JANESVILLE — It was an ethanol love fest as the governor, dignitaries, businessmen and farmers marked the beginning of construction on the state’s largest ethanol plant.

“We have had great success in this area in Minnesota and we want to raise the bar,” said Gov. Tim Pawlenty, during a modified “groundbreaking” ceremony Friday.

While the plant is being built a half-mile east of Janesville on Highway 14, the ceremony was inside Trinity Lutheran School gymnasium. Instead of the ceremonial shovels in the dirt, dignitaries pushed gold-painted shovels into a large trough of corn.

The plant, being built by US BioEnergy, will turn area corn into 100 million gallons of ethanol annually, as well as producing 320,000 tons of distillers grains. It will employ 40 people.

The plant is going up just as some analysts are saying there is going to be an oversupply of ethanol, problems in distributing it to the coasts and lower profit margins as corn prices rise. But Pawlenty, a strong booster of ethanol, dismissed the concerns.

“I have very minimal concerns because of the huge economic and security importance of renewable energy,” he said. “And in five to 10 years there will be a whole wave of new technology that will change this whole debate.”

Pawlenty said improved technology will make ethanol plants much more efficient and will allow for other crops — from fast-growing wood to switchgrass — to be turned into ethanol.

The governor also discounted the rising cost of corn as a serious part of rising food costs. He said the high cost of gasoline and other energy is most to blame for rising food prices.

Gordon Ommen, CEO and president of US BioEnergy Corp., said ethanol has revitalized rural America by returning high-paying jobs to farm country, keeping young people in small towns and putting more money into the pockets of farmers and Main Streets.

“A little more than a year from now, this area will be the source of a home-grown renewable fuel,” Ommen said.

Ron Fagen, CEO of Fagen Inc., said people don’t have to worry about ethanol plants, which need to be close to corn suppies, closing down and moving overseas. “That’s what’s great about building ethanol plants right here in Janesville.”

Fagen co-founded US BioEnergy with Ommen. Fagen Inc. does the design, engineering and construction of the plants and is the largest builder of ethanol plants in the world.

Fagen said other states and other countries are scrambling to catch up to what Minnesota has been doing in ethanol. His company is building plants in Europe and former Soviet Union countries.

Pawlenty signed legislation in the last session that will eventually boost the required amount of ethanol in gasoline to a 20 percent blend (it’s 10 percent now).

He will soon take over as the head of the National Governors Association and said he plans to push for states to focus more on renewable energy.

US BioEnergy, based in Inver Grove Heights and founded in 2004, is the third-largest ethanol producer with 300 million gallons of capacity.

The leader is Archer Daniels Midland with annual capacity of 1.1 billion gallons.

South Dakota-based VeraSun Energy Corp. has 340 million gallon capacity.

US BioEnergy hopes to produce 1 billion gallons annually within two years through new plant construction and the purchase of existing plants.

Minnesota is expected to produce close to 1 billion gallons of ethanol. The United States will produce about 7 billion gallons of ethanol this year.