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Renewable Fuels in Minnesota Commissioner Gene Hugoson

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Renewable Fuels in Minnesota. Commissioner Gene Hugoson. Renewable Fuels in Minnesota. Minnesota’s renewable fuels agenda Boost the farm and rural economy Reduce dependence on foreign fossil fuels Improve air quality. Renewable Fuels in Minnesota. The MDA’s Role: Public education - PowerPoint PPT Presentation

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Page 1: Renewable Fuels in Minnesota

Renewable Fuels in Minnesota

Commissioner Gene Hugoson

Page 2: Renewable Fuels in Minnesota

Renewable Fuels in Minnesota

• Minnesota’s renewable fuels agenda1. Boost the farm and rural economy

2. Reduce dependence on foreign fossil fuels

3. Improve air quality

Page 3: Renewable Fuels in Minnesota

Renewable Fuels in Minnesota

• The MDA’s Role:– Public education– Increasing ethanol production– Encouraging farmer-owned developments

Page 4: Renewable Fuels in Minnesota

12

34

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14 1416

0

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12

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16

Nu

mb

er o

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1986 1988 1991 1994 1995 1996 1997 1998 1999 2005 2006

Year

Number of Ethanol Plants in Minnesota

Page 5: Renewable Fuels in Minnesota
Page 6: Renewable Fuels in Minnesota

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

Page 7: Renewable Fuels in Minnesota

Minnesota Ethanol: Economic and Employment Impact

$0.03 $0.09 $0.12$0.28 $0.35

$0.51

$0.80

$1.07

$1.58

$2.77

$3.07

$4.95

10,321

18,461

671520

4,008

1,476

3,132

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

$5.00

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

*

2008

*

Ou

tpu

t Im

pac

t ($

bill

ion

)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Em

plo

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t Im

pac

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# o

f jo

bs)

Output Impact ($ billion)

Employment Impact (# of Jobs)

*ProjectedSource: AMS, MDA

Page 8: Renewable Fuels in Minnesota

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

Page 9: Renewable Fuels in Minnesota

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

Page 10: Renewable Fuels in Minnesota

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

Page 11: Renewable Fuels in Minnesota

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

Page 12: Renewable Fuels in Minnesota

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

Page 13: Renewable Fuels in Minnesota

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

Page 14: Renewable Fuels in Minnesota

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

Page 15: Renewable Fuels in Minnesota

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

Page 16: Renewable Fuels in Minnesota

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

Page 17: Renewable Fuels in Minnesota

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

Page 18: Renewable Fuels in Minnesota

Renewable Fuels in Minnesota

• External drivers– Oil prices surge past $70/barrel

Page 19: Renewable Fuels in Minnesota

Renewable Fuels in Minnesota

Page 20: Renewable Fuels in Minnesota

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

Page 21: Renewable Fuels in Minnesota

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

Page 22: Renewable Fuels in Minnesota

Renewable Fuels in MinnesotaU.S. Crop Area Summary to 2015

35

40

45

50

55

60

65

70

75

80

85

90

95

100

1990

1991

1992

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1994

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1996

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Ind

ivid

ual

Cro

ps

(m

il a

cres

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300

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Cro

p T

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Crop Total Corn Soybean Wheat All Hay Other Crops

Page 23: Renewable Fuels in Minnesota

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

Page 24: Renewable Fuels in Minnesota

Renewable Fuels in Minnesota

Minnesota Department of Agriculture

Gene Hugoson, Commissioner

651-201-6219

[email protected]