Granholm visits K&M in Cass County Monday

Published 10:34 am Tuesday, November 6, 2007

By By JOHN EBY / Niles Daily Star
CASSOPOLIS – The answer to Michigan's economic woes is blowing in the wind, Gov. Jennifer M. Granholm said Monday afternoon at K&M Machine-Fabricating Inc.
K&M needs to hire 120 additional workers to manufacture 36,000-pound wind turbine components.
Her stop in Cass County was one of several launched last week around the state where the governor will talk about the job-creating role energy will play in Michigan's economy rebounding from reliance on the auto industry.
"Developing alternative sources of energy is critical for our nation in the 21st century, and it can mean thousands and thousands of jobs for Michigan citizens," said Granholm, who met privately with K&M officials, held a press conference and addressed K&M employees during her more than hour in Cassopolis on her fourth visit to this area.
While the agricultural sector produces ethanol fuel to power vehicles, "Wind, of course, produces electricity that powers your homes and businesses. There is no doubt that Michigan is uniquely positioned to capitalize on this. We have the next generation of workers coming through the pipeline (at Western Michigan University and Ferris State University, which sent representatives).
Of NBC's "Today" show Monday morning, Granholm said, "Climate change is affecting everything from the icebergs to Great Lakes levels having gone down. The question for us as a state and as a nation is how we make sure we reduce global warming and create jobs. I want Michigan to take advantage of this moment where everybody's looking for solutions to the climate change issue. The solutions are all in creating alternatives to fossil fuel burning – to oil burning, to coal burning to natural gas. The bottom line is we've got to create alternatives."
Recalling her trip to Sweden a few months ago, Granholm said, "They have a goal of getting 100-percent of their energy from renewable sources. As a result of that goal, they've created tens of thousands of jobs in the renewable energy economy."
What the Scandinavian nation is doing, the governor said, bodes well for Michigan, which owes its "wind potential" to being surrounded by water.
"In fact, I was told this morning that in the United States right now, the U.S. as a whole produces about 14,000 megawatts of wind. Michigan has the capacity to do 14,000 MW of wind by itself. We have the capacity to be the third-most productive state for wind because of the water – particularly off Lake Superior from the north.
"We don't want to destroy the view for tourists or anything like that," Granholm said, "but we know there are areas of the state and areas of opportunity for us where we can really take advantage of this. Our great manufacturers, like K&M, have to produce the turbine components. K&M has a history of producing really big components," from mining equipment to sculpture.
"You have to have an infrastructure associated with that kind of manufacturing capacity to get a piece of this business. Does Michigan have available manufacturing capacity, or what? Our workforce, combined with the wind possibilities, make a huge possibility for Michigan to employ people in this area."
Second, water. "Many businesses … are now moving into the area of capturing movement from water currents," the governor said. "Any time there's movement, you can capture that and feed it into the electric grid. There are some who are manufacturing wind turbines and, at the bottom of the turbine, if the turbine is out in the water, they put devices that capture the movement of the waves, so you've got a two-fer. Both the wind and the water feeding into the electric grid. Michigan has the largest amount of shoreline of any state in the country other than Alaska, so our water capacity, combined with our wind capacity, is huge."
Turning again to Sweden, Granholm said, "They're also taking advantage of something Michigan uniquely has, and that's wood. That goes to this issue of the next generation of ethanol. Two-thirds of Michigan's land is covered by forests. We have the largest footprint of publicly-owned forest land of any state in the country. What a huge opportunity for us as we look at cellulosic ethanol, the next generation. We now have this moment to take wood … and at the end of the process they have fuel for your car … they call it 'wood to wheels.' If you can grow your gasoline, isn't that a better deal than paying three bucks a gallon?"
"It's an energy security issue, too," the governor continued. "As we fight this war in the Middle East, wouldn't it be great as a patriotism issue … to be able to grow energy supplies here?"
Adding to wind, water, workforce and wood is a fifth W, waste.
"In Sweden, there's a region where they're getting 80 percent of their energy from burning municipal landfills," Granholm said. "But they don't let the CO2 (carbon dioxide) go up in the air, they capture it all and put it back into heating commercial and residential businesses. (Michigan) used to be the landfill capital of North America – and we still are. I hate to say that's something unique to Michigan we could capitalize on, but it actually is.
"In Sweden, that municipal landfill stuff has become very profitable for those who want to convert it into energy."
Solar doesn't start with W, but it also "is a huge opportunity for us, too," she said, pointing out that in the Saginaw Valley there is the world's largest producer of the silicon used in making solar panels.
"It's an offshoot from Dow Chemical Co.," Granholm said. "That producer means that those who want to buy it want to locate near that producer, Hemlock Semi-Conductor. They've just announced a billion-dollar expansion in the Saginaw Valley. In Greenville, they are building, I want to say, five plants with photo-voltaic solar panels so we can sell those products and employ the people in that sector. Three years ago we had one ethanol plant in Michigan. Now we have 18 biofuel plants coming online. There's a huge opportunity for us there, as well."
"The last thing I would mention," the governor said, "with our history in the automotive industry, no other state can claim the research and development associated with the battery, with fuel cells, with hybrid electric vehicles and flex-fuel engines. The combination of what we're doing is going to be a fuel-efficient engine for the 21st century. We produce the engine, the fuel that goes into the engine and the electricity that goes overhead and employ people in this sector.
"Our goal is to replace those lost manufacturing jobs in the automotive sector with jobs in this alternative energy sector, and that's why K&M is such a great example of a growing company where the demand is enormous."
Gary J. Galeziewski, K&M's chief financial officer, said, "A significant amount of investors are rapidly putting their money into wind farm developments around this country." Michigan so far has just one.
"Windmill manufacturers are pretty much sold out into the foreseeable future," he continued. "What's fragile is their supply chain of manufacturers. They do not have the capacity in their supply chains of companies like K&M, which can manufacture all of these components for them. That's what needs to be developed. That's what we're bullish on. We have expansion plans under construction right now to move quickly at the velocity this industry is moving at to support wind farm development."
An ethanol producer said his industry is looking at gasification of both wood and more of the corn plant and grasses to fuel factories more cheaply than natural gas.
He told Granholm about visiting a stretch in northern Iowa "where you drive 40 or 50 miles with windmills on both sides of the highway. We were at an ethanol plant in Minnesota that's putting in two windmills that are going to power that plant."
"This being able to use wood or waste for energy is the most cutting-edge thing," Granholm said. "It's very exciting. In fact, in the Upper Peninsula, they're taking waste from the pulp and paper industry, from the tops of trees to the stuff they leave on the forest floor, and they've teamed up with a firm in Sweden on a process called black liquor gasification – sounds illegal doesn't it?" she said to Undersheriff Rick Behnke.
"It (derives) electric energy and it can also create biofuels. The first place in the country to have this process would be in Michigan, based upon this partnership. Michigan is also the first state in this country to have a commercial cellulostic – the next generation of ethanol – plant. We want to be the state that leads the nation in breaking U.S. dependence on foreign oil. We feel like we've got an economic obligation and a moral obligation. Since we put the world on wheels, we could be the state that leads this change."
Granholm said such energy alternatives offer Michigan "triple wins" of: creating jobs in areas known to be growing; reducing greenhouse gas emissions; and protecting the Great Lakes.
"This is a sweet spot for a state like Michigan, which needs to diversify," she said. "Our natural competitive advantage as a state is to focus on things that are unique to us and other states don't have," whether it's wind, water and forests or a trained workforce, manufacturing capacity and universities "that are ready to go."
"This is a moment for us," the governor said.
Asked about potential hurdles, she said a policy needs to be developed and adopted legislatively. "Twenty-five states already have" such standards, Granholm told reporters. "Michigan needs to position itself with a robust standard that requires a certain percentage of our energy to be from renewable sources."
Such a policy would require a certain percentage from wind, attracting turbine manufacturers and bringing jobs.
"We're on board," state Rep. Rick Shaffer, R-Three Rivers, said.
He attended the event along with Sen. Ron Jelinek's representative, Chris Siebenmark.
"This is really a bipartisan issue," the governor said. "Senators and representatives on both sides of the aisle have been very supportive of making sure the state moves forward because they recognize that Michigan is uniquely positioned when it comes to water and wind. I'm excited."
Gabe Covey of Cassopolis was part of the governor's state police security detail.