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April 6, 2001

American Bioenergy Association Director Calls For Increased Funding For Biomass Programs

Megan Smith, director of the American Bioenergy Association ("ABA"), told the House Resources Subcommittee on Forests and Forest Health today that the current energy crisis coupled with the catastrophic forest fires in the western United States make now the ideal time for converting biomass, such as wood waste, fast-growing trees and grasses, and agricultural residues, into energy and chemicals.

Smith identified three by-products of biomass conversion-biomass power, biomass ethanol, and biomass chemicals-that the ABA believes should be encouraged through increased funding and tax incentives in order to meet several important objectives including reducing the frequency of catastrophic forest fires, meeting energy demands, and reducing dependency on foreign oil.

The biomass power industry is comprised of about 350 plants, Smith told the subcommittee, although 45 of these have been idled. With the recent escalation of energy prices, some are coming back online, but even more could be built, "particularly in the West, where biomass is abundant as a forest residue and electricity is badly needed," Smith said.

Biomass ethanol offers another opportunity for the waste products of forests and agriculture. "Fires stemming from immense fuel loading have severely threatened human life and property, particularly in the Western U.S. Co-locating a biomass ethanol plant to an existing lumber/saw mill or biomass power plant...has the potential to create jobs in rural communities and will also help keep our forests safe and healthy by creating a market for the small-diameter trees and brush which are fueling these fires," Smith told the subcommittee. "Conservative estimates for energy efficiencies for a stand-alone biomass ethanol plant is 4:1, that is, four energy units in output compared to energy used during production."

According to Smith, an area that may provide the largest market potential in the future is the area of biomass conversion to chemicals. "The significance of this technology in decreasing our dependency on imported oil is great, as many products now used in the U.S. are derived from petroleum-based feedstocks," Smith told the subcommittee. "Using biomass instead of petroleum for such products would allow us to save our precious oil for higher-value markets, stretching out our dwindling supply of oil."

Biomass byproducts will confer many benefits-from decreasing the burden of agricultural residues and municipal waste on landfill sites to helping to reduce greenhouse gas emissions significantly. Smith outlined a number of recommendations to the subcommittee to achieve these benefits. Included among its recommendations was a call for an expansion of the U.S. Department of Agriculture's solicitations biomass definition to include short-term cellulosic biomass plants, such as those using agriculture or forestry residues. The ABA also recommended an increase of at least 20 percent for Department of Energy biomass programs and the authorization and appropriation of new monies for FY 2002 to support biomass energy pilot plants at the Forest Service. Smith also told the subcommittee that putting long-term biomass feedstock contracts in place was critical to making a difference in a forest fire abatement plan. Finally, Smith outlined a number of tax incentives to help support both existing and new biomass facilities, including an Open-Loop Biomass Tax Credit to allow existing biomass power plants capture certain production tax incentives for which they are currently ineligible.

"Conversion of biomass to energy and chemicals is a win-win situation all around, having both short- and long-term implications...(that will lead to) a cleaner and stronger nation for future generations to come," Smith told the subcommittee.
 

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