Cost Per Acre for Sweet Sorghum Establishment in Central Florida for Ethanol Feedstock.

Agriculture

Equipment, Labor, O&M Costs:	Cost Per Acre: (initial establishment)	Cost Per Acre: (on-going operations)
Site Prep (Mowing, Disking, Dozer)	$90.00	$22.50
Spraying Herbicide	$13.50	$13.50
Fertilizer Application	$6.00	$6.00
Planting of Seed	$22.50	$22.50
Sub-Total	$132.00	$64.50
Materials Costs:
Fertilizer	$92.00	$92.00
Herbicide	$4.85	$4.85
Seed	$16.66	$16.66
Sub-Total	$113.51	$113.51
Total Base Cost (sum of above)	$245.51	$178.01
Contingencies @15%	$36.82	$26.70
Total Estimated Cost	$282.33	$204.71

An information search on commercial field production cost of planting sweet sorghum for ethanol indicates that our above cost estimate of $178.01 per acre is comparable to other cost estimates which are in the range of ~$150 per acre.

The continued production goal of Homeland Agricultural Fuels at the Bartow Ethanol facility (a nameplate capacity of 5.4 million gallons per year) is to produce ~600 gallons of ethanol per acre from sorghum (in line with what is currently achieved in Brazil using sugarcane).

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Outrage!!! (over less than a penny a gallon?)

Oil Use

In the continuing Red State versus Blue State Ideology Battles, yet another "flashpoint" has erupted over President Obama's proposal to eliminate $4 billion annually in tax deductions for oil companies. From the N.Y. Times, outrage why these tax benefits should continue given record earnings by Oil Companies. And from the Wall St. Journal, their outrage over even considering eliminating oil tax benefits.
After hours of debate and bills introduced in Congress and the countless hours of media "Talking Heads" vilifying either Obama or Corporations and Republicans as the Anti-Christ of Satan -- this topic must be pretty important -- Right?


While we are no fancy Ivy League Economist, we thought maybe we are smart enough to do some "simple math" (with the help of Google, of course). As we understand it, most of these tax benefits are allowable deductions to taxable income (like how us common folk claim a tax deduction for interest on our home loans).

According to the Wall St. Journal article, the effective tax rate for major Oil Companies in 2009 was about 25%. So the $4 billion in allowable expenses, reduced their tax bill about $1 billion (i.e., $4 billion times a 25% tax rate).

Using the wonderfulness of Google, we see that the U.S. uses about 140 billion gallons of gasoline every year. So, spreading $1 billion in taxes over the gas we use equals less than 1 cent per gallon ($1 billion divided by 140 billion gallons).

The toxic ideological talk coming from both Democrats and Republicans is just plain silly -- as keeping or eliminating the Oil Companies' tax benefits will not have any measurable change in gas prices.

Another example of how oil prices are used for political gain is how data is "cherry-picked" by members of Congress and the Media to serve one's ideology. Recently, we saw a graph on how oil prices have increased under the Obama administration -- with the objective to blame Obama's policies for high gas prices. The problem with this presentation was it was neither "fair nor balanced". The below chart is much better in objectively showing oil prices under three Administrations of Clinton, Bush (where record prices occurred), and Obama.

As we have repeatedly said over the years, our oil dependency problem is not a Red State versus Blue State issue, its an American problem that deserves much better effort than our elected members of Congress give us. America can not simply "Drill, Baby, Drill" our way out of this problem.

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What Exactly Is America's Energy Problem?

Energy Policy

With gas prices moving to $4 a gallon at the pump, we are again reminded of the words of the beloved Yogi Berra -- "This is like Deja Vu all over again". So after +30 years, why has it been so difficult to develop a National Energy Plan? A major reason is the diversions used by so many competing Ideological, Political, and Corporate Interests to create a fog of confusion to the American Public.

In this battle over public opinion, just a few simple facts could go a long way in at least identifying what America's real energy problem is -- our oil dependency with transportation:

We do not have an overall "energy crisis". We have an oil dependency problem Only 1% of U.S. oil consumption is used to generate electricity ~72% of U.S. oil consumption is for transportation fuels (primarily cars)

U.S. Energy Sources and End Uses
Since only ~1% of our total oil use is for electricity, the U.S. is already "Energy Independent" from foreign oil for power generation. For transportation, the story is totally different as oil provides ~94% of fuel source requirements, where about 50% comes from foreign oil. The overwhelming majority of oil use is for cars and light trucks, with truck freight hauling and air transportation the other two most significant uses.
The Diversion of Global Warming: So if America doesn't use much oil for electricity, why does the energy policy debate (and failed bills in Congress) focus so heavily on electricity generation from wind, solar, and nuclear power?

By looking at the above FACTS, the American Public can see that what has been framed as an "Energy Crisis", is really two distinct issues -- (1) Oil dependency for transportation, and (2) Global Warming/Climate Change through the use of fossil fuels. By combining these two issues in framing the national energy policy debate, public opinion confusion occurs resulting in a "Status-Quo" by:

Blurring Policy initiatives between electricity generation (not causing our oil problem) and fueling transportation (which is our oil problem). Unnecessarily drawing transportation policy initiatives to reduce oil use into the Global Warming controversy

Even if we put a solar panel on every roof, a wind turbine on every street corner, a new nuclear power plant in every State, and made every building energy efficient (e.g., insulation, light bulbs) -- there would be no real change in our oil dependence. These electricity policy initiatives are to either reduce CO2 and other greenhouse gas emissions, or to advance Special Interests (especially nuclear power).

Conversely, transportation policy initiatives targeted to the three primary uses of oil would be a huge step toward "Oil Independence":

Cars -- Increased Auto MPG, Ethanol, Urban Mass Transit, Electric Vehicles. Freight Hauling -- Creating a natural gas infrastructure for heavy truck hauling. Reducing Air Transportation -- High Speed Rail between major urban areas.

Making Global Warming a focal point in the national energy debate creates a diversion of negative public opinion reactions from increased taxes (carbon tax), even more federal EPA regulation, to destroying the economy and job losses (especially to China). According to a recent national Rasmussen Poll only 33% of Americans believe that Global Warming is man-made from increased levels of greenhouse gases.

But even if Global Warming is the greatest scientific hoax ever created, America still needs to develop alternative sources, uses, and greater energy efficiencies to reduce our transportation dependency problem with oil. We can not simply "Drill, Baby, Drill" our way out of this problem. Americans consume 25 percent of the world's produced oil, but our nation holds less than 3 percent of the world's proven oil reserves.

The Diversion of "Drill, Baby, Drill": To achieve the commonly used "Oil Independence" catchphrase only through drilling, the U.S. would need to develop and sustain new sources of oil production currently equal to Saudi Arabia. Is this possible? According to Energy Information Agency information, Saudi Arabia has oil reserves 14 times greater than the U.S.In addition, an inconvenient truth that "Drill, Baby, Drill" Supporters fail to ever discuss is price. Oil is an internationally priced commodity. No oil company would ever sell oil from U.S. resources less than world market prices. Another fact never discussed is that any dramatic increase in U.S. oil production above proven reserves would require developing non-conventional resources (using some very questionable environmental practices like fracking). The reason that tar sands and shale deposits are not widely used is their very high extraction costs, making these resources economically viable only when oil prices are high. So while increasing domestic oil production in an environmentally safe way will have many benefits, reducing prices at the gas pump will not be one of them.

The Diversion that Government Shouldn't Choose Energy Winners and Losers: This often heard statement argues that a national energy policy should be based on free market capitalism, not big-government centralized control of providing incentives to "specific" technologies. However, in "Walking the Talk" this principle is only applied to renewable/alternative energy. A recent example of this hypocrisy is Republican members of Congress introducing legislation to keep federal loan guarantees for nuclear power but to eliminate the same guarantees for renewable energy projects. Federal Government intervention into free market capitalism for energy has occurred for decades, including:

Price-Anderson Nuclear Industries Indemnity Act: As the World has seen recently in Japan, nuclear accidents can be catastrophic with an economic toll in the hundreds of billion of dollars. In order to remove this economic impediment to stimulate nuclear power in the U.S., Congress enacted the Price-Anderson Act that currently limits the individual liability of a nuclear plant's owner to $300 million.

Oil Pollution Act: In the 1990 OPA, Congress limited an oil company's liability to pay for damages to fishermen, property owners and other individuals and businesses, governments (via lost tax revenue) and natural resources to $75 million per incident.

Oil and Natural Gas Federal Subsidies: The total amount of federal subsidies for fossil fuels is difficult to quantify. However, President Obama has proposed eliminating $4 billion a year in more than a half-dozen tax exemptions for oil companies. The tax breaks have a long history -- the so-called percentage depletion allowance for wells dates back to the 1920's.

Where Do We Go From Here?: America's Energy Policy shouldn't be a Red State versus Blue State issue -- it must be an American issue. From our viewpoint, a national energy policy is being held hostage by two major factions: (1) A Democratic Party overly driven by Environmental Ideology -- especially Climate Change, and (2) A Republican Party driven too much by Corporation Special Interests. Hopefully, the American Public will start to see through the myriad of diversions and demand real change, including:

Environmentally Safe Drilling: After the BP Gulf spill, is the solution really just the need for more Government oversight and regulation? We agree with Ron Paul that the answer isn't more regulation. Its just letting the market work by eliminating the $75 million liability cap from the Oil Pollution Act.

"When a business's liability is limited by law, then they make riskier decisions than full liability would allow. For instance, in this case, BP opted for single wall oil pipe casing, as double-wall was "too expensive." Of course, if full liability is incurred, then the definition of what is "too expensive" changes dramatically." -- Rep. Ron Paul.

It's Transportation, Stupid!: If 72% of America's oil use is for transportation (where about half comes from foreign oil), why are we talking about anything other than transportation in a national energy policy debate? Policy initiatives promoting "Energy Independence" through electricity generation is a Red Herring diversion for two reasons: (1) Electricity generation is not causing our oil dependency problem (only 1% of oil is used for electric power); (2) The argument for "electrification" is putting the cart (electricity supply) before the horse (electricity demand). Only after energy demand initiatives (e.g., electric vehicles, high speed rail, etc.) that will achieve significant fuel switching from oil to electricity should new power plants be on the table for discussion.

In solving America's oil problem of course we need to develop new oil resources in an environmentally conscious way. But we also need more, much more by developing alternative sources (ethanol), uses (electric cars), and greater energy efficiencies (increased car mileage).

Without an intense focus on transportation, America really doesn't have a Plan and as Yogi also said, "If you don't know where you are going, you will end up somewhere else."

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Increasing Awareness and Usage of Alternative Fuel & Energy Sources

This site exists to showcase Alabama renewable energy projects and to provide you with alternative energy information so that you can lower your expenses on fuel and ultimately help decrease our country's dependency on foreign oil.

For a more detailed demonstration view our three part biodiesel presentation.

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Core American Values and Oil Use

Oil Use

The N.Y. Times has an insightful story of how Renewable Energy and Energy Efficiency is gaining a solid foothold in Kansas, even through 52% of Kansans are highly skeptical on the science of Climate Change/Global Warming (and downright dislike Al Gore types and Big Government actions to regulate greenhouse gases). In America's very politically conservative Heartland, progress is apparently being made by addressing energy issues in terms of "Core American Values" like patriotism, ethics, saving money, spiritual convictions, economic development and job creation at local levels -- but just don't bring up the divisive subject of Global Warming.

In a N.Y. Times article on training returning Iraq and Afghanistan War Veterans to become farmers (which can include growing energy crops for biofuels like ethanol), we especially liked the quote of an ex-Marine: "It's a national security issue. The more responsibly we use water and energy, the greater it is for our country."

The below chart reflects the top 5 importers of crude into the U.S., 9 years after we were attacked on 9/11. Clearly, historical and current events in Saudi Arabia, Venezuela, and Nigeria don't reflect America's "Core Values".
One place where "Core Values" should especially be discussed is in Florida. According to U.S. Department of Energy data, Florida uses ~41% of the total oil consumed in the mainland U.S. to generate electricity. This is no one-year fluke, but has been going on for decades in Florida.

So, the next time you fill up your tank with gas or especially in Florida, flip on a light switch -- just think about where your dollars are going.

Supporting Terrorism Isn't an American Core Value.	Oil dependence is among the most dangerous threats to U.S. national security. For years, senior military and intelligence officials have warned that too much of U.S. oil payments eventually trickle down to terrorists, who use it to buy the weapons used against our troops in Afghanistan and Iraq.

Bribery Isn't an American Core Value. Nigerian authorities recently made an out of court settlement on criminal bribery charges against Halliburton and former CEO Dick Cheney. The Settlement is the latest fallout of a U.S. federal court conviction of Halliburton and its subsidiary of a bribery scheme in Nigeria -- with a record $579 million fine.

Hurting our Economy Isn't an American Core Value.

Environmental Destruction Isn't an American Core Value. While the BP oil spill in the Gulf of Mexico made world headlines in 2010 -- this type of destruction has been going on in Nigeria for decades. Look at some of these pictures. The issue isn't about some liberal, latte sipping Treehuggers wanting to protect "Mother Earth" -- its about things like clean drinking water for innocent children.

Killing Christians an Isn't an American Core Value.
Especially at Christmas, news stories of Christians being murdered in the Middle East and Africa were horrifying. But this isn't anything new in places like oil rich Nigeria or Iraq. Americans and especially American Christians need to understand the Islamic law which governments in the Middle East impose -- where converting to Christianity or any Christian missionary conversion efforts are punishable by death (e.g., Saudi Arabia, Afghanistan)

Radical Religion Isn't an American Core Value. All Americans understand the tragedy when Religion is hijacked in the Middle East to achieve a political agenda. But what about when this occurs in the U.S.? In the current Green Dragon Campaign Environmentalism is being demonized as the work of Satan to a target audience of conservative Christians. But, you're not going to believe where a major source of funding is coming from to pay for this campaign -- its gulp, Exxon/Mobil.

A New Mind-set
In thinking and talking about Energy, Americans (and especially our politicians) need to have a new mind-set. We need to move away from the pure Red State/Blue State, Conservative versus Liberal Ideologies, and always include "Core Values" in a civil national discussion which includes all resources of energy from "Drill, Baby, Drill", Renewable Energy, Natural Gas, Nuclear, and Coal.

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Sweet Sorghum (for Ethanol) Harvesting Trials in Florida Using John Deere 3520 Cane Harvester

Agriculture

As much of the U.S. digs out from freezing weather and snowstorms, Florida's extended growing season allows Farmers to still be growing and harvesting crops like sweet sorghum for ethanol feedstock. A late fall/early winter crop rotation for sorghum takes a little longer to mature (approximately 105 to 110 days from planting) compared to warmer months (where plant maturity occurs in ~90 days) -- due to the reduced amount of daylight hours. Also, while the sorghum's brix (sugar content) appears to be consistent at ~18 throughout all yearly rotations, yields during the fall/winter rotation can be ~40% less than warm weather months primarily because of reduced rainfall (as we do not field irrigate our sorghum). Ratoon yields of our sorghum is extremely poor, as we are using commercial hybrids.

Because of this extended growing season, it is believed that the typical agriculture plan for growing sweet sorghum can be three (3) crop rotations per year on the same acreage (allowing for cyclical soil resting/building to reduce plant disease/pests by rotating in crops like soil nitrogen building white clover legumes).

In early December we conducted sweet sorghum harvesting trials using the newly developed John Deere 3520 cane harvester (developed primarily for the sugar cane industry in South Florida, Louisiana, and Brazil). The capital cost of the Deere 3520 is ~$310,000 with the ability to harvest between 8 and 10 acres per hour (or around +100 acres per day).

The first two pictures below show the Deere 3520 and its total 9 foot width, and 3 foot cutting area dimensions:





The next two pictures shows the sorghum product of the Deere 3520 Harvester -- a 4 to 6 inch billet which is blown into a trailing hay wagon.





The Deere 3520 provides for flexibility in field row planting configurations (18, 24, 36 inch centers) allowing for single pass, two row and even 3 row cutting. The below schematic illustrates the row planting configuration that we use.

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Marketing Renewable Energy Crops by Farmers for Electricity Generation

Biomass Incentives

Today we are trying something new -- asking for feedback from our Readers on a communication problem we are having in marketing "closed loop" biomass energy crops for electricity generation.

A critical point in our marketing effort for energy crops is the Section 45 Federal Tax Credit which currently provides a 2.2 cents/kWh tax credit to electricity generation companies that use "closed loop" biomass fuel. An example of "closed loop" is fast growing trees that would exclusively be used as fuel feedstock. The Tax Credit is available for 10 years.

An important concept that we've been trying (to date unsuccessfully) to explain is the dollar benefit per green ton of biomass fuel purchased. This is important marketing argument, as it plays a major factor in what an electricity generation company will pay farmers for a crop. In Table 1, we present information that the value of the Section 45 tax credit is the equivalent of reducing fuel cost by $25.38 per green ton:

Table 1Converting the Tax Credit to an Equivalent Fuel Cost Savings


In the above illustration, the argument is developed that if a company paid $25.38 per green ton for closed loop biomass fuel, that the effective cost (after the tax benefit) of the fuel would be zero. If less than $25.38 was paid to a farmer, the effective fuel cost would be negative.

While the math of Table 1 may at first seem complex (e.g., using assumptions like the heat rate energy efficiency of a power plant), the question we ark asking input from our Readers is relatively simple. The issue is whether there is a need for a gross-up factor in determining the equivalent impact of the tax credit on fuel costs.

For example, if the tax benefit of deducting interest (reduction of taxable income) on a homeloan was changed to a tax credit (reducing taxes dollar for dollar for the interest expense), wouldn't a homeowner view this as increased value?

Table 2 tries to explain this difference (where in the illustration we use a tax rate of 50%, only to simplify the math to our audience).

For Company A, fuel expenses are $100 and they take a $10 Section 45 tax credit. For Company C, fuel expenses have been reduced by $20 (i.e., the $10 tax credit divided by 1 minus the tax rate), but do not have a tax credit. The cash net income of Company A and B is the same.

So, reducing fuel expenses by $20 was the same as taking a $10 Tax Credit.

Table 2Equivalent of a Tax Credit Versus an Expense Reduction

(2) Fuel expenses only reduced $10 (value of tax credit)
(3) Fuel expenses reduced by $20 ($10 credit divided by 1 minus the tax rate)

Can our Readers help us in understanding where we might be going wrong in explaining this concept in our marketing efforts?

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Energy Crop Agriculture -- Notes from the Field.

Agriculture

Pigweed Control: An issue that continues to plague farmers here in Florida and the Southeast is glyphosate resistant weeds, specifically Palmer Amaranth. A technical service representative for Syngenta, suggest farmers apply a fall weed control treatment now in order to get a head start for next year’s crop. We've had decent control using Dual Magnum

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Dry Weather: With little rainfall in recent weeks, meteorologists from the South Florida Water Management District (SFWMD) reported that last month was the driest October in South Florida since record keeping began in 1932. The low monthly rainfall total, coupled with seasonal forecasts of exceptionally dry conditions, underscores the risks of farming, especially on non-irrigated lands where our sweet sorghum yields are all over the map -- ~40 green tons per acre per harvest, to ~20 green tons per acre per harvest.

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Ergot in Sweet Sorghum: A major misconception of Farmers and non-Farmers (especially here in the Southeast and Florida) is that growing sweet sorghum for ethanol feedstock will be a "piece of cake". This belief is based primarily on the success of growing forage sorghum for decades. But as more field experience develops, farmers will be shocked that forage and sweet sorghum are very different crops. One very serious problem is a plant disease called ergot, which attacks the unfertilized ovaries in the sorghum heads. In our field experience, we've seen Brix (sugar content) go from ~18 in healthy plants to 0 in just 5 days. Ergot can hit with either high humidity, cooler temperatures, or a combination of the two. We are working with seed producers, farming equipment companies (i.e., John Deere), and applying weed control to near-by Johnsongrass (and also Cogongrass) areas to address this devastating problem.

Soil Micro-Nutrients: This is a good lesson in never really trusting anybody for advice unless they have "dirt underneath their fingernails" -- which are typically the "Old Timers". In walking our fields with typically ~15 foot height sorghum, we always saw what we describe as "crop circles" -- circular or oblong shaped areas where the sorghum was dwarf of a couple of feet tall. After extensive soil testing, we added a micro-nutrient pack to our fertilizer (N) regiment, but the problem still remained. Talking to an "Old Timer" who had worked similar fields, we applied a foliar manganese application -- problem solved!

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Phosphate Mining and Climate Change

Land Use and Mining

While today's blog treads into the subject of phosphate mining in central Florida, the bigger picture involves all surface mining (e.g., mountain top removal for coal), and an even bigger picture of large land use development anywhere on our Planet. The following discussion is neither pro or anti mining or land development, but raises a question "Don't we need to talk about something?" -- where the "Something" is Climate Change.

In arguments (and legal fights) over mining or land development, the major environmental issues usually involve topics of water (pollution, use) and habitat loss, with wetlands being the focal point. Never (at least here in Florida) have we seen the subject of Climate Change even enter into the discussion of land use development (like mining).

According to the U.S. Army Corps of Engineers, phosphate mining has occurred on 1.32 million acres (~2,100 square miles) in central Florida. Additional mining is being requested for ~100,000 acres. And here is the problem -- in mining 1.42 million acres, has this resulted in a significant Climate Change event? Nobody really knows, because the question has never been asked.

In phosphate mining, has the greenhouse gas mass balance (i.e., the release of primarily CO2 through land clearing and soil disturbance and the carbon capture post-mining practices of land reclamation) been: (1) relatively carbon cycle neutral, or (2) resulted in large carbon deficits?

One science based scientific citation that can be used in an initial discussion is work performed by Kimble, Heath, Birdsey, and Lal (The Potential of U.S. Forests Soils to Sequester Carbon and Mitigate the Greenhouse Gas Effect). The below table presents an estimate for total carbon capture (above and below ground) associated with forests which would be representative of pre-mined phosphate lands.

Type of Forest (Pre-Mining):	C in Biomass (t/ha)	C in Dead Mass (t/ha)1	Soil Organic C (1-m depth)(t/ha)2	Total Forest C (t/ha)
Oak-Gum-Cypress	81.1	26.5	152.2	259.7

(1) Dead mass includes standing dead trees, down dread trees, and forest floor.
(2) Soil includes both mineral soil and organic soils (i.e., histosols).

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Estimating the carbon released from mining 1.42 million acres (from the above proxy estimates from Kimble, et al.) results in ~548 million tons of CO2 released. Putting 548 million tons of CO2 into perspective -- would be the approximate CO2 release equivalents of:

-- Operating a coal power plant like TECO's Polk Power Station for 515 years.

-- Operating all coal fired power plants in Florida for ~8 years.

-- Operating all power plants in Florida (coal, oil, gas) for ~4 years.

-- Approximately 3 years of total volcanic activity on the Earth.

Of course, the above illustrations only reflect one part of the total greenhouse gas mass balance -- the initial emissions from land clearing and soil disturbance. According to landmark research on phosphate mined soils performed by the U.S. Department of Energy's Oak Ridge National Lab, carbon capture/sequestration on heavily forested post-mined lands and/or wetlands can be dramatic. However for lands reclaimed to pasture, the majority of the sequestered carbon is soon converted back to CO2 through respiration (Murray, Economics of Forest Carbon Sequestration, 2003).

In conclusion, it is believed that the topic of Climate Change needs to be on the "Table" whenever large land use applications (such as mining) are being decided. Clearly it is impossible to develop any type of "Actions" if the magnitude of the Climate Change concern is simply not known -- where in our opinion, the best actions are always voluntary and market based solutions.

As Mike Myers used to say on Saturday Night Live!, "feel free to discuss amongst yourselves."

(A draft of the letter to the U.S. Army Corps of Engineers is available for comments).

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Biomass Energy & Carbon Accounting (Part 3)

Sustainability

As we've discussed in prior blog posts, the EPA in its proposed "Tailoring Rules" does not consider a mass balance (inputs and outputs) approach to greenhouse gases -- only focusing on air emissions and not the source of the fuel feedstock (biomass versus fossil fuels).

It is unclear whether the EPA will change its earlier decision not to exempt biomass from its recently adopted “Tailoring Rules” which prescribe Clean Air Act permitting requirements for GHG emission sources beginning January 2, 2010.  As written, the “Tailoring Rules” treat emissions from burning biomass the same as emissions from burning coal or other fossil fuels.  Congress is expected to vote on proposals to block or delay these rules and litigation opposing the rules is currently underway.  But some states may very well find themselves scrambling to revise their State Implementation Plans (“SIPs”).  In September, the EPA released a proposed determination that 13 states’ SIPs are “substantially inadequate” and a second rule that allows the EPA to assume responsibility for the permitting of GHG emissions for those states that do not timely submit compliant SIPs.

The below data of stoker and fluid bed biomass energy technology systems comes from Babcock Power Report, while gasification technology data for carbon capture comes from previously discussed NREL (50%)and our own estimate (30%).


While we join others in the Biomass Energy Industry to disagree with the EPA proposed position -- if these rules are implemented, is there a fall-back argument to "carbon cycle neutrality" for biomass power (electricity, combined heat and power)?

The answer is yes, through the combination of (1) gasification technology; (2) biochar; and (3) below ground carbon sequestration of growing dedicated energy crops:

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Biomass Energy & Carbon Accounting (Part 2)

Sustainability

In our last post on "Biomass Energy & Carbon Accounting" we cited an engineering science reference from the U.S. Department of Energy's National Energy Technology Lab (NETL) that ~50% of carbon emissions can be captured through oxygen starved biomass gasification technology.

In our extensive experience with biomass gasification, we feel uncomfortable with the NETL estimate -- concerned that the carbon capture percentage may be too high. Our "educated guess" is the percentage would be closer to a +30% carbon capture for commercially available biomass gasifiers (i.e., up-draft gasifier) -- which is reflected in below amended chart.



While we could be wrong (overly conservative) so could NETL.

The problem in getting a handle on the issue of carbon capture is the lack of commercially operating biomass gasifiers (providing much needed engineering data). On the topic of carbon capture (biochar), the majority of engineering science work has been either at lab scale or with small gasifiers (i.e., stoves). It should be remembered that while biochar has always been a waste product of biomass gasification, only recently has it become a critical issue. Critical in the sense of the very viability of biomass power, recognizing current questions on carbon neutrality (i.e., the EPA's Tailoring Rule").

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Biomass Energy & Carbon Accounting (Part 1)

Sustainability

During the past year, biomass energy has come under the microscope with numerous environmental groups questioning the carbon cycle neutrality argument and also the EPA's "Tailoring Rule". Our understanding of these concerns center on when the accounting cycle should start (called a carbon debt). The below chart illustrates the concept of carbon debt using the logarithm function of tree growth:


Should the accounting period begin as the biomass source is originally created, or should the accounting period begin at harvest and fuel use? For example, there is a big difference between (1) harvesting an old growth forest versus (2) growing energy crop trees on marginal lands that only had weeds before tree planting.

While the topic of life-cycle carbon accounting is complex, two key carbon capture components that we rarely see in this discussion are (1) below ground carbon sequestration and greenhouse gas emissions (primarily, NOx); (2) biochar created through biomass gasification technology.

Through our field work in Florida (i.e., growing energy crop trees on marginal mined lands) our collaborative work with the University of Florida and Oak Ridge National Lab documented that in accumulating total carbon:
(A.) 62% was contained above ground (harvestable trees) and,
(B.) 38% was below ground (i.e., root systems).

Also, according to the U.S. Department of Energy's NETL, approximately 50% of the biomass harvested feedstock (i.e., the 62%) could be captured in biochar (31% of the total biomass) through gasification pyrolysis.

Clearly, biochar has the potential to be a "major player" in carbon cycle accounting ranging from the gasification process to its ability to capture NOx emissions from soils. The problem is that so little empirical data exists outside of laboratory study (the need for commercial scale field documentation).

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Notes:
(1) Per UF/ORNL field measurements of eucalyptus tree plantation (62% + 38% = 100% total tree mass).
(2) Per NETL estimates of 50% biochar carbon capture through gasification.
(3) Assumes biogas would be scrubbed downstream from the gasifier through a Wet ESP (electrostatic precipitator), emitting almost no greenhouse gas nitrous oxide emissions (and also no sulfur emissions).
(4) Lehmann (Cornell) research that biochar may capture ~80% of NOx and ~100% of methane (CH4).
(5) Current Proxy of ~10% using Life Cycle Assessment developed by University of Michigan, SUNY (Heller, Keoleian, Volk, July, 2002)

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Biochar -- Gasification Temperature Formation

Biochar

From an engineering perspective, the most critical aspect in creating biochar is to maximize surface area (pore space) with an objective of trying to create surface areas approaching activated charcoal to maximize the capture/sequester of Greenhouse gases in soils (CO2, methane, nitrous oxide).
In order to achieve high surface areas the key engineering parameter of oxygen starved biomass gasification is temperature formation, where the optimal range is approximately 500 to 700 degrees C (~900 to 1,300 F).

While quite a bit of research is on-going to create biochar with small scale gasifiers (e.g., laboratory, stove, etc.), our research and demonstration effort is focused on large-scale, commercial up-draft gasifiers where the biochar is a waste product in creating biogas (for end-use applications such as product drying/heating, electricity, steam).

In our approach, we extract biochar (just above the incandescent zone) on a semi-continuous basis using nitrogen to �quench and cool� the biochar removed/recovered from the bed cooled to room-temperature for storage and eventual soils application. The recovery of biochar from the gasifier will not significantly impact the gasifier continuous operation of biogas generation for power/heat/steam. It is also important to note that our approach to "quench and cool" in a nitrogen environment is also attempting to address the extremely high carbon/nitrogen ratio of biochar.

On a final blog note, recent published studies suggest that biochar has the potential of sequestering ~12 percent of global CO2 emissions.

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Biomass Energy Agriculture Sustainability - Focus on Water Quality.

Sustainability

When we hear the term "sustainability" for biomass energy feedstocks being discussed or debated, often we really don't know what "specifics" are being proposed. Most of the time it just seems that (1) Project developers' concept of "green" only involves making money; (2) the agenda of many environmental groups (like the Sierra Club) is to kill projects and not find solutions; (3) Legislators don't have a clue on science.

In our collaborative work with the University of Florida and industry scientists, "Advanced Cropping Systems" are being developed, tested, and implemented integrating disciplines of (1) soil science; (2) plant science, (3) engineering science through biomass gasification to create biochar (a stable component of soil organic carbon), and (4) water science.

In today's blog, we will give a brief "science based" discussion on how growing energy crops can integrate into improving and sustaining water quality through a 3 Zone nutrient capture approach.


For example, the concept schematic below illustrates the activity occurring in the yellow Soil Filtration Zone (above). Here, water is filtered through alternating aerobic and anaerobic conditions. This is because certain chemical constituents like N and large carbon-chain molecules such as organic chemicals are broken down under anaerobic conditions initially (nitrate and nitrite are blown off as elemental N in gaseous state; thus they don�t continue in a dissolved state to impact downstream waters). Large carbon-chain molecules are broken down in anaerobic conditions enabling aerobic bacteria to further decompose them. Thus, by running stormwater runoff with P from ag lands through aerobic and anaerobic cycles, more and more of the P and other nutrients are stripped out of the water with each cycle.

In our approach to sustainable agriculture, wood chips, peat and biochar are used to provide the growing media for the bacteria and soil fungi that will aid in the supporting the decomposition and adsorption of constituents. Thus, the system contains the constituents on-site so they don�t leave the biofilter and enter downstream water bodies.

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Biomass Co-Firing in Coal Power Plants

Coal Use

Renewable Energy World has a current article on the benefits of biomass co-firing. While we agree that co-firing makes economic and environmental sense -- In our opinion any significant use of co-firing will not happen because of institutional barriers that exist within Federal and State government and regulation of the electric utility industry.

Problem 1: The Section 45 Tax Credit allows for a tax credit of 1.5� per kWh for the generation of electricity from a qualified biomass fuel. But the U.S. Treasury has a guideline called the 80/20 Rule which effectively eliminates qualifying for the Tax Credit under biomass co-firing. For example, if a current coal power plant had a book value of $1 billion, biomass co-firing capital expenditures of $4 billion would be necessary to qualify the retrofitted power plant under the 80/20 Rule.

Problem 2: Currently, there is no economic cost associated with carbon emissions. Why should an electric utility incur capital costs to address an environmental issue which has no economic cost associated with it?

Problem 3: Biomass co-firing is simply fuel switching and does not involve new generation. Electric utilities make money by including capital investments (like new nuclear power plants) in their rate base earning a return.

Problem 4: Electric utilities are allowed to recover fuel costs (such as the cost of high priced oil) through a "fuel clause recovery" component of customer billing.

Problem 5: Coal ash is sold as an amendment for concrete. It has never been resolved that ash containing ANY percentage of biomass would be acceptable.

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Is the Sierra Club a Friend or Foe of Biomass Energy?

Energy Policy

This week, President Obama announced a plan to reverse a ban on oil drilling (including much of Florida) with objectives to decrease foreign oil dependence and to create new jobs. But what especially caught our attention was the reaction of environmental groups -- especially the Sierra Club.



In an opposition rally to expand off shore oil and natural gas drilling, a representative of the Florida Sierra Club refuted the job creation argument of the Obama Administration stating, "For every one oil industry job, from biomass, you would get 9 jobs per megawatt hour. And by the way, Florida is known as the Saudi Arabia of biomass," said Cathy Harrelson of the Suncoast Sierra Club."

But something does not make sense here.

Just a week earlier, the Sierra Club led the opposition in killing a proposal to build a new generation biomass energy plant (a joint venture with Duke Energy) in Gretna, Florida.

This is yet one more example of how the environmental community is dysfunctional on the subject of biomass energy and reminds us of a cartoon we once saw stating "We have seen the enemy, and he is us!"

We are also seeing carbon emission standards being advocated by environmental groups like the Sierra Club of 250 pounds of carbon per Mwh for new biomass electricity power plants -- where apparently, the carbon cycle neutral argument of biomass energy is being completely disavowed.

In doing the math, this 250 pounds standard is impossible to meet -- without the carbon cycle neutral argument. For example, an ultimate chemical analysis of biomass reflects about 9,000 btus per pound (dry basis), where approximately 50% is carbon.

An example of a new, high efficiency biomass generation technology (i.e., gasification) would have a heat rate of around 9,000 btus per kWh. Thus, using the very best technology available would result in carbon emissions of ~500 pounds per Mwh -- about double of the 250 pounds standard being advocated by environmental groups such as the Sierra Club.

Maybe we should initiate a "Bad Guy of the Year Award" -- where the leading candidate for this year's award would currently be the Sierra Club.

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Oil Use for Electricity Generation in Florida

Oil Use

Today we are referencing data from the Department of Energy on oil use in the U.S. As the below charts show, about two-thirds of all electric utility generation from oil use occurs in two states -- Florida and Hawaii.

While Hawaii's oil dependence can be understood (e.g., natural resources, transportation limitations), Florida's dependence is both confusing and troublesome. Another way of stating this is that Florida's electric utilities use more oil to generate electricity than the total used in all other continental States.

U.S. Oil Use for Electric Utility Generation in 2008

U.S. Oil Use for Electric Utility Generation in 2009

Now, Florida's dependence on oil (from not exactly friendly places like Venezuela) for electricity generation is certainly no anomaly, as this occurrence has been going on for decades -- leading us to ask, what in the world are Florida's electric utilities and lawmakers thinking about?

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CO2 Benefits of Biomass Energy Vs. Solar and Wind Energy (Part 3)

Energy Policy

In Part 1 and Part 2 of this blog series on the benefits of biomass energy, we made three key points:

That biomass energy is carbon cycle neutral, just like solar and/or wind energy.

Biomass energy can be carbon cycle negative when it is developed in an environmentally sustainable way (e.g., soil building carbon sequestration, incorporating biochar).

Biomass energy is much more likely (especially in the Southeast and Midwest U.S.) to displace base load coal-fired electricity generation than either wind or solar power.

The reason for this is something called an "availability factor" (i.e., the number of hours a generating unit runs), where typically, solar and wind resources have low availability factors which are usually associated with natural gas or oil peaking and intermediate dispatch units.

Availability or Capacity Factors by Technology

This last point is important as coal fired power plants in the U.S. are responsible for 82% of CO2 emissions from total electricity generation.

Today, we will summarize these 3 key points by

Building on the previously cited EPRI paper on the avoided CO2 intensity of fossil fuel technology options (oil, natural gas, coal).

Incorporating empirical research on soil carbon sequestration from growing energy crops.

From carbon sequestration work performed with the University of Florida on fast growing trees, we found that a volume of below ground biomass equal to ~60% of the above ground mass was being created. However, we must note that our findings of terrestrial carbon sequestration are significantly higher than found in other research. Because of this, we include carbon sequestration rates derived from a U.S. Department of Energy study performed in North Carolina in the table below -- providing a range of .24 (DOE estimate) to .64 (our research findings estimate) tons per Mwh.

CO2 Displacement by Technology (ton/Mwh)

CO2 Displacement by Technology (ton/Mwh)

Conclusion: When biomass energy is developed in an environmentally sustainable way as base load power generation (displacing coal use), the CO2 benefits can be ~4 times greater than solar power displacing natural gas peaking technology.

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CO2 Benefits of Biomass Energy Vs. Solar and Wind Energy (Part 2)

Sustainability

In Part 1 of this series, we discussed the importance of viewing renewable energy technology options (wind, solar, geothermal, biomass) on a "big picture" (macro) basis using the integrated resource grid. The key concept under this view is that not all renewable energy options have the same impact in displacing fossil fuel use for electricity generation:

Typically, solar power and many wind power resources are considered "peaking units", which displace natural gas and oil fired generation.

Conversely, biomass and geothermal resources are often dispatched as base load units which would typically (especially in the Southeastern and Mid-Western U.S.) displace coal fired generation.

Today in Part 2 of our series, we will address the question: Is Biomass Energy Really Carbon Cycle Neutral? Hopefully, some pictures of our sustainable biomass energy efforts here in Florida will be better than a thousand words in answering this question.

The first picture below reflects what our land sources looked like before planting energy crops -- unused mining lands dominated by an invasive species plant of cogongrass.

The next two pictures reflect what our sites look like 1 to 2 years after planting energy crops (e.g., fast growing trees, sorghum):

As the above pictures reflect, our sustainable energy crop efforts CREATED a carbon bank that we then used for energy production.

In addition, when biomass energy resources are developed in a environmentally responsible and sustainable way -- biomass energy can exceed the CO2 benefits of other renewable energy sources and be "Carbon Cycle Negative":

Sequestering carbon below ground through energy crop root systems.

Incorporating a stable component of carbon (biochar, a waste product of biomass gasification) into soils.

Incorporating advanced recycling and composting methods for soil building using crop waste streams (e.g., sorghum bagasse).

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CO2 Benefits of Biomass Energy Vs. Solar and Wind Energy (Part 1)

Coal Use

In understanding the benefits of all renewable energy resource options, its important to understand the concept of the integrated resource grid. Under this concept, the renewable technology is viewed not as a stand-alone resource (i.e., a micro view) but how the resource is dispatched on the electricity grid (i.e., a macro view).

While there are some differences throughout the U.S., typically on the integrated grids of all resources (coal, nuclear, natural gas, oil, and renewables), biomass and geothermal units are often dispatched as base load and displace coal fired generation. Wind and solar units are generally dispatched as peaking units and displace natural gas.

The Electric Power Research Institute has an excellent technical paper explaining why CO2 emissions associated with coal-fired generation are significantly higher than the use of natural gas. EPRI's comparison basis is called the "carbon intensity" ratio and reflects:

The higher carbon content of coal versus natural gas and oil, and

The lower energy efficiency of existing coal power plants versus generation technologies that use natural gas (e.g., combined cycle).

Fuel Effect on Fossil Carbon Intensity

Technology Effect on Fossil Carbon Intensity

The efficiency of power plant technology is measured by the unit's heat rate (i.e., the amount of Btu's required to produce 1 kWh of electricity). For example, the higher a unit's heat rate, the lower its efficiency will be. Conversely, the lower a unit's heat rate, the higher its efficiency (thus using less fossil fuel and producing less air emissions of CO2, NOx, and SO2 to generate 1 kWh of electricity).

As the above EPRI data reflects, when biomass energy displaces coal use (e.g., such as in biomass co-firing at an existing coal unit, or in a State like Kentucky where 87% of electricity generation is from coal) the CO2 reduction benefits can be almost twice as great than with a solar or wind unit that displaces a natural gas generating unit's dispatch on the grid.

For more information on this topic, you can go to our Quick Facts on Biomass Energy.

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Google Friend Connect Webpage

Networking

The Biomass Energy Crop and Biomass Power Working Group has created a Google Friend Connect Web-page at:


While we will be adding more gadgets in the future, we would like everyone to use the "comments option" and let us know what specific types of stories (e.g., engineering, agriculture, environment, energy policy, etc.) you would like to see more of.

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Biomass Energy Is a Whole Lot More Than Just About Global Warming.

Sustainability

This past week the EPA issued notification that it is reviewing
water quality standards in Florida. This issue of water quality and management brings up a key agricultural talking point of biomass energy and energy crops that's not discussed in the main stream media.

With Biomass Energy, a key focal point in the Media will always be Global Warming -- we understand this reality. However, the story of biomass energy is much more than just greenhouse gas emissions. The complete story includes what we call the catalytic pro-active environmental impacts in developing biomass energy resources involving "best management carbon management" in agriculture.


Through our work with the U.S. Department of Energy's Oak Ridge National Lab (growing energy crops on marginal lands from phosphate mining), we achieved a dramatic increase in soil organic carbon (SOC) in the soils.

Soil Carbon Percentages Found Before &
2.5 Years After Energy Crop Planting
But our story doesn't just end with carbon sequestration, rather it is just the beginning of pro-active environmental benefits that can occur by implementing carbon management in agriculture which include:

The nature of soil carbon having multiple charges (+ and -), allowing for the "capture" of cations and especially anions of phosphorus and nitrogen that impact water quality (e.g., nutrient laden water run-off into lakes and streams).

The ability of soil carbon to hold and create "pathways" for increased hydrology in soils.

The ability of soil carbon to increase soil micro-organisms, free oxygen, and anion holding capacity (i.e., nitrogen)-- reducing the need for fertilizer inputs for crops.

The ability of Energy Crops to be an effective strategy in reducing/eliminating invasive species of plants (land and hydra-flora).

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Pricing Green Electricity -- Feed in Tariffs

Energy Policy

The basis of today's blog is an article by Ronald Bailey in Reason Magazine on Renewable Energy Feed-In Tariffs. Go to: http://reason.com/archives/2010/01/26/overpaying-for-green#commentcontainer

From the article: "Green power advocates in the United States have started pushing for a European-style subsidy scheme in which homeowners or businesses that install solar panels or windmills can sell their excess power back to the grid at inflated prices. Utilities are required by the state to pay above-market rates for this environmentally-friendly power. However, a recent report by the independent German economics think tank, RWI, noted that the solar electricity feed-in tariff of 59 cents per kilowatt-hour in 2009 is more than eight times higher than the wholesale electricity price"

It is this type of journalism that one typically finds in the main stream print and TV media that quite frankly, drives us up the wall. In this type of reporting, both sides of an issue are usually being disingenuous (whether it be Republicans Vs. Democrats, Red State Vs. Blue State, the radial Environmentalists Vs. the Drill Baby Drill crowd).

In the media typically found today, Journalists most often start with an "IDEOLOGY" and then cherry picks data to prove their case. Let's review how Mr. Bailey manipulates data (cooking the books) to prove his ideology. The starting point is to understand what an electricity grid is and how it works.



An electricity grid is comprised of all generating sources (coal, nuclear, natural gas, renewable) to meet peak demand. During a season (e.g., fall, summer, etc.) and/or time of day (e.g., night versus daytime) a specific generating unit will be dispatched (run) to meet the System's demand requirements based on its variable cost (which is primarily its fuel cost). Everyone must understand that a generating unit's capital cost (the cost of originally building the facility) has little to no impact on how a unit is dispatched. Capital cost can be thought of as "sunk cost" -- things like financing costs that must be paid to lenders/investors whether the unit runs or not. This explanation explains why nuclear facilities are typically run first (low fuel cost) as base load units although their capital costs are very high.

Understanding how the integrated resource grid works shows how Mr. Bailey manipulates data in an attempt to prove his ideology where he compares the wholesale price of electricity (which includes all sources of generation) to the cost of a renewable option of wind energy. Now -- if Mr. Bailey compared the cost of a new peaking natural gas or oil fired unit to the wind option, this would be a correct and "fair" comparison.

But the story just doesn't end with a discussion of only marginal cost in a dispatch grid. The Story must include both marginal costs (primarily fuel) and capital costs. When an electric utility builds a fossil fuel plant (say to meet peak demand requirements) its capital costs are included in a "rate base" where recovery of these costs are included in the "overall price" of electricity that the utility charges its customers. If this peaking unit does not run very much (say, by having a mild winter or cool summer), the actual cost (marginal fuel cost plus fixed financing cost) can result in a cost per kWh much, much higher than any of the feed-in tariffs that Mr. Bailey referenced.

For example, look at this concept this way. If you bought a new car, monthly car payments would be due whether you drove the car 10 miles a month or 1,000 miles. However on a cost per mile driven basis (gas plus the car payments) the miles driven would have a huge impact -- a pragmatic truth that Mr. Bailey does not address.

We just wish the main stream media practiced some intellectual honesty, so that meaningful discussions on energy policy can occur. If Mr. Bailey can show that feed in tariffs for peaking renewable energy are dramatically higher than what customers are and have been historically paying for peaking natural gas and oil units -- then he should make this Apples to Apples case.

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