Saturday, July 3, 2010


JUNE 2010
Gerald W brown * 7202 County Road U * Danbury, WI 54830 Phone 715-866-8535
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At the world’s largest energy forum in Cancun, Mexico on March 30-31, the power brokers of the oil industry saw the future.
And it isn’t pretty.
The biennial International Energy Forum (IEF) drew ministers from 64 countries, members of the International Energy Agency (IEA), OPEC, and other dignitaries.
In short, all the heavy hitters on the planet were there..
Yet, very little news leaked out of these meetings.
In fact, the reporters were confined to a press room where the presentations were shown on monitors with no sound.
When the reporters asked for sound, the monitors were quickly turned off and the conference was declared to be “private.” The media was simply shut out
Why all the secrecy? What they were hiding?
Read on to discover what the oil barons don’t want you to know…and two ways you can use that knowledge to pocket solid profits for your portfolio.
The Mystery of “Peak Oil”
There’s a lot of talk these days about “Peak Oil”-the point in time when more than half of the world’s oil reserves are tapped. Basically, once we hit “Peak Oil” global oil extraction enters a terminal decline.
But here’s the thing.
The heavyweights who met in Mexico know that “peak oil” is totally misunderstood–that investors who focus on how much crude oil is left are missing the point.
You see, serious observers know that “peak oil” has never meant the depletion of reserves. Instead, it means the peak of production-the industry’s ability to get it out of the ground and to market.
Fact is, the oil insiders at the Cancun meetings quietly came to one unavoidable conclusion that could turn the global economy upside down.
A report commissioned by the IEF and delivered at the meeting by PFC Energy, a prestigious global consulting firm, has finally bubbled to the surface and sums it up best:
“This is not a world of “peak oil” where global hydrocarbon potential is exhausted, but rather of peak production, where the petroleum industry’s ability to continue to increase-or even maintain-production of conventional oil (and eventually gas) is constrained. Exploitation of unconventional oil will provide additional liquids, but in all probability only at increasingly higher costs.”
In other words, the days of cheap oil are over.
Artificially Depressed Demand Ready to Explode
e”For the past two years, we’ve been operating under the shadow of an economic meltdown that has artificially depressed oil demand,” Dr. Kent Moors, a noted expert in the field who writes a weekly newsletter for Money Map Press said in a recent interview.
When the economy tanked in 2008, people furiously pulled back, buying fewer cars, cutting back on energy use where they could. What’s more, spiking unemployment meant fewer commuters clogging the highways, dramatically reducing the demand for gas.
The situation spawned a knee jerk reaction in the markets. Oil prices fell all the way from $147 a barrel in July 2008 to a low of $32.60 last year. It took oil ministers over a year to cut enough production to swing prices back to OPEC’s preferred levels of $60-$80 a barrel.
But that’s all about to change. The global economy is bouncing back, trade is picking up, manufacturing is at full throttle and companies are hiring again.
Crude prices recently cracked the $87 barrier and are headed higher…much higher.
Here’s why…
Even though the energy experts at the IEA recently raised their forecast for world oil demand by 1.67 million barrels to 86.6 million barrels per day in 2010, they’re not telling you the whole story.
The big boys already know a major production bottleneck is developing that could leave much of the world high and dry-setting off a brutal struggle for survival among nations battling for oil to keep their economies afloat.
In fact, the IEA knows that demand is going to go a whole lot higher very soon. And they also know that oil production, instead of increasing to meet new demand, is headed for a fall.
But don’t take my word for it. A 2009 IEA presentation at a Department of Energy round-table tells the story:
As you can see by the chart, the IEA is relying on so-called “unidentified projects,” to make up the difference between oil demand and production beginning as soon as 2012.
In other words, they have no idea where a whopping 43,000,000 barrels per day (bpd) are actually going to come from.
What’s more, beginning in 2012, they expect global oil production to decline by about 2% per year- from 87,000,000 bpd in 2011 to 80,000,000 bpd by 2015- all while demand rockets to 90,000,000 bpd.
Within five short years then, there will be an astronomical 10,000,000 bpd gap between supply and demand–doubtless sending prices through the roof.
And it’s not just the IEA that’s making these pronouncements.
A report from our own U.S. Department of Defense paints exactly the same scenario.
The Department of Defense is the single largest consumer of petroleum in the U.S and the U.S. military is the biggest purchaser of oil in the world. In 2006 the U.S. Military consumed 117 million barrels or 320,000 barrels per day.
They need petroleum - the wonder fuel that can’t be replaced–and lots of it.
A Joint Operating Environment report from the US Joint Forces Command states:
“By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day,” says the report, which has a foreword by a senior commander.
Curtailed Refinery Production Spells P-r-o-f-i-t-s for Oil Companies
Oil is the lifeblood of America’s economy. Currently, it supplies more than 40% of our total energy demands and more than 99% of the fuel we use in our cars and trucks. But in order to get those fuels you need refineries
After all, the average American doesn’t go out and buy a barrel of crude oil when he needs to fill up his gas tank, or when he needs heating oil for his house.
And that’s where the real problem for U.S. oil consumers begins. Turns out, refining is where the big integrated oil companies like Exxon (XOM: 56.57 -0.04 -0.07%) and Chevron (CVX: 67.31 -0.17 -0.25%) make their money.
Moors notes that refineries in the U.S. are running at only 80% of capacity, a level which allows the big oil companies to maximize profits by controlling how and in what quantities distillates flow to end users.
Want proof?
During the last oil price bubble from late 2007 to mid-2008, prices of crude oil rose only 67% from bottom to top, while prices of gasoline soared by 85% to over $4 a gallon.
There hasn’t been a refinery built in the U.S. in 30 years.
And don’t expect that to change anytime soon.
That’s because it takes 10 years to bring a refinery online. With that kind of lead time, there are no guarantees the huge investment it takes to build one will ever pay off.
In fact, because of the higher sulphur content in oil obtained from “exotic” sources like oil sands and deep-water drilling, it’s now cheaper to import refined gasoline than to import crude and refine it here.
Consequently, imports of refined gasoline are increasing at a faster rate than imports of crude oil, according to figures from the U.S. Energy Information Administration.
And even when we find reliable sources of new oil it won’t even put a dent in the supply shortage.
Here are the facts:
The U. S. consumes 19.5 million barrels a day or 7.12 billion barrels of oil per year.
Despite the disastrous oil spill in the Gulf, there’s still a lot of optimism surrounding Obama’s plan to expand drilling off the U.S. coastline and in the Arctic National Wildlife Refuge (ANWR).
But let’s take a look at the maximum estimates of the amount of reserves in those areas everyone’s so hyped up about: ANWR has 17 billion barrels and offshore reserves contain 21 billion barrels.
That’s a total of 37 billion barrels–at most. At a yearly consumption rate of 7.12 billion barrels, that gives us enough oil for just over five years…the world would soak that up in one year.
That’s not a drop in a bucket, it’s a drop in the ocean.
Where to Look Now for Profits From the Coming Oil Spike
The coming oil shortage will set off a frantic scramble by governments around the world to keep their citizens supplied with ever-scarcer supplies of petroleum products.
China is already making deals with the most unsavory leaders in the world to lock up oil supplies. Russia and the OPEC nations are preparing to withhold portions of their production from the open market so they can refine more at home.
But no matter who wins or loses in the race for reliable sources of the black gold one thing is certain: the price of oil is going up…way up.
U.S. investors, however, can still find ways to profit.
In fact, Moors thinks one investment in particular should be part of any investment portfolio.
Because of the increasing volatility bound to be part and parcel of the coming shortages the Power Shares Oil ETF (DBE: 22.45 -0.20 -0.88%) should be a good play for conservative investors.
The ETF is an index composed of futures contracts on some of the most heavily traded energy commodities in the world-Light Sweet Crude Oil, Heating Oil, Brent Crude Oil, and gasoline. Because of its broad-based approach it tends to reflect the performance of the entire universe of crude.
For risk-averse investors who also don’t want to be left behind, Money Map Press Chief Investment Strategist Keith Fitz-Gerald recommends the United States Oil Fund LP ETF (USO: 32.60 -0.27 -0.82%).
U.S. Oil is a domestic exchange-traded security designed to track the movements of West Texas Intermediate (light, sweet crude oil). The basic investment directive of this ETF is for its net asset value (NAV) to reflect the changes in percentage terms of the spot price of light, sweet crude oil.

Published: April 14, 2010
Washington, D.C., United States [] Senators Jeanne Shaheen (D-NH), Lisa Murkowski (R-AK), Mike Crapo (R-ID), and Mark Begich (D-AK) have introduced a bill that would help businesses across the country meet their heating needs with renewable biomass.
Large scale biomass thermal systems have been widely deployed in Europe, where government incentives have played a vital role in helping reduce fossil energy and create new clean energy jobs.

The American Renewable Biomass Heating Act of 2010 (S. 3188), would establish a corporate tax credit equal to 30% of the installed cost of biomass-fueled heating or cooling systems for commercial or industrial applications. The credit would have no maximum and would be available for biomass thermal systems placed in service on or before December 31, 2013.

“We need to break our dependence on imported fossil fuels, and biomass, used effectively and sustainably, can help do that,” said Sen. Shaheen, the original sponsor of the bill. “The American Renewable Biomass Heating Act will help put highly efficient biomass on a level playing field with other renewable resources and create the incentives businesses need to invest in clean energy. There is noreason why the United States cannot and should not be a leader in clean energy technologies, including biomass.”

To qualify for the credit, biomass boilers and furnaces would be required to operate at greater than 75% efficiency and provide thermal energy for space heating, air conditioning, domestic hot water, or industrial process heat. Large scale biomass thermal systems have been widely deployed in Europe, where government incentives have played a vital role in helping reduce fossil energy and create new clean energy jobs.

“This bipartisan bill will help create a market for commercial scale biomass thermal systems,” said Charlie Niebling, chairman of the Washington D.C.-based Biomass Thermal Energy Council. “It supports biomass thermal with the same incentive that already exists for every other renewable energy technology, including solar thermal and electric, wind, and geothermal. Businesses are some of our nation’s biggest consumers of thermal energy, and S. 3188 will provide a powerful incentive to switch to biomass fuels that we produce here in America.”

Published: April 9, 2010
By James Cartledge
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New Hampshire Senator Jean Shaheen is sponsoring the Bill
The biomass heating fuel sector has applauded a group of senators for introducing a Bill to Congress that would encourage businesses to switch to renewable heating systems.
New Hampshire Senator Jean Shaheen, along with Idaho Senator Mike Crapo and Alaska Senators Mark Begich and Lisa Murkowski introduced the American Renewable Biomass Heating Act to the US Senate at the end of March.
The bipartisan legislation would allow federal tax credits to support the use of wood renewable biomass in “high-efficiency” heating systems in commercial and industrial buildings.
The tax credits could support up to 30% of a project’s costs under the proposals, which if passed by Congress, would see funding made available for biomass heating systems installed from December 31, 2013 onwards.
Sen. Crapo said a third of building energy consumption is to generate heat, and said prioritizing renewable wood fuels would help reduce US dependence on foreign oil.
The Bill would also bring economic benefits to the timber industry and rural communities.
The Idaho Senator said: “We have seen increased efforts to put wood products, like biomass and wood pellets, to work heating our homes and schools. Now, we need to expand the use of these wood products for larger, industrial uses, and create more jobs in the process.”
Tax credits
Federal tax credits have been available for biomass heating systems since the beginning of 2010, but there is a cap in place limiting credits to $1,500 per project.
The new legislation would allow tax credits for larger scale projects, supporting up to 30% of capital costs.
To qualify for the proposed tax credit, biomass boilers and furnaces would have to operate at a 75% efficiency level or greater while providing space heating, air conditioning, domestic hot water or industrial process heat.
The Biomass Thermal Energy Council, a Washington DC-based trade association, said the Bill if successful could create a market for commercial-scale biomass heating systems.
This bipartisan bill will help create a market for commercial scale biomass thermal systems” - Charlie Niebling, Biomass Thermal Energy Council
It said large-scale biomass thermal technology was already widely deployed in Europe, spurred on by government incentives there.
Charlie Niebling, Chairman of the Council, said: “This bipartisan bill will help create a market for commercial scale biomass thermal systems.
“It supports biomass thermal with the same incentive that already exists for every other renewable energy technology, including solar thermal and electric, wind, and geothermal. Businesses are some of our nation’s biggest consumers of thermal energy, and S. 3188 will provide a powerful incentive to switch to biomass fuels that we produce here in America.”
Level playing field
Senator Shaheen, the original sponsor of the bill, said: “The American Renewable Biomass Heating Act will help put highly efficient biomass on a level playing field with other renewable resources and create the incentives businesses need to invest in clean energy.
“There is no reason why the United States cannot and should not be a leader in clean energy technologies, including biomass.”
A similar titled Bill failed to get out of Committee last year in the House of Representatives. HR 2080 would have raised the cap on biomass tax credits from $1,500 to $6,000.

June 3, 2010
Blaming a decline in demand, Shaw Resources has laid off a third of its workforce at its New Brunswick wood pellet plant. Europe, which consumes over 85 per cent of Canada’s wood pellets for power generation and heat, is facing a debt crisis that has cut the value of the euro.
Ocean freight rates have also gone up and the market has slowly been flooded with wood pellets as more companies begin production.
Gordon Murray, executive director of the Wood Pellet Association of Canada, said selling into Europe is becoming unprofitable.
“The euro’s dropped from a high of about 1.6 Canadian dollars to the euro and now it’s about 1.3 Canadian dollars to the euro,” Murray said. “We can’t make any money at it.”
Canada’s 30 pellet plants, and the 25 or so under construction, are also competing with new production in the United States, where rebates are giving producers a leg up, Murray said.
Canadian Press


While most of the country's attention has been focused on 'gusher-gate' in the Gulf and the battle over offshore drilling, the South has scored a victory in the fight against another dirty energy source: coal. The University of North Carolina, Chapel Hill announced that the school would go coal-free by 2020--great news in a region plagued by environmental destruction from strip mining.
The school's chancellor said he believed that universities should be a key force in driving a transition to cleaner fuels. As YES! Magazine reports, just down the road Duke has cut its coal consumption by 70 percent, and UNC is definitely setting the bar higher. Hopefully they can come through on their pledge and other schools will follow suit.
UNC Chapel Hill currently attributes 60 percent of its emissions to a coal-fired co-generation plant, YES! reports. But after a nine-month task force investigation, they determined that it would be possible to phase in biomass and phase out coal. Now they are aiming to achieve complete independence from coal in a decade.
Biomass power, however, has its drawbacks. Corn, for example, requires intensive agriculture, which drains water and often requires pesticides. Using plant or animal wastes can be a good alternative to growing plants simply to burn them for electricity.
The UNC folks still haven't firmed up a source of their biomass, but are aiming to use wood pellets to begin. My own alma mater, Middlebury College, recently introduced a biomass gasification plant to cut emissions as well. The college has partnered with local sustainable forestry folks to secure their wood chips, and they are hoping to make the school carbon neutral by 2016--an ambitious goal for sure.
At a time when we face so many challenging environmental problems and yet seem to lack national political will to enact effective change, it's heartening to see so much progress at the collegiate level. Hopefully, these and similar actions will help propel change schools across the country--where groups like the Alliance for Climate Education (ACE) are already doing some great work with high school students.

Posted on : 03 Jun, 2010 by REEMA
"Increasing demand for pellets in Europe and decrease in ocean freight costs have created new opportunities for producers to export pellets from the US, South East Asia and recently Australia". Poyry Forestry Industry consulting.

Wood pellets are underpinning the emergence of a new commodities business in biomass. The key driver is bioenergy and Pöyry expects double digit growth in pellet markets over the next five years.

The wood pellet market is immature and the reliability of data on trade, prices, production capacity and actual production varies considerably between countries. Through its study, Pöyry hopes to establish an authoritative base of reliable data and analysis which can be used for strategic decision-making by existing or prospective market participants.

The global wood pellet market is and will continue to be a growth area. The current and future demand for wood pellets is strongly driven by the world's need to develop renewable forms of energy and reduce greenhouse gas emissions.

"The wood pellet market is attractive, but highly complex", said Ania Krolak, the study project manager. "It has attracted a high level of investment from both existing players expanding their operations and newcomers". However she cautioned that there are threats as well as opportunities in this business.

Source from§ion=Bioenergy%20%26%20Waste posted on Wednesday, 19 May 2010.

The provincial government has provided Scott's Nursery with $350,000 to help the company reduce its greenhouse gas emissions by converting from oil-fired boilers to wood-pellet boilers and installing an energy curtain.

Stephen MacGillivray
An announcement regarding the Climate Action Fund took place at Scott's Nursery on Thursday. Above, George Scoot, co-owner of Scott's Nursery, right, shows the new wood-pellet furnace he has installed thanks to the fund to Environment Minister Rick Miles, left, and Finance Minister Greg Byrne.
The garden centre's switchover is expected to reduce its greenhouse gas emissions by 1,866 tonnes annually. That's akin to taking 339 cars off the road for a year.
The funding is being provided through the $34-million New Brunswick Climate Action Fund. The fund is dedicated to reducing greenhouse gas emissions in the public-, private- and not-for-profit sectors
George Scott, co-owner of the nursery, said the decision to upgrade was made two years ago because of the price of oil.
"In 2008, oil prices sort of put us in a tailspin," he said.
He said the price of heating fuel that year forced the company to cut back.
"When the energy prices were up, that forced us to remove some of the Christmas and other crops we had been offering that we just couldn't make competitive.
"With wood pellets, we have something that is re-usable and carbon-neutral. We think we have made the right choice," he said.
He said the project was delayed by the fire last summer that ripped through the business.
He said the company expects to consume eight tonnes of pellets a day in winter.
"This new heating system will reduce the nursery's reliance on oil and instead have it rely on wood," said Environment Minister Rick Miles.
The province is covering part of the cost of the project, which is estimated at $902,000.
Scott said the nursery is talking to local suppliers about providing the pellets.
"We're talking to a number of companies in the immediate area that are interested in supplying us," he said.
The province's climate fund comes from New Brunswick's portion of the federal government's eco-trust for clean air and climate change. The province hopes to reduce greenhouse gas emissions by 5.5 megatonnes per year by 2012, bringing it in line with 1990 levels.


Albert J. Marro / Rutland Herald Workers from the Vermont Crane Co. of Rutland and Vermont Wood Pellet Co. in North Clarendon unload a new dryer Tuesday morning. The dryer has a capacity to dry 10 tons per hour. Vermont Wood Pellet is planning on starting at three or four tons per hour.
By Bruce Edwards STAFF WRITER - Published: June 7, 2010
NORTH CLARENDON — It's 10 feet wide, 30 feet long, weighs 15 tons and looks like a mobile missile launcher.

But what gets "fired" through the mammoth piece of equipment are wood chips that will nearly double production at the Vermont Wood Pellet Co. mill — the state's only pellet manufacturing operation.

Vermont Wood Pellet purchased the $250,000 drum dryer thanks to a loan package from the Rutland Economic Development Corp. and the Vermont Economic Development Authority. The REDC portion of the financing package was $148,000 with VEDA providing a $100,000 loan.

Katie Adams and partner Chris Brooks said the decision to expand production was based on demand with pre-buy orders for next season bringing the mill to capacity.

They said the company has also applied to the U.S. Department of Agriculture for a $50,000 energy grant that, if awarded, would also help pay for the dryer.

Once installed in two to three weeks, the mill will have the capacity to turn out 18,000 to 20,000 tons of wood pellets a year — double its current output of 10,000 tons.

"In real terms what it lets us do is instead of offsetting the need for 1.2 million gallons of fuel oil," Brooks said, "it boosts us up to being able to produce the equivalent of 2 million gallons of heating fuel oil."

The new drum dryer, fabricated in Coffeeville, Kan., replaces the existing equipment.

Brooks said wood chips pass through the drum dryer three times at a low heat. He said the process ensures that the premium wood pellets retain a high BTU level for maximum heat.

REDC Executive Director Jamie Stewart said since it started production last year, the company has gone from one shift to three shifts.

Stewart said the new dryer will not only make the company more viable but will also positively impact loggers and wood pellet distributors.

"If you really want to see things go well, you have to make some investments and this is an investment that we see an immediate return from in the form of good quality jobs being provided, direct and indirect," Stewart said.

The mill in the Airport Business Park employs 12 workers. Vermont Wood Pellet is leasing the 12,000-square-foot building from Bruce Belden.

In addition, Brooks said the company has three subcontractors and receives wood from 49 loggers.

Adams said the company has also earmarked part of the loan for dust reduction as well as spark detection and fire suppression systems.

She said the company has a network of 20 dealers around New England.

The current re-buy price for pellets purchased at the plant is $229 a ton.

The super premium wood pellets are sold at area stores including Mike's Country Store, Resort Spa Services and E.C. Crosby & Sons in Danby.

Bourdeau Brothers in Middlebury is the local distributor.
Policies to promote renewable energy have focused largely on transportation fuels such as ethanol and biodiesel, and electricity from hydro, wind, solar, geothermal and biomass
By: Charlie Niebling - Biomass Magazine

America's energy consumption can be divided into roughly equal thirds: transportation, electricity and heat (or thermal). Policies to promote renewable energy have focused largely on transportation fuels such as ethanol and biodiesel, and electricity from hydro, wind, solar, geothermal and biomass.

Conspicuously absent from Americas support for renewable energy is biomass used to make heat. Congress overlooked biomass thermal because lawmakers were unaware of its enormous potential to cost-effectively address U.S. energy and climate challenges. In short, nobody asked. The Biomass Thermal Energy Council was formed to make the case for these and other policies that will enable biomass thermal to gain a solid place in the market. With the possibility of a comprehensive Energy Bill in 2010, we have the opportunity to correct this oversight.

Biomass can be used to make heat in many forms including pellets or briquettes, wood chips, agricultural residues, willow, poplar, switchgrass and miscanthus.

Highly efficient combustion technology is rapidly entering the market. Bulk fuel distribution systems are in place to expand the adoption of central heating systems in home and business heating, industrial process heat, district heating of whole communities, and combined heat and power.

Biomass thermal fulfills all the same public policy objectives that are by necessity the basis and justification for energy tax incentives. These include:

• Reduced consumption of foreign fossil energy
• Increased efficiency of utilization for equivalent energy output, as compared to biomass electric generation and cellulosic biofuels
• Reduced greenhouse gas emissions due to the carbon lean status of biomass
• Reduced emissions of certain air pollutants such as sulfur dioxides and mercury, as compared to fossil fuels
• Strengthened local economic development and job creation

Because of the small market penetration of new biomass combustion, these systems are expensive compared with fossil-fueled systems. Fuel transport logistics have yet to reach critical mass with few customers spread over large geographic areas, thus increasing the distribution cost. Incentives are necessary to make biomass thermal more competitive. In time, with increasing market penetration, these incentives can be scaled down or eliminated.

The renewable fuels standard (enacted in 2007) and the renewable electricity standard (pending) provide mandates for renewable transportation fuels and electricity. No such mandate exists for thermal. Therefore, tax incentives are the logical mechanism to promote biomass thermal.

Ironically, the federal government has already established tax incentives for other thermal renewable technologies such as solar thermal and geothermal.

BTEC seeks parity treatment for biomass thermal. In the 2008 Troubled Assets Relief Program, a modest credit for residential thermal systems was established under the efficiency title, 26 USC 25C. This credit was enhanced in the American Recovery and Reinvestment Act in February. This incentive should be strengthened and reauthorized beyond 2010. For commercial and industrial installations, the most logical place to establish parity is in 26 USC 48, the 30 percent business energy investment tax credit.

Legislation has been introduced to achieve these goals. Sens. Jeff Bingaman, D-N.M., and Olympia Snowe, R-Maine, have introduced S. 1643, the Cleaner, Secure, and Affordable Thermal Energy Act, to strengthen the residential credit. Sens. Jeanne Shaheen, D-N.H., Lisa Murkowski, R-Alaska, and others have introduced S. 3188, the American Renewable Biomass Heating Act to extend section 48 tax treatment to commercial/industrial biomass thermal. In the House, companion bills have been introduced by Rep. Paul Hodes, D-N.H., also called the American Renewable Biomass Heating Acts (HR 2080 and another as yet un-numbered). BTEC is working hard to gain co-sponsor support for these bills and position them for consideration should a larger Energy Bill move in this session of Congress.

Ultimately we view these as short-term goals. Longer term, we need one mechanism that provides support for biomass in all its uses. The answer may lie in a production credit under 26 USC 45, which provides a tax credit based upon an equivalent million Btu or megawatt hour output basis from each of the three energy pathways for biomass. BTEC sees an important opportunity to work with groups such as the Biomass Power Association and the Renewable Fuels Association to advance this idea.

It is time that this simple technology was accorded the same incentives that have benefited virtually every other renewable energy technology.

Prison officials say the state's first attempt at a renewable energy project is a failure.

By: Geoff Dornan -- The Record-Courier

Prison officials say the state's first attempt at a renewable energy project the wood-fired power plant designed to eliminate nearly all of Northern Nevada Correctional Center's utility bills is a failure.

Director of Corrections Howard Skolnik said Friday the power plant "doesn't pencil out" in the long run and he wants to lease, sell or shut it down by the end of summer.

The plant cost the state $6.5 million. The project has also received both forest service and stimulus funding which, when added in, bring the total outlay to about $8.8 million, according to deputy corrections director Jeff Mohlenkamp.

But Skolnik said the federal money won't be there in the future.

"The numbers are working as long as we have the federal grant," he said.

When approved by the Board of Examiners, the project was touted as able to produce all the hot water needed by the prison and enough electricity to eliminate NNCC's $40,000 a month power bill and provide the state with a profit by selling the excess to NV Energy.

The plant is designed to burn wood chips at 1,600 degrees, producing a lot of heat but very little pollution.

Among its supporters were U.S. Sen. John Ensign and Rep. Dean Heller, both R-Nev. Heller said when the project was approved that, if it was successful, he could envision similar power plants being constructed for schools and other public buildings.

Ensign said as recently as January when he toured the plant that forest health alone is enough to justify the project.

"When you can do things that are actually good from an economic standpoint too, it's a win-win situation," he said during that tour.

Skolnik and Mohlenkamp said it hasn't worked out that way.

"The original design was just not large enough to make it truly profitable in the long term," said Skolnik.

Mohlenkamp said there were design problems and that the project "was a good idea but one that was not well implemented."

He said improvements over the past two years have made the plant much more efficient.

"It's operating a whole lot better than it ever was," he said.

But, he said, even when it is generating enough electricity to power the prison, "operating costs are such that it still can't turn an operating profit."

Andrew List of the Nevada Fire Safe Council said power generation isn't the only important reason to try to save the plant. He said it disposes of tons of forest underbrush and flammable waste that might otherwise cause serious forest fires on the Sierra Front and Tahoe Basin.

The alternative, List said, is to collect those materials and burn them in place which he said creates air pollution in the basin.

The Fire Safe Council helps remove hazardous fuels from private lands in the basin which, without it, would probably never be cleared away.

Closing the plant, he said, takes away an important option and could result in increased costs to improve the safety of those private lands.

A major problem, Mohlenkamp said, is that the plant needs "a certain specification of wood." He said with the help of Tom Baker, the former aide to U.S. Sen. Richard Bryan, the plant is getting plenty of wood chips from U.S. Forest Service and Nevada Division of Forestry crews who are trying to reduce underbrush and other dangerous fuels built up in the Sierra and Tahoe Basin. He said it's the technical specifications of the chips and the quality of the wood available which present problems.

Baker said it would be a shame to have the state's first venture into renewable energy fail this way.

And while Baker said the cost of the wood has been cut in half over the past year, Mohlenkamp said it's still too costly.

Another idea from the original proposal was that inmate labor would man the plant.

"It's just too complicated for that," Mohlenkamp said of the high-tech plant.

He said because the analysis of the operation says its flaws can't be cured, the state doesn't believe it will ever deliver as promised.

"If we can't find a buyer, it's likely we'll shut it down by the end of summer," he said.

"But that doesn't mean the technology and the concept is a bad thing," he said. "It's a lesson learned. It doesn't mean plants like this can't be successful."

He said along those lines, prison officials are going to help the forest service write a paper on the lessons learned from the NNCC plant. He said hopefully those lessons will be applied to the construction and operation of a new biomass plant being built at North Lake Tahoe.

The plant, which plans to begin deliveries late in 2011 is expected to produce 450,000 metric tons of pellets


A new company, called Point Bio Energy, LLC, is developing a $124 million wood pellet project at the Port of Greater Baton Rouge in Louisiana.

The plant, which plans to begin deliveries late in 2011 is expected to produce 450,000 metric tons of pellets. Company officials boast of the site's ideal location to shipping and international markets and said it has negotiated letters of intent with local feedstock suppliers and a European buyer at attractive terms.

Point Bio Energy CEO Bill New said renewable energy requirements in the European Union are driving demand for the wood pellets, which power plants burn as fuel. Wood pellets provide roughly the same amount of energy as low-grade coal and can be burned in coal-fired power plants. New said that European demand for wood pellets, now around 8 million tons per year, is expected to double or triple over the next decade. Shaw Capital, Inc. and LaPointe Partners are helping to finance the project.

Point Bio Energy, LLC is developing a wood pellet project at the Port of Greater Baton Rouge in Louisiana with the assistance of Shaw Capital, Inc. and LaPointe Partners.

Wood pellets consist of debarked, dried, unitized, compacted and pelletized wood that is suitable to be burned as a green fuel. The 400,000 metric ton per year wood pellet facility will receive the feedstock for the plant from the underutilized wood basket in the Baton Rouge area as well as by barge from the Mississippi River, Atchafalaya River, Red River, and the Intracoastal Waterway.

Point has negotiated letters of intent with local feedstock suppliers and a European buyer at attractive terms. Point has also gone through an extensive technology and EPC selection process to enable utilization of proven state-of-the art equipment working synergistically throughout the facility. The company will have the storage and loading capabilities at the existing deepwater port for ocean going ships delivering the pellets to both European power generators and domestic customers.

Construction is expected to start in the third quarter of 2010 and commercial pellet manufacturing operations are expected to commence in the last quarter of 2011.

The site provides superior logistical flexibility with truck, rail, barge and Panamax vessel access. The land secured at the Port has existing roadways with direct access to major transportation arteries, unit train rail capacity, deep water and barge docks, fire water protection system, weight scales, port cranes, security, drinking water, natural gas and power. By being located directly on a deepwater port, Point has a cost advantage to other projects of $10 to $25 per ton due to the avoidance of double-handling of the wood pellets.

The European wood pellet market is well established with existing and expanding power generators aggressively seeking new sources of fuel to meet renewable fuel mandates. The European market for fuel pellets was approximately 7 million metric ton per year in 2007 and 9.5 million ton in 2008. It is expected to continue to grow by 25 to 30 percent per year in the coming years with large users paying approximately $190 per ton CIF at North European ports.

The Company considers the permitting for the wood pellet operations at the Port to be streamlined and believes that minor source air permits can be secured for the project on a timely basis without public hearings.

Utilizing an experience engineering and construction contractor along with the proven wood pellet technologies that will be used for the facility, which are already used in many other plants in operation today minimizes the technology risks.

Experienced Management Team

The senior management team has over 100 years of combined experience in forest products, biomass processing and large capital projects. The team has significant experience with international sales and distribution of wood and fiber products.

Feedstock Advantage

The Plant will obtain sustainable harvested round wood as the feedstock for the wood pellet plant from land located close to the deepwater production facility and will also be able to take delivery of wood delivered by barge from a number of locations on the Mississippi River, Atchafalaya River, Red River, and Intracoastal Waterway through existing barge unloading facilities.

Working with the forest and energy ministries, Hydro has identified several regions of the province as having sufficient fibre supply to support biomass burning

By: Scott Simpson -- Vancouver Sun

BC Hydro is looking to add more green energy from combustion of wood waste and other sources including municipal compost.

Working with the forest and energy ministries, Hydro has identified several regions of the province as having sufficient fibre supply to support biomass burning.

Hydro wants up to 1,000 gigawatts per year of new electricity supply.

"The ministry of forests and range has identified the following areas as having available fibre supply: the Smithers/Fort St. James corridor, Mackenzie, Northeast B.C., Central and Northern Vancouver Island, and Northwest B.C.," a Hydro news release said Tuesday.

However the call for proposals has been issued province-wide.

"We're looking for projects that take fuel sources that might otherwise go to waste and use it to generate clean power for British Columbia's benefit," Hydro president and CEO Dave Cobb said in the release.

By 250 News
Wednesday, June 09, 2010 07:11 PM

Prince George, B.C.- Doug Bradley, Executive Director of the Canadian Bioenergy Association, began his presentation at the Bioenergy Conference in Prince George with a heading on the overhead screen that read: “Federal Climate Change Policies.” However, underneath the heading the rest of the screen was blank. And that was his point. In his opinion, government policy regarding climate change and renewable energy is not where it should be. Furthermore, he said “we can’t wait for the U.S.”

He argues that the difference between Europe, which has had considerable success with renewable energy, and North America is that, in Europe, the European Union sets targets that are enforceable. In Canada, the federal government has no jurisdiction over forestry and other resource areas, and, as a result, when dealing with biomass, policy is fragmented.

Another problem in Canada is that there are lots of incentives given for renewable power development, but not for renewable heat production, which ends up discriminating against biomass energy initiatives.

In his presentation, he talked about the experience in Vermont, U.S.A., where targets were set in the 1980s to convert the schools in the state over to renewable energy. State bonds were issued to cover 90% of the cost, with the remaining 10% covered by municipalities. The result was a huge number of conversions with a minimal effect on local taxes. In addition, each new school saved enough from the energy conversion to pay the salary for two additional teachers.

Bradley recommended several initiatives for British Columbia. One of these is for the provincial government to set up a “bio-trade equity fund” that would invest in bioenergy conversion plants and supply chains. He also said that the Port of Prince Rupert facilities need to be enhanced so that they can handle the “floodgate” of wood pellets that are expected to be exported in future years. He finished his speech by mentioning that China currently has $20 billion it would like to invest in energy resources in Canada, including bioenergy.

By 250 News
Thursday, June 10, 2010 03:45 AM

Prince George, B.C. - Most of Canada’s pellets from wood waste, are shipped to Europe for power generation, but relatively little is used here. According to Gordon Murray, Executive Director of the Wood Pellet Association of Canada, commented in his presentation at the Bionergy Conference in Prince George that global wood pellet consumption currently stands at 10 million tonnes with Europe using 8 million of those tonnes. In contrast, Canada burns a mere 100,000 tonnes, which is 1% of global consumption.

Pellets are not used at all for electricity generation in Canada, which is something Murray believes should be changed. Canada is the second worst per capita emitter in Green House Gas emissions (just behind the U.S.) In that regard, coal, widely used in electrical power generation, is one of the worst emitters with high concentrations of mercury, arsenic, and other toxins, yet Canadian coal power production (60 million tones) is going up every year.

One of the solutions often put forward to deal with coal pollutants is “carbon capture and storage.” However, Murray argues that there is another solution involving “co-firing” the two fuels which involves using wood pellets in place of some of the coal to reduce overall emissions in an operation. This is something that could be implemented immediately and at a low cost. However, it needs the involvement of power generating companies, as well as changes in government policy.

At this time, according to Murray, the federal government has no strategy for the development of co-firing operations or in terms of overall biomass utilization in the country. Murray believes that this is something that needs to change soon if Canada is to be in the running for renewable energy production, as well as reduction of green house gases.

June 11, 2010 12:04 PM PDT
by Martin LaMonica
Forested regions around the world are pursuing biomass as a renewable energy source but a study finds that the carbon footprint from burning biomass can be worse for global warming than coal.
The Manomet Center for Conservation Sciences on Thursday published the findings of a six-month study to measure the greenhouse gas impacts of using biomass, which, in many cases, does not meet claims of being "carbon neutral" over short periods of time.
The report was commissioned by the Massachusetts Department of Energy Resources, which said it will revise its regulations in response. "We can begin the process of refining our renewable energy regulations to provide incentives only for biomass energy that truly reduces our greenhouse gas emissions and protects our forests," said Massachusetts Department of Energy Resources Commissioner Phil Giudice, in a statement.

Wood pellets.
(Credit: Martin LaMonica/CNET)
The study has implications beyond Massachusetts since biomass was projected to see rapid growth as countries create policies to favor development of biomass as a source of renewable power in coming years.
Biomass plant operators have argued that biomass facilities are carbon neutral because trees absorb carbon dioxide when they grow. Carbon emissions from burning biomass are indeed offset by plant growth, but the Manomet study found that the time frame is measured in the decades, which calls into question the role of biomass in meeting carbon reduction goals.
When burned, forest biomass emits more greenhouse gases per unit of energy than fossil fuels, which the report calls the "carbon debt" of biomass. Regrowth of forests will pay off that debt and begin to deliver a "carbon dividend," in the form of lower greenhouse gas emissions than would have occurred if fossil fuels were burned.
The carbon debt payoff for using biomass instead of coal to make electricity is 21 years and more than 90 years compared to making electricity from natural gas.
Using biomass to make heat, rather than electricity, has a better environmental profile. Burning forest biomass to heat a building, such as a school, generally pays off its carbon debt within 10 to 20 years. Combined heat and power plants, which make electricity and heat, typically have lower emissions per energy unit compared to power-only facilities.
The results have implications for how Massachusetts and other regions manage forests, which is related to the cost of biomass since higher prices would create a stronger incentive to increase fuel supplies.
Manomet offered recommendations on ways to protect the local landscape and soil while operating a wood products industry over the long term. Each of the options is designed to promote sustainable wood procurement, such as requiring facilities to buy biomass from forests with state-approved forest management plans.
"The sobering conclusion is that Massachusetts cannot produce very much new energy from forest resources while also protecting the health of our forests and reducing greenhouse gas emissions," Sue Reid, a staff attorney for the Conservation Law Foundation (CFL), said in a statement. "The study echoes CLF's longstanding position that there are 'right' and 'wrong' ways to use biomass for energy."
In response, biomass industry people said that the study does not paint a completely accurate picture of biomass-to-power facilities because it assumes that they don't use residue wood products, such as branches and trees left from logging. "The study is not representative on how we plan to operate," Matt Wolfe of Madera Energy, which is proposing a wood-burning plant in western Massachusetts, told the Boston Globe.
The report, though, notes that at least in Massachusetts, there is not that much residue available. "Understanding the greenhouse gas impacts of woody biomass energy is extremely complex," said Thomas Walker, who led the study.
Massachusetts is scheduling hearings in July on potential changes to biomass policies.

The conditions are ripe for a massive increase in the production of wood pellets in the U.S. due to demand from European countries, favorable manufacturing conditions and the availability of raw
materials, especially in the South.
By Adrian Pirraglia, Ronalds Gonzalez, Daniel Saloni and Jeff Wright

Wood has been used for heating and fuel purposes for thousands of years. The wood industry has found itself on the verge of a revolution, however, because of the rapid increase in development and utilization of new wood-based solid and liquid fuels. Wood pellets represent an alternative to the use of coal, gas and even traditional wood logs and chips. Wood pellets are cylindrical, compressed wood particles used as burning fuel. Pellet size varies from one-fourth to one-third inches (6 to 8 millimeters) diameter and 1 to 1.5 inches (38 millimeters) in length, with a bulk density that is usually about 40 pounds per cubic feet (about two to three times the wood density of softwood).

Based on the principle of densification of dried wood chips and sawdust, pellets offer better and more uniform heating properties per unit volume due to their low moisture content. Pellets burn cleaner, have reduced particulate emissions compared with coal, are more economical to transport due to increased bulk density and can be easily produced from wood waste and byproducts. This provides new ways to divert wood waste from reaching landfills as well as to increase overall profit through an integral and more efficient use of the raw material. Wood pellet applications vary from household heating to large-scale industrial power generation. It is important to emphasize that wood pellets are not a new product, they have been utilized for decades, but it is only now that the world is experiencing a large demand increase, and wood pellet potential is still underestimated.

Global Market

During the past four years, the global wood pellets market has experienced a dramatic increase. Global production went from almost 8 million tons per year1 in 2007 to more than 13 million tons in 2009, of which European countries consumed more than 8 million tons (2009). North America produced about 7 million tons in 2009, of which almost 5 million tons were intended for exports to Europe. Leading countries in the consumption of pellets in Europe are Sweden, Austria and Finland, while Germany, France and Italy are experiencing the largest market growth in both capacity and consumption of pellets. Russia is also increasing its production capacity and may become a key player for exports in the near future. In addition, countries such as Denmark, Belgium and Norway are experiencing the most significant increase of the region in pellet consumption. According to the European Biomass Association, it is expected that Europe will reach a consumption of 50 million tons per year by 2020 compared with 8 million tons per year in 2009. Regardless of increased production and consumption, European countries will have a lack of production capacity to satisfy the internal demand, mainly due to the scarce availability of sustainable sources of raw material in the EU. With an increasing demand from several European countries, and few exporters besides Canada and Germany, U.S. producers are finding a growing market that literally exploded, increasing from 2002 through 2006 by more than 200 percent. Despite this large increase in production, most pellets manufactured in the U.S. were intended for domestic consumption. Canada has dedicated more than 80 percent of its production for the export market, mainly to European countries, and is the largest exporter of wood pellets in the world. With the opening of several new facilities in the Southern U.S, the capacity for exports has expanded and European countries with demand for pellets, such as Sweden, Italy, Denmark and Norway, may take advantage of their better prices, faster shipping, and a steady availability and supply of pellets from these U.S. facilities. These countries may switch from their traditional Canadian supplier, depending on delivered prices and long-term supply agreements. The market for other continents, excluding North America and Europe remain marginal, with combined production of only 0.3 million tons per year. South America, Africa and Asia are far behind in the race for market share and positioning in the pellet market. These players must not be underestimated, however, especially countries such as Brazil. With the availability of raw material, and well-established wood and paper industry, it will be a matter of time for Brazil to become a key player in the wood pellets market.

The U.S South has the ability to supply pellets for the European market at a competitive price because of enhanced production capacity due to a sustainable wood source from plantations. In addition, it may become a better alternative for European buyers than Canada, because of the locations of important ports, better road infrastructure and year-round harvesting. U.S. producers can achieve long-term agreements with European customers because of the increased demand for pellets, and the lack of resources (production capacity and raw material availability) to internally satisfy the demand.

Wood Pellet Pricing

Wood pellet prices in the U.S. are heavily affected by transportation costs. Since the most common delivery system in European countries is in bulk cargo, prices in Europe tend to be more stable around €215 per ton ($304 per ton2). Pellets in the U.S. are sold in bags by retailers, adding about $20 per ton in packing, pallets and wrapping material. With an average price of $276 per ton as of November, pellets can be found for as low as $176 per ton, or as high as $600 per ton in the Northern U.S. However, for U.S. companies intending to compete in the export market, the price for warehousing and the ocean freight costs must be taken into consideration. Warehouse costs may add around an additional $10 per ton, while ocean freight (which can be extremely volatile) adds $35 to $45 per ton to the price of pellets. The fact that pellets are not considered a commodity also affects the price. When they are considered a commodity, prices will have less variability, but will still be strongly affected by transportation costs and raw material availability. This wood pellet commodity market could be developed using futures contracts as with lumber, oil and other products.

New Facilities

The U.S. wood pellet industry has been characterized as being dominated by several small- to medium-sized factories. The definition of a medium or large factory needs to be redefined, however. Typically, a large factory was considered to be producing about 100,000 tons per year. In recent years, several facilities in the Southern U.S. have started operations, producing more than 500,000 tons per year. The opening of such facilities redefines the term large-scale production in the wood pellet market. In addition, there are several facilities planned, permitted and ready to break ground, and several others projected to start construction as this article was being written, including four facilities from Phoenix Renewable Energy, planned in Arkansas. The largest wood pellet facility in the world started operations in 2007 in Cottondale, Fla., mainly producing and shipping pellets to Sweden. Several multinational corporations are investing in pellet facilities and operations; recently, Weyerhaeuser and Mitsubishi announced a strategic memorandum of understanding in order to explore and establish the feasibility of a pellet production facility in the U.S. by 2011, and depending on its success, more facilities could follow in the next few years.

In Georgia, RWE Innogy is building a factory with the capacity to produce 1 million tons of pellets per year. More factories of similar size are projected in South Carolina and Georgia, intended for the export market to Europe. Germany has seen its pellet industry grow exponentially becoming an important exporter to neighboring countries. Since 2004, approximately 35 new facilities, in addition to the previously existent 15 plants, have started operations. With an average capacity of 66,000 tons per year, and several new facilities planned for 2010 and 2011, the potential of Germany as producer and exporter is now significant, and it’s able to absorb market share from North American manufacturers. Canadian producers have also launched several new facilities. With a well-established market for exports and solid producers such as Pinnacle, looking for a business expansion, the number of factories in Canada has been significantly increased in the past four years, adding additional capacity for European exports. U.S. producers still have an advantage compared with Canadian manufacturers regarding shipping ports and strategies. States such as Florida, Georgia, South Carolina and Virginia, all have proximity to important ports, a railroad system and a sustainable source of plantation grown wood for production, resulting in lower transportation costs and minimized storage time. Many of these Southern U.S. ports have a long history of wood chip, lumber, log, pulp and paper exports. In less than five years, the U.S. South’s pellet industry has transformed from virtually nonexistent to producing 2 million tons in 2009. New pellet facilities have also been announced in the Northern U.S. (New Hampshire, New England Pellets), and the west (Oregon and California, Enligna U.S.). Southern states will still lead the pellet market development, based on the number of facilities announced and in recent operational status.

For the U.S. domestic market, however, a single large-capacity factory may not be economically profitable, especially since wood pellets are mostly sold in bags. Transportation to several destinations from a single production site might make prices prohibitive to retail buyers. This market will require special attention in order to grow, and a solution for pellet companies may rely on having several small factories rather than one single large facility, especially when accessibility to roads, railroads and storage space is limited.

Well-Established Technology

The process for making wood pellets is fairly simple, and has been well-established and developed. The main issues to take into consideration are moisture content and wood species used in the process, making manufacturing a process of finding the right “recipe” for production conditions rather than a technological upgrade. Building requirements and labor for a pellet plant are relatively low. The key element for a pellet plant is having the criteria to choose the right equipment and capacities, especially when handling large production volumes, where typical investment levels can reach more than $30 million in equipment (for plants producing 200,000 tons per year). Nevertheless, by increasing the size of the facilities, some issues arise. Problems such as self-heating of the pellets while being stored, cooling of big volumes of pellets in the manufacturing process, utilization of local wood species with different properties that may affect production parameters and throughputs. The quality, condensation and crumbling of pellets while being transported as well as pellets from mixed species and wood waste must be managed. Production considerations for the pelletization of torrefied wood at an industrial level may represent great opportunities and technological advances that need to be addressed in order to ensure growth and sustainability of this market for the U.S. wood industry.

Final Remarks

The right conditions for a massive scale of wood pellet production in the U.S exist. With high import requirements from European countries, and favorable manufacturing conditions and raw material availability that can be found in the Southern U.S., both small and large producers are finding a market niche that must be filled. The wood pellet market seems promisingly sustainable for years to come. In order to become reliable European market suppliers, U.S. producers must solve large-scale production issues regarding warehouse strategy, self-heating, transportation, handling and capital investment. The volatility of pellet prices in the U.S. has to be addressed in order to ensure the sustainability of the market. As a final thought, the technical feasibility for pelletizing torrefied wood must be further developed, due to the promising results and enhanced heating value provided by this material. BIO


1Every weight unit expressed in tons is referred to metric tons of pellets, at 10 percent moisture content. One metric ton equals 1.2 short tons.

2Calculated at a exchange rate of 1 Euro=1.412 U.S. dollars (01/23/2010)

Adrian Pirraglia is a PhD candidate of wood products at North Carolina State University, Ronalds Gonzalez is a PhD candidate of paper science and engineering at NCSU, Daniel Saloni


Published: June 13, 2010 2:00 PM
By Arthur Williams
Black Press
Canada has a long way to go to catch up to leading European nations in the bioenergy sector, according to industry experts.
Leaders from Canada's bioenergy sector addressed attendees at the 2010 Bioenergy Conference and Exhibition in Prince George on June 9.
Canadian Bioenergy Association executive director Doug Bradley said Canada needs a national climate change policy and can't wait for the U.S. to develop one first.
"We can't wait any longer, we need a federal policy," Bradley said.
In Canada natural resources are a provincial responsibility, so each province has different policies on bioenergy. In addition, Canada has no legally-binding emission targets — just goals.
The European Union 2020 objectives are legally binding, meaning countries which fail to meet their reduction targets must purchase carbon offsets to make up the difference.
"Each country can have different incentives and policies. But when the E.U. parliament says jump, countries jump," he said. "In Canada when the federal government says jump... the provinces say, 'pardon me?'"
Provincially several jurisdictions, including B.C., have made calls for renewable energy projects, he said. But those calls often are slanted toward wind, solar and small hydro.
Bioenergy generation provides a substantial amount of heat, which must be used to get the full energy value. However, heat is not included in calls by B.C. Hydro, Ontario Power Generation and other agencies.
"Provinces think renewable energy, but they say renewable power. In Italy, you get a higher price if you provide heat and power," he said. "(Italy-based) Turboden has 90 heat/power installations in the E.U."
Canada needs to put a price on carbon, either through a national carbon tax or cap-and-trade system, he said. Currently in North America the environmental cost of fossil fuels is not factored into the final price.
"We need to put a value on all renewable energy, not just electricity," he said.
In Vermont, state bioenergy bonds were issued to raise capital to cover conversion costs to bioenergy. A similar approach could be used in Canada to, "open up the floodgates," and attract investment into the sector.
Wood Pellet Association of Canada executive director Gordon Murray simple changes in government policy could result in a substantial domestic market for wood pellets.
"Right now most of Canada's wood pellets are shipped to Europe for power generation," he said. "We have two million tonnes of capacity, but currently we're only producing 1.3 million tonnes. In Canada we use 100,000 tonnes."
Approximately 90 per cent of Canada's wood pellets are shipped from B.C. to Rotterdam or other ports in Europe — 16,500 km away.
Canada has followed suit with the U.S. to require five per cent ethanol in gasoline sold in Canada and three per cent biodiesel in diesel fuel.
In Europe wood pellets are used in combination with coal in traditional coal-fired power plants. European coal/pellet plants use an average of 15 per cent wood pellets.
"Canada consumes 60 million tonnes of coal per year. If five per cent of coal was replaced with pellets, that it would be three million tonnes — we'd have to double the current Canadian production," he said. "Even using all input costs, wood pellets represent a 91 per cent reduction in greenhouse gasses over coal."
Ontario Power Generation director of environmental policies Robert Lyng said the Ontario public utility plans to go one step further and eliminate all coal by 2014.
"If implemented, it will consume 2.1 million tonnes of wood pellets per year," Lyng said. "After landfill gas, co-firing is the cheapest form of bioenergy you can put on the grid."
Research into public acceptance shows that 80 per cent of people are in favour of biomass development, he said. But biomass, "just doesn't get the gold star," other renewable power like hydro, solar and wind get.
If Canada doesn't move quickly to get into the bioenergy market in a serious way we could lose the opportunity, Florida-based Magnolia Bioenergy CEO John Swaan said. Swaan previously was the CEO and founder of Pacific Bioenergy in Prince George.
"When I was asked to take this position, they called me up and said, 'We want to make a pellet plant to make a million tonnes a year.' I asked them if they have the fibre... and they do," Swaan said. "Typically we grows one tree in a lifetime. They grow three or four."
Private control of forest lands, and a well-developed private market for timber, means producers can access a steady supply of raw materials, he said.
"If you're not secure in the resource, you're not going to attract conventional investors," Swaan said. "You need an established market or ownership of the resource. A (pellet plant is a) $200-250 million investment, that is not going to be made on a heart handshake and a love letter from the Ministry of Forests."
Putting a cost on carbon will drive a domestic market in Canada.
"Why do we continue to ship pellets to Europe? Because of that economic weighting."
Posted June 14, 2010, at 10:28 a.m. CST commends Manomet biomass study, a distributor and direct-to-consumer provider of wood pellet heating fuel, applauded the findings of a six-month study commissioned by the Massachusetts Department of Energy Resources and conducted by the Manomet Center for Conservation Science. This study concluded that “the use of biomass for heating and combined-heat-and-power (CHP) facilities would result in a 25 percent reduction in greenhouse gas emissions in 2050 relative to oil, but biomass-fired electricity would result in a 3 percent increase in emissions over coal-fired electricity in 2050.

“This study offers further evidence that using renewable biomass to generate heat is the cleanest, most efficient use of our biomass resources,” CEO Jon Strimling said. “Homeowners have a tremendous opportunity to decrease greenhouse gas emissions, to reduce our dependence on foreign oil, and to save on their heating costs by using wood pellets for heating. In a world where BP’s recent oil spill has made us only too aware of the environmental hazards of oil, consumers and businesses can switch to a safe, domestically produced alternative today. From high-efficiency heating appliances to sustainably harvested fuel and convenient fuel delivery systems, all the pieces are in place for the renewable heating revolution. We invite every citizen to join us in this movement.”

Thermal energy, essentially heat, accounts for roughly one-third of the total energy used in the United States. Europe has proven that biomass can replace oil heat and displace carbon emissions. To fully confront our nation’s energy crisis and reduce greenhouse gas emissions, a comprehensive policy must address the thermal sector, not only the electric and transportation sectors. “Now what we need is a renewable thermal standard to tackle the heating sector,” Strimling said. “Investing in the thermal energy sector will not only slash our greenhouse gas emissions, it will also lower energy costs for homeowners and businesses.” Consumers who switch from heating oil to wood pellet fuel can save hundreds of dollars in annual energy costs.

But consumers are not the only ones who can save on their heating costs. In Massachusetts alone, state and federal agencies contributed more than $233 million to providing heating fuel assistance in 2008. Nationwide, fuel assistance programs in 2010 totaled more than $5.1 billion, with most of those expenditures supporting oil purchases. “By spending billions of dollars of public funds annually, the LIHEAP and state fuel assistance programs are essentially enabling our nation’s addiction to oil heating,” Strimling said. “We are calling on policymakers to ensure that at least a portion of our heating assistance program funds are allocated to enable a transition to clean, renewable, locally produced, and carbon neutral heating fuels. This switch could provide heat at a lower cost, effectively enabling LIHEAP to provide coverage for more families across the state.”

Thirty-nine percent of Massachusetts homes are heated with heating oil, compared with a national average of just 9 percent. Those homes consumed 15,253,000 barrels of oil in 2008, and emitted 14 billion tons of C02. The Manomet study found that heating with renewable biomass instead of heating oil will reduce greenhouse gas emissions by 25 percent. With the second-highest residential fuel oil consumption in the nation, Massachusetts can slash greenhouse gas emissions by helping consumers make the switch from fossil fuels to renewable biomass fuels. applauds Department of Energy Resources Commissioner Phil Giudice’s desire to “begin the process of refining our renewable energy regulations to provide incentives only for biomass energy that truly reduces our greenhouse gas emissions and protects our forests." Thermal biomass appliances are currently eligible for many clean energy tax credits and incentives, including a 30 percent federal tax credit, up to $1,500, for qualifying biomass stoves. More than a million families in the U.S. already heat their homes with wood pellets or biomass fuels.



by Lisa Gibson - Biomass Magazine

The Biomass Power Association is requesting an apology and a clarification statement from the Manomet Center for Conservation Sciences and the Commonwealth of Massachusetts for misinformation communicated in a study released June 10.

Biomass Sustainability and Carbon Policy Study examines biomass energy in the state of Massachusetts, but bases its analyses on new forest biomass instead of the waste wood most biomass plants use or propose to use. It's a subject of grave concern for the members of the BPA who do business in 20 states, according to Bob Cleaves, president and CEO of the BPA. "The report issued by Manomet on behalf of the Commonwealth of Massachusetts has generated both a lot of interest, but also a tremendous amount of confusion and misinformation about a very, very important issue for our industry and that issue is carbon impacts from utilizing biomass in the production of electricity," he said.

In response to the study, Cleaves emphasized four major principles of the BPA and its members that guide operations: only sustainable fuels that do not contribute to land-use changes and offer much lower greenhouse gas emissions than fossil fuels are used; members do not promote harvesting of forests for energy; members fully support use of wood waste and byproducts from sustainable forestry; and members support the use of nonforestry waste from the agricultural industry. "The Manomet study completely ignores waste wood fuels for the first 109 pages," Cleaves said, "addressing them almost as an afterthought on page 110: All bioenergy technologies, even biomass electric power compared to natural gas electric, looks favorable when biomass waste wood is compared to fossil fuel alternatives."

"It assumes, we think, that in order to support the growth initiative in Massachusetts, that the chopping of trees has to occur to produce an adequate amount of fuel to support these facilities," Cleaves said of the study. "But that's not the fuel used by existing or proposed facilities in the country."

"We want the commonwealth and Manomet to issue a statement immediately, recognizing that this study is not about waste wood and waste materials and organic residues that are not generated solely for the purpose of producing energy," he said. "To issue a study like was done yesterday and baldly assert that biomass is less carbon friendly than coal is flatly misleading, irresponsible and not an accurate portrayal of our industry."

Governor used the Rocky Mountain Workforce Development Associations annual conference to sign three bills into law that will strengthen the states economy

Senate Bill 177 (Schwartz & Gibbs/Scanlan) promotes biomass energy development through tax incentives and renewable energy initiatives.

Tourism, timber, energy: they are all key to Colorado's economy, Sen. Gail Schwartz said. By protecting our forests we support industry and protect jobs. By helping the timber industry grow, we create jobs. By bringing biomass to Colorado's viable energy development, we create jobs. Creating and preserving jobs is our No. 1 priority, and this bill is all about growing Colorado's economy.

Colorado needs a viable, competitive timber industry practicing sustainable forestry, Rep. Christine Scanlan said. This new law will revitalize the industry so they can clear out dead trees, find a smart way to recycle beetle-kill timber, develop green energy, create new jobs and preserve existing ones. While jump-starting our mountain-town economies, we a can make good use of an abundant clean energy resource that is in our backyards. Dead trees turned to clean energy and jobs? Sounds great.

A growing number of U.S. wood pellet, chip and briquette producers are shipping their products to Europe, where demand is high, supply is limited and incentives are good

By: Lisa Gibson -- Biomass Magazine

Carolina-Pacific LLC shipped 5,000 tons of wood briquettes to Scandinavia at the beginning of March, marking the first of the company's regular shipments out of its location at the Port of Georgetown, S.C. The briquettes are contracted to specific power plants there, adding Carolina-Pacific to the increasing number of U.S.-based manufacturers sending their woody biomass products overseas.

U.S. companies are attracted to the European market because of higher demand and better incentives for renewable energy. In addition, wood pellet, chip and briquette producers in the Southeast U.S. have the advantage of a large supply of wood to satisfy that European demand, and the product can be transported by ship instead of more costly truck or rail. Cottondale, Fla., is the home of Green Circle Bio Energy Inc.'s 560,000-ton pellet plant, currently the largest in the world; Phoenix Renewable Energy is developing a pellet plant in Camden, Ark., with a capacity of 250,000 tons; and Point Bio Energy LLC is developing a 496,000-ton pellet plant at the Port of Baton Rouge, La. The products from these plants, and many more, are headed for Europe's well-established renewable energy market.

Patchwork Quilt

The European Union has a policy that requires its member countries to generate 20 percent of their energy consumption from renewables by 2020. In addition, numerous individual nations have their own goals. "They're just about 10 years ahead of us in terms of a commitment to renewable energy," says John Kern, chairman and CEO of Carolina-Pacific. "What we've got here is a patchwork quilt of portfolio mandates for each state." Specifically in the Southeast where "coal is king," he adds, few states have goals that draw renewable developers. "There's a lot of indecision," he says. "There's a lot of inaction domestically here in the states because nobody knows what the future holds." Kern says he would sell his wood briquettes in the U.S. if a federal renewable portfolio standard (RPS) was passed, but even then, it would be years before the standards would take effect, and development takes time.

An RPS usually leads to the implementation of incentives to spur development and ensure those goals are met. "The thing is, there are some incentives in the EU so that there can be higher and better production coming from renewable energy," says Ronalds Gonzalez, a PhD student at North Carolina State University and co-author of "Wood Pellets: An Expanding Market Opportunity" (see page 68). "Here in the U.S., we don't have as much incentive to use wood pellets." Gonzalez adds that more tax incentives in the U.S. would drive the domestic market.

Europe adopted the Kyoto Protocol in 1997 and in 2003 started with a disincentive to burn fossil fuels: the carbon tax, Kern explains. The continent aspires to drive down pollution to 1990 levels. "Every year they have to shave off a little bit more fossil fuel generation," Kern says. The domestic biomass market there is expensive from a logistics perspective, as trucking means the added cost of highway tolls and other fees, Kern says. The cost to move 5,000 tons across the Atlantic Ocean by ship is about the same as the cost to move it 100 miles across the countryside, he says.

In addition, wood resources in Europe are limited, meaning longer and even more expensive land transportation routes, and reharvesting must be done much more sparsely, Gonzalez says. Most areas wait 70 to 100 years, while some forestlands in the U.S. can be harvested again after about 18, he says.

"It has a lot to do with the supply," agrees Al Wolfson, senior associate at Malcolm Pirnie, an environmental engineering, science and consulting firm. "Most of the wood resources available that are reasonable are still in the U.S." But the majority of U.S. manufacturers in discussions with Malcolm Pirnie aren't looking exclusively at the European markets, Wolfson adds, as many are banking on an increase in domestic use and therefore a growing domestic market. "It's not an either/or situation. It's an and situation."

Growing Demand

European renewable goals coupled with a limited wood supply drive a heavy demand for imported biomass. In 2009, 14.3 million tons of wood pellets were produced globally, of which European countries consumed 8.8 million tons. The continent is expected to reach a consumption of 55 million tons per year by 2020, according to the European Biomass Association. Europe is already using woody biomass for industrial, as well as residential and other applications. "My orientation is around trying to reap the harvest of the biomass markets that we have in the states and position it into the demand, which is in Europe," Kern says. "I'm bridging the chasm across the Atlantic between suppliers of biomass and the market."

In the U.K. alone, an estimated 12 million to 20 million tons of woody biomass per year will be needed to satisfy the demand, according to Pete Stewart, founder, president and CEO of Forest2Market, a market price and industry information agency. "It's a phenomenal amount," he says. While that demand drives densification development in the U.S., it can also hinder profitability, according to Stewart. Being so advanced in biomass utilization, Europe is experienced in developing and operating pellet plants. "They know exactly how much it costs to build those plants, manufacture and run them," he explains. They understand the cost structure very well so they take that knowledge to the manufacturers in the U.S. "We find it will be a very difficult-type market for manufacturers to squeeze out a margin because if the Europeans can't get what they consider a fair or good price, they're just going to buy it and do it themselves."

Germany-based RWE Innogy is developing a wood pellet plant in Waycross, Ga., called Georgia Biomass. The facility is expected to produce 826,000 tons of pellets each year, headed to RWE's existing power plants in the Netherlands for cofiring, according to the company. RWE was drawn to develop in the state by the wood surplus, along with a well-established harvesting and logistics infrastructure, local government support, and plenty of local workers with local support to train for RWEs special requirements, according to Michael Eissing, RWE project manager. "Unlike Europe, the U.S. has a huge growth surplus of wood with no use for the moment," Eissing says. "This is particularly true in the Georgia region. Wood growth is currently ahead of consumption in Georgia. Due to the large surplus available, wood is much more affordable in the U.S. than in Europe, with its restricted woodland availability." Furthermore, Eissing adds that forest management in Georgia is carried out sustainably, meeting RWE's strict standards for biomass production.

Such integration of the supply chain for European renewables is a growing trend, affecting the developing woody biomass product manufacturing market in the U.S, Stewart says. "[The market] will come in, but it will be a lot more integrated than people think it's going to be," he says. "There will be a bona fide pellet export business, but a lot of that will be integrated and a few independents will make it, but anybody who believes there's a 15, 20 or 25 percent manufacturing margin in that is just not thinking logically."

Export Market Limitations

The inability of U.S. companies to acquire a margin in the sale of their pellets can mean producers have to scrimp in other areas, including quality. "RWE was not satisfied with the quality of pellets coming from the U.S., so they're building their own plant," Stewart says. Wolfson is also concerned about the quality of U.S. pellets, with depressed pellet prices in Europe and cheap resources coming out of areas such as Brazil and Malaysia. "Quality could be a critical limiting factor," Wolfson says. "You really have to be a reliable supplier with a high-quality product."

Another factor limiting the development of a robust export market of woody biomass products is increasing concerns about shipping life-cycle analyses. "I've talked to a lot of shippers who are concerned about this," Wolfson says. "On the other hand, another thing we need to think about is we get a lot of goods brought in by container and a lot of those containers go back empty to their countries of origin. So I do think there's a lot of backhaul opportunities."

"My expectation is that unless you really control your feedstock, as far as being in export and a pellet manufacturer, you're going to face two big issues," he says, citing significant increases in prices of raw material and competition for that raw material.

"I think there's going to be a big competition between existing pulp and paper mills and pellet plants," Stewart says. "They use exactly the same raw material, so there's going to be a big rub there. And I also think there's going to be some political fallout." American pulp and paper companies are going to lean on their representatives, especially locally, to dissuade any incentives providing tax abatements, making investments for new woody biomass densification facilities difficult, he predicts. "I think the big companies that are long-time players in the local markets will really push on them to not provide those sorts of incentives. And I think a lot of them will be successful."

In addition, complaints have surfaced about the USDA's Biomass Crop Assistance Program, including concerns that the Farm Service Agency was subsidizing the export of green energy to Europe. Stewart expects BCAP-2 to exclude exported material for payment qualification, which will undoubtedly affect the woody biomass products industry in the U.S. "I think it will slow down the development because pellet costs will be higher, manufacturing costs will be higher, and that means the end product cost in Europe will be higher," Stewart says.

Another limitation is depth at U.S. ports. Carolina-Pacific's shipping capacity is limited by the Port of Georgetown's depth of only 6 meters, Kern says, adding that his once-monthly shipments will amount to about 60,000 tons this year and up to 120,000 next year. Plans to deepen the port to 9 meters would mean it could support 25,000-ton ships and significantly increase freight, he says. Carolina-Pacific also will increase its volume of export by procuring pellets from other companies for shipment with their own products. "We think we can fairly economically reach out about 240 miles or so," he says.

Deep water is essential for shipping wood resources, with most ports requiring about 12 to 13 meters, Stewart says. "There are a limited number of deepwater ports that have handling or bulk handling capabilities and you have to have those combinations," he says.

But many agree that the limitations are not insurmountable and won't stop the market from developing. "I do think there's such an incredible demand in Europe that there's going to be biomass wood chip and pellet export opportunities and it's going to grow over the next five to 10 years," Stewart says.

Wolfson agrees and says the U.S. is still in the fact-gathering phase to sort out the market. "In the next 10 years, we'll have a very good market," he says. "We're seeing intelligent landowners and pellet people and customers overseas getting together to develop truly sustainable supply chains."

The six-month study, entitled Biomass Sustainability and Carbon Policy Study, addresses a wide array of social, scientific, economic and technical issues related to the use of forest biomass for generating energy in Massachusetts

Bioenergy technologies, even biomass electric power compared to natural gas electric, look favorable when biomass waste-wood is compared to fossil fuel alternatives. Thus concludes a study released this week by the Manomet Center for Conservation Sciences, and by the Massachusetts Department of Energy Resources, which funded the study. The Pinchot Institute was among several organizations participating in the study.

The six-month study, entitled Biomass Sustainability and Carbon Policy Study, addresses a wide array of social, scientific, economic and technical issues related to the use of forest biomass for generating energy in Massachusetts. Key components of the study include a full analysis of existing domestic and international biomass policies; a supply analysis of forest biomass availability based on competitive pricing for energy generation; and the atmospheric greenhouse gas implications of combusting forest biomass instead of fossil fuels for energy. The Pinchot Institute provided a review of regulations and standards needed to ensure the sustainability of forest resources in light of potential increases in wood consumption for bioenergy.

Determining the sustainability of forest-based bioenergy is complex and requires evaluating a number of interrelated social, economic, and environmental values that people expect from forests. The analysis and recommendations within the study are specific to current policy issues in Massachusetts, particularly whether expanded use of wood biomass in place of fossil fuels in electricity generation is an effective means to reduce the Commonwealth's carbon emissions. In 1997, Massachusetts adopted a Renewable Portfolio Standard requiring electric utilities to generate at least 15 percent of their electricity from renewable sources by 2020.

In addressing the specific question of whether wood biomass electricity can reduce carbon emissions relative to fossil fuels, the study concluded that carbon emissions per unit of electricity generated can be higher with wood, based on the more concentrated energy content of fossil fuels such as coal or natural gas. However, this conclusion is not meant to address the additional significant environmental, economic, and social effects of fossil fuel use, nor does it reflect that electric power generation from forest residuals and waste wood results in minimal if any net carbon emissions. Both of these factors are important to consider in policymaking relating to opportunities to substitute renewable energy sources for fossil fuels.

The report, Forest Sustainability in the Development of Wood Bioenergy in the U.S., summarizes the results of a two-year study of the challenges and opportunities for sustainable wood bioenergy

Policy goals for renewable biofuels and bioenergy could be achieved, but U.S. policymakers must take steps to protect the sustainability of the nation's forests in the face of these increased demands, according to a joint report released today by the Pinchot Institute for Conservation and the H. John Heinz III Center for Science, Economics and the Environment.

Two major national priorities achieving greater energy security through increased domestic energy production and mitigating climate change have converged to create rapidly expanding demands on U.S. forests for wood-based bioenergy. To protect our forests, careful consideration and forethought is needed, however, to ensure that the increases in wood harvesting do not lead to unintended consequences for biological diversity, water quality, and other forest ecosystem values.

The report, Forest Sustainability in the Development of Wood Bioenergy in the U.S., summarizes the results of a two-year study of the challenges and opportunities for sustainable wood bioenergy. The study included one national and four regional workshops involving more than 280 experts and stakeholders across the U.S. and Canada.

"In conducting this study, one message we heard consistently from region to region is that new uses of wood for energy can be a positive force for improved conservation and sustainable management of forests, but rigorous attention to sustainability issues will be crucial to ensure that renewable energy goals are met in ways that are environmentally sound, economically viable and socially responsible," said Dr. Al Sample, President of the Pinchot Institute for Conservation.

"Given the fact that this report reflects the views of a diversity of experts in science, the forest products and energy industries, conservation organizations and government at all levels, we believe it is a uniquely valuable resource for decision makers working to establish policy on forest bioenergy," according to Deb Callahan, President of The Heinz Center. "The report," she added, "shows how wood biomass can play a significant role in meeting the nation's energy needs in positive and sustainable ways."

The report contains several key findings, conclusions, and recommendations:

Improved biomass supply estimates. There is a need for more reliable and accurate methods for assessing how much biomass is available and sustainable over the long-term. This is needed at the national scale for policy makers, but also at the regional and local scales to serve as a basis for informed decisions by energy companies and local communities to site appropriately scaled new or expanded wood bioenergy or biofuels facilities.

Demands on forests are many and growing. Ambitious renewable energy goals and timetables in federal and state policy, in combination with powerful financial incentives, can result in many simultaneous decisions to increase the capacity for both wood bioenergy and biofuels production. There is concern over the potential effects on forests from meeting existing and proposed mandates for bioenergy and biofuels.

Sustainability standards. Adequate environmental safeguards are needed to address the more intensive type of wood harvesting that is often conducted for energy purposes, through state forest practices policies, through state and/or regional biomass harvesting guidelines, through nongovernmental sustainability certification programs, and through responsible sourcing policies by energy companies.

Public forest lands. Policies to define the role of federal forests in biomass supply are inconsistent. Clear policy direction is essential in developing guidelines to ensure continued conservation and sustainable use of these lands.

Range of biomass energy options. Decision makers and stakeholders need to consider the full range of wood bioenergy and biofuel technology options before making facility siting decisions, including factors such as scale and type of facility proposed, and how it relates to local environmental and economic circumstances. High-efficiency technologies can triple the amount of energy produced from wood biomass, allowing renewable energy goals to be met with less impact on local forests.

Federal and state policy alignment. There is a need to better align federal and state policies for financial incentives, tax credits, and targets for renewable energy production with existing policies aimed at ensuring the sustainable management of both public and private forests. There are opportunities in federal policy to reinforce support for bioenergy technologies that minimize new demands on forests, while meeting public policy goals for renewable energy production and climate change mitigation. Federal policy needs to be flexible enough to accommodate sustainable wood bioenergy strategies that may differ significantly from one major forest region of the country to another.

The report concludes that with planning and foresight, the U.S. can meet both important policy goals of expanding the use of renewable energy and ensuring the sustainable use of the nation's sustainable forest resources.


By Dan Schell
Staff writer
For a decade, the local forestry industry has been researching and waiting the opportune moment to move forward with plans to make Bancroft a hub for green energy. Now, in 2010, two investors bring to the Town of Bancroft council a chance for the area to become pioneers in biomass heating.
At the June 8 meeting of the municipality's council, Emile van Nispen and Gary Gall from County Power Corporation presented their concept for a state of the art $40 million biomass energy project that will also serve to fuel other projects across the globe.
Using technology that has been used for years in countries across Europe, Gall said that he is hoping that the organization will be able to access benefits of the recently passed Green Energy Act. The goal would be to access the 13.8 cents per kilowatt generated that is offered in through the Feed In Tariff program.
This plan is accentuated by the addition of a wood pellet production portion of the plant that will serve as another source of income for the plant, utilizing the access energy generated through biomass heater. Used for similar energy producing plants, the pellets produce a high amount of heat in order to generate the charge in the grids in an environmentally friendly manner using waste wood from forests.
With projects being planned across Canada and the United States due to the need for more carbon neutral options for energy production, he explained that the need for locally produced pellets will be on demand with much of the product being shipped in overseas.
"They all want to see it at a provincial level, and with the push for environmentally friendly energy production there will be a need for the pellets we produce," said Gall. "This is a viable and exciting project."
After discussions with the local forestry industry through the Bancroft and Minden Forestry Company, the pellet and power plant is garnering a lot of support as it deals with the growing issue of using waste wood that is not usable in their products in an effective and manageable manner.
Looking at the potential numbers of the project, van Nispen suggested that the budget may be tight, but he feels will be viable move that will not only benefit the region with jobs, but also the region as a green energy hub in the province.
In order for the project to bring in the money it needs to sustain the local jobs and sub-contracting jobs, he suggested that some negotiation will need to happen at the Ontario Ministry of Environment in order to set a production deal that will allow the plant to be sustainable. Using what van Nispen described as precedence in a deal that was formed in British Columbia, he feel that the group has a solid chance in being paid for up to 15 mega watts of power, which is five mega watts over the regulations set within the Feed In Tariff.
By Lisa Gibson

Posted June 24, 2010, at 3:29 p.m. CST

NextGen Biofuels Inc. and Iowa State University will conduct cofiring trials with coal, wood chips and wood pellets at ISU’s coal-fired combined-heat-and-power (CHP) plant, as the school contemplates switching to a biomass-coal blend.

Instead of spending millions on retrofitting, the project is designed to evaluate the efficiency of burning biomass in an existing coal boiler. “We’re trying to demonstrate that you can run wood biomass through a currently operating coal plant,” said Bob Ravlin, president of NextGen. The fuel does, however, need to be tailored to the boiler type, he added. NextGen procured pine wood pellets and wood chips from Rocky Mountain Pellet Company in Colorado for the 3½-month tests, which were supposed to start June 21, but have been postponed because of wet weather and will begin June 28, Ravlin said.

The tests will begin with a 5 percent biomass blend, gradually increasing to 10 percent, 15 percent and 20 percent. Separate testing will be done for the two different forms, as they are handled differently for the boiler. “Each feedstock has its own benefits and drawbacks,” Ravlin said.

ISU has also done similar tests with construction and demolition waste, but the feedstock proved too dirty and was loaded with impurities, according to Jeff Witt, assistant director of utilities for ISU. “We are looking to displace some of our coal,” he said. “We’ve been looking around in the past couple years.” Although most biomass products will be more expensive than fossil fuels, there are clear benefits to the switch, Witt said.

The testing is preliminary and the school has not looked deeply into supply chains or sustainability as of yet. “There’s probably enough product, but there’s nobody making it right now,” Witt explained, using a cart before the horse metaphor. If any other kinds of biomass feedstock seem applicable, they will be tried also, he said.

Once testing is complete, results will be evaluated and the school will decide whether to proceed with further research into the wood chip and pellet feedstocks for the long term. “It’s a work in progress,” Ravlin said. “You’ve got to start somewhere. You’ve got to start simply and build up from there.” Besides demonstrating that it is possible to burn wood in existing coal boilers, NextGen has other goals for the project. “We want to jumpstart the local economy,” Ravlin said, adding that the logistics, know-how and equipment for lumber are already established. “You’ve got to get that area started.” Fortunately, the tests have garnered a lot of attention from local utilities looking into the benefits of cofiring biomass, Ravlin said.


This cogeneration unit generates approximately 3 kW electric output to the grid and 10.5 kW thermal outputs.
The CHP (combined heat and power) unit delivers an over all efficiency of 90% and its electrical efficiency is 20%. The flow temperature of this unit is 50–75°C, its optimal return temperature is 30°C, and its maximum return temperature is 60°C. The DIN plus type of pellet fuel utilized in the unit produces approximately 14.9 kW power.
The Stirling engine incorporated in this unit utilizes one cylinder with a capacity of 520 ccm. This engine operates with nitrogen as working gas and operates in the speed range of 500–1000 rpm with a maximum working pressure of 40 bar. The Micro Wood Pellet Power CHP offered by German Power Generators incorporates an inverter with a nominal output of 3.4 kW, a peak capacity of 3.8 kW, an input voltage ranging from 350 to 750 V and a maximum efficiency of 95.7%. The inverter inputs single phase 230 V and 50 Hz power to the grid and the three phase grid control is performed through an inbuilt grid disconnecting device. The control unit incorporated in this model utilizes a graphic touch screen display and a RS232 interface for reading the data.
The pellet container incorporated in this model holds approximately 50 L of pellets and delivers pellets for heating through vacuum delivery. The length x width x height dimensions of this unit is 1160 mm x 760 mm x 1590 mm and weighs 410 kg. The sound emission level of this unit is 49 dB and this unit is available in blue and green colors.

Cheaper oil, warm winter and confusion thwart conversions
What's the quickest way to burn 25 percent less heating oil in the Northeast? Wind energy won't do it. Conservation and efficiency will make a big difference, but how about switching 1.4 million homes in seven states from oil heat to clean-burning, biomass boilers that are popular in Europe.

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The conversion -- done over the next 15 years -- would cut annual oil use by 1.14 billion gallons, create 140,200 jobs and keep $4.5 billion in the regional economy.
These are among the conclusions of a recent study that outlines the benefits of a large-scale switch of central heating systems in the region from oil to wood pellets and other forms of renewable biomass. Called "A Bold Vision for 2025," it was prepared by five trade groups that include the Maine Pellet Fuels Association and the newly-formed Biomass Thermal Energy Council.
Using sustainable harvest figures, the study calculated how much biomass is available each year in New England and New York. There's enough to meet three-quarters of the industry's annual heating goal, the study found. The balance could be satisfied with solar and geothermal energy. But like other bold, alternative energy strategies, this one faces obstacles. It needs favorable government policies and a higher degree of consumer awareness. Most of all, it needs oil prices to stay high enough, long enough, for people and businesses to make alternative investments.
Using sustainable harvest figures, the study calculated how much biomass is available each year in New England and New York. There's enough to meet three-quarters of the industry's annual heating goal, the study found. The balance could be satisfied with solar and geothermal energy. But like other bold, alternative energy strategies, this one faces obstacles. It needs favorable government policies and a higher degree of consumer awareness. Most of all, it needs oil prices to stay high enough, long enough, for people and businesses to make alternative investments.
The study was prepared prior to the oil spill in the Gulf of Mexico, which has refocused public attention on cleaner energy and renewable resources.
"The timing is right," said George Soffron, chairman of the Maine Pellet Fuels Association and chief executive officer at Corinth Wood Pellets. "People are looking for a reason (to switch from oil heat). "
The study was introduced at a recent wood energy conference in New Hampshire. It has received little public attention so far, but advocates are preparing to send press releases, contact officials and create marketing campaigns.
Much of the national debate over energy policy centers on electricity and gasoline. Less is said about thermal energy. But heat is a big concern in northern states such as Maine, where eight of 10 homes burn oil and the state has ambitious goals to cut oil dependence.
Two years ago, when heating oil hit record prices, it seemed possible that many Maine homes would convert to wood fuels. Mainers were waiting in line to buy stoves and boilers, as well as cordwood and pellets.
But the recession, collapsed oil prices and last year's warm winter threw the pellet industry for a loop. Sales are way down and existing pellet plants are operating at half capacity. A new mill that had planned to open this year at Burnham has been put off until late 2011.
In Europe, modern wood pellet boilers heat schools and businesses, not just homes. Fuel is delivered in bulk by truck and automatically fed into the boilers. The higher cost of the equipment is subsidized, reflecting policies to cut petroleum dependence and fight climate change.
A European-style distribution system is slowly being set up in the Northeast, but it lacks a similar level of government support.
Maine Energy Systems in Bethel distributes an Austrian-made boiler that costs more than $10,000. Sales have been slow and the company isn't profitable.
A federal tax credit of $1,500 lowers the cost, but Dutch Dresser, the managing director, said a 30 percent incentive common in western Europe is needed here. Some proposals in Congress, including bills co-sponsored by U.S. Rep. Olympia Snowe, R-Maine, and Sen. Jeanne Shaheen, D-N.H., would help, Dresser said. Supporters hope these provision could be included in a federal energy bill.
Wood pellets don't have a high profile in Washington, D.C. They tend to get lumped in with biomass, the broad definition for plant material used as fuel. Forest biomass got a bad rap this month. A state report in Massachusetts concluded that cutting trees to feed wood-fired electric plants would contribute to climate change. The same report had favorable findings for burning biomass for heat, but that conclusion got little mention. "We feel like the stepchild of the renewable energy world," Soffron said. "All you ever hear about is wind and solar."
Soffron and Dresser met briefly this month with Energy Secretary Steven Chu, when he was at the University of Maine to visit an offshore wind research lab. Chu seemed supportive of wood pellets, Soffron said, but offered no commitments.
Consumer awareness also is critical. Dresser said he'd like to install a network of demonstration boilers in homes, so people could visit and see the systems work.
"When people think of wood pellets, they think of stoves and 40-pound bags," he said. That's because New Englanders know about cordwood, and the chores of hauling logs and cleaning ash from stoves. They're less familiar with high-efficiency pellet boilers, which produce little ash and operate automatically.
"Burning wood is considered old technology," said Charles Niebling, chair of the Biomass Thermal Energy Council. "Our job is to persuade people that we're not talking about your grandfather's boiler in the basement."
The industry also has to convince people that pellet heat will cost less than oil. A ton of pellets has the heat energy of 120 gallons of oil, Niebling said. With heating oil now at $2.50 a gallon or so, the break-even for a ton of pellets is $300. Niebling, the general manager of New England Wood Pellet in Jaffrey, N.H., said pellets bought in bulk are selling for roughly $240, not including delivery, so heating with a pellet boiler today still makes economic sense.
"Ninety percent of consumers are simply looking to save money," he said.
In the months ahead, the industry will try to convince Northeast politicians to support the 2025 biomass vision. And it will try to persuade consumers to switch to pellets. Members of the Maine pellet group met recently to discuss an advertising campaign, to counter the seasonal pitches made by oil dealers. That would be a first for a young industry with little money to spend on promotion.
Rising oil prices would make their task easier. But Bill Bell, a spokesman for the Maine pellet association, said his group's challenge is to increase demand for the fuel, before the next petroleum price spike.


From The Sunday Times
April 25, 2010
Scott Hussey
Plans to build a network of biomass power plants in Scotland as part of Alex Salmond’s green revolution could damage the environment and cost thousands of jobs, according to a new report.
A shortage of domestic wood means that millions of tonnes of timber will have to be imported to fuel the plants, which are a key element of the SNP’s renewable energy strategy.
In addition to the carbon footprint of importing wood, the independent study warns that the surge in demand from government-subsidised biomass plants is likely to squeeze Scottish timber-processing firms out of the market.
According to the report, commissioned by the Confederation of Forest Industries (ConFor), demand for wood could exceed supply as early as next year — before the biggest biomass plants are built.
There are only a handful of the plants in Scotland, but more than a dozen are in the pipeline.
The biggest is a 225-megawatt plant in Hunterston, North Ayrshire. Others include four 100-megawatt plants at the ports of Leith, Rosyth, Grangemouth and Dundee. These four plants alone would burn four million tonnes of wood every year, almost half of Scottish timber production.
A subsidy of £8.1m was given to a 44-megawatt plant in Markinch, Fife, and £10m to a plant in Irvine, Ayrshire. The largest biomass plant in Scotland — and one of the UK’s largest — is in Lockerbie, Dumfries and Galloway. The £114m plant delivers 44 megawatts of energy and burns 475,000 tonnes of sustainable wood a year.
The report, by the Edinburgh-based firm John Clegg Consulting, concludes: “If new large users of British-grown wood and other wood fibre enter the marketplace, supported by subsidy, then it can only be at the expense of existing users, impacting negatively and disproportionately on sustainability, employment, carbon sequestration and mitigation of climate change.”
Stuart Goodall, chief executive of ConFor, which represents about 2,000 woodland owners and forest businesses across the UK, urged the Scottish government to reconsider its policy of subsidising biomass plants.
“Diverting wood from existing users to large-scale biomass plants will be bad for the environment and bad for jobs.
“By subsidising the dash to large-scale biomass, the Scottish government threatens to damage its own aim of a low-carbon economy — creating an artificial market that undermines its environmental and economic objectives. The policy will create a huge demand for wood that just isn’t there.”
Only 12% of Britain is covered by forest, the lowest proportion of any European country. About 20,000 workers are employed in Scotland in industries that use wood, such as saw-milling and wood-panel, paper and pulp manufacturing.
Tom Bruce Jones, joint managing director of James Jones & Sons, Scotland’s largest independent saw-miller, said there would not be enough domestic wood to meet demand once all of the biomass plants come on stream.
“The timber processing sector has invested more than £250m in Scotland in the past five years. As a company, we employ 550 personnel directly, and many hundreds more indirectly. We rely on secure long-term supplies of wood and, as can be seen from the report, there are not significant additional volumes available.”
Niall Stuart, chief executive of Scottish Renewables, said biomass plants would make a “significant contribution” to achieving government targets.
The Scottish government, which is opposed to nuclear energy, has set a target of 31% of electricity supply to be generated from renewable sources by next year, and 50% by 2020.
A spokesman said: “We want to see a balanced use of wood that allows all who depend on it to continue to flourish, and make the maximum contribution to growing Scotland’s economy.”
The conclusion attributed to John Clegg Consulting, that the establishment of large scale biomass plans "could impact negatively and disproportionately on sustainability, employment, carbon sequestration and mitigation of climate change" is contained in the foreword to the report and was written by the three organisations that commissioned the report (The Confederation of Forest Industries, UK Forest Products Association and Wood Panel Industries Federation).
Jun 27, 2010 7:20 am US/Eastern
PORTLAND, Maine (AP) ― A new study says wood pellets are a key to reduce heating oil in the Northeast by 25 percent.

A report called "A Bold Vision for 2025" says switching 1.4 million homes in Maine and six other regional states from oil heat to clean-burning, biomass boilers over the next 15 years would cut annual oil use by 1.14 billion gallons, create 140,200 jobs and keep $4.5 billion in the regional economy.

The Maine Sunday Telegram says the report was prepared by five trade groups, including the Maine Pellet Fuels Association and the Biomass Thermal Energy Council.

Meanwhile, the Telegram says plans to build a $20 million wood pellet manufacturing plant in Burnham this year have been put off, a victim of tight financing and lower demand.

Maine has four pellet plants.

Massachusetts Department of Energy Resources will clarify the results of their study on GHG

Source: Biomass Magazine

There has been much press coverage of our study about using forest biomass for energy in Massachusetts. This study was commissioned and funded by the Massachusetts Department of Energy Resources. Many of the resulting press articles have oversimplified the results. Indeed, a key lesson of the study is that understanding the greenhouse gas (GHG) impacts and benefits of using wood for energy is more complex than most people have assumed, and that a life-cycle assessment is needed in order to assess these GHG costs and benefits.

Here we seek to provide some additional clarifying comments about the study given the substantial press coverage that followed the release of our report on June 10. The study can be downloaded from We encourage interested parties to read the report, or at least the Executive Summary, to understand first-hand what the study concludes.

One commonly used press headline has been wood worse than coal for GHG emissions or for the environment. This is an inaccurate interpretation of our findings, which paint a much more complex picture. While burning wood does emit more GHGs initially than fossil fuels, these emissions are removed from the atmosphere as harvested forests re-grow. As discussed in more detail below, the timing and magnitude of the recovery is a function of forest productivity, land management choices, and technology and fuel characteristics. To help stakeholders and policy makers gain a more accurate and complete understanding of the study results, we revisit some of the key points found in the report.

• First, the study addresses only the carbon cycle implications of biomass harvested from actively managed, natural forests. We do not analyze woody biomass from other sources, for example biomass plantations, land clearing, tree work and landscaping wastes, or construction waste. These materials can be important potential sources of biomass - ones that likely have very different carbon cycle implications than biomass from natural forests and merit careful and separate consideration in biomass policy development.
• Second, we do not analyze the impacts of non-GHG pollutants emitted from energy generation facilities (e.g., particulate matter, NOx, SO2, or other hazardous air pollutants such as mercury). Emissions of these pollutants vary considerably between wood and fossil fuel energy systems, and are an important consideration in determining the relative merits of biomass and fossil fuels.
• Third, we clearly state that the study is specific to the forest and energy situation in Massachusetts. While the study methodology is transferable to other regions of the country, the specific results of our analyses, particularly the carbon cycle implications, cannot be readily applied to states where the biophysical characteristics of forests, forest management practices and energy sector differ significantly from Massachusetts.
• Fourth, based on the results of our economic analysis of potentially available wood supplies, we concluded that, overall, biomass harvests in the state would include a mix of logging residues (tops and limbs) and low-quality whole trees or logs (pulpwood and low-grade saw logs). The relative proportions of these materials in the biomass feedstock have an important effect the timing of GHG impacts and benefits to the atmosphere. We pointed out that these proportions will be different in other situations or states, and that conclusions about the impacts on the atmosphere will necessarily be different. Each state or situation (or even specific biomass facility) would need to do its own analysis to properly evaluate the GHG costs or benefits.
• Fifth, there has been some confusion about whether our assessments of GHG implications are based on a life-cycle analysis of biomass and fossil fuel carbon emissions. In fact, the study considers the upstream costs of producing and transporting both biomass and fossil fuels, and the stack emissions from burning these fuels. Capture of carbon in growing forests is also part of our life-cycle framework.
• Sixth, the study makes no recommendations regarding the development of specific policies to address GHG emissions from biomass. The intent of the study is simply to provide the best possible information and analysis of the carbon cycle implications to Massachusetts decision makers as they develop biomass energy policies for the state. These decision makers will need to carefully weigh the relative importance of nearer term increases in GHG emissions against longer-term benefits. The study did show that using wood for energy generally results in greater emissions of GHGs per unit of energy than using fossil fuel. These differences are a function of the lower embedded energy content of wood relative to fossil fuels, inclusion of emissions from upstream production and transportation of fuels, as well as differences in the efficiency of the various energy generation technologies. We called the excess emissions from burning biomass for energy the carbon debt. But because trees can grow back, this debt can be paid off and a carbon dividend can be achieved as GHG levels are reduced to levels lower than they would have been had only fossil fuels been burned.

The length of time it takes to pay down the debt and realize dividends depends on four factors:

1.The lifecycle of the wood (e.g., logging debris, whole trees, trees vulnerable to catastrophic events) in the absence of the biomass energy opportunity.

2. The type of energy that will be generated (heat, electricity, combined heat and electricity), because different types have different efficiencies and thus different CO2 emissions profiles.

3. The type of fossil fuel being displaced (coal, oil, or natural gas), because different fuels have different emissions profiles.

4. The management of the forest management can either slow or accelerate forest growth, and therefore recovery of carbon from the atmosphere.

Unless these factors have been assessed, as they have in our report for Massachusetts, it is not possible to estimate the time it would take to pay off the debt or the magnitude of the carbon dividends making it difficult to draw conclusions about GHG implications of using wood. For example, when the wood used to fuel an energy facility is all, or nearly all, logging debris that would have decomposed in the forest anyway, the debt period can be relatively short, even for large-scale electricity generation where biomass replaces coal.

Conversely, fueling an electricity generating facility with mostly whole (live) trees will likely incur a longer carbon debt period (up to several decades) before GHG benefits are realized. Thermal uses of wood generally have a shorter debt period than electricity generation with wood. Renewable energy policy makers who seek to reduce GHG emissions by using wood for energy will be well served by assessing these four factors for the specific energy and forestry contexts of their state or region.

Finally, there are many other considerations besides GHG emissions when making energy policy - these include energy security, air quality, forest recreation values, local economics, other environmental impacts besides just GHG emissions, and quality of place, among others.

We hope these comments help to more accurately present the major findings of this study and to better inform policy makers and stakeholders. We welcome and invite feedback on our study, as well as improvements or corrections to our approach.

June 30, 2010, 7:01 AM EDT
By Jeremy van Loon
June 30 (Bloomberg) -- Global production of wood pellets, an alternative fuel for heating, will grow by multiples over the next decade, helped by the European Union’s renewable energy regulations, an industry lobby group said.
Production will increase to 100 million tons from about 12 million tons now, Christian Rakos, head of the association of Austrian pellet producers, said today in Brussels. Much of the increase will come from Canada and the southern U.S.
The EU aims to boost the use of renewable energy to 20 percent of the region’s total by 2020, with almost two-thirds of that coming from plant-based biofuels, pellets and biomass, Rakos said. Pellets are made by compressing sawdust and chips from pulp and paper production.
Europe is currently the biggest producer and consumer of wood pellets with companies including Sweden’s Vapo Group among the largest producers.
--Editors: Randall Hackley, Reed Landberg
To contact the reporter on this story: Jeremy van Loon in Brussels via
To contact the editor responsible for this story: Reed Landberg at
Biomass Magazine
July 2010
By Lisa Gibson
Posted June 24, 2010, at 3:29 p.m. CST

NextGen Biofuels Inc. and Iowa State University will conduct cofiring trials with coal, wood chips and wood pellets at ISU’s coal-fired combined-heat-and-power (CHP) plant, as the school contemplates switching to a biomass-coal blend.

Instead of spending millions on retrofitting, the project is designed to evaluate the efficiency of burning biomass in an existing coal boiler. “We’re trying to demonstrate that you can run wood biomass through a currently operating coal plant,” said Bob Ravlin, president of NextGen. The fuel does, however, need to be tailored to the boiler type, he added. NextGen procured pine wood pellets and wood chips from Rocky Mountain Pellet Company in Colorado for the 3½-month tests, which were supposed to start June 21, but have been postponed because of wet weather and will begin June 28, Ravlin said.


June 29, 2010, Duiven, The Netherlands – An official groundbreaking has taken place at Duiven in the Dutch province of Gelderland for the first commercial-scale plant to produce torrefied wood pellets. The approximately €15 million plant is a project of Topell Nederland, a joint venture between Netherlands company Topell Energy and German company RWE Innogy. The plant is expected to begin producing torrefied biomass in early 2011, with a production capacity of 60,000 tons/year.

The process developed by Topell enables the continuous production of torrefied pellets on an industrial scale. The manufacturing process is highly flexible in terms of raw material feedstock. Torrefied pellets have a high energy density and when co-fired with conventional coal, no additional infrastructure such as separate storage or pulverization equipment is required.

RWE Innogy's Dutch subsidiary Essent will be the first company to use the torrefied pellets over a period of five years for combustion in the Amer coal-fired power plants in Geertruidenberg.

June 30, 2010 – The Forest Guild’s new Forest Biomass Retention and Harvesting Guidelines for the Northeast address questions of forest sustainability in a time of increasing interest in harvesting forest biomass for energy security, climate mitigation, and economic reasons. The guidelines are based on the best available science and are a product of a six-month effort by a working group of 21 Forest Guild members. The scientific background for the guidelines is summarized in an accompanying document titled Ecology of Deadwood in the Northeast. The working group also drew from existing biomass harvesting guidelines developed by states and internationally. These biomass harvesting guidelines are reviewed in the Guild’s newly released Revised Assessment of Biomass Harvesting and Retention Guidelines.

The new Forest Biomass Retention and Harvesting Guidelines for the Northeast are intended to augment and enhance existing best management practices or new state-based biomass guidelines that may, in some cases, leave managers and policy makers looking for more detailed recommendations. It includes guidelines and specific targets for retention of downed woody material, snags, and live decaying trees, and offers data to tailor retention to forest type. It also provides suggestions for forest harvest operations, silvicultural practices, and carbon management. This is also the first time that carbon considerations have been included in biomass harvesting guidelines.