Minnesota firms working to get 'beyond petroleum'

The disastrous Gulf of Mexico oil spill is another painful reminder of why it's good for U.S. energy, economic, environmental and security policy to move, as BP has said in its ubiquitous ads, "beyond petroleum."

U.S. proven reserves and production have declined since the 1970s, according to the U.S. Energy Information Agency. The promise of yet-undiscovered offshore fields means deeper wells and, apparently, little backup plan if something goes wrong.

Other than the Canadian tar sands, the bulk of known reserves are controlled by Middle Eastern despots, Russian oligarchs and African dictators. We spend about $400 billion annually on foreign oil, about the same as last year's balance of payments deficit with our trading partners. We use nearly a quarter of the world's oil production and produce about 10 percent. Count on global demand driving oil prices higher as economies recover.

The more we cut oil consumption through efficiency and alternatives, the better for oil-and-gas-poor Minnesota. The good news is we are rich in innovation and technology.

"We're starting to see flesh on the bone of what will be a massive economic and employment opportunity," said Dan Carr, CEO of the Collaborative, which hosted last week's the annual "Cleantech" forum for about 250 scientists, businesspeople and investors. Here are a few examples:

•Eagan-based Restaurant Technologies (RTI) has built a $240 million-revenue business collecting used cooking oil, a lot of which used to get dumped.

"We take the worst, most-dangerous job in the back of the restaurant and eliminate it," said CEO Jeff Kiesel, who has 16,000 customers in 40 markets. "Our data-management system helps customers use less oil, reduce waste, cut carbon and we cut them in on the sale of their used oil."

•Golden Valley-based Segetis, which makes bio-based substitutes for petrochemicals that go into rubber and plastics, has just struck an agreement with big PolyOne Corp. of Cleveland to develop bio-derived "plasticizers" for use in bio-based polymers.

In short, Segetis, which has raised $27 million in venture capital to develop its chemistry, believes this is the first of other deals with paper mills, agribusiness and others that can provide oil-substitutes for use in electronics, automotive and other products.

"Why not create high-end jobs with Midwest sustainable feedstocks that can be replacements for the petroleums that go into plastics and solvents?" said Segetis CEO Atul Thakrar, who spent 25 years in the chemical industry. "I'd love to think that we could be the Medtronic of the bio-based chemical world."

•Tennant, a 140-year-old manufacturer of sweeping-and-cleaning equipment, has reinvented itself as a growth company rooted in products that use less water and harmful chemicals and even electronically activated water cleaning systems that avoid the use of detergents.

"I was intrigued by the possibility of transforming a traditional manufacturer into a green-cleaning, innovation leader on a global basis," said CEO Chris Killingstad. "We've been going increasingly green since 2002. Our nation can and needs to do more of this."

McNeff is raising $5 million to launch "McGyan Biodiesel," named for the process. It will license the technology to biodiesel and ethanol plant operators who can use it to refine waste oil left in the distiller's grain that becomes animal feed. McNeff wants the McGyan process in the hands of small operators at waste-treatment plants around the globe to consume their oily, toxic residue.

•Since 2001, CEO Tim Brownell's Eureka Recycling has become a 105-employee, $10 million-annual-revenue operation, collecting 50,000 tons of recyclables a year in the Twin Cities area that are sold to industrial markets.

"There's commodity value and there's environmental value to what we do," Brownell said.

Meanwhile, at the Minneapolis Convention Center, several hundred technologists, companies and researchers spent two days last week at the annual Biomass Conference discussing everything from wood waste to algae to no-fertilizer energy crops to ethanol and biodiesel fuels.

Not all will succeed. But investments today will yield homegrown fuels that could make Minnesota an economic engine that powers a cleaner, stronger America.