Woody Biomass Utilization Break-out Session

New Developments in the World of Biomass Utilization

Christopher Write — Tue, 18 Oct 2011 00:00:00 PDT

The economic competitiveness of cellulosic biofuels is highly dependent on feedstock cost, which constitutes 35–50% of the total fuel production cost, depending on geographical factors and equipment selection for harvesting, collecting, preprocessing, transporting, and handling the material. Consequently, feedstock cost and availability are the driving factors that influence near-term biorefinery locations and will largely control the rate at which this industry grows. Initial model-based supply scenarios postulate a dry feedstock supply system design case as a demonstration of the current state of technology. Based on this near-term design, advanced scenarios were developed to determine key cost barriers, needed supply improvements, and technology advancements to achieve long-term cost targets. Near-term supply systems will start by using current infrastructure and technologies and be individually designed for biorefineries using specific feedstock types and varieties based on local geographic conditions. However, as the industry develops, cost barriers are addressed, and risks associated with large scale biomass utilization are considered, the supply systems will incorporate advanced technologies that will eliminate downstream diversity and provide a uniform, tailored feedstock for multiple biorefineries located in different regions. This advanced supply system will utilize current handling infrastructure to move a quality controlled, desified, and stable cellulosic feedstocks to biorefineries as a commodity material similar to current grain and emerging wood commodities.

Marketing Strategies for Biomass Utilization

Dusty Moller — Tue, 18 Oct 2011 00:00:00 PDT

The key marketing strategy for improving Pinyon/Juniper biomass utilization is to discover the customer value propositions (CVPs) that offer the greatest return and then finding the lowest cost production processes that will deliver that return. PJ, bless its heart, is a non-timber forest resource—apparently lacking a high-value component to offset the high cost to fell and remove the biomass called for in the prescription. But, there are “bright spots”—products and bi-products that can go a long way to provide the land managers revenue that can drive the restoration costs to acceptable levels. Those CVPs can be shown as symbiotic relationships and marketed as such. When relationship marketing is effective, people, processes, and technology work in synergy to increase profitability, and reduce costs.

Biomass Business Principles of Success

Gilbert Miller — Tue, 18 Oct 2011 00:00:00 PDT

The Biomass Industry has many characteristics of an infant industry but unlike an infant industry its products are primarily energy commodities that can be obtained from many sources. These characteristics create a multitude of risks. Risks are in three main areas. The first set of risks are market risks. The second set of risks are technology risks. The third set of risks are public policy risks. Market risks include prices received, prices paid and price volatility. Technology risks include current densification technology costly. Most biomass technology was developed if the late 19th and early 20th centuries. Technology is changing with resent renewed interest in biomass. Therefore, there is the risk of stranded investment as new technologies displace current technologies. Public policy risks are in three areas. First is withdrawal of public funding for biomass. Second is policy changes effecting harvesting biomass on public lands. Third is changes in environmental policies including CO² regulation. Risk management is key to success in the biomass industry. Market risks can be reduced through forward contracting. Technology risks can be reduced by investing in technologies that have multiple uses and spreading costs over many shareholders on single use technologies. Public policy risks are difficult to manage but must be evaluated in every business plan. Sensitivity analysis is essential in determining the magnitude of risk associated with changes in any element of the biomass enterprise.

The Economics of Biomass

Jared Abodeely — Tue, 18 Oct 2011 00:00:00 PDT

Biomass feedstock supply chain logistics and the associated costs are key to building a sustainable biofuels industry, as biomass conversion facilities that rely on an unsustainable biomass supply quickly become unsustainable to operate. The US Department of Energy (DOE) has developed cost and quantity targets for biofuels production, requiring large quantities of biomass that meet aggressive cost targets. Analyses performed at the Idaho National Laboratory (INL) have shown that these targets cannot be met with conventional biomass logistics systems. Therefore, INL has developed an advanced, commodity-based Uniform Format biomass feedstock logistics system that addresses barriers to meeting these goals and enables DOE targets to be met. This presentation will present some analyses performed by INL to support the development of an advanced biomass logistics system.