GROWING FUEL: Last of four articles

Production of corn ethanol is rapidly expanding, but a "next generation" renewable fuel — ethanol made from grasses and "biomass" like wood and organics — is on the horizon. It's a potentially huge development for Minnesota's countryside that could continue an economic resurgence in rural areas fueled by ethanol.

Despite concerns about its effects, the corn ethanol industry is only hitting its stride. Energy legislation signed last month by President Bush mandates a doubling of ethanol made from corn, even though it already consumes 20 percent of the nation's corn crop and with the new law is estimated to rise to a third of the crop.

The energy law, passed with broad support in Congress, also mandates that by 2022 the United States produce 21 billion gallons of ethanol from grass cellulose and biomass from wood, animal waste and even garbage.

The ambitious goal is prompted by rising concerns about U.S. dependency on oil imports and the effects of burning oil whose carbon emissions are linked to climate change.

Meeting the non-corn ethanol goal is certain to induce still more rural economic growth that could surpass the explosive expansion of corn ethanol production in Minnesota and across the Great Plains.

Technology not ready
But questions loom over how much can be done and on what timetable.

Consider: it will have taken 30 years for U.S. corn ethanol production to attain the new goal of 15 billion gallons (with 7.2 billion gallons currently produced, it's about half there).

Corn has long been an established crop and distilling ethanol from it utilizes a centuries old liquor-making process. However, no cellulosic or biomass ethanol is currently being commercially produced. The technology to make it happen is years off, and cultivation processes to produce the grass feedstock is far from established.

Still, Congress has directed that non-corn ethanol production go from zero to 21 billion gallons in half the time it took the much simpler corn ethanol industry to mature.

"A lot of things have to go right within the space of only a few years," said Aaron Brady, an energy expert at Cambridge Energy Research Associates, an international energy consulting service headquartered in Massachusetts.

Minnesota is poised to gain enormously from "next generation" ethanol. The state has prairies where needed grasses can thrive, as they did before 30,000 square miles of sod was busted in the Great Plains to raise grain crops during pioneer settlement. Minnesota also has forests for wood biomass and a major urban center that generates copious organic wastes that now goes to landfills.

"We're in the bulls-eye of ethanol growth," said Don Arnosti, an agriculture and forestry expert with the Institute for Agriculture and Trade Policy of Minneapolis. Arnosti is a leader in a multi-pronged push by advocacy groups seeking legislative funding and policy support for alternative fuels.

Estimates vary on the value of a non-corn ethanol industry. However, economists generally peg a fully mature corn ethanol industry at about $7 billion annually with 25,000 jobs scattered across Minnesota's rural areas, helping reversing an economic decline that's been steady since World War II.

'Ready to fire'
A new ethanol industry likely would be valued at more than twice what corn ethanol has meant for the state's economy.

"We understand that the opportunities here are enormous," said Michael Bull, an assistant commissioner of the Minnesota Commerce Department and Gov. Tim Pawlenty's point person for energy policy.

State government is planning for "next generation" renewable fuels by supporting research and by working to amass a ready reserve of lands to grow prairie and other grasses. The state also is creating market pull for the fuel by becoming the nation's first to require refiners to blend gasoline with 20 percent ethanol (all that's needed is for the Environmental Protection Agency to designate E20 as a legal fuel, which is expected to happen).

"We're at the ready-aim point with renewable fuels," Bull said. "As it comes time we'll be ready to fire."

Unlike corn, native prairie grasses are low maintenance: they are perennials that obviate annual plowing, they require little added water and no chemical fertilizers, and they'll grow most anywhere on the prairie.

University of Minnesota ecologist Clarence Lehman says prairie grasses also provide quality habitat for varied wildlife populations that have suffered historical declines as the prairie was plowed and millions of wetland acres drained. Plus, the energy gain with cellulosic ethanol is more than eight times that of corn ethanol.

Lehman is part of a team of university researchers led by David Tillman who are conducting landmark studies on the value of prairie grass in ethanol production. Tillman, Lehman and Jason Hill published an article in Science last December that provoked worldwide discussion on grasses as an alternative to corn ethanol and helped generate public and political support for grasses as a fuel source.

But there are challenges:

· Breaking down complex polymers in cellulose to simple sugars for fermentation requires commercially affordable enzymes or a thermal-chemical process, and breakthroughs are at least three years away.

· For native grasses to again flourish on the prairie, seeds specific to each area need to be grown in large incubator plots. It could take a decade or more for sufficient seed stock to potentially plant up to 3,000 square miles of prairie grasses.

· Processing plants would have to be built or converted to distill cellulosic grasses or biomass, and that would be expensive.

· Farmers would need financial incentives to switch from high-profit corn to grass crops that take up to three years to mature.

"It will cost a lot of money, on a scale of the investment that was made for corn ethanol," said state Rep. Al Juhnke, DFL-Willmar, who chairs the House Agriculture Committee that this year may consider legislation that would pump $46 million into a plan to acquire prairie land to grow cellulosic grasses.

Ethanol production in general is enabled by billions of dollars in public subsidies. And for the nascent industry to flourish, government must require reluctant refiners to add ethanol to gasoline and require automakers to produce "flex fuel" engines capable of burning higher and higher ethanol blends.

Ethanol advocates point to Brazil as a country that has reduced oil dependency through ethanol.

Brazil's sugar cane-based ethanol has reduced the country's oil imports from 80 percent during the 1973 oil embargo to zero. All cars now sold in Brazil are "flex fuel" to burn any combination of gas and ethanol.

While corn ethanol is currently the renewable fuel of choice in the United States, it's encountered a chorus of concern about using a food staple for fuel, the negative environmental effects of growing all that corn, and the vast quantities of water used to process corn ethanol. (Combined, Minnesota ethanol plants annually consume as much water as the annual residential needs for 80,000 people.)

Industry changes
Responding to those concerns, there's stepped-up innovation in the industry to help drive down ethanol production costs and prepare for "next-generation" fuels.

For example, Central Minnesota Ethanol in Little Falls, Minn., tempers its need for natural gas by making fuel from wood-waste biomass; steam from the plant's distillery spins generators to offset a third of the plant's electricity.

Central Minnesota General Manager Kerry Nixon said he's next looking to produce ethanol from wood, which would vastly lower his plant's water requirements because the process utilizes the water in wood. Together, the innovations would increase energy output efficiency by using by-products to further replace natural gas.

At POET Biorefining's Glenville East plant near Albert Lea, Minn., ground soon will be broken for a 65-million gallon plant next to the 42-million plant currently operating there.

Plant manager Rick Mummert said the new facility is designed to switch to processing cellulosic or biomass ethanol as the technology becomes viable. Meantime, his staff is seeking to reduce water use through closed-loop recycling that recovers rather than discharges water and runs it back through the cooling system.

Mummert is also seeking to expand production of "co-products" such as nutrient-rich livestock feed, and even capture carbon dioxide that gurgles up in fermentation and sell it to the soft drink industry.

"Only a third of a corn kernel goes into ethanol production and the rest goes into other products, mostly livestock feed," Mummert said.

But a major question remains over how fast the ethanol industry can be shaped to meet the ambitions federal goal of producing 36 billion gallons by 2022.

"Obviously, there's a worldwide scramble to develop the technology to make this happen," Arnosti said.

Ron Way, a former reporter for several Midwest newspapers, covers the environment and energy issues. He can be reached at rway [at] minnpost [dot] com.