Dec 13 - Knight Ridder/Tribune Business News - Thomas Content Milwaukee Journal Sentinel

Wisconsin hopes to help jumpstart more investment in renewable energy including ethanol, biodiesel and waste-to-energy power under a $1 million grant program announced Monday.

The grants were announced by Gov. Jim Doyle, who proposed the grant program as part of the state budget that passed this year.

"I want Wisconsin to be a leader in the emerging bio-economy," Doyle said in a statement. "We are looking for ideas to help Wisconsin realize an economic future where we rely on the Midwest" for energy and less on the Middle East, he said.

The initiative is one of several in the works at the state level to boost the state's supply of renewable energy at a time of rising prices of energy from fossil fuel. Another is legislation proposed last month by state Sen. Robert Cowles (R-Green Bay) and Rep. Phil Montgomery (R-Ashwaubenon) to boost the state's supply of renewable energy to 10 percent within 10 years.

Also Monday, the federal Energy Information Administration issued a report that changed dramatically its long-term outlook for oil prices.

"Since 2000, world oil prices have risen sharply as supply has tightened, first as a result of strong demand growth in developing economies such as China and later as a result of supply constraints resulting from disruptions and inadequate investment to meet demand growth."

As a result, the agency is forecasting "much higher world oil prices than were projected" a year ago. For instance, it now projects per-barrel oil prices to be $54.08 in 2025, or 63 percent higher than the level forecast a year ago.

The agency said high oil prices will stimulate demand for both biodiesel and ethanol and will also prompt automakers to boost the fuel efficiency of new cars and trucks.

"Much of the increase in new light duty vehicle fuel economy reflects greater penetration by hybrid and diesel vehicles and slower growth in the sales of light trucks and sport utility vehicles," the agency said.

The state bioindustry program will encourage use of plant and animal resources for renewable energy, fuels or products. That could include cow manure or waste products from two significant economic sectors, the paper and forestry industries, said Mike Bandli, an economic development consultant at the state Department of Agriculture, Trade and Consumer Protection.

"Wisconsin has a significant biomass resource, whether it be plant matter including crops or forestry products or from the agricultural waste products of our livestock industry," he said. "The idea is to find ways to create value and further develop businesses that can take advantage of those resources."

But the ramifications of the project can extend right down to the farm, Bandli said.

"Consider a farmer that's growing corn," he said. "Right now, they have their markets for the corn itself, but if there's an opportunity to take some of the agricultural waste, the stalks and parts of corn that are left over after the corn is harvested, and create a value-added product from that, it creates another income stream for that farmer."