Dr Liam E. Leightley Biomass Conference University of Georgia, Athens August 29-31, 2005

1. DEVELOPMENT OF A SUSTAINABLE INDUSTRY FOR THE PRODUCTION OF ENERGY AND CHEMICALS FROM FOREST BIOMASS Dr Liam E. Leightley Biomass Conference University of Georgia, Athens August 29-31, 2005

2. DEVELOPMENT OF A SUSTAINABLE INDUSTRY FOR THE PRODUCTION OF ENERGY AND CHEMICALS FROM FOREST BIOMASS If the environmental and social benefits of wood energy are not accounted for, then the lack of utilization of forest biomass for the production of energy will become environmentally, economically and socially unacceptable.

3. OUR FOREST RESOURCE

4. SUSTAINABLE DEVELOPMENT “…seeks to meet the needs and aspirations of the present without compromising the ability to meet those of the future” World Commission, 1987

5. MANAGEMENT OF RENEWABLE RESOURCES • Harvest rates should equal regeneration rates (sustained yield) • Waste emission rates should equal natural assimilative capacities of the ecosystems into which the wastes are emitted

6. UTILIZATION OF FOREST RESOURCES • What will happen to the significant volumes of pulpwood which are increasing daily in the Southern States? • What will happen to the significant volumes of merchantable stems which will become available over the next 10 years? • How could forest residues be utilized more effectively for bioenergy and products?

7. A BIOMASS INDUSTRY FOR THE SOUTHERN STATES The Southern States of the USA needs a Biomass – Based Industry • New industry would create high-volume , non-cyclical markets for biomass (trees, forest thinning, logging residue, under-story vegetation, mill residue ). • New jobs will be created , lost jobs restored and existing jobs retained • 214 million acres of forestland in the 13 southeastern states.

8. BIOMASS AND ITS CONTRIBUTION TO RENEWABLE ENERGY FOR AMERICA • As a source of energy Biomass is the largest domestic source of renewable energy providing over 3% of total U.S. energy consumption, and surpassing hydropower. • US DOE and USDA support biomass fuels and products as a way to reduce oil and gas imports and support the growth of agriculture, forestry, and rural economies

9. WHAT COMES OUT OF THE 42 GALLONS IN A BARREL OF OIL?

10. A GOAL OF 30% DISPLACEMENT OF CURRENT PETROLEUM CONSUMPTION AND THE PRODUCTION OF 1 BILLION TONS OF BIOMASS FEEDSTOCK PER YEAR?Trick or Treat? • Answer from USDA and DOE is that 1 Billion dry tons of Biomass feedstock can be produced per year. • So what is the deal for Forestry and the current state of play?

11. Feedstocks - Conversion-Uses • USES • Fuels: • Ethanol • Renewable Diesel • Power: • Electricity • Heat • Chemicals • Plastics • Solvents • Adhesives • Acetic Acid • Carbon black • Paints • Dyes, Pigments, and Ink • Detergents • Food and Feed Biomass Feedstock Conversion Processes - Enzymatic Fermentation - Gas/liquid Fermentation - Hydrolysis to Oil - Gasification - Combustion - Co-firing Trees Agricultural Crops Forest residues

20. MAJOR CONGRESSIONAL DIRECTIONS • The Biomass Research and Development Act of 2000 • Farm Security and Rural Investment Act of 2002 • Healthy Forests Restoration Act of 2003 • American Jobs Creation Act of 2004 • Energy Policy Act of 2005

21. WHAT DO WE MEAN WHEN WE TALK ABOUT FOREST RESOURCES AS BIOMASS? • PRIMARY – logging residues; fuel treatments • SECONDARY – primary wood processing mill wastes; secondary mill wastes; pulping liquors • TERTIARY – Urban wood wastes

22. BIOMASS FROM THE FOREST RESOURCE • 52 MM tons fuel wood • 144 MM dry tons of residues from wood processing mills and pulp and paper mills • 47 MM dry tons of urban wood wastes • 64 MM dry tons logging and site clearing • 60 MM dry tons of biomass from fuel reduction 368 MM dry tons

23. CURRENT BIOMASS FEEDSTOCK CONSUMPTION • Slightly more than 75% of biomass consumption – 142 mm tons, comes from forestlands • 2003 – biomass contributed nearly 2.9 quads BTU to the nations energy supply ; ~ 3% of the Nations energy consumption of ~ 98 quads. • More than 70% of this biomass comes from wood residues and pulping liquors generated from the forest products industry.

24. WHO OWNS THE 504MM ACRES OF US TIMBERLAND FORESTLAND? • 29% Public • 13% Forest Industry • 58% Private In the South an estimate would be that more than 75% forest land ownership is privately held

25. AREA OF PLANTATION PINE STANDS IN MISSISSIPPI THROUGH 2040 USDA, FOREST RESOURCE RPT #24, 1988

26. 7% 2% National Forest Other Public 44% Forest Industry Non-industrial Private 47% AREA OF PINE PLANTATIONS BY OWNERSHIP IN THE STATE OF MISSISSIPPI THROUGH 2030 ROSSON, 2001

27. TIMBER REMOVALS OF PLANTATION PINE IN MISSISSIPPI THROUGH 2030

28. STATE RANKINGS OF FOREST PRODUCTS IMPACTS, 2001 Source: Implan data for US states (MIG Inc.)

29. THERE IS A NEED TO CREATE A SUSTAINABLE FOREST BASED BIOMASS INDUSTRY IN THE SOUTH • Feedstock for bioenergy and bioproducts create jobs and enhance income for the rural sector of America’s economy • It is vital that the barriers which are preventing the economically and environmentally sound development of sustainable biomass are removed.

30. RESOURCE ASSESMENT • Forests are expected to provide multiple use –benefits, including wildlife habitat, recreation, and ecological and environmental services • US Timberland – 29% publicly owned. 13% forest industry and 58% privately owned • Fuel wood – 35 MM tons of current consumption for residential and commercial use and electrical utility use. • What about short rotation woody crops? ( Grow on Agricultural lands).

31. SOME ASSUMPTIONS and A QUESTION • A demand will continue for the supply of forest products which in turn will provide an increase in forest biomass • The introduction of more efficient equipment logging, sawmills and pulp mills could reduce the residual biomass • What about off shore competition and mill closures leading to an over capacity of precommercial and commercial thinnings?

32. FOREST GROWTH AND INCREASE IN DEMAND FOR FOREST PRODUCTS • Current trends in the demand and supply of forest products could increase the potential contribution of forest biomass by 89 MM tons /pa • The rate of increase in primary and secondary forest biomass will be tempered by product substitution, recycling and reuse and improved manufacturing efficiencies

33. SOME BARRIERS TO CREATING THE SUSTAINABLE INDUSTRY • Transportation costs per dry ton-mile, especially if based upon bioenergy and biobased product values • Labor availability • Environmental impact • Lack of efficient and specialized equipment needed for small diameter removal • Federal funding for forestry programs - < 0.5% of direct agricultural payments to farmers

34. GAO REPORT - BARRIERS • Emphasis on fuel reduction and the West and North West situation in Public Forests • Difficulty in using woody biomass effectively and lack of a reliable source of biomass material from Federal Lands • Incentives are required in the form of subsidies and tax credits

35. GAO REPORT • Tax credits are required to offset development costs • Federal and State Policies are needed which require the use of renewable energy sources in the generation of electricity • Major costs in harvesting and transportation • Exit fees charged by utility companies

36. GAO REPORT • Incentives could have adverse unintended consequences on the ecological health of National forests • How about – in the absence of incentives the forest based industry in the South will suffer a terminal illness with unwanted consequences?

37. A SUSTAINABLE INDUSTRY BASED UPON MARKET FORCES • Federal policy changes such as increased subsidies could address obstacles to woody biomass utilization. • Research and development efforts, combined with market forces, will eventually result in “equilibrium”. • Woody biomass utilization needs to find its appropriate level. If cost-effective uses of woody biomass can be found, its utilization will increase.

38. Production tax credits or subsidies may be successful in getting businesses or industries started. However, they may not be sustainable over the long term. • Market-driven solutions are more appropriate—for example, providing information to exploit the existing market, or developing requirements or incentives (such as renewable portfolio standards) that create a market on their own.

39. CURRENT IMPACTS ON FOREST PRODUCTS CONSUMPTION • Intensive management of Plantation forests is widely practiced in the Southern States of the USA resulting in a significant amount of thinnings destined for pulp mills as pulpwood • US pulpwood consumption has decreased in the South since the 1990’s Decrease can be attributed to higher costs: • Changing paper demand • High labor costs • High fiber costs • High tax rates

40. UTILIZATION OF FOREST RESOURCES • What will happen to the significant volumes of pulpwood which are increasing daily in the Southern States? • What will happen to the significant volumes of merchantable stems which will become available over the next 10 years? • How could forest residues be utilized more effectively for bioenergy and products?

41. ENERGY AND PRODUCTS FROM WOOD • Consider the future for production of energy and high value chemicals from wood • The South is rich in lignocellulosic material • Wood material can come from wood waste and also forest thinnings • Wood could be specifically grown for conversion to energy and chemicals • The future for energy and high value chemical products is with lignocellulosic products

42. THE PRODUCTION AND PRODUCTION AND UTILISATION OF ENERGY AND CHEMICALS FROM WOODY BIOMASS • Consider the emphasis on production of electricity in co-fired power plants for hub and spoke reticulation • The development of a form of distributed energy could be much more attractive, especially to rural communities

43. SMALL IS PROFITABLE • Combined Heat and Power (CHP) units would lend themselves particularly well to small communities, especially supplying energy requirements for key installations such as schools, clinics and fire stations • Local economies could derive direct benefit from locally developed energy and local communities retain the revenue from the production of wood based fuels

44. SMALL IS SUSTAINABLE • Highly integrated Biorefineries will need to have very favorable resale prices, especially since gasoline is so heavily subsidized • Given the continual advances in technology and specific market demands the emergence of micro-Biorefineries seems a very logical development

45. BARRIERS AND SOLUTIONS FOR DEVLOPING A SUSTAINABLE INDUSTRY • Major barrier to the sustainable development of wood based energy is its cost vs. fossil fuels • If the environmental and social benefits of wood energy are accounted for, then the utilization of forest biomass for the production of energy becomes environmentally, economically and socially justifiable.

46. DEVELOPMENT OF A SUSTAINABLE INDUSTRY • I would suggest to you that - If the environmental and social benefits of wood energy are not accounted for, then the lack of utilization of forest biomass for the production of energy will become environmentally, economically and socially unacceptable.

47. WHAT NEXT FOR BIOMASS UTILIZATION? • US DOE and USDA committed to expanding role of biomass as a source of energy and chemicals • View this as a way to support new industries manufacturing fuels, chemicals and other products • Additional work is required to develop appropriate conversion technologies and to determine the impact of Forest Biomass Utilization on traditional Forest Products markets