BENSON -- Ethanol fuel production discussions baffled Dale Tolifson during early meetings of Chippewa Valley Ethanol Co. more than a decade ago.
"We could have just as well have been talking in German," the corn grower recalled. "I didn't understand what they were talking about."
But Tolifson and hundreds of other Minnesota corn farmers quickly embraced the budding renewable fuel, believing it could result in a better price for their crops. It did.
Southern and western Minnesota farmers like Tolifson invested in plants that turned corn into ethanol fuel. When the state required ethanol be blended with gasoline, the industry grew rapidly.
A little later, soybean growers found a new use for their crop with production of vegetable oil-based biodiesel fuel.
Record-high corn prices meant "2007 was a good year, I can't deny that," said Tolifson, chairman of Chippewa Valley's board of directors.
Yet also this year, the flourishing corn-based ethanol industry slowed down, the result of a flooded marketplace and growing concerns about the environmental impacts of ethanol production.
Energy leaders say the downturn is a speed bump and they look ahead, proclaiming Minnesota is on the verge of the next big home-grown energy development, known by the tongue-tangling term "cellulosic ethanol." On the verge, that is, if "verge" is defined as a decade or more away.
That is when experts say the country will see commercial production of cellulosic ethanol, which researchers predict could be made with wood, grasses, corn stalks and other plant material, leaving valuable corn kernels for livestock feed. Even garbage can be turned into ethanol.
Certainly it is a transition time for ethanol, which in the United States mostly is added to gasoline in small doses; some is sold in an 85 percent ethanol-15 percent gasoline blend. Minnesota was one of the leaders in ethanol production, although it now trails Iowa, Nebraska and Illinois.
Cellulosic ethanol is the buzz in renewable energy, with pilot projects under way and state and federal lawmakers pumping record levels of research funding into the area.
Until there is large-scale production of cellulosic ethanol, existing and new plants in Minnesota's corn belt will distill the corn-based ethanol the state helped make famous.
"You will continue to see corn and soybeans used for ethanol and biodiesel," Gov. Tim Pawlenty said in an interview. "The promise of cellulosic is still largely a promise."
Experts and agriculture political leaders say the next generation ethanol is seven to 15 years away from large-scale, money-making production.
Tolifson, who farms 1,200 acres near Benson in western Minnesota, said both corn-based and cellulosic ethanol will be needed to reach renewable fuel goals being established across the country.
Researchers and ethanol producers are finding ways to use plant material other than corn to curb reliance on fossil fuel-based energy, which emits greenhouse gases like carbon dioxide.
Some say wood, such as in northern Minnesota's massive forests, would be good for ethanol.
But Dave Zumeta, executive director of the Minnesota Forest Resources Council, warned that many businesses and 35,000 employees in industries such as wood pulp, paper and lumber depend on those existing stands.
"Woody biomass for ethanol is more a threat than an opportunity from the perspective of existing industry right now," Zumeta said
He suggests using newly planted trees and prairie grasses for ethanol feedstocks, leaving today's forests for traditional uses.
Zumeta said most farms on forest land cleared for cropping -- 16 million acres -- are not very productive, but fast-growing trees such as willow, poplar and aspen could be planted for ethanol or even electricity production. Prairie grasses also would be better crops on that land than traditional corn and soybeans, he added.
He called the new farms "energy plantations."
Some wood products remain on the forest floor, Zumeta said, and they might make good ethanol feedstock.
In the heart of corn country, at the University of Minnesota Morris, campus leaders decided to "reclaim some control over our energy footprint" and looked into using biomass as an alternative fuel source to heat buildings, Associate Vice Chancellor Lowell Rasmussen said.
The campus is building a nearly $9 million "biomass gasification unit" to burn corn stalks, converting the material into a gas used to fuel a boiler. Other biomass gasifier projects in Minnesota are expected to be fueled by waste wood and other plant matter, but Morris chose corn stalks because of the plant's abundance near the western Minnesota campus.
"That was the 'ah-ha' moment for us," Rasmussen said. "Every morning we were driving by an energy plant that we simply hadn't thought of as an energy plant."
The university spends around $800,000 a year on natural gas for heating. Gasification could allow the campus to instead spend about $500,000 on corn stalks rather than natural gas, a fossil fuel subject to a volatile market.
Looking to cut costs on traditional energy sources, some corn-based ethanol producers also are turning to plant material. Chippewa Valley Ethanol Co. is completing construction of a gasification unit that will convert biomass -- beginning with wood chips, probably from northern Minnesota -- to a gas used to fuel its ethanol production, although corn still will be converted into ethanol.
General Manager Bill Lee said the gasification process could allow Chippewa Valley to rely less on natural gas as a fuel source.
"Our longer term goals are to tap into the ag residues like corn (stalks), wheat straw, grasses," Lee said. "But no one really has figured out real efficient ways of moving those materials from the field to (an ethanol plant), so the economics need to be improved there."