and once the announced
expansions are complete in about 2008, capacity will be over 7 billion
gallons annually. And a nationwide 10 percent ethanol blend in the fuel
supply would take the market to a little over 14 billion gallons.

We believe the market can and should grow even larger. We see
opportunity in the expansion of E85. We also believe there's opportunity
in biodiesel. The broader renewable energy industry, in which these
biofuels play a leading part, is today, not unlike other industries; the
automotive industry in the start of the 20th Century or the micro-chip
industry in the \'80(s). They were budding industries with enormous
potential, over an undetermined time frame. And within these industries
the technological innovation, drove change. And with that change came
significant improvements in product quality, and actually the cost to
consumers became lower and in the quality of life. I think bioenergy is
poised to follow that same trajectory. But its development from the
visionary to the viable is not inevitable as our early history
demonstrates. In the face of the challenges still to be addressed, it's
easy for some to focus on what is limited or what doesn't work today,
rather than focusing on what is working and what can work even better
tomorrow.

Ethanol derived from corn and vegetable oil based biodiesel, are
examples of here and now solutions that deserve investment and support.
They're good for people, adding to the fuel supply. They're good for the
environment, reducing greenhouse gas emissions. They are good for
agriculture, creating new uses for farmer's crops and bringing new
economic resources to rural communities. And they're good for energy
security, providing renewable, sustainable, grown at home, energy. They
provide a positive energy balance, they're fostering the development of
a bioenergy infrastructure and they're also spurring the creation of a
critical mass of vehicles that can burn these biofuels. We believe that
corn ethanol and vegetable oil biodiesel will continue to account for a
significant percentage of biofuels for years to come. They will be
supplemented by products that are still largely today in the laboratory.
Will they ultimately be supplanted? We don't know, but we do know that
the future of energy is not in a single feed stock, a single product,
but it is in this diversity of supply. And at ADM we intend to be at the
forefront of practical, plentiful, renewable energy.

What will it take to advance renewable fuels and build this bioenergy
industry from the visionary to the viable? What will it take to overcome
our challenges and override fits and starts? Well we believe the
bioenergy will be built on a foundation of four elements: innovation,
investment, partnership and vision.

Innovation: Innovation to make more crops and croplands, more
productive. And to better develop new and better feed stocks. Innovation
to enhance the vision and the value of co-products and to ensure that no
part of the crop goes wasted, and innovation to improve processing to
create greater yields and lower costs and using less energy.

At ADM we are employing innovation in these areas. We're working to
develop cellulosic ethanol, first, by focusing on the materials already
being handled by our plants today. Our process involves thermochemically
treating corn hulls to allow part of their fiber to be fermented into
alcohol. And we believe this process will boost our production of
ethanol by 15 percent without adding an additional ear of corn.

We also believe that while technologies for cellulosic ethanol develop
there are things we can do quickly today to take advantage of this
material. We are researching the potential to combine cellulosic
material with dried distiller grains produced from dry mill and to
produce and create a replacement for corn as cattle feed. This way we
free up more of the corn stalk for ethanol production, without reducing
any of the feed supply.

We're also working to improve the CO~2~ balance of our ethanol
production by fueling more of our Cogen operations with biomass.

Investment: Investment is the second element of the foundation. We need
additional research. We need it to accelerate the development of the
here and now bioenergy solutions and to speed the arrival of the next
generation breakthroughs. We also need investment in infrastructure, in
the capacity to collect and store large amounts of biomass. We need
investment in larger transportation systems capable of handling a more
complex interconnected requirement. And investment in a distribution
system that makes it easy and convenient for consumers to actually
choose biofuels.

ADM is investing two and a half billion dollars in two new dry mill
facilities to increase our ethanol capacity; in two new biodiesel plants
here, as well as one in Brazil; in two Cogens, and additional rail cars
to increase our capacity, our transportation network, which is already
one of the nation's largest today.

Partnership is the third criteria; partnership with industry up and down
the supply chain; with farmers, with customers, with universities. The
growth of bioenergy presents a rare opportunity to build new value for
each of these stakeholders. We understand that together we can build
more value than any of us can alone. We believe our industry should also
partner with engine manufactures. And partnership should also include
government. Again, I would like to acknowledge Secretaries Johanns and
Bodman for their leadership in this area. Consistent, sound policy
initiatives can encourage the substantial investment needed to make this
industry viable. It can also translate widespread public sentiment and
support into pragmatic action.

And finally, the foundation of our industry must include vision. To
fulfill the promise of this bioenergy industry we will need to enlist
our brightest minds and unleash their creative capacity. To win their
commitment and to deserve their finest efforts, we need to paint a
picture of the bioenergy industry\'s future, vividly in bold and
compelling stokes, so that they not only see, but they feel its
opportunity. Our picture must be credible. We must answer our critics,
but we must not let cynics obscure the vision or dim the passion that so
many people feel at the prospect of a better way, to a better future
coming into view.

ADM is committed to leading the bioenergy industry into the future
through innovation, partnership, investment and vision. I hope that many
of you share this commitment and share our vision. We may differ in the
details, but the broad picture is clear. The dawn of a fundamentally new
energy era represents an extraordinary, perhaps, once in a generation
opportunity, to invest in people and their innovation and creative
capacity, to seek solutions based on holistic global needs and to fuel
sustained global economic growth that lifts lives and drives progress to
a better future.

I am honored to share this vision with you and to partner with you to
make this future not just visionary, but viable. Thank you.

**CONCLUSION: MR. TOLMAN**

Thank you Ms. Woertz, for sharing that exciting vision and perspective
about being able to meet both our food and fuel needs. That's a
significant and important message.