Pete Stewart Quoted in USA Today Article on Renewable Energy

Bioenergy Encourages Sustainability

From the October 2009 Forest2Fuel newsletter.

Forest2Market CEO, Pete Stewart, was recently quoted in the USA Today , in a story by Traci Watson, entitled "Wood Making Comeback as Power Source." Here’s an excerpt:

In 2008, wood-burning power plants were capable of generating roughly 6,700 megawatts or enough to provide power to about 6 million homes, according to the Energy Department. That includes, however, plants that supply power to wood-products factories that use waste wood to generate electricity.

Many plants now burn bark, twigs and other waste wood. If wood power grows as expected, whole trees will have to be cut down to fuel the plants, says Pete Stewart of Forest2Market, a forest-industry analysis firm. Plants have promised to use waste wood, but “as soon as they get their permit and see how much it’s going to cost to do that, they change their tune,” he says.

Those who read our publications regularly will not be surprised by Pete’s comments to the USA Today. We’ve long argued that if wood bioenergy took off, the amount of biomass available would not be sufficient to meet the demand—a result of both harvest levels (biomass is available only when timber is harvested; when demand for building products is low, less sawtimber and therefore less biomass is harvested) and the ready infrastructure to remove and deliver it to an energy plant (having available loggers with the appropriate biomass harvesting equipment). Our view has long been that other classes of wood will need to be used to meet the demand.

One thing we don’t think, however, is that the move to using wood to produce renewable electricity will lead to an increase in forest destruction. In the USA Today article, Scot Quaranda of the Dogwood Alliance, a forest-protection group, argues that biopower will lead to “more large-scale clear-cutting, more conversion of natural forest to plantations and more endangered forests being logged.” We’ve observed on many occasions that bioenergy capacity will grow gradually enough that markets will have time to adjust to the additional demand, making this type of catastrophic change unlikely.

We’ve also noticed some trends in the marketplace that are adding pressure in the opposite direction—toward sustainability.

In June of this year, for instance, Curran Renewable Energy, a Massena, NY pellet plant, became the first wood pellet plant in the United States with to receive chain-of-custody certification from the Forest Stewardship Council (FSC). FSC chain-of-custody certification guarantees that the wood used by the facility comes from certified, responsibly managed forests and is tracked throughout the supply chain, from the forest to the consumer. To obtain FSC certification, a company must meet a set of environmental, social and economic criteria covering compliance with laws and international treaties, land-use and indigenous peoples' rights, community relations, biodiversity conservation and maintenance of high-conservation value forests.

While this is the only pellet plant certified to date, we think this trend will increase, especially for pellet companies with large European customers. Because they are shipping pellets overseas, European companies would like to control their carbon footprints in other ways. Procuring wood from certified forests or from companies with chain of custody certification is one way to show their governments and customers they are environmentally responsible.

Another trend we see is that communities entering into Power Purchase Agreements (PPAs) with independent power producers are requiring plant developers to give precedence to feedstocks from certified forests. Two American Renewables projects—Nacogdoches Power in Texas (recently sold to Southern Companies) and Gainesville Renewable Energy in Florida— have done just that. In addition to having a PPA that gives priority to certified biomass, the Gainesville facility’s PPA includes a price premium of $0.50 to $1.00 per ton (depending on the certifying body), for biomass from certified forests.

As additional renewable electricity standards take effect, and as wood bioenergy capacity and demand grow, we think more bioenergy companies and cities will follow the paths of Curran Renewable Energy, Austin, Texas and Gainesville, Fla. A sustainable wood bioenergy industry may rely upon this foresight for its longevity. As soon as wood bioenergy is seen as a cause of deforestation, it will no longer be supported as a renewable source of energy.

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