Forest2Fuel E-Newsletter

September/October 2009

In This Issue
BCAP Matching Payments
USA Today Article Quotes Pete Stewart
Federal RPS and Bioenergy Demand
Cellulosic Ethanol
Forest2Market News
Quick Links

Suppliers of Pulp and Paper Companies EligibleWood Chips and Conveyor?
When the Biomass Crop Assistance Program's qualified facility list was last updated on October 19, a trend became clear. Over two dozen pulp and paper mills showed up on the list. The fact that pulp and paper companies have qualified as biomass conversion facilities may come as a surprise to those who thought the program was intended to benefit bioenergy companies and their suppliers and build a stable biomass market. The terms of the program make it clear, though, that a facility using biomass to create heat and electricity for its own operations qualifies.
Some of these companies don't burn a single wood chip in their boilers. Instead, they burn black liquor that is produced during the paper making process. Right now, they are trying to determine what percentage of their feedstock goes to making the black liquor they feed into their boilers.

Power PlantBioenergy Encourages Sustainability
Forest2Market CEO, Pete Stewart, was recently quoted in the USA Today, in a story by Traci Watson, entitled "Wood Making Comeback as Power Source." Here's an excerpt:

In 2008, wood-burning power plants were capable of generating roughly 6,700 megawatts or enough to provide power to about 6 million homes, according to the Energy Department. That includes, however, plants that supply power to wood-products factories that use waste wood to generate electricity.
Many plants now burn bark, twigs and other waste wood. If wood power grows as expected, whole trees will have to be cut down to fuel the plants, says Pete Stewart of Forest2Market, a forest-industry analysis firm. Plants have promised to use waste wood, but "as soon as they get their permit and see how much it's going to cost to do that, they change their tune," he says.
US Capitol Building
Everyone agrees that the federal renewable electricity standard in the American Clean Energy and Security bill now in Congress will, if passed, lead to dramatic increases in the number of wood-fired electricity plants. To our knowledge, however, no one has attempted to quantify what the impact of the federal standards might be for wood bioenergy.

Recently, we applied the proposed standards to data about projected electricity consumption published by the Energy Information Administration in the supplemental tables of the Annual Energy Outlook. While we had to make assumptions about the amount of the standard that will be met with wood, we think these numbers are somewhere in neighborhood of the ballpark.
Green Fuel
A recent announcement by BlueFire Ethanol Fuels that it is relocating a planned biorefinery from Riverside County, Calif. to Fulton, Miss. highlights some of the issues that potential cellulosic ethanol plants are facing. Cited as the reasons for the relocation: timing and taxes.
In 2007, BlueFire was awarded a $40 million grant from the Department of Energy (DOE) to construct the facility. The DOE's intention in awarding these grants was to fast-track development of cellulosic ethanol. Licensing for BlueFire's first plant in Lancaster, Calif. took 20 months, however. The DOE wanted the facility up and running faster than this 20-month process would allow. As a result, BlueFire began searching for other locations in states that didn't require the lengthy licensing procedure. According to Arnold Klann, President and CEO of BlueFire, "The Economic Development people in Mississippi, and in Itawamba county, welcomed us, and facilitated the project in every way." The company now expects the permitting process to be done by March of 2010, nine months after starting the process.
Pete Stewart
Peter Stewart to Speak at Cellulosic Biofuels Summit
Forest2Market's President and CEO, Pete Stewart, will speak at the Infocast's 2009 Cellulosic Biofuels Summit on November 19 at 10:30 a.m. Pete will describe how the biomass power market has helped shape the biomass supply chain, explain the impact biomass power will have on feedstock supply for cellulosic biofuels producers and provide a forecast of woody biomass demand, supply and pricing. The summit runs Nov. 16-19 at the Almas Temple Club in Washington, D.C.
Wood Chips
NAFO points to consensus within the international community and the Federal government that climate goals are unreachable without working forests
The National Alliance of Forest Owners (NAFO) voiced support for the established science on the carbon-neutrality of domestic, renewable forest biomass, and offered to work collaboratively with the Environmental Defense Fund (EDF) and other stakeholders on realizing the carbon mitigation potential of working forests in climate change policy.
David P. Tenny, President and CEO of NAFO, said, "NAFO agrees with the position of the United Nations Intergovernmental Panel on Climate Change (IPCC) that, 'In the long term, a sustainable forest management strategy aimed at maintaining or increasing forest stocks, while producing an annual sustained yield of timber, fiber or energy from the forest, will generate the greatest mitigation benefit.'  NAFO also shares the view of the EPA that there is, 'scientific consensus' that carbon dioxide emitted from burning biomass will not increase CO2 in the air if done on a sustainable basis,' a position also supported by the IPCC."
Tenny continued, "We look forward to working with EDF and others to examine how the hypothesis provided in the Serchinger, et. al. article compares with the established scientific consensus.  We agree with a host of international experts that the full suite of carbon benefits provided by working forests, including the displacement of fossil fuels by forest biomass and the reabsorbtion of emitted carbon through forest regrowth, can significantly reduce greenhouse gasses."
NAFO is an organization of private forest owners committed to promoting federal policies that protect the economic and environmental values of privately-owned forests at the national level. NAFO membership encompasses more than 75 million acres of private forestland in 47 states. 
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