This is actually great news. It means that farm grade machinery already exists that is capable of pelletizing waste wood and the like. Even if markets do not immediately exist, the ability to clean up woodlots and produce fuel pellets is a vast improvement in terms of handling than any other option.
The pellets can be stored for long periods very easily and reloaded and moved very easily, likely with equipment already in use.
This article brings home the shape of our own future. We see here the strategies that are only been talked about here been actually implemented with real success. This will remove the doubts that delay the necessary regulatory changes. Read it slowly. When he calls it a miracle, it is because a regulatory framework was imagined and implemented successfully. This is economic engineering at its best.
The eastern forestlands continue to be semi managed forests with a poor economic model. Suppose we could produce an annual crop of fuel pellets while we groomed the forest properly. Suppose we got a decent price from industry for those pellets. If a combination of market price and perhaps a subsidy to smooth out local variations were put in place, we could create a feed stock from the Eastern forests alone that is massive and possibly sufficient to satisfy most of our fuel needs.
The real dividend would come from the full development of a rich mature forest ecosystem that could supply the full range of forest products. We can restore and surpass the partly managed woodlands of the original inhabitants.
Since a real market has already been created, we have a pricing mechanism in place to support early work. This is a great gift and can change the whole economics of forest management by the local small owner. My original model woodlot needed some form of long term government partnership in order to create economic stability. This is a very positive development that may still be insufficient but will certainly allow a better partnership with natural feedback and control.
It will be necessary to price coal and wood chips at the same BTU point through regulation to make this work since the coal industry will be always in a position to dump into any market that suits them. It is here that a carbon tax is suddenly attractive, provided it is phased in at ten percent of the final tax rate per year and the revenue is used to support expansion of the fuel pellet industry.
by Chris Schilling
Thursday September 18, 2008, 6:32 AM
Last week, I mentioned that I recently took a Swedish alternative energy tour organized by the U.S. Department of Labor.
I was struck that the Swedish countryside looks so much like central Michigan: green farm fields, windbreak trees in the distance. The farms were generally smaller, and it seemed they all had a windmill or two. I saw field after field of yellow flowering canola, a crop that is shipped to nearby biodiesel refineries. I saw field after field of native grass and salix (a native shrub), crops that make heating fuel pellets or methane biogas (an automotive fuel).
It seemed many people had jobs related to some aspect of farm-based renewable energy.
Is this a glimpse of rural Michigan's future?
For the past decade, high energy prices across the board have spawned remarkable economic growth across Sweden. And it turns out the miracle is spreading across Europe and the Former Soviet Republics.
It's characterized by a strong linkage that is forming among three existing industries: agriculture, forestry, and renewable energy production. Bottom line: these industries are joining forces to create a host of new food production and renewable energy operations large and small. As a rule, the supply chains for these industries are becoming more local. In turn, local jobs are created.
As food and fuel prices continue rising, I believe Michigan will eventually follow suit. We have a big advantage with our talented people and our abundant biomass resources.
How will the workforce change? Based on what I learned in Sweden, I predict farming will no longer be viewed as a smelly, impoverished business. I noticed little difference in the work qualifications of today's Swedish farmer, today's Swedish MBA, and today's Swedish chemical engineer / computer programmer.
It happened before the King of Sweden decided to visit Flint to kick off the new biogas plant. Invented by clever Swedish engineers, it makes cheap auto fuel from all manner of biomass, including grass clippings, food waste, and manure. The affordable technology was born out of the same economic miracle described above. It's mimicked after the clean, odorless plants that have been perfected in small and large towns throughout Sweden.
Since when is a sewage treatment machine sexy? It became so when Swedish engineers figured out how to cheaply feed the machine native grass instead of manure, native grass that local farmers grow in big quantities. Did I mention Swedish gasoline filling stations have pumps that sell this locally-made biogas?
The King's visit is part of a larger, concerted effort to market on a global basis a tremendous variety of new, renewable energy technologies recently born in Sweden. Car fuel from grass clippings is just one example. Others are slow, powerful, and quiet wind turbines, smart geothermal, cheaper biodiesel, and more.
Did I mention the miracle is spreading throughout Europe and the Russian Federation? American inventors have some catching up to do.
Let's have a deeper look at one of these new industries coming our way: pellet fuel that burns cleanly in furnaces large and small, pellets made from biomass wastes such as grass clippings or sawdust. Last week I mentioned that this industry is growing rapidly across Europe. However, it now faces a big problem: in many locations, demand is outstripping the supply of locally available biomass. Sales of furnaces that consume this biomass are rapidly increasing. Across Europe, many new companies, small and large, are making these furnaces.
It turns out Canada is exporting massive quantities of pellet fuel to meet the fuel supply challenge in Europe. The Wood Pellet Association of Canada reports that, in 2006, Canada exported over 600,000 tons of wood pellets to Europe, eighty percent of which was shipped from the Canadian west coast. It is remarkable this business is profitable, given the rising cost of diesel fuel needed to ship this material from Vancouver through the Panama Canal to northern Europe. I would think a shorter trip from Saginaw might make more sense.
At its core, this Canadian industry utilizes a fleet of massive, ocean-going ships that are originally designed to haul grain. This industry uses much of the same infrastructure already in place for international grain markets: truck- and rail-transport equipment, ocean tanker terminals, and so on.
The rapid growth of this export industry is covered in a report by B. Verkerk, M. Junginber, and A. Faaij of Utrecht University; and E. Ackom and P. McFarlane of the University of British Columbia. Their report, "Current and Future Trade Opportunities for Woody Biomass End-Products From British Columbia, Canada," was presented at the 2008 World Bioenergy Conference that I attended in Sweden.
The authors report that sawmill residues are mainly used as feedstocks for pellet fuel in British Columbia. However, the availability of this material is becoming limited. As in many countries, the forest products industry is becoming more efficient, making less waste from wood cutting, and incorporating more residues into fiberboard. As a result, more and more Canadian companies are investigating alternative feedstocks to satisfy the European pellet fuel market. Prime candidates are native grasses and roadside trimmings of grass, shrubs, and trees.
The authors claim British Columbian pellet fuel production could cover a whopping 67 percent of the European Union's anticipated imported pellet demand (60.9 gigajoules) by the year 2020. However, cost reductions throughout the supply chain and increases in market prices are needed to expand trade. I think it is safe to conclude that market prices will increase as long as oil prices and shipping costs continue to rise.
It seems to me, Michigan can benefit from this growing industry. We have plenty of wood waste, plenty of roadside trimmings, and we can grow native grasses. We have deep water ports closer to Europe than Vancouver. Our shipping costs will be more competitive.
Make no mistake. I'm not talking about clear-cutting Michigan. And I'm not talking about reckless crop cultivation that destroys land. I can point you to an abundance of scientific literature that teaches best practices in grass and tree cultivation, best practices that prevent erosion, preserve wildlife, and conserve soil fertility for future generations. It is exactly these best practices that are producing a miracle of economic growth throughout many rural areas of Europe.
It will be essential that local schools and colleges teach these best practices; weed science is a hot college degree these days.
And just as in Sweden, we'll need regulatory agencies to protect against reckless land use as this new industry unfolds.