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.

Torrefied fuels have already been successfully test fired at several power plants in the U.S., Europe and Japan. These have demonstrated the potential to displace coal in largely un-modified utility-scale power plants at high co-firing percentages and at minimal capital cost to the generator.

A number of developers have commercial scale plants either under construction or in the early stages of operation. Significant volumes of torrefied biomass are expected to reach the market in the coming months. Several truly commercial-scale torrefaction plants are likely to be operating by 2013.

Hawkins Wright has analyzed the costs of each element in the biomass supply chain, from the supply of raw feedstock through to the end-user of the torrefied fuel. One of the main advantages of torrefied fuel is that its higher energy density reduces sensitivity to the cost of transport. Each shipment of torrefied fuel carries about 40% more energy (by volume) than conventional white pellet and well over three times that of wood chips.

The carbon footprint of torrefied biomass is also significantly smaller than that of conventional wood pellets. This is due to reduced electricity consumption in the manufacturing process and to the lower transport emissions per unit of energy.

“Advanced biofuels are critical to securing America’s energy future,” said U.S. Agriculture Secretary Tom Vilsack. “This project, and others like it will help establish a domestic advanced biofuel industry that will create jobs here at home and open new markets in the Pacific Northwest and across America.”

Development of the first commercial biorefinery is already underway. The facility is expected to have capacity of 25 million or more gallons-per-year (GPY). It will be located at the Port of Morrow in Boardman, Ore., adjacent to ZeaChem’s 250,000 GPY integrated demonstration biorefinery. ZeaChem has agreements for 100% of the facility’s woody biomass feedstock from the nearby GreenWood Tree Farm Fund (GTFF), managed by GreenWood Resources (GWR), as well as from local agricultural residue processors.

ZeaChem’s first commercial facility will create 188 direct construction jobs and 65 full-time operations jobs, plus an additional 242 indirect jobs for construction and full-time operations.

“The USDA loan guarantee is a significant validation for ZeaChem’s highly efficient, economical and flexible biorefinery technology,” said Jim Imbler, president and chief executive officer of ZeaChem. “This commitment allows us to move forward with securing financing, beginning construction, creating jobs in the community, and producing economical and sustainable products for the fuel and chemical industries.”

“Biomass is a made-in-Manitoba fuel that can be produced from agricultural residues like straw, oat hulls and flax shives,” said Kostyshyn. “Manitoba is committed to reducing our greenhouse-gas emissions and with the assistance of programs like this, Manitoba farms will reduce their carbon footprint and continue to be part of the solution to environmental challenges.”

Current coal users can apply for grants of up to $12,000 to cover the price difference between coal and biomass. Grants of up to $50,000 are also available for biomass producers to upgrade their infrastructure or build capacity.

Kostyshyn expects funding for the program to increase up to $1.5 million as revenue continues to be collected from the emissions tax.

According to the PFI, at least 27 companies representing 41 pellet manufacturing mills have pledged to support the PFI standards program. PFI’s membership includes approximately 60% of the pellet mills operating in the United States, according to PFI.

Manufacturers of PFI-graded pellet fuels will be allowed to place labels on their packaging that assure consumers and retailers that the pellets meet the new standards. In order to use the PFI certification label, manufacturers must adhere to the PFI standard, which includes third-party mill inspections by an ALSC-accredited inspection agency as a part of the compliance procedure.

The Environmental Protection Agency (EPA), which will finalize its own regulations for residential wood heaters later this year, is expected to adopt the PFI standard for wood pellets.

Green organizations are fighting biomass expansion projects at the Nippon mill in Port Angeles and the Port Townsend Paper Corp. mill in nearby Port Townsend. In a summary judgment, the board ruled January 4 that the groups failed to prove the emissions calculations used by the agency were incorrect.

Last June seven groups appealed a construction permit for Nippon that was granted by the Olympic Region Clean Air Agency, claiming it was based on faulty data. Also, last June several groups filed an appeal of Port Townsend Paper’s $55 million biomass project to Thurston County Superior Court. That appeal challenges a review by the PCHB that sided with the mill and its biomass project that could produce up to 25 megawatts of power.

The expansion of Nippon’s facility, expected to be finished in April 2013, would produce up to 20 megawatts of electricity by burning leftover logging slash and residues produced at sawmills. The mill currently consumes 70,000 tons of wood fuel. The expansion would increase this consumption to 160,000 tons annually.

By combining their experience and BBI International’s broadcast spectrum, the new venture will have the ability to offer a breadth of bioenergy consulting to thousands of companies and organizations worldwide, as well as state and federal departments in the United States.

Leading the consulting group are two experienced bioenergy consultants, Dr. Rafael Nieves and Mark Yancey of NEAtech.

Dr. Rafael Nieves has worked in the bioenergy sector for over 28 years. He has extensive experience nationally and internationally managing bioenergy projects in the U.S., Mexico, the Dominican Republic, El Salvador, Puerto Rico, Brazil, Australia, Philippines, Ghana, Armenia, Indonesia and the Ukraine.

Mark Yancey has 35 years of experience in the fields of bioenergy and environmental engineering including extensive experience in project development and economic analysis for first and second generation biofuels facilities. Mark’s expertise is in the development of bioenergy projects including development of business strategies and financial, market and technical analyses of projects and renewable energy opportunities.

Regarding the announcement, Joe Bryan, President and Chief Executive Officer of BBI International, stated: “We are excited about offering a consulting service to our customers. This venture is the first step in helping companies associated with BBI International gain valuable insight on their current and future projects.”

LanzaTech is developing a process that uses proprietary microorganisms to convert carbon monoxide-containing gases from steel mills, oil refineries and chemical plants into ethanol and biochemicals. It is also working with the U.S. Dept. of Energy (DOE) on making jet fuel.

Located in Soperton, Ga., the Range plant was sold January 3 for $5.1 million, a fraction of the financial support it received. The U.S. Dept. of Agriculture required a foreclosure sale following Range’s default in 2011 on an $80 million loan guarantee the agency offered. The plant was also supported by more than $160 million in venture funding and part of a separate $76 million grant the DOE awarded.

The plant will generate nearly 750 MW of electricity using wood pellets produced at RWE’s Waycross, Ga. facility. The facility is currently running two of three biomass boilers, with the third set to be operational by the end of the month.

The facility has been using coal, but RWE npower plans to operate the facility exclusively on biomass by 2013. At 100% capacity, the plant will use roughly 2.5 million tons of wood pellets by the time the plant switches only to biomass. This switch would account for 10% of renewable energy output for the U.K. going into 2013, according to Dan Meredith, Corporate Public Relations Manager for RWE npower.

With three Andritz pellet presses, the plant is converting pine residue from area sawmills into pellets bound for Europe to be used in residential heating and by utilities companies to generate heat and electricity. A small percentage of the 100,000 ton annual production is sold domestically for animal bedding.

Owner Sonny Harwell and his sons Beau and Rhett handled general contracting internally. “We have a background in metals recycling, and we were very familiar with projects of this size,” Harwell says. After 30 years in the waste business and 15 in scrap metal, the family sold those interests and became involved in biomass four years ago. Harwell expects to announce expansions that will bring pellet production at the plant to 200,000 tons soon.