Biomass Energy & Pollution:   Because energy crop fuel contains almost no sulfur and has significantly less nitrogen than fossil fuels -- reductions in pollutants causing acid rain (SO2) and smog (NOx) may be realized -- improving our air quality. An additional environmental benefit is in water quality, as energy crop fuel contains less mercury than coal. Also, energy crop farms using environmentally pro-active designs will create water quality filtration zones, uptaking and sequestering pollutants such as phosphorus and particulates from soils that leach into water bodies.

Biomass Energy & Agriculture: What if the next big oil or natural gas field wasn't in places like the Middle East or Venezuela -- but fields of energy crops (trees, sorghum, switchgrass) grown in Florida and the Southeastern U.S.?

In ongoing research and commercial demonstration (best management agricultural and environmental practices) efforts, "energy crop farms" of non-invasive eucalyptus trees and various row crops (e.g., soybeans, sweet sorghum, sweet potatoes, energycane) has been established on closed phosphate mining marginal lands (non-irrigated) in central Florida.

The Project reflects decades of tree research conducted by the University of Florida and Shell Energy to produce "Super Trees" which may grow 20 feet a year (yielding 32 green tons and 16 dry tons per acre per year).

Also, significant collaboration is occurring with sorghum seed companies in the development and/or commercialization of varieties (F4 hybrids, cultivars) producing high yields (~30 green tons per harvest) and high Brix (sugar content) that can be grown year-round in Florida's warm climate providing crop feedstocks (not competing with food markets) for ethanol and other biofuel production.

Another important aspect of "Energy Crops" is that they can also represent a sustainable renewable energy resource -- since our trees, certain row crops like sugarcane and possibly sorghum, will re-grow after each harvest (coppice, ratoon) -- allowing multiple harvests without having to re-plant (called short rotation crops).

A key aspect of our agriculture research and demonstration efforts is the development of Strategies to vertically integrate Farming into Bioenergy projects -- allowing Farmers to participate in a profitable "process end" (e.g., biofuel ethanol production) of agriculture rather than just selling a commodity based raw product (e.g., corn, soybeans, etc.). All of these Strategies have a common nexus to create "value added" products and services to become a low cost Producer.

If our team of scientists, engineers, farmers, and environmentalists are successful, energy crops could provide:

Biomass Energy Engineering for Electricity Generation: The power plant engineering behind our efforts is also innovative, using an approach called biomass co-firing. With co-firing, an existing power generation facility is modified to allow use of energy crop fuel -- changing the fuel mix from a current 100% dependence on fossil fuels (such as coal, oil, natural gas) to approximately 5% biomass fuel and 95% fossil fuels.

While displacing relatively small percentages of fossil fuel use with biomass energy crops may not sound like much, it is very significant when recognizing the tremendous size of electricity generation facilities. For example, co-firing energy crops at just one medium size power plant would be the equivalent of installing over 41,000 large solar panels -- or in reducing CO2 emission levels, by removing approximately 17,000 cars off the road.

Co-utilizing "Energy Crop Fuel" especially with coal is both effective and economically promising because it doesn’t require major changes in existing technology at power plants.

Instead of building new power generating facilities, which would ultimately result in higher costs to the consumer, we are working with scientists and engineers to change the fuel blend. It’s a novel approach to creating Renewable Energy, and if it works, there’s potential for immediate commercial use by electric utilities offering their customers a low cost option to purchase "Green Energy".

In biomass co-firing, there are three primary approaches to biomass fuel delivery into the existing power plant: Solid Fuel Blending; Solid Fuel Direct Injection; and External Gasification.

Examples include: (1) Blending coal and biomass fuel together for a cyclone coal unit; (2) Directly injecting only biomass fuel through dedicated fuel ports into a pulverized coal unit; (3) Creating biogas in an external gasifier and then piping the hot gas into an existing coal, oil, or natural gas boiler.

An intriguing aspect of this third option is the potential to use the biogas high in the boiler's re-burn zone -- possibly avoiding the need to install costly pollution control equipment (e.g., Selective Catalytic Reduction or SCR) at a coal unit. Engineering research suggests that the "hot tar" fraction in the "hot raw" biogas is particularly reactive and may reduce NOx emissions between 50% and 70%.

Working with Electric Utilities, U.S. Department of Energy Labs (NETL, NREL, ORNL), the Electric Power Research Institute (EPRI) and Others -- we have performed biomass co-firing engineering research (called "test burns") on all major combustion technologies of cyclone, pulverized coal, and combined cycle gasification (IGCC) units.

Biomass Energy Engineering for Industrial Applications: Within the Industrial/Manufacturing sector, biomass gasification is used for electricity, steam, co-generation, and heat for product drying. Also, with developing advancements in engineering technology, biomass gasification can be used for ethanol production (cellulose based ethanol).

Biomass gasification designs can generally be classified into two broad categories producing a low (~200 Btu/scf) to medium (~400 Btu/scf) Btu gas -- (compared to ~1,000 Btu/scf for natural gas):

In common industrial applications (e.g., process heat for product drying), the hot raw gas from the biomass gasifier is sent either to a heat exchanger or an electrostatic precipitator. If process steam is required, a heat recovery steam generator (HRSG) or package boiler would be used.

Biomass Energy Economic Incentives: A significant economic incentive to use biomass fuel feedstock for electricity generation is the Federal "Production Tax Credit -- PTC" (Section 45) which provides a tax credit valued at ~2¢ per kWh for electricity generation. However, since the PTC is a direct dollar-for-dollar reduction in taxes (versus a deduction to taxable income) the 2¢ must be adjusted to reflect its true production cost value (dividing 2¢ by 1 minus the tax rate). Thus, the true economic value of the PTC is ~3¢ per kWh.

For example, if the production cost of using closed loop biomass fuels was 3¢ per kWh (e.g., crop cost, O&M, capital financing costs, etc.), the net production costs would be zero.

Another economic benefit of biomass energy is the emerging U.S. market for selling carbon credits (e.g., Chicago Board of Exchange -- CBOE). As of July 2008, CO2 credits on the CBOE were trading at ~$3.95 per metric ton of CO2 .

Biomass energy projects create carbon credits in two ways:

The Biorefinery Concept: In addition to the above electric utility power plant project work, we are working with Industrial Companies to integrate a variety of biomass raw feedstocks (e.g., cellulose, sugar/starch crops or waste streams) and conversion processes (e.g., biotechnology) into a single facility called a biorefinery at an existing "host" industrial plant:

Our approach in creating a biorefinery is fundamentally the same as the approach used with electric utility power plant co-firing -- where an existing industrial "host" facility is modified for biomass applications utilizing as much of the existing engineering infrastructure as possible (e.g., avoiding high capital costs of a new stand alone bioenergy or biorefinery facility).

From an industrial company's perspective, the large economic incentive with this approach is the displacement of high cost natural gas (and in Florida, also oil) with lower cost biogas in the generation of steam/power (i.e., cogeneration) and/or process heat (i.e., product drying) for the industrial company's "core market" products.

(Note: Above prices reflect only the wellhead price of natural gas and do not include any transportation & distribution costs of ~$1.00 per MMBtu.)

(1) U.S. Department of Energy's EIA Weekly Update. For natural gas, ~$1.00/MMBtu should be added to the Henry Hub price for transportation & distribution costs. (2) U.S. Department of Energy's Average Weekly Coal Commodity Spot Prices. Add ~$30/ton (~$1.20/MMBtu) to spot commodity price for transportation costs. (3) Hog fuel woodchips in Florida with ~48% moisture and 4,160 btu's per pound. On a dry basis, this equates to a price of ~$38 per ton with ~8,000 btu's per pound.

Example of Biomass Energy in Florida: While there are compelling economic, environmental, and national security (foreign oil dependency) arguments why biomass energy resources need to be developed in the U.S., there is perhaps no greater illustration of this than in Florida.

While oil used for electricity generation is only ~6% nation-wide, oil is 31% of the electric utility fuel mix in Florida. During 2008 (where oil prices peaked at ~$150 per barrel), electricity prices in Florida were ~30% greater than other States in the southeast.

An illustration of low hanging fruit for reducing foreign oil dependency in Florida would be the installation of a new external biomass gasifier to an existing electric utility oil fired boiler (e.g., a fuel switching co-firing strategy discussed previously).

Through our biomass gasification project development efforts in Florida, the below chart is an approximation of the production cost of implementing this fuel switching approach.

It should be noted that the "net" production cost of biomass gasification would be even lower when factoring in economic incentives such as the production tax credit (I.R.C. Section 45) and carbon credits.

The below chart illustrates the cost savings that electricity consumers could realize at various price levels of oil per barrel. For example:

(Note: The above cost saving illustration is believed to be very conservative as biomass energy reflects total production costs, while oil costs only reflect fuel costs. In reality, the price per MMBtu of oil fired electricity generation would include production costs of labor, operation and maintenance, etc.)

Biomass Energy & Native Habitats:   Also included in this Research Effort are special project advisors from leading environmentalists, such as the Sierra Club, Audubon Society, and the Florida Fish & Wildlife Conservation Commission -- ensuring that natural wildlife habitats are preserved and enhanced. A key aspect of this environmental habitat work effort is using energy crops as "Bridge Crops" to reclaim/restore severely damaged closed phosphate mining sites.