BioEnergy and BioChemicals Development and the Potential Role of Forests An Opportunity for Minnesota

BioEnergy and BioChemicals Development and the Potential Role of Forests Current energy trends. Bio-energy as an alternative to fossil fuels. Minnesota’s bio-energy potential. Bio-energy in an integrated bio-economy. Public policy considerations in bio-energy/ bio-chemicals development.

Current Energy Trends

U.S. energy consumption and imports are rising.

US Energy Production, Consumption, and Imports, (Quadrillion Btu) Source: EIA, Annual Energy Outlook, Consumption Production Net Imports 30% 32%

U.S. Petroleum Supply, Consumption, and Imports, (million barrels per day) Source: EIA Annual Energy Outlook, Production Consumption Net imports 60% 72%

U.S. Natural Gas Production, Consumption, and Net Imports, (trillion cubic feet) 16% 21% Net ImportsConsumption Production Source: EIA, Annual Energy Outlook, 2006.

U.S. Trade Deficit, Energy Products, Billion Dollars Year Source: USDOE, Energy Information Administration, 2006.

Global energy consumption is increasing rapidly.

World Energy Consumption, Quadrillion Btu HistoryProjections Source: U.S. Department of Energy, EIA 2006.

China Petroleum Net Imports, Barrels/Day Year Average Daily Imports 1990 Net exporter , (est.) 3,600, (est.) 10,900,000 Source: Energy Information Administration, 2006 and Congressional Budget Office, 2006.

Peak production of petroleum globally is within sight.

World Petroleum Consumption

Consensus is Emerging that Peak Petroleum Production in in Sight OECD International Energy Agency World Resources Institute J. Edwards, Colo. School of Mines 2020 U.S. Department of Energy 2037

Different Interpretations of a Hypothetical 6,000 Billion Barrel World Original Oil-in-Place Resource Base

Bio-Energy as an Alternative to Fossil Fuels

Plants Energy CO 2 O2O2O2O2 Sugars No net CO 2 produced in the cycle. Bio-Fuels Are Environmentally Attractive

There are also a number of potential sources of bio- energy.

Forms of Bio-Energy Resources Wood Pulping liquor Municipal solid waste Organic materials in wastewater Landfill gas Biomass

Potential Sources of Biomass Energy Energy crops Agricultural crop residues Forest biomass –Logging residues –Thinnings Corn (ethanol)

Potential supplies of biomass are much greater than those now used for energy generation.

A recent report from the U.S. Departments of Agriculture and Energy suggests the annual availability of over 1.3 billion dry tons of biomass in the United States. Source: Perlack et al. (2005).

Estimated Potential Biomass by Source – United States Form of Biomass Estimated Volume Available Annually (million dry tons) Energy crops 377 Crop residues 428 Woody biomass 368 Total1,173 Source: Perlack et al. (2005).

There are a number of options for utilizing biomass as an energy source.

BioMass Derived Fuels Ethanol Biodiesel Synthesis gas (syngas) Replacement for fossil fuels in electricity generation Pelletized fuels Source of steam generation for district heating Hydrogen

Minnesota’s Bio-Energy Potential

Renewable Energy Produced in Minnesota in 2005 (values in billion Btu equivalents) EthanolHydropower Firewood Biodiesel Derived from Jordan and Taff (2005), and for firewood from Mouelle et. al. (2003).

Profile of Renewable Electricity Production in Minnesota, 2005 Hydro Wind RDF Biomass Other Non- renewable Renewable Source: Minnesota Department of Commerce (2005). Non-renewables – 50,100,000 MWh Renewables - 6,200,000 MWh 56,300,000 MWh

Minnesota has significant opportunity for further development of bio-energy.

Biomass Resources in Minnesota by Three Studies Source of Biomass Biomass in Resources from ORNL database (tons/year at < $50/ton) Biomass Resources from NREL GIS Group (tons/year) Biomass Resource from 1997 ILSR Inventory (tons/year) Average of All Biomass Resource Data (tons/year) Forest residue 874,900-- Mill residue 1,121,000 1,017, , ,549 Agricultural residue 11,935,896 40,709,527 22,040,438 24,895,287 Energy crops 5,783,002-- Urban wood waste 1,532, Total21,247,32741,727,21522,612,398 33,989,267 Source: NREL (2005)

Ethanol Production Potential

Ethanol Production in the United States, Source: Renewable Fuels Association (2006). (2006 est.)

The corn ethanol industry in the U.S. reached a production capacity of over 6 billion gallons annually in 2006.

Potential annual production of ethanol in the U.S. is estimated at 50 billion gallons. To put this in perspective, gasoline consumption in the U.S. in 2006 was 140 billion gallons.

Geographic Location of U.S. Ethanol Production Facilities, 2006 Source: Renewable Fuels Association, (

Ethanol Production and Consumption in Minnesota Source: Minnesota Department of Commerce (2007).

Geographic Location of U.S. Biodiesel Production Facilities, 2006 Source: National Biodiesel Board, ( Existing.pdf)

Ethanol Production Potential from Minnesota Biomass, Based on ONRL 1999 Study* and NREL Near-Term Conversion Factors Resource Quantity (000 dry tons/year) Ethanol Potential (million gallons) <$30/t <$40/t <$50/t Forest residues Mill residues (wd) , Ag. residues 0 11,936 11, Energy crop pot , Urban wd waste ,533 1, Total ,494 21, ,122 Walsh et al

Ethanol Production Potential from Minnesota Biomass, Based on ONRL 1999 Study* and NREL Near-Term Conversion Factors Resource Quantity (000 dry tons/year) Ethanol Potential (million gallons) <$30/t <$40/t <$50/t Forest residues Mill residues (wd) , Ag. residues 0 11,936 11, Energy crop pot , Urban wd waste ,533 1, Total ,494 21, ,122 Walsh et al In 2006, Minnesota produced 550 million gallons of ethanol from corn. Production nationwide was 6.0 billion gallons.

Ethanol Production Potential from Minnesota Biomass, Based on ONRL 1999 Study* and NREL Near-Term Conversion Factors Resource Quantity (000 dry tons/year) Ethanol Potential (million gallons) <$30/t <$40/t <$50/t Forest residues Mill residues (wd) , Ag. residues 0 11,936 11, Energy crop pot , Urban wd waste ,533 1, Total ,494 21, ,122 Walsh et al To put these numbers in perspective, gasoline consumption in Minnesota in 2006 was 2.7 billion gallons.

Energy Required to Deliver 1,000,000 Btu to a Vehicle Fuel Tank Fuel Total Energy Required (Btu) Fossil Energy Required (Btu) Gasoline1,241,000 Ethanol (corn- starch) 1,587, ,000 Source: Oregon Department of Energy, (

Energy Required to Deliver 1,000,000 Btu to a Vehicle Fuel Tank Fuel Total Energy Required (Btu) Fossil Energy Required (Btu) Gasoline1,241,000 Ethanol (corn- starch) 1,587, ,000 Ethanol (corn cellulose) 1,250, ,000 Source: Oregon Department of Energy, (

Energy Required to Deliver 1,000,000 Btu to a Vehicle Fuel Tank Fuel Total Energy Required (Btu) Fossil Energy Required (Btu) Gasoline1,241,000 Ethanol (corn- starch) 1,587, ,000 Ethanol (corn cellulose) 1,250, ,000 Ethanol (wood)2,600,000 10,000 Source: Oregon Department of Energy, (

Electric Generating Potential

Power Potential from Minnesota Biomass Source of Biomass Average of All Biomass Resource Data from Table 1 (tons/year) Power Potential from the Use of Direct-Fired Biomass Power Plants (aMW) Power Potential from the Use of Integrated Gasification/Combined Cycle Power Plants (aMW) Forest residue 874, Mill residue 903, Agricultural residue 24,895,287 5,009 6,252 Energy crops 5,783,0021,1641,452 Urban wood waste 1,532, Total33,989,2676,3898,536 Source: NREL (2005) To put these numbers in perspective, Minnesota electricity capacity in 2005 was 56,300,000 MWh

Potential Power Obtainable from Minnesota’s Plant-Based Bio-Resources, Based on ONRL 1999 Study and NREL Conversion Factors Resource Quantity (000 dry tons/year) Electric Potential (aMW) <$30/t <$40/t <$50/t Forest residues Mill residues (wd) , Ag. residues 0 11,936 11, ,401 2,401 Energy crop pot , ,164 Urban wd waste ,533 1, Total ,494 21, ,081 4,231 Source: National Renewable Energy Laboratory, 2004.

Bio-Energy in an Integrated Bio-Economy

A singular focus on bio- energy might be a mistake.

A Myriad of Chemicals are Derived from Petroleum Source: API. Totals more than 44 gals. Because of “processing gain.” What is in a barrel of oil? 19.5 gal. 9.2 gal. 4.1 gal. 2.3 gal. 1.9 gal. 1.8 gal. 0.3 gal. 0.2 gal. 0.5 gal. 1.2 gal. 1.3 gal.

Chemical and Material Demand 10% from Renewable Resources by 2020 ~$400 billion/year in products (2 times current Forest Products) US DOE Technology Roadmap for Plant/Crop based Renewable Resources 2020, Renewable Vision, February Bio-economy – the Future is Now

A Vision of the BioEconomy in the Year 2020 Biorefinery: Cluster of biobased industries producing chemicals, fuels, power, products, and materials. Source: NREL

O2O2 CO 2 BL Recovery Power Boiler Paper Manufacture Black liquor, residuals 90 x 10 6 mt CO 2 Purchased Energy (30% of energy needs - $2.0 billion) Pulpmill Energy, Steam, Chemicals Current Chemical Paper Mill

O2O2 CO 2 Black liquor, residuals 66 x 10 4 mt CO 2 Power export ($3.8 billion) Biorefinery Pulp ($5.5 billion) The Forest Biorefinery - Extract Hemicelluloses - New products, chemicals, polymers ($3.3 billion) -Black liquor gasifier - Wood residual gasifier - Combined cycle system - Process to mfg. liquid fuels and chemicals or Liquid Fuels/ Chemicals ($5.5 billion) Syngas Paper mfg.

An Integrated Bio-Economy Has Many Facets Raw Material Options - Trees - Grasses - Agricultural Crops - Agricultural Residues - Animal Wastes - Municipal Solid Waste Technologies - Acid/enzymatic hydrolysis - Fermentation - Bioconversion - Chemical Conversion - Composite products technologies - Gasification - Combustion - Co-firing Source: Adapted From Iowa Industries of the Future, End-Uses Products – Plastics – Functional Monomers – Solvents – Chemical Intermediates – Phenolics – Adhesives – Hydraulic Fluids – Fatty acids – Carbon black – Paints – Dyes, Pigments, and Ink – Detergents – Paper – Horticultural products – Fiber boards – Solvents – Plastic filler – Abrasives – Building products Fuel Power

These products will be made from a variety of biochemicals and biofeedstocks arising from biorefineries.

Summary

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