Making ethanol from trees is nothing new. Wood ethanol was used extensively to fuel vehicles during World War I. But today, U.S. ethanol production is mostly based on corn, because it's cheaper.
Scientists haven't figured out a cost-effective way to make ethanol from most other plants. They're lower in starch and have something called cellulose, which is more difficult to convert to fuel.
But experts say that technology is coming. Shri Ramaswamy heads the department of bioproducts and biosystems engineering at the University of Minnesota. He predicts it will happen within the next five to 10 years. Ramaswamy says the new technologies will have a huge impact on Minnesota's forest economy.
"As we move into the future, as more and more of us start to use ethanol, whether it is 10 percent, 20 percent or more, we need more resources to supply that," says Ramaswamy. "The wood products industry has a tremendous potential to offer for cellulosic ethanol. This technology is coming, and it's going to happen."
The transition will require a radical change in the way Minnesota manages its forests. Experts say right now there's lots of waste. When loggers cut down trees, more than a million tons of limbs and treetops are left to rot on the forest floor each year.
Bill Berguson, director of the Duluth-based Natural Resources Research Institute, says there are other sources of unused forest biomass that could be tapped for energy. The NRRI conducted a study of what's available in the forests for ethanol production.
Berguson says aspen and red pine plantations could be thinned to recover trees that would otherwise die back. Landowners could plant fast-growing hybrid poplar trees on idle agriculture lands. Loggers could even harvest the state's shrub lands.
“The state has a unique opportunity to send signals to the energy industry, the biomass industry, as it grows... to look at the opportunities for collaboration and for joint ventures.”Dave Zumeta
Berguson says there's potentially enough forest biomass in Minnesota to replace 20 to 30 percent of the gasoline used in the state.
"There could be as much as, on the outside, let's say 10 million tons of material," says Berguson. "That's probably the top end. More realistically in the three to five million tons. So it's not a trivial amount. It could be a very significant industry."
Environmentalists are concerned that removing all that material could be harmful to forest ecosystems. But industry experts say it can be done sustainably.
Dave Zumeta is director of the Minnesota Forest Resources Council. The organization has developed first-in-the-nation guidelines for harvesting forest biomass. Zumeta says it will require new training for loggers and forest managers.
"As we take more material off the land, woody biomass, we have to make sure we do that in a way that is sustainable, that tends to impacts on water quality, wildlife habitat, biodiversity, soil productivity in particular," says Zumeta. "We want to make sure we are retaining the fertility of our soils for future forests and future generations."
The future business model envisioned by forest industry leaders is simple -- attach biorefineries onto existing paper mills and wood products plants in northern Minnesota.
The model goes beyond just producing ethanol. Such facilities could produce a synthetic gas that can be converted to hydrogen, electricity or a range of high-value chemicals.
Right now, the wood products industry is struggling. Global competition and a construction slowdown have meant layoffs and temporary shutdowns at northern Minnesota mills.
Zumeta says new biotechnologies will make the industry more profitable and create new jobs. He says it's going to take huge capital investments to make it a reality.
"The state has a unique opportunity to send signals to the energy industry, the biomass industry as it grows, and the forest products industry, to have them work in concert with one another, to look at the opportunities for collaboration and for joint ventures," says Zumeta.
Last month, Gov. Tim Pawlenty announced the formation of a forestry subcabinet. Part of its focus will be to push development of biofuels in the wood products industry.
State officials are working to develop capital incentives for pilot projects that will test next generation bio-energy technologies.