Industrial Development of Biomass Energy Sources - ACS Publications

1 Industrial Development of Biomass Energy Sources

Biomass as a Nonfossil Fuel Source Downloaded from pubs.acs.org by 117.253.237.202 on 11/22/15. For personal use only.

GEORGE P. SCHAEFER Booz-Allen & Hamilton, Incorporated, 4330 East-West Highway, Bethesda, M D 20014

A wide diversity of companies has entered into the development of biomass resources to solve non-energy and energy-related problems. These companies can be grouped as follows: • Companies currently utilizing or producing biomass or biomass-derived materials and products (e.g., paper, lumber, food, and distilled spirits) are attempting to recover and use greater amounts of the resources and by-products available to them to reduce costs, develop new products, and produce energy. • Companies which have large amounts of wastes (e.g., animal manures) are developing new ways of reducing and disposing of the wastes, reducing operating costs, and producing energy. • Manufacturers and entrepreneurs are conducting research and development, production, and marketing of equipment to convert biomass feedstocks into energy. The goal of these activities, primarily, is to develop new products and processes which can be marketed to potential biomass users. • Utilities which have large demands for fuels on a continuing basis are supporting the development of new, renewable, supply sources to help satisfy this demand.

0097-6156/81/0144-0003$05.00/0 © 1981 American Chemical Society

4

BIOMASS AS A NONFOSSIL FUEL SOURCE


T h e c o m p o s i t i o n of these c o m p a n i e s a n d t h e i r m o t i v a t i o n s are i m p o r t a n t t o g o v e r n m e n t p o l i c y makers a n d c o m p a n i e s c o n s i d e r i n g e n t r y i n t o t h e i n d u s t r y , for t h e m o t i v a t i o n s p r o v i d e a f r a m e w o r k w i t h w h i c h t o e v a l u a t e a l t e r n a t i v e o p t i o n s . It is i m p o r t a n t t o k n o w , for e x a m p l e , t h a t t h e d e v e l o p m e n t of e n e r g y f r o m b i o m a s s is of s e c o n d a r y i m p o r t a n c e t o m a n y c o m p a n i e s w h e n d e v e l o p i n g a n e w m a r k e t i n g p l a n or t a x i n c e n t i v e p r o g r a m . In r e c o g n i t i o n of t h i s f a c t o r , t h e Office of Policy a n d A n a l y s i s w i t h i n t h e U.S. D e p a r t m e n t o f Energy (DOE) asked Booz. A l l e n & H a m i l t o n Inc. t o assess t h e n a t u r e of i n d u s t r i a l a c t i v i t i e s in t h e utilization of b i o m a s s for energy. This assessment, p e r f o r m e d in t h e s u m m e r a n d fall of 1 9 7 9 . f o c u s e d u p o n i d e n t i f y i n g t h e s t r u c t u r e of t h e i n d u s t r y , t h e t y p e s of c o m p a n i e s a c t i v e in t h e i n d u s t r y , w h a t t h e y are d o i n g , a n d w h a t t h e m o t i v a t i o n s are for these activities. Initially, an e x t e n s i v e literature research w a s p e r f o r m e d t o d e t e r m i n e t h e c o m p a n i e s a c t i v e l y p u r s u i n g b i o m a s s e n e r g y d e v e l o p m e n t , t h e issues critical t o t h e e x p a n s i o n of t h e i n d u s t r y , a n d m a r k e t p e r s p e c t i v e s w h i c h exist. Based u p o n t h e d a t a c o l l e c t e d . Booz. A l l e n i n t e r v i e w e d 1 0 0 e x e c u t i v e s of c o m panies n a t i o n w i d e t o d e t e r m i n e t h e s c o p e of p r i v a t e sector i n v o l v e m e n t in b i o m a s s e n e r g y d e v e l o p m e n t . These c o m p a n i e s , s h o w n in Figure 1. represent a cross s e c t i o n of c o m p a n i e s a c t i v e in t h e d e v e l o p m e n t of e n e r g y f r o m b i o m a s s a n d are representative of c o m p a n i e s in t h e field. T h e i n t e r v i e w s w e r e p e r f o r m e d by t w o - p e r s o n t e a m s u t i l i z i n g a standardized i n t e r v i e w f o r m d e v e l o p e d b y Booz. A l l e n a n d r e v i e w e d by t h e client. T h e y w e r e c o n d u c t e d on-site a n d w e r e c o n s i d e r e d c o n f i d e n t i a l . T h e i n t e r v i e w s f o c u s e d u p o n t h e c u r r e n t a n d p l a n n e d activities of t h e c o m p a n i e s in t h e d e v e l o p m e n t of e n e r g y f r o m b i o m a s s , t h e m o t i v a t i o n s for t h e i r activities, t h e financial c o m m i t m e n t s w h i c h the companies were making, and their market outlook. T h e d a t a c o l l e c t e d i n d i c a t e t h a t p r i v a t e sector i n v o l v e m e n t in biomass e n e r g y d e v e l o p m e n t is e x t e n s i v e d e s p i t e i n d u s t r y ' s p e r c e p t i o n t h a t federally s p o n s o r e d w o r k has had little i m p a c t . A n o t h e r key f i n d i n g w a s t h a t g o v e r n m e n t r e g u l a t o r y policies generally had a greater effect u p o n i n d u s t r y t h a n DOE a n d these policies o f t e n c o n t r a d i c t e d DOE's p o s i t i o n . INDUSTRY STRUCTURE There is no single biomass for t h e e n e r g y industry. Rather, m a n y c o m p a n i e s are a c t i v e in utilizing a variety of biomass resources. In m o s t cases, t h e p r i n cipal line of business of these c o m p a n i e s is not biomass d e v e l o p m e n t b u t a g r i c u l t u r a l p r o d u c t i o n , w o o d p r o d u c t s m a n u f a c t u r i n g , d i s t i l l i n g , a n d similar

1.

SCHAEFER

FOREST

PRODUCTS

COMPANIES

Boise-Cascade Chamoion Paoer Crown-Zcllcrbach


AGRICULTURAL

. Georgia-Pacific . I n t e r n a t i o n a l Paper . I n t e r s t a t e Paper

PRODUCTS

Diamond-Sunsweet F i r s t C o l o n y Farms Grain Processing Corporation Jack Daniels KaDlan Industries Kelco Corporation

AND

GAS

PETROLEUM

. General Electric . Halcyon . Hamilton-Standard . Johnson Energy Systems . Oneida Heater . PyroSol . Rexnard-Envirex

. Α . 0. S m i t h . A. E . S t a n l e y . Thermonetics . V e r m o n t * ood E n e r g y Corporation . Wheelabrator Clean-fuels . Yukon Industries

. P a c i f i c Gas & E l e c t r i c . S e a t t l e Power & L i a h t . Southern C a l i f o r n i a Edison . U n i v e r s i t y o f Oregon . N a t u r a l Gas P i o e l i n e

. San D i e g o Water and u t i l i t i e s Department . Southern C a l i f o r n i a Gas . U n i t e d Gas Pioeline

COMPANIES

AND

A m e r i c a n O i l Company Bohler Brothers

. Gulf O i l . MarCom I n d u s t r i e s

.

Fannon

. Mid-West

O i l &

A r t h u r D. Little CPR F o r e s t P r o d u c t s Energy Resources Company . G a r r e t t Energy R&D . Gas R e s e a r c h Institute . IE A s s o c i a t e s

. .

· Mobil O i l . Occidental

Petroleum

Solvents

ENGINEERING

. . .

.

7

DISTRIBUTORS

. .

TRADΓ

Land 0'Lakes National Distillers New L i f e Farm Pioneer Hi-Bred International . Publicker Distillers . S m i t h Bowman D i s t i l l e r s . Sunny Time Foods

UTILITIES

B o n n e v i l l e Power Administration Burlington Electric E u g e n e W a t e r and E l e c t r i c Board Lamar U t i l i t y Board

RESEARCH

. . . .

MANUFACTURERS

. American Can . American Fry-Feeder . Bio-Gas of Colorado . Bio-Solar R&D . Chromoloy Corporation . Combustion Power . Evans P r o d u c t s . Forest Fuels ELECTRIC

. Scott Paper . U n i o n Camp . Weyerhaeuser

COMPANIES

. Anheuser-Busch . Archer-Daniels-Midland . Brown & W i l l i a m s o n . Cajun Sugar C o o p e r a t i v e . C a s t l e and Cook . C. P. Brewer . Dekalb AgResearch

EQUIPMENT

5

Biomass Energy Resources

I n s t i t u t e o f Gas Technology Intertechnology Marelco, Inc. O a s i s 2000 SRI International Touche-Ross

WED Enterorises "right-Malta Bechtel Chemapac Ultrasystems

Northwest Pine Association W e s t e r n Wood P r o d u c t s Association Wood E n e r g y C o r p o r a tion

Wood E n e r g y Institute

ORGANIZATIONS

Alternative Alcohol Fuels Institute Distilled Spirits C o u n c i l of the U.S. national Gasohol Cornmi s s i o n

Figure 1.

Companies interviewed for the study


6

endeavors. In t h i s assessment, these c o m p a n i e s w e r e e x a m i n e d a c c o r d i n g t o t h e t y p e s of b i o m a s s e n e r g y p r o d u c t s w h i c h t h e y p r o d u c e . Based u p o n t h e d a t a a n d i n f o r m a t i o n c o l l e c t e d , t h e i n d u s t r y w a s d i v i d e d into f o u r p a r t s : • • • •

A l c o h o l fuels Thermal energy from w o o d Thermal energy from agricultural wastes Gaseous fuels.


Each s e g m e n t has a d i f f e r e n t set of f e e d s t o c k s , c o n v e r s i o n t e c h n o l o g i e s , a n d p r o d u c t s associated w i t h i t as s h o w n in Figure 2. A l c o h o l Fuels T h e a l c o h o l fuels s e g m e n t is r e c e i v i n g s i g n i f i c a n t a t t e n t i o n f r o m t h e p u b l i c a n d p r i v a t e sectors at t h e present t i m e . T h e use of b i o m a s s resources — p r i m a r i l y h e r b a c e o u s c r o p s , s u c h as c o r n , w h e a t g r a i n s o r g h u m , a n d w o o d m i l l residues — is v i e w e d as a m e a n s for r e d u c i n g o u r d e p e n d e n c e o n i m p o r t e d oil a n d for u s i n g excess crops. T h e key c h a r a c t e r i s t i c s of t h e c o m p a n i e s a c t i v e in t h i s s e g m e n t are t h a t t h e y have: • • • •

Access to ethanol feedstocks A c c e s s t o e x i s t i n g gasoline m a r k e t i n g s y s t e m s Experience in d e s i g n i n g a n d b u i l d i n g f e r m e n t a t i o n u n i t s A n interest in r e d u c i n g d e p e n d e n c e u p o n o t h e r s for f u e l .

By u t i l i z i n g s t a n d a r d f e r m e n t a t i o n a n d d i s t i l l a t i o n processes, c o m p a n i e s in t h i s sector are p r o d u c i n g a n h y d r o u s e t h a n o l . It can be b l e n d e d w i t h u n l e a d e d gasoline t o f o r m g a s o h o l , w h i c h is c u r r e n t l y m a r k e t e d t h r o u g h o u t t h e n a t i o n , a l t h o u g h m o s t sales are in t h e M i d w e s t . Thermal Energy From W o o d M o r e b i o m a s s - d e r i v e d e n e r g y is p r o d u c e d f r o m w o o d t h a n a n y o t h e r source. T h e use o f w o o d f o r t h e r m a l e n e r g y p r o d u c t i o n is m o t i v a t e d p r i m a r i l y b y a desire t o r e d u c e w a s t e disposal p r o b l e m s a n d oil a n d gas usage. C o m p a n i e s a c t i v e in t h i s sector generally h a v e : e

Experience in h a n d l i n g b i o m a s s materials a n d / o r solid fuels

• • •

Access to w o o d and w o o d wastes Experience in b u i l d i n g a n d utilizing d i r e c t c o m b u s t i o n u n i t s External s u p p o r t for, or e n t r e p r e n e u r i a l interest i n , d e v e l o p i n g p a r t i c u l a r equipment.

AND ANIMAL

COLLECTION

Figure 2.

UTILITY SECTOR

AGRICULTURAL SECTOR

ENERGY

PETROCHEMICAL SUBSTITUTES

SECTOR

INDUSTRIAL

SECTOR

COMMERCIAL

RESIDENTIAL

SECTOR

TRANSPORTATION

MARKETS MARKETS

PROCESS

SOLID FUELS

GASEOUS FUELS

LIQUID FUELS

PRODUCTS PRODUCTS

Biomass overview (nonfossil, primary organic materials)

RESIDUES

MATERIAL PROCESSING

AGRICULTURE

THERMOCHEMICAL

BIOCHEMICAL

CONVERSION TECHNOLOGIES

RESIDUALS

FORESTRY,

BIOMASS

AQUATIC

AQUATIC

AND

BIOMASS

TERRESTRIAL

RESOURCE BASES

OPEN OCEAN

LAND BASED

SILVICULTURE

PRODUCTION TECHNOLOGIES


8


T h e d i r e c t c o m b u s t i o n of w o o d t o p r o d u c e t h e r m a l e n e r g y , w h i c h c a n be used as process s t e a m or heat, is t h e m o s t f r e q u e n t a p p l i c a t i o n in t h i s sector. S o m e research a n d d e v e l o p m e n t is b e i n g p e r f o r m e d in o t h e r areas, especially o n t h e g a s i f i c a t i o n of w o o d . Thermal Energy From Agricultural Residues


T h e use of a g r i c u l t u r a l residues for t h e r m a l e n e r g y is v e r y similar t o t h e t h e r m a l - e n e r g y - f r o m - w o o d s e g m e n t . C o m p a n i e s a c t i v e in t h i s s e g m e n t h a v e : •

A need t o dispose of a g r i c u l t u r a l process b y - p r o d u c t s a n d access t o a

• •

c e n t r a l l y l o c a t e d stock of residues or b y - p r o d u c t s A need for l o w - c o s t process heat or s t e a m Experience in b u i l d i n g or utilizing d i r e c t c o m b u s t i o n systems.

Gaseous Fuels T h e d e v e l o p m e n t of gaseous f u e l s f r o m b i o m a s s is t h e least d e v e l o p e d of t h e b i o m a s s i n d u s t r y sectors. M o s t efforts in t h i s sector are e x p e r i m e n t a l a n d t h e c o m m e r c i a l use of gases f r o m b i o m a s s is still years a w a y in t h e o p i n i o n of i n d u s t r y e x e c u t i v e s . C o m p a n i e s a c t i v e in t h i s area g e n e r a l l y h a v e : • A c c e s s t o a resource base — p r i m a r i l y m a n u r e s — w h i c h present a d i s posal p r o b l e m • Experience w i t h c o n s t r u c t i n g c o n v e r s i o n e q u i p m e n t , s u c h as anaerobic digesters • N e e d f o r gaseous fuels. T h e m o s t w i d e s p r e a d a p p r o a c h t o g a s i f i c a t i o n is t h e a n a e r o b i c d i g e s t i o n of m a n u r e s a n d land-based a q u a t i c biomass. T h i s c o n v e r s i o n process p r o d u c e s e i t h e r a m e d i u m - B t u gas, w h i c h can be used on-site, or in s o m e cases, u p g r a d e d t o a s u b s t i t u t e n a t u r a l gas (SNG). T h e b i o m a s s i n d u s t r y is c o m p o s e d of g r o u p s of c o m p a n i e s a c t i v e in t h e d e v e l o p m e n t of specific p r o d u c t s or uses for biomass. T h e f o c u s of t h e i r a c t i v i t i e s is g e n e r a l l y not t o d e v e l o p processes or e q u i p m e n t w h i c h c a n be used in a w i d e range of a p p l i c a t i o n s . Rather, i n d u s t r y has f o c u s e d its efforts o n p a r t i c u l a r a p p l i c a t i o n s s u i t e d t o their c i r c u m s t a n c e s . T h e specific t y p e s of c o m p a n i e s a n d t h e i r a c t i v i t i e s are d e s c r i b e d in t h e f o l l o w i n g s e c t i o n .

1.

SCHAEFER


9

CORPORATE ACTIVITIES A N D OUTLOOK Corporate activities in biomass i n c l u d e a w i d e range o f efforts related t o m e e t i n g a n u m b e r o f internal needs a n d p r o b l e m s w h i c h , in m a n y cases, are not e n e r g y - r e l a t e d . In a d d i t i o n , m a n y c o m p a n i e s are a c t i v e in t h e d e v e l o p m e n t o f n e w p r o d u c t s a n d m a r k e t s f r o m biomass. W i t h i n t h e f o u r i n d u s t r y s e g m e n t s d e s c r i b e d above, v a r i o u s t y p e s o f activities are b e i n g p u r s u e d in t h e d e v e l o p m e n t o f biomass.


A l c o h o l Fuels A l t h o u g h t h e a l c o h o l fuels s e g m e n t is in its infancy, m a n y c o m p a n i e s are a c t i v e in its d e v e l o p m e n t . A t t h e present t i m e , t h e r e is n o s i g n i f i c a n t vertical i n t e g r a t i o n in t h e i n d u s t r y . T h a t is, f i r m s are generally a c t i v e in o n l y one o f t h e t h r e e c o m p o n e n t areas d e s c r i b e d in Figure 2. C o m p a n i e s presently e n g a g e d in t h e large-scale p r o d u c t o n o f e t h a n o l generally have access t o a c o n t i n u i n g resource base w h i c h c a n be c o n v e r t e d t o e t h a n o l . These c o m p a n i e s are n o r m a l l y agriprocessors, f o o d processors, a n d distilleries. A t t h e present t i m e , o n e large agriprocessor, A r c h e r - D a n i e l s M i d l a n d , is p r o d u c i n g large q u a n t i t i e s o f e t h a n o l f r o m b y - p r o d u c t s g e n e r a t e d during the production of corn sweetener. Many of the other companies active in t h i s s e g m e n t are also e x p l o r i n g a l t e r n a t i v e means t o p r o d u c e e t h a n o l f r o m t h e i r f e e d s t o c k s , w a s t e s , or b y - p r o d u c t s b y t h e a d d i t i o n o f n e w d i s t i l l a t i o n u n i t s , as i n d i c a t e d in Figure 3. These large-scale p r o d u c e r s consider t h e m i n i m u m e f f i c i e n t size o f a n e t h a n o l plant t o be 10 m i l l i o n gallons a year, based u p o n c u r r e n t costs for f e e d s t o c k s , b y - p r o d u c t s a n d e t h a n o l . In v i r t u a l l y every case, these a c t i v i t i e s have been i n i t i a t e d w i t h i n t h e past t w o t o t h r e e years a n d represent n e w o p e r a t i o n s f o r t h e c o m p a n i e s in r e c o g n i t i o n o f t h e m a r k e t o p p o r t u n i t i e s w h i c h are d e v e l o p i n g in a l c o h o l fuels. S m a l l - a n d m e d i u m - s i z e d f a r m s are interested in t h e d e v e l o p m e n t o f s m a l l scale e t h a n o l p r o d u c t i o n facilities ( a p p r o x i m a t e l y 2 5 0 , 0 0 0 gallons per year) as a m e a n s o f d e v e l o p i n g a d d i t i o n a l uses f o r t h e i r crops, a n d as a m e a n s t o d e v e l o p i n d e p e n d e n c e f r o m oil suppliers. W h i l e , t o date, t h e r e has been little c o n s t r u c t i o n o f o n - f a r m u n i t s , t h e s e f a r m s represent a large p o t e n t i a l m a r k e t if c u r r e n t t r e n d s c o n t i n u e . A t h i r d g r o u p o f c o m p a n i e s in t h e a l c o h o l fuels s e g m e n t o f t h e biomass i n d u s t r y are a r c h i t e c t / e n g i n e e r i n g f i r m s , fuel d i s t r i b u t o r s , a n d oil c o m p a n i e s . These c o m p a n i e s are a t t e m p t i n g t o b u i l d u p o n their expertise in c o n s t r u c t i o n , f u e l h a n d l i n g a n d retailing t o d e v e l o p n e w markets for t h e i r p r o d u c t s . In m o s t cases, gasohol d i s t r i b u t o r s are i n d e p e n d e n t w h o l e s e l e r s a n d retailers.


10

AGRIPROCESSING

•

FIRMS


WHY ARE THEY DOING IT?

WHAT ARE THEY DOING?

WHO IS INVOLVED?

PRODUCE ETHANOL FROM

•

AN ADDITIONAL REVENUE

WET CORN MILLING PLANTS

GENERATING PRODUCT

• FOOD PROCESSING

•

FIRMS

PRODUCE AND MARKET

BY-PRODUCT STREAMS OF

WASTE STREAMS

PRODUCE AN ADDITIONAL REVENUE-GENERATING

PRODUCE ETHANOL FROM

PRODUCT •

ALLEVIATE WASTEHANDLING PROBLEMS

DISTILLERIES

ARCHITECTURE/ ENGINEERING

UTILIZE EXISTING PLANTS

POTENTIAL PROFITABLE

IN THE PRODUCTION OF

UTILIZATION OF EXCESS

ETHANOL

CAPACITY

•

SELL TURN-KEY FACILITIES

•

BLEND AND DISTRIBUTE

FIRMS

•

SALES EXPANSION

• FUEL DISTRIBUTORS

GASOHOL

DEVELOP MARKET FOR POTENTIAL RENEWABLE LIQUID FUEL • PUBLIC RELATIONS

PUBLIC RELATIONS MAJOR OIL

EXPERIMENTAL TEST

KEEP UP-TO-DATE IN

COMPANIES

MARKETING

CASE INDUSTRY EXPANDS RAPIDLY

PRODUCE FEEDSTOCKS BUILD ON-FARM ETHANOL PLANTS (PREDOMINATELY SMALL FARMERS)

Figure 3.

SEE ETHANOL PRODUCTION AS AN ADDITIONAL MARKET FOR THEIR CROPS ENERGY SUPPLY SECURITY. INDEPENDENCE FROM UTILITIES. "BIG OIL" (PRIMARILY SMALL FARMERS)

Overview of motivations for entry into the alcohol fuel/gasohol segment

1.

SCHAEFER


11


a l t h o u g h large oil c o m p a n i e s , i n c l u d i n g A m o c o , Exxon, a n d Gulf, are b e g i n n i n g t o m a r k e t gasohol. I n d u s t r y e x e c u t i v e s a n t i c i p a t e t h a t t h e a l c o h o l fuels business w i l l g r o w m o r e rapidly in t h e next f e w years t h a n o t h e r s e g m e n t s of t h e i n d u s t r y . S y s t e m s c u r r e n t l y exist, or are e x p a n d i n g , in m a n y regions for c o l l e c t i n g t h e resource, c o n v e r t i n g it t o e t h a n o l , a n d t r a n s p o r t i n g a n d m a r k e t i n g it. In a d d i t i o n , curr e n t g o v e r n m e n t policies e n c o u r a g e t h e use o f gasohol. T w o major barriers t o a l c o h o l fuels are u n c e r t a i n t y r e g a r d i n g g o v e r n m e n t policies, i n c l u d i n g a p r o b l e m recently addressed in part b y President Carter, w h o proposed t h a t tax e x e m p t i o n s be e x t e n d e d t o t h e year 2 0 0 0 , a n d t h e lack o f a pipeline s y s t e m t o d i s t r i b u t e large v o l u m e s o f gasohol. Thermal Energy From W o o d T h e t h e r m a l e n e r g y f r o m w o o d s e g m e n t o f t h e biomass i n d u s t r y is c o m p o s e d of a broad m i x o f c o m p a n i e s t h a t are d o m i n a t e d b y t h e forest p r o d u c t s a n d p u l p a n d paper industries. These c o m p a n i e s are active in all t h e various c o m p o n e n t areas o f t h e i n d u s t r y f r o m o w n e r s h i p of t h e resource base t o t h e use of w o o d f o r p r o d u c t s a n d energy. Generally, t h e m a i n t h r u s t of these c o m panies is t o p r o d u c e p r o d u c t s f r o m w o o d rather t h a n t h e r m a l energy. Only small w o o d d i s t r i b u t o r s a n d h a r d w a r e - o r i e n t e d c o m p a i n e s are active in t h e d e v e l o p m e n t o f e n e r g y f r o m w o o d , as s h o w n in Figure 4. Forest resource c o m p a n i e s are a c t i v e l y p u r s u i n g t h e d e v e l o p m e n t of w o o d resources f o r a n u m b e r o f a p p l i c a t i o n s — t o increase t h e g r o w t h rate of w o o d , t o improve t h e efficiency of harvesting and collecting w o o d , t o d e v e l o p m o r e efficient c o m b u s t i o n systems. The p r o d u c t i o n o f energy f r o m w a s t e w o o d is g r o w i n g , a n d close t o 5 0 p e r c e n t of t h e t o t a l e n e r g y requirem e n t s of these c o m p a n i e s is p r o d u c e d f r o m biomass in t h e f o r m of heat, s t e a m , a n d c o g e n e r a t e d electricity. W o o d fuel d i s t r i b u t i o n s y s t e m s are b e g i n n i n g t o e m e r g e in m o s t regions of t h e c o u n t r y , a l t h o u g h m a n y p o t e n t i a l users indicate t h a t t h e y still have d i f f i c u l t y a c q u i r i n g w o o d d u e t o t h e lack o f a d e q u a t e d i s t r i b u t i o n systems. W i t h t h e e x c e p t i o n o f s o m e large d i s t r i b u t o r s in parts o f t h e Northeast, Southeast, a n d N o r t h w e s t , t h e e x i s t i n g d i s t r i b u t i o n s y s t e m of fuel w o o d f o r t h e industrial a n d residential m a r k e t s is c o m p o s e d of small operators. M o s t industrial users o f w o o d for e n e r g y are t r a n s p o r t i n g w o o d t h e m s e l v e s , or c o n t r a c t i n g f o r its t r a n s p o r t a t i o n . Large w o o d e n e r g y users i n c l u d e m a n u f a c t u r i n g f i r m s , utilities, a n d o t h e r facilities, s u c h as universities, w h i c h are b e g i n n i n g t o utilize w o o d as a cheaper, m o r e reliable source o f energy. These users are b u r n i n g w o o d b o t h

12


WHO IS INVOLVED?

HARVESTING WOOD

FOREST

PRODUCING WOOD

RESOURCE

PRODUCTS

COMPANIES



WHAT ARE THEY OOING?

BURNING WASTE WOOD

•

•

USE A GREATER PERCENT OF THE HARVESTED WOOD

•

MEET ENVIRONMENTAL REGULATIONS

•

REDUCE ENERGY COSTS

DISTRIBUTING WOOD FROM FOREST RESOURCE

WOOD FUEL

•

CONSUMER DEMAND FOR WOOD FUEL

COMPANIES TO END

DISTRIBUTORS

USERS

UTILITIES

•

BURNING WOOD

BURNING

TO GENERATE

WOOD

ELECTRICITY

•

REDUCE ENERGY COSTS

•

PROVIDE EXTRA CAPACITY

t

PROCESS STEAM. HEAT,

FIRMS BURNING

•

ELECTRICITY

A

TECHNOLOGY


AND COGENERATED

WOOD


BURNING WOOD FOR

MANUFACTURING

CONDUCTING R&D OF

REDUCE ENERGY COSTS

•

NEW WOOD BURNING

DEVELOPERS/

•

PRODUCTS

• EQUIPMENT

MANUFACTURING AND •

BURNING EOUIPMENT •

PERSONAL CHALLENGE AND OPPORTUNITY

SELLING PROVEN WOOD-

WOOD-BURNING

FIRST TO THE MARKET WITH NEW PRODUCT

TECHNOLOGIES AND

INNOVATORS

MANUFACTURERS

•

INCREASE MARKET SHARE

IMPROVING THESE PRODUCTS

INDUSTRY ASSOCIATIONS AND AGENCIES

CONDUCTING STUDIES ON ISSUES OF CONCERN TO THE INDUSTRY LOBBYING PROVIDING A COMMUNICATIONS

•

INCREASED PUBLIC PERCEPTION AND INFORMATION REGARDING WOOD FOR ENERGY

FORUM

Figure 4.

Motivations for entry into the thermal energy from wood sector

1.

SCHAEFER


13


alone o r w i t h coal t o l o w e r e m i s s i o n s f r o m their f u e l - b u r n i n g installations. A n o t h e r g r o u p o f c o m p a n i e s is a c t i v e in t h e d e v e l o p m e n t o f w o o d c o m b u s t i o n s y s t e m s t o m e e t t h e g r o w i n g d e m a n d f o r utilizing w o o d energy. C o m panies specializing in t h e d e v e l o p m e n t m a n u f a c t u r e a n d m a r k e t i n g o f w o o d b u r n i n g e q u i p m e n t f o r residential, c o m m e r c i a l , a n d industrial uses are e m e r g i n g in t h o s e regions w h e r e w o o d is m o s t heavily used. Business e x e c u t i v e s e x p e c t g r o w t h o f t h e w o o d - f o r - e n e r g y business t o o c c u r s l o w l y . W h i l e t h e means exist t o c o l l e c t a n d c o n v e r t w o o d into useful p r o d u c t s , t h e lack o f w o o d fuel d i s t r i b u t i o n s y s t e m s is p e r c e i v e d t o be a major barrier t o g r o w t h . A f u r t h e r c o n c e r n o f e x e c u t i v e s is t h e lack o f assurances r e g a r d i n g t h e l o n g - t e r m a v a i l a b i l i t y o f supplies. Thermal Energy From Agricultural Residues The s e g m e n t c o n c e r n e d w i t h t h e r m a l e n e r g y f r o m a g r i c u l t u r a l residues is small a n d localized at t h e present t i m e . Only a f e w t y p e s of a g r i c u l t u r a l residues, s u c h as n u t shells a n d c o r n c o b s , are being utilized f o r t h e p r o d u c t i o n o f energy. Corporate a c t i v i t i e s are f o c u s e d u p o n t h e use o f a g r i c u l t u r a l residues w h i c h are l o w in m o i s t u r e c o n t e n t , w h e r e t h e residues are a b y - p r o d u c t o f a n o t h e r o p e r a t i o n , a n d w h e r e t h e y are a c c u m u l a t e d in a central location. A g r i c u l t u r a l processing c o m p a n i e s are e n t e r i n g into t h i s s e g m e n t t o f i n d a m e a n s t o dispose o f their b y - p r o d u c t s a n d w a s t e s , as w e l l as t o d e v e l o p a c h e a p , i n d e p e n d e n t source o f e n e r g y , as s h o w n in Figure 5. T o m e e t this g r o w i n g d e m a n d , e q u i p m e n t m a n u f a c t u r e r s are d e v e l o p i n g boilers a n d o t h e r c o m b u s t i o n e q u i p m e n t w h i c h c a n be utilized easily b y a g r i c u l t u r a l processing c o m p a n i e s . M a n u f a c t u r e r s w i t h e x p e r i e n c e in h a r d w a r e d e v e l o p m e n t a n d f a b r i c a t i o n are a t t e m p t i n g t o s p i n o f f their experience in o t h e r markets t o t h i s n e w market. In a d d i t i o n t o t h e g e n e r a t i o n o f s t e a m a n d heat, a g r i c u l t u r a l processors are d e v e l o p i n g c o g e n e r a t i o n s y s t e m s t o p r o d u c e e l e c t r i c i t y w h i c h c a n be used on-site. In m o s t cases, these s y s t e m s generate m o r e e l e c t r i c i t y t h a n can be c o n s u m e d b y t h e processor. Local electric utilities in these cases m a y serve as m a r k e t s for t h i s p o w e r a n d s o m e c o m p a n i e s are p u r c h a s i n g this e l e c t r i c i t y f r o m t h e processor. In California, t w o m a j o r utilities are also e n t e r i n g into a g r e e m e n t t o p u r c h a s e s t e a m f r o m t h e processors t o g e n e r a t e electricity. Business e x e c u t i v e s see t h e barriers t o w i d e s p r e a d use of a g r i c u l t u r a l residues for t h e r m a l energy as similar t o t h o s e in t h e w o o d s e g m e n t . The lack of c o l l e c t i o n a n d d i s t r i b u t i o n s y s t e m s f o r t h e f e e d s t o c k is a key barrier, as is t h e c y c l i c a l nature of its availability.

14


I M P A C T OF FEDERAL G O V E R N M E N T P R O G R A M S


T h e Federal G o v e r n m e n t has d e v e l o p e d n u m e r o u s p r o g r a m s d e s i g n e d t o accelerate t h e c o n v e r s i o n of b i o m a s s t o energy. In s o m e cases c i t e d by i n d u s t r y , t h e s e p r o g r a m s c o n f l i c t w i t h o n e another. Industry e x e c u t i v e s i n d i c a t e d t h a t Federal i n c e n t i v e s p r o g r a m s a n d r e g u l a t o r y policies are h a v i n g a m a j o r i m p a c t o n t h e g r o w t h of b i o m a s s activities, w h i l e DOE p r o g r a m s are h a v i n g little i m p a c t . A m a j o r f a c t o r t h a t affects t h e e c o n o m i c v i a b i l i t y of t h e a l c o h o l fuels i n d u s t r y is t h e c o n t i n u a t i o n of gasohol t a x e x e m p t i o n s p r o v i d e d b y Federal a n d s o m e state g o v e r n m e n t s . A t t h e present t i m e , g a s o h o l is e x e m p t f r o m t h e 4-cent per g a l l o n ($16.80 per barrel of alcohol) excise tax o n gasoline a n d state e x e m p t i o n s range f r o m 3 t o 9.5 c e n t s per gallon ($12.60 t o 3 9 . 9 0 per barrel of alcohol). Extension of t h e Federal tax e x e m p t i o n t o t h e year 2 0 0 0 has been p r o p o s e d ; t h i s is v i e w e d by e x e c u t i v e s as a m a j o r step t o w a r d s a c c e l e r a t i n g t h e d e v e l o p m e n t of t h e i n d u s t r y . T h e Bureau of A l c o h o l , T o b a c c o a n d Firearms (ATF) is responsible for m o n i t o r i n g a n d r e g u l a t i n g all processes w h i c h result in t h e p r o d u c t i o n of e t h a n o l or o t h e r a l c o h o l i c substances. Currently, r e g u l a t i o n s w h i c h a p p l y t o t h e p r o d u c t i o n of a l c o h o l for h u m a n c o n s u m p t i o n also a p p l y t o e t h a n o l p r o d u c e d for fuel a n d industrial uses. T h e r e g u l a t i o n s are c u m b e r s o m e a n d retard t h e d e v e l o p m e n t of t h e i n d u s t r y . D e v e l o p m e n t of s t r e a m l i n e d p r o c e d u r e s w o u l d help accelerate t h e d e v e l o p m e n t of t h e i n d u s t r y a c c o r d i n g t o industry executives. T h e U.S. Forest Service, t h r o u g h its c o n t r o l over p u b l i c forests a n d its policies, has a s i g n i f i c a n t i m p a c t o n t h e a m o u n t l o c a t i o n , a n d p r i c e of w o o d t h a t is available for all uses, i n c l u d i n g energy. Of greatest i m p o r t a n c e are t h e r e g u l a t i o n s r e g a r d i n g c u t t i n g , h a r v e s t i n g , and m a n a g e m e n t of t h e forest, especially t h e a m o u n t t h a t c a n be c u t . Clearer g u i d e l i n e s r e g a r d i n g t h e use of p u b l i c lands c o u l d help i m p r o v e t h e availability of w o o d for energy. T h e DOE has t h r e e m a j o r offices w h i c h are a c t i v e in b i o m a s s t e c h n o l o g y d e v e l o p m e n t a n d c o m m e r c i a l i z a t i o n . T h e Biomass Energy S y s t e m s Branch a n d W o o d C o m m e r c i a l i z a t i o n Program w i t h i n t h e Office of t h e A s s i s t a n t Secretary for Conservation a n d Solar A p p l i c a t i o n s are t h e m a j o r f u n d e r s of b i o m a s s projects in DOE. In a d d i t i o n , DOE provides f u n d s t o t h e Solar Energy Research I n s t i t u t e for b i o m a s s research a n d d e v e l o p m e n t activities. Presently. DOE f u n d i n g is f o c u s e d o n t h e p r o d u c t i o n , c o n v e r s i o n , a n d / o r u t i l i z a t i o n of b i o m a s s , rather t h a n on p r o g r a m s w h i c h f o c u s u p o n a p a r t i c u l a r t y p e of b i o m a s s or i n d u s t r y s e g m e n t . I n d u s t r y e x e c u t i v e s felt t h a t t h e i m p a c t of

1.

SCHAEFER


15

Gaseous Fuels


A c c o r d i n g t o t h e i n t e r v i e w s p e r f o r m e d as part of t h e assessment o f t h e biomass i n d u s t r y , t h e g a s e o u s - f u e l s - f r o m - b i o m a s s i n d u s t r y is small. Corporate a c t i v i t i e s are f o c u s e d o n t h e anaerobic d i g e s t i o n of m a n u r e s t o p r o d u c e gaseous fuel. M i n i m a l activities are d i r e c t e d t o w a r d s t h e d e v e l o p m e n t of o t h e r f e e d s t o c k s a n d processes. Despite t h e c u r r e n t i n d u s t r y a t t e n t i o n t o these systems a n d their p o t e n t i a l t o m e e t site-specific needs, i n d u s t r y e x p e r i e n c e indicates t h a t t h e e c o n o m i c s of t h e a n a e r o b i c d i g e s t i o n o f m a n u r e s are n o t c o m p e t i t i v e a t t h e present t i m e . In f a c t , m a n y o f t h e c o m p a n i e s i n t e r v i e w e d i n d i c a t e d t h a t t h e refeed materials ( b y - p r o d u c t s w h i c h can be fed t o animals) p r o d u c e d b y anaerobic d i g e s t i o n have higher e c o n o m i c value t h a n t h e gas w h i c h is p r o d u c e d . Resource o w n e r s , s u c h as c a t t l e f e e d l o t operators, farmers, a g r i c u l t u r a l p r o cessors a n d w a s t e w a t e r t r e a t m e n t p l a n t operators, p r o d u c e large q u a n t i t i e s of w a s t e s t h a t c o u l d serve as feedstocks. T h e y are e x p l o r i n g w a y s t o c o n v e r t these w a s t e s t o e n e r g y as s h o w n in Figure 6. A n u m b e r of anaerobic digesters have been b u i l t at facilities s u c h as feedlots, b u t t h e results are m i x ed. Gaseous fuels are p r o d u c e d , b u t t h e a m o u n t is small a n d h i g h in cost. E q u i p m e n t c o m p a n i e s , industrial research organizations, a n d utilities are p r o v i d i n g s u p p o r t f o r research a n d d e v e l o p m e n t in t h i s s e g m e n t . M a n u f a c t u r e r s are a t t e m p t i n g t o d e v e l o p e q u i p m e n t w h i c h c a n c o n v e r t t h e f e e d s t o c k e c o n o m i c a l l y i n t o gases a n d are c u r r e n t l y b u i l d i n g d e m o n s t r a t i o n facilities. Utilities a n d industrial research o r g a n i z a t i o n s foresee t h e d e v e l o p m e n t of b i o g a s i f i c a t i o n as a p o t e n t i a l r e n e w a b l e source o f e n e r g y a n d are a c t i v e l y s u p p o r t i n g efforts in t h i s area. I n d i v i d u a l utilities have b u i l t anaerobic d i g e s t i o n facilities t o b e g i n t e s t i n g s y s t e m s , a n d t h e g a s i n d u s t r y is s u p p o r t i n g R&D o n n e w f e e d s t o c k p r o d u c t i o n a n d c o n v e r s i o n . Electric utilities foresee t h e possibility o f c o n v e r t i n g t h e p r o d u c t gas into e l e c t r i c i t y a n d are s u p p o r t ing d e m o n s t r a t i o n facilities t o test t h e e f f i c i e n c y of t h e process. T h e o u t l o o k f o r t h e gaseous fuels s e g m e n t is t h a t l i m i t e d d e v e l o p m e n t of t h e resource w i l l c o n t i n u e u n t i l c o m p a n y e x e c u t i v e s are c o n v i n c e d t h a t these fuels c a n be p r o d u c e d e c o n o m i c a l l y . S o m e u n c e r t a i n t y exists regarding t h e c o n v e r s i o n t e c h n o l o g y , w h i c h also hinders its d e v e l o p m e n t . In a d d i t i o n , if t h e p r o d u c t gases are n o t u p g r a d e d t o a h i g h - B t u gas, n e w d i s t r i b u t i o n systems m u s t be d e v e l o p e d .

16




FOOD AND AGRICULTURAL PROCESSING COMPANIES

COMBUSTION OF PROCESSING BY-PRODUCTS

• FUEL DEPENDABILITY • DISPOSAL • REDUCE ENERGY COSTS

CONVERSION AND MATERIALS HANDLING EQUIPMENT MANUFACTURERS

PROVIDING DEMONSTRATED TURNKEY SYSTEMS

TRANSFER EXISTING SKILLS AND CAPABILITIES INTO A NEW MARKET

ELECTRIC UTILITIES

PROVIDING A MARKET FOR GENERATED ELECTRICITY


WHO IS INVOLVED?

Figure 5.

• PUBLIC RELATIONS • EXTRA CAPACITY

Motivations for entry into the agricultural residues industry segment

WHO IS INVOLVED?


WHY ARE THEY DOING IT? •

RESOURCE OWNERS

PRODUCE GAS FROM WASTE STREAM

• EQUIPMENT MANUFACTURERS

•

DEVELOP EQUIPMENT SELL TURN-KEY FACILITIES

SUPPORT R&D PROVIDE MARKET FOR PRODUCT GAS

Figure 6.

DEVELOP ENERGY SUPPLY INDEPENDENCE • REDUCE ENERGY COSTS

TRANSFER EXISTING SKILLS INTO NEW MARKETS

•

DEVELOP NEW SUPPLY SOURCES • IMPROVE PUBLIC RELATIONS

Motivations for entry into the gaseous fuels industry segment

1.

SCHAEFER


17

these p r o g r a m s c o u l d be e n h a n c e d b y p l a c i n g m o r e e m p h a s i s o n t h e d e v e l o p m e n t o f near- a n d m i d - t e r m t e c h n o l o g i e s a n d a p p l i c a t i o n s .


O t h e r Federal agencies, s u c h as t h e Federal Energy Regulatory C o m m i s s i o n (FERC) a n d t h e U.S. D e p a r t m e n t o f A g r i c u l t u r e , affect t h e g r o w t h of specific sectors. In s o m e cases. Federal p r o g r a m s have c o n t r a d i c t o r y i m p a c t s u p o n t h e i n d u s t r y . For e x a m p l e : •

DOE is e n c o u r a g i n g t h e d e v e l o p m e n t of c o g n e r a t e d electric p o w e r . H o w e v e r , FERC has n o t i m p l e m e n t e d regulations w h i c h w o u l d p e r m i t utilities t o b u y t h i s p o w e r f o r t h e i r c o n s u m e r s .

•

DOE's e n c o u r a g e m e n t t o utilize w o o d as a n e n e r g y source is n o t consist e n t w i t h Forest Service policies o n m a n a g i n g w o o d availability.

These f i n d i n g s s u g g e s t t h a t Federal policies c o u l d be m o r e effective if t h e y c o u l d be c o o r d i n a t e d t o e n h a n c e d e v e l o p m e n t of biomass energy. A reorganization of DOE's p r o g r a m a l o n g p r o d u c t lines w o u l d help t o i m p r o v e c o m m u n i c a t i o n s w i t h i n d u s t r y a n d w o u l d increase DOE's effectiveness. ACKNOWLEDGEMENT T h e f o l l o w i n g people p a r t i c i p a t e d in Booz, A l l e n ' s Biomass Industry Assessm e n t : J a m e s F. L o w r y , S c o t t D. Moeller, K e n n e t h G. Salveson, M i c h a e l R. S e d mak, Satish S u r y a w a n s h i .

RECEIVED M A Y 12, 1980.

Industrial Development of Biomass Energy Sources - ACS Publications

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