Renewable Fuels in Minnesota

1. Renewable Fuels in Minnesota Commissioner Gene Hugoson

2. Renewable Fuels in Minnesota • Minnesota’s renewable fuels agenda • Boost the farm and rural economy • Reduce dependence on foreign fossil fuels • Improve air quality

3. Renewable Fuels in Minnesota • The MDA’s Role: • Public education • Increasing ethanol production • Encouraging farmer-owned developments

6. Renewable Fuels in Minnesota • The results: June 2007 • Ethanol supports 10,000 jobs • Ethanol generates $2.8 billion for state • 16 ethanol plants, most farmer-owned • Production capacity tops 600 million gallons • 20% of corn crop used for industrial processing • $300 million in value added to commodities

7. Minnesota Ethanol: Economic and Employment Impact *Projected Source: AMS, MDA

8. Renewable Fuels in Minnesota • Goals achieved: • Boost farm and rural economy  • Value added to corn crop • Multiple farmer-owned, value-added cooperatives • Reduce reliance on foreign energy  • Each gallon of ethanol cuts oil import needs by 7 gallons • Clean up environment  • Twin Cities in attainment for carbon monoxide

9. Renewable Fuels in Minnesota • Governor Pawlenty takes Minnesota to the next level • Making Minnesota the “Saudi Arabia of renewable energy” • May 2005: Signs legislation to move to 20% ethanol (E20) content in state gasoline by 2013 • Boosts number of E85 vehicles in state fleet • September 2005: Minnesota becomes first state to mandate use of 2 percent biodiesel

10. Renewable Fuels in Minnesota • Governor Pawlenty takes Minnesota to the next level • E20 progress • Conducting tests with University of Minnesota on • Materials compatibility • Drivability • Exhaust and evaporative testing • Additional testing to be done on • Health impacts of E20 • Long-term durability

11. Renewable Fuels in Minnesota • Governor Pawlenty takes Minnesota to the next level • May 2007: Signs Next Generation Initiative into law • Increases Renewable Energy Objective to 25% by 2025 • E-85 Everywhere – Goal of 1,800 stations by 2010 • Promote cellulosic ethanol and advanced biomass technologies

12. Renewable Fuels in Minnesota • Governor Pawlenty takes Minnesota to the next level • Next Generation Initiative includes… • Next Generation Energy Board • Develop recommendations on how state should invest resources to achieve renewable energy goals • Next Generation Energy Grants • $35 million for Next Generation Energy initiatives, including funding for a wide variety of grants and research

13. Renewable Fuels in Minnesota • Biodiesel in Minnesota • Three major biodiesel plants with annual production capacity of 63 million gallons • Minnesota ranks among largest biodiesel producers in the country

14. Renewable Fuels in Minnesota • Minnesota’s status in June 2007 • More than 300 E-85 stations • 16 ethanol plants with more than 600 million gallons of production capacity • Minnesota leading the nation in per-capita consumption of renewable energy

15. Renewable Fuels in Minnesota • Minnesota’s status in June 2007 • Continuing to grow • Five new ethanol plants under construction will add 450 million gallons of production capacity • 5-6 existing plants are expanding

16. Renewable Fuels in Minnesota • Minnesota’s status in June 2007 • Continuing to innovate • Winnebago plant burns DDG syrup, replacing half of natural gas needs for process energy • Last summer, Little Falls rolled out gasification plant that uses wood chips and DDGs to replace all natural gas and 1/3 of electricity needs • CVEC plant in Benson to produce syn-gas, opening door to cellulose-to-energy technology

17. Renewable Fuels in Minnesota • Federal activity • President announces “20 by 10” goal in 2007 State of the Union • Seeks to cut U.S. gas consumption by 20% over next 10 years • Renewable fuels standard increase to 35 billion gallons in 2017 • Reforming and modernizing CAFE standards

18. Renewable Fuels in Minnesota • External drivers • Oil prices surge past $70/barrel

19. Renewable Fuels in Minnesota

20. Renewable Fuels in Minnesota • External drivers • Oil industry drops MTBE as oxygenate option • U.S. auto makers step up promotion efforts for E-85 vehicles

21. Renewable Fuels in Minnesota • External barriers to success • Lingering misconceptions about renewable fuel • That it causes engine problems • That it drives up fuel prices • That it takes more energy to produce than it yields • That it is the root cause of food shortages and price hikes

22. U.S. Crop Area Summary to 2015 100 333 95 330 90 327 85 324 80 321 75 318 70 Crop Total (mil acres) Individual Crops (mil acres) 65 315 60 312 55 309 50 306 45 303 40 35 300 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Crop Total Corn Soybean Wheat All Hay Other Crops Renewable Fuels in Minnesota

23. Renewable Fuels in Minnesota • To-do list • Pursue alternative fuel stocks • Educate public about renewable fuels • Federal farm bill process • National Governors Association calls for increased biofuels production and consumption

24. Renewable Fuels in Minnesota Minnesota Department of Agriculture Gene Hugoson, Commissioner 651-201-6219 Gene.hugoson@state.mn.us