by James Spartz, University of Wisconsin Graduate Student Economists have not been harbingers of optimistic news as of late, but Ken Skog, project leader for economic and statistics research at the Forest Products Laboratory (FPL), dares to provide a ray of hopeful light. Skog (rhymes with vogue) believes that even though efficiently converting wood to fuel is not simple, cheap or easy, ethanol produced from woody biomass will help meet the 16-billion-gallon goal for domestic cellulosic biofuels production by 2022, a benchmark set by the Energy Independence and Security Act (EISA) of 2007. "I definitely think it's possible," said Skog, "but certain conditions will have to exist." To spur necessary investment and research progress, Skog suggests that, among other factors, sustained and more stable high fossil fuel prices will be required.
"If investors think that fossil fuel prices will remain volatile," Skog said, "it really slows down investment." Instability in petroleum markets—as evidenced by the quadrupling of crude oil prices, followed by a price collapse over the past five years—has created an uncertain financial outlook. When gas prices rise, according to Skog, people are more willing to investigate alternative resources. Investors, he continued, will need to perceive that fossil fuel prices will persist at or above a certain level for potential biofuel investments to be considered profitable. But, there is no bull's-eye fossil fuel price. There is no magic bullet. Along these lines, according to FPL director Chris Risbrudt, the proper role of the federal government is threefold. First, the current state of forest biomass conversion to bioenergy must be analyzed—from forest biomass production through conversion to biofuels and distribution to end users. Second, key technical barriers must be determined and defined. Third, Risbrudt suggested, the federal government must "lead the charge" to devise new and novel cost-effective technologies to overcome these technical barriers. "In carrying out these roles," said Risbrudt, "we must also anticipate and take into account potential developments." These, he said, could be "the enactment of a carbon cap-and-trade or carbon-tax system; the effects and impacts of governmental incentives and subsidies; and infrastructure issues related to the distribution and end-use consumption of alternative fuels nationwide." One of the technological hurdles facing the FPL is to advance cellulosic biofuels processing technology to the point of integration with existing production facilities such as pulp mills. According to Skog, government budget allocations will also need to reflect continued support of alternative fuels research where there is promise of notable improvements and innovations. Pulp mills located in Wisconsin Rapids and Park Falls, Wisconsin, and Escanaba, Michigan, are each currently at different stages of planning for the thermochemical conversion of wood energy to biofuels. Skog shared in Nobel Peace Prize glory with thousands of other scientists and Al Gore in 2007 for their collective efforts to illuminate the perils of global climate change. As a wisp of fresh air in a downright stifling economic period for the United States, Skog and fellow FPL economist Peter Ince used data from a 2008 report from the federal Biomass Research and Development Board (BRDB) to estimate that wood-based biofuels production could provide, at the low end, approximately 102,000 new American jobs by 2022. According to a recent BRDB report, an estimated 6 billion of the total 16-billion-gallon EISA cellulosic biofuels goal could be produced from wood biomass sources. Two billion of those 6 billion gallons would potentially come from short-rotation woody crops such as willow or poplar trees. The other 4 billion gallons would be sourced from forest biomass such as small-diameter trees, tops, and branches typically left as logging residue after harvests, a source of cellulosic feedstock often considered a waste product. Skog and Ince estimate that such wood biomass harvesting jobs would increase if wood-based biofuels production increases. The production of 6 billion gallons of wood-based biofuels would support an estimated 19,500 jobs in harvesting by the year 2022, according to these estimates. Total direct jobs harvesting biomass and in biorefineries could exceed 26,000 positions in the same period. For every one of those jobs, approximately three indirect and induced jobs could be supported (about 76,180). This brings the total of estimated direct, indirect, and induced jobs associated with harvesting biomass and in facilities producing biofuels to over 102,350 jobs by 2022. These labor estimates are based on estimates for corn stover cellulosic ethanol facilities developed by the National Renewable Energy Laboratory. As such, they are low approximations because wood-based biochemical plants would likely have more production processes than corn stover plants, and would thus require more person-power to operate and maintain. Estimates of these job developments, of course, are highly dependent on three very different variables: technology, policy, and market prices. FPL focuses on technology. Policy issues, which take into account potential changes in renewable fuels standards, cap-and-trade system proposals, or so-called carbon tax options, are not the specialty of FPL professionals like Skog and Ince. It is the economics and market potential of cellulosic biofuels technology development, and the economic implications of those advances, that interest economists like Ince and Skog. It is to the technological and economic variables we now turn. About 90 million acres of corn are planted each year in the United States. Roughly one-fifth of that crop heads to corn-based ethanol plants dotting the midwestern landscape. It may seem like American ethanol production is in high gear—and it is—but corn-based biofuels plants are not typically equipped with the machinery needed for either of the two predominant conversion technologies (i.e., thermochemical and biochemical) that give rise to the potential of cellulosic biofuels production. Because the cellulosic materials of plant cell walls need to be converted to sugars, production of cellulosic ethanol would require more processing than that used for corn-based ethanol. It is these sugars, not unlike those more easily obtained from starch-heavy corn, that could eventually be used to produce cellulosic ethanol. Thermochemical technologies, generally speaking, can utilize raw wood and bark material such as wood chips, mill residue, or tree tops and branches and, through a gasification process, convert this raw material into synthetic gas. This "syngas" can then either be used as a replacement for natural gas in other production processes or further processed through Fischer-Tropsch synthesis to produce diesel fuel, ethanol, or other biofuels and chemicals. Biochemical conversion processes that can be added to existing pulp mills are also getting a lot of attention by FPL researchers, according to Skog. Called "value prior to pulping," this process uses oxalic acid and steam to extract some hemicellulose from wood chips already coming into a pulp mill. Without detracting from the utility of the biomass for making pulp, this process then converts the hemicellulose to sugars and uses fermentation to convert those sugars to ethanol. Outside of actually developing efficient and large-scale technologies to produce energy from wood, sources of this biomass must also be considered. With 342 million acres of cropland in the United States, and another 107 million acres either idle or in pasture, agricultural land can potentially contribute cellulosic biomass feedstocks. Crop residues like corn stover and perennial crops such as switchgrass or short-rotation woody crops are increasingly considered to be valuable and viable renewable resources for biomass energy. Forest and agricultural lands combined make up about half of the contiguous United States, most of it east of the Mississippi River. According to the report by the federal BRDB, forests could provide at least 40 million oven-dry tons of biomass per year to make 4 billion gallons of biofuel. Potential hurdles to this use exist, especially in western states, according to Skog. The EISA as currently written excludes the use of biomass from most federal land. Even if more biomass from federal land could be used to meet the EISA production targets, said Skog, opportunities for the most economical biofuels plants—plants at pulp mills—will be limited due to lower overall pulp production in the West. A potential benefit of increased biofuels production capacity in the West, using a range of agricultural and wood feedstocks, according to Skog, is that the use of wood from forest thinning could become a factor in reducing fire hazards and offsetting the costs of fighting fires.
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