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The Growing Demand for Biopower

Many states have taken energy independence into their own hands, not waiting for the federal government to adopt Renewable Electricity Standards (RES). According to the Pew Center on Global Climate Change, thirty states and Washington D.C. currently have RES; five additional states have renewable electricity goals. In these states, the mandated standards have become impetus for both utility companies and energy entrepreneurs to explore alternative sources of electricity.

The impetus for other states has been more economic than environmental. Some states have adopted fast-track systems to speed bioenergy facilities to production. These one-stop shops are most often created in economic development agencies. They assist project developers by giving them a single source of information and access for navigating bureaucracies quickly.

In general, these states contain rural communities that rely on working forests and wood products mills for jobs and tax revenue. They have been heavily impacted by the downturn in the housing and wood products markets, which has led to fewer harvests, fewer mills and fewer jobs. If a renewable energy standard is passed by Congress, Congressional delegations from these areas (mostly "blue dog" Democrats) will be key players. But they will support the legislation primarily for economic reasons, not environmental ones. (These Democrats played a significant role in amending Waxman-Markey to include a broader defintion of biomass.)

Their rational makes sense. Dozens of studies, from all regions of the United States, have been done to isolate the economic advantages of bioenergy plants, and they suggest that when you combine construction, logging and manufacturing jobs, the economic benefits are substantial, since harvesting, transporting and procesing are all labor intensive. The tax-base and rural infrastruction see improvements as well. And because forest biomass feedstocks can only be transported economically within a 50- or 60-mile range, local areas reap the benefits of a larger proportion of the wealth these facilities create.

Diversity in the types of biomass power producers increases the promise they hold for these communities. Producers run the gamut from old mills being converted to electricity plants, coal plants switching to wood, utility built and operated plants and independent power producers. They include cogeneration to heat and power manufacturing facilities and distributed systems to heat and power schools and business parks. This diversity should make it easier to match wood-to-electricity plants to the resources available in any given supply shed.

And for those communities in forested areas that do not become sites for bioenergy plants, opportunites will still exist. Because of international renewable, clean energy standards, international power companies are sourcing wood pellets and chips from the United States. We expect this source of demand to increase over time as well.

The benefits--environmental or economic--will not be immediate though. A survey of biopower facilities in planning and construction phases across the country and internationally suggests that capacity will come on-line gradually, with 2011, 2012 and 2013 being the years most often cited by companies making announcements or updating progress. These may be the watershed years for biopower; they will represent the timeframe in which the conversion rate from announcement to production becomes clear, the years during which we more fully understand how much additional demand wood-to-electricity facilities will add to the system.

In the long-term, the best interest of both the forestry and bioenergy industries--and the communities that will provide biomass or host manufacturers and producers--will be served by growth that proceeds at a gradual pace. This will allow the wood supply system and industry participants to plan and adjust gradually. Healthier and more sustainable forests, greater energy independence, more meaningful climate change mitigation efforts and more certain economic stability will result.

Sources: For an up-to-date look at state renewable energy standards: www.pewclimate.org