WisBusiness: Ag Secretary Says State Ripe for Bio-Refining Breakthrough

By Brian E. Clark

MADISON – Genetically engineered corn designed for use in ethanol could be a major boon for Wisconsin farmers, the state’s rural economy and the environment.

But that is only the tip of the iceberg for the Wisconsin’s developing bio-based industry, Rod Nilsestuen, the state’s agriculture secretary, said Tuesday at a Wisconsin Technology Council board meeting.

Nilsestuen heads Gov. Jim Doyle’s Consortium on Bio-Based Industries. It consists of energy, forestry, manufacturing, agriculture, construction, academic and business interests.

Though some scientists say the jury is still out on how much energy ethanol saves, Nilsestuen said he hopes high-tech companies and scientists will use their genius to find new and better ways to turn forest products, row crops, grasses and cow manure and plants into fuel, fiber, plastics and chemicals.

“We need to get ahead of the curve in this state,” he said. “Bio-refining could produce a mega-paradigm shift, and it’s my hope Wisconsin’s research base can help us leap-frog technologies into the future.”

In response, UW-Madison Engineering School Dean Paul Peercy said a great deal of work is going on by academics to achieve a net energy gain from ethanol.

And Michael Sussman, director of the UW Biotechnology Center and a member of the Consortium, said he is excited about the potential for genetically engineered plants to produce a multitude of products.

“There is nothing more important than getting us off petrochemicals,” he said.

Nilsestuen said it won’t be long before biomass – plants – will be a substitute for making nearly all petroleum-based products.

“And I think we can all appreciate the value of not being dependent on outside sources for our oil needs,” he said. “The Middle East is certainly not getting any more stable.

And he said the demand for oil is only going to increase as the Chinese and Indian economies expand.

“The poster child for biotechnology here is stem cells,” he said. “But I believe that same effort can produce breakthroughs in bio-refining and manufacturing.”

Nilsestuen pointed to Monroe-based Badger State Ethanol as an example of a company that is rapidly expanding beyond fuel to create and sell food an array of other products.

“As this industry matures, there will only be more spin-offs, new technologies and products,” he said.

Citing a McKinsey & Co. industry study, he said biotech developments will have a huge effect on the chemical industry, creating $160 billion in value this decade alone.

Nilsestuen said DuPont and a partner have launched an effort in Tennessee to turn corn byproducts into not only plastics but engineering components.

In addition, DuPont says it can make clothing from corn that is soft, fast-drying, colorfast, chlorine resistant, resilient and easy care, among other attributes.

And in Blair, Nebraska, Cargill is building a huge plant that will employ 7,500 workers to turn corn into plastic packaging.

“Major players are getting into bio-refining and I think that speaks more loudly than perhaps anything else,” he said.

In this state, he said farmers are already using methane digesters to make energy from cow manure. And the forest industry looking exploring ways to produce ethanol, fibers and other products from wood chips before they are turned into paper.

Nilsestuen said he hopes the Legislature will give more incentives to push bio-refining and create opportunities for the state’s farmers and foresters.

“In an ideal world, nothing would be wasted because it would be the foodstock for the next product,” he said. “It would be a closed loop.”

In a separate presentation, State of Wisconsin Investment Board (SWIB) director David Mills said the tentative decision to invest an additional $50 million in two new venture capital funds could be finalized in February.

Mills said it had taken some work to convince the fiscally conservative SWIB board to make the investment in the funds, which will focus on opportunities in Wisconsin and the upper Midwest.

“They were impressed, but there was skepticism,” he said of the board, which controls SWIB’s $70 billion in assets.

Sen. Ted Kanavas lauded SWIB for its investment and said he believes the returns will be “extraordinary” and help create new high paying jobs.

“This is something that will lift all boats,” he said.

Since 2000, he said SWIB has targeted $135 million on Wisconsin and Midwest early stage companies. If, as expected, the new investment goes through, that figure will rise to $185 million.

Mills told the board not to expect any new money in the near future.

“We are always looking for new opportunities,” he said. ”But the level of diversification is not broad enough. The next step before we invest anything more is to see some good returns.”