Forest2Fuel E-Newsletter

November/December 2010

In This Issue
BCAP Set for Implementation
On Back Burner: Boiler MACT Rule
EPA Continues with Tailoring Rule
The Tipping Point
State of PNW Industry
Running On Empty? Cellulosic Ethanol
Quick Links

 
 
Top 3 Stories from the Sept/Oct Issue



BIOMASS CROP ASSISTANCE PROGRAM
Program Set for Implementation

On December 15, the United States Department of Agriculture released all the documents necessary to kickoff the implementation of the final Biomass Crop Assistance Program Rule. The documents, which can now be found on the BCAP website, include:
  1. Forms and instructions for applying to become a qualified biomass conversion facility
  2. An eligible materials list
  3. The forms and instructions for setting up a project areas
ON THE BACK BURNER
Power Plant

 Boiler MACT Rule


The Environmental Protection Agency (EPA) recently requested an extension for implementing the proposed Boiler Maximum Achievable Control Technology (MACT) Rule, which was scheduled to go into effect on January 16, 2011. The EPA asked for the 15-month extension so that it could reconsider the rule based on comments and additional data it received that "raise questions about the agency's initial conclusions." Gina McCarthy, the EPA's assistant administrator for air and radiation, said that some of the pollution limits "were simply too tight to...be achievable."

If the District Court for the District of Columbia--the Court that ordered the EPA to set the standards as part of Sierra Club v. Lisa Jackson, Administrator, US EPA--accepts the extension, the EPA will re-propose the rule no later than June 1, 2011. Another 60-day comment period would follow, and a final rule would be released no later than April 13, 2012.

EPA PROCEEDS WITH TAILORING RULE

The EPA continues to release rules and guidance that will help state and federal permitting agencies implement the Tailoring Rule, which goes into effect January 2, 2011. The rule will require large sources of greenhouse gas emissions to adopt the best available emissions control technology (BACT) to reduce emissions. One of the biggest unknowns about the new rules continues to be the treatment of biomass. Citing insufficient information, the EPA did not outline a final action for the treatment of biomass combustion emissions for air permitting purposes in PSD and Title V Permitting Guidance for Greenhouse Gases.

The EPA appears to continue along the path of treating biomass plants in the same manner as it does fossil fuel plants, without regard for either life cycle analysis science or the negative consequences of failing to distinguish between renewable and non-renewable sources of energy.

THE TIPPING POINT:
A More Complex Look at Wood Supply Sheds

Two and a half years ago, in the summer of 2008, oil prices topped $145 per barrel. Many companies searching for ways to replace this high-risk, high-price energy source with a less expensive, renewable source of energy approached Forest2Market with requests to help them understand how wood might be a strong alternative.

Today, as the price of a barrel of oil approaches $100, we're seeing a much broader range of requests. When we first started a bioenergy practice, many misconceptions about wood basins and markets prevailed. Many contemplating entrance into bioenergy markets lacked knowledge of market dynamics, logistical constraints and logging practices. Today, that gap has closed. Few people still believe, for instance, that there are unlimited supplies of biomass available for energy production.

STATE OF PACIFIC NORTHWEST INDUSTRY

While the Pacific Northwest may not be experiencing the same number of project announcements and updates as other U.S. regions (the South in particular), that does not mean that the wood biomass based bioenergy industry in the region is static or weak. With an established wood products industry and a sustainable supply of woody biomass, the Northwest is well positioned, with some biofuel and biomass power projects in advanced stages of the permitting process and others already in the construction phase.

Between the unproven state of advanced cellulosic biofuels and volatile economic conditions, securing financing for ventures like the ZeaChem Inc. plant in Boardman, Ore. can become an insurmountable hurdle that can derail projects with even the most promising technology. Despite these odds, ZeaChem, a producer of biofuels and biochemicals, has recently met two pivotal financial objectives. The first was the finalizing of a guaranteed maximum price for the construction of the core facility through an Engineering, Procurement and Construction (EPC) agreement with an engineering firm. The second was obtaining the full funding amount necessary for constructing the core facility through receiving a $25 million U.S. DOE grant. Through reaching these targets, ZeaChem has been able to start the construction phase of the project and is currently pouring foundations. When completed in late 2011, the facility will produce 250,000 gallons per year of advanced biofuels as well as biochemicals.

RUNNING ON EMPTY?
Cellulosic Ethanol
 
The tank for cellulosic ethanol inched closer to empty at the end of November, as the EPA released its 2011 revision of the US Renewable Fuel Standards. The standards, adopted by Congress as part of the 2007 Energy Independence and Security Act (EISA), are goals not mandates.

With its 2011 modification, the EPA reduced the volume of cellulosic biofuels from 250 million gallons to 6.6 million gallons, a whopping 97 percent reduction. The overall total of renewable fuels for 2011 remained the same at 13.95 billion gallons, or 8.01 percent of all transportation fuels used domestically. Conventional corn ethanol will make up nearly 92 percent, or 12.8 billion gallons, of 2011's volume.

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 Phone: (704) 540-1440
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