Renewable fuels rev up Wisconsin's bio-industryImproved federal and state initiatives helping to strengthen state's role in alternative energies research and productionStory by Jessica LaPlante-WikgrenWith state and federal legislation making historic investments in renewable energy and alternative fuels, Wisconsin agriculture is on track to become a major incubator of economic growth as the drive to replace a dwindling supply of world oil intensifies. By mobilizing the state’s traditional strengths of farming and high-tech manufacturing, Wisconsin agribusiness is sowing the seeds of a new economic revolution. Wisconsin currently ranks seventh in the nation for ethanol production capacity and is poised to become a frontrunner in biomass conversion, a process that transforms agricultural waste and organic residue into biofuel. By the end of 2007, Wisconsin’s ethanol production capacity is expected to top 500 million gallons, according to the Wisconsin Office of Energy Independence, a new bureau recently established by the governor’s office. The outlook for Wisconsin’s biodiesel industry is equally bright. Biodiesel, which can be produced from a multitude of sources – including soybeans, feedstocks and agricultural waste such as cheese whey or paper pulp – is expected to undergo a two-fold increase within the next year, with statewide output expected to surpass the 100-million gallon mark by the end of 2008, projects the Office of Energy Independence. Created by an executive order in early April 2007, the new administrative arm is tasked with the mission of helping the state generate 25 percent of its power needs and transportation fuels from renewable sources by 2025 – part of a national campaign known as “25 x 25.” More than solving the energy crisis, the expansion of renewable energy could serve as a spur to economic growth, resulting in over 17,000 new jobs and contributing more than $13.5 billion to the state’s economy – growth projections cited in the April 5 executive order from Gov. Jim Doyle. At the federal level, commitment to advocating energy independence is a defining feature of the 2007 Farm Bill, which provides up to $2 billion in loan guarantees for the development and construction of biorefineries, doubles funding for the federal Biodiesel Education Program, and extends $1.5 billion in production incentives for U.S. producers of bio-based renewable fuels. With major pieces of state and federal legislation providing the monetary stimulus to help the bioenergy industry shift into high gear, local educators and industry leaders believe the time is right for northeast Wisconsin to launch its own concerted campaign. Apart from providing an affordable substitute to foreign petroleum, an energy source expected to last only another 30 to 40 years, biofuel will help the state build a secure future by strengthening another dwindling resource – farming operations that have become fewer in number with time. “This is the greatest boom in agriculture we’ve seen in 100 years,” said Don Jaworski, associate dean in NWTC’s Trades and Technical Division. “The energy department has come over to the agriculture department and said, ‘can you grow us energy crops?’” Participants in the movement are large and small: from major ethanol producers to progressive farmers that strive to be self-sufficient, generating enough “home-brewed” biodiesel to power their own equipment. To serve the growing ranks of companies and individuals who are jumping aboard the bioenergy movement, the college started planning a curriculum expansion a year and a half ago. Toward that end, NWTC is recruiting a full time renewable energy technologies educator who will be responsible for developing three courses by January 2008 with the long-range goal of rolling out an entire suite of courses that anticipate industry needs. Students can take a stand-alone course to earn elective credit toward a related degree program – such as diesel equipment technology, gas utility construction, or electrical power distribution – or they can cross-train by combining a single course or a certificate with any college major. Sandra Duckett, vice president for college advancement, said the push to develop new programming has been both in response to existing demand and in anticipation of future growth. Test driving its theory that biofuel training is a high-demand area, the college conducted a biodiesel seminar in early January. The seminar served as an orientation to ethanol and biodiesel production and included guest speakers from the state Office of Energy Independence and manufacturers of biodiesel production equipment. Organized and promoted in less than a month, the seminar attracted more than 150 participants, Duckett said. The growth of local companies serving the bioenergy market is another indicator that points to the need for expanded training in renewable technologies. Anamax Energy Services, a Green Bay-based recycler of organic materials, made its debut in the renewable energy sector in May by shipping out its first large-scale batch of biodiesel fuel made from livestock byproducts and vegetable oils. The alternative fuel will be distributed through northeast Wisconsin’s Progressive Farmers Cooperative. A pioneer in cellulosic ethanol production, Packerland Whey Products in the Kewaunee County community of Luxemburg recently received a $40,000 grant from the state Department of Agriculture, Trade and Consumer Protection to develop a biofuel plant that will convert cheese whey into ethanol, turning industrial waste into clean-burning fuel. Smaller farms and factories are also producing biodiesel. “These plants are coming (online) and they’re pretty sophisticated,” Jaworski said. “They’re highly organized with technology and I think they’re going to be able to compete very well.” Biofuel isn’t the only renewable energy market that already has a foothold in northeast Wisconsin, a fact reflected in the comprehensive scope of the college’s training program. Wind and solar also rank high on the college’s list of training priorities. “Wind is leading the pack in renewable energy,” Jaworski said, adding, “it seems to have the greatest capacity to compete with the coal-fired burning we’re doing right now.” The college already has a head start in demonstrating one of solar power’s brightest innovations – photovoltaic panels which convert sunlight directly into electricity. Recently, NWTC installed two sun-flower shaped photovoltaic units at the Green Bay Botanical Gardens, a community garden that doubles as a living learning lab for NWTC’s horticulture program. The sunflowers “get up in the morning facing the east and go to sleep facing the west, tracking the sun all day long and harvesting the sunlight and converting it into electrical energy,” Jaworski said. Realizing that renewable is just one promising area among a team of technologies, NWTC also will create a “green energy” cluster of training courses, focusing on efficient building design and other energy conservation practices. Ultimately, the college would like to construct a renewable technology learning center that would serve as both an education center and showroom for exhibiting a wide array of alternative power sources. Kagen’s amendment designates $5 million in grant funds to support farmers’ efforts to achieve total energy independence – serving as industry trendsetters by using existing technologies in innovative ways. A five-year legislation package covering agriculture, energy, conservation, rural development and food stamp programs, the 2007 Farm Bill – passed by the U.S. House of Representatives on July 27 – includes a substantial aid package directed at bioenergy. The new bill is ramping up funding for the production of alternative fuels using cellulosic biomass – ethanol produced from organic matter and agricultural byproduct – injecting new vitality into the federal Bioenergy Program by proposing a funding level of $1.5 billion over a five-year period. In addition, the 2007 bill substantially increases funding for biomass research and the construction of improvements that utilize renewable energy or energy conservation techniques. “It’s very important that our entire nation begin to formulate an energy policy that makes sense economically and politically,” Kagen said. “We have to move in 10 to 15 years away from fossil fuel consumption and toward renewable sources – biomass and cellulosic (product).” The renewable energy investments made in the House-passed farm bill are by no means final. The U.S. Senate must pass its own version of the bill, and the two chambers of Congress much reach a consensus before the bill is forwarded on to the president for final approval. Nonetheless, the unprecedented funding package has inspired optimism among local biofuel companies, including Ethanol and biodiesel have transformed the landscape of the gasoline market by reducing foreign oil’s control over the pricing structure of fuel, keeping prices low by keeping production local. hat concept of keeping it regional is the driving force behind Renew’s business model. The company buys ethanol directly from producers and blends it with gasoline to produce its own in-house fuel that is sold directly to consumers at a lower cost than if a middle distributor were involved, said Jay Stoflet, director of retail marketing for Renew E85. Although ethanol gets fewer miles to the gallon than petroleum-based gasoline, the company is able to market ethanol-gasoline blends that are still cheaper than petroleum-based fuels when cost per mile is measured. Perhaps ethanol’s biggest disadvantage is that it is primarily made from corn starches, causing biofuel producers to rely heavily upon a single energy crop. Cellulosic ethanol, a technology that uses other biomass – including byproducts of agriculture, forestry and livestock/food processing – could revolutionize the industry by turning any number of organic materials into precursors of alternative power. Legislation that funds new research into process improvement, rather than simply financing the construction of existing technologies, is vital to the long-term growth of biofuel. Stoflet said the 2007 Farm Bill is “creating a more favorable climate (for biofuel) because it’s pushing people into the advancement phase of the industry versus just setting up infrastructure.” Research into cellulosic ethanol as a fuel source could have profound implications for Wisconsin industries that generate waste products such as wood chips, paper pulp, cheese whey, grease and animal fat. The research could enable Fox Valley manufacturers to diversify their income by turning unused residue into supplemental revenue “as cellulosic ethanol becomes a production reality in this area,” Stoflet said. “You have a lot of paper industries still here, and there’s a lot of opportunity with cheesemaking as well to take that liquid whey and convert it to ethanol.” For the alternative fuel market to really take off in Wisconsin, there needs to be not only a steady and diverse supply of energy crops, but adequate distribution channels and fair pricing laws, Stoflet said. The state’s minimum markup law requires retailers to markup gasoline products by 9.18 percent above the average rack price of the nearest fuel terminal. Originally designed to level the playing field for independently owned fuel stations, the law has the unintended effect of penalizing ethanol producers for developing a cost-effective alternative to foreign oil. Renew E85 uses a pricing formula that subtracts a federal blending credit from the markup price to offset the law’s impact. Until the state markup law is revised to take into account ethanol’s domestic origins and unique role in energy independence, the biofuel industry must cope with the uncertainty of having sales and distribution indirectly controlled by its competitor – the oil industry. Stoflet said he would like to see legislative changes that distinguish between ethanol and petroleum-based fuels, helping consumers make the connection between cost savings and purchasing homegrown fuels. Another limiting factor faced by ethanol producers is a shortage of distribution points, a problem some ethanol producers are side-stepping by building their own fuel stations. Stations with old ties to the petroleum market don’t have a strong incentive to make the switch to ethanol. While consumers with flex fuel vehicles are increasingly demanding that option, the cost of upgrading an existing station to dispense E85 may seem like an extravagance to stations that don’t specialize in biofuel. For that reason, it is more economical for new stations to include E85 pumps in their construction plans than for old stations to renovate. A state-administered grant designed to defray the cost of pump installation will help gas stations pay the upfront costs of breaking into the biofuel market. In the end, the rise of renewable energy is not only good news for consumers, farmers, and ethanol producers; it’s sustainable fuel for economic growth, giving construction firms, manufacturers and service providers plenty of reason to anticipate a bright future teeming with vibrant opportunities. |