Pacific West Biomass Conference: Policy Drivers and Regulatory Challenges

Posted by Mackinnon Lawrence on 1/14/10 • Categorized as Issues, RPS

On January 11-13, biomass industry leaders, service providers, and policymakers converged on Sacramento for — what turned out to be — a tough critique of California’s current regulatory environment around biomass. The event, the Pacific West Biomass Conference & Expo hosted by Biomass Magazine, featured presentations in four tracks:

Biomass for electricity generation
Industrial heat & power
Biorefining
Biomass power project development & finance

Although many of the presenters acknowledged that California leads the nation in enacting first-of-its kind energy and environmental legislation, the web of regulatory agencies and policies — both at the state and federal levels — has slowed down the advancement of biomass utilization in the state.

On the whole, speakers recognized the enormous potential for biomass resources in the Pacific West region, which includes California, Oregon, Washington, Idaho, and Nevada. This is especially true for making ground on California’s aggressive 33 percent RPS goal by 2020, which Governor Schwarzenegger targeted by Executive Order in 2008. Within this context, the benefits of biomass were celebrated throughout the two-days of presentations, including the use of forest thinning practices to mitigate fire danger, its economic and societal benefits to the local communities in providing jobs, its contribution to baseload power avoiding the intermittency challenges associated with wind and solar, and the diversion of waste streams, which avoids the use of landfills.

Some of the main policy drivers for biomass highlighted throughout the conference include climate change, national security, economic development, and job security.

Climate Change and National Security

Climate change is widely regarded as a main driver for the increased utilization of biomass for energy, and more recently, for transportation. As discussed by James Boyd, Vice Chair & Commissioner of the California Energy Commission (CEC) in his opening remarks, state RPS (and the potential RES emerging out of Washington) are designed to encourage the use of more renewables for power generation in place of fossil fuel plants and reduce the pumping of excess greenhouse gases (GHGs) into the atmosphere.

Power

The advantages of using biomass as a climate change mitigation strategy were discussed in detail by Dr. Gregg Morris of the Green Power Institute. Brown notes that although biomass is a key component of California’s RPS, it is underutilized as a resource throughout the state. As evidence, he pointed out that no new biomass plant has been built in the state during the RPS, largely due to the expense and difficulty of permitting. This, despite the fact that biomass utilization costs are far outweighed by the health and environmental costs of potential fuel disposal in landfills.

Morris points to the fact that decomposition of biomass resources leads to the increased release of methane versus biomass burning; methane is 25 times more potent as a GHG than CO2. He highlighted the point that burning biomass adds no new carbon to the atmosphere, and when you add in the displacement of fossil fuels, its effectiveness as a GHG mitigation strategy increases.

Fuel

On the transportation fuel side of the equation, climate change has only recently been folded in. The heavy subsidization of corn-based ethanol in the past decade was designed to stimulate the growth and development of a domestic renewable fuel source to decrease US dependence on politically sensitive and vulnerable foreign oil supplies. Although the use of biofuels as a climate change mitigation strategy has always been inherent in policy decisions, it is only within the past year that low carbon fuel standards have emerged, taking advantage of the improving scientific methodology for conducting life-cycle anlyses of various feedstock crops to decouple the use of transportation fuels from carbon emissions. As the climate change debate has unfolded, the increased use of cellulosic material, algae-based fuels, dedicated energy crops, and waste streams has increased.

The PacWest conference featured presentations from advanced biofuel companies, including:

Scott Johnson of Sustainable Oils
Carl Kukkonen of VIASPACE
Doug Miller of RENTECH
Paul Hughes of Lignol
Jim Long of Cabriel Venture Partners
Robert Schuetzle of Pacific Renewable Fuels
Bill Baum of Verenium
David Rubenstein of California Ethanol + Power

Many of the speakers emphasized the importance of choosing the right feedstock as critical to project viability. Generally, those that grew fast, were energy dense, required little water, were appropriate for the local climate, and did not compete with food sources were regarded as the most promising. In the water scarce West, water supply is of central importance. The so-called “fish versus farms” debate, which is highlighted by the long-time battle over access to Klamath River resources in Northern California, presents a difficult challenge. David Rubenstein of California Ethanol + Power has deliberately avoided the sensitive issue of drawing from Sierra snowpack runoff by using water from the Colorado River to feed his Imperial Valley operation.

Despite the enthusiasm around biomass and biofuels as a climate change mitigation strategy, most in the conference acknowledged that regulatory uncertainty around climate change have tempered expectations around the role regulation might play in advancing the industry. All in all, climate financing is viewed as a boost, but not sufficient to drive investment on its own.

Economic Benefits and Job Security

A key point emerging out of the conference is the fact that biomass and jobs are rarely discussed in the policy context. Under the federal Stimulus, for example, funded projects are tied to clean energy manufacturing, but rarely to the buildout of biomass power infrastructure. Meanwhile, many presenters highlighted the role biomass power operations can play generating jobs around plant operations, improving economic development in rural communities, and generating new sources of income for farmers.

From a permitting perspective, Fred Tornatore of TSS Consultants, discussed the importance of selling these benefits to local communities when seeking public support for biomass projects. Although many from the regulatory environment recognize these benefits and acknowledge the necessity of increased biomass utilization, getting the general public on board takes — what Tortatore calls — the “4 P’s”: