This is yet another issue of Biomass Power &amp; Thermal packed with great content and I&rsquo;m pleased to finally release it to you. Among a number of pertinent topics, we touch this month on an avenue of feedstock transportation that hasn&rsquo;t prompted much chatter in the biomass industry: inland waterways.
 That&rsquo;s not to say the subject never comes up, but until very recently, I haven&rsquo;t heard much about it. It seems most pellet companies and other biomass-related operations look first to railways when evaluating how best to get feedstock from point A to point B.
 But a few projects are, in fact, structured around access to river barges, including one by A New Leaf Energy, which Associate Editor Anna Austin explores for an article in the Fired Up section this month. In addition, Associate Editor Luke Geiver has crafted a feature article around the use of inland waterways for biomass transport, beginning with developing plans in Britain to use decades-old canal systems to move both raw material and pellets. He expands his coverage into the potential for similar strategies in the U.S., including the use of the Mississippi River. It&rsquo;s certainly an exciting prospect.
 In keeping with the issue&rsquo;s theme of feedstock handling, Anna also examines the circumstances dictating whether direct pipeline injection or power generation holds more promise for methane-emitting operations. Pipeline injection is another topic covered this month that I hope will drum up interest and discussion, having been given little in the past.
 And I hope you&rsquo;ll be reading all our thought-provoking coverage between panel sessions at the International Biomass Conference &amp; Expo in Denver, Colo., or as you&rsquo;re preparing for it. The event&rsquo;s agenda is impressive and includes for the first time a forest health seminar. The Rocky Mountain Forest Restoration &amp; Bioenergy Summit is an exciting addition because it shows that the biomass industry is without a doubt concerned about forest sustainability and vitality. There seems to be a misunderstanding among critics that our industry wants to clear cut forests without regard for their continued growth. That is fundamentally untrue and I&rsquo;m proud that this biomass conference will feature discussions aimed specifically at forest restoration.
 The number of new topics in this issue is, I think, a testament to the evolution and innovation of the biomass industry, and an indication of the torrent of new talking points that will arise at the conference.&nbsp; You won&rsquo;t be able to get enough of us.

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Digging into New Subject Matter 

Biomass Power Association and California Biomass Energy Alliance held their joint annual conference in February in Las Vegas.&nbsp; This gathering of members of the biomass community each year from across the country is a venue for discussing solutions to the challenges facing the industry on both the national and local levels.
 The conference kicked off with a heartfelt thank you to Mike Whiting, a decades-long member of the biomass community, who is retiring from the woods to devote more time to his family&rsquo;s foundation. The BPA recognized his dedication to biomass with a wood-chip plaque.
 &nbsp;Some of the highlights from the two days of meetings included presentations from experts. Steve Brink with the California Forestry Association outlined the USDA&rsquo;s forest restoration project and its positive effects on the biomass industry. Similar to the USDA Biomass Crop Assistance Program, projects like this&mdash;removing dead, flammable debris from forests and using it for clean, biomass power&mdash;are increasingly recognized as mutually beneficial to industry, government and citizens.
 Tom Christofk, an air pollution control officer with California&rsquo;s Placer County Air Pollution Control District, expanded on Brink&rsquo;s mutual benefits message. Christofk related the story of Placer County&rsquo;s search for common sense ways to dispose of the large amounts of debris cleared out of forests to prevent wildfires. Not only did biomass provide a way to put these materials to use, diverting them from landfills, but Placer County also discovered that using them for biomass power resulted in dramatically fewer emissions than open burning. Placer County&rsquo;s work in this area did not go unnoticed. The EPA awarded the county a Clean Air Excellence Award for the initiative in 2010.
 &nbsp;Attendees also received comprehensive policy updates on EPA&rsquo;s Tailoring Rule, Boiler MACT and related rules, as well as the legislative outlook for the year. Author: Bob Cleaves President and CEO, Biomass Power Association <a href="http://www.USABiomass.org">www.USABiomass.org</a>

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Highlights from BPA, Calif. Biomass  Energy Alliance Joint Conference

In 1932, U.S. Supreme Court Justice Louis Brandeis referred to the states as laboratories for policy experiments, popularizing the concept as a pillar of American federalism that is still relevant today. Nowhere is this more apparent than in energy policy. While there has been a lack of significant legislation on the federal level, states have moved ahead in developing innovative mechanisms, such as renewable portfolio standards (RPS), to encourage the development of our nation&rsquo;s renewable energy resources. While thermal energy has not played a significant role in most RPS policies, there are a few laboratories to look to as the biomass thermal industry continues to move forward on this issue.
 As of January, 29 states and the District of Columbia had enforceable RPSs or other mandated clean energy capacity policies. These programs require retail electric utilities to provide a specified percentage of their electricity from qualifying renewable sources. Even though the primary focus of an RPS is electricity generation, several states also include the output of renewable thermal energy. But of those, only four currently recognize thermal energy derived from biomass sources. Arizona, Iowa, North Carolina and Wisconsin all have varying policies on how they incorporate biomass thermal into their RPSs, and several states, such as Massachusetts, New Hampshire, Ohio, Vermont and Virginia, are actively considering adding biomass thermal as a qualifying renewable energy source.
 The four existing state laws differ in both the definition of biomass thermal and the mechanisms used to measure the output of thermal energy. While the biomass industry is all too familiar with the inconsistencies among different governing bodies on what constitutes biomass, there are also differences on what qualifies as renewable thermal energy. Iowa simply expanded the eligibility for renewable energy credits (REC) to include heat generated for a commercial purpose from a renewable energy source, including biomass.&nbsp; Similarly, Wisconsin defines non-electric facilities, which qualify for renewable resource credits, as the thermal output generated from biomass, biogas, and densified fuel pellets. On the other hand, Arizona specifically incorporates biomass thermal systems into its RPS, not including wood stoves, furnaces, and fireplaces, while North Carolina has only added waste-heat derived from a renewable energy resource such as biomass and used to produce useful, measurable thermal energy.
 Incorporating thermal energy into an RPS also requires mechanisms to support compliance. Both Arizona and Iowa explicitly define how thermal energy units are measured and integrated into the renewable energy trading system. In Arizona, one REC is granted for each 3,415 Btu of heat produced by a biomass thermal system, while in Iowa, renewable energy tax credits equal $4.50 per 1 million Btu. This is in contrast to Wisconsin law, in which RECs are created for thermal energy based on the amount of conventional electricity it displaces.
 In addition to existing policies, legislation has been introduced in several state legislatures seeking to add biomass thermal to RPS programs. A New Hampshire bill would qualify biomass thermal energy for RECs under Class I of the state RPS. This additional revenue gained from the sales of RECs would incentivize switching to renewable biomass in a state that spends more than $1 billion annually on heating oil and propane, with almost 80 percent of that flowing out of New Hampshire&rsquo;s economy. New Hampshire could displace its demand for heating oil and propane by an estimated 18.5 percent by utilizing sustainably sourced wood and agricultural biomass alone. In doing so, the state could potentially retain more than $250 million annually in its economy and create or retain up to 6,500 jobs.
 Each state RPS signifies an important opportunity to recognize the significance of thermal energy and promote the use of renewable resources to meet this demand, which accounts for approximately one-third of our nation&rsquo;s energy consumption. If states are truly the laboratories of policy experiments, it is essential that the biomass thermal industry continues to build upon this momentum within state legislatures. This becomes especially important as policy makers look to state RPS programs when evaluating the recently introduced Clean Energy Standard Act of 2012, which would create a national clean energy mandate that includes a provision to study how thermal energy may be incorporated in the future. Author: Stephen Gunther Policy and Government Affairs Fellow Biomass Thermal Energy Council (202) 596-3974 <a href="mailto:Stephen.Gunther@biomassthermal.org">Stephen.Gunther@biomassthermal.org</a>

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Biomass Thermal in Renewable  Portfolio Standards

The majority of electricity in the U.S. is produced at large, centralized coal, gas or nuclear power plants. Only Hawaii still maintains significant oil-fired power generation. For the past several years, however, federal and state rules, incentives, and energy portfolio standards have led to significant new power generation from sustainable sources of distributed energy, such as locally available biomass.
 Distributed biomass power generation systems can range in size from less than 1 MW to 50 MW, depending on the amount of opportunistic, residual, or waste biomass fuel available. Oftentimes, landfill restrictions or higher costs stimulate interest in smaller biomass power systems. These opportunity biomass fuels and feedstocks can include forestry byproducts, used railroad ties, high-moisture animal waste, or liquid effluents generated in ethanol distilleries and food-processing plants. In utilizing these waste materials, not only can power be generated sustainably, but the amount of material that needs treatment or processing prior to landfilling is reduced, thereby reducing costs for producers.
 Gasification is one option for well-contained conversion of biomass to power, using the resulting syngas in boilers or an internal combustion engine generator. The Energy &amp; Environmental Research Center&rsquo;s experience in the technology goes back six decades in the coal industry and at least a decade with respect to distributed-scale biomass gasification. From a research standpoint, gasification is a good option for biomass-to-energy and value-added byproduct recovery. Through integration of a biomass-to-energy recovery technology with manufacturing or waste sources, both economic and environmental sustainability can be achieved.
 An examination of commercially available distributed-scale power systems, however, reveals a lack of turnkey options. Some of the key technical challenges responsible for the limited development include: the difficulties in maintaining consistent gasifier performance with variations in the physical and chemical composition, as well as moisture content of a biomass feedstock; the resultant presence of contaminants in the syngas requiring extensive syngas cleaning; and the lack of available efficient and reliable syngas-to-energy technologies, such as engine generators, microgas turbines, or fuel cells.
 In ongoing efforts to develop a reliable distributed waste biomass-to-energy technology, the EERC has partnered with Cummins Inc., an industry leader in internal combustion engine generator technology and manufacturing. The partnership has three goals: develop an integrated gasifier and electrical generator technology with improved syngas-to-power efficiency; design a system that is tolerant of varying syngas compositions; and design a system with exhaust emissions that are well within environmental limits and has lower maintenance costs. Engine manufacturers provide warranties on traditional fuels such as diesel or natural gas, but varied compositions of biomass gasification syngas are currently difficult to certify for warranties.
 The EERC and Cummins plan to couple expertise in gasification processes and engine technology to find solutions suitable for commercial industry. A follow-up Energy Review column will highlight achievements toward producing a reliable biomass fuel distributed power plant. Author: Nikhil M. Patel Research Scientist, EERC (701 )777-5214 <a href="mailto:npatel@undeerc.org">npatel@undeerc.org</a>

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Distributed Biomass Waste-to-Energy  Technology for a Sustainable Future 

Biofuel companies often store grain in bins, which makes them a target of investigation by the U.S. Occupational Safety and Health Administration. A new initiative by the government to focus on chemical processing plants, which includes biofuel production and certain biomass storage facilities, means more inspections and potentially higher fines for the industry.
 Last year, the head of federal OSHA responded to a series of fatal accidents in grain storage facilities with a letter to 3,300 grain facility storage operators. The letter identified specific steps that are required of employers by existing law, naming three companies recently issued combined penalties of almost $4 million. The letter concluded with this warning: &ldquo;If any employee dies in a grain storage facility, in addition to any civil penalties proposed, OSHA will consider referring the incident to the Department of Justice for criminal prosecution pursuant to the criminal provisions of the Occupational Safety and Health Act of 1970.&rdquo;
 The OSHA administrator&rsquo;s letter demonstrates the current tone of his agency, including its inclination to refer all appropriate cases for possible criminal prosecution. It also highlights the focus OSHA is placing on deaths caused by entrapment hazards, especially in agricultural industries. And it puts the industry on notice of OSHA&rsquo;s view of those hazards, setting the stage for willful citations in the event of any such deaths.&nbsp;
 Given the focus on biomass aggregation to create a more cost efficient, stable supply chain, the biomass industry is experiencing a greater need for storage facilities. Companies that store feedstock materials must be aware of OSHA standards that apply to those storage facilities, and biomass companies with storage facilities should pay close attention to the regulation of grain storage in the biofuel sector, even if the particular feedstock is nongrain biomass. In addition to OSHA&rsquo;s specific grain handling standards, there are standards that apply to the storage of other biomass, including confined space, lockout/tagout, electrical, and fall protection standards.
 If employees are entering feedstock storage containment facilities but the employer has not implemented a permit system to control and monitor those entries, the facility's management should take note that the applicable regulations either have not been adequately recognized or have not been followed. Generally speaking, when an employee enters a storage bin, the air must be monitored before and during entry, ventilation must be in place, equipment must be locked out and the entrants must be tied off to a lifeline and harness attached to hoisting equipment in case of an emergency. An attendant must be outside the facility in case the employee inside is overcome.
 OSHA standards for grain storage also address fire and explosion hazards by requiring that equipment and tools be appropriately designed to avoid ignition of grain dust. Other biomass feedstock will be treated the same as grain. If a material poses the potential for fire, engulfment, entrapment or suffocation of employees, OSHA regulates it.
 Facility operators must protect not only their own employees, but also the employees of contractors on site, such as companies that build or repair bins. The facility owner, and the contractor, likely will be targeted by OSHA, or be subject to substantial liability, including criminal charges, where a contractor&rsquo;s employee is injured or killed in a storage bin.&nbsp;
 Unlike grain handling, where a specific standard applies, the storage and processing of nongrain biomass are not subject to a specific set of OSHA standards. Nevertheless, companies that have such operations need to understand how OSHA&rsquo;s general industry requirements apply to their feedstock handling and storage. If in doubt, a biomass company should arrange for legal counsel to engage experts who will evaluate the extent of its legal compliance, making reports and recommendations. Any reports by those experts, in most jurisdictions, can be protected as attorney/client privileged material. This is especially important where OSHA is focusing on criminal prosecution. Authors: Charles Palmer Attorney, Michael Best &amp; Friedrich LLP (262) 956-6518 <a href="mailto:cbpalmer@michaelbest.com">cbpalmer@michaelbest.com</a> Eric Hobbs Attorney, Michael Best &amp; Friedrich LLP (414) 225-4991 <a href="mailto:eehobbs@michaelbest.com">eehobbs@michaelbest.com </a>

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Grain Bin Safety Hazards Have  Implications for Biomass Storage	

AF&amp;PA board elects new chairman and officers
 The American Forest &amp; Paper Association elected Alexander Toeldte, chairman and CEO of Boise Inc., as board chairman, and announced the 2012 slate of board officers.&nbsp;
 Toeldte has served as president and CEO of Boise Inc. since February 2008.&nbsp; Since being elected to AF&amp;PA&rsquo;s board of directors in November of the same year, Toeldte has been an active member of the board, serving in leadership positions within the CEO Task Force and committee structure.&nbsp; Toeldte studied economics at the Albert-Ludwigs-Universitat in Freiburg, Germany, and received his master&rsquo;s degree in business administration from McGill University in Montreal, Canada.
 Also elected to officer positions on the AF&amp;PA board were:&nbsp; David W. Scheible, president and CEO of Graphic Packaging Corp.; John D. Williams, president and CEO of Domtar Inc.; and Jim Hannan, president and CEO of Georgia-Pacific LLC.
 Others beginning terms as members of the AF&amp;PA board of directors in 2012 are: William B. Johnson, CEO of Johnson Timber Co.; George D. Jones, president and CEO of Seaman Paper Co.; Frank Papa, president and CEO of The Newark Group; Allan F. Trinkwald, president of Simpson Investment Co.; and Russell Wanke, vice president and general manager of Thilmany Papers LLC.
 The AF&amp;PA board of directors currently consists of 29 presidents, chairmen and CEOs representing the broad spectrum of the forest products industry.
&nbsp;
Vecoplan appoints William Davison as service director
 William Davison has been named service director of Vecoplan LLC, a shredding, recycling and waste processing technology provider. His new responsibilities include planning and allocation of resources and scheduling, as well as management of maintenance and service on existing machines, systems and control panels in the field.
 Formerly general manager at Sieger Mechanical Maintenance LTD, Davison brings to Vecoplan more than 22 years of mechanical and electrical maintenance experience in the industrial sector.
&nbsp;
Vermeer Corp. makes equity investment in McLaughlin 
 Vermeer Corp. has made a minority equity investment in construction equipment manufacturer McLaughlin Group Inc.
 Dave Gasmovic, president of McLaughlin, is the primary shareholder and will continue to lead operations.&nbsp; Jeff Wage, a veteran of the construction industry, joins McLaughlin as vice president and an equity partner, while the minority equity investment by Vermeer provides a deeper strategic relationship with McLaughlin.
&nbsp;&nbsp;&nbsp; This new ownership arrangement will not affect the current branding or distribution of McLaughlin products, including vacuum excavation systems, auger boring systems, locators and attachments, according to the companies.&nbsp;
&nbsp;
Fecon announces new dealer and service provider
 Power Equipment Co. will be added to the list of dealers and service providers for Fecon in Tennessee, Northwest Georgia, Northeast Arkansas, Northern Mississippi and Western Virginia. Power Equipment will offer Fecon&rsquo;s line of Bull Hog mulchers, FTX track carriers and various other forestry attachments. Fecon and Power Equipment Co. will work together to fulfill the land clearing, vegetation management, right-of-way clearing and site preparation equipment needs of their customers. Power Equipment will also be a local service facility for Fecon products and customers.
&nbsp;
Atlas Energy Technologies Inc. recruits new CEO
 Richard Bradshaw will serve as the new CEO of Atlas Energy Technologies, Inc. AET is a five-year-old, company based in Rantoul, Ill., that has developed an innovative systems approach to converting biomass waste into energy.&nbsp;
 The technology, trademarked Integrated Nutrient Fixation, is a holistic approach to utilizing all the available energy and nutrient content of all types of biomass by producing biogas, biofuels, carbon-enriched fertilizer, and potable water.&nbsp; The system is scalable and modular. The company also offers several mix-and-match modules that produce gas, fuels, fertilizers, organic acids, and clean water.&nbsp; AET is designing systems for forest biomass in New Mexico, fire control, large-scale hog farming in Iowa, rural development in southern Africa, and sewage-disposal-with-power-generation for high-rise buildings in the Middle East.
 Bradshaw has 15 years of experience in renewable energy technology development, project funding, and project development. He has provided consulting and government affairs services to more than 40 small firms and several universities. He worked for the U.S. Department of Energy until 2001, and was a major contributor to President Bill Clinton&rsquo;s seminal Executive Order in 2000 that set goals for research and development, as well as commercialization of biofuels and bioenergy.
&nbsp;
GEA Nu-Con rotary valves are designed for dairy industry
 GEA Nu-Con rotary valves are specifically designed to comply with USDA regulations and offer several distinctive features to meet the demanding requirements of the dairy industry.
 Tools-free demounting affords a convenient method to remove the rotor from the valve body and features precise rotor alignment to enable easy reassembly after cleaning or inspection.
 In addition, an optional easy-slide system can be supplied, which virtually eliminates rotor droop and allows unaided operation for maintenance personnel.
 An optional second-generation Rotor Detection System now features full operation during wet cleaning. With the RDS Gen2 system, customers can conveniently configure and monitor up to 25 valves.
 GEA Nu-Con now has a full-time product development team that will continue to introduce new features for its entire range of components.
&nbsp;
PHG Energy hires new national sales manager
 PHG Energy, a Tennessee-based alternative energy company, has hired Robert Cox as national sales manager. PHG Energy provides equipment and technology that converts recycled waste material or renewable biomass into an economic substitute for fossil fuels, and recently developed a downdraft gasification system.
 Cox graduated from the University of Michigan-Flint with a bachelor of science in resource ecology and environmental science. He has more than 16 years of professional experience in the design and implementation of regenerative thermal oxidizers, recuperative thermal oxidizers, regenerative catalytic oxidizers and various other environmental control systems. Most recently, Cox was the eastern regional sales manager for Pro-Environmental Inc., with a focus on capital equipment and aftermarket service. Prior to that, he spent 14 years with Durr Systems Inc. of Plymouth, Mich., in a variety of sales and engineering roles.
 The fuel created by PHG&rsquo;s gasification process and proprietary equipment can be used to power thermal oxidizers, boilers, kilns or combined-heat-and-power equipment. The industrial-grade gasifier system has been vetted through more than 40,000 combined hours of commercial production. With further refining, the fuel can be used to power electrical generators. PHG&rsquo;s process delivers high-Btu fuel gas without an ignition or burning stage, allowing users to lower their greenhouse gas emissions while significantly reducing their energy costs.
 BinMaster capacitance probe ideal for hostile environments
 BinMaster Level Controls&rsquo; newly designed Pro Remote capacitance probe offers the ability to mount electronic components up to 75 feet away from the sensing probe. The point level indicator is designed specifically for hostile applications such as high temperatures or excessive vibration, featuring a unique split configuration that houses sensitive electronics away from extreme conditions that may interfere with proper probe operation. The Pro Remote can be used for high-, mid- and low-level detection of solids, liquids or slurries using a variety of Delrin, Teflon, food-grade, flush-mounted, stubby, or extended-probe options.
 The probe features a new housing with a triple-thread, screw-off cover that allows easy access to internal components. It also has dual conduit entries to simplify wiring and installation. Another new electronic feature allows the user to set flexible time delays for covered and uncovered conditions. The probe can be set to react either immediately or with up to a 30-second delay.
&nbsp;
DP CleanTech appoints new director&nbsp; 
 DP CleanTech has appointed Andreas Asmussen managing director and head of engineering for Europe. He will be located at DP CleanTech&rsquo;s new headquarters in Copenhagen, Denmark.&nbsp;
 The global expansion of DP CleanTech requires significant efforts to ensure continued integration and alignment across all functions, according to the company. Asmussen&rsquo;s background and experience will enhance the management team&rsquo;s capabilities in driving efficiencies and positive growth.&nbsp;
 Asmussen previously worked in director positions for Maersk Drilling and FLSmidth, both in Denmark and abroad. He holds a master&rsquo;s degree in mechanical engineering, and has experience and qualifications across a range of management disciplines.

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Business Briefs

Through a combination of energy conservation measures, on-site renewable power generation, green power and renewable energy credit purchases, the New Belgium Brewery in Boulder, Colo., is a leader in sustainability.
 Founded in 1991 and considered the nation&rsquo;s third largest regional craft brewery, the company manufactures more than 20 different types of beer, including its flagship amber ale Fat Tire. As beer-making processes in general require a significant amount of water&mdash;roughly five gallons of water for every gallon of beer&mdash;the facility goes the extra mile to make the most out of its waste water by hosting an on-site process water treatment plant (PWTP). There, water that was used in the beer-making process is sent through a series of aerobic and anaerobic basins, and the resulting methane is piped back to the brewery where it powers a 292 kilowatt (kW) combined-heat-and-power (CHP) engine.
 Sarah Uhl, enculturation specialist at New Belgium Brewery, says the CHP system was installed about seven years ago, and a second biogas generator was recently commissioned. &ldquo;So one provides energy for the PWTP, and the other is utilized to supplement facility electricity, which can be up to 15 percent,&rdquo; she says.
 In 2009 alone, the CHP system generated 957,000 kilowatt hours and saved the brewery nearly $60,000 in electricity costs. In addition to the PWTP and CHP system, a 200 kW photovoltaic array sits on the top of the brewery's packaging hall to contribute more than 3 percent of the facility&rsquo;s electrical needs. Spent grains from the brewing process are sold to a local farmer who feeds them to his cattle.&nbsp; New Belgium Brewery also purchases renewable energy credits for the offsite warehouse it leases, as well as a substantial amount of wind energy from the City of Fort Collins&rsquo; Wind Program.
 Tour attendees of the International Biomass Conference &amp; Expo in Denver from April 16-19, will visit the brewery and get a first-hand account of its sustainability and renewable energy practices. Uhl says attendees will learn about the company&rsquo;s history and business culture, tour the brew house, packaging hall and the PWTP, and sample some of the beers produced on site.
 The dual-stop conference tour will also include Boulder County&rsquo;s forest management operation and biomass energy facility, where proactive forest management minimizes fire hazards and improves the health of the county&rsquo;s forests, while producing renewable heat.
 Therese Glowacki, Boulder County Parks and Open Space Resource Management Division manager, says tour attendees will view foothills forests containing pine beetle attacked trees, as well as forest management activities. The site takes in about 150 acres worth of managed forests each year, according to Glowacki, and wood brought to the site is chipped or sent through tub grinders and screened.&nbsp; Then, it&rsquo;s hauled to a district heating plant located about seven miles away, to be used as feedstock in a seven-year-old biomass heating system that generates heat for five buildings at the Boulder County Open Space &amp; Transportation Department Complex.
 &ldquo;Tour attendees will hopefully get to see the plant in action, the automated system and wood chips in storage,&rdquo; Glowacki says. &ldquo;We say it&rsquo;s forest management to biomass energy, the complete cycle.&rdquo;
 The International Biomass Conference &amp; Expo will offer another set of tours, which will include continuous emissions monitoring systems manufacturer Custom Instrumentation Services Corp., proprietary gasification system developer Community Power Corp., and the National Renewable Energy Laboratory&rsquo;s National Bioenergy Center.
&mdash;Anna Austin

BUBBLING UP: A large dome holds methane that will power a CHP engine at New Belgium Brewery. 

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The International Biomass Conference & Expo tour features a brewery process water treatment plant and forest management activities

Brimming with Biomass   

The Forest Guild has released its report, &ldquo;Forest Biomass Retention and Harvesting Guidelines for the Southeast,&rdquo; identifying how expanding markets for forest bioenergy can enhance forests, while meeting the social and economic needs of society. The report is also meant to fill the gap between state-level biomass guidelines and existing best management practices.
 The document includes guidelines for four major forest types in the Southeast: Southern Appalachian hardwoods, upland hardwoods and mixed pine, bottomland hardwoods and piedmont, and coastal plain pinelands. All four types can be found, however, from New Jersey to Florida and into West Texas, according to the report.
 The Forest Guild makes several recommendations. First, biomass harvesting in critically imperiled or imperiled forest types should be avoided, unless the biomass harvest is used to perpetuate the forest. In sensitive areas, biomass harvesting may be appropriate to control invasive species, enhance critical habitat or reduce wildfire risk, according to the report. But harvesting activity in such places should be led by ecological goals and not for biomass supply. For old growth forests, biomass harvest should be minimized or nonexistent.
 For downed woody material (DWM) retention, the guidelines list several suggestions. At an existing DWM site, one-third of harvest slash should remain on-site and the DWM material should remain varied, including coarse woody material, fine woody material and downed logs, all of which should be distributed evenly across a site.
 The retention of forest structures for wildlife and biodiversity is crucial, and the Forest Guild recommends leaving and protecting roots, stumps andlarge downed wood material, live cavity trees, den trees, and other live decaying trees and snags.
 The guidelines also provide an estimated goal each forest type should try to achieve when maintaining tree snags per acre.
 &ldquo;The Forest Guild guidelines show a much needed middle path,&rdquo; said Mike DeBonis, Forest Guild executive director. &ldquo;We don&rsquo;t have to forfeit environmental protection to produce renewable energy and create jobs.&rdquo;
&mdash;Luke Geiver

TREE TIPS: Longleaf pine is among the tree species in the Southeast U.S. that will fall under harvesting guidelines. 

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The Forest Guild crafted biomass harvesting guidelines for the Southeastern U.S.

Guild Guidelines

U.S. Sen. Jeff Bingaman, D-N.M., has introduced legislation for a national Clean Energy Standard that would require large utilities to begin selling a certain portion of their electricity from clean energy sources beginning in 2015.
 The Clean Energy Act of 2012 begins at 24 percent clean energy in 2015, and increases by 3 percent per year through 2035 to reach 84 percent. It would only apply to utilities that are selling electricity to retail consumers, and exempts small utilities. In 2015, 8 percent of all utilities would need to meet the standard, increasing to 13 percent in 2025.
 The bill&rsquo;s definition of clean energy is as follows: electricity generated at a facility placed in service after 1991, using renewable energy, qualified renewable biomass, natural gas, hydropower, nuclear power, or qualified waste-to-energy; electricity generated at a facility placed in service after enactment that uses qualified combined-heat-and-power (CHP); electricity generated with a carbon-intensity lower than 0.82 metric tons (.9 tons) per megawatt hour, or as a result of qualified efficiency improvements or capacity additions at existing nuclear or hydropower facilities. The definition also includes electricity generated at a facility that captures and stores its carbon dioxide emissions.
 Qualified CHP must generate at least 20 percent of its useful energy as electricity and 20 percent as heat, and have an overall system efficiency of greater than 50 percent, according to the bill. To be considered qualified renewable biomass, the feedstock must be produced and harvested in an ecologically sustainable manner.
 Qualified waste-to-energy is defined as energy produced from the combustion of post-recycled municipal solid waste, animal waste or animal byproducts, biogas, landfill methane, or other biomass that has been diverted or separated from other waste out of a municipal waste stream. Existing waste-to-energy facilities must be in compliance with all applicable environmental regulations for new facilities within the applicable source category under the Clean Air Act.
 In addition, the proposal includes a provision to study how thermal energy may be incorporated into a national CES, an element that the Biomass Thermal Energy Council is enthusiastically supporting. No later than three years after the date of enactment of the bill, the U.S. DOE will conduct a study to examine mechanisms to supplement the standard by addressing clean energy resources that do not generate electric energy but that may substantially reduce electric energy loads. That would include biomass converted to thermal energy, thermal energy delivered through district heating systems, and waste heat used as industrial process heat.
 &ldquo;BTEC has worked tirelessly in support of policies that recognize and promote the use of renewable thermal energy from sources like biomass,&rdquo; says Joseph Seymour, BTEC executive director. &ldquo;We look forward to working with Senator Bingaman's office on the thermal study and other components of this legislation.&rdquo;
 The U.S. Clean Heat &amp; Power Association also expressed support of the bill, particularly the CHP provision. According to the association, 82 gigawatts (GW) of CHP are currently installed in the U.S., and estimates indicate the technical potential for additional CHP at existing sites in the U.S. to be between 130 and 170 GW, plus an additional 10 GW of waste heat recovery CHP.
&mdash;Anna Austin

National Clean Energy Standard legislation has been introduced in the Senate

Considering a CES 

Southeast Alaska is the Saudi Arabia of biomass, according to Nathan Soboleff, renewable energy coordinator for Sealaska. The region is not only in the middle of a 17-million-acre forest with rich biomass resources, but it also has huge potential that has been historically underutilized and untapped, according to Soboleff. But after the Alaska Energy Authority, which oversees statewide energy policy, issued the Southeast Alaska Integrated Resource Plan (SEIRP), he might be happily mistaken about the region&rsquo;s resources going unused.
 Each section of the state has unique assets and opportunities, so the AEA released the SEIRP to take advantage of them, according to Rick Harris, executive vice president for Sealaska. By issuing the plan, the overarching critical issues pertaining to energy use in Southeast Alaska were addressed, he says. The plan found that although the region has access to hydroelectric power, many of the electricity consumers in need of that power are not close to the generation facilities, which increases the price of electricity. In addition, the region&rsquo;s hydroelectric capacity is being maxed out by a lack of transmission lines and grid networks, as well as an overuse of electric heat in areas that are close to generation facilities and can receive their electricity cheaper than oil-based heat. In one instance, Soboleff says an entire school district is considering the conversion of several buildings to electric heat.
 But Soboleff says that won&rsquo;t happen if the biomass portion of the SEIRP comes to fruition. The report concluded that nearly 80 percent of all residential budgets are used up on space heating costs. The report also concluded that all 80 percent could be replaced by biomass-based thermal applications.
Over the next 20 years, Soboleff estimates that such an aggressive strategy to satisfy the region&rsquo;s heating needs with wood pellets would create investments reaching $500 million. &ldquo;We believe that half of that money would be needed within the next four to eight years,&rdquo; he says, adding that it&rsquo;s achievable.
 Harris points out that although the report is more of a directional plan, it notes that biomass offers a viable, affordable and real solution. Soboleff agrees. &ldquo;All great things start as a plan,&rdquo; he says.
&mdash;Luke Geiver

UNLOADING ENERGY: A truck pours feedstock into a silo in woody biomass-abundant Southeast Alaska. 

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Southeast Alaska has problems with energy, and a plan to fix them with biomass

The Next Biomass Hotbed   

Alex Woodward and the rest of the team at Natural Power, a U.K.-based renewable energy consulting firm, built their business on wind power projects, not biomass.
 But in 2010, the consulting crew added biomass projects to its list of services. Woodward says the challenges in making biomass endeavors a success, including continual change in the feed-in tariff regime and investor nerves, are similar to those of other projects. &ldquo;However, these projects bring significant benefits to clients and their communities,&rdquo; he adds. &ldquo;The general trend is that support in some way is available for these early adopters.&rdquo;
 The team recently signed on with three separate organizations in Scotland to provide a range of services for future biomass power and thermal projects. In Glasgow, it will provide technical and project management services for a brewery waste anaerobic digestion system. In Aberdeenshire, Natural Power will do the same for an ice cream manufacturer, and in Dumfries, the team will develop another AD system for a dairy farm at Barony College.
 Woodward says Natural Power has been able to land contracts such as the brewery or ice cream manufacturing facilities because of its reputation in the wind industry. It has specialized in helping rural communities and small developers produce between 15 kilowatts and 5,000 kW from wind. &ldquo;We have benefited from our reputation for delivering a realistic consultancy,&rdquo; he says. &ldquo;Many clients have heard of us in the wind sector and now trust us to develop bioenergy projects.&rdquo; Woodward adds that the company tries to engage new customers at every level, from meetings at trade associate events, to more targeted marketing approaches.
 &ldquo;As we grow our business in line with the rapidly expanding biomass market, these significant contract wins are a testament to the high level of technical expertise Natural Power can bring to clients,&rdquo; says Dan Gates, senior manager of biomass services for Natural Power. He adds that once developed, the projects will be a great demonstration of the significant benefits that biomass and on-site heat and power generation can bring to communities and local businesses throughout the U.K.
&mdash;Luke Geiver

BUILDING BUSINESS: A U.K. energy consultancy added biomass to its portfolio and has three ongoing projects. 

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The biomass industry is drawing support from other renewable sectors, including wind

Adding Biomass to the Mix 

An Illinois company that has been working under the radar for the past few years on new fuels and new ways to transport them says it is beginning to see results. It is planning to begin construction of its first fuel pellet plant within the next couple of months.
 A New Leaf Energy partner Bob McElwee says the plant will be located in the Midwest on a major river, and will manufacture wood pellets for shipment to Europe, as well as a blend of coal fines and biomass. &ldquo;I have three million tons of coal fines available within five miles of our plant, which load product directly onto barges at the site,&rdquo; McElwee says.
 The blended fuel will feature a binder, but McElwee says he&rsquo;s working with research groups to determine the final additive. Currently he is a partner in Nu Materials, which has developed an organic binder called Thermoresin. It is made from proteins and carbohydrates of renewable biomass and allows the blending of coal and biomass materials into one pellet product.
 McElwee says he will be working with other companies as well to get the best additive or binder for each client.
 The Midwest pilot plant will be the prototype for upcoming plants in other parts of North America, according to McElwee. These plants will not only offer the biomass pellets and coal blends, but also baled chips. &ldquo;This new baled product will be available through our Southern U.S. locations as we begin to ship our orders within months,&rdquo; he says. &ldquo;The wood chip product will be available in two-ton bales that are sanitized and wrapped in plastic.&rdquo;
 McElwee says the planned plants will have a combined capacity exceeding 2 million tons per year, and A New Leaf is opening up new long-term supply agreements each week. Because the company will ship from multiple points in North America and the bales have a favorable density, he expects the shipping costs to be much less than similar bulk products.&nbsp; &ldquo;Our next operation in the Southern U.S. is slated to start shipping 350,000 tons in year one, but we have not yet committed the product to a specific customer,&rdquo; he says.
 The team from A New Leaf Energy will be working with utility customers globally in the coming months on additional agreements for all the products, McElwee adds. He says the ability to produce multiple products using the same skilled labor, and being located near the raw material while at or near major ports, has created a value and price difference for the company&rsquo;s products.
&mdash;Anna Austin

BETTER BLENDS: A New Leaf Energy is developing biomass and coal blended pellets, including (from left) 100 percent coal, 80:20 coal:biomass, 60:40 coal:biomass, and 100 percent biomass. 

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Biomass/coal blended pellets might be on the horizon

Turning Over a New Leaf 

David Lowe has been fielding an increasing number of inquiries from potential biomass energy developers lately at his Commercial Boat Operators Association (CBOA) office in London. The CBOA is tasked with increasing freight traffic on the inland and estuarial waterways in&nbsp; the U.K., and the developers want to know about just one thing, he says: transporting biomass via barge on the country&rsquo;s plethora of inland waterways.
 Success in transporting woody biomass or processed wood pellets on an inland waterway always depends on a number of factors, Lowe says, such as the distance between load and unload locations, or the total volume of product going from point A to point B in a given timeframe. But in many instances, moving biomass on a canal or river system can save time and money and create a competitive advantage.
 Benefits by Barge
 Several factors make moving product by water a better option than by road, according to Stuart McKenzie, freight operations manager of British Waterways, an organization also working to increase the use of the country&rsquo;s canals and waterway systems. &ldquo;One of the biggest advantages is that roads and rail networks don&rsquo;t actually go to the site where waterways do,&rdquo; McKenzie says. But, although waterway transport provides environmental benefits, he says the biggest advantage is linked to savings.
 According to Lowe, water freight is far more environmentally friendly, producing just 20 percent of the greenhouse gases that road transportation alternatives do. But, the real benefit comes from fuel costs and labor. The Freight Transport Association, a U.K. organization that advocates and supports all forms of freight transport from sea to air, estimates that 40 percent of the costs associated with truck transport stems from the fuel. For water transport systems however, fuel costs only account for 20 percent. &ldquo;Water freight can be cheaper,&rdquo; Lowe says. &ldquo;Water can make better use of labor.&rdquo; Not only can one or two men working a barge move more product than one or two men driving a truck, but the barge can get it done more quickly.&nbsp;
 The Chamber of Eco Commerce in Atlanta, Ga., has already highlighted the increase of inland water freight transport as an area ripe with potential. The chamber was created this year to provide consulting and advisory services, along with financial assistance for companies in the energy and environment sectors. Through the inland waterway transport project, the CEC is looking to help project developers with technical, organizational or financial support for such projects. According to the CEC, energy consumption per kilometer per ton of transported goods is roughly 17 percent less than that of road transport, and 50 percent of rail transport. And costs associated with water navigations, such as accidents, congestion, noise, air pollution and others, are seven times lower than those of road transport.
 But McKenzie says several factors must be met before a freight-by-water approach will work. First, a product, biomass in this case, needs to be sourced and processed in close proximity to the waterway. &ldquo;In other words, what we call waterside to waterside,&rdquo; McKenzie says. Next, the navigation system needs to be large enough and rated to support the amount of biomass that needs to be transported to make the process economically viable.
 Although that may seem obvious, McKenzie and Lowe are seeing a trend. Barges on the waterways of the U.K. can typically handle 500 to 600 metric tons (550 to 660 tons) of product, which historically has included steel, timber, aggregates, oil, coal and most recently, waste and recycling materials. The recent uptick in waste and recycling material transport has brought with it a change in the amount of product that can be transported on some of the waterways, making biomass transport attractive to those who need to move higher quantities of products.
 Some companies not only believe the option of inland waterway freight transport is attractive, but they have plans in place to develop the system for their projects. One entity looking to transport biomass using a waterside-to-waterside approach is Dalkia. The European biomass giant has acquired the necessary planning permits to use the Aire &amp; Calder navigational canal network to transport 360,000 metric tons of wood waste annually for use at a 53 MW power facility currently under development.
Lowe and his team at CBOA began discussing barge transport with Dalkia roughly four years ago. The company wanted to transfer&nbsp; biomass approximately 15 to 16 kilometers (9.3 to 10 miles) for use at an existing pellet manufacturing facility.
 It Makes Sense
 Lowe and McKenzie&rsquo;s time working with Dalkia has given them a better understanding of what it will take to transport biomass on inland waterways. In most cases, the barges already available will not require retrofit, Lowe says. Dalkia will utilize readily available shipping containers to ensure time-saving and efficient loading and unloading processes. &ldquo;Conveyors can load the barges quickly, but it can sometimes be quite difficult to get that product out,&rdquo; Lowe says. After the barges are loaded with the containers, a tug will push the barges from behind.
 The pricing model used in the biomass transport system will be the same for other products, according to Lowe. A barge needs to earn a set amount per day. Factors that affect the price of shipment include the amount of time required for loading and unloading, and the time it will take to move the material. For example, the charge for going from Hull to Leeds, which is roughly 96 kilometers (59 miles) fully loaded is currently about &pound;5 per metric ton ($7.92), plus handling costs, according to Lowe. For a 20-kilometer trip, the charge would be about &pound;3 per metric ton, but in both cases, handling time remains the same, so quick loading and unloading would reduce costs.
 The Dalkia project was formed around the possibility of inland waterway transport, as was a project in Louisiana primed to capitalize on European wood pellet demand. Point Bio Energy LLC chose the Port of Greater Baton Rouge for the future home of a wood pellet plant. The facility, announced in January 2011 by Louisiana Gov. Bobby Jindal, will produce 496,000 tons annually, and bring in some of the feedstock from an intercoastal waterway network that includes the Red River and the Mississippi River.
 According to the American Society of Civil Engineers, 41 states (including all states east of the Mississippi River) are served by commercially available waterways. The U.S. waterway networks consist of four main systems, the Mississippi River, the Ohio River Basin, the Gulf Intercoastal Waterway, and the Pacific Coast system. In total, those systems include roughly 12,000 miles of navigable water. The Mississippi River accounts for 9,000 of those miles; the next largest is the Ohio River system at 2,800 miles, followed by the Gulf Coast Intercoastal Waterway at 1,109 miles, and the Columbia River system in the Pacific Northwest at 596 miles. In most waterways, commercial operators are charged a fuel tax of 20 cents per gallon, according to ASCE.
 When Point Bio Energy builds a second facility in Louisiana to meet the demand for pellets, access to the Mississippi waterways will again play a crucial role, according to Bill New, CEO of the company. &ldquo;It is critical,&rdquo; New says. &ldquo;The location gives us a competitive advantage because we can bring ships right to our plants.&rdquo; New believes his barges will have to travel to the facility from an area outside 80 miles to make economic sense, with a lip or retaining wall so the wood chips don&rsquo;t fall into the Mississippi. Unlike Dalkia, New doesn&rsquo;t advocate for the shipping container method, but it is clear he supports the idea of improving biomass logistics with landlocked waterway rivers or canals. &nbsp;&nbsp;&nbsp;
 The company is already developing a pellet facility in Peru that will utilize barge traffic on the Amazon River network. &ldquo;We will be sending pellets by barge and those will be contained and covered,&rdquo; New says.
 For McKenzie and Lowe, biomass transport on inland waterways is a possibility that is starting to make sense in the U.K. But is it repeatable everywhere? New might argue it is. Because the costs of traditional roadway transport are more closely tied to rising diesel fuel costs, it&rsquo;s possible that the interest McKenzie and Lowe are seeing in the U.K. will spread everywhere inland water is available. Author: Luke Geiver Associate Editor, Biomass Power &amp; Thermal <a href="mailto:lgeiver@bbiinternational.com">lgeiver@bbiinternational.com</a> (701) 738-4944

MOVING MONEY: Inland waterways offer an alternative means of reliable and efficient biomass transport.

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CANALS THAT CAN: Several organizations and companies in Britain support the use of the U.K.'s many canals for biomass transportation. 

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PILES OF POTENTIAL: Because diesel fuel costs are lower for inland waterway transport than for land options, pellet producers can cost-effectively bring in feedstock via barge. 


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BURNING QUESTION: Many pellet producers are exploring the use of rivers and canals to help transport their product to end users.


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LOADING UP: Enclosed containers, large biomass storage bags or open air containment spaces can all be used to ship biomass on an inland waterway. 

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Developers in the U.K. and U.S. are using barges instead of railways to move their biomass material 

Inland Asset

According to the U.S. EPA&rsquo;s Landfill Methane Outreach Program, there are about 555 operational landfill gas-to-energy projects in the U.S., and more than 500 additional landfills have been identified as potential candidates for projects. If each one seized its opportunities, LMOP estimates the total gas generation potential to be 210 billion cubic feet per year, or 1,165 MW of renewable electricity. More landfill owners&mdash;as well as owners of other methane-emitting operations&mdash;are beginning to weigh their options, and each and every detail must be carefully considered to determine the best energy model. That model may be the most common avenue taken&mdash;electricity production&mdash;or high-Btu pipeline injection, which is far less common but is beginning to garner more attention.
 Out of the 550-plus LFG-to-energy projects in the country, about 30 of them are injecting renewable natural gas into the pipeline, and several more are in development. Texas-based Element Markets is developing one in Amsterdam, Ohio, at the APEX Sanitary Landfill. The landfill, which covers approximately 1,285 acres in Jefferson and Harrison counties, receives about 1.8 million tons of waste per year and is one of the fastest-growing landfills in the U.S. Randy Lack, chief marketing officer of Element Markets, says the project will generate more than 32 million Btu (MMBtu) of bio-methane through its operational life of 20-plus years.
 Construction is underway on the well field where Element Markets is expanding the system for eventual tie-in to the gas processing plant, and a lateral pipeline will be constructed to connect to an interstate pipeline.
 While landfills represent a considerable chunk of those taking advantage of pipeline injection, it can also be an option for certain wastewater treatment plants and anaerobic digestion facilities.
 Leading by Example&nbsp;&nbsp;&nbsp; 
 The Huckabay Ridge Anaerobic Digestion Project in Stephenville, Texas, is a rare but successful example of an animal manure-based AD facility injecting renewable natural gas into the pipeline. The facility, which is the largest AD project in North America, consists of eight giant cement tanks with a working capacity of 6.8 million gallons, processing more than 26 million gallons of manure, glycerin, grease trap and other organic waste each year. Owned by Element Markets, the facility has been operating since 2006 and the RNG generated at the site is injected into an intrastate pipeline where it is sold to a large California utility.&nbsp;
 In the realm of wastewater treatment plant energy projects, pipeline injection is slowly becoming a trend. San Antonio Water System and Ameresco opened the first such project in the U.S. at the Dos Rios Water Recycling Center in September 2010. There, Ameresco treats and delivers up to 1,060 standard cubic feet per minute of biogas to the natural gas market. SAWS invested about $1 million in pipelines and structures, according to Michael Bakas, Ameresco senior vice president of renewable energy. Not only do the rate payers receive royalties of around $200,000 per year, but the biogas plant will have paid for itself in as few as five years.
 But for a wastewater treatment plant like the Philadelphia Water Department, which recently teamed up with Ameresco for a $47.5 million, 5.6 MW electricity project, pipeline injection isn&rsquo;t the right fit.&nbsp; So why might a project choose pipeline injection over electricity production, or vice-versa? &ldquo;In choosing pipeline injection, the quick answer is that with electricity generation, you&rsquo;re really limited to the local market,&rdquo; Lack explains. &ldquo;Renewable natural gas flows fluidly through natural gas pipelines, and the pipeline system in the U.S. is robust.&rdquo;
 &nbsp;From there, RNG can be taken to the market where it has the most value. &ldquo;Electricity can only flow limited distances because of the way it works and the way the network is built,&rdquo; Lack says. &ldquo;Once RNG is in the pipeline, it can flow very long distances.&rdquo;
 According to the U.S. Energy Information Administration, there are more than 210 natural gas pipeline systems in the U.S. and 305,000 miles of interstate and intrastate transmission pipelines. While RNG may be able to reach long distances through the pipeline system, actually getting it into the pipeline can be challenging. &ldquo;It&rsquo;s not as if you can say, &lsquo;I have gas and I want to get it into the pipeline,&rsquo; Lack says. &ldquo;That&rsquo;s not how it works; you really have to clean it up and compress it, and in a lot of areas you might not even be able to get into the pipeline because the specifications are so tight. There are a lot more challenges in trying to meet the quality climates of the pipeline carriers using landfill gas.&rdquo;
 With power prices dropping and the market for RNG growing, some operations are taking advantage of that, even though the necessary gas clean up is a much more complicated process compared with a conventional engine with moderate cleaning. &ldquo;Some companies have developed technologies over the past five to seven years that have really advanced the potential for gas clean up,&rdquo; Lack says. &ldquo;It&rsquo;s very difficult to remove nitrogen and some of the oxygen, and these newer technologies do a good job of it, whereas traditional gas processing technologies only treat CO2.&rdquo;
 On the other hand, the currently low prices of natural gas can pose a challenge to pipeline projects, according to Bakas. &ldquo;Prices at the wellhead right now are $2.50 per MMBtu, so the economics aren&rsquo;t that supportive right now,&rdquo; he says.
 And there are still a number of other variables that have to come to bear for landfill gas projects to be technically feasible, according to Bakas.
 Analyzing the Details
 &ldquo;You have to look at all sorts of technology applications when looking at [best options for] these projects,&rdquo; Bakas says. &ldquo;You need to look at the macro conditions and what&rsquo;s going on in the economy to determine what you&rsquo;re dealing with.&rdquo;
 With landfills specifically, there is a lot more variability in the volume of gas, compared to biogas projects that opt for pipeline injection. &ldquo;There are a lot more disruptions in landfill gas supply, and that&rsquo;s just the nature of the process of landfilling, but it makes it more challenging to try to meet quality specifications for high-Btu,&rdquo; he says.
 The project&rsquo;s location is also a key factor in determining the correct energy model, according to Bakas. &ldquo;Landfills in particular are located in remote areas and not necessarily close to a host facility, so we&rsquo;ll find you&rsquo;ll have to go a good pipeline distance away to bring the gas to a host. The only other solution may be to put the electricity to the grid.&rdquo;
 Mark Warren, director of safety and marketing at Morrow Renewables, says a key indicator to determine if a landfill is a good candidate for the high Btu model is whether it takes in 250,000 tons of waste or more per year. &ldquo;They&rsquo;ll find the high-Btu model a little more profitable over the long run,&rdquo; he says. That is, of course, taking into account the project&rsquo;s proximity to a pipeline or electrical grid.
 &nbsp;Although there are about 10 landfill gas electricity projects for every one high-Btu project, Warren says the high-Btu model was actually the original means of converting landfill gas to energy. &ldquo;It was only since the early 1980s that electricity became the prevalent model,&rdquo; he explains. &ldquo;Obviously there&rsquo;s been a lot of technology development since then.&rdquo;
 Morrow Renewables, formerly known as SouthTex Renewables, built the Huckabay Ridge AD project before selling it off to Element Markets. The company now focuses almost exclusively on landfill gas-to-high-Btu projects, and holds a patent on CO2 stripping of pretreat solvent, and two patents pending for deeper stripping of solvent to achieve higher methane purity in sales gas.
 Warren says that while a lot more planning goes into pipeline projects, it doesn&rsquo;t take as long to actually build the plant&mdash;about nine months to build a pipeline facility from the notice to proceed, compared with roughly two years for a power project. &ldquo;It does take longer to produce profits because it takes a while for trash to break down and produce landfill gas in quantities that you can pull enough methane out,&rdquo; he says, adding that there are ways to speed up the process.
 In some places, pipeline projects might have the upper hand, requiring fewer permits because of their cleanliness compared with electricity projects. &ldquo;They&rsquo;re definitely a cleaner solution,&rdquo; Warren says. &ldquo;You don&rsquo;t have to purify your landfill gas at all for it to be able to run through generators for electricity production, which is kind of a messy operation. You&rsquo;re dealing with heavy particulates, diesel emissions, and a lot of CO2 going back into the environment with that production model. And a lot of people fail to foresee how much is involved in maintaining and repairing the heavy equipment that goes along with the electricity model.&rdquo;
 Processed gas can be transported to higher-priced renewable energy credit markets in most cases, Warren adds, which offers much better economics to the project owner. He admits the low price of natural gas does affect the economics of a pipeline project somewhat, but says there are ways to increase the efficiency of a project that will help balance it out.
 Overall, a strong feasibility analysis should be able to determine which option will be more profitable. &ldquo;It all goes back to the size of the landfill, and oftentimes the upfront cost of building the facility,&rdquo; Warren says. Morrow Renewables sets up a separate company for each project and acquires the lease rights, so in most cases there are no upfront costs to partners. &ldquo;With a high-Btu plant, we cut them a monthly royalty check on the back end. We will engineer, manufacture, install and operate the facility.&rdquo;&nbsp;
 Warren points out that landfills around the world produce the lion&rsquo;s share of human-induced methane, and there has been new attention on methane as a short-term method of reducing global warming. &ldquo;I think there will be an emphasis on this in the future and a lot of landfills could really profit from it,&rdquo; he adds. &ldquo;Out of the 500-plus landfills that are candidates for energy projects, how many are suited for high-Btu models verses electricity production? I don&rsquo;t think anyone has the answer, but we&rsquo;re finding out one landfill at a time.&rdquo; Author: Anna Austin Associate Editor, Biomass Power &amp; Thermal <a href="mailto:aaustin@bbiinternational.com">aaustin@bbiinternational.com</a> (701) 751-2756

PIPE DREAM: The Huckabay Ridge Anaerobic Digestion Project in Stephenville, Texas, injects renewable natural gas into the pipeline.

2012/04/13334722513518.jpg

ENORMOUS AD: Huckabay Ridge processes more than 26 million gallons of waste annually.


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GIANT DIGESTION: Eight large cement tanks process a number of waste products at the Huckabay Ridge AD plant.

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ANAEROBIC INFRASTRUCTURE: Construction of the digester at the Northeast Water Pollution Control Plant Biogas Project can be seen over the aeration tanks.

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Technology Trendsâ€”Direct-Use Projects

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As more landfill gas and biogas producers take advantage of renewable energy opportunities, high-Btu pipeline injection is gaining popularity

Choosing an Energy Avenue

When Jesse Evans and his brother Samuel, founders of New Chicago Beer Co., saw the wide open first floor of Chicago&rsquo;s The Plant and were told a brewery would eventually occupy that space, they immediately knew they wanted to be involved.
 The pair had been making beer in California, but they were eager to return to their home city of Chicago and set up shop there. The Plant, a developing vertical farm and food business incubator, presented a perfect opportunity.&nbsp;
 So New Chicago Beer is now preparing the space for its 8,000-barrel operation, just one aspect of a developing multi-faceted and integrated project that will occupy The Plant, a 93,500-square-foot, three-story building. The brewery, expected to be operational in the middle of this year, will be integral for The Plant, as it will provide a waste stream for the in-house anaerobic digestion process that will eventually produce 380 kilowatts of energy to heat and power all 20 expected tenants of the enormous building. &ldquo;It&rsquo;s quite a substantial amount of beer and subsequent brewers grains,&rdquo; Evans says.
 &ldquo;We&rsquo;re very excited because they&rsquo;re a very key component of what we&rsquo;re doing,&rdquo; says Melanie Hoekstra, operations manager at Plant Chicago, NFP, the nonprofit that will own and operate several aspects of The Plant, as well as conduct research and educational programming regarding the facility&rsquo;s operations. The combined-heat-and-power (CHP) process will produce about 2.1 million Btu (MMBtu) per hour when fully operational, processing about 10,000 tons of brewery waste from New Chicago Beer and other breweries per year. Initially, the process will digest about 5,000 tons annually, until the building is at full capacity and can utilize all the energy that can be produced with 10,000 tons of feedstock.
 &ldquo;We hope to just produce enough for our own needs and any extra we&rsquo;re just going to put back on the grid for free,&rdquo; Hoekstra says. &ldquo;We&rsquo;re not going to try to sell it.&rdquo; In Illinois, she explains, only a very small amount of energy can be sold to the grid before the generator is considered a utility.
 &ldquo;The idea is we&rsquo;re going to produce lots and lots of grain that will be useful, not just for anaerobic digestion, but will also be used [by all the other tenants],&rdquo; Jesse Evans says, citing additives in mushroom growth, fish feed and other developing operations within the building. &ldquo;That biomass will move all around.&rdquo;
 The Plant
 The plans for the facility are quite novel and carry a crucial net zero energy goal. The building is a former meat packing plant and was purchased a year ago for realization of plant director John Edel&rsquo;s self-sufficient indoor food growth vision. With food-grade infrastructure including high-quality stainless steel and floor drains already in place, the vertical farm, a concept where food is grown on vertically-inclined surfaces, is a perfect fit. &ldquo;The fact that we&rsquo;re producing food is a function of the facility itself,&rdquo; Hoekstra says. &ldquo;We&rsquo;re reusing probably 80 percent of the material that was in the building. We adjust as we go and realize the advantages we have.&rdquo;
 Currently, the indoor farm is growing mostly greens, using horizontal systems that consist of flat beds filled with water and floating rafts to hold the plants. &ldquo;But probably in the next few months, we will be building prototypes for vertical systems, meaning floor-to-ceiling systems,&rdquo; Hoekstra says. In that scenario, the plants will grow on plastic boards sitting vertically at a 10- or 15-degree angle. Holes will allow the roots to sit inside the boards, while the plants grow out from them, she explains. &ldquo;There are lots of different ways you can do this. I&rsquo;ve also seen people use netting.&rdquo;
 Water will be dispersed through a specialized system that prevents trickling and ensures all the plants get the nutrients they need. Taking the concept further, The Plant has implemented an aquaponics design, connecting fish and their waste to the plants. &ldquo;The plants actually clean the waste for the fish,&rdquo; Hoekstra says. The facility will grow freshwater fish, currently focusing on tilapia.
 While most of the facility&rsquo;s elements are still under development, about 250 plants are currently harvested per week, yielding about 75 pounds of food per month. With all aspects of the project firing on all cylinders and the vertical farms in place, Hoekstra expects The Plant will produce three to six times more food, sold to restaurants and eventually farmers markets.
 No fish are being harvested currently because the practice just recently was legalized in Illinois, but The Plant will harvest about 160 pounds of fish every other month.
 Besides the vertical farms, aquaponics, brewery and anaerobic digester, the single building houses a bakery and a kombucha tea producer.
 And that&rsquo;s still not all. The Plant will also serve as a food business incubator with a two-pronged model. It will include a commercially licensed kitchen that can be used any time of the day or night and will be invaluable to start-up businesses with low profit margins that are currently using restaurant kitchens and have to operate in the middle of the night when the restaurants aren&rsquo;t open, Hoekstra says. &ldquo;This is a great setup for small businesses because having a kitchen of your own is very, very expensive.&rdquo; The second aspect of the food business incubator will be 10 tenant kitchens available for rent by individual companies. Plant Chicago NFP will own and operate the vertical farm and food business incubator.
 &ldquo;There&rsquo;s a lot that&rsquo;s going on in the building,&rdquo; Hoekstra says.
 Digester Development 
 Because of its innovation and positive spirit, support for the digester and the plan for The Plant as a whole has come from city officials and community members alike, according to Hoekstra and Evans. Even though the plant is near a residential neighborhood, both say the project has encountered no opposition and those residents are eager to finally see action in a building that has been vacant for four years.
 &ldquo;We&rsquo;re turning a building that was meant to be torn down into at least 125 jobs and that&rsquo;s a number that&rsquo;s going to grow,&rdquo; Evans says. &ldquo;To do that around a green technology is incredibly exciting. We&rsquo;ve had nothing but support here.&rdquo;
 Alderman Pat Dowell has been integral in helping plans for the facility get off the ground, and Hoekstra says even Chicago Mayor Rahm Emanuel has expressed interest in the project. &ldquo;That&rsquo;s really flattering and exciting,&rdquo; she says. &ldquo;The support has been really overwhelming.&rdquo;
 The anaerobic digester has to be operational by the end of June 2013, in accordance with guidelines set forth for state funding it received. &ldquo;We should have no problems getting it done by that time,&rdquo; Hoekstra says. A total of two state grants&mdash;one in Recovery Act funds and the other from Illinois&rsquo;s food scrap composting program&mdash;will pay a total of $1.5 million toward the anaerobic digestion system. In addition, The Plant closed on a loan in February from Chicago Community Loan Fund, a nonprofit bank that is supportive of the operation. &ldquo;They&rsquo;re really excited about what we&rsquo;re doing,&rdquo; Hoekstra says.
 Heat from the CHP system will go to the brewery, as well as to heat the rest of the building. &ldquo;We have to boil 9,000 gallons of water per batch,&rdquo; Evans says of the beer-making process. &ldquo;That takes a massive amount of energy, so we&rsquo;re using gas right off the anaerobic digester to burn in steam boilers and we&rsquo;re using steam heat instead of burning fossil fuel underneath the kettles.&rdquo;
 As if The Plant weren't facilitating enough reuse and renewable concepts, the CHP generator itself, from Alcor Energy, is made of old, repurposed Air Force jets, Evans adds. Construction work on the brewery began this winter and the CHP generator was delivered in mid-February. &ldquo;Everything is progressing very well there,&rdquo; he says.
 Evans eagerly divulges the numerous reasons he and his brother chose to develop their next brewery inside the facility, fulfilling a crucial aspect of its self-sufficient concept. He can&rsquo;t wait to be a part of the intricate, integrated and progressive design of The Plant.
 &ldquo;It&rsquo;s been inspiring since the first day we were in here,&rdquo; he says. Author: Lisa Gibson Editor, Biomass Power &amp; Thermal <a href="mailto:lgibson@bbiinternational.com">lgibson@bbiinternational.com</a> (701) 738-4952

BIG BLUEPRINT: An enormous former meat packing plant in Illinois will house more than 20 operations, including a CHP system. 

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ELEVATED EATS: A vertical farm is just one of many elements incorporated into the project. 


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FISH FARM: The biomass produced at the brewery will be used in all other aspects of the integrated operation, including for fish feed. 

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PLANTING PLANS: Food crops inside The Plant will be mostly greens. 


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A novel and multi-faceted vertical farm and business incubator in Chicago will source its heat and power from a brewery waste anaerobic digester 

Brewing Up Biomass

When Mark Standley Jr. and his crew at Biomass Harvesting LLC began hauling woody biomass off Northwest Oregon job sites in 2007, they could handle roughly three or four loads every day. They were professional loggers, employed by Bighorn Logging out of Banks, Ore.
 Today, Standley&rsquo;s team hauls 10 to 15 loads per day, and has a $2.5 million capital investment in a Peterson 5710C horizontal grinder, a 210 Kobelco excavator and log loader, a Z200F Hitachi log loader, a TF820 Timberpro slash forwarder, six Kenworth tractors and another six 48-foot Western chip trailers.
 The crews haul all their woody biomass to one of two places: Longview, Wash., which is two hours away, or Wauna, Ore., which is 1.5 hours away. Of all people in the biomass industry, Standley and his team know that the business of biomass transport is a heavy one. But, with the right planning, transport strategy and equipment, moving biomass from the field to the facility can become easier, and lighter on the pocketbooks that pay to get it done.
 Field Tested
 Standley talked about his company&rsquo;s operations from an Oregon logging convention while preparing for a presentation about&nbsp; the nuts and bolts of biomass harvesting. Standley knows firsthand what the right equipment and transport features can do to a harvesting operation and why it makes more sense to harvest slash instead of taking the traditional approach of piling and burning it. He estimates the average site preparation cost savings of harvesting the leftover biomass on a 25-acre clear cutting site, instead of burning it, at roughly $100 to $400 per acre. So, at 25 acres with an average savings of $200 that means a $5,000 savings. The equipment typically required to burn the slash costs between $500 to $1,200 per day; a fire truck rental costs $50 to $100 an hour, and a standby fire crew will run about $15 per hour of labor. The message of Standley&rsquo;s presentation: Biomass contractors can eliminate all of these expenses, while reinvigorating forests and even making money.
 To do that, a harvesting team or a project developer needs to be mindful that the bulk of the costs is tied up in transport. &ldquo;Of all the cost centers, to get biomass from the field to the plant, transport in our experience is the highest and most significant cost,&rdquo; says Tad Mason, CEO of TSS Consultants.
 Combating those costs safely means understanding the latest technology and equipment options available. &ldquo;We&rsquo;ve tried various methods,&rdquo; Standley explains. &ldquo;We had some used trailers, but they would break down. Taking those chip trailers up in the brush, they just weren&rsquo;t built for it. We got by, but to be consistent every day we needed something better.&rdquo;
 By better, Standley means a trailer that is durable enough, light enough and easily maneuverable on tough curves. The trailer also has to have enough capacity to haul at least 16 bone dry tons, it has to be simple to hook up, simple to stage and the jacks shouldn&rsquo;t sink into the mud.
 In 2011, Mason tried to find the best, or at least a better trailer like the one Standley described. Through a study for the Sierra Institute for Community and Environment, Mason analyzed four separate biomass trailering options for a California-based wood waste removal project: 1. Conventional trailer with a straight bed featuring a length of 59 feet, a width of 8.5 feet, a weight capacity of 40 gross tons or 25 net tons, and a volume capacity of 21 cubic units.
 2. Conventional trailer with a drop bed featuring a total length of 64 feet, a width of 8.5 feet, a weight capacity of 40 gross tons or 25 net tons, and a volume capacity of 27 cubic units.
 3. Short trailer with a length of 49 feet, a width of 8.5 feet, weight capacity of 40 gross tons or 25 net tons, and a volume capacity of 19 cubic units.
 4. Stinger steer with a length of 56.7 feet, a width of 8 feet, a weight capacity of 40 gross tons or 21 net tons, and a volume capacity of 21 cubic units.
 The biomass removal project directors then chose two of the four options, the short trailer and the stinger steer trailer, which will follow the path of the truck wheels more closely as if the trailer is being steered. The biomass was transported 100 miles from the site and the costs for using each trailer varied. The cost per hour of operation of the stinger steer totaled $90, the short trailer, $85. Hauling costs for the short trailer were $19.14 per green ton of biomass and almost $50 per bone dry ton, while costs for the stinger steer were roughly $30 per green ton and almost $60 per bone dry ton.&nbsp; In the end, Mason concluded that although both transport systems performed well, the short trailer was more cost effective while the stinger steer was more versatile because of the articulated stinger. In both cases, net revenue generated from biomass recovery helped overall project economics.
 Denise Dethlefs, of Biomass Harvesting LLC, says that when the team went looking for more efficient, cost effective trailers, the goal was simple. &ldquo;Maximize the volume we could haul on a single load and still maneuver in the brush,&rdquo; she says. And it needed to be done while balancing the cost and function. So which trailer is the best? While the easy answer is it depends, there are several aspects of biomass transport that will dictate which trailer suits a specific situation.
 Latch on to Savings&nbsp;&nbsp;&nbsp; 
 Finding a winning financial strategy for hauling biomass out of the forest begins with recognizing that each state&rsquo;s regulations are different. As Mason explains, on-road transport is regulated at the state, not federal level, so the tonnage allowed in one state may vary from the next.In California for example, the most a truck can haul without acquiring a special permit is 70,000 to 80,000 tons. But in Oregon, the limit is much higher. Those limits are determined by axle spread on the trailers, and because a trucker will sometimes haul biomass over state lines, it&rsquo;s important to keep state-by-state limits in mind, Mason says.
 Once tonnage haul limits are accounted for, it all comes down to two simple phrases, green ton or bone dry ton. &ldquo;Most biomass in the West is bought and sold on a bone dry ton basis,&rdquo; Mason says. &ldquo;So many of the suppliers try to leverage that as much as possible and move down the road with as dry a fuel as possible in order to maximize their revenue.&rdquo; The supplier needs to recognize that dryer product can mean more money. &ldquo;In some cases, they may not get their trucks up to weight, and will instead not fill that 50-foot trailer to capacity because they are trying to get 18 to 19 bone dry tons on board,&rdquo; he says.&nbsp;
 After understanding those two principles of state weight regulations and the unit of measure, a biomass supplier or handling manager needs to understand the importance of an onboard weigh scale system. &ldquo;It is really important to have those scales,&rdquo; Standley says. &ldquo;Our payloads were a lot more constant once we knew what we were hauling.&rdquo; The Biomass Harvesting crew started its work initially with trucks that didn&rsquo;t have scales.
 &ldquo;That was one of our downfalls,&rdquo; Standley says. &ldquo;One day we&rsquo;d go in there and it&rsquo;d be 105,000 pounds and the next day it would be 60,000. It is hard to tell just by watching it.&rdquo;
 Mason agrees. &ldquo;Onboard scales typically pay for themselves to assure you are carrying optimized capacity,&rdquo; he says.
 In addition to scales, Standley employs a trailer with a double rear axle system, one hydraulically lifted. &ldquo;When you get to the brush, [the liftable axle] corners better than just a regular 48 footer,&rdquo; Standley says. &ldquo;You&rsquo;d be amazed how much better that corners without that third axle on the ground.&rdquo; Standley paid roughly $85,000 for those trailers, but in the future, he has his eyes on the stinger steer version, a trailer that he says will run roughly $120,000.
 Along with the stinger steer options, which represent one of the greatest innovations in biomass transport operations over the past decade, Mason says there is still room for innovation in moving biomass. In some cases, harvesting crews are hauling material with a pup-trailer set-up, which gives them added weight capacity because of the additional axle spread created by adding another trailer to the back of a larger trailer. &ldquo;Truckers have had to haul longer distances at times, and I think there may be some innovation with that,&rdquo; he says.
 Truck fuel costs can also be manipulated to create savings during biomass transport, Mason says. &ldquo;It is a matter of being careful of how you set up your sourcing so that you are moving product to the closest facility and not having trucks passing each other going to different facilities,&rdquo; he explains. For example, a fuel buyer can trade fuel that is under contract to a closer facility for fuel that might be closer to harvesting operations or a biomass facility. &ldquo;That way we aren&rsquo;t writing as big of checks, and in that way, we are being strategic in how we move fiber,&rdquo; he says.
 As for strategy, that might be where it ends. Jayant Khambekar, power industry specialist with Jenike &amp; Johanson Inc., works with biomass companies to develop handling and storage sites and says he doesn&rsquo;t get involved with the equipment used on the biomass handling side. &ldquo;We are interested in the material the plant is bringing in,&rdquo; he says. But there is typically no set strategy or overarching plan that will integrate the way biomass gets from the field, over the road, river or ocean, and into a site&rsquo;s storage location. &ldquo;When people come to us, they have already decided the layout and the grand arrangement of how things will look,&rdquo; he says, adding that the company does advise its clients to communicate with suppliers about their methods.
 For Mark Standley, the arrangement will certainly include a stinger steer trailer with an onboard weigh scale, and maybe even a camera on the back to create the perfect trailer. For Tad Mason, the setup will be based on the pricing method for biomass, fuel cost contract options and the distance from the harvesting site to the offload site. And for others it might include a walking floor trailer, a short trailer or some combination of trailer/barge/railcar transport system. In any case, the nuts and bolts of biomass transport and trailering options matter.
 &ldquo;We like to acknowledge upfront that biomass fuel is not a real high-priced commodity, so you only want to touch it once,&rdquo; Mason says.
 Author: Luke Geiver Associate Editor, Biomass Power &amp; Thermal (701) 738-4944 <a href="mailto:lgeiver@bbiinternational.com">lgeiver@bbiinternational.com</a>

FINE-TUNED TRAILERS: Cost-efficient hauling strategies will only improve when the proper trailers are used.

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CUTTING CORNERS: Many trailers are not equipped with rear axle-raising mechanisms or stinger steers that make sharp turns possible. 


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DODGING DEBRIS: The proper harvesting machinery can maneuver through difficult job sites. 


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Proper strategies and equipment simplify biomass feedstock procurement 

Transport Truths

Power plant developers, project financiers, and government energy planners are well aware that the potential for biopower generation is limited by the availability of economic biomass fuel. The way allowable fuels are defined has a significant impact on the project development potential. A dramatic 500 percent increase in project development would be possible if whole tree chips were not disqualified from biopower feedstock.
 Whole tree chips and certain other types of biomass are often excluded from tax qualifications and, in many cases, from power purchase agreements (PPA) and air permits. The procurement of unmerchantable timber and under-utilized pulpwood like bark and leaves in the form of whole tree chips, however, can be a significant advantage for many biopower projects, both in reduced cost and security of fuel supply.
 Whole tree chips are excluded out of concern for the protection of traditional forest product industries, such as pulp and paper and wood products manufacturing, and to ensure overabundance of caution in protecting the environment. There have been both systemic and cyclical declines in the demand for timber from the traditional industries.&nbsp; As a result, the amount of available timber in many areas far exceeds the real long-term production needs of these users. The availability of this biomass represents a significant opportunity to the biopower industry.
 Unmerchantable Exclusion
 Unmerchantable timber is defined by the U.S. Forest Service as &ldquo;material that is unsuitable for conversion to industrial wood products due to its size, form or quality.&rdquo;&nbsp; Under-utilized pulpwood is frequently described as economically unmerchantable pulpwood and exists when perfectly good pulpwood is located too far from a pulp mill to be affordably delivered.
 Use of these feedstocks as biofuel has been prohibited by many government policies that limit the definition of qualified biofuel to logging and mill residues. More than 20 definitions of biomass circulate among agencies in the federal government, not to mention definitions in different states and power off-take agreements.&nbsp;
 For example, the IRS Tax Code currently excludes whole tree chips for production and investment tax credits, limiting acceptable biofuel to residues only. IRS Bulletin 2006-42, Oct. 16, 2006, provides guidance on a tax credit for electricity produced from open-loop biomass, which it defines as mill and harvesting residues, pre-commercial thinning, slash and brush, or solid wood waste materials, including landscape or right-of-way trimmings.
 This exclusion of unmerchantable timber and under-utilized pulpwood for production and investment tax credits unnecessarily curtails biomass fuel availability and limits the development of the biopower industry. Clearly, policies that limit the definition of biomass constrain local timberland-based economies.
 Georgia Case Study
 The Parton Group has explored these issues with a case study investigation of the biopower feedstock availability for all 159 counties in the state of Georgia.&nbsp; Using our proprietary methodology and the U.S. Forest Service 2010 database, we determined the biopower development potential of each of the counties based first on biofuel consisting of harvest residue only, and second, based on a biofuel mix consisting of harvest residue and whole tree chips.&nbsp; Our case study also determined the optimal counties for biofuel sourcing.&nbsp;
 In our analysis, each county in Georgia was analyzed as a separate biopower development site, having a 100-mile radius wood basket. In all cases, we assumed that only 60 percent of harvest residue was actually recoverable and that to finance a project, the developer needed to identify twice the amount of net recoverable biofuel the plant will actually consume.&nbsp;
 We determined that the recoverable quantities of logging residues from private timberland provide sufficient feedstock for the financeable development of only up to 250 MW of biopower statewide. By including whole tree chips with the logging residues, however, more than 1,200 MW of biopower can be developed and financed statewide&mdash;nearly a 500 percent increase. This situation is typical in many states.
 So, how do the delivered costs of biofuel types compare? Whole tree chips from unmerchantable timber are generally sold at the same delivered cost per ton as fuel chips from logging residue. The in-woods cost of whole tree chips from under-utilized pulpwood is slightly higher than the in-woods cost of logging residue because higher stumpage fees are added to its cost. Because transport distance greatly impacts delivered price, however, these higher in-woods costs for pulpwood can be offset by delivery cost savings when significant quantities are sourced nearby.
 The in-woods cost of pulpwood includes stumpage fees (for this example $8 to $9 per ton), a cost not incurred by logging residue.&nbsp; At the current freight cost of 13 cents per ton-mile, this additional cost will be offset by delivery cost savings if the pulpwood is available 65 miles closer to the plant than residue. In this case the annual cost of residue fuel plus shipping is essentially the same as the annual cost of a fuel blend with whole tree chips plus shipping. Additionally, there is a very significant reduction, roughly 50 percent, in greenhouse gas emissions associated with fuel shipping from the smaller radius wood basket.
 As more biopower is developed, the availability of logging residues is tightening and projects are sourcing fuel farther from their sites. Biomass supply regions of 100-plus mile radii will become more common. The biomass supply-demand ratios of 2:1 preferred by many project financiers may be obtainable only if whole tree chips are considered part of the project&rsquo;s fuel blend.
 The availability and security of biomass supply are important considerations in biopower project development, and may outweigh the value of available tax credits. Government policies (time period, funding level, material qualifications, implementation details, etc.) are always uncertain and, therefore, at risk as project development considerations.&nbsp;
&nbsp;
 Renewable Whole Tree Chips
 Some in the environmental community and traditional forest products industries are opposed to defining biomass derived from whole wood as a renewable source.&nbsp; But a 2011 ruling by the North Carolina Utilities Commission approved Duke Energy&rsquo;s petition to classify its biopower plants as renewable energy facilities, using a fuel mix that includes whole tree chips.&nbsp; Based on scientific information provided by the North Carolina Forestry Commission, the Utilities Commission rejected the argument that whole trees chips are not available on a renewable basis.
 Currently, only five states have developed specific harvest guidelines that protect the environment while allowing the managed harvesting of whole trees for biopower. They are Maine, Minnesota, Missouri, Pennsylvania and Wisconsin.&nbsp;
 The Parton Group believes that the definition of qualified biomass should be expanded to include whole tree chips from unmerchantable timber and from under-utilized pulpwood. We recommend that project developers very carefully draft the definition of allowable biomass in critical project documents including power purchase agreements and air emissions permits. Author: Bob Synk The Parton Group (706) 559-4536 <a href="mailto:bobsynk@thepartongroup.com">bobsynk@thepartongroup.com</a>

TRUCKING TREES: Wood from Southern Georgia is hauled during a feedstock investigation project.

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The qualification of whole tree chips as biopower feedstock would increase project development potential


Maximizing Biopower Development 

A power generating facility in Hibbing, Minn., has completed the first phase of a program to drastically reduce dust and spillage from its biomass fuel handling system, helping to prevent fugitive material from reaching nearby homes and businesses. The complex project at Hibbing Public Utilities included belt cleaners, new transfer points and modified chutes, settling zones and apron skirts, as well as vibration technology to improve material flow at key points. Company officials have been so satisfied with the upgrades from Martin Engineering that they are considering additional system enhancements to several other conveyors.
 HPU has been providing electricity to the city of Hibbing and surrounding area for more than 100 years, and currently owns and operates a cogeneration plant that brings both steam heat and electricity to its service area. In partnership with Virginia Public Utilities, HPU formed a company called Laurentian Energy to deliver power from the abundant biomass resources nearby. Under a 20-year contract with Xcel Energy, the firm currently produces about 300,000 megawatt hours (MWh) of electricity per year, approximately 70 percent from biomass. The fuel includes wood from open-loop sources such as waste wood, limbs and agricultural waste, and from closed-loop sources, including dedicated crops of trees, with a goal of averaging 75 percent of the power generated from biomass fuels over the life of the agreement.&nbsp;
 The material handling system at the Hibbing site is critical to the plant&rsquo;s efficiency, but from the time it began operations in 2007, controlling dust and spillage has been a challenge. &ldquo;When construction of the biomass operation was completed, we had three air-supported conveyors and one bucket-type conveyor feeding the material,&rdquo; says Gary Myers, assistant general manager and director of power production. &ldquo;The boiler can produce up to 135,000 pounds of steam per hour, used to turn three turbo-generators with a combined capacity of 35 MW.&rdquo;&nbsp;
 Conveyors and Chutes
 Because the facility is located in a largely residential area, controlling carry-back and spillage were among the first priorities. After a thorough evaluation of the material handling system, Martin Engineering technicians began by installing primary and secondary belt cleaners on all four conveyors. The primary units on each belt are Martin Brush Belt Cleaners, a unique electric-powered model that provides an effective, cost-efficient solution for residual belt-borne material. The secondary units are Martin SAF-2 Belt Cleaners, a versatile deflected blade design that features a gentle pressure to prolong service life and prevent belt damage.&nbsp;
 &ldquo;We installed electric brush cleaners on each conveyor, because they&rsquo;re very effective on the type of cleated belts used at this facility,&rdquo; says Tom Hines, Martin Engineering territory manager. &ldquo;The rotating brush delivers good cleaning performance in difficult applications, including belts with ribs, grooves or chevrons, and belts carrying sticky materials or stringy fibers.&rdquo;&nbsp;
 &ldquo;Part of the problem occurred on the three air-supported conveyors,&rdquo; Myers says. &ldquo;Some of the sections were at steep angles, and with the variable size and moisture content of the fuel, there were always chips that would fall back down.&rdquo;&nbsp;
 To address the issue, Martin Engineering technicians removed troublesome sections of the air-supported conveyor and replaced them with specially-engineered transfer points. They also modified existing transfer points, installing drop chutes to help eliminate dust, as well as transfer chutes with a hood-and-spoon design to improve the material flow.&nbsp;
 &ldquo;Reducing the material turbulence during transfers is key to preventing fugitive dust,&rdquo; Hines says. &ldquo;By managing the material speed and direction, transfer chutes help minimize impact and wear on liners and belts, while containing the dust and spillage that are often generated at transfer points,&rdquo; he says. &ldquo;All of the chutes were field-fabricated, which helped us get an exact fit and minimize lead time.&rdquo;&nbsp;
 The transfer chutes employ special geometries that capture and concentrate the material stream as it travels through. Each unit is customized to suit the specific material characteristics and conveyor systems of the individual customer. They provide the dual benefits of minimizing aeration and preventing buildup within the chute, particularly important when dealing with combustible materials.&nbsp;
 The installation team also placed electric rotary vibrators in key locations inside drop chutes to reduce the potential for plugging. To further ensure control of fugitive material, settling zones were created at the transfer points to slow the air speed, with dust curtains to contain airborne particles.&nbsp; &nbsp;&nbsp;&nbsp;
 Seal Skirting
 Finally, skirt-board sealing systems were installed on the sides of the loading zones to contain dust, eliminate spillage and reduce cleanup. Martin Apron Seal Skirting, a dual-sealing system, incorporates a primary seal clamped on the steel skirt-board to keep lumps on the belt and a secondary or &ldquo;outrigger&rdquo; strip to capture any fines or dust particles that pass beneath the primary seal. The secondary seal lies gently on the belt and self-adjusts to maintain consistent strip-to-belt pressure, despite high-speed material movement and fluctuations in the belt&rsquo;s line of travel.
 Martin Engineering&rsquo;s Apron Seal Skirting provides two wear surfaces on a single elastomer sealing strip, installed along the bottom of the skirt-board. When the bottom side of the strip against the belt is worn, the sealing strip is inverted, providing a second service life.
 With the modifications in place, HPU reports significant reductions in spillage and airborne dust. &ldquo;We&rsquo;re very pleased with the results we&rsquo;ve seen in fugitive material control,&rdquo; Myers says. &ldquo;We&rsquo;re now reviewing several other conveyor sections to determine the opportunities for additional dust control measures. Our goal has always been to provide the Hibbing area with safe, reliable power that&rsquo;s produced and delivered in an environmentally responsible manner, and this work is a reflection of that commitment.&rdquo; Author: Dave Mueller Senior Product Specialist, Martin Engineering (309) 852-2384 ext. 245 <a href="mailto:davem@martin-eng.com">davem@martin-eng.com</a>

PERFECT PAIR: A new Martin Transfer Point installed at a Minnesota power plant was fitted with a belt tracker to center the belt through the feedstock load zone. 

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FUEL FEED: A field-fabricated drop chute was fitted with a Martin Vibrator, improving material flow to the new transfer point.

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KEEPING IT CLEAN: A new head chute and brush cleaner were installed at the bucket elevator to eliminate plugging and reduce dust. 


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To improve efficiency and be a good neighbor, the Hibbing, Minn., power plant enlisted Martin Engineering to modify its biomass fuel handling system  

Putting a Lid on Dust

Honeywell Process Solutions has signed on to support the scale-up of a drop-in biofuels process technology developed by California-based AliphaJet Inc. As part of the agreement, Honeywell will invest in the company via the supply of engineering services and equipment. AliphaJet will use Honeywell controls, instrumentation and advanced solutions, including its Experion Process Knowledge Systems and UniSim process simulations and field instrumentation. AliphaJet&rsquo;s technology features a proprietary catalytic process that can covert renewable oil feedstock into drop-in hydrocarbon fuels, including biobased jet and diesel. Unlike many other biojet production technologies, AliphaJet&rsquo;s is able to remove all the oxygen from the feedstock without the need for substantial amounts of hydrogen or co-location at a traditional oil refinery. AliphaJet&rsquo;s pilot-scale facility is scheduled to be operational within 12 months. The proposed plant will likely be located adjacent to an existing biodiesel plant in the Midwest. Codexis Inc. introduced its own line of cellulose enzymes, trademarked CodeXyme Cellulase enzymes, designed to convert biomass to sugar. The launch marks Codexis&rsquo; introduction to the global cellulose enzyme market, what is projected to be one of the largest industrial enzyme market. Codexis is in the final stages of customization of CodeXyme Cellulase enzymes with current partners. The company expects to have commercial samples for customers in the chemicals industry broadly available in the second half of this year. In July, Codexis announced a broad collaboration with Chemtex, an M&amp;G Group company, to develop and produce sustainable detergent alcohols for use in the household products market. In the collaboration, CodeXyme Cellulase enzymes will be used to produce second-gen detergent alcohols from biomass. In May, Codexis announced successful 20,000 liter production of cellulase enzymes using the trademarked Codexis CodeXporter enzyme production platform. In other company news, Wes Bolsen has left Coskata Inc. to join Codexis as its vice president and chief marketing officer. Working closely with the Iowa Economic Development Authority and the Nevada Economic Development Council, Mentor, Iowa-based Thesis Chemistry has selected a 40-acre site within the West Industrial Park of Nevada, Iowa, for a proposed biorefinery center that will produce a range of biobased chemicals derived from corn stover lignin from instate cellulosic ethanol production. Subject to financial and economic incentives, planned new buildings within the industrial park complex include an initial biorefinery, a corporate headquarters office building and a chemical research and development laboratory. Thesis Chemistry also plans to establish a pilot facility in conjunction with the Biomass Energy Conversion (BECON) research center, also located in the West Industrial Park. Phase one will be the production of the oxoaromatic compound vanillin used as a flavoring agent. The second will be cresols, used as disinfectants or deodorizers. The third will be the production of phenols, and the fourth will be the production of butanes and other fuel additives. Thesis Chemistry teamed with De Pere, Wis.-based Smet Construction Services in June to design and construct its first biorefinery, which is anticipated to be in production by early 2014.&nbsp; Toronto-based CORE BioFuel Inc. successfully completed testing the final stage of its wood-to-biogasoline process via catalytic conversion of dimethyl ether (DME) into benzene-free, 94-octane green gasoline. This is the remaining noncommercialized step in CORE&rsquo;s patent-pending process with contract partner RECAT Technologies Inc., a commercial spin-off of the University of Western Ontario. Specifically, CORE is commercializing a patent-pending variant of ExxonMobil&rsquo;s methanol-to-gasoline process, trademarked the Melnichuk-Kelly-Stanko Fuel Synthesis Process (MKS Process). The company modified the process by incorporating advanced indirect gasification modules developed by Energy Products of Idaho, creating an exothermic reaction for sufficient electricity and steam generation to power the process. CORE further improved the process by eliminating the methanol step entirely. It devised a route that can effectively and efficiently produce biogasoline straight from DME via a robust zeolite-based catalytic reaction without the need for further upgrading to meet retail pump 92-octane requirements. Algae systems provider Algae.Tec Ltd. has signed a collaboration contract to build its first algae biofuels production facility in Asia. The facility will be built in Sri Lanka in conjunction with cement and building materials company Holcim Lanka Ltd. Algae.Tec stated that Holcim Lanka was attracted to its systems as a way of reducing its carbon footprint through channelling waste CO2 into the algae growth system and generating biofuel at below market cost. The facility will initially include a production plant of five photobioreactor modules. Holcim will then evaluate incorporating such a system at a much larger facility. Algae.Tec stated that it expects the technology could be rolled out at other sites. The photobioreactor modules are assembled at the Australian company&rsquo;s U.S. manufacturing plant, the Algae Development &amp; Manufacturing Centre, in Atlanta. Algae company OriginOil Inc. has appointed Thomas H. Ulrich to its board of advisors. Most recently Ulrich was an Idaho National Laboratory advisory scientist working with OriginOil to create a strategic partnership between the two, and he launched the first Cooperative Research and Development Agreement between OriginOil and INL. OriginOil stated that Ulrich has been a key supporter of its technology, and that &ldquo;he offers tremendous value to the company as a highly regarded thought leader in the field of biomass and bioenergy.&rdquo; Ulrich worked with OriginOil to help design, implement, and complete its first phase CRADA in February 2009, which resulted in what the company calls &ldquo;an unprecedented energy balance model bringing algae-based fuels one step closer to reality.&rdquo; Ulrich has more than 25 years of experience in planning, securing funding, executing projects as a group leader and principal scientist in private industry and at INL. Massachusetts-based cellulosic ethanol developer Qteros Inc. has gone through a reduction in staff, and longtime CEO John McCarthy &ldquo;has stepped down,&rdquo; confirmed the newly appointed CEO Mick Sawka. Prior to becoming CEO, Sawka was Qteros&rsquo; senior vice president of commercial development and engineering where he was responsible for developing and executing the company&rsquo;s global commercialization strategy, including spearheading Qteros&rsquo; commercial development and partnering initiatives, as well as leading the company&rsquo;s engineering and process design efforts. Calif.-based bioplastic producer Cereplast Inc. has announced a three-year distribution agreement with GAMA Plastik AS to supply bioplastic resin in Turkey. GAMA Plastik plans to purchase 200 metric tons a month of the biobased resin this year, with a significant purchasing increase in 2013. Cereplast anticipates generating revenue from the agreement within the next 90 days. GAMA Plastik will be purchasing bioplastic resin from both Cereplast&rsquo;s compostable and sustainable lines of materials. GAMA Plastik, a leading plastic trader located in Istanbul, will use the biobased resins to produce films and injection molded products. The resin material to fulfill GAMA Plastik&rsquo;s orders will initially be produced at its Indiana factory. Cereplast is also working to develop a factory in Europe expected to be operational by late 2012. Once the new production facility comes online, it will likely be used to fulfill orders from Europe. Developer of next generation bio n-butanol Cobalt Technologies appointed Bob Mayer as chairman of its board of directors and CEO. With more than 30 years of experience in the chemicals and biotech sectors, Mayer joins Cobalt to lead the company as it focuses on developing commercial facilities globally. As Chairman and CEO, Mayer will be responsible for setting strategic direction, cultivating partnerships and driving the company to profitability. Mayer, who has extensive experience growing businesses within the biotech sector as the former executive vice president of Danisco, will also lead the development of strategic business relationships and fundraising for the company. Most recently he was the CEO of Genencor International Inc. Additionally, Mayer will join Cobalt&rsquo;s board of directors with significant board experience. He currently serves on the board of Edeniq Inc., a biofuels company, and Kalesec Inc. He formerly served on the board of Martek Biosciences Inc. prior to its sale to DSM earlier this year. Mayer started his career as an assistant professor of chemical engineering at Massachusetts Institute of Technology. Ineos Bio has selected international engineering company AMEC to be its global license support engineering firm. AMEC will work with Ineos Bio in developing engineering design packages for future Ineos Biotechnologies licenses. AMEC will be playing a major role in the scale up of the company&rsquo;s technology. AMEC is the engineering, procurement and construction provider for Ineos Bio&rsquo;s first commercial-scale facility in Vero Beach, Fla. That plant, which is expected to begin operations during the second quarter, will be capable of producing 8 million gallons of cellulosic ethanol per year, along with 6 megawatts of renewable electricity. AMEC was chosen to serve as Ineos Bio&rsquo;s global license support engineering firm for several reasons, including its global presence and ability to serve a global license base. Ineos Bio expects to begin licensing its cellulosic ethanol technology this year, and AMEC will ensure the engineering designs for these facility are optimized and customized for each site location.

Colorado-based Sundrop Fuels Inc. has agreed to purchase about 1,200 acres of land near in Rapids Parish, La., for the planned construction and operation of a biorefinery that will use locally sourced woody biomass to produce up to 50 MMgy of sulfur-free, low benzene green gasoline.
 To pay for the proposed $500 million project, Sundrop Fuels intends to sell tax-exempt private activity bonds that don&rsquo;t carry with them financial obligation from state or local authorities, and investments from strategic partner Chesapeake Energy Corp., the nation&rsquo;s second-largest natural gas provider. Venture capital firms Oak Investment Partners and Kleiner Perkins Caulfield &amp; Byers will also help cover project costs. The company expects to break ground on the first commercial production facility&nbsp; by the fourth quarter this year with plans for full-scale production by 2014, according to Steven Silvers, spokesman for Sundrop Fuels, adding that negotiations with feedstock suppliers are underway while offtake agreements have not been executed yet.&nbsp;
 Sundrop Fuels&rsquo; green gasoline platform is based on its patented, trademarked RP Reactor, a radiant particle heat transfer technology that generates temperatures of more than 1,300 degrees Celsius to convert woody biomass into syngas, which is then converted into finished biobased gasoline via ExxonMobil&rsquo;s well-established methanol-to-gasoline synthesis production process. With the ability to use natural gas, electricity or concentrated solar energy to power the RP Reactor, Silvers says Sundrop Fuels&rsquo; use of high-temperature heat transfer to drive endothermic gasification results in higher yield of biofuel per ton of biomass feedstock than other traditional gasification methods. &ldquo;What we do is strip hydrogen molecules from natural gas then combine them to the biomass feedstock that&rsquo;s being gasified,&rdquo; Silvers tells Biorefining Magazine. &ldquo;This provides for a 2-to-1 [hydrogen to carbon] ratio while at the same time letting us produce 50 percent more biofuel than we could with biomass alone. Virtually every molecule of carbon used becomes liquid fuel. No carbon is wasted.&rdquo;
 With a pilot facility in Colorado demonstrating its technology, Sundrop Fuels intends to develop a commercial-scale biorefinery capable of producing about 200 MMgy, anticipated to be in operation by 2016. The company has a grand vision of 1 billion gallons of production capacity by 2020.
&mdash;Bryan Sims

Sundrop Fuels has big plans in Louisiana—and beyond

Drop-In Fuel Hotspot

After the congressional super committee failed to meet its deadline to agree on a bipartisan plan to cut federal spending and reduce the national deficit, the question for conventional and advanced biofuel producers was, how might this impact the chances of extending various expiring federal tax credits?
 President of the Advanced Biofuels Association Michael McAdams said most people who still had any hope that these tax incentives would be renewed thought the best chance for an extenders package would be to attach one to the super committee effort. &ldquo;How,&rdquo; McAdams asked, &ldquo;do you do an extenders package with no vehicle? Do you simply deficit finance it? That would be politically awkward following the public failure to reach a deficit deal. Or do you come up with offsets and try and move certain pieces to spur the economy?&rdquo;
 Despite the lack of tax code support expected this year, advanced biofuels and biobased chemicals will continue making headway in the marketplace. Lux Research generated a new report, titled &ldquo;Nations Race to Build Alternative Fuel Capacity,&rdquo; in which the lead author of the report, Andrew Soare, writes, &ldquo;The market is shifting to second-generation fuels like renewable diesel and cellulosic ethanol. These fuels bypass the major logistical hurdles of first-gen alternative fuels, and investors, as well as governments, are realigning investment to grow capacity.&rdquo;
 The report projects that in 2015, next-generation renewables such as biobutanol, renewable gasoline, biojet and biocrude, will reach a combined 3.2 billion gallons, a respectable commercial volume for this emerging industry.

Continued Growth

Elections have consequences&mdash;an old but true adage in Washington. America&rsquo;s domestic biofuels industry experienced firsthand diminishing support for the entire renewable energy sector as a consequence of the 2010 election. A quick look at recent national polls and you&rsquo;ll find support for renewable energy decreasing, although it remains above 50 percent. The coming year will see a debate between candidates of all sizes, shapes, parties and views, a milestone opportunity for the greater renewables industry. An opportunity that demands pulling together of resources across the board to make sure candidates and voters understand the importance of America building and maintaining a broad renewables portfolio approach to our nation&rsquo;s energy, economic and national security policies. There are no silver bullets in the traditional hydrocarbon or renewable sectors. As I have continued to write, we all must work together and provide a balanced approach to the fuels we will use.
 Significant accomplishments in the advanced biofuels sector were seen in 2011. The Dynamic Fuels plant in Louisiana has fully powered up, the impetus to the U.S. Navy&rsquo;s December announcement of placing the world&rsquo;s largest advanced biofuel order, 425,000 gallons. The military has flown its most sophisticated, powerful jet fighters on biojet, from the F-16 and F-18, and the first cross-country commercial flight occurred from Seattle to Washington, D.C.&rsquo;s, Reagan National Airport. We&rsquo;ve also seen a number of companies break ground for commercial plants or announce agreements to do so.
But this is just the beginning, the tip of the iceberg for what we can do long-term for the nation in the area of liquid transportation fuels.&nbsp; The cornerstone of the U.S. effort starts with the renewable fuel standard (RFS) and the federal government&rsquo;s commitment to mandate the use of more than 15 billion gallons in today&rsquo;s marketplace. Not bad for a law that was just signed in 2007 and implemented in 2010. But the key to delivering on the promise of advanced biofuels is staying the course. It is providing a stable, predictable public policy framework. It cannot be a politically motivated, mercurial policy that ebbs and flows. It is only with this stable regulatory framework that investors will make the choice to enter into the commercial funding of these projects that will operate for years to come. We must continue to actively work with both federal and state governments to build this future. We can ill afford to see other countries around the globe outspend and deploy the innovative technologies developed in the U.S., rather than deploying them ourselves.
&nbsp; So as we say goodbye to 2011 and hello to 2012, there are a number of outstanding items that could make that future more likely here at home. The most significant is the full funding of the MOU between the U.S. Departments of Defense, Energy and Agriculture to spend $510 million to build first-of-its-kind, commercial, advanced drop-in renewable fuel plants. At deadline both defense and energy pieces for FY 2012 needed funding. Under the best circumstances this would mean some funds might be forthcoming by year&rsquo;s end.
 A second set of issues involves the tax code. I suspect when Congress adjourns, no fewer than four of the provisions that provided tax credits to the renewable fuels industry will have expired.&nbsp; That will mean we are exactly where we were in 2010 for a number of producers in the advanced biofuels pool. Obviously, we will need to have a serious effort to create support for tax support for this industry, particularly if the incumbent industries are afforded support. Our national energy policy should address each of the portfolio pieces by recognizing their state of commercial development.
 Last, we managed to preserve a small amount of money to be continued under the energy title of the Farm Bill. This area will also need continued support if we are to have any type of significant support in the growing of energy crops and their use in biomass conversion technologies.
 As you can see, there is a lot on the line and many moving parts. Be it Republican or Democrat, these are not partisan programs for the future of renewable energy in the U.S. We should be a world leader in this space and everyone from Oklahoma to Maine ought to openly discuss and support building the advanced biofuels space. But you, the reader, also have to be engaged by talking to all types of candidates about your support for this industry, and the policies that support it.
 Here&rsquo;s to the new year and our success! Author: Michael McAdams President, Advanced Biofuels Association (202) 469-5140 <a href="mailto:Michael.McAdams@hklaw.com">Michael.McAdams@hklaw.com</a>

Full funding of $510 million government commitment, renewed tax support still needed

This Year Could Be a Game Changer

Call me a heretic, but biofuel is not a near-term substitute for petroleum. Recent shale oil discoveries, efficient drilling technologies, and a boon of natural gas have moved the U.S. to energy positive for the first time in 65 years. This is no time, however, to stop. Biofuels and earth science are identifying critical renewable sources and methods of obtaining both fuel products and food.
 As in any bold challenge to old thinking, the biofuels industry is running into resistance to funding. The Valley of Death is where concepts lie in finance limbo between proven results and funding to commercialize. Investors like to fit science into their world. Wrong fit puts pre-commercial science in a gridlock where economic innovation and scientific growth stagnate. It happened with the first American power generation, but the inventors figured out the solution. In 1884 Thomas Edison&rsquo;s partner, Elihu Thompson, said, &ldquo;The Dynamo is not the system, nor the regulator, nor the lamp, nor the lines and switches, but the whole entity must be compared with another entity, under conditions which represent real, out-and-out commercial usage&rdquo; (from Maury Klein&rsquo;s &ldquo;The Power Makers&rdquo;). Edison and his partners realized they were working toward a complete solution. Educating the public and policymakers on practical aspects of electrical energy was a distraction, but it piqued investor interest. Sound familiar? It should. Today&rsquo;s hurdles are similar.
 The success incentives in science and finance are somewhat different today. Private equity, hedge funds, and venture capital resources may or may not be knowledgeable about specific process technologies. Near-term profit projection tickles most investors&rsquo; interests more. Biofuel operations require monitoring and ongoing improvement throughout the system if the enterprise is to commercialize and grow. This is simply Edison&rsquo;s own science in business balancing act, updated&mdash;knowledge in money.
 To prepare our &ldquo;science clients&rdquo; for financing, we review three stages: research, process and testing. We call the fourth the &ldquo;shampoo step,&rdquo; repeat. The logic behind each is straightforward. Research: scientists and investors exhaustively study and probe their materials. Process: the scientific process carefully monitors the process steps; investors use management models to gauge whether their money is achieving the objectives. Testing: peer review is often a step in commercializing scientific findings; the investor necessarily reviews customers&rsquo; preferences and buying patterns.
 The scientific process is exacting. The investment management process, while somewhat less exacting, is critical to commercial and financial success. Getting understanding of the relationship between them is mandatory. Randy Komisar, partner at Kleiner Perkins Caulfield Byers, advises innovators to create a management dashboard. In &ldquo;Getting to Plan B,&rdquo; he describes it as a necessity &ldquo;to constantly iterate to find a path that will work.&rdquo;
 With the exception of Vinod Khosla and John Doerr, funders are not fond of experimentation. To scientists, however, it&rsquo;s the secret sauce to their next-generation business. One scientist and client told me, &ldquo;It&rsquo;s amazing how creative you get when you don&rsquo;t have money.&rdquo;
 A few months ago, I introduced two clients into a conversation about combining their respective science and technology, for business reasons. One has an algal process. The other is a Midwestern multifeedstock biofuels producer. They had individually worked through the research, process and testing stages. Both have exceptional business plans and credentials. The joint venture idea came from the dashboard I conceived for them.
 The repeat stage led us to indexing the cost of variable feedstocks against the algal oil; offsetting variable commodity costs may enable us to closely manage operating profits of each business. Only by turning the mathematical and scientific problems upside down did we arrive at this business concept. We are no Einsteins, but our imaginations should begin to payoff for investors in a quarter of the original time. This idea was also derived out of a science lesson from Michio Kaku, a founder of string theory and author of &ldquo;Physics of the Future.&rdquo; Recently he spoke about the recession and the limits of zero-sum thinking. His reference was primarily directed at politicians. Science doesn&rsquo;t work that way, said Kaku. &ldquo;Science makes more pie.&rdquo; In one real-life situation, my own on-paper calculations suggest that our investors may find their rewards highly satisfying, and lucrative. &nbsp;&nbsp;&nbsp;&nbsp; Author: Robert Bailey Biofuel Financing Advisor/Broker, Trusted Advisory (646) 472-5213 <a href="mailto:rbailey@trustedadvisory.com">rbailey@trustedadvisory.com</a>

Is there a science to financing science? 


Research, Process, Testing—Repeat 

IPOs are back in biorefining! Why? Because biorefining presents attractive opportunities in a growth industry. In the past 15 months, initial public offerings have been completed by Amyris, which is modifying microorganisms to produce pharmaceuticals; Gevo, an isobutanol producer; Solazyme, a producer of algae-based oils; and KiOR, which plans to convert nonfood biomass into crude oil. And new offerings are in the pipeline by REG, the nation&rsquo;s largest biodiesel producer; Genomatica, a biotech manufacturing process developer; and BioAmber, a biobased chemical manufacturer.
 Two principal motivations to do an IPO are raising capital and providing a liquid market for stockholders. Collateral benefits include the ready ability to return to the markets for additional equity or debt financing, the opportunity to use publicly traded stock as currency for acquisitions, the availability of tradable stock for employee compensation plans, the perception of stability to lenders and the enhancement of the company&rsquo;s public image. Disadvantages include the cost of continuing compliance with Securities and Exchange Commission regulations, management time for compliance and attention to markets, and the scrutiny to which public companies are subject.&nbsp;
 An IPO must be registered with the SEC, which will review and comment on the disclosure in the prospectus for the offering. This can require several amendments to the registration statement. Exhibits to the registration statement include the company&rsquo;s governing documents and all agreements that are considered material to the investment decision to be made by investors.
 Advance planning is critical. The company needs to be properly structured from a legal standpoint and attractive to public markets. Delaware incorporation is not essential but should be considered. The capital structure should be tailored to present and future needs. Most companies will authorize both common and preferred stock. The governance structure will be revised to provide outside director positions on the board, establish board committees, develop governance procedures and adopt compensation plans and policies to satisfy SEC and stock exchange requirements and meet public market expectations. The markets will also expect management to have the talent required for success. Audits must be available to satisfy the SEC&rsquo;s financial disclosure requirements. This may require a change in the company&rsquo;s audit firm and the restatement of previous financial statements. All significant contracts and relationships should be reviewed and, if possible, changed to assure investors that the business is well-managed and stable. Debt financing agreements should be positioned to provide the resources required for the foreseeable future.&nbsp;
 Companies commencing an IPO will likely engage an underwriter to sell the offering whose compensation is a commission reflected in a discount from the public offering price. The underwriters will have counsel to assist in diligence review, statement preparation and preparing the underwriting agreement. The company&rsquo;s counsel will assist in positioning the company for the offering, coordinate delivery of diligence materials to the underwriters, draft the registration statement, supervise filings with the SEC, negotiate the underwriting agreement and complete the closing. The company&rsquo;s audit firm will review and report on its financial results. Existing stockholders will sometimes offer securities already held by them in tandem with the primary offering by the company. If so, the offering stockholders and their own counsel will also have a role.
 Preparing for an IPO can take months, even years. The real kickoff is the selection of the lead underwriter to manage the offering. This will be followed by the underwriters&rsquo; diligence investigation. A stockholders&rsquo; meeting will likely be required to approve changes to the company&rsquo;s governance documents. Diligence, final positioning and registration statement preparation can take three months or more. After the registration statement is filed, the primary focus will be responding to SEC comments, but amendments will also update financial statements and reflect changes in the business.
SEC review will normally require at least three months but significant issues can cause the offering to be in registration for considerably longer. During this period, the underwriters conduct a &ldquo;road show&rdquo; to introduce the company to potential investors. Contrary to popular wisdom, the SEC does not approve the registration statement or offering. Rather, it indicates that it has no further comments and is willing to allow registration to go effective and the offering to commence. Assuming the company and underwriters agree on the offering price, the underwriting agreement is signed, the offering becomes effective with the SEC, the final prospectus is made available, final commitments by the ultimate purchasers are made, the offering is closed and the company receives the offering proceeds, all within a week. Author: Dean R. Edstrom Partner Attorney, Lindquist &amp; Vennum PLLP (612) 371-3955 <a href="mailto:dedstrom@lindquist.com">dedstrom@lindquist.com </a>

The long, arduous filing routine is worth the wait for some

The IPO Process

If Amyris&rsquo; biobased farnesene, trademarked Biofene, isn&rsquo;t a household name by now, it will be soon. The Emeryville, Calif.-based biotech outfit and French energy giant Total expanded their ongoing research and development collaboration to which Total will contribute an additional $105 million to the existing $180 million the two companies previously committed to the program, which was created in June 2010. Amyris plans to contribute at least $65 million to R&amp;D of the renewable diesel program, according to an 8-K filing through the SEC in late November. Total owns approximately 21 percent of Amyris.
 &ldquo;With this expanded relationship with Total&rsquo;s vast distribution network, as well as Total&rsquo;s stated commitment to invest in production units, we expect to be able to co-develop products and, ultimately, deliver a global supply of sustainable renewable fuels at commercial scale,&rdquo; says John Melo, president and CEO of Amyris.
 In addition to the expanded R&amp;D collaboration, Total and Amyris formed a 50/50 joint venture that will allow the two companies to have exclusive rights to produce and market renewable diesel and jet fuel worldwide and entail nonexclusive rights to other biobased products based off Amyris&rsquo; Biofene platform, such as drilling fluids, solvents, polymers and specific biolubricants. The venture is expected to launch by first quarter this year.
 The creation of the joint venture &ldquo;will strengthen Total&rsquo;s position in the global renewable diesel market, which is projected to nearly double in size to 32 million tons in 2020 from 17 million tons in 2010,&rdquo; says Philippe Boisseau, president of gas and power at Total.
&mdash;Bryan Sims

Global partnership drives commercialization of renewable diesel, chemicals

Strategic Expansion

Those in the biofuel industry often think of algae as a future source of oil for conversion into biodiesel and hydrocarbon fuels. Researchers, however, say that algae may become an important source of feedstock for carbohydrate-based processing.
 A team of researchers at Iowa State University has developed a technique that can increase the carbohydrate-based biomass of algae by up to 80 percent. A more energy intense version of the technique can also be used to increase the oil fraction of the biomass by approximately 50 percent. According to the researchers, the improvements are made possible by expressing certain genes in algae that increase the amount of photosynthesis in the plant, leading to greater biomass production. A combination of two genes is used to create this increase in biomass as long as the algae is able to access sufficient carbon dioxide, says Martin Spalding, a professor in ISU&rsquo;s Department of Genetics, Development and Cell Biology.
 The two genes, LCIA and LCIB, are usually expressed in nature in environments that have relatively low levels of carbon dioxide. They allow the algae to capture and channel more carbon dioxide from the air into the cell, which keeps the algae alive and growing. The genes, however, shut down in environments with high carbon dioxide levels.
 &nbsp;The research conducted by Spalding&rsquo;s team has shown that when these genes are expressed in areas of abundant carbon dioxide, the cells can produce significantly more biomass than would be otherwise possible. The researchers can also increase the oil production of algae cells by using some existing mutated genes, but that process requires more energy. The patent-pending technology is available for licensing.
&mdash;Erin Voegele

Genetically modified algae increases biomass by up to 50 percent

Synthesizing a  Better Algae

Finnish renewable diesel producer Neste Oil started up its 800,000-ton-per-year (240 MMgy) refinery in Rotterdam in September, and the company didn&rsquo;t stop there. Together with the Port of Rotterdam and the Rotterdam Climate Initiative, Neste Oil has also launched a trial where a port authority patrol boat will record 1,000 hours of operating time powered by Neste Oil&rsquo;s NExBTL renewable diesel. The pioneering trial will measure exhaust emissions, such as SOx and NOx, and engine performance of the patrol boat, as well as gather operational experience.
 &ldquo;Our NExBTL fuels have already shown what they are capable of in terms of performance and lower emissions on the road and in the air, and now we will have the opportunity to see how our renewable diesel performs in marine use as well,&rdquo; says Kaisa Hietala, Neste Oil&rsquo;s vice president of marketing.
 Meanwhile, Neste Oil made a major environmental investment in October at its refinery harbor in Porvoo, Finland, by installing a system for recovering volatile organic compounds (VOCs) when gasoline is loaded at the harbor. The new system, expected to be commissioned by the end of 2013, will reabsorb VOCs into gasoline during loading with the help of two absorption tanks and related equipment at the harbor, after which the gasoline used will be returned to the refinery for reuse.
&mdash;Bryan Sims

How Neste Oil is going above and beyond renewable diesel production

Refining Environmental Efficacy, Applications

Eastman Chemical Co. ventured into the biobutanol space in November when its subsidiary Eastman Renewable Materials LLC acquired TetraVitae Biosciences Inc. and its assets. TetraVitae Biosciences is a developer of biobutanol and bioacetone, which are platform intermediates in the production of a variety of products, including coatings, molded plastics and personal care products. The company&rsquo;s technology features the use of Clostridium Beijerinckii BA 101, a proprietary, mutant, nongenetically modified organism. To date, TetraVitae Bioscience&rsquo;s process has been demonstrated through the retrofit of a corn ethanol demonstration facility at the National Corn-to-Ethanol Research Center at Southern Illinois University.
 &ldquo;This announcement is a demonstration of Eastman&rsquo;s continued investment in innovation and our commitment to delivering sustainable solutions to our customers,&rdquo; says Greg Nelson, senior vice president and chief technology officer of Eastman. &ldquo;I am confident that TetraVitae&rsquo;s patented biocatalysis technology will provide Eastman an excellent platform for the development of a range of biobased processes that will strengthen our sustainable product offerings.&rdquo;
 Meanwhile, Butamax Advanced Biofuels LLC announced the U.S. Patent and Trademark Office issued reexamination decisions regarding one of its foundational patents&mdash;U.S. Patent No. 7,993,889 (&rsquo;889 Patent)&mdash;which Butamax asserts has been infringed upon by Gevo Inc. The USPTO has agreed to grant Gevo&rsquo;s petition to reexamine the &lsquo;889 Patent, and recently denied reexamination of a separate Butamax patent, U.S. Patent No. 7,851,188. A hearing on a motion for a preliminary injunction to halt Gevo&rsquo;s infringement is scheduled for early this year.&nbsp;
&mdash;Erin Voegele

Acquisitions, patent infringement disputes continue 

The Business of Biobutanol

Industry leaders consistently remark that initial public offerings (IPOs) defined the biorefining sector for 2011. At least five companies, including Codexis Inc., Solazyme Inc., Gevo Inc., Amyris Fuels LLC, and KiOR Inc., have successfully entered the public space, while numerous others have IPOs pending with the Securities and Exchange Commission. As Michael McAdams, president of the Advanced Biofuels Association, recently pointed out to Biorefining Magazine, those that have gone public have done so &ldquo;with great success.&rdquo; He says the trend has been amazing and it shows few signs of slowing. In November, BioAmber Inc. became the latest biorefining company to file a registration statement with the SEC for a proposed IPO.&nbsp;
 In a recently published analysis, Lux Research noted that several factors&mdash;including the IPO trend&mdash;demonstrate evidence that certain segments of the biorefining industry are maturing. According to the Lux Research report, &ldquo;Seeding Investment in the Next Crop of Bio-Based Materials and Chemicals,&rdquo; big-ticket acquisitions, IPOs and other examples indicate the biochemical field is rapidly maturing. It also indicates that venture capital funding in the biochemical segment will soon peak and start to decline. Mark B&uuml;nger, a Lux Research director and lead author of the report, stresses that&rsquo;s not a bad thing.&nbsp; &ldquo;That is really just how venture funding works,&rdquo; B&uuml;nger says, noting that when investors start seeing good returns they often want to make additional contributions. In the venture capital space, when investments start making returns, it generally means the field is maturing. But B&uuml;nger says it also means companies that go public will begin to crowd out their earlier-stage counterparts.
 Most companies go public to rapidly raise large amounts of capital. Pavel Malchanov, an energy analyst at financial services company Raymond James, says the advanced biofuels and biochemicals sector is by definition an early-stage industry. &ldquo;What we have seen from the five IPOs that have priced in the past 18 months is that investors are open to putting money in early-stage, pre-revenue, and certainly pre-earnings companies,&rdquo; Malchanov says. More than a dozen additional biorefining firms have filed registration statements with SEC for proposed IPOs, but those IPOs haven&rsquo;t gotten priced. Malchanov says that is not surprising given what has happened in the broader stock market in recent months.
 Greg Lynch, an attorney and chair of the transactional group at Michael Best &amp; Friedrich says success of the biorefinining sector in public markets has been rather unique. &ldquo;Unlike the broader market, I think this is one sector that has gone reasonably well,&rdquo; he says. &ldquo;I anticipate it will continue to do so for the near-term. I also think that the successful IPO market will help attract more venture capital because they can see an easier path to future fundraising.&rdquo; Lynch notes, however, it may be pre-emptive to try to predict which companies will enjoy long-term success in the public markets. &ldquo;Successfully is a tough question to answer,&rdquo; he says. &ldquo;You may not know, even within the first six or 12 months whether it&rsquo;s a successful IPO. I think there will continue to be companies who can successfully raise money in the IPO market in the next six months or so. The real issue is whether the money they will raise will be sufficient to get them to cash flow break even [if] the public markets sour on advanced biofuels.&rdquo; If that happens, Lynch says that it could be very challenging for companies to raise capital in public markets.
 Lynch also says companies filing IPOs might face slightly different investor expectations. &ldquo;I think it will be much harder in the future for pre-revenue companies to raise significant amounts of money in the public markets,&rdquo; he says. He also points out that companies with flexible platforms in both the biobased chemicals and fuels markets will continue to see an advantage. He also stresses companies that are further along in technical development will be attractive to investors since they require less capital to realize commercial success.
 Some biorefining companies that have filed IPOs feature these multiplatform production abilities, but others are pure players focused on one market segment. &ldquo;As more companies in the space go public it will provide investors an opportunity to leverage whatever specific markets that they want,&rdquo; Malchanov says. The chemicals industry represents a multitrillion dollar global market. &ldquo;There is a tremendous variety of products in the chemicals industry that individual renewable chemical companies can focus on,&rdquo; Malchanov says. &ldquo;There is a lot of diversity in this industry and that will continue to be visible as these IPOs are getting priced.&rdquo;
 There are several factors beyond raising significant capital that make filing an IPO attractive. Lynch says for one, earlier investors may be looking for a liquidity event or ability to sell their shares. &ldquo;I&rsquo;d caution companies to not overemphasize that reason for going public at this point,&rdquo; he says.
Drawbacks and advantages of going public should both be considered. &ldquo;Currently there are attractive valuations and in some respects it&rsquo;s easier to raise money in public markets in this sector than it is through venture capital and private equity markets,&rdquo; Lynch says. &ldquo;Some of the downsides are that it is significantly more burdensome from an accounting and legal regulatory oversight [perspective].&rdquo; For example, the disclosure requirements are much more significant. &ldquo;If the company either can&rsquo;t follow through on its expectations from a commercialization strategy, or if the overall markets go south, it could be very hard.&rdquo; In essence, a company could be stuck with the burdens of being a publically traded entity without enjoying some of the most significant benefits.
 B&uuml;nger says companies considering going public need to offer more concrete business plans to potential investors. &ldquo;Your funding opportunities better be more closely tied to revenue than to just a good idea or technology,&rdquo; he says. Malchanov also stresses it is imperative to understand how potential investors evaluate IPOs in the biofuels space. First, he says that a company must have evidence its concept has been proven out at pilot or demonstration scale. Also, a company should be prepared to answer questions by investors regarding yield and technology, and how close those figures are to what&rsquo;s required to be commercially competitive.
 Malchanov notes investors expect to see a credible, transparent roadmap of scale-up activities, and how they lead to positive cash flow and profitability. This involves disclosing details regarding target production economics and capacity expansion costs, and how expansion will be funded along with scale-up timing and cost reduction plans. Investors will evaluate the existence of strategic partners, including those who offer financial support to expand production capacity and those involved in offtake agreements. He also says investors will want to know about any exclusivity provisions in partnership agreements. Finally, Malchanov says access to feedstock will be a concern. For traditional feedstock such as sugar or oilseeds, investors want to know if it can be obtained at preferential pricing, or if long-term contracts are viable. If the feedstock is cellulosic, he says they want to know if the pricing structure is clear. Malchanov says these criteria provide an evaluation framework for how investors assess IPO candidates. He says that companies should ideally meet all of these elements before deciding if an IPO is right for their operations.
 While advanced biorefining companies are relatively new to the public markets, Lynch notes that several first-gen biofuels firms went public in the past. One of the most significant differences between those and the current crop of advanced biorefining companies filing IPOs is that the first-generation companies were already profitable when they filed IPOs. The same is not true in the advanced biorefining sector. &ldquo;While [these companies] have significantly more potential than some of the first-generation IPO companies, they are also much further away from commercialization and profitability,&rdquo; he says. Only the future will tell to what extent that potential is realized. Author: Erin Voegele Associate Editor, Biorefining Magazine (701) 540-6986 <a href="mailto:evoegele@bbiinternational.com">evoegele@bbiinternational.com</a>

Biorefining companies continue to file IPO statements as venture capital funding trends downward   

Venturing into the Public Space

The government is a tricky organization to work with. At least that&rsquo;s what Pamela Serino, director for the quality and technical support office at the Defense Logistics Agency (Energy) told a ballroom full of prospective advanced biofuel producers at a conference this fall. Serino was there to explain how her team at the DLA would go about awarding the advanced biofuel contracts created when the U.S. DOE, the USDA and the U.S. Navy announced they would award up to $510 million to a number of future biorefinieries that could supply biobased jet or marine fuel.
 Serino makes it very clear that the process won&rsquo;t be easy. The DLA acts as the main contractor for many government entities such as the U.S. Navy, and the selection process was &ldquo;a little touchy&rdquo; she says, because &ldquo;if [advanced biofuel producers] can&rsquo;t meet the contract requirements, it is going to come back to us and the customer won&rsquo;t be happy.&rdquo; With these newer fuels, she adds, &ldquo;there are some that just don&rsquo;t exist yet, so we are actually awarding contracts on a prayer kind of thing.&rdquo;
 Of course, Serino isn&rsquo;t entirely correct&mdash;there are some fuel providers such as Solazyme or Dynamic Fuels that have already provided renewable jet fuel for use in several U.S. commercial flights. But her sentiments on government partnerships do highlight one of the most complex directions a nascent biorefining firm may take on its path to commercial development and prosperity. As Serino says, working with government is &ldquo;tricky,&rdquo; and without going too far into the current political atmosphere and economic climate this past year, expecting Congress to agree on any sort of legislation that would immediately bolster the advanced biofuels industry would be like expecting the major oil companies to voluntarily give up their tax subsidies. It could happen, but not likely.&nbsp;
 Company builders and government grant writing experts spoke with Biorefining Magazine and gave their take on when walking the government tight rope makes sense, and when it doesn&rsquo;t.
 Sam Nejame helps his clients enter and evaluate new markets or, in some cases, create them. He&rsquo;s managed process design projects for Pfizer, GE and the Department of Defense, and today, he says, he helps companies apply for grants, loans and loan guarantees. A major part of Nejame&rsquo;s job is working with people like Serino, but for him working with government isn&rsquo;t always productive.
&ldquo;Nondilutive capital can be alluring,&rdquo; he says. &ldquo;If you can get help building your demo plant or first commercial facility and it makes sense, sure, do it. But,&rdquo; he adds, &ldquo;even now government opportunities are just one source of funding. No company should base its business plan solely on winning government money.&rdquo;
 Russell Howard, CEO of Oakbio and one of the founding members of Codexis Inc. and, before that, several other companies, shares the same popular belief with Nejame. &ldquo;It may be seductive to work on an exciting grant-funded project,&rdquo; he says. &ldquo;Grants provide nondilutive funds that may be used to build value in core technology, develop product concepts, or advance product development at scale.&rdquo;
 But working with, or through, a government-based organization or grant as a means to company growth can be counterproductive. &ldquo;Executives need to understand it&rsquo;s a time-consuming process and it distracts from running the business,&rdquo; Nejame says, adding that some people see it as marketing. &ldquo;If the grant is not core to their mission I tell them not to pursue it. It&rsquo;s great when it works, but there&rsquo;s no such thing as free money.&rdquo;
 Howard believes that a government-backed business strategy makes sense, but only for the right companies. Mature firms that can explore areas not in tune with their core values have the ability to invest time and research into a grant, but for a small company, this can be extremely tenuous. &ldquo;The very low probability of funding,&rdquo; Howard says, &ldquo;coupled with the weeks of effort and opportunity cost involved in chasing funds that may not materialize, is a profound cost for small innovator companies.&rdquo;
 Nejame&rsquo;s and Howard&rsquo;s perspectives are fairly clear regarding what government support companies should or shouldn&rsquo;t focus on. Large companies with the financial wherewithal to devote time and research into markets that might not be in line with the company vision could, and should, seek out the services of people like Serino. But for smaller companies, pursuing government assistance isn&rsquo;t worth the chase.
 Nejame&rsquo;s advice for the smaller companies, or even those simply looking to find the funding to continue on the path to commercialization, starts with existing relationships. &ldquo;Later-stage companies will need to look to their existing VCs. You&rsquo;ve got to keep making milestones and giving the guys with the bucks reason to keep you alive,&rdquo; Nejame says, adding, &ldquo;Strategic money is smart money. Expect to see more acquisitions. And of course, the public markets will open again. Institutional investors will have a shot at these lottery tickets. Some companies will fail, but others are going to pay off at big multiples.&rdquo;
 Nejame&rsquo;s sentiments of prosperity to come, one that isn&rsquo;t directly linked to a government strategy, sounds appealing and is highlighted even more by Howard. &ldquo;What the government may be able to promise one day may evaporate one election cycle or years later,&rdquo; he says. So, as both seem to show, working with and focusing a business strategy based on government-anything seems detrimental to commercialization and financial stability. Or as Serino says, it seems &ldquo;tricky.&rdquo;
 Even with very few companies that can actually supply the quality, high-volume quantities of renewable jet fuel to the U.S. Navy or the U.S. Air Force, included in Serino&rsquo;s speech in that ballroom in October, she also noted that there were already roughly 100 applicants looking to win government contracts. So why would so many biorefining firms look to enter into such &ldquo;tricky&rdquo; ground? Nejame offers his perspective. &ldquo;Well, the U.S. Air Force isn&rsquo;t going to go Chapter 11 like we saw with American Airlines,&rdquo; he says. &ldquo;Obviously, the military has a need and a history of paying top dollar for new technologies.&rdquo; Author: Luke Geiver Associate Editor, Biorefining Magazine (701) 738-4944 <a href="mailto:lgeiver@bbiinternational.com">lgeiver@bbiinternational.com</a>

Experts say it's counterproductive, but biorefining firms continue on with government

April 2012

Business Briefs

Business Briefs

Business Briefs

Columns

Digging into New Subject Matter

Highlights from BPA, Calif. Biomass Energy Alliance Joint Conference

Biomass Thermal in Renewable Portfolio Standards

Distributed Biomass Waste-to-Energy Technology for a Sustainable Future

Grain Bin Safety Hazards Have Implications for Biomass Storage

Continued Growth

This Year Could Be a Game Changer

Research, Process, Testing—Repeat

The IPO Process

Featured

Inland Asset

Choosing an Energy Avenue

Brewing Up Biomass

Transport Truths

Venturing into the Public Space

Why a Government-Based Business Strategy is Tricky

Contributions

Maximizing Biopower Development

Putting a Lid on Dust

April 2012.css-7jxktu{position:absolute;bottom:0px;left:0px;right:0px;height:3px;border-radius:3px;background-color:var(--chakra-colors-brandBlack);}

Business Briefs

Business Briefs

Business Briefs

Columns

Digging into New Subject Matter

Highlights from BPA, Calif. Biomass Energy Alliance Joint Conference

Biomass Thermal in Renewable Portfolio Standards

Distributed Biomass Waste-to-Energy Technology for a Sustainable Future

Grain Bin Safety Hazards Have Implications for Biomass Storage

Continued Growth

This Year Could Be a Game Changer

Research, Process, Testing—Repeat

The IPO Process

Featured

Inland Asset

Choosing an Energy Avenue

Brewing Up Biomass

Transport Truths

Venturing into the Public Space

Why a Government-Based Business Strategy is Tricky

Contributions

Maximizing Biopower Development

Putting a Lid on Dust

April 2012