Biomass Provision in Bipartisan Energy Bill Touches Environmental Flash Point

On April 21, the Senate passed the Energy Modernization Act (S. 2012) 85 to 12. The measure avoided many third rail issues – including climate change and Arctic drilling. While not the overhaul to energy policy many hoped for, it addresses seismic shifts in the energy sector since the last time an energy bill landed on the President’s desk in 2007, including the dropping costs of renewables, booming natural gas and oil production as well as a shift away from coal and an aging electric grid. In the sweeping measure that was overall non-controversial, one provision in particular has some environmental groups in apoplexy – the categorization of biomass as carbon neutral.

Passed by voice vote in February and advanced by Senator Collins (R-ME), the amendment to categorize biomass as carbon neutral had several co-sponsors: Senator Amy Klobuchar (D-MN), Angus King (I-ME), Kelly Ayotte (R-NH), Al Franken (D-MN), Steve Daines (R-MT), Mike Crapo (R-ID), and James Risch (R-ID), all of whom represent heavily forested states. It calls for harmonizing biomass policy between federal agencies – namely the USDA and the EPA on biomass utilization.

The provision asks for agencies to “establish clear and simple policies for the use of forest biomass as an energy solution including policies that reflect the carbon-neutrality of forest bioenergy and recognize biomass as a renewable energy source, provided the use of forest biomass for energy production does not cause conversion of forests to non-forest use.”

This week, a group of environmental organizations sent a letter to the Senate over what they see as a “sweetheart deal” to the biomass industry, urging them to kill the biomass provision. On April 21, the New York Times editorial board also called on the Senate to remove the provision, stating that it “encourage[s] the burning of trees to generate electricity.” For those who follow the debate over biomass, this most recent chapter isn’t surprising, but it merits another look at what is and isn’t biomass and why this is such a thorny issue.

What is woody biomass and does it include whole trees?

Woody biomass is a term of art for woody materials used for thermal (heating), electricity or combined heat and power applications. Because of wholesale electricity prices, plus the cost of handling, transporting and processing biomass feedstocks, they can’t compete with timber and other wood products for usable whole trees.

Biomass is sourced from the lowest value, otherwise unusable products out of working forests -- tops, limbs and sawdust; wastes from forestry thinning operations (called slash); urban wood waste and wood products waste, such as trimmings from furniture manufacturing. Small diameter or diseased trees which are unusable by the lumber industry are also used by the biomass industry in some cases.

In the Southeast, a slumping pulp and paper market created excess low-value woody materials – and a new industry sprang up to utilize these materials as electricity. In the Northwest, states are grappling with record forest fires and diseased trees – resulting in excess material in the forest that is left for wildfire tinder, open burned or left to decompose. And in the Northeast, biomass has long been used as pellets to heat homes as well as for small-scale combined heat and thermal applications.

Currently, the use of smaller whole trees is the source of much controversy over the use of biomass, particularly in the Southeast. In the region, the majority of the biomass produced is sent to Europe as pellets, due to EU directives that allow the use of co-firing woody pellets with coal to meet climate goals.

Higher value forestry materials, such as lumber, will always fetch higher prices than the biomass feedstocks. The idea that the use of these so-called waste resources will explode the market for woody biomass for heating and electricity has little basis in economic reality. Indeed, without policy support through Power Purchase Agreements, most California biomass power facilities that use agricultural and forestry wastes have closed. The alternative fate of these materials are the landfill or open-burning.

Biomass Science is Messy, Policy Needs to be Clear

When you ask a scientist if biomass is carbon neutral – they will likely answer, it depends. It depends on many factors – what was the alternative fate of the biomass, how efficient is the power plant, is the forest mass increasing, stable, or decreasing?

At the same time, the task before regulators is to set clear and implementable policies on biomass utilization, given these complexities. In recognizing the need to find a middle ground between a simple regulatory framework and the complexity of biogenic carbon accounting, the biomass industry, many foresters, and forestry scientists have long sought a carbon neutral designation for power sourced from woody fuels, so long as forest stocks are stable or increasing. They argue that not only does the science support this theory, both the U.S. Forest Service and the Department of Energy, as well as international climate bodies, support this definition of sustainable biomass as carbon neutral.

The National Association of University Forest Resources Programs (NAUFRP), which represents 80 U.S. universities that have forest resource programs, has asked the EPA, in a recent letter to the agency, to recognize that “the carbon benefits of sustainable forest biomass energy are well established.”

Labelling biomass as carbon-neutral is the linchpin on which the biomass industry has pinned all hopes for federal policy – according to the industry, doing so could simplify navigating the federal landscape as far as whether or not biomass as electricity can be used for compliance with the Clean Power Plan. The Plan includes some positive language on biomass power’s ability to reduce stack CO2 emissions and it recognizes the "CO2 and climate policy benefits of waste-derived biogenic feedstocks and certain forest- and agriculture-derived industrial byproduct feedstocks.” However biomass does not receive recognition under the mass-based model trading rule and has been left out of the Federal Implementation Plan, which will apply to states that don't develop their own Clean Power Plan compliance strategies.

While the Clean Power Plan is currently on hold, labelling biomass as carbon neutral could send a positive and clarifying signal to states. At the same time, the net effect of the biomass provision could take time to work its way through the federal system, and states will still regulate the industry. Therefore, state policies that support the sustainable use of biomass for heating and power applications are key if industry wants to see policy stability in the near term.

Congressional Support

In the meantime, the House has a few new caucuses aimed at working on these and other issues related to forests: the Working Forests Caucus and the Biomass Caucus. The Working Forests Caucus is co-chaired by Representatives Bruce Westerman (R-AR), Collin Peterson (D-MN), Jaime Herrera Beutler (R-WA) and Sanford Bishop (D-GA). The Biomass Caucus is chaired by Reps. Ann Kuster (D-ME) and Bruce Westerman (R-AK).

Last July, 46 Senators wrote to EPA, DOE and USDA asking for policy clarity on the issue, stating that “the carbon neutrality of forest biomass has been recognized repeatedly by numerous studies, agencies, institutions, legislation, and rules around the world, and there has been no dispute about the carbon neutrality of biomass derived from residuals of forest products manufacturing and agriculture.”

Conclusions

The Biomass provision in the Energy Bill isn’t going to make or break the biomass industry, for all the reasons stated above. More importantly, the idea that whole, usable trees are going to biomass power plants is a fallacy. Forests aren’t managed for carbon storage – but rather for clean water, air, wildlife, recreation, and yes, wood. Taking the lowest value by-products from forestry operations won’t flip this proposition on its head.

The bill now passes to the House for conference with the House energy bill, the North American Energy Security and Infrastructure Act of 2015 (HR 8). If sent to the President’s desk for signature, it would be the first major energy legislation since 2007.