Biomass project potential in Montana

By Lisa Gibson
Posted January 28, 2010, at 1:30 p.m. CST

Montana holds potential for two biomass projects, both in very early stages of development, but one is at a standstill after the local utility declined to enter into a power purchase agreement. The other, involving the Conservation District of Chouteau County and the Research Conservation and Development Board, is trying to find a use for an abundance of wheat straw.

Stoltze Land and Lumber in Flathead Valley, Mont., believes the recent closing of a pulp and paper mill in Frenchtown, Mont., leaves the area's well-developed forest products infrastructure in limbo. "It's hanging on the edge," said Chuck Roady, Stoltze vice president. The solution, according to Stoltze, is to build a 12 megawatt biomass power plant and use existing wood that would previously have been delivered the mill. The project hit a snag, though, when the local utility declined a power purchase agreement because of energy and feedstock costs, Roady said. "We are at a standstill," he said. "A frustrating standstill."

Until a PPA is secured, the project cannot proceed because no funding will be granted to a project that has no use for its end product. Stoltze has been trying to work with power company Northwestern Energy, but it would involve transmitting the energy, a problem not easily solved, according to Roady. "We have very limited transmission capabilities in Montana," he said.

Initially, Stoltze hired consultants to evaluate the project. "We determined the best avenue or sweet spot as far as bang for our buck is a 12 megawatt plant for 12 months a year," Roady said. Additionally, 18 megawatts would be generated during peak energy consumption times from December to February and from July to September, he added. The cost would be between $36 million and $54 million, or $3 million per megawatt, Roady said.

Besides bringing jobs and work back to the community, the plant would have several other benefits including improved forest management, healthier trees and forests that can store more carbon and wildfire mitigation, Roady said. "We live in a smoke blanket in the summer," he added.

The company is still working to find ways around its current PPA barrier and trying to convince utilities to look beyond today and see the potential of biomass power in the future. Montana currently has cheap hydropower, at about 3.2 cents per hour for consumers. Compared with an 11 cent-per-hour price tag for biomass, hydro seems much more attractive today, Roady said.

The state could also be the home to another biomass project, this one in Chouteau County, the biggest agriculture-producing county in the state. The Conservation District of Chouteau County and the Research Conservation and Development Board are working together to determine what type of product should be developed to use wheat straw from local farms. Annually, farmers in the county generate between 50,000 and 100,000 1,000-pound bales, which is a conservative estimate, according to Mike Arnst, who serves on both boards and is also a farmer. "We're trying to turn it into local revenue that can create jobs," he said.

About 440,000 acres of winter wheat are planted in the county each year, not including spring wheat and barley. But this project would only use winter wheat, Arnst said. "We feel there's a huge potential to take some of this residue off," he said. "Right now, we're not doing anything with it."

The organizations are currently weighing two options: electricity production for the local community, along with export; and pellets for local use or exportation. "We're investigating what the potential is and what options we have," he said. No timeline has been established for release of the results.
While there has been a little skepticism and concern, numerous farmers have expressed interest to Arnst about participating. While the straw can be collected with existing equipment, Arnst doesn't think farmers harvesting their own residue is the best approach. "We don't want to worry about straw while we're harvesting our wheat," he said. Instead, young farmers who are "sitting on the fence," he said, can get involved and contract for those harvests. "I feel there's an opportunity for young farmers to go out and create a business out of it," he said.