On the flip side, there’s also been uncertainty on the part of end users of the biomass materials, regarding whether the materials will be too costly or consistently available.
To alleviate those concerns, the Biomass Crop Assistance Program was created in the 2008 Farm Bill to provide financial assistance to eligible material owners providing biomass to facilities that convert or propose to convert biomass to heat, power, biobased products or advanced biofuels. The Congressional Budget Office estimates the cost of the program will top out at $70 million, including $14 million in 2009 and 2010, and $21 million during each of the remaining two years of the program.
Since its inception, to say the program is popular would be an understatement. As of the end of November, the qualified biomass conversion facility list was at 250, ranging from pellet producers to biomass power plants to pulp and paper mills.
Article Continues After Advertisement
Although the program has been received positively for the most part, it hasn’t escaped criticism. In August, the USDA Farm Service Agency began accepting comments on the draft programmatic environmental impact statement (EIS) on BCAP to collect suggestions on the program and any ideas for rulemaking, and plans to release more program rules later this year.
Meanwhile, the program continues to gain momentum. Jonathan Groveman, USDA FSA public affairs specialist, says the overwhelming interest in the new program has been the greatest surprise with inquiries coming from all levels and sectors of the biomass industry.
Taking Off
“The best part [of BCAP] has been hearing from all the innovative start-up facilities trying to figure out how they fit into the program and to get the indirect benefits, such as a small tree farm that is installing a hydronic unit to power its operations,” Groveman says. He adds that it’s been a surprise to learn that many facilities already in operation, during pressing economic times, see their indirect benefits as a way for them to move toward more efficient bioenergy production. “Eligible material owners (EMOs), too, appear to see their direct benefit as an opportunity to make their operations more efficient, such as using mobile briquetting which cuts the bulk and cost of transporting biomass,” he says.
One of the aspects of the program that might have led to its popularity was the easy application process. Applying to the program wasn’t difficult, says Gerry DeNotto, president of Indeck Energy Services. Indeck Energy has two biomass conversion facilities in BCAP—a 16 megawatt wood-to-energy plant in Alexandria, N.H., and a 90,000 ton per year wood pellet plant in Wisconsin. “The [initial] rules came out piecemeal, although, I must give the FSA credit for getting them out quickly,” he adds.
So far, the list doesn’t include many facilities in the Midwest, which is touted as the country’s agriculture belt. Groveman points out that it’s important to remember that while a biomass conversion facility may be located in one state, the eligible material may come from several states. “The initial trend of sign ups for qualification of the biomass conversion facilities came from the forestry and paper industry and now a variety of sectors are beginning to submit applications,” he says. “We’re receiving applications from schools and universities, smaller entrepreneurial start-ups, various biobased product and advanced biofuel producers and cooperatives.”
Most bioconversion facilities that have applied to the program have qualified, only a few facilities have been turned away because the facilities convert only ineligible materials or there were no conversion processes, according to Groveman. “Several facilities have been unable to qualify based on their inability to provide environmental compliance with federal, state or local laws,” Groveman says. “Many applications have had to be returned for deficiencies, meaning they were incomplete.”
If an application is returned, however, the applicant may reapply. “And most have reapplied, or intend to apply when licenses and permits are in place,” he adds.
Questions and Concerns
As with any new program, kinks in the BCAP program still need to be worked out. Charlie Niebling, general manager for BCAP qualifier New England Wood Pellet and chairman of the board of directors for the Biomass Thermal Energy Council, believes BCAP will benefit the pellet industry in the Northeast, as it is a critical revenue enhancement for wood suppliers, many of whom are struggling in the down economy. However, Niebling says he has a healthy skepticism about subsidy programs such as BCAP because markets often adjust quickly to the presence of subsidies, and the benefits of the program diminish as a result. “I’m also concerned about what happens in two years when most current EMO’s no longer qualify to participate,” he says. “Will they be in a position to adjust their businesses to the absence of the subsidy at that time? I think all companies participating in the program have to keep expectations realistic and not view BCAP as a panacea.”
| 1 2 | Next Page --> | |
| View Entire Article | ||