But he insists the key to that growth is moving beyond traditional ethanol and a 10-year-old government renewable fuel mandate to embrace exports and airlines' demand for cleaner-burning alternatives - while also beating back steep oil industry opposition.
"I'm very optimistic about the future of the bio-economy and the role biofuels and advanced biofuels will play in that future," Vilsack said in an interview.
While Vilsack (pictured) praises the sector's successes, he also wants the industry to broaden its focus beyond the renewable fuels mandate, which forces refiners to meet annual biofuel quotas.
An oil industry campaign against that statute and the prospect that Congress could repeal it has the biofuels sector "hunkered down," trying to guard against attacks, he said.
Under the renewable fuel standard, refiners are obligated to add steadily increasing amounts of ethanol and other alternatives into the nation's transportation fuels - up to 36 billion gallons in 2022. While Congress set out the basic framework, it is up to the Environmental Protection Agency to establish annual quotas for the four types of biofuels required under the law: traditional corn-based fuel; advanced biofuels not derived from cornstarch; biodiesel; and cellulosic biofuel.
Oil companies and industry groups say the law is pushing them against a "blend wall" where they can no longer mix in enough ethanol to meet the volumetric targets without exceeding a 10 percent threshold acceptable for use in all cars and trucks. With a multiyear campaign that has drawn in motorcycle enthusiasts, chain restaurants and recreational boaters, the oil industry has raised the specter of spiking gasoline prices, engine damage and higher food costs.
American Petroleum Institute downstream director Bob Greco calls the ever-increasing mandate "a crisis in waiting ... that could put consumers in harm's way, hurt the economy and disrupt the nation's fuel supply."
But Vilsack is skeptical of the oil industry's opposition.
"They seem to be really, really focused on trying to eliminate the RFS and trying to hamstring the department, which leads me to believe not that they don't think this is a necessary industry but that they are looking for an opportunity to potentially purchase the infrastructure of the industry for a lot less than having to actually purchase it from scratch," Vilsack said.
He blames the oil industry for "limiting the options available to help finance" renewable fuels infrastructure, including gas station blender pumps that offer a range of ethanol fuel. Lawmakers embedded a provision in the 2014 farm bill to block the Agriculture Department from tapping its Rural Energy for America Program to encourage gas stations to install blender pumps.
The EPA's long delays in rolling out the annual RFS quotas have provided fodder to congressional critics of the program, spurring calls to repeal or revamp it.
But Vilsack says biofuel foes would seize on any opening: "The opponents of the renewable fuel industry and the renewable energy industry are very well organized and very big and very smart. And they would use any opening to create confusion, uncertainty and momentum for doing away with the RFS."
Amid the controversy, Vilsack says the USDA's role is to defend the RFS but "keep an eye on everything else," and use other programs to spur research and commercialization of next-generation biofuels, made from algae, cornstalks and endless other materials. And, as he works to revitalize rural America and agriculture, Vilsack increasingly is championing bio-based manufacturing that uses soybeans, flax and other organic materials to make plastics, fabrics and other products - often replacing petroleum in the process.
Biofuels and bio-manufacturing are signature issues for Vilsack, not coincidentally because of his ties to Iowa, where he moved after law school and spent eight years as governor. The state leads the nation in ethanol and corn production and its soybean harvest in 2014 ranked second in the country.
During Vilsack's six-year tenure atop the USDA, he has fiercely championed biofuels.
Perhaps the biggest biofuels venture created under his watch is a 2010 partnership with the Energy Department and Navy to accelerate the development of domestic drop-in diesel and jet fuel that can be used inside existing marine and aviation equipment without modifications. The USDA's separate Farm to Fly program seeks to enable commercially viable supply chains for aviation biofuel, with research and development as well as demonstration activities.
USDA investments also have gone to commercial aviation biofuel projects in Nevada and New Mexico - including one that aims to produce green oil from algae and another that targets municipal solid waste.
Low gasoline prices have squeezed the margins for ethanol manufacturers, but exports of biofuel and its byproducts can help blunt some pain. The United States exported 835 million gallons of biofuel last year and $1.3 billion worth of distillate dried grains, an ethanol byproduct that is coveted overseas as a high-protein food additive. The USDA has used its trade promotion authority to talk up the product to potential customers in Asia.
"With exports, you create greater stability and greater profitability," he said. "This is an enormously expanding opportunity."
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