June 27, 2005
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June 27, 2005 |
"Today the Minnesota biomass mandate has been transformed into a
waste-to-energy program that will cost electricity customers over $1 billion
more than they would have paid if the electricity had been generated from
wind."
- David Morris, RE Insider
Designing policies that effectively promote wind or solar energy is relatively straightforward, even if getting them implemented is not. The same cannot be said for policies that promote another renewable energy resource, biomass, for two key reasons.
First, unlike wind or sunlight, which can only generate some form of power or
heat, biomass has multiple end uses: power, heat, chemicals, soil enrichment,
clothing, food, feed, construction. Policymakers need to be careful that they
don't subsidize bioenergy at the expense of using plants or acreage for more
socially and environmentally valuable uses.
Second, unlike sunlight and wind (perhaps excepting the avian mortality issue
for wind), biomass use can have significant environmental impacts. Consider the
deforestation of parts of Africa and Asia that has resulted from the widespread
use of wood for cooking. Or the pollution generated from manufacturing
cellophane, despite the fact that this thin film plastic's very name is derived
from its primary raw material, cellulose.
Given these difficulties, why should we encourage the use of biofuels? Here are
three reasons.
First, sunlight and wind are intermittent energy sources. Their output needs to
be stored. Various kinds of storage are, or soon will be, available---hydrogen,
flywheels, compressed air, batteries of various types. Storage has a high cost
and/or environmental impacts. Biomass comes with its own built-in storage. That
offers certain advantages.
Second, the use of biomass for non food and feed purposes addresses one of the
most important and contentious domestic and international issues-the plight of
farmers and rural areas. Agriculture continues to comprise a significant part of
the world's economies, especially those of poorer nations. There may not be
sufficient biomass to provide 100 percent or even 50 percent of our primary
energy needs. But even if plants were to satisfy only 30 percent, the quantity
of feedstock involved, and the potential for creating tens of thousands of
farmer-owned manufacturing facilities in rural areas, serving domestic markets,
could change the face of world agriculture and dampen international trade
tensions.
Third, the Kyoto protocol puts agriculture front and center. Plants absorb
carbon dioxide and sequester it. The Kyoto protocol, which went into effect only
this February, for the first time in almost 150 years makes a legal distinction
between living carbon(e.g. plants) and dead carbon(e.g. fossilized plants or
fossil fuels). The implementation of that protocol will raise the value and
importance of agriculture as a vehicle for reducing greenhouse gas emissions.
Living organisms can also be used to extract the carbon dioxide from greenhouse
gas emitting facilities like coal fired power plants and convert the carbon into
useable products.
It makes sense to encourage the expanded use of biomass. But policies must be
crafted and implemented in a considered manner. A recent report from the
Institute for Local Self-Reliance, Minnesota's Biomass Mandate: An Assessment,
reveals what happens when that doesn't occur (see link following this RE
Insider).
In 1994, in a hotly contested legislative session over the request by
Minnesota's largest utility(Xcel Energy), a compromise was reached. The utility
was given the right to install a limited number of storage casks for radioactive
nuclear power plant spent fuel, in return for which it was obligated to buy 550
MW of renewable electricity; 125 MW of which had to be generated from biomass.
Legislators fashioned the law to make clear that the mandate was intended to
foster new feedstocks (i.e. grasses, fast growing trees) and new processes (for
collection or for processing).
Regrettably, but in retrospect, not surprisingly, within a year of passage, the
initiative began to unravel. Lobbyists for individual businesses persuaded
legislators to change the definition of biomass to allow their clients to
participate. Over the next few years the legislation was changed many times,
each time chipping away at its original intent.
Today the Minnesota biomass mandate has been transformed into a waste-to-energy
program that will cost electricity customers over $1 billion more than they
would have paid if the electricity had been generated from wind.
The low point in the initiative occurred when legislators decided to not only
allow, but to virtually insist on awarding a contract under the mandate to
incinerate hundreds of thousands of tons of turkey manure. At the time, this dry
manure had a thriving market as a nitrogen rich fertilizer. The company will
receive over $100 million in subsidies over the life of the contract. Meanwhile
a number of farmers will probably shift back to using nitrogen fertilizers
derived from natural gas.
When it comes to poultry manure, other states like Maryland and Oklahoma
designed a better policy. They offered a per ton subsidy rather than a per kWh
subsidy. The money could be used to transport the manure from a part of the
state that is environmentally overloaded to another area that can use the
fertilizer. It could also be used to help finance an incinerator, but since the
cost of incineration would be much higher, it is doubtful it would occur.
When it comes to designing biomass policies, the federal government is a serial
offender. In past and proposed energy bills, it has single-mindedly focused on
generating electricity from biomass. In 1992, the federal government allowed an
incentive for biomass-generated energy only if the biomass was grown
"exclusively" for energy purposes. But as farmers know, that is not
the way the agricultural world works. To my knowledge, no biomass facility ever
qualified for that federal incentive. The federal government later extended the
1992 incentive, but only to encourage poultry manure incineration. The current
energy bill would extend tax exempt financing to municipal garbage incinerators.
There is no federal incentive for recycling or for composting. The conversion of
biomass into industrial chemicals like plastics earns no incentive. Only the
production of kilowatt hours is rewarded. Such a single-minded incentive may
work to encourage wind or solar energy, but it ignores the complexity of
biomass.
About the author...
David Morris is Vice President of the Minneapolis based Institute for Local
Self-Reliance. He is the author of five books, the most recent of which is
Seeing the Light: Regaining Control of Our Electricity System. As a member of
the Congressionally-created Biomass R&D Technical Advisory Committee, he
advises USDA and USDOE. His 2004 report, A Better Way, offers a transportation
strategy based on a combination of electricity and biofuels. dmorris@ilsr.org
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