Growing the Bioeconomy: Austin Meeting Summary

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On a cold December day in Minnesota, talking about growing anything outside seems a bit, well, out of season. The fields were white and bare, and little wisps of snow blew across the road, as Amanda Bilek, and I, along with Andrew Skinner from Segetis, Dale Wahlstrom and Genevieve Plumadore from LSA/BBAM, and long-term ethanol industry booster Larry Johnson loaded into a mini-van to head down to Austin for a meeting, “Growing” was the topic – growing plants to displace fossil fuels, and growing a new industry in Minnesota.
 
Representative Jeanne Poppe and Senator Dan Sparks, and the good people at Riverland Community College hosted us in Austin. Around 30 people including legislators from both parties, representatives from the ethanol industry, the next generation fuels and chemicals industry, educators, researchers, farmers, and economic development officials braved slippery roads and sub-zero temperatures to be to be there.
 
Just as farmers spend much of the winter planning for the next growing season, this group spend a cold winter day planning the growth of a new industry. Minnesota has all the ingredients to build an innovative new industry to displace petroleum with biobased materials and fuels. A few notable tidbits from the meeting:
 
  • Minnesota’s ethanol industry contributes over $5 billion to the state annually. It was created in part through a production incentive program that cost the around $450 million over 20 years.
  • Minnesota has an innovative “knowledge cluster” in renewable chemicals – a cluster of start-up companies, +$100 million in venture capital funding in the past 5 years, a flurry of patent activity, and a recent $80 million IPO.
  • Minnesota’s ethanol and forest products industries are foundational – and we can build on that foundation to establish additional production of “next gen” biofuels and renewable chemicals.
  • Building this “next gen” industry will not happen without the state playing an active role for three reasons: 1) We are competing with other states/nations that are willing to invest in this industry; 2) New technology often requires help from governments to deploy, particularly if capital costs are high; and 2a) even more so if financial markets are still locked up and debt financing is hard to come by.
  • The benefit of taking decisive action now will be enormous - this industry could be larger than medical devices, and benefits will be shared state-wide.
Participants heard from three presenters. Kevin Potas from POET-DSM talked about the status of Project Liberty. This will be a cellulosic ethanol plant producing ethanol from corn stalks and cobs. It will be co-located with a conventional grain ethanol plant. The co-location will make both facilities more efficient. POET-DSM is investing over $200 million in the plant, and creating hundreds of construction and permanent jobs. Its a great example of how the first gen industry is the foundation for ongoing innovation! Cellulosic ethanol plants could be co-located with each of Minnesota’s 20 existing ethanol plants – resulting in billions of dollars of new investment and thousands of new jobs.
 

 
Andrew Skinner talked about Segetis, a Golden Valley, MN-based start-up company that produces biobased chemicals to displace petroleum-based chemicals. There is a potential market of over $50 billion for products they produce, including things like plasticizers, household cleaners, and polymers. Their current challenge is to scale up from demonstration to commercial scale. Minnesota’s challenge is to make sure that happens here!
 

 
The group discussed the Bioeconomy Coalition of Minnesota’s policy proposals for 2014. The Coalition supports creating new programs to aid in financing commercial-scale production of renewable chemicals and advanced biofuels, We believe that if our recommendations were enacted, Minnesota would experience a lot of new growth and innovation. What an exciting topic for a cold winter day!