What should we do with corn?

Shove it into cows that become fatty, high-cholesterol meat that contributes to heart disease? Turn it into cheap sugars that make people fat or sick?

Or use it to produce biofuels that will help reduce the U.S.'s dependence on Middle East oil, improve our balance of payments and create jobs instead of funding terrorists?

That's a loaded question, of course, but that's the way that James Woolsey, the former head of the CIA who is now a venture capitalist, put it to a friendly audience of biotech executives.

The biofuels industry has been subject to "propaganda" and "false narratives," he said

Putting a new twist on the food-vs.-fuel debate, Woolsey argued that there's plenty of acreage to grow corn and, in any event, that corn is better used as a biofuel to replace oil than it is to make "cheap junk food" so that the "grocery manufacturers association can make more money making our children obese."

"We need to go on the attack," he declared.

No wonder he's been called a "green hawk."

Woolsey, a partner at VantagePoint Venture Partners, and Vinod Khosla, the venture capitalist and relentless advocate of biofuels, spoke today to BIO's World Congress on Industrial Biotechnology and Bioprocessing at the National Harbor convention center, just across the Potomac from Washington, D.C.

Woolsey's a lawyer and a Washington veteran who has worked for Republican and Democratic presidents, so he focused on the politics and economics of biofuels and bioplastics. Silicon Valley-based Khosla, who was trained as an engineer, presented slides packed with dense chemical diagrams and formulas.

Both argued that the biotech industry can find ways to use agricultural products and advanced chemistry to create new fuels and feedstocks that will compete with and gradually replace petroleum-based products.

Woolsey, who drives an electric car, talked briefly about electricity, arguing on behalf of distributed rather than centralized power generation. He described today's transmission grid as "very, very troubling structure" because it is vulnerable to blackouts, hackers and terrorism.

"If we could gravitate -- not jump, but move over time -- to a much more distributed electric grid, towards micro and mini-grids, we would have a much more secure and much more resilient electrical structure," he said. That would also create opportunities for small-scale biomass generation.

Mostly, though, he focused on the economic and security risks of the U.S. dependence on OPEC oil. "We're borrowing about $1 billion a day just to import oil," he said.