BIOENERGY STRATEGY ACTION TEAM

                                        

Team Recommendation: 

Develop a forest bioenergy strategy for Minnesota.

                                       

March 2009 Action Team Progress Report

                                      

Here is the summary of the Itasca Community College Boiler project that was distributed at the Jan. 16 informational meeting.

                                        

Draft Action Plan from Nov. 3 Conference Call 

Click here to view the planning document that was drafted during the November 3 Bioenergy Strategy Action Team conference call.  Please hit the comment button below to add your input/suggestions, or email Matt.

Please provide input before November 10, which is the date that this will be ciruclated to all project participants for their review. 

Comments

[Matt Rezac]

Posted by Steve Betzler on Nov. 2

Hi Team,

I thought I’d grab a couple of moments and provide my perception of the background and components of a bioenergy strategy prior to the teleconference (at best it might help move us forward, at worst I won’t have to talk during the teleconference):

1. Filters – you remember these put forward by the Systems Change group – I suggest a few of them should inform/focus our discussion of our recommendation and action plan:

Does not require the development of new knowledge
Can be accomplished in five years (and we should have some short term goals out there in year one)
No ‘solo’ champions (we agree and own the results together)
Builds upon assets
Doesn’t require significant public investment dollars

Want to add or delete any? Do you want to use these filters as we go through the planning effort?

2. Scope – from what I’ve heard from our larger group, I think there are two components to our bioenergy Action Plan: resource and end use. I’m suggesting our action steps may fall into these two broad areas:

Resource - bioenergy depends on a competitively-priced and sustainable resource (forest materials) and related policies/practices/guidelines (Dave C. suggested a couple of these)

End Use – I’ve heard discussions of developing two primary bioenergy end uses: district heating and biofuels (liquid or gas or solid). (Sandy had some ideas, and others driven by end use)

Perhaps you have some other components of the strategy to suggest, great. As we go through the exercise, I need a bit of organization for the scope. I’d suggest we should discuss this early in our teleconference so we can organize our efforts at filling in the blanks.

3. Biofuels – I’ll share an idea for this individual component from my perspective.

I’m keen on focusing part of our actions on working w/existing paper industry customers to support the development of a new paper industry business model, built upon bioenergy. That appears to be a big step, but based upon what many of us read/hear, it may be the right strategy.

The industry is moving in that direction, they have good procurement processes for the resource, and their current business model is not sustainable for the longer term (that’s me speaking, not MP). Paper (of all types made in MN) demand is declining at various rates, pricing is holding or declining (at various rates), and profitability has been stuck (and is declining now) historically. Capacity reductions in Europe and North America will continue.

We have five major paper corporations with mills in MN: Sappi, New Page, UPM, Boise and the Sartell mill (I forget the owner’s name). At least 3 of these parent corporations have active bioenergy development efforts, some in EU and some in North America (UPM mostly in EU, New Page (Wis. for sure), and Boise (I Falls mill).

How serious is the paper industry developing the bioenergy business model? You may have some examples, and here’s one that came just last week (10/31) from TAPPI (the paper industry’s technical association). TAPPI announced the launch of a bioenergy newsletter (BTQ – Bioenergy Technologies Quarterly)stating that the newsletter will include: BTQ will contain the latest news, developments, and statistics in four key cellulosic biorefinery arenas: thermochemical, fermentation/sugar platforms, pryolysis, and the general "biomass" sector. It will focus on bioenergy and sustainable fuels activities around the world, with particular emphasis on applied technologies and operating biorefineries. All feedstock areas will be covered, with primary concentration on woody biomass and applications in the forest and paper industries. From what I can see, the industry in North America is now seriously engaged in developing the bioenergy business.

I’m suggesting that part of our effort should be to come alongside these industry efforts working to achieve bioenergy development sited in MN at one of our paper mill sites. I would look forward to discussing potential action plan elements with all of you, but will await our group’s decision on whether to include a focus upon MN mill sites as part of our strategy development.

That’s enough. I’m sure you all have ideas and suggestions, and look forward to hearing them (or reading them in advance of our teleconference).

Steve

[Matt Rezac]

Posted by Dave Chura on 11/3:

As I mentioned in an earlier email, I believe one of our recommendations/action items should be to encourage the state and other public land managers to rethink the way they sell biomass – I prefer the Cass County model. Below you will find a short summary of how the Cass County model works and how the state currently handles biomass sales.

In addition, I think we should suggest that market rates for biomass be based on a formula that recognizes moisture content and BTU value. Loggers shouldn’t receive less money for delivering a higher quality, drier product.

Biomass Sales – Two different approaches:

Cass County (summary from Land Commissioner Norm Moody) – “Since all our timber sales are sold on area estimate (lump sum) it was relatively simple to add one sentence to our auction prospectus "Biomass Is Included In The Bid". Our sale contracts do include biomass harvest guidelines. If there is money to be made on the sale of biomass it will be reflected in the bid, if there is no profit at the present time then we will have done our job promoting the utilization of biomass without creating a bureaucratic cost factor.

DNR (summary from DNR Forestry-Doug Tilma) - Biomass (tops and limbs) are sold currently as "added timber" to a typical roundwood timber sale. This occurs at any time after the logger has purchased a roundwood timber sale at public auction. Usually loggers choose to buy added timber biomass right before the timber sale start up. Our foresters use percentages of the standing roundwood volume to calculate the top and limb volumes. We require that loggers provide a check and sign the Added Timber Form before we modify the slash handling requirement of the roudwood timber sale, usually lop and scatter, and before the logger can begin hauling biomass. The current price for added timber biomass is 60 cents per 1000lbs.

We do have a small amount of roundwood timber sales that include the biomass volume on the original timber sale. On these appraisals it states very clearly that the tops and limbs are included, and no added timber process is necessary. However, a logger is charged for this biomass whether it is utilized or not in this case. Some salvage timber sales are sold this way.

We have also sold biomass from old landings, not associated with an ongoing roundwood timber harvest. In this case, we sell an Informal Timber Sale for the biomass volume, again 60 cents/1000lbs. Our appraisers use the rough dimensions of the piles to estimate volumes.

[Matt Rezac]

Posted by Jim Bowyer on 11/3:

Dave:

In my view your proposal is reasonable, and I also like the Cass County module. I also strongly agree that moisture content should be taken in to account. Just for purposes of discussion, what would the DNR say in defense of the procedure that they use?

Jim

[Matt Rezac]

Posted by Dave Chura on 11/3:

Jim-

I have asked the DNR to consider this and get back to me. My thoughts in suggesting we includes this are that it would generate a greater discussion on the issue. I was hoping that our recommendation would help spur/leverage us in organizing a working group to explore the pros/cons of the issue further.

-Dave

[Matt Rezac]

Posted by Jim Bowyer on 11/6:

Abel and all:

I have no comments or additions. This is a good summary of our discussion.

I have talked with Dave Zumeta, incidentally, about MFRC coordinating development of a comprehensive bioenergy strategy for Minnesota. He is open to this possibility. As per discussion of our committee earlier this week, we will need to find a source of funds to support this effort.

Cheers,

Jim
jimbowyer