Bioenergy in the USA - Success with Decentralized Bioenergy Utilization

The U.S. is facing a critical energy problem. This is the second of three sections exploring the problem, and actions being taken: The U.S. Energy Problem, this section (Bioenergy in the USA), and Appropriate Bioenergy Development. You can also download and/or view the full text and PowerPoint slides for this paper in pdf format.

Bioenergy in the USA
The bioenergy industry is receiving considerable attention in the U.S. due to its perceived potential to improve energy independence. The current state of the industry and its potential for growth are profiled below.

Total bioenergy consumption in the U.S. was 839 million megawatt-hours (MWh) in 2003, accounting for about three percent of all energy consumed. (Figure 1.) Nearly three quarters of this energy (72 percent) was produced from wood and wood waste. (Figure 5.) Municipal solid waste and landfill gas provided another 16 percent of bioenergy, and corn for ethanol production (and, to a much lesser extent, wheat and barley) accounted for 8 percent. The remaining 4 percent is comprised of agricultural byproducts, sludge waste, tires, and other biomass solids, liquids, and gases.

Bioenergy consumption by end-use is shown in Figure 6. The largest use of bioenergy in the U.S. is industrial process heat, accounting for 367 million annual MWh, or 43 percent of total bioenergy consumption. Most of that amount - an estimated 241 million MWh - was consumed by the paper industry. Paper mills generate heat primarily by burning the "black liquor" lignin residue produced during the pulping process. Paper mills also consume a considerable amount of wood and wood-waste solids for process heat. Other biofuels consumed for industrial process heat include, in declining order of prevalence, landfill gas, agricultural byproducts, wood-waste liquids, sludge waste, tires, and municipal solid waste.

Electricity generation at industrial sites consumed 128 million MWh of bioenergy in 2003 (15 percent of total consumption), again dominated by the paper industry. Many paper mills have cogeneration facilities, thus the fuel composition for their electricity generation is also predominantly black liquor and, to a lesser but still significant extent, wood and wood waste.

Electricity generation by utilities and independent power producers consumed 143 million MWh of bioenergy in 2003 (17 percent of total consumption). Much of this consumption is attributed to co-firing a small percentage (typically not more than 5 percent) of wood residues, wood chips, straw, or switchgrass in large power plants designed originally to burn only coal.

Ethanol production, using corn with few exceptions, accounted for 64.5 million MWh (8 percent) of bioenergy consumption in 2003. According to the U.S. Department of Energy, ethanol production from corn totaled 2.81 billion gallons in 2003, up sharply from the 1.7 billion gallons produced in 2001. The rapid growth is largely due to aggressive government incentives designed to help the ethanol industry meet the demand for gasoline oxygenates to reduce emissions. The use of methyl tertiary butyl ether (MTBE), the only other oxygenate used in the U.S., is declining due to its propensity to contaminate groundwater.

Residential heating accounted for 105 million MWh of bioenergy consumption in 2003 (13 percent of total consumption). Roughly 1.84 million U.S. households (1.5 percent of total households) heat with wood, predominantly by burning "cord wood" logs in wood stoves and fireplaces. Pellet stoves and boilers are gaining popularity, with an estimated 48,500 sold in 2003. There are at least 26 pellet-fuel manufacturers in the U.S., with combined annual shipments of 793,000 tons (719,400 metric tons) in 2003. Based on this data, only an estimated 3.8 percent of homes heated with wood use pellets.

Commercial heating and electricity are the smallest bioenergy consumptive sectors, consuming a combined 32.2 million MWh (4 percent of total consumption) in 2003. The majority of this energy was used for space heating in businesses and schools, and in federal, state, and local government buildings.

Potential to Expand U.S. Bioenergy
Several national resource assessments and federal programs aimed at increasing U.S. bioenergy production have been carried out recently. The Oak Ridge National Laboratory (ORNL) estimates the total standing vegetation in the U.S. to be 65-90 billion dry metric tonnes, containing 14-19 years of the country's energy use at present consumption levels. A 1999 study by ORNL and others [7] cites a 1997 USDA estimate that the country has 559 million acres (226 million hectares) of publicly and privately held forestlands and 337 million acres (136 million hectares) of agricultural cropland. The location of forest biomass resources, and their proximity to cold climates, can be seen by comparing Figures 7 and 8.

The ORNL study [7] also looked at other biomass sources, and estimated that at a market price of US$40 per delivered dry ton, the availability of biomass from urban wood waste, mill waste, and forest thinning residues could produce 559 million MWh annually.

The University of Tennessee developed a computer model called POLYSYS that uses agricultural and economic data to determine locations and conditions under which energy crops can be produced at the same or higher profit margins than conventional crops. A 2003 report on the model [8] estimated that at a farmgate price of US$1.83 per gigajoule (US$1.73 per MMBTU), 7.9 million hectares (19.5 million acres) of agricultural land could be economically converted to bioenergy production (switchgrass, hybrid poplar, and willow), producing 60 million dry tons (54.4 million metric tonnes) of biomass. At a higher price of US$2.44 per gigajoule (US$2.31 per MMBTU), the model estimated that 17 million hectares (41 million acres) of agricultural land could be economically converted to bioenergy production, producing 188 million dry tons (170.6 million metric tonnes) of biomass. Based on ORNL's energy density factor of 65 million dry tons per quad, and converting to SI units, energy from crops grown on the converted land areas for the two cases would yield 271 million MWh and 847 million MWh, respectively.

Government Support for Bioenergy
In 1999, President William J. Clinton signed Executive Order 13134, ordering the development of "a comprehensive national strategy, including research, development, and private sector incentives, to stimulate the creation and early adoption of technologies needed to make biobased products and bioenergy cost-competitive in large national and international markets." The next year, Congress passed the Biomass Research and Development Act of 2000 with the stated purpose to "promote research and development leading to the production of biobased industrial products. The Act furthermore called for the creation of a technical advisory committee and board to guide and oversee the process, and a funding initiative to provide grants, contracts, and financial assistance to help carry out the objectives.

• Biomass consumption in the industrial sector will increase by 2 percent per year through 2030
• Biomass consumption in electric power will double every 10 years through 2030
• Increase biomass-derived transportation fuels from the current 0.5 percent of U.S. transportation fuel consumption to 20% in 2030
• Increase production of chemicals and materials from biobased products from the current 5% of target U.S. chemical commodities to 25% in 2030

Calculations of actual increases in bioenergy if the technical committee's stated energy-based goals are met are shown in Table 2 below.

Table 2: Potential Increases in Bioenergy Consumption based on Governmental Goals

End Use Sector	2001 Consumption (million MWh)	Vision for 2030 (million MWh)	Net Increase (million MWh)	Annual Effective Rate of Increase
Industrial	791	1,405	614	2.0%
Electric Utilities	6	42	36	7.2%
Transport Fuels	43	2,344	2,301	14.8%
Totals:	840	3,790	2,951

Source: Data have been converted to SI units, but are taken from "Vision for Bioenergy and Biobased Products in the United States 2002" a report from the Biomass Technical Advisory Committee established by the Biomass R&D Act of 2000.

Grant awards made through the funding initiative established under the Act have totaled US$144 million over three rounds of funding. Awards in the first round were US$96 million and went to just six companies, all focused on the conversion of energy crops (primarily corn) into liquids (primarily ethanol). Second-year funding was more diverse, giving 19 awards valued at US$23 million to companies and universities seeking to advance research into liquid fuels (ethanol, biodiesel), hydrogen, biogas, and chemicals. Two of the 19 awards, one of them to Local Energy for the project that produced this paper, were for economic and environmental assessments of biomass potential. The third round awarded US$25 million to corporations, universities, and research institutes for a total of 22 projects including research and development on corn-stover biomass, black-liquor gasification, ethanol production, liquid fuels for fuel cells, and hydrogen from farm-animal waste. The projects also included two for education, one for rural development, one for sustainable forestry and one to investigate incentives. See Table 3.