What Tangled Webs
This issue of Biomass Magazine, the companion issue for the International Biomass Conference & Expo, offers a data-rich and comprehensive assessment of the role that imports and exports play in the broader biomass-to-energy segment. Together, the stories make it clear that each sector is similar to the next, in that they covet foreign markets as a means of industry growth. Yet, the most compelling discoveries our team made while producing this issue are the ways in which the import/export realities of the sectors differ from one another.
Senior Editor Ron Kotrba’s page-36 feature, “The Imports Cometh,” is a case study in the law of unintended consequences when well-intentioned domestic policies meet the global marketplace. Last year, the U.S. imported more than twice as much biodiesel as domestic producers made in 2010. Argentina alone shipped nearly a half a billion gallons of biodiesel into the U.S. last year, while U.S. producers shipped less than 100 million gallons to all foreign markets combined. Had U.S. producers been running at full tilt to satisfy domestic demand, this fact would not likely generate the rancor that it does, but Kotrba points out in his piece that U.S. producers are only operating at about 70 percent of full throttle. This simple fact makes it clear why the National Biodiesel Board continues to push for changing the tax credit from one awarded to blenders of biodiesel, regardless of where it originates, to one that is awarded to domestic producers.
That situation couldn’t be more different for the relatively new class of wood pellet producers in the U.S. While this country does have a domestic market for wood pellets, it has little to no impact on the emergence and continued growth of the industrial pellet capacity in the Southeast. The stark contrast between the two made an impression on me, and I dedicated the bulk of my page-44 feature, “Sizing Them Up,” to a side-by-side comparison of three U.S. renewable energy commodities, and the size, proportion and diversity of the export opportunities that each enjoys. They really couldn’t be more different from one another. Both U.S. ethanol and wood pellet producers are the world’s largest producers, but U.S. ethanol is largely consumed in domestic markets, while U.S. pellet exports outstrip domestic usage three or four times over.
The tie that binds them all is the complexity of the web of foreign and domestic policies that support these markets, and the constant effort to ensure these policies introduce at least as much opportunity for U.S. interests as they do for a growing roster of foreign competitors.
Author: Tim Portz
Vice President of Content & Executive Editor