Biomass Power: Environmentalists Miss the Forest for the Trees
By Michael Schewel, Partner, McGuireWoods, LLP and Ben Ladd, Associate, McGuireWoods LLP
If our nation is to meet its renewable energy goals, we need biomass-fired electric generation. Nevertheless, biomass power generation has become the unlikely target of environmentalists and regulators. Perhaps this trend is rooted in the widespread but mistaken belief that forests in the United States are disappearing. In fact, since 1900, the total amount of forest land in the United States and the amount of forest land available for periodic harvest have remained virtually constant. Trees are cut and trees grow in a powerful renewable cycle.
In the past year, beginning with a flawed report prepared by the Manomet Center for Conservation Science, environmental groups and, in their wake, regulators, have sought to stop biomass generation through the imposition of impossibly restrictive regulations. In fact, the 2010 Manomet study appears to have been the first salvo in a nationwide attack on biomass power generation. Regulators in Massachusetts responded to the Manomet report by proposing changes to the Massachusetts renewable energy portfolio standard (RPS) that drastically reduce the extent to which biomass qualifies for renewable energy credits under the Massachusetts RPS, making such plants uneconomical to develop or operate.
The Manomet Report and others similar studies begin from the absurd assumption that biomass power generators will use whole logs to make power, and that generators will therefore be cutting down trees to get those logs. Nothing could be further from the truth. As anyone who has ever worked in the biomass power industry knows, the economics of biomass power are very tight even if the biomass generator is burning only wood waste. A biomass project that was forced on a regular basis to buy whole logs or chipped logs would quickly be out of business. Moreover, almost every biomass power plant being developed in the U.S. counts on receiving either the tax credits available to open-loop biomass or, this year at least, a 1603 grant in lieu of those tax credits. And, to get such a tax credit or grant, the fuel the biomass generator burns must, by tax code definition, be solid, non-hazardous cellulosic waste material. Neither whole logs nor whole log chips nor pulpwood could ever be construed as waste material.
So it is that biomass power generation in the U.S. will not deforest the nation. On the contrary, biomass power will always depend on secondary sources of waste biomass material or on specialized quick-growing energy crops. We need to recognize these important facts and adopt regulations that reflect the environmentally positive value and carbon neutrality of generating electricity from renewable biomass. If we don't, then our nation will be left with the need to build even more coal-fired and gas-fired power plants than would otherwise be the case. And the Southeast, where on-shore wind generation, geothermal power and solar power are available only in limited quantities, will inevitably be arrayed in opposition to renewable energy standards that it cannot meet without substantial biomass generation.
Michael Schewel is a partner at the law firm of McGuireWoods LLP and a member of the ACORE Biomass Coordinating Council. He was formerly Secretary of Commerce and Trade of the Commonwealth of Virginia.
Ben Ladd is an associate at McGuireWoods, LLP. Mike and Ben represent the developers of biomass and other renewable generation facilities.