Scientific uncertainty about bioenergy from a forestry perspective

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Scientific uncertainty about bioenergy from a
forestry perspective

• Peter J. Ince
• Forest Products Laboratory
• GHG Modeling Forum
• April 6-9, 2009 Shepherdstown, WV

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The forestry perspective is long-range, and
focuses on sustainability . . .
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• Sustainability
• Modern concept derives from
• Brundtlands UN Report,
• Our Common Future (1987)
• 3 components . . .
• Environmental Protection
• Social Equity
• Economic Growth

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• Our focus today . . .
• Uncertainty about Sustainability of Economic
  Growth in Forest Bioenergy
• (? Uncertainty about Timing Extent)

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Why is sustainability of bioenergy development
important? Consider two IPCC scenarios (SRES)
both with exactly the same global GDP and
population assumptions but different energy
pathways
Global Biomass Renewable Energy
Anthropogenic Carbon Emissions
? Future carbon emissions hinge on future energy
pathway, including timing and extent of biomass
and renewable energy development.
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• However, lets consider uncertainty
• among these basic elements
• Sustainability of Demand (for bioenergy)
• Sustainability of Supply (of wood biomass)
• Sustainability of Competitiveness (biofuels)

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• Sustainability of Demand (for bioenergy)

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According to many scientific studies and also
many scenarios developed for IPCC (SRES) the
peaking of global petroleum output may be
imminent . . .
IPCC Special Report on Emissions Scenarios
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• Sustainability of Demand for bioenergy. . .

As global oil production peaks, global production
of energy from biomass becomes sustainable ??
This is economic substitution driven by limits to
oil supply . . .
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• This view assumes that biorefinery outputs
  (biofuels, bio-plastics, etc.) are technically
  feasible substitutes for petroleum . . .

economic feasibility is still
uncertain
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• Given potential technical feasibility,
  substitution of biofuels for gasoline has became
  favored by Congressional legislation . . .

• Energy Independence and Security Act of 2007
• Renewable Fuels Standard (RFS) for
  blenders/refiners
• By 2008 9 billion gallons biofuels (corn
  ethanol is ok)
• By 2016 15 billion gallons biofuels (corn still
  ok)
• Corn does not count after 15 billion gallons of
  corn ethanol
• By 2022 37 billion gallons (21 billion gallons
  must come from Advanced Biofuels not
  corn-based based on biomass, etc.)

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Yet, growth in bioenergy demand still depends on
the timing of global peak oil production . . .
Global energy models developed for IPCC indicate
that global biomass energy expands only after
world oil production peaks peak oil ?
? biomass energy expands
Primary Energy - Oil
Primary Energy Biomass
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According to the 2009 AEO, the price of oil by
2030 might be anywhere from 50 to 200 per bbl.,
a wide range of variability, so obviously the
near-term outlook for peak oil and sustainable
bioenergy demand is uncertain.
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Indeed, according to the 2009 AEO, biofuels use
will fall short of the 36 billion gallon RFS
target in 2022 (in the Reference case scenario)
. . .
Furthermore, there is a pronounced lowering of
cellulosic ethanol use by 2030 in the low oil
price case, reducing ethanol consumption in 2030
by about 9 billion gallons relative to the
reference case.1
1Testimony of Dr. Howard Gruenspecht, Acting
Administrator, U.S. Energy Information
Administration, before the Subcommittee on
General Farm Commodities and Risk Management
Committee on Agriculture, U. S. House of
Representatives, April 1, 2009.
(www.congressional.energy.gov/documents/4-1-09_Fin
al_Testimony_(Gruenspecht).pdf)
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Summary (Re Sustainability of Demand)

• Growth in bioenergy demand appears sustainable,
  because . . .
• The world has huge growing demands for energy
• World petroleum output is expected to peak, and
• Biofuels are legislatively favored substitutes
  for oil
• But, uncertainties exist about the timing of
  demand growth, based on timing of peak oil and
  future price of oil

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• 2. Sustainability of Supply (wood biomass)

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Sustainable Growth in Biomass Supply . . . ?
A fundamental (yet unresolved) question is the
extent to which forests will sustain economical
expansion of biomass supply, given costs of
supply, and also other competing forest needs.
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Economic Reality
Costs to Produce Electricity in British Columbia
(CN per MW-hour) Large
Hydroelectric 43-62 Coal 67-82 Imported power
80 Wood biomass gt100 (mill residuals and
roadside beetle kill) ----------------------------
----------------------Europe 100-200
Source BC Government, The BC Energy
Plan
Even in a region with massive surpluses of wood
biomass and liberal access to timber, use of
forest thinnings is a fairly expensive energy
option (e.g. British Columbia with the massive
beetle kill on provincial lands)
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• Biomass harvesting systems run on diesel fuel .
  . .
• ? higher oil prices higher costs for wood
  biomass
• (reduced economic supply)

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Forest biomass management is also at the nexus of
other competing needs . . .
Air
Wildlife
Water
Protection
Biomass Management and Use
Recreation
Land Use
Development
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Public forest management agencies such as the
Forest Service have a broad mission to sustain
the health, diversity, and productivity of
forests to meet diverse needs of current and
future generations.
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Under EISA, biomass from federal forest lands do
not appear to qualify as a source of biomass to
meet the RFS goals

• The Energy Independence and Security Act of 2007
  defined wood sources that qualify as renewable
  biomass for advanced biofuels (21 billion gallon
  goal by 2050)
• Sources that do qualify (Sec. 201)
• Planted trees and tree residue from actively
  managed tree plantations on non-federal land
  cleared at any time prior to enactment . . .
• Slash and pre-commercial thinnings that are from
  non-federal forestlands . . .
• Biomass obtained from the immediate vicinity of
  buildings or other areas . . . at risk from
  wildfire
• Sources that do not appear to qualify
• Biomass from most federal lands
• Non-slash/non pre-commercial thinnings from most
  natural forested landscapes

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Apart from federal forests, there are hundreds of
millions of acres of private and state
forestlands in the United States, but management
of those lands does not focus primarily on
producing cheap biomass for energy. Furthermore,
competing land uses (such as development)
impinge upon the ability of private forests to
sustain biomass output.
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Americas Forest Resource The bulk of U.S.
forestland consists of diverse natural forests .
. .
300 million hectares (749 million acres)
2/3 of Americas forests are east of the
Mississippi River
Biomass on U.S. TimberlandAbout 24 billion tons
of tree biomass exists on all U.S. timberland,
but most of this volume is in larger trees, far
to valuable to use as biofuel feedstock
About 3/4 of Americas private forests are in the
East
Forestland gt 10 tree cover
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Large trees (gt10 diameter) are too expensive for
use as biofuel feedstock. Only smaller trees
(6-8) are an affordable biofuel feedstock.
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A traditional private forestry view of the forest
management cycle . . . The primary focus is not
on producing cheap biomass supply but rather the
focus is on economic returns . . .

Time
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There are roughly 15 million hectares of managed
tree plantations in the United States (about 6
of U.S. timberland area), mostly southern pine
(loblolly pine) plantations in the South, and
mostly grown for uses other than biomass (e.g.
pulpwood, saw timber, etc.) . . .Periodic
plantation thinnings offer
some biomass supply . . .but biomass
fromthinnings and otherforest residues arenot
cheap (they can be costly to recover and
transport)
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Another big concern about wood supply . . .
Conversion of Forestlands to Higher-Value HBU
Non-forest Uses (e.g. housing development)
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Loss of US forest land to development 1,877
acres per day (1982-1997)
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Forest conversion and fragmentation limits future
forest biomass production capacity . . .
Portions of the 1,500-acre Sunrise development
between Puyallup and Orting once belonged to
timberland company Pope Resources.
http//dwb.thenewstribune.com/news/local/story/644
2278p-5739856c.html
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Will forest land be available to grow biomass for
energy, given exponential growth in global
withdrawals for land protection, not to mention
development carbon offsets?
Source Lysen, Erik, and Sander van Egmond
(Eds.). 2008. Assessment of global biomass
potentials and their links to food, water,
biodiversity, energy demand and economy
Inventory and analysis of existing studies.
Netherlands Environmental Assessment Agency MNP.
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Current potential productivity . . . Net
annual growth of timber on all US timberland
has leveled out at 1.8 m.t./ha (Forest Service
FIA Database) However, silviculture
commercial tree genetics promise future
productivity of 25 m.t./ha (in USA) More than
10X higher! . . . But at higher cost
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While expansion of biomass supply from existing
forests may be limited, a potential huge source
of supply (which appears to qualify under RFS) is
planted trees and tree residue from actively
managed tree plantations on non-federal land
cleared at any time prior to enactment1 (e.g.
short-rotation woody crops, SRWC, established on
agricultural land or other open land areas)
1EISA, 201
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Economical production of SRWC hinges on . . .

• Management systems productivity
• Genetic improvements
• Harvest transport systems
• Favorable price of biomass (price of oil)

The (relatively low) price typically paid for
biomass feedstock is still a limiting
factor. Short-rotation poplar plantations still
occupy just a tiny fraction of U.S. agricultural
and forest land area lt0.1 .
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Results from 17 scientific studies that evaluated
the global potential to grow and harvest energy
from biomass up to 2100 show a wide range of
outcomes . . . (this looks like real
uncertainty) . . .
Source Jussi Heinimö, Virpi Pakarinen, Ville
Ojanen, Tuomo Kässi. 2007. International
bioenergy trade - scenario study on international
biomass market in 2020. Research report 181.
Lappeenranta University of Technology. 42 p.
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Summary (Re Sustainability of Wood Biomass
Supply)

• The US has large volumes of forest biomass
  (standing forests)
• But there are other higher-value needs and uses
  for forests
• Larger trees (gt 10") are too expensive to use for
  bioenergy
• Legislation does not favor biomass from federal
  lands (EISA)
• Conversion of private forests to non-forest uses
  (e.g. housing) is reducing future capacity to
  supply forest biomass
• Sustainable growth in wood biomass supply may
  hinge on development of energy plantations of
  fast-growing short-rotation woody crops (SRWC),
  but there is uncertainty about when such crops
  will become more economical

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• Sustainability of Competitiveness

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Competitiveness of advanced biofuels
Although there are a number of potential
conversion pathways from biomass to advanced
biofuels, the economics of biofuel production
remain uncertain. Studies of cellulosic biofuel
production usually adopt assumptions about yields
or costs of biofuel production, but there are no
real data on the commercial economic performance
of large-scale advanced biofuels technologies
(such facilities do not yet exist).
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NRELs 2006 Biofuel Cost Targets
NREL is well known for setting future biofuel
cost targets, but . . .
. . . Cellulosic ethanol at 1.07/gallon
feedstock at 30/ton, would require 50 cost
reductions!
Source Dr. Stanley Bull, NREL,
Non-Carbon-Emitting Technologies for the
Future, May 8, 2006
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New U.S. Renewable Fuels Standard
The RFS under EISA mandates that by 2022 blenders
must consume 21 billion gallons of advanced
biofuels (e.g. cellulosic ethanol) . . .
Advanced (cellulosic) biofuels increment
Cap on corn ethanol
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Competitiveness of advanced biofuels
The reality is that advanced biofuels
technologies are in early stages of development,
largely subsidized by the government, and their
commercial feasibility has yet to be demonstrated.
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Converting southern pulpwood to wood pulp for
paper offers much higher and less risky profit
margins based on conventional costs. At January
2007 prices and costs (without major cost
reductions or subsidies) producing cellulosic
ethanol appears unprofitable, although it could
be profitable at higher ethanol prices . . .
Range of net returns given product price
range since mid-90s
Product Value
January 07 prices Pulp _at_ 750/ton Ethanol
_at_ 2.00/gal
Costs approximated from following sources NLK
(kraft pulp), NREL (cellulosic ethanol), Timber
Mart-South (feedstock price)
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Carbon taxes, credits other incentives could
give advantages to biofuel technologies but
sustainability and extent of such impact remain
uncertain . . .

• Carbon taxes are perceived as likely to . . .
• reduce overall energy use
• increase biofuels use
• but the tax rate remains entirely uncertain

Global energy use by 2050 over a range of carbon
tax rates (/tC)
Source Lysen, Erik, and Sander van Egmond
(Eds.). 2008. Assessment of global biomass
potentials and their links to food, water,
biodiversity, energy demand and economy
Inventory and analysis of existing studies.
Netherlands Environmental Assessment Agency MNP.
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Carbon taxes, credits other incentives
Also, at around 100/tC, the carbon tax tilts
future electric power production in favor of Coal
with CCS (. . . an example of the need to be
careful what you wish for) Thus the carbon tax
impact may be to level out biofuel consumption
(although use increases in transport and in
industry).
Source Lysen, Erik, and Sander van Egmond
(Eds.). 2008. Assessment of global biomass
potentials and their links to food, water,
biodiversity, energy demand and economy
Inventory and analysis of existing studies.
Netherlands Environmental Assessment Agency MNP.
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Other biofuel producer credits incentives1 IRS
offers tax credits for cellulosic biofuel
producers, up to 1.12 per gallon, expiring at
end of 2012. USDA offers various grant and loan
guaranty programs. DOE offers grants for biofuel
plants and RD. The credits and incentives
mainly benefit biofuel producers, but are these
sustainable benefits to forest landowners? At
present, there appears to be little if any
significant expansion in growth of dedicated wood
biomass crops for energy in the United
States. 1Yacobucci, Brent D. January 2009.
Biofuels Incentives A Summary of Federal
Programs. Congressional Research Service. Report
R-40110.
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Summary (Re Sustainability of Competitiveness)

• Commercialization of wood-based liquid biofuel
  production is in its infancy
• Existing ventures appear to need government
  subsidies, tax credits and incentives
• Cost-competitive and profitable wood-based
  biofuel plants have yet to be demonstrated
• Impacts on forestry of future carbon taxes,
  forest policies and incentives are yet uncertain

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Conclusions Discussion
? GHG modelers should be cautious regarding
assumptions about wood bioenergy development, and
explore a wide range of alternative
scenarios From a forestry perspective, the topic
of bioenergy is surrounded by risks and
uncertainties. Expansion of biomass energy
demand may seem certain, but there is much
uncertainty about timing and extent of bioenergy
development related to the timing of peak oil,
uncertainty about economic sustainability of wood
biomass supply, biomass productivity and biofuel
competitiveness, and uncertainty about forestry
impacts of policies such as carbon taxes, or
other bioenergy incentives.