November 2014 Biomass Magazine

Page 1

PHOTO REVIEW:

National Advanced Biofuel Conference & Expo

ASTEC WOOD

PELLET

PLANTS

Hazlehurst, Georgia, USA

Modular design with replicated 20 TPH rated “lines” One source for equipment and construction No add-on equipment needed to reduce VOC emissions Quick setup and startup with guaranteed production 24/7 support, parts and service Any hard wood or soft wood species

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INSIDE ¦ NOVEMBER 2014 | VOLUME 8 | ISSUE 11

ON THE COVER

Col. Terry V. Williams, right, visits with a fellow Marine in front of the $20 million landfill gas-toenergy plant at Marine Corps. Logistics Base Albany in Georgia.

06 EDITOR’S NOTE Hurry Up and Wait By Tim Portz

07 INDUSTRY EVENTS 08 BUSINESS BRIEFS

PHOTO: NATHAN L. HANKS JR

42 MARKETPLACE

16 Subscriptions Biomass Magazine is free of charge to everyone with the exception of a shipping and handling charge of $49.95 for anyone outside the United States. To subscribe, visit www.BiomassMagazine.com or you can send your mailing address and payment (checks made out to BBI International) to Biomass Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Back Issues & Reprints Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 701-746-8385 or service@bbiinternational. com. Advertising Biomass Magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To find out more about Biomass Magazine advertising opportunities, please contact us at 701-746-8385 or service@ bbiinternational.com. Letters to the Editor We welcome letters to the editor. Send to Biomass Magazine Letters to the Managing Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to asimet@bbiinternational. com. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

POWER 10 NEWS 11 COLUMN Engaging Communities Nationwide with Bioenergy By Bob Cleaves

12 FEATURE Contract Vehicle in DOD Driveway The U.S. Department of Defense is equipped with several tools to expand renewable energy consumption to meet goals, leaving the industry anxious for requests for proposals. By Katie Fletcher

PELLETS 16 NEWS COPYRIGHT © 2014 by BBI International

Biomass Magazine: (USPS No. 5336) November 2014, Vol. 8, Issue 11. Biomass Magazine is published monthly by BBI International. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices. POSTMASTER: Send address changes to Biomass Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.

Please recycle this magazine and remove inserts or samples before recycling

17 COLUMN Maintaining Industry Stability By Bill Bell

18 DEPARTMENT Cautious Optimism The U.S. Pellet Export Conference concluded that increasing pellet demand from European utilities won’t last forever, therefore, engaging new markets is imperative in maintaining industry momentum. By Tim Portz

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NOVEMBER 2014 | BIOMASS MAGAZINE 3

INSIDE ÂŚ

ADVERTISER INDEXÂŚ

NOVEMBER 2014 | VOLUME 8 | ISSUE 11 2015 International Biomass Conference & Expo

44

Amandus Kahl GmbH & Co. KG

34

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24

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10

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9

Pittcon

23 COLUMN Perfect Storm for a Pellet and Firewood Shortage

43

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8

TerraSource Global

By John Ackerly

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Vector Systems Inc.

14

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30

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24 FEATURE Sweetening Wood Heat More states are beginning to realize the potential beneďŹ ts of crafting programs that help homeowners ditch fossil fuels for wood and pellet heat. By Anna Simet

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32 DEPARTMENT Expanding Energy, Decreasing Dependency Marine Corps Logistics Base Albany in Dougherty County, Georgia, builds out its existing landďŹ ll gas-to-energy system. By Katie Fletcher

ADVANCED BIOFUELS & CHEMICALS 34 NEWS

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35 COLUMN Forging Ahead in 2015 By Wayne Simmons

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36 Q&A Advanced Biofuels’ Beltway Crusader Advanced Biofuels Association President Michael McAdams discusses the organization’s roots, the tough year the industry faced, biofuel use in the U.S. military and the path ahead. By Tim Portz

36 DEPARTMENT Toughing Out Turbulence A concentrated group of industry stakeholders met at the National Advanced Biofuel Conference & Expo in Minneapolis to socialize, strategize and share information. By Anna Simet 36 )RUP ; $XJXVW 3DJH RI

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¦EDITOR’S NOTE

Hurry Up and Wait The U.S. DOD is the single largest user of energy in the world, spending nearly $20 billion annually on heat, power and liquid fuels. Combine that with an ambitious goal of 25 percent renewables by 2025, and the DOD very quickly becomes one of the most attractive market opportunities in the world for producers of renewable energy. As our team dug into the stories we produced for November Biomass TIM PORTZ VICE PRESIDENT OF CONTENT Magazine, our annual examination of bio& EXECUTIVE EDITOR tportz@bbiinternational.com energy use in the military, we learned that penetrating the military market brings with it the very same challenges that bioenergy producers have come to expect in the civilian marketplace. Katie Fletcher’s page-12 feature, “Contract Vehicle in the DOD Driveway,” aptly sums up the significant divide between the military’s goals and the reality of achieving them. Fletcher quotes Amanda Simpson, executive director of the newly established Office of Energy Initiatives, who told her, “Right now, all of our long-term contracts for energy have to be at or below what we forecast the price of power from the grid to be.” While top brass inside the DOD recognizes the mission risk that being exposed to the outages the grid inevitably brings, the appetite to pay a premium for power to mitigate risk just isn’t there. In this regard, the DOD wants to have its cake and eat it too. The news on the biofuel front is more encouraging. While we worked on this issue, the DOD awarded contracts to three different advanced biofuels players to build and commission biorefineries capable of delivering 100 million gallons of drop-in fuels. I asked the Advanced Biofuels Association’s Mike McAdams, this month’s Q&A (page 36) subject, about the importance of these contracts for his constituents, and he reported that they “move the commercial ball forward in a most significant manner.” Anyone who has spent time in uniform has heard the expression “hurry up and wait.” Soldiers share a universal recognition of the slow-todevelop nature of things that plagues the military. The DOD is a massive enterprise charged with this country’s most critical mission, keeping its citizens safe from threats, both foreign and domestic. With that in mind, I urge the biomass community to exercise a measured patience with the pace of bioenergy deployment in the military. Finally, the Biomass Magazine crew found itself on the road for much of October at two important industry events. We hope you enjoy the photo-rich recaps included in this issue, especially those of you who couldn’t make the trips.

6 BIOMASS MAGAZINE | NOVEMBER 2014

EDITORIAL PRESIDENT & EDITOR IN CHIEF Tom Bryan tbryan@bbiinternational.com VICE PRESIDENT OF CONTENT & EXECUTIVE EDITOR Tim Portz tportz@bbiinternational.com MANAGING EDITOR Anna Simet asimet@bbiinternational.com NEWS EDITOR Erin Voegele evoegele@bbiinternational.com STAFF WRITER Katie Fletcher kfletcher@bbiinternational.com COPY EDITOR Jan Tellmann jtellmann@bbiinternational.com

ART ART DIRECTOR Jaci Satterlund jsatterlund@bbiinternational.com GRAPHIC DESIGNER Elizabeth Burslie bburslie@bbiinternational.com

PUBLISHING & SALES CHAIRMAN Mike Bryan mbryan@bbiinternational.com CEO Joe Bryan jbryan@bbiinternational.com VICE PRESIDENT OF OPERATIONS Matthew Spoor mspoor@bbiinternational.com SALES & MARKETING DIRECTOR John Nelson jnelson@bbiinternational.com BUSINESS DEVELOPMENT DIRECTOR Howard Brockhouse hbrockhouse@bbiinternational.com SENIOR ACCOUNT MANAGER Chip Shereck cshereck@bbiinternational.com CIRCULATION MANAGER Jessica Beaudry jbeaudry@bbiinternational.com TRAFFIC & MARKETING COORDINATOR Marla DeFoe mdefoe@bbiinternational.com

EXTERNAL EDITORIAL BOARD MEMBERS Chris Sharron, Western Oregon Wood Products Amanda Bilek, Great Plains Institute Stacy Cook, Koda Energy Ben Anderson, University of Iowa Justin Price, Evergreen Engineering Adam Sherman, Biomass Energy Resource Center

INDUSTRY EVENTS¦

Renewable Energy World Conference & Expo DECEMBER 9-11, 2014

Orange County Convention Center Orlando, Florida Renewable Energy World Conference & Expo has a proven track record as renewable energy's leading conference. Featuring insightful discussions and presentations during technical sessions related to technology, markets, business strategies and policy covering the wind, solar, biomass, hydro, geothermal, ocean/tidal/ wave, biopower, biofuels, hydrogen and energy sectors. 888-299-8016 | www.renewableenergyworld-events.com

International Biomass Conference & Expo APRIL 20-22, 2015

Minneapolis Convention Center Minneapolis, Minnesota Organized by BBI International and produced by Biomass Magazine, this event brings current and future producers of bioenergy and biobased products together with waste generators, energy crop growers, municipal leaders, utility executives, technology providers, equipment manufacturers, project developers, investors and policy makers. It’s a true one-stop shop—the world’s premier educational and networking junction for all biomass industries. 866-746-8385 | www.biomassconference.com

International Fuel Ethanol Workshop & Expo JUNE 1-4, 2015

Minneapolis Convention Center Minneapolis, Minnesota The FEW provides the global ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-to-business environment. The FEW is the largest, longest running ethanol conference in the world—and the only event powered by Ethanol Producer Magazine. 866-746-8385 | www.fuelethanolworkshop.com

National Advanced Biofuels Conference & Expo OCTOBER 26-28, 2015

Century Link Center Omaha Omaha, Nebraska Produced by BBI International, this national event will feature the world of advanced biofuels and biobased chemicals—technology scale-up, project finance, policy, national markets and more—with a core focus on the industrial, petroleum and agribusiness alliances defining the national advanced biofuels industry. With a vertically integrated program and audience, the National Advanced Biofuels Conference & Expo is tailored for industry professionals engaged in producing, developing and deploying advanced biofuels, biobased platform chemicals, polymers and other renewable molecules that have the potential to meet or exceed the performance of petroleum-derived products. 866-746-8385 | www.advancedbiofuelsconference.com

NOVEMBER 2014 | BIOMASS MAGAZINE 7

Business Briefs PEOPLE, PRODUCTS & PARTNERSHIPS

Vermeer announces management changes As part of its family succession planning process, Vermeer Corp. has announced that third-generation family member Jason Andringa will serve as the company’s next president and CEO, Jason Andringa effective Nov. 1, 2015. On Nov. 1 of this year, he will assume the role of president and chief operating officer for one year, before transitioning to president and CEO. Andringa currently serves as president of forage and Mary Andringa environmental solutions. Mary Andringa, current president and CEO, will assume the role of CEO and chair of the board Nov. 1. Mary will transi-

tion exclusively to chair of the board Nov. 1, 2015. Bob Vermeer, current chairman of the board, will assume the role of chair emeritus, effective Nov. 1. Mason Manufacturing appoints manager Decatur, Illinois-based Mason Manufacturing LLC has appointed Sherman Levin as engineering manager. He brings experience and expertise to the company’s shell and tube heat exchanger and ASME pressure vessel business. Prior to joining Mason Manufacturing, Levin held positions with GE Generator Engineering, Jacobs Engineering, B-KBR and Black & Veatch.

particulate as required by local and federal environmental regulations. Covanta’s energy-from-waste facilities feature state-of-the art emission control technology, supported by FSLmidth AFT products.

Viridis Energy adds to management team Viridis Energy Inc. has appointed Tim Knoop as senior vice president of operations. Knoop will oversee the company’s Canadian west coast and east coast manufacturing operations with the goal Knoop FLSmidth AFT, Covanta of heightening cost renew contract efficiencies and fortifying the company’s FLSmidth AFT has agreed to a longoperational framework in preparation for its term extension to a current contract agree- expansion strategy. Prior to joining Viridis, ment with Covanta to supply filter bags and he served as general manager of Pacific cages to Covanta’s domestic energy-fromBioenergy, as well as director of Nazbec, a waste locations. FLSmidth AFT’s filter joint venture between Pacific Bioenergy and bagas are manufactured to capture dust Nzko, a first nations logging company.

Best density Low Energy C Consumption High Reliability

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The most cost efficient densification technology 8 BIOMASS MAGAZINE | NOVEMBER 2014

BUSINESS BRIEFS¦

Joule announces achievement Joule has announced its engineered photosynthetic biocatalyst has been shown to divert 95 percent of fixed carbon normally converted to biomass directly to fuel. The achievement was made at the company’s demonstration facility in Hobbs, New Mexico. Joule also recently entered into a memorandum of understanding (MOU) with Scatec Solar ASA. Terms of the MOU anticipate that Scatec Solar will become a preferred supplier and operator of photovoltaic power installations for Joule plants. A separate MOU was announced with DNV GL, a provider of technical assurance and advisory services to the energy industry. Under the MOU, DNV GL and Joule will define specific areas of collaboration to accelerate the production of carbon dioxide-neutral fuels.

ings Ltd. and those of its various subsidiary companies. Greenland has designed and built more than 80 biogas plants around the world. Pressure Technologies has indicated the acquisition is complementary to its existing subsidiary Chesterfield Biogas Ltd., which has been working with Greenlane since 2008 under an exclusive license to sell Greenlane technology in the U.K.

director of forest biomaterials and sustainability services. In this role, she is responsible for opening new markets for Forest2Market data subscriptions and analytic services. She joins Stan Parton, Hearn manager of bioenergy Forest2Market announces sector sales. The new change to sales team team will expand the Forest2Market has announced Suzanne use of Forest2MarHearn, vice president of marketing and sales, ket’s product offerings retired at the end of September. She joined into existing bioenForest2Market in 2006 and has been respon- ergy markets as well as sible for the launch of the company’s bioemerging markets in energy and lumber practices. Forest2Market biofuels, biochemicals began transitioning Hearn’s responsibilities and sustainability. Leslie to other staff members last summer. Peter Pressure Technologies to Coutu, director of North American Sales, acquire Greenland Biogas will lead forest products industry sales, while SHARE YOUR INDUSTRY NEWS: To be included in the Business Briefs, send Pressure Technologies has agreed to information (including photos and logos, if available) to Business Briefs, Peter Stewart, president and CEO, is now Biomass Magazine, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. acquire the business and certain assets of overseeing Forest2Market’s lumber service, You may also email information to evoegele@bbiinternational.com. Please New Zealand-based Greenlane Biogas Hold- Mill2Market. Tracy Leslie has been named include your name and telephone number in all correspondence.

SMART IS

HELPING ALTERNATIVE ENERGY BECOME MAINSTREAM. PROUDLY SUPPORTING AMERICA’s ENERGY INDEPENDENCE.

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PowerNews ReEnergy wins military contract

BETTER WITH BIOMASS: The Atikokan Generating Station has completed its transition from coal to biomass. PHOTO: ANNA SIMET

Atikokan fires up on biomass Ontario Power Generation’s Aitkokan Generating Station began operating on biomass in September, becoming the largest plant in North America to be fueled with 100 percent biomass. The facility burned its last coal Sept. 11, 2012, and began converting to biomass in mid-2012. The conversion project included construction of two 5,000-metric-ton capacity storage silos for wood pellets. Modifications were also made to the boiler and a new distributed controls system was required. In addition, new truck receiving

and transfer infrastructure was built. OPG has fuel contract supplies in place with Rentech Inc. and Resolute Forest Products Canada. Each company will supply 45,000 metric tons of wood pellets to the facility annually. Efforts are also underway to convert another of OPG’s coal-fired plants to biomass. In April, OPG’s Thunder Bay Generating Station burned its last supply of coal. The facility is expected to be converted to advanced biomass by January.

The Defense Logistics Agency has awarded a 20-year contract to ReEnergy Black River, a 60 MW bioenergy facility in New York. The facility will provide secure, renewable electricity to Fort Drum. According to ReEnergy Holding LLC, the contract is the largest renewable energy project in the history of the U.S. Army. The facility, previously fired primarily by coal, was idled in early 2010 by its former owner. ReEnergy acquired the facility in December 2011 and invested more than $34 million to convert it to biomass. The converted facility began operations in May 2013. ReEnergy Black River submitted a proposal to the Defense Logistics Agency as part of a competitive procurement process in spring 2013. The U.S. Army issued ReEnergy a notice of intent to award the purchase agreement in February. The facility was expected to begin supplying 100 percent of Fort Drum’s electrical load as of Nov. 1. Fort Drum’s electricity needs currently peak at about 28 MW. A transmission line will be built to directly connect the plant to Fort Drum’s substations. Until that project is complete in mid-2015, ReEnergy will arrange for bilateral deliveries through an energy service company.

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POWER¦

Engaging Communities Nationwide with Bioenergy BY BOB CLEAVES

Oct. 22 marked the second annual National Bioenergy Day. What started as a grassroots effort to help bioenergy organizations engage better with their communities is becoming a widespread recognition of the benefits of the many types of bioenergy. The first National Bioenergy Day was held last October 2013 and included 25 events in 13 states. We didn't know what to expect while organizing events, but were pleased to see an enthusiastic response from not only Biomass Power Association members, but also companies, universities and other organizations representing the many corners of the sector. This year’s event exceeded our expectations, again. We counted nearly 50 events in 22 states and Canada, each highlighting a unique aspect of bioenergy in a specific area of North America. We have a lot of people and groups to thank for this increase. First among them is the U.S. Forest Service, which contributed funding and organizational support that helped us spread the word and encourage participation far beyond what we were able to accomplish last year. The USDA, which oversees the U.S. Forest Service, truly acknowledges the role of bioenergy in keeping forests healthy and reducing the risk for catastrophic fires in unmanaged forests that we have seen in recent years. The USFS’s talented and enterprising staff ensured that we were able to build a website, www. bioenergyday.org. The site provides basic information about the various types of bioenergy and ties together all the events that occurred on Oct. 22, and features a video about a USFS partnership with a bio-

mass facility in Colorado that is making an undeniably positive impact on the White River National Forest. We also appreciated enthusiastic support from several other sponsors, including Plum Creek, Pellet Fuels Institute, Biomass Thermal Energy Council, U.S. Industrial Pellet Association and, of course, Biomass Magazine. As a testament to all the hard work that went into planning National Bioenergy Day activities, the overall turnout was impressive. Thousands of people were exposed to or reminded of the benefits of bioenergy, many of them gaining a better understanding of the benefits provided by their local facilities. There were facility tours, webinars, pyrolysis demonstrations, seminars, retailer discounts and panel discussions. There was even a Mayoral Proclamation from Seattle Mayor Ed Murray. Many of these events featured close cooperation among local government officials and multiple local bioenergy groups. We are grateful for the support for National Bioenergy Day 2014 from everyone who hosted an event or participated in any way. We look forward to continuing this annual event. It’s important for us to rally together to dispel the many myths about bioenergy that persist, and also to demonstrate the considerable positive effects of bioenergy on the environment and local economies. Author: Bob Cleaves President and CEO, Biomass Power Association www.biomasspowerassociation.com bob@biomasspowerassociation.com

NOVEMBER 2014 | BIOMASS MAGAZINE 11

Contract Vehicle in the DOD Driveway The U.S. Army is equipped with the tools it needs to fulfill renewable energy targets, but project approval processes are lengthy. BY KATIE FLETCHER

T

he U.S. Department of Defense intends to acquire 25 percent of its power from renewable energy sources by 2025, a substantial amount when considering its $20 billion annual energy bill makes it one of the largest energy consumers in the world. All three major branches of the U.S. military have made commitments to sourcing power from renewable energy, taking various approaches to meet those targets. The U.S. Army launched a $7 billion renewable energy procurement program in 2012 in an effort to keep its commitment. The U.S. Army Corps of Engineers, Engineering and Support Center and the Army’s Energy Initiatives Task Force teamed up to drive the firstof-its-kind contracting vehicle forward. The indefinite delivery indefinite quantity (IDIQ) multiple award task order contracts (MATOCs) were issued to qualify sets of contract awardees to compete for future Army renewable energy projects through project-specific contracts called task orders. “The concept of the multiple award task order contract was developed as a way to prequalify companies to bid on task orders that would allow them to compete on a level playing field without FUELING THE FACILITY: Chip vans are brought to the Central Energy Plant at Fort Stewart in Georgia to unload wood chips into the wood dump to be moved onto a conveyer belt system. The CEP uses the chips to create steam, chilled water and hot water for more than 100 buildings on the installation. PHOTO: ELIVA KELLY, FORT STEWART PUBLIC AFFAIRS

12 BIOMASS MAGAZINE | NOVEMBER 2014

POWER¦ regard to whether they are qualified to do the job,” says Amanda Simpson, executive director of the newly established Office of Energy Initiatives, formerly the Energy Initiatives Task Force.

MATOC Mechanics The EITF Simpson led was established over three years ago to look at opportunities to leverage renewable energy and bring energy security to Army installations. The task force was able to successfully do this, Simpson says, so the Secretary of the Army has asked the EITF to transition to an enduring organization. Since Oct. 1, with the start of the new fiscal year, the task force formed the permanent Office of Energy Initiatives. As head of the new office, Simpson plans to continue to help identify, award and complete renewable energy projects across the country. The first request for proposals (RFP) were issued in August 2012 and last year 58 MATOCs were awarded across four energy sectors: solar, wind, biomass and geothermal. An additional 21 MATOCs were awarded at the beginning of this year after further evaluation by the government. Out of the total 79 MATOC-qualified companies, there are 15 in biomass holding contracts. Out of the 52 applicants, the 15 selected include Acciona Energy North America Corp.; ECC Renewables LLC; EDF Renewable Energy; Emerald Infrastructure; Energy Answers International Inc.; EIF United States Power Fund IV LP, Needham, Massachusetts; Energy Management Inc.; Honeywell International Inc.; MidAmerican/Clark Joint Venture; Pacolet Milliken Enterprises Inc.; Siemens Government Technologies Inc.; Stronghold Engineering; Energy Systems Group LLC; Ameresco Inc., and Wheelabrator Technologies Inc. “This solicitation seeks ‛best value’ for the government in accordance with Federal Acquisition Regulation Part 15,” says Debra Valine, chief public affairs USACE. “It is the intent to award to all responsible and qualified companies whose proposals conform to the solicitation and are rated acceptable or better.” The Source Selection Authority holds the responsibility of ensuring proper conduct of the process and making the final source selection decision, Valine says. The main factors that are assessed when selecting the companies include technical and management experience, financial capability, past performance, small business and price. “After the government individually evaluates and rates each proposal, the SSA determines which proposals are responsible and qualified,” Valine says. Now that the pool of qualified firms and contractors for renewable energy technologies has been selected, they must wait until competitive task order RFPs are issued for them to bid on and compete for individual power purchase agreement (PPA) task order contracts.

“As renewable energy opportunities at Army installations are assessed and validated, the U.S. Army Corps of Engineers, Engineering and Support Center, Huntsville, will issue a competitive task order RFP to the prequalified MATOC companies for the specific technologies,” Valine says. In late July, the first RFP was put into drive for on-site solar renewable electricity at Redstone Arsenal in Huntsville, Alabama, but an RFP for biomass still remains in park, searching for the right project to rev up the contract vehicle. Task orders are still moving through the approval process at the pentagon, Simpson says.

Awardees Await Opportunities The biomass MATOC awardees awaiting opportunities like these have varied views on how successful this type of contracting vehicle will be in enhancing their biomass business. MATOC awardees, Siemens and Ameresco see value. Siemens was the only team to be selected under all four energy sectors. It partnered with Bechtel and AECOM to win the four contracts. “Our biomass experience is unique in the marketplace,” says Judy Marks, president and CEO of Siemens Government Technologies Inc. “We have industry knowledge and regulatory expertise to help the Army address those risks associated with today’s evolving and complex biomass market.” Marks mentioned Siemens’ experience with biomass development projects, such as its commercial carpet gasification facility at Shaw Industries in Dalton, Georgia. The facility turns carpet scraps into power for its own manufacturing facility. “This has resulted in lower and cleaner plant emissions, reduced carpet waste in landfills and savings up to $2.5 million per year,” Marks says. “We will pursue similar types of efficiency, innovation and effectiveness to help the U.S. Army increase its biomass capability.” Ameresco has a 20-MW biomass cogeneration facility in Aiken, South Carolina, at the DOE’s Savannah River Site. Nicole Bulgarino, vice president-federal with Ameresco, says the company plans to be responsive as opportunities present themselves with the MATOC program, and will encourage its Army customers to utilize this vehicle. “We have to have a vehicle to work with federal government agencies, and this is another avenue to do these large-scale renewable projects, rather than using performance contracting or another type of contracting vehicle that may be more restrictive or not completely applicable to a large-scale renewable project,” Bulgarino says. One of the less-restrictive aspects of the contract is that it is long-term, up to 30 years, in comparison to the 10-year constraints that the rest of the federal government has. This, according to Simpson, makes it more economical. “This MATOC leverages 10 USC

NOVEMBER 2014 | BIOMASS MAGAZINE 13

¦POWER 2922a, which gives the DOD the unique authority to contract up to 30 years for renewable energy PPAs,” Valine says. The $7 billion capacity expended for PPAs is money already allocated to pay the Army’s utility bills. “Under each PPA, the Army will only purchase the energy that is produced; no generation assets will be required,” Valine says. “Selected contractors of the MATOC will finance, design, build, operate, own and maintain the energy plants.” Even though the long-term contract may make projects more economical, there are still fiscal constraints, and not all the selected biomass companies have confidence that their efforts will be awarded under the program. Although companies have been awarded a MATOC, they are now only eligible to bid on future specific contracts with no guarantee of having a bid accepted. The companies also have no knowledge at this time when opportunities to bid will present themselves. However, since this is an ambitious and new undertaking for the Army, most understand that these efforts will take time.

One constraint with proposed biomass projects is that the power procured from them has to compete with power from the grid. “Right now, under fiscal constraints that we are handed, all of our long-term contracts for energy have to be at or below what we forecast the price of power from the grid to be,” Simpson says. “We do believe that there is a value to energy security, it’s just no one can assess, nor has Congress given us approval to pay for, that added security.” Simpson believes there are opportunities for industry to be competitive with gridconnected power, but the Army doesn’t have a price premium that it is approved to pay at this time.

Securing Energy Security MATOC and other renewable energy procurement pathways are spurred by the need for more energy security on military installations. This, in fact, is the ultimate goal, rather than for environmental, governmental or publicity reasons. “What the Army is doing through the EITF with the Office of En-

ergy Initiatives is focused not so much on we want to put renewable energy on our installations, it’s that we want energy security, so that our Army is ready to do the job whenever they are called,” Simpson says. “To do that, we can leverage renewable energy through private, third-party financing.” On a similar note, a leadership meeting between the American Council on Renewable Energy and the DOD, emphasized that renewable energy projects help reduce the national defense’s vulnerability. According to ACORE, 99 percent of 500-plus military bases on U.S. soil rely on the commercial grid. A significant problem resulting from this reliance has been demonstrated with 87 power outages of eight or more hours at bases. The Center for National Policy released a paper making the same claim. The report says most on-base renewable energy power systems are configured to offset electricity purchases from the grid, but cannot provide power to the base during blackouts. Even facilities with diesel generators as a backup power source are susceptible to sustained

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POWER¦ blackouts due to limited fuel and potential fuel delivery interruptions.

Biomass for Power Assurance Biomass can serve as a dependable energy source to power through potential outages. “When we look at solar and wind, for example, those are wonderful renewable resources—it is great when we have that type of generating asset on our installations—but they are subject to the weather,” Simpson says. “Solar panels don’t generate electricity at night and wind turbines don’t generate electricity unless the wind is blowing; biomass has the ability to provide power 24/7, as long as there is sufficient feedstock available.” Another component playing into energy security is today’s technological environment, which Simpson says military personnel refer to as “reach-back capability.” “A soldier on the battlefield is connected through a variety of electronic means, all the way back to data centers, intelligence sources back here in the continental U.S.,”

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Simpson says. “Those command and control facilities are critical to the operations that our soldiers conduct every day, and more so during times of conflict. Without that reach-back, which of course is dependent upon the access of electricity to keep the telecommunication links operational, there is a missing link in our ability to perform our missions.” Although specific biomass project information with MATOC cannot be shared, Simpson says 13 projects are currently in the works under the four technologies with a dozen more behind that. Even though there is no public information on biomass projects or even an estimate of when information will be released, the Army is and will be purchasing renewable energy from a few biomass projects under different acquisition vehicles. “In each one of those cases, we are bringing energy security to our installations, because that is indeed the driver, and when we can do that without spending appropriated dollars that tells us that industry can be our partners in this,” Simpson says.

m rgy Syste Heat Ene

Three projects Simpson mentions are the 60-MW biomass facility at Fort Drum in New York, a 60-MW peaking station that is biodiesel capable at Schofield Barracks, Wheeler Army Airfield in Hawaii, and a requisition on a biomass facility at Red Stone Arsenal in Alabama, where the current MATOC RFP for solar has been issued. Simpson stresses that it is important that the Army access electricity there because of an outage the base experienced three years ago after a bad storm. The base lost electricity for eight days in that case. “So having a biomass facility to provide electricity in a situation like that is quite crucial,” Simpson adds. “We are looking at other biomass opportunities across the 50 states, and I think one of the things we often look for with biomass is what is the access and long-term longevity of the feedstock.” Author: Katie Fletcher Staff Writer, Biomass Magazine 701-738-4920 kfletcher@bbiinternational.com

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Enviva plans 3 additional pellet plants Enviva LP is pursuing the development of three new pellet plants. Two are planned for development in North Carolina. A specific location has not been announced for the third, but documents published by the North Carolina Ports Authority indicate it could be located in Laurens County, South Carolina. In early September, North Carolina Gov. Pat McCrory and North Carolina Commerce Secretary Sharon Decker announced Enviva is planning new pellet projects in Richmond and Sampson counties. The projects are supported by For more information, contact: info@javousa.net 770-428-4491 (ext. 3) See it online at: http://www.javo.eu/en/toploader/ Or snap below to see it directly:

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an award from the state Job Development Grant program that could provide Enviva with more than $1.7 million incentives for the creation of 160 jobs. In a statement provided to Biomass Magazine, Enviva said all three facilities would export pellets through a proposed terminal at the Port of Wilmington, North Carolina. The Sampson County project is expected to be completed first, followed by the Richmond County facility. Specific development timelines are dependent on permitting.

Bagasse pellet projects planned in Louisiana NFR BioEnergy has announced plans to manufacture pellets from sugarcane bagasse in Louisiana. The company indicated it will make a $312 million capital investment to install pellet production capacity at more than 10 sugar refining hubs in the southern portion of the state, subject to completing lease and biomass agreements with sugar mills. The facilities are expected to feature a torrefaction process that has been aided by research at the University of Louisiana at Lafayette’s Energy Institute. The initial facility is under development in White Castle, Louisiana. The plant will be

collocated with the Cora Texas Sugar mill. A demonstration biorefinery is expected to begin operations soon. A larger, commercialscale facility is scheduled to be complete in time for the 2015 sugarcane growing and refining season. The State of Louisiana has offered NFR BioEnergy an incentive package that includes a performance-based $500,000 Economic Development Award Program grant and the comprehensive workforce solutions of Louisiana Economic Development FastStart.

PELLET¦

Maintaining Industry Stability BY BILL BELL

“Girl, we couldn’t get much higher…” (Light My Fire, The Doors, 1967.) All looks good for Maine’s pellet industry. Spurred by $5,000-per-unit consumer rebates from the state’s Efficiency Maine energy agency, pellet boiler firms are installing at a combined rate of one unit per day. These firms’ annual sales targets are being met or exceeded; in one instance, amounting to a doubling of sales over an already robust 2013. The Pine Tree State’s four pellet manufacturers are running all-out and are having to turn down requests. Consumers visiting industry booths at the state’s large fall fairs are much more informed about pellet heat than in previous years. Clearly, the corner is being turned. And yet… “We need to maintain stability in the boiler rebate program,” says Jacob Roberson, partner in Portland-based Interphase Energy, which imports and distributes Kedel boilers from Denmark. “We’re nowhere near critical mass.” “As we displace existing technologies, we’re going to get more and more pushback from our competitors,” warns Les Otten, founding partner of Maine Energy Systems, which, in the ski town of Bethel, assembles and distributes Austria’s OkoFEN boilers from New England to Alaska. The Efficiency Maine boiler rebate program is scheduled to stay on track, at least through the budget year ending June 2015. This program is an outstanding example of what a state agency can do when it decides not to act like a state agency. Under Executive Director Mike Stoddard, the overriding priority has clearly been to get insulation, weather sealing, and better heating and lighting equipment into Maine homes and business firms, and the agency has operated like an aggressive retailer rather than a bureaucracy. Partnerships with private sector contractors have been emphasized, and the agency has aggressively branded itself with Maine’s public. Boiler firms also serving the New Hampshire market note that, despite a rebate program slightly higher than Maine’s ($6,000 per unit as opposed to $5,000), “the equipment isn’t exactly flying off the shelves over here.” The variable? The New Hampshire program is conducted through a finely tuned regulatory agency, the state’s Public Utility Commission, which lacks the promotion capacity and pizzazz exhibited by Efficiency Maine. But what about the “pushback” of which Otten

warns? He names three areas that competitors to pellet heat are likely to cite, one being alleged depletion of Maine’s forest resource. While Maine is the most forested state in the U.S., this is not readily apparent to mall shoppers in the southern part of the state. Maine’s industry may need to publicize the fact that virtually all of the wood going into pellets is from certified sustainably managed woodlands, where trees are actually growing faster than they are harvested. The second potential objection to the expansion of pellet heat, alleged air pollution, is equally bogus. Maine’s industry will be exploring a partnership with American Lung Association of Maine, whereby homeowners are encouraged to swap out aging cordwood stoves—the real cause of woodburning air pollution—for EPA-approved wood and pellet stoves. This should help to get across the point about the high-intensity burn, low-particulate matter characteristic of pellet heat. The third issue, “Will there be a ready supply of pellets?” poses a challenge. There is adequate capacity among Maine’s four pellet manufacturers. Lacking, however, is foresight among pellet retailers, particularly the Big Box stores, whose conservatism in placing orders in 2013 led to empty pallets when the Maine winter turned out to be as long and cold as, well, Maine winters used to be. While the chains have reportedly upped their orders this year, small retailers who only just recently have decided to add bagged pellets to their merchandise are being put on waitlists or simply turned away. Bulk delivery customers will all be served, and the supply side of market will find ways to respond to increased demand for bagged product. The pellet mill in Corinth will be coming back on line after undergoing—via new ownership—some significant equipment upgrades, and the mill in Athens will be expanding production as part of a huge project to generate its own electricity. The future remains bright, so bright that we’re still wearing shades. Author: Bill Bell Executive Director, Maine Pellet Fuels Association feedalliance@gwi.net www.mainepelletheat.com

NOVEMBER 2014 | BIOMASS MAGAZINE 17

¦PELLET

The 2014 Annual Exporting Pellets Conference opened with its traditional utilities panel. From left to right are Matthew Rivers, director of fuel procurement, Drax Biomass; Jens Price Wolf, senior manager, DONG Energy; and panel moderator Thomas Meth, executive vice president, Enviva.

RISI’s Seth Walker found himself in the middle of one of the conference’s most robust discussions about the differing opinions on the future size of the global pellet market. Walker stood by his recent report suggesting the global pellet market could grow to 50 million tons by 2024.

18 BIOMASS MAGAZINE | NOVEMBER 2014

Nigel Hildyard, director of biomass business development, Eggborough Power, left, and Seth Ginther, executive director U.S. Industrial Pellet Association.

PELLET¦

Cautious Optimism

Markets that gave rise to the pellet industry will begin to plateau, but the promise and growth of new market opportunities are very real. STORY AND PHOTOS BY TIM PORTZ

T

he market shows “more certainty now than there was 12 months ago.” With this message, Seth Ginther, USIPA executive director, welcomed the 475 attendees to the U.S. Industrial Pellet Association’s annual fall gathering, held Oct. 1 at Miami’s historic Fontainebleau resort. While British utilities have been the market that has thus far propelled Ginther’s members, conference panelists suggested that growth in the sector will have to begin coming from other places.

“The coal-to-biomass conversions that you already know about are likely to be it,” said keynote speaker Nigel Adams, a member of parliament from the power stationrich Selby area of North Yorkshire, England. Adams and other panelists pointed to waning appetites of British policymakers to offer more financial support for biomass conversions of existing coal power stations. Noting that biomass solutions are funded with the same dollars that fund other renewable technologies, Adams said, “It is a tragedy that so

Gilles Gauthier and Jean-Marc Jossart, European Biomass Association, enjoy an outdoor chat with Jennifer Hedrick, executive director, Pellet Fuels Institute.

NOVEMBER 2014 | BIOMASS MAGAZINE 19

Left to right: Jesse Dickerman, Zilkha Biomass; Christopher Huhne, chairman, Europe Zilkha Biomass; Nigel Adams, British Parliament; and Nigel Hildyard, director of biomass business development, Eggborough Power.

much of the U.K.’s support for renewables has been spent on technologies that are more expensive and far less reliable than biomass.” While the news about the inevitable plateau of the market that gave rise to the industrial pellet industry gave the conference’s opening a cautionary tone, attendees were soon buoyed by reports of long-expected markets finally coming to life. “You might see some folks in this room that look a little tired, as many of them spent some time in South Korea last week,” said Ginther. RISI’s Seth Walker offered the conference’s most detailed assessment of the emergence of the long-anticipated South Korean pellet market, reporting that in the second quarter of this year, South Korea imported nearly 400,000 metric tons. In the same quarter of 2013, South Korean pellet imports topped just over 60,000 metric tons. For now, Vietnam enjoys the largest South Korean market share, followed by Canada and China. This market is fueled by a 2012-initiated renewable portfolio standard that requires 2 percent of all power generated by South Korean utilities to be renewable. An ultimate goal of 10 percent remains in place, but the achievement deadline has been pushed back to 2027.

Mike Curci, capital sales manager of biomass, Andritz, and Robert Lowry, senior vice president, Gray Construction.

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The South Korean market remains a challenging one for North American producers, however. The country has little inbound pellet infrastructure at ports, and delivery costs are the responsibility of producers. “The South Koreans are ruthless on price,” said FutureMetrics president William Strauss. The conference closed with a producer panel, and the conversation quickly turned toward the ongoing public debate about the overall sustainability of the sector and biomass-derived power generation. Ginther and his member panel reported that while biomass generation has achieved broad public support in the U.K., a very vocal and active minority remains in place and committed to disseminating misinformation. Panelists expressed frustration about a general lack of understanding about how the pellet industry fits inside of a robust, well-established and sustainable North American forest products industry. Westervelt’s Mike Williams brought the panel and event to a conclusion by wondering aloud, “I just don’t understand how people would think we would destroy the resource that we rely on for our business.”

Gordon Murray, executive director, Wood Pellet Association of Canada and John Swaan, team partner, FutureMetrics.

Author: Tim Portz Executive Editor, Biomass Magazine tportz@bbiinternational.com 701-738-4969

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Handling a World of Materials

ThermalNews Massachusetts APS

SOURCE: MASSACHUSETTS EXECUTIVE OFFICE OF ENERGY AND ENVIRONMENTAL AFFAIRS

Massachusetts law adds thermal to APS A new law in Massachusetts has added renewable thermal energy as a component of the state’s alternative portfolio standard (APS). The measure was signed by Gov. Deval Patrick in August. The new law expands the definition of an “alternative energy generating source” to include “any facility that generates useful thermal energy using sunlight, biomass, biogas, including renewable natural gas that is introduced into the natural gas distribution system, liquid biofuel or naturally occurring temperature differ-

ences in ground, air or water.” Under the new regulations, 1-MW hour of alternative energy credit is earned for each 3.412 million Btu of net useful thermal energy produced and verified through an on-site utility grade meter or other approved means. The Biomass Thermal Energy Council has praised the bill, noting Massachusetts has joined New Hampshire as the only states that have authorized the inclusion of renewable thermal in comprehensive renewable portfolio standards.

Minnesota community plans district heating A proposed biomass-fueled district heating project in Grand Marais, Minnesota, is one step closer to reality with the recent publication of a Step II study. The project, currently spearheaded by the Cook County Local Energy Project, grew out of an initiative led by the county Firewise Group to educate homeowners on the benefits of clearing brush from around their homes. The community now generates a large volume of slash and began looking for productive ways to utilize that biomass, along with slash generated by the local 22 BIOMASS MAGAZINE | NOVEMBER 2014

forestry industry. An initial Step I study demonstrated the feasibility of using that material in a district heating plant, while the Step II study includes the development of a schematic design and full business plan. The proposed system would feature a 6.8 million-Btu-per-hour biomass boiler. Proposed customers include the local hospital and schools, along with several hotels, government buildings, and other community facilities. Construction could begin as soon as 2016 if state bonding is secured during the next bonding cycle.

THERMAL¦

Perfect Storm for a Pellet and Firewood Shortage BY JOHN ACKERLY

As winter approaches, the groundwork is being laid for a perfect storm of unprecedented firewood shortages in the Northeast and Great Lake states. This may result in the impression that biomass is taxing our forests too heavily, when it’s almost entirely due to other factors. Like last year’s pellet “shortage,” this year’s shortages are mostly a supply chain issue. Industry has been waiting for the consumers, and now that they're here, is playing catch-up. As far south as Maryland, people couldn’t even find pellets in late September. So far, coverage of the firewood shortage has been good, and scores of articles typically cite the causes as: last year’s cold winter, a wet spring and summer kept loggers out of the woods, a declining number of loggers, competition with other biomass users, new restrictions from transporting wood over state lines to combat invasive species, and more people heating with wood and and pellets. There is one thing none of the articles mention: the shortage is likely to result in far more smoke because more people will be using unseasoned wood. The shortage began as a shortage of seasoned wood. Now it’s a shortage of any wood. Also, coverage rarely mentions that about half of American homes that heat with cordwood—5 million— obtain their own wood and will not be affected by this shortage. The real seasoned wood heaters have a two-year supply of wood in storage, because even wood purchased in the spring is not necessarily ready in the late fall. It’s many of the people new to heating with wood who are the least prepared this winter and don’t have enough seasoned wood. If we have another cold winter like last year, this shortage will be far worse than it’s already shaping up to be. And if there is also another pellet shortage, it may shake the confidence of potential wood and pellet stove customers and lead to more concern over how the U.S. can sell millions of tons of pellets to heat European homes instead of serving the American market. Generous European subsidies, particularly in the U.K., make pellets an economical choice to make electricity at only 30 percent efficiency, instead of using this resource at 70 to 80 percent efficiency for heat.

The market is definitely giving signals that higher demand for both pellets and cordwood is not just shortterm. More pellet mills are being built, and hopefully, more customers will learn to order early in the year. Pellet mills are making sure to first take care of their bulk customers: residential, commercial and institutional. What’s left over gets bagged. The cordwood industry is, for better or worse, incredibly decentralized and unregulated. Each state has hundreds of retailers who source wood from a variety of ways, some buying it and others cutting it themselves. This shortage could help expand operations that kilndry wood and sell by the cord, not just in small, shrinkwrapped bundles. Operations with robust kilns that can get green wood one week and deliver it seasoned the next week command $400 and higher, instead of the normal $225 to $275 per cord. Regardless, this winter, normal prices will move moving upwards of $300 for any cord of wood. Unlike most cordwood, kiln-dried wood can cross state lines or be transported further than 50 miles, as long as it’s dried to federal specifications that assure all bugs are killed. Kiln drying operations are much more common in Europe. Expansion in the U.S. would be a great way to ensure more of our firewood supply is properly split and seasoned, resulting in higher efficiency and lower emissions. While Maryland is already experiencing a pellet shortage, there is no firewood shortage here, or in many major suburban areas outside of the northern Snow Belt. In fact, there is still a slew of free, precut firewood from tree cutting companies, some that will deliver it for free. One company just posted a big, permanent sign advertising “free firewood” on a major thoroughfare, and several local tree trimmers drop cords of unsplit, 18-inch pieces there every month. I often drive by and am tempted to grab it, but my wife reminds me that we already have two years of seasoned wood out back. Author: John Ackerly President, Alliance for Green Heat jackerly@forgreenheat.org 301-841-7755

NOVEMBER 2014 | BIOMASS MAGAZINE 23

¦THERMAL

KEEPS GETTING BETTER: Many wood stove designers continually strive for to produce more efficient, lower-emitting appliances, as demonstrated at a Wood Stove Decathlon held in Washington, D.C., in late 2013. Pictured is an Englander NC 30. PHOTO: ANNA SIMET, BIOMASS MAGAZINE

24 BIOMASS MAGAZINE | NOVEMBER 2014

THERMAL¦

Sweetening Wood Heat

Using wood to heat homes and businesses offers plenty of perks, but spreading state incentives are further enticing installations. BY ANNA SIMET

D

uring the first week of September, homeowners in New Hampshire paid about $25.20, $33.91 and $44.88 per million Btu for fuel oil, propane and electricity, respectively. Those using bulk-delivered wood pellets and cordwood paid about half that amount or less—$14.91 and $15.50. Though the low price of wood and pellets holds plenty of appeal to consumers, making the transition is oftentimes a different story, particularly when it comes to anteing up to purchase the appliance and pay for installation. Most wood and pellet stoves cost between $3,000 and $5,000 for the appliance, potential change out and installation, but a wood pellet boiler system can cost anywhere from $15,000 to $20,000 with installation. To help mitigate the initial financial burden of fuel switching, New Hampshire is one of five U.S. states that offers wood pellet boiler incentives—up to a 50 percent rebate, a max of $6,000—and is one of a handful of states that does so, which includes Maine, Massachusetts, New York and Vermont. Eight states offer tax credits, rebates or deductions for wood or pellet stoves, mostly in the western U.S., and a few states offer some kind of incentive for both. Though states with wood heat incentives have seen momentous growth over the past several years—by over 100 percent in some—the trend isn’t isolated to that region; Great Lakes states such as Wisconsin, Michigan and Ohio have also experienced exponential increases. But states with incentive programs have a leg up on states that don’t, especially when it comes to meeting certain objectives, such as guiding consumers to purchase cleaner and more efficient appliances to improve air quality, or providing help to lowincome families dealing with ever-increasing fossil fuel prices. It all depends on what the state’s goal is, says John Ackerly, president of the Alliance for Green Heat.

Different Goals, Different Programs “Rebates are much better for lower-income people; they don’t have to wait until the next year to get it [money back], most rebates come in the mail one or two months later. Rebates are better for the consumer,” Ackerly says.

In states that don’t have air pollution problems, there aren’t typically requirements for qualifiers to remove old stoves, such as in Maryland, Ackerly’s home state, a newer member of the state wood heat incentive club. “We don’t have any substantial wood smoke problems, plus the program is being run out of the Maryland Department of Energy, and they don’t even have a mandate to improve air quality,” he says. It’s a different story in the Northwest U.S., where programs are totally driven by air quality. “Even to the point of where the state will give you more money if you agree to switch to a natural gas appliance,” Ackerly says. “So there, the government is trying to get people to go from a renewable to a fossil fuel, and paying them more money to do so, which is kind of a pity. But in a deep valley in an urban area where pollution is really bad, you can’t really argue with that. Although, I think they could have done a better job starting earlier and providing people with incentives to get onto pellet stoves—the air quality might not be as bad as it is.” Though the general wood heating incentive wave is trending toward boilers and automated bulk delivery—in Maine, distributors report an installation rate of about one system per day—Maryland’s new wood and pellet stove program has exceeded expectations in terms of popularity, and serves as a good example and place to start for other states looking to implement something similar.

Implementation and Challenges Providing $500 grants for wood stove installations and $700 for pellet stoves—both required to meet certain emissions rates—the goal of the program is to reach Marylanders who don’t have natural gas access, says Emilee van Norden, Maryland Energy Administration clean energy program manager. “Last year was a pretty difficult year for people—many had difficulty affording fuel oil because of the really harsh winter, harder than we’re used to. These stoves only cost a few thousand dollars, and we give a pretty sizeable grant to them. It also allows us to get to parts of Maryland where they can’t get solar on their roof because they’re in the woods or mountain areas, or regions where income is a bit lower and [they] can’t afford geothermal or solar.“

NOVEMBER 2014 | BIOMASS MAGAZINE 25

¦THERMAL

U.S. Home Wood Heat Trends and Tidbits

26 BIOMASS MAGAZINE | NOVEMBER 2014

THERMAL¦

NOVEMBER 2014 | BIOMASS MAGAZINE 27

¦THERMAL After a strong response to its pilot phase, the program was expanded indefinitely as part of the state’s Clean Energy Grant Program, which also funds other types of renewable installations. Money for the program is drawn from Maryland’s Strategic Energy Investment Fund, which results from the state being part of the Regional Greenhouse Gas Initiative, a marketbased, carbon cap-and-trade program. Figuring out where funding for such a program will come from can be a challenge to states hoping to implement what Mary-

28 BIOMASS MAGAZINE | NOVEMBER 2014

land has done. To help generate ideas, EPA Burnwise has recently released a guide for states to help them through the program development process. Program funds may potentially come from weatherization and other housing assistance programs, grants and loans through the U.S. Department of Housing and Urban Development, USDA, U.S. DOE or U.S. EPA. Once the program is in place—after a need is demonstrated, preliminary plan has been developed, partners identified and funding scored—there are implemen-

tation problems that may arise, such as “free riders,” or people who would make the purchase anyway and don’t really need the financial help, an issue that stove incentives are more likely to encounter than pellet boilers. “[For boilers] the upfront cost is high, so I don’t think there will be too many free riders,” Ackerly says. “A few may have done it otherwise, but a $5,000 incentive is certainly enough to push people over the edge. One thing we don’t have in the stove or boiler world is the volume that will bring the per-unit cost down. Some of these companies are only selling a couple hundred boilers a year, and though 5,000 single stoves is a good year, it’s not enough volume to help bring the cost down.” In Europe, where the residential heating market is thriving, the upfront costs of stoves and boilers are nearly the same, but the return on investment is much quicker. “The fuel you’re avoiding is double or triple the cost,” Ackerly says, adding that people stay in their houses longer in Europe, so most don’t mind making a longer-term investment. “Here, if you’re not sure you’re going to live there in five years, do you want to pay $20,000?” Ackerly noted that a new payback mechanism, on-bill financing, is helping to sway those who may be planning to move in the future to make the investment anyway. “The next owner of the house will continue to pay the monthly amount, so you don’t need to worry if you sell the house in a few years,” he says. “They’ve been using it in the solar world, but it’s a lot easier to use it for electric appliances because the electric utility usually just adds a certain amount each month onto your electric bill. When you’re adding a nonelectric appliance onto your electric bill, it definitely takes coordination to make that happen.” Other potential implementation challenges that are likely to be discovered during postprogram analysis include too many people using the incentive, causing the budget to run out quickly, excessive administration burdens, and people finding loopholes. At that point, determining and fixing challenges is essential in ensuring a more successful next round. In Maryland, one challenge was identification of which stoves qualify and which don’t, van Norden says. “Now, I’m at the point of when I see

THERMALÂŚ a certain dealer’s name, I know it’s going to be a good application. It’s mostly a matter of making sure the dealers and stove owners are getting the right marks. Emissions rates are part of our requirement that people didn’t understand at first.â€? To keep things running smoothly, a bimonthly meeting is held with Maryland stove dealers to find out what issues they might be having, or to answer any questions. Ace Hardware & Hearth owner Pete Peterson, who opened the Glen Burnie, Maryland, hardware store in 1978, said the rebate program does result in more stove sales, but how it really benefits his business is other things that customers also buy— venting, pellets and wood, grates and materials to start their fires. And, perhaps most importantly, the uptick in business has allowed Peterson to keep more employees on year-round. “We’re busy the whole year in spring and fall, so we get to keep eight people on during the winter because of this program.â€? Peterson says upon implementation of the program, impacts occurred nearly immediately—people were quick to act upon the opportunity. “It was a very obvious there was an incentive to switch off of electric, oil, gas and propane,â€? he says. “In Maryland, we went through a situation where electricity costs went up 72 percent in just a couple of years, and there wasn’t much of an incentive [to fuel switch] other than some meager things the dealer can give. It’s been just like the story of the frog boiling in the pot—the heat has been turned up slowly and it’s dying but doesn’t know it—people have been slowly bleeding from their electric bill, when they could be buying other things.â€? The biggest challenge has been spreading the word about the program, in Peterson’s opinion. “Letting people know they have an option, that they can take control,â€? he says. On any confusion of qualifying vs. nonqualifying stoves, Peterson says the list the state has provided is pretty cut and dried, and there isn’t much motivation for hardware stores to carry stoves that don’t qualify. “It’s not very common, most of ones not certified are carried in big boxtype stores that aren’t concerned about the

things we are—they’ll sell anything at the right price points,� he says. Van Norden says there’s potential to add pellet boilers to the state rebate program, but as the program is still new, much has to be figured out. “We’ll probably be looking at other states to see what they’re doing,� she says. And to those states on the fence about implementing wood heating incentive programs, van Norden has the following advice to offer: “Engage the stove community—it’s a really good asset. And don’t hesitate. It’s a

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BiogasNews Biogas RIN data D3 cellulosic biofuel RINs (millions)

D5 advanced biofuel RINs (millions)

2011 Biogas

-

1.42

Total (all fuels)

0

224.96

Biogas

-

2.88

Total (all fuels)

0.02

2012 597.37

2013 Biogas

-

Total (all fuels)

0.42

25.393 551.58

2014 (Jan.-Aug.) Biogas

20.35

Renewable CNG/LNG

3.49

Total (all fuels)

3.57

115.16

SOURCE: U.S. EPA RFS2 EMTS INFORMATIONAL DATA

Biogas fuels enter cellulosic RIN market Biogas-based transportation fuels are now helping to meet the cellulosic biofuel requirements of the renewable fuel standard (RFS). According to U.S. EPA data, the first D3 cellulosic biofuel renewable identification numbers (RINs) were generated for biogas transportation fuels in August. During the month, more than 1.64 million D3 RINs were generated for renewable compressed natural gas, along with nearly 1.85 million for renewable liquefied natural gas.

Biogas-based transportation fuels have been contributing to RFS targets for several years under the D5 advanced biofuel RIN category. In July, the EPA published a final rule qualifying several additional cellulosic and advanced biofuel pathways, including those for compressed and liquefied natural gas produced from biogas from landfills, municipal waste-water treatment facilities digesters, agricultural digesters and separated municipal solid waste.

Wisconsin landfill gas-to-energy project expands Dane County’s Rodefeld landfill is undergoing an expansion that will double its landfill gas-to-energy project to double electricity production. The upgrades will also extend the life of the landfill for an additional 30 years. The landfill currently generates approximately $3.3 million in electricity each year, enough to power 4,000 homes. The power is purchased by Madison Gas and Electric. Following the expansion, the landfill will enable production of more than 6 MW of electricity during peak years. In addition to increasing the production of renewable power, the expansion is 30 BIOMASS MAGAZINE | NOVEMBER 2014

also expected to provide energy that will eventually heat a nearby medical examiner’s building and Dane County highway garage. The project capitalizes on a pilot project at the landfill that encourages garbage to decay faster. Leachate, the liquid that comes out of garbage, is collected at the bottom of the landfill and pumped back into the waste mass. The project helps keep the waste at a near-optimal moisture level, which helps accelerate the natural decay process. It also allows the landfill to control and increase the amount of gas produced when necessary.

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www.BBIProjectDevelopment.com NOVEMBER 2014 | BIOMASS MAGAZINE 31

¦BIOGAS DEPARTMENT

BIOGAS ON BASE: The Marine Corps Logistics Base Albany’s landfill gas-to-energy generator team stands in front of its initial installation, which will soon be joined by a second generator. Among the government officials pictured are Col. Donald Davis, current commanding officer on the base, Fred Broome, director with the installation and environment division, and former Public Works Officer Navy Lt. Commander Jeff Benjamin. PHOTO: MARINE CORPS LOGISTICS BASE ALBANY

Expanding Energy, Decreasing Dependency Marine Corp Logistics Base Albany battles toward meeting and exceeding DOD renewable energy goals with expansion of its landfill gas-to-power project and other developments. BY KATIE FLETCHER

I

n southwest Georgia’s Dougherty County, the 3,600-acre Marine Corps Logistics Base Albany assumes the mission of rebuilding and repairing ground combat and combat support equipment. The base embarked on another mission in 2005 to develop opportunities for renewable energy installations to support what it was already positioned to do. Now, after some completed installations, the base is in the process of boosting those efforts even further. The renewable energy onset began when a number of mandates were issued to increase energy production from renewable resources. MCLB-Albany contracted with Chevron Energy Solutions to identify renewable energy projects using a Department of Energy Savings Performance Contract, one of the private-sector financing authorities leveraged to meet these goals. “One of the mandates requires us to reduce our consumption—on a MMBtu per thousand square feet (ksf) basis—by 30 percent by 2015,” says 32 BIOMASS MAGAZINE | NOVEMBER 2014

Fred Broome, director with the installation and environment division on the base. Broome says the ESPC task orders and others have allowed the base to meet and exceed that goal. Under the ESPC, Chevron identified eight energy conservation measures (ECMs). One of the ECMs was a project with the Fleming/Gaissert Road Dougherty County landfill across the road from the base. “It’s a great project for us, this (methane gas) is a resource that we would have just been flaring off and now we’re getting a beneficial use of it,” says Scott Addison, Dougherty County solid waste director. The landfill gas-to-energy (LFGE) project uses gas that was previously vented and flared from a header pipe at the landfill. The landfill gas extraction system includes 140 vertical wells and one horizontal well to provide landfill gas for the project. Addison compares the wells that are inserted with plastic pipes to straws with holes in them. After being vacuumed through the wells, methane

BIOGAS¦ rect digital controls system. The 20-year contract was signed with Chevron in December 2009 for it to develop and maintain the CHP plant, pipeline and landfill gas (LFG) processing equipment throughout the life of the contract. The base pays Chevron back with the energy savings gathered from the project. According to Broome, last year the LFGE project had a total cost savings of over $1.5 million, with total energy savings of 48,030 MMBtu. Economic viability also played a large role when determining if the project supported expansion. The generator at the base is down 14 percent of the year on average for maintenance and COMPRESSING FOR CONVERSION: Landfill gas is brought to the compression and dehydration routine checks. “When we did the ecoskids at the landfill site where the gas’s quality is monitored and compressed up to pipeline pressure. nomic analysis for a second generator, PHOTO: SCOTT ADDISON, DOUGHERTY COUNTY SOLID WASTE DIRECTOR we were able to justify it just off of the second generator running when the other is down,” Broome says. gas is sent to a compression skid at the landfill site, which cleans, The project has the potential to produce 24 to 40 percent of dries and compresses the gas before sending it via 3 miles of pipeline to a combined-heat-and-power (CHP) plant at MCLB-Albany. the base’s load depending on the availability of LFG, and reduce Addison says the base pays 75 cents per MMBtu for baseline quality energy use and carbon emissions by 21,160 tons annually. The gas, with a 2 to 5 percent increase each year and a 33 percent in- county landfill currently does not produce enough LFG to run crease on year five. “The first year we (Dougherty County) received both generators full time simultaneously, but Addison says as the landfill grows, the well field will be expanded to new areas. Until the about $122,000 in revenue from the project,” he says. The gas fuels the CHP plant’s 1.9-MW GE Jenbacher genera- amount of LFG production and amount required to fuel the gentor and a heat recovery steam generator (HRSG), which recov- erators is determined, MCLB-Albany has several options on how to ers heat from the engine stack that produces 95-pound force per run the generators. One is running the second generator on natural gas or a blend of natural gas and methane. The GE Jenbacher gensquare inch gauge (psig) of steam. Since the plant’s completion in 2011, MCLB has kept expan- erators allow dual fueling. MCLB-Albany doesn’t want to stop with just this expansion. sion under consideration, and is now taking action. The base is Presently, the base has exceeded the mandated 30 percent by 2015 capitalizing on space set aside during initial construction by installing a second generator with the capacity of 2.1 MW and an addi- with a current 41 percent reduction. However, there is also the tional HRSG. The HRSG produces hot water (180 to 200 degrees goal of reaching net-zero by 2020 at half of the bases in the Navy Fahrenheit) for industrial processes at the maintenance center on and Marine Corps. MCLB-Albany wants to be one of the first to base, and the second generator should produce enough steam to achieve net-zero, and Broome believes the base is on track to reach cover the center’s demand year-round. The $4.5 million expansion, that goal by spring of 2017, if all goes as planned. A proposed projfunded under the Energy Conservation Improvement Program ect that could bring the base to net-zero is through a partnership Headquarters Marine Corps, will essentially double its renewable with Proctor and Gamble and Constellation Energy on a 7.5 to 10 energy production capabilities by the anticipated startup date in MW biomass project. The base’s location comes at an advantage April 2015. “The thought was that when the first generator was again, with this project utilizing property near P&G’s paper proddown for maintenance or outages the second generator could run ucts plant near the base. Broome anticipates contract signatures in and the renewable energy would not stop,” Broome says. “The re- August 2015 with production in spring 2017. “To meet the secredundancy of having two generators helps with energy security on tary of the Navy’s goal, short of shutting the lights off, we have to have more renewables,” Broome says. “To get there, we have to the base.” Energy security is a driver with renewable energy installations, have technology that saves money—we cannot put technology in but as Broome points out, the economics have to make sense. The place that does not save money to be green for green sake—it has initial project economics didn’t demonstrate savings on a stand- to be economical.” alone basis when compared to terms MCLB-Albany had with utility providers. In order to make the economics work, the project was Author: : Katie Fletcher Staff Writer, Biomass Magazine bundled with another ECM, which replaced and upgraded 18,500 701-738-4920 kfletcher@bbiinternational.com light fixtures on the base, and added another building to the diNOVEMBER 2014 | BIOMASS MAGAZINE 33

AdvancedBiofuelNews September 2014: Selected for USDA loan guarantee; awarded DOD contract

November 2012: Withdraws IPO registration request

May 2013: Demonstrates fully integrated MSW-to-jet fuel process

September 2011: Registers for proposed IPO

November 2011: Announces strategic investment by Waste Management

September 2009: Announces cellulosic ethanol breakthrough; proposes construction of Sierra Biofuels plant

January 2011: Announces partnership with Waste Connections

Fulcrum secures USDA loan guarantee for biobased jet fuel project The USDA has awarded a $105 million loan guarantee to Fulcrum Sierra Biofuels LLC to support the development of an 11 MMgy facility to convert municipal solid waste (MSW) into jet fuel. The $266 million project, under development near Reno, Nevada, is expected to break ground this year and enter commercial production by the end of 2016.

The loan guarantee is being made under the USDA’s Biorefinery Assistance Program through the Bank of America N.A. At the proposed facility, Fulcrum Bioenergy will produce syntheses gas from 147,000 tons of MSW and catalytically convert it to synthetic paraffinic kerosene/jet fuel through a proprietary technology.

DOD awards contracts to 3 biofuel producers In September, the U.S. Department of Defense awarded Defense Production Act contracts to Red Rock Biofuels, Fulcrum Bioenergy and Emerald Biofuels to construct and commission biorefineries. Together, the facilities will produce 100 million gallons of drop-in biofuels to serve military and private sector needs at an average price of $3.45 per gallon. Fulcrum BioEnergy, based in northern Nevada, will produce 10 million gallons of biofuel from municipal solid waste. Red Rock Biofuels in Oregon will utilize woody biomass to create 12 million gallons of advanced biofuels. Using waste fats, Emerald Biofuels will produce

82 million gallons at a Gulf Coast refinery. Both Fulcrum and Red Rock will deploy the Fischer-Tropsch process, and initial production of the facilities is to begin in 2016. The Defense Protection Act was passed in 1950 for the purpose of providing investments in anything America needs, but doesn’t have at scale, for national security. “We’ve done it in a myriad of industries from steel to microchips,” said Secretary of the Navy Ray Mabus. “And energy is particularly called out... Today is a major milestone that only happened because of DPA, which is there to use for America’s defense.”

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Forging Ahead in 2015 BY WAYNE SIMMONS

Ladies and gentleman, there is a lot on the line in this election, and we must be involved to make sure our industry moves forward in 2015 and beyond. For those of you who run advanced biofuels and renewable products companies like I do, there is a great deal you must keep your eye on. Whether it is the opportunity to apply for grant money available from the Defense Procurement Act, the Biorefinery Program or loan guarantee programs from the USDA or U.S. DOE, one must plan way in advance. Of course, we all also have to follow how the U.S. EPA is implementing and changing the regulatory requirements for our industry under the renewable fuel standard (RFS). Whether we like it or not, in the short term, our industry is in partnership with the federal government and the states, in an effort to become a commercial and dependable segment of the transportation fuels supply chain. Fortunately for us, the investment community has already funded $18 billion in just the past 10 years in the U.S. to make that happen. For decades, energy policy has not been a partisan issue; it has been one of regional focus between consumers and producers. However, the biofuels movement, given the wide range of available feedstocks that can be used, gives all 50 states an opportunity to create jobs and sustainable fuels while also generating energy and economic security for our nation. Whether you are a Republican or a Democrat, an Independent or a Libertarian, you have a reason to support the call for advanced biofuels. From my position as the chairman of the Advanced Biofuels Association, I can tell you firsthand, having been in many agencies and congressional offices, that they are inclined to support our effort and cause. But unless we continue to keep them upto-date on our progress and efforts, they will lose interest. We have had many successes in the past few years, but we have much further to go before we are a household-known and accepted industry.

That is where this election impacts us. No matter what the outcome of the election, given the discourse in Washington surrounding the RFS, I expect that we are likely to return in 2015 to a discussion on whether we should reform the RFS. For my money and the association’s members, having to wait more than 11 months for the renewable volume obligation (RVO) numbers to be published is simply not acceptable to our innovative industry. Let’s just take the numbers off the EPA Moderated Transaction System as a starting point, and use periodic adjustments to ensure the RVO is, in fact, the actual production, in lieu of the current system. Just recently, we have seen our members benefit from $210 million investment under the Defense Production Act, and another $200 million under the USDA loan guarantee efforts. These things don’t happen unless you fight for them in Washington. The Advanced Biofuels Association has been fighting for all of us for nine years—come join our efforts, make a stand and get ready for a busy and active 2015. Together we can make a difference; individually and separately from each other, the challenge is far greater. As you receive those phone calls requesting assistance, remember to tell those politicians that we can make a difference, but only if they give the industry certainty. They must, on a consistent basis, make sure the rules they write and the laws they pass provide a clear message to the investment community to instill confidence to invest in our industry of the future. Author: Wayne Simmons CEO, Sundrop Biofuels 720-890-6501 info@sundropfuels.com

NOVEMBER 2014 | BIOMASS MAGAZINE 35

Q&A Advanced Biofuels’ Beltway Crusader Mike McAdams discusses work on Capitol Hill, founding of the Advanced Biofuels Association and the importance of engaging in the ongoing public debate about renewable fuels. “We’re the people you hire to protect you from the people you elect.” Anyone who has spent time around Mike McAdams has likely heard his tonguein-cheek description of the role of industry associations. Jokes aside, McAdams has established himself as the voice in D.C. for companies producing drop-in fuels and platform chemicals that would otherwise find themselves without a voice or advocate in the beltway. McAdams’s member companies benefit from a network that he has built over a career best measured in decades. Still, he would be the first to say that the most powerful voice in Washington is yours. Is it fair to say you’ve spent the bulk of your professional life in Washington, D.C.? Yes. My father and mother met in 1953 while working on Capitol Hill for two senators, and I began as a house page at age 16 in 1972. After graduating from Virginia Tech, my first job was working for a Texas member of Congress. This year is my 35th consecutive year working either in government or in government affairs in Washington, D.C. Who founded the Advanced Biofuels Association and why? In 2007, the Congress was considering renewable fuel standard 2 (RFS) reform legislation, and at the time I was representing Amyris and Neste. We all recognized that drop-in fuels were not clearly represented by any of the current associations. Additional conversations with Tyson and ConocoPhillips led to the four companies essentially forming the Advanced Biofuels Association, and I have

had the honor of running the organization since its inception. In a recent Biomass Magazine column, you outlined a number of disappointments for the industry from a 2014 policy perspective. Which policy shortfall do you think will be the most difficult for the industry to overcome? I am concerned with two policies in particular. First, the tax policy has been on-again, off-again, since its inception. Tax policy can play a significant role in assisting the development of a new industry. It helps buy down the cost of bringing a new industry into the market. Over the long haul, I expect more scrutiny on the tax front as we seek to reform the nation’s overall tax policy. Moving to a technology-neutral, performance-based system will be difficult to construct, but I believe in the end it will create a more even playing field for all concerned. Second, under the statute, RFS program was asked to create a system to certify new technologies, feedstocks and fuels under the RFS. This part of the program is referred to as pathway approval. It is complicated, and many of the current stakeholders simply don’t want new competition, but that was the intention of the authors of the legislation. It is essential that the U.S. EPA expedite the process and get these innovative companies participating in the RFS program as soon as possible. You closed the aforementioned column by suggesting that if the Republican Party should gain majority in the Senate, the RFS may well be one of its first priorities. What makes you feel that way? First of all, America is tired of a Congress that points fingers at each other instead of addressing the country’s issues on a more consistent basis. If the legislative branch of government is controlled by PHOTO: ISTRICO PRODUCTIONS

36 BIOMASS MAGAZINE | NOVEMBER 2014

Mike McAdams

Q&A ¦

INTERVIEW BY TIM PORTZ

one party, they will most likely have to put out a clear and concise agenda, which differentiates itself from the other branches of government. Given the consistent debate on the RFS over the last two years, reforming it, at a minimum, would most likely make that list. Just over two years ago, you were aboard the USS Nimitz for the most ambitious test of renewable fuels in military ships and planes in history. How would you characterize the momentum for the advanced biofuels industry within the defense community since then? First, I want to give high praise and gratitude to the Secretary of the Navy, Ray Mabus. He has been a visionary and seminal leader in this effort. As for the day on the USS Nimitz, it was a bucket list day for me to be with the men and women of the U.S. Navy. This effort has laid the groundwork for the importance of a portfolio approach in the use of biofuels for our military and society in general. In addition, the recent announcement of $210 million to construct three commercial plants moves the commercial ball forward in a most significant manner. Procurement efforts are also a significant factor in aiding the development of the advanced drop-in biofuels industry. Two members of your organization, Velocys and Honeywell/UOP, were part of the teams awarded funding under the Defense Production Act. What does a funding award like this mean for these organizations? For both organizations, funding under the Defense Production Act is an opportunity to demonstrate their technologies on a commercial scale. For the advanced biofuels community, it means more gallons toward the targets under the renewable volume obligation process, and more momentum for the industry as a whole. These are large facilities. Moreover,

the gallons and projected average cost by the Navy at less than $3.50 per gallon prove that these fuels can, for the long haul, compete with the existing industry. Congratulations to all the organizations that won these opportunities—Red Rock Biofuels, Emerald Biofuels and Fulcrum BioEnergy. Will there ever come a time when participants in the biofuels industry won’t have to wonder about the long-term future of important policy mechanisms like the RFS? Public policy works best when it is a partnership between the business community and a government with the vision to create new options for our country that move us favorably forward. The RFS is such a policy, one that seeks to stand up a clean fuels industry that adds to the nation’s options for energy and economic security by augmenting our current energy base. If that vision succeeds, it will make itself irrelevant. On the business side, that means that the industry will need to deliver competitively priced products and market participation in a manner that can be independently sustained over the long term. The Energy Independence and Security Act of 2007 established the RFS and garnered strong bipartisan support, with 95 house Republican votes. Has the pendulum for biofuels brought it back to being a very partisan issue? Energy policy has never been partisan; it is regional and about consumers and producers. Biofuels give a broader opportunity for all areas of the country to participate in the production of advanced and cellulosic biofuels. No matter who runs the White House, or the Congress, biofuels will remain part of the public policy discussion, there are simply too many winners, including consumers, for it not to be.

With all the brake tapping on the policy front, what keeps your members pressing forward with their commercialization efforts? The opportunities moving forward and investment made to date keep our industry pressing forward. In the last 10 years, we have seen more than $13.6 billion deployed in the U.S. alone, to stand up the advanced and cellulosic industry. The sad part is that, given recent uncertainty surrounding both tax policy and the RFS, there has been a significant decline in the rate of the deployment of money in this sector over the past 18 months. My members remain committed and focused on delivering the value proposition for renewable fuels and renewable bioproducts moving forward, which will not end anytime in the near future. At nearly every industry event you attend, you conclude your remarks beseeching the audience to get involved in the political process and directly contact their representatives. It’s hard for people outside the beltway to believe it makes a difference. What have you witnessed that affirms the importance of engagement for you? As a young legislative director for Congressman Ralph Hall, I watched as former President Reagan called on the American people to write their congressman about supporting a tax bill early in his term. Before his speech, all the senior staff and members said there wasn’t a chance on the tax bill. But following the speech, our office received 10,000 cards and letters in one week asking him to support the tax bill. It passed. Members and their staff need to hear from the people they represent, so they can represent them. Get involved.

NOVEMBER 2014 | BIOMASS MAGAZINE 37

ÂŚADVANCED BIOFUELS & CHEMICALS

Advanced Biofuels Association President Michael McAdams expresses industry frustration with Congress during the National Advanced Biofuel Conference & Expo federal biofuels policy panel. Also participating were Tim Portz, Biomass Magazine executive editor, left, National Biodiesel Board CEO Joe Jobe and Matt Carr, Algae Biomass Organization executive director.

National Biodiesel Board CEO Joe Jobe said he is optimistic the U.S. EPA will get the RFS renewable volume obligation numbers right.

38 BIOMASS MAGAZINE | NOVEMBER 2014

Mike Jereke, Guardian Energy Management LLC CEO, Brian Kletscher, Highwater Ethanol CEO and Randall Doyal, Al-Corn Clean Fuel CEO, discuss plant management and investment during policy turbulence.

ADVANCED BIOFUELS & CHEMICALS¦

Toughing Out Turbulence BY ANNA SIMET PHOTOS BY JOHN SCHMIEG

A

concentrated group of serious industry players committed to the advanced biofuel and chemical industry gathered at the Hyatt Regency in downtown Minneapolis in mid-October, for an intimate discussion of policy issues, progress, new technologies and the industry’s outlook. The National Advanced Biofuel Conference & Expo kicked off with a federal biofuels policy panel featuring Mike McAdams, president of the Advanced Biofuel Association, Joe Jobe, CEO of the National Biodiesel Board, and Matt Carr, Algae Biomass Organization executive director. After lamenting the damage that a dysfunctional Congress has inflicted on the industry over the past two years, and uncertainty surrounding renewable volume obligation (RVO) numbers, renewable fuel standard (RFS) pathways, the compliance division of the Quality Assurance Program, the on-again, off-again tax code and unpredictability as to whether Congress will get anything done in any amount of time, McAdams expressed optimism for a potential change of direction after the midterm election in a few weeks. “Though there’s a good chance of a Republican takeover of the Senate, which could break loose some legislative and regulatory circumstances that have taken place over the last couple of years…if it does happen, and we are able to move some things forward, we could reaffirm that the federal government recognizes the importance of cellulosic and advanced biofuels industry…that will clear up this lack of certainty, which would be very, very helpful.” Following McAdams, National Biodiesel Board CEO Joe Jobe highlighted the success the biodiesel industry experienced in 2012 and 2013, but delved into its major struggles following a leaked U.S. EPA RVO proposal draft. “If it was designed to have a chilling effect on markets and on RIN values, then it achieved its purpose, because RIN values began to drop at that point,” he said. That,

David Rubenstein, CEO of California Ethanol & Power LLC, asks a question during the federal biofuels policy panel.

NOVEMBER 2014 | BIOMASS MAGAZINE 39

David Belseth, CHS Renewable Fuels Marketing, and Luke Schneider, Highwater Ethanol, wait for the plenary session to begin.

Superior Process Technologies’ Kirk Cobb and Chris Sorensen welcome booth traffic.

National Advanced Biofuel Conference & Expo attendees traveled to Emettsburg, Iowa, for a tour of Poet-DSM’s Project Liberty and a chance to witness corn stover collection.

40 BIOMASS MAGAZINE | NOVEMBER 2014

New Holland’s Scott Wangsgard prepares to cut the ribbon to the National Advanced Biofuel Conference & Expo grand reception, along with Tim Portz.

coupled with an expired blenders tax credit, resulted in a very tough year for the biodiesel industry, particularly from small- and medium-sized producers. Jobe concluded by saying that he’s cautiously optimistic that the EPA will ultimately get it right, even though it will have taken them a year to do so. Algae Biomass Organization Executive Director Matt Carr emphasized the huge potential algae has to alleviate some of today’s most pressing sustainability issues, but pointed out that the sector has moved beyond its youthful, exuberance phase that drew many “looking to strike it rich,” and has boiled down to serious players focused on strategic partnerships, diversifying portfolios and looking overseas for first production facilities. Carr provided several examples of developments amongst companies looking at higher value markets while domestic biofuel policy remains uncertain, but was quick to add that the industry hasn’t moved away from fuels. “It remains a main driver,” he said.

Verdanté Bioenergy Services CEO David Waechter and New Holland’s Scott Wangsgard converse during a refreshment break between technical breakout sessions.

For the algae industry, a big piece of missed opportunity lies within the Clean Power Plan proposed rules for new and existing power plants, from Carr’s perspective. “There is this really dynamic and exciting set of technologies, many of which are biobased, to use waste CO2 to create fuels and products…to really turn CO2 from a problem into an opportunity, a revenue generator opportunity for utilities and a way to address climate change...” Carr said that right now, the way EPA has written proposed rules for existing power plants, there’s some acknowledgement of carbon capture and sequestration and underground storage, but no discussion at all on reusing that CO2.” Following the policy panel was a biofuels plant management and investment

Pan American Hydro Inc.’s Sergio Martinez chats with booth visitors.

executive roundtable featuring Mike Jerke, CEO of Guardian Energy Management LLC; Brian Kletscher, CEO of Highwater Ethanol and Randall Doyal, CEO of AlCorn Clean Fuel. Two days of technical breakout sessions ensued, covering topics including new routes to advanced ethanol, momentum biogas producers are experiencing in the advanced biofuel markets and innovation in biodiesel and renewable diesel approaches, and an Oct. 15 stover collection field day at Poet-DSM’s Project Liberty in Emmetsburg, Iowa. Author: Anna Simet Managing Editor, Biomass Magazine asimet@bbiinternational.com 701-738-4961

Travis Brotherson, Quad County Corn Processors plant engineer, moderates a breakout session focused on leveraging the foundation of existing biofuels platforms to expand the advanced biofuels industry.

Cool Planet’s Wes Bolsen discusses the company’s renewable gasoline commercialization plans during a technical breakout session also featuring Steve Csonka, Commercial Aviation Alternative Fuels Initiative executive director (left); Ted Aulich, senior research manager, EERC; David Kittelson, professor of mechanical engineering, University of Minnesota; and Bruce Folkedahl, senior research manager, EERC.

NOVEMBER 2014 | BIOMASS MAGAZINE 41

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