Wood Bioenergy | a Hatton-Brown publication

Natural gas prices have hit rock-bottom in Minnesota, undercutting the state’s taxpayer-supported efforts to promote statewide biomass energy projects.

Minnesota has invested more than $11 million in taxpayer and utility funds to advance technologies that burn biomass for heat and electric generation or convert it to a synthetic gas, but it’s now getting difficult for the technology to compete.

“The era of low-priced natural gas has blunted opportunities for biomass and other renewables,” said Doug Tiffany, an agricultural economist at the University of Minnesota.

Natural gas prices have dropped by half since their peak in 2008 as explorations using hydraulic fracturing have opened new gas fields in Texas, Pennsylvania and elsewhere.

These discoveries have spelled bad news for Chippewa Valley Ethanol in Benson, Minn. The cooperative spent more than $20 million in 2008 on a system that gasifies wood chips and corncobs. The technology worked, and for a time furnished 20% of the adjacent ethanol plant’s process heat, but as the price of natural gas dropped, the plant resumed using it. The gasifier has been idle more than a year.