Pawlenty says China could be open to state's biofuel ideas

China could be a ripe market for Minnesota's expertise in developing biofuels and renewable energy sources, Gov. Tim Pawlenty said Thursday morning.

Pawlenty spoke at a biofuel symposium this week during his trade mission to China. He spoke about the trip from Hong Kong in a conference call with Minnesota reporters.

The conference was a good opportunity to showcase Minnesota's efforts, Pawlenty said.

During his speech, he said, he outlined the need for the world to move toward using more renewable energy.

He highlighted the advantages for farmers in higher crop prices and more opportunities for value-added products, as well as the clear environmental advantages of renewable energy, Pawlenty said.

The governor said he was direct with the Chinese about the resistance often seen from oil companies when the issue of renewable fuels comes up.

The Chinese have an interest in biofuels but at this point it's more "aspirational," Pawlenty said. Some provinces have mandates, but they aren't strictly enforced.

"They just seem to be getting started" with alternative fuels, he said. The country has four or five very large ethanol plants, but it's a "drop in the bucket" when weighed against the huge country's energy demands.

"The market here is just huge," Pawlenty added. Minnesota is an international leader in alternative energy and "I think we could help them."

Pawlenty said he emphasized environmental considerations in his talks, but concern for the environment is also a just-emerging issue in China.

"They note it," he said, but the country continues to build coal-burning power plants and diesel generators.

The situation has led to "unfortunate air quality problems," he added. "This is a clear day by Hong Kong standards, but I think most Minnesotans would be quite startled by the amount of air pollution here."

In the past year China moved from fourth to third in the list of Minnesota's largest export markets, Pawlenty said.

For the first time, the state's exports to China are expected to exceed $1 billion this year. Only Canada and Ireland buy more products from Minnesota. Japan has moved from third to fourth.

The goal is to expand into the Chinese market without losing jobs in Minnesota, Pawlenty said.

Pawlenty listed some examples of how that can be done. A 3M facility in China, geared toward serving the Chinese market, which uses components and supplies from plants in Minnesota. A Chinese company is a part owner of the taconite plant in Eveleth, and has helped revitalize northeastern Minnesota's iron mining industry.

The Chinese are planning a trade mission to Minnesota in the next year to look into possible investment in Minnesota, too.

"They know of Minnesota's long history of exchange with China," he said, and the people they've met have been impressed with the size of the state's delegation, the largest ever sent to China by a single state.

Pawlenty said there was not much concern among the 218 delegation members when human cases of bird flu were confirmed in China this week. Health officials indicated that there was no danger to people, since the disease so far is only contracted through contact with infected birds.

"It's a very big story here, as it should be," he said. "They are following as best they can the protocols in dealing with it."

The government has been aggressive in slaughtering infected flocks and has said it will vaccinate chickens. However, there's some question in how effective that will be in rural areas with high numbers of small residential-based chicken farms, he said.

The delegation returns to the United States today.