Four years ago, the state was the underdog in the renewable fuels race, lagging behind with no biodiesel facilities, miniscule wind power generation and two small ethanol plants.

Today, an about-face in North Dakota's energy policies means it's the sixth largest energy producer in the nation. That turnaround was heavy with incentives, legislation and strong efforts from both industry and government.

Incentives have taken renewable energy production in the state to new highs: A 2002 energy plan set goals that have been met and exceeded, prompting more challenging goals for the future.

In 2003, a countercyclical production program for ethanol was put in place, to help reduce the risk for potential investors. And investors and developers stepped up, as is evident by the now half a billion gallons of ethanol produced in the state.

The state also produces 85 million gallons of biodiesel and has up to 900 megawatts of wind power projects in the works. And the goal to have 50 percent of gasoline in the state blended with ethanol has been surpassed; newer goals set the mark at 75 percent by 2015. The incentives in place, said Gov. John Hoeven, include production, marketing, finance and tax incentives.

"If you look at what we've got going, it's a tremendous number of projects." Hoeven said. "But we're committed to doing more."

Kim Christianson, manager of the renewable energy and energy efficiency office in the state Department of Commerce, said he's amazed at the developments that have taken place in the last few years.

Wind energy, particularly, has taken off, he said.

Initially, he said, there was a resistance and skepticism about wind energy in the state, because of the strong coal-based industry and the potential conflicts another energy source could produce.

"Once that initial development took place … others started seeing, first of all, the economic impacts for the local area, then secondly, that project turned out to be a very good project," Christianson said. "It turned out they were producing a higher rate than what they expected. What that did (was) encourage other wind developers to take very seriously North Dakota's wind resource."

Bismarck-based Basin Electric took the reins when it came to wind energy, partly because the opportunity was finally available by way of the investment in farms by FPL Energy, LLC., said Daryl Hill with Basin.

"… Developing wind farms is a capitol-intense venture," Hill said. "From an FPL perspective, they could build a wind farm, but their challenge was someone to sell the power to."

From a Basin perspective, the challenge was the opposite.

"Our challenge was we didn't have much experience with wind," Hill said. "The beauty of this deal is that we both had expertise or needs that we could bring to the table, and we could meet each other's needs to help develop this."

The other part of Basin's seemingly quick investment in wind energy was the recognition that renewable resources can be a part of a generating mix, Hill said.

That mix is something Hoeven touts as North Dakota's strongest point: The state is No. 6 not just in non-renewables or renewables production separately, but altogether.

"The attitude is that we need all of it" Hoeven said.

Investors haven't been shy in North Dakota in the past few years. In Minot, a $2 million wind-to-hydrogen plant, a collaboration of Basin Electric, UND Energy and Environmental Research Center and NDSU North Central Research Center, will use intermittent power from wind turbines to produce and store hydrogen fuel. Basin also plans on spending $150 million on carbon capture, and has invested heavily in wind projects on the state's borders.

The about-face in energy production in North Dakota also may be attributed to newly formed partnerships, authorities and committees.

Coal and oil, for example, always have been major players in the state, but with recent near-record production levels of more than 120,000 barrels of oil a day, the challenge has been getting it out of the fields and into the hands of buyers, refineries and, ultimately, retailers.

This year's Legislature helped create a state Pipeline Authority, headed by Mark Makelky, in an attempt to unclog the bottlenecks in oil transportation. Since the inception of the authority, the Enbridge pipeline, which runs across northern North Dakota to a terminal in Clearbrook, Minn., expects to increase its capacity from 75,000 to 110,000 barrels by the end of the year, according to a report drafted by Makelky. Enbridge wants to raise that to 155,000 barrels daily.

Improvements to a separate pipeline, called the Belle Fourche line, will provide two pipeline shipping options for oil producers in North Dakota's southwestern corner.

Power bottlenecks also are prevalent, prompting the creation of the Transmission Authority, headed by Sandi Tabor.

And most recently, Hoeven addressed the first meeting of his Energy Policy Commission, which will look more at energy parks to increase production efficiency, maximizing all outputs from each type of plant.

Its not all rosy, however. Not only has getting the energy out of the state been a challenging task, but consumers also have a long ways to go in efficiency.

Christianson said that, although the state seems healthy in its renewables plans, the Legislature could do more by way of encouraging energy efficiency.

His office has programs in place to encourage that efficiency, but it's not enough.

"There's so much more we could do in the residential area with energy codes …" Christianson said. "We don't really have incentives for efficiency."

Otherwise, from an environmental standpoint, Christianson points to the efforts by the coal industry, which has put in equipment and spent huge amounts of money on methods to reduce their emissions. And wind energy, he points out, has no emissions.

Hoeven has said that the state can do more with its energy, most importantly, bringing the bigger projects to completion. The state also needs to help industries address the issues, such as transportation problems, he said.

"We're big believers in partnerships," Hoeven said."The short answer is, we're doing a lot, but we're committed to doing more."

(Reach reporter Crystal R. Reid at 250-8261 or at crystal.reid@bismarcktribune.com.)