It's all about feedstocks . . .

July 10, 2008

BY Rona Johnson

In real estate, the maxim states "It's all about location, location, location." In biomass circles, Maurice Hladek, Iogen Corp., says, "It's all about feedstock, feedstock, feedstock." In speaking at the Corn Utilization and Technology Conference in Kansas City the first week of June, he laid out just what an enormous task it will be to build enough biorefineries to meet the new federal Renewable Fuels Standard. "To meet 16 billion gallons [of advanced biofuels] by 2022 will require 266 biorefineries in 14 years, averaging 80 MMgy each year," he said. He estimates that will require 200,000 growers. And that's not including the growers needed to fuel other biomass power projects under consideration.

Where will all that feedstock come from? Hladek argues that big biomass producers like Arundo donax (giant reed) and miscanthus will need to be developed, with due respect given to the potential for their invasive potential. And, with a wink, suggested geneticists should perhaps work on changing the leaf shape of another big biomass producer, hemp. (See my story in the March Biomass Magazine on "The Risk of Invasion" for an overview of the issue and a discussion of arundo's potential.

One of the other speakers at the early June conference, Jacob Barney, University of California-Davis, worries that if arundo gets planted as a biomass crop in Florida as is proposed, the high winds and flooding of a hurricane could carry pieces of arundo to unintended areas. Certainly in California, where arundo is considered invasive, it was intentionally planted decades ago for stream bank stabilization and was carried by floodwaters to invade new areas. It makes me wonder if Californians shouldn't figure out how to harvest those weedy stands. Of course, farmers always joke that all you need to do is turn a weed into a crop, and suddenly it won't grow so easily.

Another development in Florida set me thinking about the future of biomass feedstocks. A couple of weeks ago it was announced that the State of Florida had agreed to a statement of principles with U.S. Sugar Corp. to buy out the sugar company's operation and nearly 188,000 acres of sugar cane fields. Negotiations to settle the details of the estimated $1.75 billion transaction are underway. It was widely hailed as a bold step by the State of Florida in its long term campaign to restore the Everglades. For more details, read the story in the Christian Science Monitor For a view with a different slant, read Forbe'stake on the project.

Does Florida's initiative to revert cropland to original habitat signal a new willingness for the public to support ecological restoration? Certainly, Florida's governor never would have supported such a bold move if he didn't believe taxpaying citizens would support it. Public support for big ecological restoration projects could have a profound impact on potential feedstock availability. For instance, if there were a move to re establish large segments of the tall grass prairie - arguably the nation's most depleted natural habitat -it could be opened to harvesting the biomass every other or every third year much like the current conservation reserve program allows.

I wonder, too, if rising crude oil prices and fertilizer prices will present new incentives for farmer's to raise crops for the biomass industry that will naturally build soil fertility. Even though commodity prices are at all time highs, so are fertilizer prices. Nitrogen, phosphate and potash prices have climbed dramatically. The market for diammonium phosphate in Tampa, Fla., for example, was $1,100 per metric ton in early April, compared with $255 in January 2007. Mike Rahm, vice president for market analysis and strategic planning for Minneapolis-based The Mosaic Co., says if a Midwestern farmer paid spot prices this spring, he would be paying $155 per acre for NPK, a $100 per acre increase from five or six years ago. (See my story in Biomass Magazine's sister publication, Ethanol Producer Magazine, "Perfect Storm for Fertilizer Prices.")

Grasses and legumes, prime targets for biomass crops, are noted for their soil building capabilities. A soil scientist once told me that for every one percent of organic matter built up in the soil, there would be 1,700 pounds of nitrogen per acre added. Also, while conventional agriculture has focused on NPK as the limiting factors in soil, other things have an impact on yields as well such as the water holding capacity of organic matter and soil tilth. More than one organic farmer has had neighbors comment on how they could work their fields with so little horsepower, another cost savings from building physical soil quality.

It will be interesting to see if high energy costs and fertilizer prices will reach a point where putting land into soil building crops, particularly crops that can be sold to a nearby biomass power plant or refinery, will give a farmer a return that equals corn.

* * *

As an aside, two weeks ago I did a web-news story about an erroneous report that Mascoma Corp. had pulled out of the University of Tennessee's biorefinery project. Both Mascoma and UT officials denied the report, saying the project is going forward. I've seen another report that Iogen is backing out of its project in Idaho. At the Corn Utilization and Technology conference, I specifically asked Maurice Hladek if Iogen's two cellulosic ethanol projects in Idaho and Canada were on track. He said yes. It's long been a question, though, over which project would break ground first.

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