Over the last two years, stories about the number and scope of wood bioenergy projects have dominated the news. Outside of pellet manufacturing facilities, however, the vast majority of these projects have yet to become operational. During this two-year period, we at Forest2Market have repeated over and over again what our data, experience and models have told us: increased consumption of wood fiber from the bioenergy sector will be slow to come about, a gradual augmentation to current demand.
 
As this additional demand takes shape, we'll continue to struggle in attempts to find a definition of biomass that applies to everyone in the industry. As Pete mentioned in his inaugural letter, the definition of biomass is fungible. In this issue's price trends feature, we look at one of the categories of wood fiber that is considered biomass: fuelwood.

Exploring the Gap

By introducing a wood bioenergy newsletter at this juncture, it may seem like we're jumping on the bandwagon. But it really goes much deeper than that.
 
Forest2Market researchers and analysts have been tracking the emerging bioenergy industry for more than two years. We've been to numerous meetings and conferences in both the traditional forestry industries and in the bioenergy industry. We've talked to dozens of experts, from biomass suppliers to energy project developers and analysts. In these conversations, we've been struck by how many misconceptions, about biomass availability and price, exist.
 
Two words we heard over and over to describe biomass supply were "abundant" and "free." Obviously, these descriptors didn't seem right to us. What we identified in these conversations was a gap between what we heard and what we knew to be true.

 

In order to close the gap between biomass supply (what is available for removal and delivery) and demand (how much biomass will be consumed by energy producers) a legislative tight rope must first be crossed. Currently, anyone who is planning to develop or invest in a bioenergy project must wade through four laws and one proposed bill, all of which contain different definitions of forest biomass. Until the definition of biomass is appropriately broad and consistent, it's difficult to see how this new industry will stabilize and mature.
 
Two critical pieces of legislation, because they involve renewable energy standards, are the December 2007 Energy Independence and Security Act (EISA), which set a Renewable Fuel Standard (RFS), and the proposed American Clean Energy and Security Act of 2009 (also known as Waxman-Markey), which if passed would set a Renewable Electricity Standard (RES).

 

Biomass Power: Drivers and Demand

 

Many states have taken energy independence into their own hands, not waiting for the federal government to adopt Renewable Electricity Standards (RES). According to the Pew Center on Global Climate Change, thirty states and Washington D.C. currently have RES; five additional states have renewable electricity goals. In these states, the mandated standards have become impetus for both utility companies and energy entrepreneurs to explore alternative sources of electricity.

The impetus for other states has been more economic than environmental. Some states have adopted fast-track systems to speed bioenergy facilities to production. These one-stop shops are most often created in economic development agencies. They assist project developers by giving them a single source of information and access for navigating bureaucracies quickly.

 

 

For an in-depth look at the wood bioenergy supply chain and how you can ensure an adequate and affordable feedstock supply for your bioenergy facility, read Pete Stewart's article "A Crash Course: Supply-Shed Economics," in the Summer 2009 issue of Wood Bioenergy magazine.

 

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