State looks to energy future

ST. PAUL -- Minnesota sits at an energy crossroad.

Ethanol and wind-power pioneers gave Minnesota a good start. But visions of a better future bubble up in scientists' and political leaders' heads -- energy plantations, using every bit of a plant for power and new ways of harnessing the wind.

Minnesotans are ready for a new energy future, one that uses much more homegrown resources than today's oil-dependent economy.

"We have reached a turning point," Gov. Tim Pawlenty said in an interview. "The public's awareness of this, the public's appetite for this, the public's demand for this is strong and increasing. And the markets are responding in astounding ways."

Energy options abound.

"Can there be a silver bullet or will there be, by necessity, silver buckshot?" asked Dick Hemmingsen, director of the University of Minnesota's Initiative for Renewable Energy and the Environment.

The answer appears to be buckshot. Some experts, for instance, predict fuel pumps with 10 options, ranging from gasoline to hydrogen.

That day is not here. Pawlenty predicted it will be 15 years before the energy future arrives, but he and others said technology is advancing fast and potential profits mean businesses may find new ways to use Minnesota resources sooner rather than later.

A Minnesota-based energy drive began decades ago, and really caught fire in 1992. Twin Cities' air was so polluted that federal authorities ordered all gasoline sold in Minnesota's largest metropolitan area that winter to contain some oxygen to ease the problem.

Minnesota farmers provided the solution with corn-based ethanol, which when mixed with plain gasoline lowered pollution.

Five years later the Legislature required gasoline statewide to contain 10 percent ethanol. After several years of struggling to build the state's ethanol industry, the mandate 10 years ago fueled a massive growth, leading many politicians to claim Minnesota was becoming "the Saudi Arabia of the Midwest."

Lots of talk followed about using Minnesota's crop, wind and other resources to help the country become "energy independent." That rhetoric, while still heard from some quarters, has faded a bit.

During a recent "Washington Journal" appearance on the C-SPAN cable television service, Pawlenty fielded an Alabaman's charge that energy independence is not possible for decades.

"I always say it is important that we should move towards energy independence rather than say in the next two years we are going to be energy independent because that is unrealistic ... " Pawlenty said in a measured tone. "Over time, we certainly can make progress toward that goal."

Realism that time is needed to reach anything approaching energy independence is taking hold in Minnesota, along with the understanding of an ever-increasing role for corn, soybeans, wind, wood, even turkey manure. All parts of the state can get into the energy act.

But that is the future. Now is a transition time.

Ethanol plant construction has slowed. In northwestern Minnesota's Erskine, for instance, economic fears influenced Agassiz Energy last month to indefinitely postpone plans to build a corn ethanol plant.

"With today's market conditions, we can't make any money," said Agassiz Energy President Don Sargeant, citing high corn prices and relatively low ethanol prices.

On top of money questions, many of the more than 100 people attending an October Erskine meeting said they were concerned about environmental impacts from ethanol plants, the primary of which is ethanol plants use lots of water.

In Benson, Chippewa Valley Ethanol Co. decided in September to delay an expansion of its corn ethanol plant, noting increased construction costs and a flooded ethanol marketplace.

Pawlenty said the ethanol boom, which he called "a gold rush," is making a market correction: "It's like everything else -- there is a huge buildup in the ethanol market. They have to take a little pause and a little breather until they restabilize. Some people would say they were overbuilding."

Wind power also faces a hurdle that slows its development -- there are not enough transmission lines to move the juice from where it is produced, mostly in southwestern Minnesota, to where it is needed, mostly in the Twin Cities and farther east.

Companies manufacturing wind turbine parts, such as southwest Minnesota's Suzlon Energy, are seeing a growing demand for wind energy and a long list of wind farm projects are under construction.

Major new wind projects will struggle unless there is investment in new transmission lines, which face regulatory challenges and in some cases stiff opposition from environmental groups.

The energy speed bumps do not affect Deputy Commerce Commissioner Ed Garvey's enthusiasm for Minnesota's energy future.

"We are the shining star of the whole planet on energy issues," he said.

Maybe so, maybe not. In wind power, for instance, California and Texas dominate. And Iowa, much maligned by many Minnesotans, produces three times as much ethanol, and the Hawkeye state is ramping up to have an ethanol plant in every one of its 99 counties.

Corn-based ethanol costs too much to produce, and more research is needed before the next generation is available. Known as cellulosic, the new ethanol would be made out of grass, wood chips, garbage, crop residue and other cheaper and more environmentally friendly feedstocks.

Minnesota was the first state to mandate that all gasoline contain at least 10 percent ethanol. And before any other state adopted a similar standard, Minnesota's leaders decided to up the bar to require that 20 percent of the state's gasoline sales be ethanol.

Minnesota has a third of the country's 1,300 E85 pumps that provide customers with an 85 percent ethanol, 15 percent gasoline blend for cars that can burn it.

Soybean-based biodiesel is being produced in Minnesota, the only state to require that most diesel fuel contain 2 percent of that crop-based fuel.

Western Minnesota is among the windiest areas of the country, and wind farms are sprouting up as fast as the corn that grows around them.

Also in western Minnesota, the Fibrominn facility produces electricity by burning turkey manure, abundant in that poultry-producing area.

"Clearly, there is a vision that we all basically have," Garvey said.

"Energy plantations" is a vision of Dave Zumeta, Minnesota Forest Resources Council executive director. Those plantations would be places where prairie grass or fast-growing trees provide raw materials for ethanol and electric-generating plants.

There is plenty of land for the plantations -- 16 million acres of former forest land across the state that after it was cleared for farms was discovered to be less than suitable for traditional crops. Zumeta said much of that land would be ideal for the new crops.

"We are not there yet, technologically," Zumeta admitted. "But there is a lot of money chasing this."

One of the big changes, experts predict, is that all of Minnesota will be part of the energy future. Crop-based fuel plants, such as those that produce ethanol, mostly are in southern and western Minnesota. So are wind farms.

"The energy industry will be more evenly spread out," Zumeta said.

Plants, which scientists like to call biomass, will be a big part of this energy future.

"There are biomass resources all over the state," Assistant Commerce Commissioner Mike Bull said.

That will lead to a major change for Minnesotans, added Assistant Agriculture Commissioner Joe Martin: "You will live closer to an energy facility than you do now."

Grand Forks Herald reporter Kevin Bonham contributed to this story.