• WisBusiness

Monday, August 31, 2009

Summertime's the right time to lobby legislators

By Dan Danner
As Labor Day approaches, marking the unofficial end of summer, many Americans are grabbing their last chances at a variety of activities: neighborhood cookouts, family outings, lounging by a pool or taking a last few days of vacation.

There's one other thing that all Americans, especially small business owners, should grab a last chance to do. They should contact their lawmakers in person before they go back to Washington after the holiday.

Special-interest groups have grabbed many headlines by spending huge sums of money on ads aimed at influencing legislators. But that's no substitute for hearing directly from voters. For lawmakers, talking to real people about their everyday concerns is a much more effective way to gauge what's on their constituents' minds than any slickly produced ad campaign.

For the next few days, representatives and senators will be out and about in cities and towns around the country. They'll be shaking hands, visiting coffee shops and community centers. You'll see them marching in Labor Day weekend parades, waving and carrying flags, all to tell you how much they care about you, your community and our country.

So take advantage of the opportunity to tell them exactly what's on your mind and what's important to you and your business. Let them know what you expect of them when they go back to the Capitol.

A funny thing sometimes happens to our representatives when they get inside the Washington Beltway bubble. They can too easily get caught up a petty politics, insider bickering and frantic races to one fundraiser after another as they think about their next campaign. The kindly, community-oriented Dr. Jekyll can become a self-centered Mr. Hyde, forgetting who he is, who he represents, and who, in the end, he works for -- you.

They need to be reminded of that fact whenever possible, with the strongest possible messages. As a small business owner, you have a particularly powerful message to deliver. You're a leader in your community. You create jobs, pay wages and taxes to all levels of government. You are the largest single sector of our economy, both local and national.

And right now, many small business owners are struggling. If you're one of them, let your legislator know. Be sure they hear that you can't afford to be hit with an expensive new mandate to provide health insurance. Help them to understand that the proposed energy bill, with its risky new cap-and-trade program, will mean much higher costs for your business, stifling growth and investment. Let them know that your taxes need to be kept low so that you can grow your business. Talk to them about whatever is threatening the well-being of your business.

Now is your chance to speak up. Don't let it pass you by. Otherwise, they're liable to forget that you're the boss.

-- Danner is president and CEO of the National Federation of Independent Business in Washington, D.C.


Friday, August 28, 2009

GreenBiz: Pool 8 project restores islands to Mississippi River

By Gregg Hoffmann
For several years, one of the biggest reconstruction projects in the Midwest has been going on -- in the middle of the Mississippi River.

The Pool 8 project is located within the Upper Mississippi River National Wildlife and Fish Refuge, just west of Stoddard, Wis., and east of Brownsville, Minn. It includes constructing 26 islands, which were virtually wiped out by high water after Lock and Dam No. 8 was constructed in 1937. Higher water allowed wind and wave action to erode the islands, resulting in the loss of aquatic plants and valuable habitat for birds, reptiles, amphibians and other animals.

The U.S. Army Corps of Engineers, U.S. Fish and Wildlife Services, U.S. Geological Survey, Minnesota and Wisconsin Department of Natural Resources, the Minnesota Pollution Control Agency and others have cooperated on the project, which started in 2006.

The benefits of projects like this island restoration is varied. First, the habitats for birds, fish and other animals is being restored. That has an intrinsic value that is hard to put a dollar figure on, but it also should lead to continued growth in recreation and eco-tourism industries.

By restoring the islands and more natural flows to the river, the impacts of flooding and high water periods could be reduced. Land values also tend to go up along riverways that have been restored.

The rehabilitation is quite a project. Sand and water are pumped as far as five miles along the river to the island sites. Rock and other base are installed to gather the materials. Bulldozers, which from the shore seem to be working right out of the water, shape the contours of the islands. Various cover foliage then is planted, and as one worker said, "the river plants what it wants to grow."

"It really is a team effort out there, between various agencies and our contractors," said James Nissen, district manager for the Refuge. "We do the designs, but the ingenuity and creativity of our contractors who are out there doing the work really get it done."

Public tours were recently conducted of the work. "We started the tours last year," Nissen said. "There's a lot of interest in the project because it is visible from Highway 26. So, we take the opportunity to let people know what progress we are making."

Visitors also come for the wildlife -- the area serves as one of the migratory havens for more than 300 species of birds. Fifty percent of the world's canvasback ducks spend time in the area.

Twenty percent of the population of Eastern Tundra Swans stop on their migratory routes from northern Canada to Chesapeake Bay.

The arrival of the swans has become an annual tourist event. The birds begin arriving in mid-October, and some stay until mid- to late-December.

"We draw people from all over, not just the Midwest but also from other states and foreign countries," Nissen said. "It's quite a gathering, and people always have a lot of questions."

The area also is home to 119 species of fish. While hunting is not allowed in the Pool 8 area, fishing and other types of recreational activities are allowed, with some exceptions during peak migratory times.

About 3.7 million annual visits are made to the area for hunting where it is allowed, fishing, wildlife observation and other recreation.

Eco-tourism is a growing industry on the Big River. The Mississippi Explorer, which was used to transport some of the 300 people who showed up for the public tours, runs boats out of La Crosse, Prairie du Chien, Lansing, Iowa, and Galena, Illinois. Other nature tours are conducted in the area.

Economic Figures

The project has been rather costly. Estimated costs for the north and west islands is Pool 8 are $9.5 million. Costs for the four islands slightly further south are estimated at $5.3 million.

An east island was completed in 2006 for $780,000. The Army Corps of Engineers completed several islands in 2007-08 and several more are scheduled for completion this summer.

All this work has been funded through federal funds. Additional islands are being designed and will be built as funding becomes available. Nissen said work on those islands are scheduled to start in 2011 and be completed in 2012.

The entire Environmental Management Program, which includes much more than just the Pool 8 project, is authorized to receive $33.5 million annually. For fiscal year 2009, the allocation is $17.7 million. Project design, construction and other costs are fully paid by the federal government if the project is located on lands managed as a national wildlife refuge. For any other projects, costs are funded 65 percent by the federal government and 35 percent from non-federal sources.

"Any time you are doing marine construction, it is expensive," Nissen said. "We have been funded through the EMP funds and could be tapping other sources. We also are receiving some stimulus money from the American Recovery Act."

According to the Refuge web site, the Mississippi River annually contributes an estimated $1 billion in recreational benefits to the region. Refuge visitation generates nearly $90 million per year in economic output.

Visitation to the refuge, plus visits to adjacent counties in Wisconsin, Minnesota and Iowa, generates another $255 million annually.

The Pool 8 project created some controversy because of a drawdown of water in the backwater area. But, adequate water depth for commercial transportation and other navigation has been maintained in the main corridors of the river.

While Pool 8 might be getting the most attention right now, it is by no means the only project along the river. In fact, 25 projects have been completed -- ranging from island reconstruction to dredging to dike construction and bank restoration -- from Gutenberg, Iowa, to the Twins Cities since the EMP was authorized by an Act of Congress in 1986.

Perhaps the most valuable benefit of projects like these is summed up by a couple signs along Highway 26, on the Minnesota side of Pool 8. One reads that the Upper Mississippi Refuge is "perhaps the most important corridor of fish and wildlife habitat in the central United States."

The second deals with the migration of the tundra swans: "You are lucky. Not everyone can say they have witnessed the spectacle of tens of thousands of tundra swans making their way on the 4,200 mile journey to and from their wintering grounds.

"Stop where swans have gathered and listen. You will hear the melodious bugling call of swans talking to each other. It is a sound you will not soon forget."

-- Hoffmann has written on a variety of topics for WisPolitics.com and WisBusiness.com. He writes the WisBiz GreenBiz feature monthly.


Thursday, August 27, 2009

For this governor and the next: Ideas for going out, or coming in, with a bang

By Tom Still
Jim Doyle could have pulled a Sarah Palin and quit in mid-term, but to his credit he did not. He left himself and his administration time to accomplish more -- and he gave potential successors in both parties a long runway on which to give flight to their own agendas.

Here are a few ideas that may apply to Doyle's remaining 500 days as Wisconsin's chief executive as well as those who might follow:

Improve Wisconsin's economic competitiveness: While the Great Recession may be subsiding, unemployment likely will not for months -- if not years. Productivity will return long before the jobs do, but many jobs are gone forever. Policies that stroll down memory lane will be far less successful than policies that attract and retain the next generation of jobs. Some groundwork has been laid through Wisconsin's nationally recognized incentives for start-up companies. But it's a different story with mid-sized firms and larger, a sector where the state must take stock of what attracts those companies and keeps them here.

Doyle began his first term with an economic advisory council led by a couple of blue-chip chairmen, but it disbanded on schedule within a year or so. It may be time for a new Competitiveness Council to examine what's working and what's not.

Build a 21st century tax system: Wisconsin's tax system grew up around an economy that has changed dramatically, from one that was almost exclusively based on agriculture, raw resources and manufacturing to an economy also defined by service, technology and exports. It's a system built upon state government being a giant ATM machine, returning dollars collected through state taxes to schools and local governments in hopes of equalizing services statewide. Some excellent tax reform plans that retain equity while enhancing competitiveness have been proposed over time; let's dust them off.

More strongly link state aid to local consolidation: Wisconsin has more government than it can afford. With 72 counties, hundreds of cities and villages and more than 1,000 towns (a unit not found in most states), the state should make inter-governmental cooperation a requirement for state aid. That could start in typical business services, such as personnel and purchasing, and expand from there as confidence grows.

Consolidate school districts where it makes sense; bust up districts where bigger isn't better: Consolidating school districts in rural areas need not mean mass closings of schools, but gaining administrative efficiencies. Breaking the Milwaukee School District into smaller pieces could speed improvements in our largest city.

Get our fair share of federal aid: In 2007, Wisconsin taxpayers sent $5.6 billion more to Washington than they got back. In per capita terms, Wisconsin was fourth from the bottom among the 50 states. While historically low defense spending in the state is a factor, it's not the only problem. Example: Wisconsin ranked 49th among the 50 states in federal aid per capita to K-12 students. Are our kids somehow less deserving -- or are we leaving money on the table?

Put public school teachers on a statewide contract: The district-by-district bargaining scenario that exists today unnecessarily pits school boards and administrators against teachers and sometimes parents and taxpayers, as well. It's a race to see who can strategically settle a contract first (or last). Build in regional cost-of-living adjustments to better reflect regional differences, but make it more possible for good teachers to teach in all types of districts -- rural, suburban or urban.

Redefine the senior year of high school: Wisconsin spends a great deal of money to educate kids twice -- once in the K-12 system and again (for some) in the first year or so of college or technical college, where remedial education costs represent up to 20 percent of spending. Let's try to solve the problem in the 12th grade, when students can get help in those areas where tests or performance show they're lacking. It's also an ideal time to better introduce students to the choices available to them, from technical college to internships to college.

Invest in bricks and clicks: The fact that one of Wisconsin's busiest commercial interchanges is closed to truck traffic should be a reminder that reliable transportation systems are essential to farmers, manufacturers and anyone else who buys and sells tangible goods. Also vital are the high-tech highways that carry data and information around the world. Wisconsin needs both to prosper.

A time of transition can be a time of innovation. Doyle's decision not to seek a third term has opened a window to enact or debate these ideas and more, before the 2010 campaign itself buries them in clutter.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.


Friday, August 21, 2009

National nuclear medicine shortage could have a Wisconsin solution

By Tom Still
An average of 40,000 Americans per day are given a radioactive isotope that acts as a light source within their bodies, illuminating cancerous tumors and heart problems that doctors otherwise couldn't detect -- short of surgery and other procedures that are riskier, more costly and less effective.

The supply of that isotope, used widely and safely for decades, is now threatened by a shortage of the core material -- Molybdenum 99 -- used to produce it for hospitals and clinics. It's an emerging crisis with national and even international dimensions, yet a dilemma that could be solved by a Wisconsin company called Phoenix Nuclear Labs.

Scientists working with the Madison-based company believe they can generate the neutrons necessary to create Mo-99, an essential nuclear medicine tool, without using a nuclear reactor to do so. It's a safer and more sustainable method than the status quo, which relies on production of Mo-99 from five retirement-age nuclear medicine reactors -- two of which are now shut down, one perhaps permanently.

The idled reactors in Canada and the Netherlands supply 92 percent of all Mo-99 used in the United States, where some 25 million doses are given each year. Eighty percent of nuclear medicine scans use the isotope, called Technetium-99 after refined for clinical use, to detect cancer, heart disease or kidney illness.

The isotope allows physicians to examine bones and blood flow, among other things, then disappears within hours from the body, minimizing the dose of radiation received by the patient. Because of its short half-life, the Mo-99 isotope cannot be stockpiled and must be used within a week after it is produced.

Already, nuclear medicine doctors and pharmacists nationwide are reporting widespread shortages, with thousands of procedures delayed each day. While they can handle part of the caseload in other ways, doctors say it's only a matter of time before more patients miss necessary scans -- or pay much more to get them.

"It's possible some deaths could occur," Dr. Michael Graham of the University of Iowa, president of the nation's largest nuclear medicine association, told the Los Angeles Times.

Enter Phoenix Nuclear Labs, a company with ties to scientists such as Dr. Paul DeLuca, a nuclear medicine pioneer at the UW-Madison and its current provost; Dr. Thomas "Rock" Mackie, co-founder of TomoTherapy; and Dr. Harrison Schmitt, one of the last astronauts to walk on the moon in 1972 and an adjunct professor of nuclear engineering at UW-Madison. The company president is Dr. Greg Piefer, who holds a Ph.D. in nuclear engineering from the UW-Madison.

The technical details of how the company would produce Mo-99 would fill a book, but imagine a device through which electrically charged particles bombard a specific type of "plasma," or hot, ionized gas. That produces neutrons which in turn strike a low-grade uranium solution, which produces the Mo-99. There is almost no long-lived nuclear waste, no risk of an explosive accident, and it's about 20 times less expensive to construct than a nuclear medicine reactor -- if one could be approved at all.

The process may also benefit national security: The Phoenix Nuclear process could be operated at home or abroad without fear of the waste being reused to make atomic weapons. That's not true of the current isotope production process, which some observers believe is vulnerable to nuclear terrorism.

The security angle is one reason why Piefer and Phoenix Nuclear were selected to present at the third annual "Resource Rendezvous," a conference that attracts federal science and technology experts to review Wisconsin technologies and companies. The conference, organized by the Wisconsin Security Research Consortium, will be held Wednesday at UW-Milwaukee.

"This system offers a near-term solution for a very real problem that is affecting patients today," Piefer said. "The core technology has been demonstrated over decades. Now, we're putting it to use to improve nuclear medicine. Over time, there will be energy and security applications, as well."

As the isotope shortage gains national attention, look for a Wisconsin company to be a part of the solution.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.


Tuesday, August 18, 2009

The road to single-payer health care

By Dan Danner
House Speaker Nancy Pelosi and others in Congress have been talking a lot about how a government-run public option will lead to lower costs and more choices for health insurance. Nothing could be further from the truth. Instead, the reality is that a "public option" would restrict "choice" to a single plan: the government-run plan.

But what it's really intended to do, according to prominent leaders like U.S. Rep. Barney Frank of Massachusetts, is to put us on the road to single-payer, government-run healthcare. On a YouTube video that's making the rounds, he says, "If we get a good public option, it could lead to single-payer [healthcare] and I think that's the best way to reach single payer."

Sure enough, the House bill has elements that are deliberately designed to drive small business owners out of the private market and into the public option. For example, the bill includes a provision that would require employers above a certain revenue threshold to offer a health insurance plan, whether they can afford to or not.

If they don't, they're forced to pay a tax of up to 8 percent of their total payroll. No matter how profitable or unprofitable a business might be, the owners are forced to pay this tax if they do not provide "qualified" health insurance to their employees.

The bill also establishes a confusing test that hits employers who already offer health insurance. Small businesses must, one, offer that qualified plan (determined by a government-appointed board); two, provide both individual and family coverage; and three, meet minimum contribution levels, which could be more than they are already paying, let alone can afford.

And if employees decline coverage and decide to go to the government-run option, the employer must also pay the payroll tax. All of these added expenses and new rules are likely to lead small business owners to throw up their hands and say it's cheaper to drop their plan and pay the tax.

As you can imagine, these ideas scare and outrage many small business owners, and rightly so. One owner told us, "How do I add expenses to my company when I've already lost $100,000 this year and am just desperately trying to survive? We lost one-third of our employees and the remaining ones are working reduced hours."

Another member wrote in, "Mandates are ineffective [and] this bill deprives me of my rights to determine how to use my resources. It harms small business and their employees--the very groups it is supposed to help."

The House bill simply will not work for small businesses. Small business owners, their employees and families are in dire need of health insurance reforms that will lower costs, increase competition and result in more choices for private health insurance.

That's why thousands of small business owner across the country are contacting their legislators while they are back home in August. Their message? If the president and Congress insist on going down the House's road, they will actually make things worse for small business. Anyone who values the contributions small businesses make to their communities and to the country should tell their representatives the same thing.

-- Danner is president and CEO of the National Federation of Independent Business in Washington, D.C.


Monday, August 17, 2009

Popularity of 'Cash for Clunkers' prompts ideas for personalized federal stimulus checks

By Tom Still
The federal Car Allowance Rebate System, better known as CARS or "Cash for Clunkers," has become a highly visible, consumer-driven federal stimulus program. Dealers have submitted requests for federal rebates on nearly 340,000 new cars, which should translate to an equal number of gas guzzlers being taken off the road.

But if owning a clunker car for too long is cause for a stimulus check, perhaps the feds should also pay people who experience other annoyances and inconveniences in life. How about federal rebate systems for the following?

FILM, or Flicks In Loser Mode. Movie-goers who sit through really bad films will be entitled to a federal rebate on the cost of their overpriced popcorn. Those who sat through this year's "Paul Blart: Mall Cop" also get money back from Uncle Sam on their soft drinks.

LATE, or Lousy Airport Travel Experiences. Pity those miserable souls who waited inside a stuffy airplane on the runway in Rochester, Minn., for more than six hours this month because weather had blocked their landing in the Twin Cities. Not only were these passengers 50 feet away from the terminal and unable to exit, but the plane's toilets backed up. An extra rebate is available for passengers seated within six aisles of a clogged head.

HOLD, or Held On the Line until Doomsday. Under this program, people who are kept on hold by automated telephone services or customer sales representatives for more than five minutes are entitled to a federal rebate equal to 10 percent of the cost of the product or service they probably won't receive, anyway.

DRIVE, or Detours Rarely Involving Visible Evidence of work. So how many times this summer have you dutifully merged into traffic a mile or more before an actual construction site, only to arrive there and find a idle pieces of road equipment and no actual workers? Drivers caught in this shovel-ready snafu also deserve a federal stimulus check.

TWIT, or Twittering With Intent to Traumatize. Under this program, you would be eligible for a federal check every time you're asked, "What do you mean, you don't Twitter?"

CHEW, or Cheese Heads who Embarrass Wisconsin. It never fails: You're watching a nationally televised Green Bay Packers game and the camera finds some guy wearing a tri-cornered hunk of Styrofoam Swiss cheese, which your out-of-state friends and business contacts all gleefully mention. How about a federal rebate for people who voluntarily turn in their cheeseheads? Federal stimulus dollars could also be made available for a Wisconsin marketing program to reverse years of branding damage.

CRUDE, or Common Rudeness Undermines Daily Etiquette. Victims of any of the following are eligible for a federal check: Someone else drinks directly from your milk or orange juice container. You're using a public restroom and discover there's no coat hook inside the stall door. You're dialed repeatedly on a voice line by a fax machine. YOU ReCeIVE E-MaiL MESsAGES THaT aRE a MIX Of CAPitAL anD LOWer CaSe LETTers, almost as if the author was sending a ransom note. You cut your finger on difficult-to-open plastic packaging, which is strangely most often found on children's toys. You're stuck behind someone who refuses to turn right on a red light, even when it's safe.

Of course, all of these programs will drive up the federal deficit and make it that much harder for the next generation to pay its bills. But the "Cash for Clunkers" model is nonetheless instructive: Wait long enough, and maybe the feds will help you solve your problem.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.


Friday, August 14, 2009

In the rush to control health-care costs, don't chill biotech drug innovation

By Tom Still
It's not the stuff of a town hall shouting match, but one of the most far-reaching elements of the national debate over health care is the question of how long to protect breakthrough drugs produced by biotechnology from copycat generics.

One side argues that five years of exclusive marketing rights is enough of a head start for expensive biotech drugs, called "biologics." Members of this camp believe the sooner generic biotech drugs -- called "biosimilars" -- can hit the market, the better for consumers.

Others contend that research into life-saving biologics could screech to a halt if scientists and biotech companies, such as many emerging firms in Wisconsin, can't count on more time to recoup their research, testing and development costs. They want a 12-to-14 year period in which innovative biologics are protected from competition by knock-off drugs.

As the issue moves to the Senate, lawmakers such as Wisconsin's Herb Kohl and Russ Feingold should vote to grant at least 12 years of biologic protection. Anything less could crimp innovation in an industry in which American ingenuity is the world's gold standard -- and it might expose consumers to generic drugs that aren't really generic.

Biologics are medicines made from complex proteins in controlled containers of living cells. They're different from traditional pharmaceuticals, which are the product of chemicals organized in comparatively simple molecules. In fact, the term of art for biologics is often "large-molecule" pharmaceuticals, while traditional drugs are called "small-molecule" pharmaceuticals.

The problem with large-molecule drugs is that they usually come with equally large price tags. Some of the most successful biologics for cancer, anemia and multiple sclerosis can cost $20,000 to $50,000 per year; biologics from some rare diseases can top $200,000 per year because the markets are so small.

That's why some health-care reformers are pushing for five-year protection periods. They point to generic small-molecule drugs, which can cut costs by up to 60 percent compared with the original patented drug, and with little or no risk to the users.

There are some important differences between generic drugs and biosimilars. It is difficult to verify that a copy of a biologic is exactly the same as the original. In fact, biosimilars are called biosimilars for good reason: They may be close to the real McCoy, but they're not likely to be identical.

That poses important safety questions for patients and medical professionals. Biologics only reach the market after extensive review by the U.S. Food and Drug Administration and rounds of clinical tests. Generic small-molecule drugs don't undergo FDA review because they're exact knock-offs. Biosimilars may require some clinical trials and review before getting the FDA's stamp of approval -- and before medical professionals feel confident in prescribing them.

Another danger associated with a short protection period for biologics is the threat to innovation. The development of biologic drugs is a riskier investment proposition than traditional small-molecule drugs. Development times are longer. Manufacturing is often more complex and expensive. The failure rate during clinical trials is high, which means investors often spread their bets over a number of drugs in the hope one will hit the jackpot and pay for all the rest.

Tell those investors they only have five years to recoup their costs versus 12, and they might not invest at all -- which means promising new drugs never hit the market.

The rush to a one-size-fits-all approach to drug development may appeal to some federal policymakers, but it's not consistent with a core American strength -- innovation. To the extent the law fails to protect innovators, our nation will simply have fewer of them.

Controlling health-care costs is vital, and the existing system appears unsustainable in many ways. But protecting innovation and rewarding risk is just as important as cost for those millions of patients who are awaiting a breakthrough cure. Striking a proper balance is best for health care in America.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.


Thursday, August 6, 2009

From beakers to billions of gallons: Biofuels must achieve mass production

By Tom Still
Lee Edwards, the chief executive officer at Virent Energy Systems in Madison and a veteran of 25 years in the energy business, is running an emerging company ranked among the hottest young biofuels firms in the country. Within the past year or so, Virent has won a Presidential Green Chemistry Challenge Award, been named a "technology pioneer" by the World Economic Forum and been touted in industry ratings of promising companies.

But as Edwards will be quick to add, the honors won't mean all that much unless Virent's formula for turning plant sugars into what is essentially gasoline can scale up from gallons per day to thousands and even hundreds of thousands of gallons per day.

Edwards, who was CEO of BP Solar's $1 billion operation before joining Virent in January, made that point during a recent Wisconsin Innovation Network meeting in Madison. Virent aims to eventually produce fuels competitive with crude oil priced at $60 a barrel and is building a pilot plant in Madison that will turn corn and sugar beets into 10,000 gallons of fuel a year, with hopes of getting to a full 100-million-gallon-a-year production scale by 2015.

Can they do it? So far, investors as sophisticated as Shell, Cargill and Honda are betting "yes" because of the unique properties of the Virent process, which turns plant sugars into hydrocarbons much like those produced by petroleum refineries. Much still depends, however, on scaling the production.

The same challenge facing Virent confronts other biofuels companies in Wisconsin and beyond: Is the technology scalable -- at a price that can compete with oil? It is also a challenge for federal and state policymakers, who should want alternative energy grant dollars to land with companies and technologies with the best chances of meeting the nation's ambitious energy goals.

About 9 percent of the nation's liquid fuel supply comes from biofuels, mostly ethanol produced from corn. By 2022, Congress has declared, biofuels production must reach 36 billion gallons. Today, the United States consumes about 138 billion gallons of gasoline each year.

Hitting the biofuels mandate in roughly a dozen years will test technologies, resources and production processes, not to mention political resolve. Some technologies now considered promising may fall by the wayside because the costs of production outweigh the energy produced. Other technologies once considered fanciful may emerge because they're economical and produce a lot of fuel.

A recent example is Exxon's foray into producing liquid transportation fuels from algae, or organisms in water than range from ordinary pond scum to seaweed. Working with genomics pioneer J. Craig Venter, Exxon will invest up to $600 million on developing an "oilgae" process that could lead to commercial-scale plants within 10 years.

... Or not. Much depends on whether projections about algae's energy yields hold up. According to Exxon, algae could yield more than 2,000 gallons of fuel per acre of production, compared with 650 gallons for palm trees, 450 gallons for sugar cane and 250 gallons for corn. Algae may hold other advantages, such as its ability to soak up carbon dioxide.

Still, cost-effective mass production of algae has eluded researchers so far. It may be some time before it's known that algae is better than switchgrass, or switchgrass is better than sugar cane, or sugar cane is better than wood waste, or that corn will ever be replaced, when it comes to mass production of biofuels.

Federal and state research dollars will be inevitably spread around to cover all those bets and more. Eventually, however, the winning wagers will land on technologies that can be scaled at the right economic and environmental costs.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.


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