Biomass conference addresses farming community's role in industry
The farming community is an integral part of the biorefining and biomass heat and power industries. However, its contribution to the growth of the industry can—at times—be overshadowed by the massive amount of attention paid to research, development and scale-up activities. Attendees at the 2011 International Biomass Conference & Expo in St. Louis had the opportunity to learn more about the farming community’s perspective of the biomass industry during a panel titled Enlisting Farmers in the Profitable Production of Biomass Supply Chains.
Daniel Simon, a partner in Ballard Spahr LLP’s Energy and Project Finance Group, opened the panel with a historical overview of the Biomass Crop Assistance Program. Although the program initially faced a variety of implementation issues, the USDA is forging ahead.
During his presentation Simon noted that USDA originally planned to accept project area proposals for BCAP on a rolling basis, but in a surprise move announced application deadlines for the program earlier this spring. “You need to get your application in by May 27,” said Simon. Although the move came as a bit of a shock to those following the program, he noted that it is understandable under the circumstances. “I think USDA wants to get the money out the door as quickly as possible,” Simon added. The optimistic schedule established by the USDA calls for the state level Farm Service Agency to review the applications by June 10, with federal reviews following two weeks later.
The biggest question with the program right now, said Simon, is whether or not Congress will continue to fund the program in Fiscal Year 2012 and beyond. The USDA seems to strongly support this program, Simon noted, but said it has had “a very tortured history.” For this reason the USDA seems very motivated to roll out the program correctly and make sure the assigned funding goes to support the best possible projects.
Don McCabe, vice president of the Ontario Federation of Agriculture, also participated in the panel and was able to share valuable insight from the view of the farming community. McCabe noted there seems to be a lot of potential in the biomass power sector, but potential doesn’t necessarily equate to reality. “Talk to me in three years; talk to me in 10 years and I’ll tell you if it’s reality or not,” he said. “There is no silver bullets here folks, but I’m very optimistic there is a whole lot of silver buckshot.”
McCabe offered a simple explanation of what famers need in order to become involved in biomass production—fair compensation. “Don’t come insult me by offering me $35 a ton for corn stalks,” he said. “I’ve got earth worms that are hungry. They are going to eat it before you are.” He elaborated by noting that famers already supply our society with food, clothing, hunting opportunities, jobs, and several other important products and services. “So, now you want me to supply electrons?” he said. “I’ll do it, but show me the money, because something has to give…$7 corn is here to stay and so are soybeans.” In addition, McCabe spoke about the farming community’s needs regarding long-term contracts for biomass crops, simple logistics plans and strong federal policies.
Risk was a primary topic of Timothy Baye’s presentation. Baye is a professor of business and bioenergy specialists with the University of Wisconsin-Extension. The biomass value proposition is “all about risk,” he said. “It’s all about dealing with risk involved from the ground to the conversion—and getting paid for that risk…When you first think about biomass supply you are thinking about optimizing the value extraction. It’s a good place to start. Think about all the variables. The pulp and paper industry has a long history of dealing with a lot of bulky products, logistics [and] pricing.” There are also comparisons that can be made with the grain, oil, gas and coal industries.
Aaron Schuchart, a managing partner with Biomass Integrators LLC, closed out the session with a discussion of how biomass composition, genetics, agronomic practices, soil composition and harvest dates all contribute to the impact biomass fuels have on boiler operations and emissions.
“Ideally as an industry we would have a database to actually quantify all of these independent variables and their effect on fuel composition, but unfortunately we do not have that,” he said. “So, what we recommend is for any project that is going to employ a dedicated energy crop, we suggest a one-year pilot program—at a minimum—as part of your feasibility prior to actually scaling to [the commercial level].”
Schuchart also spoke about federal policy needs. While there has been a lot of talk about BCAP, he noted that there are several other actions the federal government could take to support the biomass industry, including the development of crop insurance for dedicated energy crops and the inclusion of grasses grown under conservation programs. “I think those two things would be really helpful,” he said.