Natural Resources Research Institute
To foster economic development of Minnesota's natural
resources in an environmentally sound manner to promote
private sector employment
• Two Centers
Center for Applied Research and Technology Development
Center for Water and the Environment
• CARTD
Mining and Economic Geology
Peat/Environmental Processing
Forestry and Forest Products
NRRI CARTD Forestry Program
Program Purpose: Enhance forest productivity and
wood supplies to industry through high quality research
and development to support economic development in
Minnesota - GROW TREES FAST
Research Areas:
• Hybrid Poplar - Genetic Improvement, Yield
• Aspen Productivity and Silviculture
• Plantation Production of Conifers
• Biomass Energy
Minnesota Wood Markets
Present and Future
• Present situation
• Harvesting 3.8 million cords of roundwood
• Estimated 400,000 green tons of energy chips
• Limited growth potential in additional roundwood
-Thunderhawk project, past that?
• Energy markets are large and here to stay
• All biomass on the table
• President’s recent remarks: mentioned conversion of
cellulose to ethanol
Warning: Any mention of price is strictly
an estimate for example purposes only
• Depends on:
• logging operation
• “hot” processing of chips or grind from piles
• species
• part of tree
• future stumpage and competition
• location
• silvicultural management goals (thinnings)
• forest or brushland
• land use policies – harvesting guidelines
Biomass Energy
Drivers
•
•
•
•
•
•
•
High energy prices
Xcel Energy biomass mandate
Potential applications
• Laurentian energy
• Taconite plants
• Ethanol plants and other industrial
Biomass resource in forest residues, brushlands
Local impact - reduced import of fossil fuels
No-net carbon dioxide increase using biomass
Relatively clean - low ash fuel
Biomass Fundamentals
• Relatively low energy density (14-17 MMBTU/dry ton)
• Geographically-dispersed resource
• Transportation/sourcing a critical factor
• Moisture content relatively high
• Ash content low (variable depending on material)
• Agricultural Residues – 5 – 15%
• Wood (and Bark) – 2 – 4%
• Various physical forms
• Seasonal variation in availability and characteristics
• Not as straightforward as other energy sources
Current Energy Prices
$/MMBTU
Natural Gas
Efficiency Real Cost
$7.00
0.9
$7.80
Heating Oil #2
$21.40
0.80
$26.75
Heating Oil #2
$21.40
0.65
$32.93
Propane
$21.02
0.9
$24.03
Electric Heat
$20.50
1
$20.52
Wood (round)
$5.00
0.5
$10.00
Home Wood Energy
Cost Calculations:
• Cord of energy wood – $90.00 (for example)
• Approximately 20 MM BTU/cord
• $90/20 = $4.50 per MMBTU
• Transportable and Stores Easily
• If converted at 60% efficiency = $7.50 per MMBTU
• Comparable to natural gas, 30% of oil/propane
Home Wood Energy
Cost Calculations:
• $5,000 installation of new hot water system
• Burn 70 MMBtu per year (average home in MN)
• Potentially save $1,200 per year
• About 4 year payback
• Makes sense for many rural homeowners
• Loggers encourage/finance changeover and ensure
wood price/supply?
Recent Natural Gas Price - Henry Hub
Historical Natural Gas Prices
Minnesota Industrial
14
12
10
8
6
4
2
Jan-02
Jan-01
Jan-00
Jan-99
Jan-98
Jan-97
Jan-96
Jan-95
Jan-94
Jan-93
Jan-92
Jan-91
Jan-90
0
Jan-89
Natural Gas Price ($/mcf)
(source: US DOE-EIA)
Gasification
• Replace natural gas in
industrial applications
• Technology is understood
• Application in Little Falls
• More opportunity for growth
• May need other sources
besides wood residues such
as corn stover or wheat straw
to ensure supply
Potential for Biomass to Replace Natural Gas
Forest Harvest Residue
BTU (millions)
Corn/Wheat Residue
Electric Power
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
Industrial
Commercial
Residential
MN Use
MN Production
Uses - Residential – 40%, Industrial – 28%, Commercial – 28%, Power – 4%
Note: optimistic for both FHR and Ag Residues: Probably 60% of this total realistic
FHR could replace roughly 10% of the industrial gas use
Example
• If chips are $22.00 per green ton (variable)
• Theoretical maximum energy = 8.5 MM BTU/green ton
• Deduction for driving off water – approx. 25%
• 8.5 MMBTU * 75% = 6.375 MMBTU
• $22.00 / 6.375 = $3.45/MMBTU ($3.50 differential from
natural gas)
• Need to recoup equipment investment
• Worth it ? … depends on scale, investment cost and
fuel costs
Statewide Residue Estimate
• 3.8 million cords X 2.3 green tons/cord = 8.7
million green tons harvested statewide
• 8.7 X 15% residue = 1.3 million green tons residue
(no cull included)
• 1,300,000 X 75% = ~ 1,000,000 green tons
• 300,000 green ton/year operation not out of the
question
• Statewide – could support 3 or 4 projects
Cellulosic Ethanol
• U.S. and the world undergoing dramatic shift
• All options are going to have to be used
• Cellulosic ethanol represents next major leap to
supply transportation fuels
• Commercially ready to go – Iogen, pilot plant in
Canada, commercial project starting in Idaho using
wheat straw
• Ethanol yield –
80 gallons/ton now, shooting for 94 – white rot,
termite guts
Reducing the Cost of Cellulosic Ethanol
(NREL, 2006)
$6.00
Enzyme
Conversion
Feedstock
Current DOE Cost Targets
President's Initiative
Costs in 2002 Dollars
Minimum Ethanol Selling Price ($/gal)
State of Technology
Estimates
$5.00
Feed $53/ton
$4.00
$3.00
$2.00
2005 Yield
65 gal/ton
$1.00
Feed $30/ton
Feed $30/ton
Yield 90 gal/ton Yield 94 gal/ton
10,000 TPD
$0.00
2000
2005
2010
2015
2020
Transportation Fuels and Cellulosic
Ethanol
• U.S. annual gasoline use: 150 billion gallons/year
• MN estimated consumption: 2.5 billion gallons/year
• 50% of the current corn crop for ethanol would
produce 50% of our fuel needs
• Cellulosic ethanol - wood harvest – 4.0 million cords
plus all residue = 20% of MN transportation fuel needs
• NRRI’s hybrid poplar program – dedicated energy
crops such as poplar and switchgrass, Miscanthus
Biomass Crops
Corn grain
$2.50/bushel = $89.00/ton, $6.37 / MMBTU
Corn/Wheat Straw
$40.00/ton delivered, < $3.00 / MMBTU
Hybrid Poplar
• higher yields in northern MN than corn
• lower input agriculture
• easy to store – unlike most other materials
• may apply even on soils in S. MN
New directions in existing poplar research – shorter rotations,
harvesting technology (bundling), cooperate with the Forest
Service
Laurentian Energy Project
• Municipalities of Virginia and Hibbing
• Serving 5,000 customers – heat and electricity
• Aging system – either upgrade or everyone has to
install new systems - residential and commercial
• Developed PPA agreement under Xcel Energy
Biomass Mandate
• Woody biomass is the primary source
• NRRI cooperating on the $1.3 million project with LEA
Laurentian Analysis
Location affects:
• species mix
• stand volumes
• transportation
• logging infrastructure
• competition
• land policies
• environmental concerns
Brushland Harvesting for Energy
• Shearing – technology and cost known
• Forwarding – unknown, needs testing
• Grinding/Chipping – technology and cost known
Brushland Resource Evaluation
How much is available?
At what price?
Where is it?
NRRI Brushland Study
GAP – 1.3 million acres in the LEA 100-mile zone
• average site: 120 acres
• average fully stocked: 32 acres
• 28% stocking
• average of 561 dry tons/site
• 13 tons in fully stocked areas
• 45 truckloads per site
• Could be managed on 10 to 15 year rotation
Brushland Harvesting Equipment
Best collection system?
Biomass density too
low – can’t get full load
without compression
USDA/UC-Davis help –
evaluating equipment
and design of new
equipment
Bandit Beast Recycler
Bandit Beast Recycler
THE FUTURE
• Energy perhaps the #1 national issue behind
homeland security – not unrelated
• Cellulosic ethanol is going to happen
• All biomass is going to be used, rapidly economical
• Energy markets dwarf anything we’ve seen so far
• USDOE Energy Assistant Undersecretary Karsner “This is War”