Forest and Wood Residues in a Low Carbon Future

Forest and Wood ResiduesForest and Wood Residuesin ain a Low Carbon FutureLow Carbon Future

C. Scott MillerPrice BIOstock, Marketing ConsultantBIOstock Blog, EditorMay, 2008

The Price Companies Business Model

Provide all services upstreamof the wood processing facility:– Paper and pulp mills– Saw mills

Services include:– Procurement– Harvesting and hauling logistics– Design/construction of the

receiving/processing site– Processing site management

Victoria, Australia

Wood Chipping

PBS Headquarters

14+ million tonsper year

The Price BIOstock Mission:

To apply The Price Companies business modelto making biomass supply simple foremerging bioenergy companies.

The Commitment:

Use the most environmentally sustainablebiomass available to supply emergingbioenergy technologies - wood, energycrops, MSW, etc.

Biorefinery Agreements

PB Headquarters

Raven EnergyKamloops, BC

Range FuelsSoperton, GA

Overview:Overview:

Woody biomass fundamentals

Lessons learned from theforest products industry

The need to manage forests

State and federal policies thatfrustrate market development

Woody biomass fundamentals

Wood built and powered early America

Energy Information Administration

QuadBTU

1800 1900 1950 20001850

40

30

20

10

0

Wood

Coal

Hydro

Nuclear

Natural Gas

Petroleum Fossil fuels are carbon positiveand “getting dirtier”

Biofuels are carbon neutraland “getting cleaner”

Forests do not consume resources

The Nature Conservancy

SugarCaneCanolaSoy

25-50% less

>75%less

LifecycleGHG vs.

Oil-based

PalmOilCorn

Roughly equal

Forests do not consume resources

The Nature Conservancy

SugarCaneCanolaSoy

Very High Low

Resource Consumption

25-50% less

>75%less

Energy

Pesticides

Fertilizer

Water

LifecycleGHG vs.

Oil-based

PalmOilCorn

Roughly equal

Forests do not consume resources

The Nature Conservancy

SugarCaneCanolaSoy

Very High Low

Resource Consumption

25-50% less

>75%less

*depends on methods & type

WoodyBiomass

Agric.Waste

>95% less tonet sequestration*

Energy

Pesticides

Fertilizer

Water

LifecycleGHG vs.

Oil-based

PalmOilCorn

Roughly equal

Forests do not consume resources

The Nature Conservancy

SugarCaneCanolaSoy

Very High Low

Resource Consumption

25-50% less

>75%less

*depends on methods & type

WoodyBiomass

Agric.Waste

>95% less tonet sequestration*

Energy

Pesticides

Fertilizer

Water

LifecycleGHG vs.

Oil-based

PalmOilCorn

Roughly equal

AlgaeNativeprairie

Switchgrass

Net sequestration

Wood industry produces residualsWood industry produces residuals

USDA Billion Ton Report, 4/2005

Residues of logging & forest products industryResidues of logging & forest products industry

Lessons learned fromthe forest products industry

Pulp & Paper

+$

‘70’s “Cradle-to-grave” material value cycle

BiomassConversion

Wood Biomass& Grid Power

Wasteto

Landfill

+$

Waste asan EnergyFeedstock

- Black liquor- Sawdust- Wood residues- Bark

‘80’s “Cradle-to-cradle” bioenergy value cycle

BiomassConversion

ParasiticLoad

Wood Biomass

Pulp & Paper

+$

Waste asan EnergyFeedstock

New “Cradle-to-cradle” bioenergy value cycle

FlexibleFeedstock- Wood- Energy crops- Residues- MSW

ParasiticLoad

BiomassConversion

FlexibleProducts-Pulp & Paper-Biofuels-Bioplastics-Centralized Heat-Power to Grid

Stumpage Prices

Example: $25/ton Biomass Delivered to Mill

$13Site Logging

and Processing

$5Freight

$7Stumpage

The need to manage forests

Forest Service litigation 1989-2002

728 land management cases over 13 years

58%21%

18%

4%

Society of American Foresters, 2007

USDA - Greenhouse Gas Impact 1990-2030

TemperatureUSDA Climate Change Program Office May 2008 Report based on IPCC, 2006

USDA - Greenhouse Gas Impact 1990-2030

TemperatureUSDA Climate Change Program Office May 2008 Report based on IPCC, 2006

Precipitation

Multiple stresses of a changing climate

2003 National Assessment Synthesis Team, US Global Change Research Program

Forest Management means Fire Prevention

National Interagency Fire Center, 2008

6 of the 7 worst fire seasons

U.S. Forest Fires

1960-2007

Colorado Hayman Fire,emitted more CO2 in oneday than all the cars in theU.S. in one week.

- NASA

Lasted 14 days.

2002 fire - 80,000 acres

Where thereWhere there’’s fire,s fire,therethere’’s smoke.s smoke.

The problem of forest densityThe problem of forest density

4-10 timesmore dense

“Many forests, particularly those on publiclands, have grown dangerously overcrowdeddue to a century of fire suppression anddecades of restricted timber harvesting.”

Thomas Bonnicksen, Ph.D

We need “moreinfrastructure.”

Rod VineyardEagle Lake Ranger DistrictLassen National Forest

2002 fire - Cone fire

GHG during decayGHG during decay

“Nearly four years after fires burned more than133,000 acres of national forest land in California, lessthan one percent of those acres have been replanted.”

The Forest Foundation

Unsalvaged Unsalvaged trunkstrunkscontribute 300%contribute 300%more GHG duringmore GHG duringdecaydecay

Tahoe - 1911 Tahoe - 2003

1.1. Salvage decaying biomassSalvage decaying biomassto pay for forest managementto pay for forest management

2.2. Reforest to historic modelReforest to historic model

3.3. Mechanically thin vulnerableMechanically thin vulnerableforests for biomassforests for biomass

The sustainable solution:

Beetle kill deforestation

J.Q. Chambers et al., Science 318, 1107 (2007) Published by AAAS

Hurricane disaster debris

Destruction demolition waste

Katrina knockdown - 5,000,000 acres(Mount St. Helens - 130,000 acres)

State and federal policies thatfrustrate market development

1. CARB LCFS land use change

Direct - cultivating corn and energy crops addscarbon to the atmosphere– Tilling soil - releases Biogenic carbon– Fossil inputs - fertilizer and diesel fuel

1. CARB LCFS land use change

Direct - cultivating corn and energy crops addscarbon to the atmosphere– Tilling soil - releases Biogenic carbon– Fossil inputs - fertilizer and diesel fuel

Indirect - Developing countries will deforest acresto compensate for acres changed in U.S.– Soy acres changed to corn acres in U.S. means…– Amazonian deforestation to soy acres in Brazil

Future carbon improvementsFuture carbon improvements

No-till agricultureNo-till agriculture Increased yield per acreIncreased yield per acre Biogenic inputs replaceBiogenic inputs replace

fossil inputsfossil inputs HybridHybrid crops that are:crops that are:

–– PerennialPerennial–– Faster growingFaster growing–– Nitrogen fixingNitrogen fixing–– Bug & drought resistantBug & drought resistant

If we don’t create alternative fuels here…

Won’t that increase market demandfor creating it elsewhere?

2. 15% Ethanol Blend Wall

Other BiofuelsBioDiesel

CellulosicBiofuels

Corn Ethanol

Billion Gallons/Year

0

5

10

15

20

25

30

35

40

Green Car Congress

21B

15B20057.5B x 2012

10% Blend Wall

15% Blend Wall

One dot = 5,000 acres

Federal land

23,000,000 acres

3. EISA’s RFS2 definition

USDA Forest Service - Forest Inventory and Analysis National Program

Georgia before EISA RFS

23,000,000 acresvs. 7,300,000 acres

After RFS

USDA Forest Service - Forest Inventory and Analysis National Program

Georgia before EISA RFS

3. EISA’s RFS2 definition

One dot = 5,000 acres

Federal land

75 Miles

50 Miles

25 Miles Logistics uneconomical

Feedstock trackingunworkable

3. EISA’s RFS2 definition

USDA Forest Service - Forest Inventory and Analysis National Program

19,000,000 acresCalifornia before EISA RFS

3. EISA’s RFS2 definition

One dot = 5,000 acres

Federal land

USDA Forest Service - Forest Inventory and Analysis National Program

19,000,000 acresvs. 500,000 acres

After RFS

California before EISA RFS

3. EISA’s RFS2 definition

One dot = 5,000 acres

Federal land

Bad precedents beget bad policies

The same RFS2 definitions are beingused as RES definitions in the

Waxman / Markey cap and trade bill

SummarySummary

Bioenergy addresses carbonfootprint challenge

Forest products industry isa blueprint for developingintegrated biorefineries

Bioenergy infrastructurehelps environment

Biomass opportunities andchallenges require advocacyand public education

BIOenergy BlogRing BIOenergy BlogRing @@BiostockBiostock..blogspotblogspot.com.com

C. Scott MillerPrice BIOstock, Marketing ConsultantMay, 2008