Wisconsin

Mar 26 - McClatchy-Tribune Regional News - Rick Barrett Milwaukee Journal Sentinel

Businesses and researchers may soon apply for state grants and loans aimed at developing renewable energy, Gov. Jim Doyle said Tuesday.

The state expects to award about $15 million per year for 10 years from the newly created Wisconsin Energy Independence Fund, Doyle said at a news conference at Johnson Controls Inc.

The money will be used to support research and development of renewable fuels and encourage businesses to adopt new technologies that save energy and use renewable energy.

Typical grants are expected to range from $100,000 to $500,000. Matching funds of at least 50% of total project costs must come from other sources, according to the state Department of Commerce.

Doyle laid out a long-term strategy that he hopes will make Wisconsin a leader in renewable energy. He repeated his call for the state to generate 25% of its electricity and motor fuels from renewable resources by 2025.

To accomplish that, the governor said the state will have to make targeted investments and strategically use assets such as forests and renewable farm crops.

"We are one of the country's leading ethanol producers, making 400 million gallons per year. Using ethanol will be a way to decrease greenhouse gas emissions and save money at the (gas) pump," Doyle said.

The first round of grant applications and loan requests begins April 1 and ends June 2.

"The first year we might only get $10 million to $12 million in grants out the door. But we really want to get going on it," Doyle said.

In 2007, about 20% of Wisconsin's corn crop was used to make ethanol, a fuel additive that's supposed to reduce the nation's dependence on petroleum.

Local distilleries that produce the home-grown fuel have created new markets for farmers and have boosted corn prices.

"I think corn for ethanol has been a tremendous thing and has helped our agricultural community," Doyle said. "For decades, farmers in this state had only one option for corn. They had to take whatever was handed to them on the commodity markets. But now they have two options (ethanol and commodity markets), and it's made a huge difference."

Corn is a "first-generation fuel" used to make ethanol, and research is needed to find other feedstocks, Doyle said.

"But go into farm country in Wisconsin right now and they will tell you the last five years have been the best years they've had," the governor said.

Most gasoline sold in Wisconsin contains some blend of ethanol.

"I think in the short term, we will see increased use of corn as an (ethanol) feedstock, but in the long term, we will certainly see an increased variety of feedstocks," said Joshua Morby, executive director of Wisconsin Bio Industry Alliance, an ethanol trade group.

"Corn-based ethanol is a good start, and it's available now," he added.

The growing share of the U.S. grain harvest going to ethanol distilleries has driven up food prices and drawn criticism.

"I think there's a growing consensus that getting ethanol from food crops isn't a good idea, and that corn in particular isn't a very good energy crop," said Christopher Damm, a researcher in advanced energy technology at Milwaukee School of Engineering.

Damm is a critic of corn-based ethanol because of the energy needed to make it, including fertilizer used to grow the crop. He also doesn't care for the fact that corn, a crop the U.S. exports as food, is being used to power vehicles that don't get good gas mileage.

Ethanol from corn is partly to blame for higher gasoline prices because the fuel additive is expensive, said Jerry Taylor, senior fellow at the Cato Institute, a libertarian think tank in Washington, D.C.

"As lavish as the government subsidies are on the ethanol industry, and they are stunning, they still aren't enough to close the cost gap with gasoline," Taylor said. "If you are a corn farmer in Wisconsin or an ethanol processor, you win. If you are anybody else in Wisconsin, you lose."

In 2007, the University of Wisconsin-Madison received $125 million to establish the Great Lakes Bioenergy Research Center. Wisconsin is the only Midwestern state to host one of the centers, and the Midwest is pivotal because it's home to so much biomaterial that could be used to make ethanol.

Ethanol from corn is a starting point, Doyle said, adding that he wants to keep the focus on developing all types of renewable fuels.

"As long as we continue on our old energy course, we will be putting money into big oil and foreign nations," Doyle said.

On the Web For more information on grants and loans from the Wisconsin Energy Independence Fund, go to http://commerce.wi.gov/BD/BD-WEIF.html.