Chapter 10. Forest Biomass-Based energy...213 chAPTeR 10. Forest Biomass-Based Energy Janaki R. R....

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213chAPTeR 10. Forest Biomass-Based Energy

JanakiR.R.Alavalapati,PankajLal, AndresSusaeta,RobertC.Abt,andDavidN.Wear1

key FiNDiNGS

•Harvestingwoodybiomassforuseasbioenergyisprojectedtorangefrom170millionto336milliongreentonsby2050,anincreaseof54to113percentovercurrentlevels.

•Consumptionprojectionsforforestbiomass-basedenergy,whicharebasedonEnergyInformationAdministrationprojections,haveahighlevelofuncertaintygiventheinterplaybetweenpublicpoliciesandthesupplyandinvestmentdecisionsofforestlandowners.

• Itisunlikelythatthebiomassrequirementforenergywouldbemetthroughharvestresiduesandurbanwoodwastealone.Asconsumptionincreases,harvestedtimber(especiallypinepulpwood)wouldquicklybecomethepreferredfeedstock.

•Theemergenceofanewwoodybiomass-basedenergymarketwouldpotentiallyleadtopriceincreasesformerchantabletimber,resultinginincreasedreturnsforforestlandowners.

•Whilewoodybiomassharvestisexpectedtoincreasewithhigherprices,forestinventorieswouldnotnecessarilydeclinebecauseofincreasedplantationsoffastgrowingspecies,afforestationofagriculturalorpasturelands,andintensivemanagementofforestland.

•Becauseitwouldallowmoreoutputperacreofforestlandanddampenpotentialpriceincreases,forestproductivityisakeyvariableinmarketfutures.

•Theimpactsthatincreaseduseofwoodybiomassforenergywouldhaveontheforestproductsindustrycouldbemitigatedbyimprovedproductivitythroughforestmanagementand/orbyincreasedoutputfromcurrentlyunmanagedforests.

1JanakiR.R.AlavalapatiisaProfessorandDepartmentHeadofForestResourcesandEnvironmentalConservation,VirginiaTech,Blacksburg,VA24061.PankajLalisanAssistantProfessor,DepartmentofEarthandEnvironmentalStudies,MontclairStateUniversity,Montclair,NJ07043.AndresSusaetaisaPostdoctoralScholar,DepartmentofForestResourcesandEnvironmentalConservation,VirginiaTech,Blacksburg,VA24061.RobertC.AbtisaProfessor,DepartmentofForestryandEnvironmentalResources,NorthCarolinaStateUniversity,Raleigh,NC27695.DavidN.WearistheProjectLeader,CenterforIntegratedForestScience,SouthernResearchStation,U.S.DepartmentofAgricultureForestService,Raleigh,NC27695.

• Pricevolatilityassociatedwithincreaseduseofwoodybiomassforenergyisexpectedtobehigherforpulpwoodthanforsawtimber.

•Theimpactsofwood-basedenergymarketstendtobelowerforsawtimberindustries,althoughmarketsforallproductswouldbeaffectedatthehighestlevelsofprojecteddemand.

•Differenttypesofwood-basedenergyconversiontechnologiesoccupydifferentplacesonthecostfeasibilityspectrum.Combinedheatandpower,co-firingforelectricity,andpellettechnologiesarecommerciallyviableandarealreadyestablishedintheSouth.Biochemicalandthermochemicaltechnologiesusedtoproduceliquidfuelsfromwoodybiomassarenotyetcommerciallyviable.

•Currentresearchdoesnotsuggestwhichwoodyspeciesandwhattraitswouldlikelybemostsuccessfulforenergyproduction.Thefutureofconversiontechnologiesisuncertain.

• Intheabsenceofgovernmentsupport,research,pilotprojects,andincentivesforproduction,woodybioenergymarketsareunlikelytogrowsubstantially.

•Underahighdemandscenarioforbioenergy,theresultingintensityofwoodybiomassharvestscouldhavedeleteriouseffectsonstandproductivity,biodiversity,soilfertility,andwaterquality.

•Althoughresearchprovidessomeguidelinesforthedesignofmanagementtoprotectvariousforestecosystemservices,forestsustainabilitybenchmarksarenotwelldefinedforahighbioenergydemandfutureandexistingcertificationsystemsmayneedmodificationstoaddressmultipleresourcevalues.

iNTRoDucTioN

TheUnitedStatesisthelargestconsumerofpetroleumproducts,consumingabout19.5millionbarrelsperdayin2008(EnergyInformationAdministration2009),withasignificantportionimportedfrompoliticallyunstableregionsoftheworld.Thisrelianceonimportedfossilfuels,coupledwiththeirassociatedgreenhousegasemissions,hasledtoeconomic,socialandenvironmentalconcerns.Bioenergymayoffsetfossilfueluse,diversifyenergysources,reduceemissions,andprovidesocioeconomicbenefitsintheform

Chapter 10. Forest Biomass-Based energy

214The Southern Forest Futures Project

ofadditionalincomeandnewjobs.BioenergyfromwoodybiomasscouldcontributebyincreasingU.S.renewableenergyresources,reducingcompetitionbetweenagriculturalcropsdestinedforfoodandthoseforfuelproduction(Hillandothers2006),andperhapsimprovingtheconditionofsomeforests.Someanalysts,forexampletheManometCenterofConservationSciences(2010)intheiranalysisofwood-basedbioenergyinMassachusettsraisedoubtsaboutthegreenhousegasmitigationpotentialofforestbioenergy.Others,e.g.,Lucier(2010)andO’Laughlin(2010),challengethesefindings.IntheSouth,somestudies,e.g.,Dwivediandothers(2011),indicatethatsouthernpinebasedenergycouldreducegreenhousegasemissionsascomparedtousingfossilfuels.

Althoughhistoricallylimitedtoresiduesfromtheproductionofwoodproducts,biomasscouldbesourcedfromloggingresidues,standsdamagedbynaturaldisturbances(suchaswildfire,pestoutbreaks,andhurricanes),small-diametertreesthinnedfromplantationsandotherforests,andenergycropssuchaseucalyptusandpoplar;thesesourceswouldlikelybetappedaswoodybioenergymarketsbecomecompetitive.Athighenoughprices,evenmerchantabletimbercouldbedivertedtobioenergyuses.Hughes(2000)suggeststhatthecombinationofforestbioenergyplantationsandcontinueduseofwoodresiduesfromforestproductindustriescouldsupply7to20percentoftheU.S.electricitygenerationinthefuture.

Manypineplantationsestablishedtosupplypulpwoodforpaperandengineeredwoodproductsareoverstockedandthereforesusceptibletowildfiresandpestattacks(GanandMayfield2007a).Forexample,nearlyhalfofover1.1millionacresofnearlypurepinestandsareatriskfromsouthernpinebeetleinOklahoma(OklahomaDepartmentofAgricultureFoodAndForestry2008).Wood-basedbioenergymarketscouldincreasethinningandremovals,therebyreducingtheserisks(Belangerandothers1993,GanandMayfield2007a,NearyandZieroth2007,Speight1997).Schmidtandothers(2002)estimatedthat2.7billiondrytonsofforestbiomassneedstoberemovedthroughforestfuelreductiontreatmentsintheSouth,about20milliondrytonsannually.Furthermore,wood-basedbioenergymarketswouldimproveprofitabilityforlandownersintheSouth(Nesbitandothers2011,Susaetaandothers2009).Furthermore,southernersappearwillingtopaymoreforcleanersourcesofenergysuchaswoodbasedbiofuels(Susaetaandothers2010).

Federalpoliciessuchasthe2002FarmBill,2005EnergyPolicyAct,2007EnergyIndependenceSecurityAct,and2008FarmBillhavespecificallyencouragedtheproductionofcellulosicbiofuelssuchasthoseproducedfromwood,rangingfromgrantsandloanstotheestablishmentofrenewablefuelstandards(15.5billiongallonsin2012,and

36billiongallonsby2022ofwhich21billiongallonsmustbecellulosic).Federallawprovidesdifferingdefinitionsofacceptableforestbiomassforbioenergy.Forexample,underthe2007EnergyIndependenceSecurityActbiomassfrompubliclands,municipalsolidwaste,plantationsestablishedaftertheenactmentoftheAct,‘oldgrowth’or‘mature’forests,andmostotherwoodybiomass(exceptforslashandpre-commercialthinning)isexcludedfromprivateandnon-industrialforests(NIPFs)landowners.The2008FarmBillontheotherhandislessrestrictive,asitallowsforbiomassderivedfromFederallandsandotherforests(i.e.,nottreeplantations)asbiofuels.TheAmericanCleanEnergyandSecurityActof2009(H.R.2454),aspassedbytheHouseofRepresentatives,soughttocreateabroadeneduniversaldefinitionofrenewablebiomassthatappliestotheRenewableFuelStandard,andanationalRenewableElectricityStandard.Wefollowedanon-restrictivedefinitionofbiomasswhilesimulatingsupplyvariationsandsouthernforestsandconsideredthatabovegroundbiomassonprivateforestlandsintheSouthcouldbeusedforenergyproduction.Thisisbasedontheassumptionthatpolicywouldnotrestricttheallocationofforestbiomasstobioenergyuses.

Thischapteranalyzesthepotentialeffectsoftheemergenceofabioenergymarketonsouthernforests,forestowners,traditionalforestproductindustries,andecosystemintegrityandservices;withemphasisonthefollowingkeyissues:

•Howmarketsforwoodforenergyproductionmightevolveandpotentialimplicationsfortraditionalforestproductindustriesandlandowners

•Thestatusofcurrentandpotentialtechnologiesthatcanhelprealizelarge-scaleproductionofwoodybioenergy

•Howbioenergypoliciescouldimpactforestlandownersandforestindustry

•Effectsofwoodybioenergymarketsonforestecosystemshealth;benchmarksforsustainability

meThoDS

Wesurveyedtheliteraturetoaddressquestionsabouttechnologydevelopment,bioenergypolicies,andsustainability,andwedevelopeddetailedmodelingtoprojectmarketchangesandincorporateananalyticalcomponentintotheresultsoftheliteraturesurvey.

Toassesstradeoffsbetweenthetraditionalforestproductindustryandthewoodybioenergyindustry,weevaluatedwoodybiomasssupplyvariationthroughtimeandassociatedprice,inventory,andremovalresponsesfollowingRossiandothers(2010).Inthefaceoffuturecompetitionforrawmaterialsandthepotentialcompetitiveadvantagethatpolicyincentiveswouldprovidetowoodybioenergysector,thistradeoffanalysiswasconsidered

criticalforthefutureofsouthernforests(Wearandothers2009).Manyauthorshaveexploredthisissue;whathasbeenlackingisasystematicanalysisofregionaltrendsthatassesseswoodybiomasssupplyinresponsetovariationinfutureconsumptionforenergy.

WemodifiedtheSubregionalTimberSupply(SRTS)model(Abtandothers2000),toassessthepotentialeffectsofbioenergyconsumptiononwoodproductsmarkets.Themodelprovidedprice,inventory,andremovalresponsesfordifferentwood-for-energyconsumptionandsupplyscenarios;andallowedustoestimateimpactsontraditionalforestindustriesandlandowners.

Ofthelarge-scalemacromodelsavailableforconductingouranalysis(Adamsandothers1996;DeLaTorreUgarteandRay2000;DeLaTorreUgarteandothers1998,2006),theSRTSmodelistheonlyonethattreatsstandingtimberasapotentialsupplyofbioenergyanddefinesregionsinawaythatiscongruentwithForestInventoryAnalysis(FIA)surveyunits.Becauseitincorporatesaninventoryprojectionmodelintoatimbermarketmodelframework,itsprojectionsarebasedonsupplyanddemandinteractions.Itallowsoflargerdiametersawtimbertobedowngradedfornonsawtimber(largelypulpwooduses)inresponsetopricesignalsandisfamiliartomanyforestindustryanalystsandStateforestryagencies,havingbeenusedtomodeltimbersupplyandpricesintheNortheast(Sendekandothers2003)aswellastheSouth(Binghamandothers2003,PrestemonandAbt2002).Ithasalsobeenusedtoassesstheinfluenceofnonmarketvaluesontimbermarketdecisionsbynonindustrialprivateforestlandowners(Pattanayakandothers2005),theeffectsofwoodchipmillsontimbersupplyinNorthCarolina(Schabergandothers2005),theimpactsofRenewableEnergyStandardspolicyimplementedinNorthCarolina(Galikandothers2009),andbioenergydemandsinSouth(AbtandAbt,inpress).

TheSRTSmodelestimatestwoforestproducts,sawtimberandpulpwoodproductallocationsforsoftwoodsandhardwoods.Itsequations—definedthroughsupply,demand,andinventoryelasticityvalues—areusedtoprojectthemarket-clearingpriceandquantitylevels,whichinturnareusedtoallocatesubregionalharvestingandtoprojectthenextperiod’sinventoryvalues.AGoalProgramthencategorizesthetotalwoodrequirementbymanagementtypeandageclassandmakesallocationstosubregions,owners,andproducts.

Theseparationofproductsandinventoryintermsofsawtimberandpulpwoodisbasedonuser-specifieddefinitionsthatallocatemostofthelargestdiameterwoodtosawmills,apercentofthelargestdiameterandallofthemediumdiameterwoodtopulpwood,andthesmallestdiameterwoodtotheforestfloor.Withtheseallocations,a

productmixiscalculatedforharvestinanymanagementtypeandageclasswiththeobjectiveofdefiningtheprojectedremovalmixfortheregion/ownerinawaythatfollowshistoricalharvestpatternsofexistingremoval-to-inventoryintensities.Forpartialharvests,themodeldefinesastockingtarget(volumeperacre)foreachmanagementtypeandageclass;ifthecurrentstockingisgreaterthanthetarget,theharvestisconsideredathinning.Afterthevolume-per-acretargetisreached,theharvestconsideredfinalandacresarereturnedtoageclasszero.Undermostcircumstances,thisapproachensuresthataveragestockingisclosetotarget(historical)levelsthroughouttheprojection(AbtandAbt2010;Abtandothers2000;Abtandothers2009,2010;PrestemonandAbt2002;Rossiandothers2010).

WemadeanumberofmodificationstotheSRTSmodel(fig.10.1)toassesstheeffectsofwoodybioenergyindustryonfutureprices,harvests,andinventoriesoffourwoodproductcategories—softwoodsawtimber,othersoftwoods,hardwoodsawtimber,andotherhardwoods—derivedfromprivateownersofforestland(publicforestlandshavebeenexcludedfromthestudy,becausepubliclandharvestdecisionsarenotnecessarilyprice-responsive).AppendixBcontainsdescriptionsoftheseproductsandtheallocationofconsumptionofeachforwoodybioenergyproduction.Themodelallocateswoodybiomassconsumptionamongproductgroupsbasedonthepricevariations.Pineplantationscanbeharvestedforpulpwoodasearlyas10yearsofage.Todeterminetheavailabilityofharvestresiduals,weappliedutilizationpercentagesthatareconsistentwithtimberproductoutputdatafortheSouth(Johnsonandothers2009).

Alternativerunsofthemodelallowedustoexaminehowmanagementorgeneticimprovementswouldaffectproductivity.Ratherthanapplyingidenticalresponsesacrossthefiveforestmanagementtypes(pineplantation,naturalpine,oak-pine,uplandhardwood,andlowlandhardwood),wemodifiedthemodelsothatresponsescanbedisaggregatedacrossthem.

WithintheSRTSmodel,theareaoftimberlandwillchangeinresponsetotherelativerentsofcropandforestuses.Wedefinedtimberrentsasweightedaveragesofsawtimberandnonsawtimberprices,withweightingspecifiedbythepresentvaluedifferenceinincomebetweenthetwoproductswhileagriculturalrentsareheldconstant.Becausewoodybioenergymarketsareexpectedtoimpactthenonsawtimbersectormorethanthehighvaluedsawtimbersector(Aulisiandothers2007),themodelallocateslessweighttosawtimberprices.

Weusedtheaggregatedemandinformationgatheredfromeachsouthernwood-basedindustry—forestproducts,woodybiomass-basedelectricity,woodybiomass-basedliquidfuels,andwoodpellets—toprojecttheallocationofharvested

timber.ThemodifiedSRTSmodeldefinesamarketsimulationmodelbasedonempiricalrelationships—demandandsupply,price,landuse,reforestationandinventory—forwoodybiomassandtraditionalforestproducts.Akeyassumptionisthatforestownersarepriceresponsiveanddecisionstoinvestorharvestaremadeaccordingly.

consumption/Demand Scenarios

Ourconsumptionscenarioswerebasedonthethreeprincipalusesofwoodybiomassforenergy:aspowerforelectricitygenerationthroughcombustionorgasificationprocesses,co-firingwithcoal,orincombinedheatandpowersystemsinindustrialfacilities(EnergyInformationAdministration2010b);asliquidfuel(cellulosicethanol)thatcanbeblendedwithconventionaltransportationfuels(EnergyInformationAdministration2010b);andasbioproductssuchashighly

compactwoodpelletsusedforheatingpurposes(SpelterandToth2009,appendixB).

Theamountofwoodconsumedforelectricity,liquidfuels,andpelletsdefinesthetotalrequirementformeetingbioenergyconsumptionprojections.Thiscanbemetwithwoodfromadditionalharvestingorwithresidualsandotherwoodwaste.Althoughharvestingunutilizedresidues(discardedtreetopsandlimbsgeneratedduringtheharvestingprocess)mightprovideaportionofwoodybiomass-basedenergyconsumption,recentanalysis(Galikandothers2009,Rossiandothers2010)indicatesthatmerchantabletimberisalsolikelytoberequired.Inaddition,woodybiomass-basedenergydemandfiguresneedtoaccountforurbanwoodwastesthatcouldbeusedforenergyproduction(Rossiandothers2010).BecausetheSRTSmodeldealsonlyinharvestedwood,webackedurban

Figure10.1—MethodologydiagramforthemodifiedSubregionalTimberSupplymodelusedtoprojectlevelsandeffectsofwoodybiomassconsumedforenergyfortheSouth.

Forest inventory plot data

Growth regressions Inventory and harvest data for plots

Timberland acreage change Price sensitive land use model

inventory proportion in term of d.b.h.Species, product, percentage degrade from sawtimber to nonsawtimber

Productivity increaseSubregion, product, owner, age class

Goal programEquilibrium harvest by region, owner and product are allocated to forest type, age class

harvest Subregion, product, owner

Starting acres, growth and harvest species, subregion, owner, age class, management type

inventory accounting Growth and removals

inventory available for harvest Subregion, product, owner

Product price Determined by interaction of aggregate demand and supply

Woody biomass for energy consumption scenarios Net of urban wood waste

Demand scenariosDownward sloping forest industry demand plus vertical demand curve for bioenergy

elasticity ValuesSupply elasticities based on Uinited States Forest Product model runs and demand elasticities (Abt and Abt 2010, Abt and others 2010)

wasteandothersourcesofnonharvestedwoodybiomassoutoftheconsumptionestimates,anddefinedtheremainderasharvested-woodconsumption(includingharvestingresidues)forwoodybiomass-basedenergy;appendixBshowsthemethodusedtoestimatetheharvestingresiduesandurbanwoodwastethatcanbedivertedforenergyproduction.Demandpriceelasticity,whichlikeinventorysupplyelasticitycanvarybyproduct(LiaoandZhang2008,Pattanayakandothers2002),wasassumedtobe-0.5forallfourSRTSproducts(softwood/hardwoodsawtimberandnonsawtimber),thesameassumptionusedbyAbtandAbt(2010)fortheirSouthwidetimbersupplyanalysis.

Demandforwoodybiomassforenergycanalsobemetwithfast-growingshortrotationwoodycropspecies,amongthemyellow-poplar(Populusspp.),willow(Salixspp.),cottonwood(PopulusfremontiiL.),sweetgum(Liquidambarstyraciflua),sycamore(Platanusoccidentalis),blacklocust(Robiniapseudoacacia),silvermaple(AcersaccharinumL.),andeucalyptus(Eucalyptuscinerea);thesespecieshavebeenidentifiedbytheU.S.DepartmentofEnergyaspotentiallyviableforenergyproduction.WefollowedtheapproachoutlinedbytheEnergyInformationAdministration(2010a)andassumedthatshortrotationwoodycropswouldgrowlargelyonnonforestedlands(agriculturalorpasturelands)andpartiallyoffsetincreasedfuturewoodrequirements.Weassumedoftheoffsettobe10percentby2050andremovedthismaterialfromwoodybiomassdemandsforbioenergy(ineffect,treatingshortrotationwoodycropsasapartoftheagriculturalsector).

Althoughwedescribeourassumptionsasconsumptionscenarios,itisimportanttounderstandthattheyarenotdemandprojections,aswehavenotspecifiedprice-responsivedemandrelationshipsforwoodybiomass.Theconsumptionprojectionisessentiallyaverticaldemandcurveaddedtothedownwardslopingdemandcurvesfor

traditionalforestproductsforeachperiodusingmodifiedEnergyInformationAdministration(2010b)projections.Asacounterfactual,wealsointroducedaconstantconsumptionscenariowithnoforestbiomass-basedenergymarketandrantheSRTSmodeltodefinetheamountofwoodybiomassthatwouldberequiredbytraditionalforestindustryabsentabioenergymarket.Subsequentyearsareheldconstantattheoriginal2010levelontheassumptionthatthetraditionalforestproductindustrywillnotincreasewoodconsumptionbeyondwhatwouldbeexpectedattheconstantpricelevelestimatedbySRTS.

Toaccountforuncertaintyinbioenergytechnologies,demands,andpolicies,weconsideredthreeconsumptionscenariosthatwelabelhigh,medium,andlow.Thelow-consumptionscenarioassumesthat7.74percentoftotalelectricitywillderivefromrenewablesourcesbasedonEnergyInformationAdministration(2010b)referencecaseprojections.Themedium-andhigh-consumptionscenariosassumethat20percentoftotalelectricityconsumptionderivesfromrenewablesources;inthehigh-consumptionscenario,woodybiomassisassignedahigherpercentageofthetotalelectricitygenerationfromrenewablesources(table10.1).

Biomass Supply

TheSRTSmodelaccountsforforestinventorychangesandtimberremovalsbasedonhistoricalforestinventory(FIA)data.However,southernforestproductivityhasseenathree-foldoverthelast50yearsfromadvancementsinmanagementandgeneticimprovements(Foxandothers2007).Siryandothers(2001)projectedthatproductivitygainsforpineplantationscouldbeashighas100percentofempiricalFIAdata(usingdatafromthelate1990s)overthenext50years.PrestemonandAbt(2002)assumeda75-percentproductivitygaininsouthernpineplantationsfrom2000to2040.Withstrongmarkets,otherforest

Table 10.1—Allocation of woody biomass for energy production under woody biomass consumption scenarios by 2050

Woody biomass consumption scenario electricity liquid fuels Wood pelletsLow Based on Energy Information

Administration (2010b) projectionsProvides 30 percent of renewable energy sources

Based on Spelter and Toth (2009)

Medium Increases to 20 percent of renewable energy sources by 2050, with share of total electricity sources remaining the same as in the low-consumption scenario

Increases to 50 percent of renewable energy sources by 2050, with 30 percent of total liquid energy coming from woody sources

Increases by 25 percent, 2015–50

High Increases to 40 percent of renewable energy sources by 2050, with 20 percent of total electricity coming from woody sources

Increases to 50 percent of renewable energy sources by 2050, with 40 percent of total liquid fuel coming from woody sources

Increases by 50 percent, 2015–50

managementtypesmightexperienceproductivitygainsduetosilviculturalimprovementsorimprovementsinmanagement,althoughnotashighaspineplantations.

Wedevelopedsupplyprojectionstoexaminealternativetrajectoriesofproductivityincreasesthrough2050.Intheseprojections,productivitygrowthisappliedtoeveryacreeveryyear,sothatovertimetheimprovedsilviculturalpracticesonexistingornewforeststandsorgeneticimprovementsofnewplantationsresultinanaggregategrowthresponse.Forthe“pineproductivity”strategy,weassumedthatpineplantationproductivityincreasessteadilyuntilitreaches100percent,whiletheproductivityofotherforestmanagementtypesisheldconstant.Forthe“allproductivity”strategy,weassumeda100-percentpineplantationproductivityincreaseanda25-percentincreaseforothertypes.Forthe“lowproductivity”strategy,pineplantationproductivityincreasesby50percentandtheproductivityofothertypesincreasesto25percent(tables10.2and10.3).Theseassumptionsareinlinewithhardwoodfieldtrialsthatreportgrowthresponsesbetween17and33percentafterstemdensityreduction,herbaceouscompetitioncontrol,andfertilization(Siryandothers2004).

WithinSRTS,removalsaretreatedasafunctionthatrespondstochangesintheproductpriceandthetotalbiomassinventory.Thetimbersupplyelasticitywithrespecttoinventoryhasbeenassumedtobe1.0forallproductsandowners.Forown-priceelasticitiesoftimbersupplies(elasticityofproductdemandwithrespecttotheirownprice),weusedtheaveragebootstrappedvaluesforA1BandB2cornerstonefuturesdescribedinchapter9,whichvaryacrossproductsandyearsandrangefrom0.18to0.32.

ReSulTS

market Analysis

By2050,woodybiomassconsumptionisprojectedtorangefrom150.16milliongreentonsforthelow-consumptionscenarioto235.88millionforthemedium-consumptionscenarioand316.12millionforthehigh-consumptionscenario(fig.10.2).Theamountofurbanwoodwasteamountstoabout12.72millionin2010andtrendsslightlyupwardthroughouttheprojectionperiodtoreach20.08millionby2050.Incontrast,theprojectionofbiomassrequirementfortheforestproductsindustry(heldconstantthroughtheprojectionperiod)isabout278.46million.By2050,thebiomassrequirementforenergyreachesabout54percentoftheforestproductsrequirementforthelow-consumptionscenarioand85percentforthemediumscenario.Forthehigh-consumptionscenario,thebioenergyrequirementexceedstheforestproductsrequirementby2045

andis13percentgreaterthantheforestproductrequirementin2050.

Addingurbanwoodwasteandtheforestbiomassconsumptionrequirementin2050wouldbringdemandto170milliontonsforthelow-consumptionscenario,256millionforthemediumscenario,and336millionforthehighscenario.TheseestimatesarecomparabletootherestimatesintheliteratureifweassumethatthatsupplyofwoodfromtheSouthmirrorsthenationalharvestshare—i.e.,approximately57percentofnationalharvestasperHansonandothers(2010).

Withoutaccountingformillingresidues,Milbrandt(2005)estimatedthatjust86milliontonsofwoodybiomassisreadilyavailableforenergyproduction(roughlyhalfoftheprojectionforthelow-consumptionscenario).Walsh(2008)estimatedthatapproximately121milliontonsofforestandmillresiduescouldbesuppliedatapriceof$100perdryshortton,comparedtoestimatesof154milliontonsbyKumarappanandothers(2009).TheEnergyInformationAdministration(2007)estimatedthatapproximately414milliontonsofwoodfromSouthmightberequiredtomeettheFederalgoalof25percentofrenewablefuelandelectricitystandards.Sample(2009)suggestedthatthisdemandfigurecouldbemuchhigher,estimatingtheyearlyrequirementat992milliongreentons.Perlackandothers(2005)estimatedthat420milliongreentonsofwoodresourcescouldbeannuallymadeavailableforenergyproductionfromsouthernforests.

Consumptionincreasesofthismagnitude(ataminimum,a54percentincreaseintimberharvesting)couldimplyastructuralchangeinforestproductsmarkets.Analysisoftraditionalwoodproductsmarkets(chapter9)indicatesthatthesupplyofbiomasscouldgrowbyabout43percentundercurrentlevelsofproductivitywithoutincreasedscarcity,largelybecauseofdecliningdemandsforwoodproducts.Withplantationproductivitygrowthatabout50percentby2060,forestbiomassoutputcouldexpandbyasmuchas70percentwithoutsubstantialimpactsonmarketscarcity.

Toidentifythemarketimplicationsofthethreeconsumptionscenarios,werantheSRTSmodel,whichprovidesprojectionsoftheremovalsfromgrowingstockresultingfromtimberharvestingbutdoesnotdistinguishamongfinalproducts.Todeducetheimplicationsofincreasedwoodybiomassrequirementforthetraditionalwoodproductsindustry,wedisaggregatedtheremovalsprojectionsintoharvestingresidues,additionalremovalsthatcouldnothaveoccurredwithoutwoodybioenergymarkets,and/ordisplacementfromtraditionalwoodproductindustry.

Toensurethatsomeslashisleftontheground,weconstrainedtheSRTSmodelsothatnomorethan

Table 10.2—Simulations of supply responses when woody biofuels at three consumption levels are matched with four productivity strategies, 2050

Woody biomassconsumption scenario Productivity strategy Details

Medium Only improve pine plantation productivity Productivity of pine plantations doubles; no change in other forest management types

Medium Improve productivity on all management types

Productivity of pine plantations doubles by 2050 and productivity of other forest management types increases by 50 percent

High Only improve pine plantation productivity Productivity of pine plantations doubles; no change in other forest management types

High Improve productivity on all management types

Productivity of pine plantations doubles and productivity of other forest management types increases by 50 percent

Short rotation woody crops Improve productivity on all management types and expand short rotation woody crops

Short rotation woody crops growing on agricultural or pasture land offset 10 percent of wood energy demand; productivity of pine plantations doubles and productivity of other forest management types increases by 25 percent

High Low productivity Productivity of pine plantations increases by 50 percent and productivity of other forest management types increases by 25 percent

Table 10.3—Modified subregional timber supply model assumptions

Assumption Scenario/Strategies DetailsWoody biomass consumption for electricity and biofuels

Low,Medium. High Demand values in million green tons (Energy Information Administration 2010b)

Urban wood waste Low,Medium. High Per capita availability (Carter and others 2007)Harvest residues Low,Medium. High SRTS model run based on Johnson and others (2009) data Forest industry demand Low,Medium. High Auxiliary SRTS run for constant pricesDemand elasticity Low,Medium. High -0.5 for all products (Abt and others 2010)Supply elasticity Low,Medium. High Different annual values for products based on RPA storylinesa Pine productivity Pine productivity strategy Pine productivity increases by 100 percent by 2050

All productivity values All productivity strategy Pine productivity increases by 100 percent and other forest type increases by 50 percent by 2050

Low productivity values Low productivity strategy Pine productivity increases by 50 percent and other forest type increases by 25 percent by 2050

Short rotation woody crops Short rotation woody crops

Short rotation woody crops take care of 10 percent of total woody biomass for energy demand by 2050

Forest management type acreage

All scenarios and strategies

Forest land change as compared to agriculture and pasture land, in turn impacting acreage of pine plantations, natural pines, oak-pines, upland hardwoods, and lowland hardwoods (Abt and Abt 2013, Hardie and others 2001)

Timber rent All scenarios and strategies

Weighted average of pulp and sawtimber prices. Model allocates weights, with pulpwood gaining more weight in total rent calculations

Degradation of sawtimber for pulp use

All scenarios and strategies

Percentage allocation of sawtimber that can be used as pulp (Abt and others 2010)

Pulp diameter range All scenarios and strategies

<9 inch softwood<13 inch hardwood

Sawtimber diameter range All scenarios and strategies

>9 inch softwood>13 inch hardwood

Forest products All scenarios and strategies

Sawtimber softwoods, other softwoods, sawtimber hardwoods, and other hardwoods

aPersonal communication. 2010. David N. Wear, Project Leader, Center for Integrated Forest Science, Southern Research Station, U.S. Department of Agriculture Forest Service, Raleigh, NC 27695.

reachingfivetimesthe2007levelforsoftwoods,andeighttimesthe2007levelforhardwoods.Inventoryandharvestlevelsforsoftwoodsarehighercomparedtolow-orno-consumptionscenarios,butlowerthanthemediumscenario;forhardwoods,inventorylevelsaremuchhigherthantheno-orlow-consumptionscenariosandremovalsarehigherthanallotherscenarios.Thepulpindustryisadverselyimpactedassignificantsuppliesaredivertedtoenergyproduction(fig.10.12).Thebioenergyrequirementisnotmetbynewremovals,pulpwood,orharvestingresidues,resultinginacompleteeliminationofforestindustrydemandforhardwoodsby2037followedbysoftwoodsin2043.

Theprices,inventory,andremovallevelsofsawtimberaresimilartotheotherconsumptionscenarios.Theindustrywouldexperienceasignificantimpactas91milliongreentonsofsawtimberisdivertedtoenergyproduction.Theincreasedacreageofpineplantationsmightresultinsomeofthesoftwoodtimbermovingtosawtimberdiameters.Significantamountsofhardwoodsawtimberarealsodivertedtoenergyproduction.

Privateforestacreageincreasesby9percentfrom175.39millionacresin2010to191.6millionacresin2050(fig.10.13),21percenthigherthantheno-consumptionscenario.Allforestmanagementtypesexceptnaturalpinesincreaseinareaby2050,ledbya33percentincreaseinpineplantationacreage.Initialacreagedeclinesforuplandandlowlandhardwoodsandoak-pinesarereversedafter2027,resultingina2-percentnetincreaseby2050.

Supply Adjustment Strategies

Increasedconsumptionforwoodbyanewwoodybioenergyindustrycanbeexpectedtoresultinthesupplysideadjustmentssuchastheuseofshortrotationwoodycropsandtheincreasedproductivitystrategiesdescribedbelow.

Productivity increases limited to pine plantations—Anincreaseinpineplantationproductivitywoulddomoretodampennonsawtimbersoftwoodpriceincreasesinthemedium-andhigh-consumptionscenarios(fig.10.14)thanintheno-andlow-consumptionscenarios(whichdonotstimulateproductivitygains),withpricesfallinguntilthelate2020sbeforebeginningtoincreaseagain.Inventoryandremovalslevelsarealsohigher.Theincreaseinproductivityofpinesalsolowerspriceresponsesforhardwoods,largelybecauseincreasedsoftwoodinventoriesfulfillthedemandsforbioenergy.

Figure10.15showsprice,inventory,andremovalprojectionsforsawtimberundermedium-andhigh-consumptionscenarios.Forsoftwoodsawtimber,productivityincreasesinpineplantationsalsoresultinlowerpricesandhigherinventoryandremovalsunderbothincreasedproductivity

strategies,withthemedium-consumptionscenarioprovidingagreaterpricedampeningeffectthanthehigh-consumptionscenario.Pricetrendsarethesameforhardwoodsawtimberbutthedecreasesarelessextreme.Higherinventorylevelsresultfromtheincreaseinproductivity,whichreducesprices.Theimpactonthesawtimber-usingindustryisalsoreduced.Forexample,inthehigh-consumptionscenario54.5milliongreentonsofsawtimberfrombothhardwoodsandsoftwoodsisdivertedtoenergyuseinthepineproductivitystrategyascomparedto91milliongreentonsassociatedwithnoproductivityincreases.Thedecreasedimpactontheforestindustryisduetoexpandedremovalssupportedbyincreasedproductivity.

Productivityincreasesresultinhigherremovalsandlessdisplacementfromforestindustry(fig.10.16).Thesoftwoodsbeingusedbyforestindustryarestillcompletelydivertedforenergyproductioninthehigh-consumptionscenario,butthisoccurslater.

Forestmanagementtypetrendsaresimilarforthemedium-andhigh-consumptionscenarios,withincreasesinpineproductivityresultinginlowerlevelsofprivateforestacreageforbothscenarios(fig.10.17)—9.6percentforthemedium-and10.2percentforthehigh-consumptionscenario—albeitmuchhigherthanfortheno-consumptionscenario.Becauseproductivitygainsarelimitedtosoftwoods,ahighershareofthewoodrequirementsforwoodybioenergymarketsismetbysoftwoodsthanhardwoods.Acreagedeclinesacrossallfivemanagementtypes,withthehighestrateofdeclineinpineplantations.

Productivity increase extended to all management types—Aproductivityincreaseforallforesttypesresultsinprice,inventory,andremovalresponsesthataresimilartothoseobservedforincreasesinpineplantationsalone,theonlydifferencebeinginthemagnitudeofchange.Softwoodpriceislowerandinventoryandremovallevelsarehigher(fig.10.18).Hardwoodtrendsformedium-andhigh-consumptionscenariosaresimilartothesoftwoods,withlowerpricesandhigherinventoriesandremovalsthanwasprojectedforplantedforesttypesalone(fig.10.19).

Nonsawtimbersoftwoodsusedbyforestindustryarestillcompletelydivertedtoenergyproductioninthehigh-consumptionscenario,buttheimpactonthesawtimber-usingindustryisreduced.Forexample,inthehigh-consumptionscenario,36.38milliongreentonsofsawtimberfromisdivertedtoenergyuseascomparedto53.5milliongreentonswithpineproductivityaloneand91milliongreentonswithnoproductivity(fig.10.20).Higherremovalsofsawtimberareattributedtounharvestedpulpwoodtimbermovingintothehigherdiametersawtimberclass.Theproductivityincreasesthereforeresultinhigheracreageandhigherinventoryattheaggregatelevel.

Comparedtoplanted-pine-aloneproductivitystrategy,thisapproachincreasestotalforestareaforbothmedium-consumptionscenario(165.52millionacres)andthehigh-consumptionscenario(175.01millionacres),withacreageincreasesforallforestmanagementtypesexceptpineplantations(fig.10.21).

Low productivity increase—Lowerproductivityincreasescombinedwithmedium-andhigh-consumptionscenariosresultinprice,inventory,andremovalresponsessimilartotheallproductivityincreasestrategies(figs.10.22and10.23).

Thesupplyresponseofthelowproductivitystrategyfailstooffsetthewoodybiomassrequirements,withallnonsawtimbersoftwoodbeingdivertedfromforestindustrytoenergyproductionunderthehigh-consumptionscenarioandasignificantamountdivertedunderthemedium-consumptionscenario(fig.10.24).Theimpactonthesawtimber-usingindustryishigherthanfortheallproductivityorpineproductivitystrategies,butlowerthanifnoproductivitymeasuresweretaken.Forexample,inthehigh-consumptionscenario,57.18milliongreentonsofsawtimberisdivertedtoenergyuseascomparedto36.38milliongreentonsfortheallproductivitystrategy,53.5milliongreentonsforthepineproductivitystrategyand91milliontonsifnoproductivitymeasuresweretaken.

Privateforestacreageishigherthanfortheothertwoproductivitystrategies.Forestlanddecreasesfrom175.39millionacresin2010to172.47millionacresforthemedium-consumptionscenario,butincreasesto181.85millionacresforthehigh-consumptionscenario(fig.10.25).Plantedpineacreageincreasesmoreandotherforesttypeacreagedeclineslessascomparedtothepineproductivityorallproductivitystrategies.

Productivity increases on short rotation woody crops—WeranthemodeltosimulatetheresultsofahighproductivitystrategycoupledwiththeemergenceofshortrotationwoodycropsintheSouth.Inventoriesandremovals(fig.10.26)arehigherthanfortheallproductivitystrategycoupledwithhighconsumption(similartoresultsfromasubsequentruncombiningalowproductivitystrategywithshortrotationwoodycrops).Softwoodandhardwoodinventoriesarehighercomparedtotheno-consumptionscenario.Priceincreasesforallproductsaredampened.

Theseresultsalsosuggestthatthepulpindustrywouldstillfaceadverseimpacts,asmerchantablewoodfromforestindustrywouldbedivertedtoenergyproduction(fig.10.27).However,thecombinationofincreasedsuppliesfromshortrotationplantationsandfromproductivitygainsonexistingforestswouldprovidemostofthe‘additional’sawtimberneededforenergyproduction,resultinginjust26.7milliontonsdivertedfromforestindustry.Thehigherlevelsof

aggregateinventoryandremovalscounterthenotionthatdivertingwoodforenergywouldnecessarilyleadtoinventorydeclines.Forestacreageislowerthanfortheotherproductivitystrategies,buthigherthantheno-consumptionscenarios(fig.10.28).

Technologies

Consideringthepotentialavailabilityofwoodthatcouldbeusedinthetraditionalforestproductindustriesandwoodybioenergyindustries,itisimportanttodeterminehowcurrentandlikelysuitablewood-to-energyconversiontechnologiescanpotentiallyimpactthefutureofsouthernforests(forexample,howtechnologicalpreferencestowardsaparticularspeciesmightincreaseitsprice,producingchangesininventoryandremoval).DwivediandAlavalapati(2009)foundthatabroadspectrumofstakeholdersviewconversiontechnologiesasoneofthemainweaknessesforthedevelopmentofforestbiomass-basedenergyintheSouth.Inaddition,Nesbitandothers(2011)foundthatundercurrentlevelsoftechnology,slashpineethanolisnotafinanciallyviablecompetitorforfossilfuels.Theyfoundthatunitcostofproducingethanolfromslashpine(Pinuselliottii)throughatwo-stagedilutesulfuricacidconversionprocess,andasynthesisgasethanolcatalyticconversionprocesswasestimatedtobe$2.39pergallonand$1.16pergallonrespectively.Ifadjustmentsarebasedonthelowerenergycontentofethanolrelativetogasoline(OakRidgeNationalLaboratory2008),thecostofanenergyequivalentgallonofethanolincreasesto$3.55and$1.74pergallonforthetwoconversionprocesses,respectively.

Woodybiomasscanbeconvertedintoenergyusinganumberofdifferentprocesses.Broadlyspeaking,wood-to-energyconversiontechnologiescanbegroupedintotwomaincategories:thermaltechnologies—suchasco-firingandcombinedheatandpower,directcombustionusingwoodpelletsandwoodchips,gasificationandpyrolysis—andbiochemicalprocesses.

Co-firing and combined heat and power—Combustionofwoodybiomasscanbeappliedtoproduceheatandelectricity,particularlyinindustrialandresidentialsectors.Threemajortechnologyoptionsarebeingdevelopedforproducingelectricityandheat.Theseare:settingupdedicatedcellulosicpowerplants,co-firingbiomassinexistingcoalplants,anddevelopingcombinedheatandpowerplants.AlltheseoptionsarebeingexploredintheSouth,rangingfromadedicatedpowerplantthatwilluseurbanwoodwaste,woodprocessingwastes,andloggingresiduesinGainesville,Floridatoplantsthatblendbiomasswithcoalorinjectbiomassseparatelyintoboilers.Currently,27co-firingplantssupplyabiomass/coalco-firingcapacityof2,971megawatts.Virginiaistheleaderinthenumberofco-firingplantsandcapacityintheSouth,followedbyNorth

aremoreexpensiveandhavelowerethanolyields,buttheyalloweachtobecarriedoutatitsoptimaltemperature(Jacksonandothers2010).

Althoughseveralhydrolysistechniqueshavegainedmomentuminthelastdecade,efficiencyandcostissueshavehinderedcommercialviability.Anintegratedenzymaticprocesscouldcontributetocostreductions,butithasnotyetmovedoutofthelaboratorystage.

TheDepartmentofEnergyset2012commercializationtargetsforresearchanddevelopmentwhichincludedreducingthesellingpriceofethanolby2012to$1.07ratherthan$1.61pergallon,increasingethanolyieldperdrytonfrom56gallonsin2005to67gallonsin2012,andreducinginstalled2005capitalandoperationalcostsby35.5percentand65.3percentrespectively.Forfermentationbasedethanolproduction,thetargetistoincreaseyieldfrom65gallonspertonin2005to90gallonspertonin2012.Thetargetalsosetsfeedstockcosttargetfor2012as$35perdryton.Effortsareongoingtoachievethesetargets,butnotechnologicalbreakthroughhasyetachievedtheselarge-scaleproductiontargets.TheRangeFuelplantinSoperton,GeorgiaproducedwastewoodmethanolinAugust2010,andcurrentlyproducingitsfirstbatchofcellulosicethanol.However,theplantisshuttingdownoperationsafterdemonstratingitscellulosicproductiontechnology.Thescaleofbioenergyplantintermsofcapitalandbiomassdemandsfromtheforestlandscapeareissuesthatneedfurtherattention.Ifalargeplantissetup,thenthetransportationcostofprocuringbiomassfromareasfartherfromtheplantsitemightincreaseperunitcostand/orleadtoprocuringlowerqualityfeedstock.Thescaleoftheplantnotonlydependsoncostissues,butalsoonthepurposeforwhichitisbeingbuilt.Forexample,VanLooandKoppejan(2008)suggestthatsmallcombinedheatandpowerplantfacilitieswithlowerconversionefficiency(10percent)canbeusedwhereheatistheprimaryproductwithpowerasthesecondaryproduct,whilefacilities(morethantenmegawatts)generallyhavehigherefficiency(25percent)astheyproduceelectricityastheprimaryproduct.

The Policy environment

Anumberofcurrentandproposedpoliciesandprogramsmayinfluencethefutureofwoodybiomass-basedenergymarketsintheSouth.Someofthesepoliciesaredirectedspecificallyattheexpansionofwoodybiomassuseforenergy,andothersinfluenceindirectlybyfocusingonreductionsofgreenhousegasemissions.

Incentive-basedpoliciesprovidefinancialsupportsuchascost-shares,taxreductions,subsidiesorgrants,andlow-orno-interestloansforprojectfinancing.TheDatabaseofStateIncentivesforRenewablesandEfficiency(2010)reportsthat

policiesforrenewableenergy(includingwoodybiomassforenergy)intheSouthernStatesaregenerallyintheformoftaxrebates,grants,loans,industrysupport,bonds,andperformance-basedincentives.

Regulatoryandsupportmechanismsincludepoliciesthatsetgoals,targets,andlimits;andcompelcertaintypesofbehavior,aswellascreatingsupportiveinfrastructureandfacilitatingpubliceducationaloutreach.Rules,regulations,andpolicies(regulatoryandsupportpolicies)areintheformofpublicbenefitfunds,renewableportfoliostandards,netmetering,interconnectionstandards,contractorlicenses,equipmentcertification,accesslaws,constructionanddesignrules,greenpowerpurchasingguidelines,andgreenpowerpolicies.

Incentive-based policies—Inanefforttosupportmarket-basedsolutions,FederalandStategovernmentshaveintroducedanumberofincentive-basedpolicies.Thisgenerallyresultsinalteringpricesbyassigningamonetaryvaluetosomethingthatwaspreviouslyexternaltomarketforces(Shrum2007).Subsidiesareintendedtoencourageplantingandmanagementactivitiesthatmightpromotefeedstockavailability,andtaxsupportencouragestheuseofrenewables.Supportintheformofgrantsandloansarealsoprovidedtoencouragecleantechnologydevelopmentandadoption.

IncentivesforliquidbiofuelswerefirstinstitutedintheEnergyTaxActof1978,whichprovideda$0.40pergallonexemptionfromthegasolineexcisetaxforblendswithatleast10percentethanol.Thenitwasincreasedto$0.51pergallonbythe1998TransportationEquityActofthe21stCentury.TheAmericanJobsCreationActof2004replacedtheexcisetaxexemptionwithavolumetricethanolexcisetaxcreditof$0.51pergallonuntil2010(reducedto$0.45pergallonbytheFarmBillof2008).TheEnergyIndependenceSecurityAct(2007)providedaproductiontaxcreditof$1.01pergallonforcellulosicbiofuelsthrough2012.ThefollowingsectionsummarizesthecurrentbioenergypoliciesintheSouth.

The2008U.S.FarmBillcreatedanewBiomassCropAssistanceProgram(BCAP)toencouragedevelopmentoflarge-scaleenergycropsthatcansupportcommercial-scalebioenergyproduction.BCAPprovidesincentivestofarmers,ranchers,andforestlandownerstoestablish,cultivateandharvestbiomassforheat,power,bio-basedproducts,andbiofuels.Theprogramsharestheestablishmentcostandmatchescostrelatedtotransportationandlogisticsupto$45pertontoproducerswithuserfacilitiescontracts.Theprogramreducesthefinancialrisktofarmersandforestlandownerstosupplyeligiblebiomassmaterialstoqualifyingfacilities,andcanreducethecostofrawmaterialstothefacility.Thesealsopromoteconservationandstewardshipbyemphasizingthatbiomassiscollectedandharvested

accordingtoanapprovedconservation,orsimilarplantoprotectsoilandwaterqualityandpreservefuturelandproductivity.

RebatesfollowedbyloansarethemostpopularfinancialincentivesintheSouth(table10.4).Federalfinancialincentivesaremainlycomprisedofcorporatetaxrebates,researchanddevelopmentgrants,andloans.Loansandperformance-basedincentivesarethepoliciesmostfrequentlyusedinthe76StatefinancialincentiveprogramsintheSouth.NorthCarolinahasthelargestnumberofStatefinancialincentives(eight),andTexashasthesmallest(two).

FewStateprogramsarespecificallyaimedatincreasingwoodybiomassstockforenergyuse,partlybecausewood-for-energymarketshavenotyetbeenestablished.However,moreoftenthannot,improvementinforestbiomassavailabilityandsustainableuseisanoffshootalthoughnottheoverarchinggoaloftheseprograms.AlthoughtheminimumacreageandstockinglevelsforpropertytaxcalculationsvaryacrossSouthernStates,thegeneralobjectiveofallthesetaxesistoprovideanincentiveformanaginglandonasustainedyieldbasisandadisincentiveforconvertingforestlandtootheruses.Theobjectivesof

Statecost-shareprogramsaretoreforestcutoverland,plantopenland,orimprovewoodlands;andmanyStatesoffertosharethecostsofotherforestmanagementactivities.Forexample,SouthCarolinahasforestrycommissioncost-shareprogramsandNorthCarolinahasforestagriculturecost-sharingprograms.Theseprogramsleadtohigheravailabilityoffeedstocksforenergyconversion.

SeveralFederalprogramsprovideincentivesforconservationofforestlandsandmaintainingsustainableforestmanagementpractices.Forexample,theEnvironmentalQualityIncentivesProgram(EQIP)providescostsharesforinstallinggreenhousegasmitigatingtechnologiesandtheLandownersIncentiveProgramprovidesfinancialassistancetolandownersforavarietyofconservationgoalsincludingcarbonsequestration.TheForestLandEnhancementProgrampromotesadditionalcarbonsequestrationandotherecosystemservicesthroughcostshareswithlandowners.Theseprogramshelptoreducelandusechangeawayfromforests,inturnindirectlymaintainingtheforeststockthatcanbeusedforenergyproductionatalaterdate.IncentiveprogramsforreforestationhavelongbeenestablishedinanumberofStates.Forexample,Mississippiprovidestaxcreditsforreforestation.

Table 10.4—Number of financial incentives for renewable energy at Federal and State levels (blanks indicate no incentives): Number in the parentheses means whether incentives are State governments (S), utility companies (U), local governments (L), or nonprofit organizations (N)

State(s)Personal tax

corporate tax

Sales tax

Property tax Rebates Grants loans

industry support

Performance- based incentive

All States (Federal incentives) 3 4 3 5 1 1Alabama 1(1S) 3(3U) 1(1S) 3(1S,2U) 1(1U)Arkansas 2(1S,1U) 1(1U) 1(1S)Florida 2(2S) 2(2S) 12(1S,10U,1L) 6(1S,5U) 1(1L) 2(2U)Georgia 1(1S) 1(1S) 1(1S) 10(1S,9U) 1(1S) 2(2U)Kentucky 1(1S) 2(2S) 1(1S) 11(1S,10U) 1(S) 4(1S,1U,1L,1N) 1(1S)Louisiana 1(1S) 1(1S) 1(S) 2(2S)Mississippi 5(1S,4U) 4(1S,3U) 1(S)North Carolina 1(1S) 1(1S) 1(1S) 2(2S) 6(6U) 1(1S) 4(3S,1U) 4(3S,1N)Oklahoma 1(1S) 3(3U) 6(4S,2(U) 1(S)South Carolina 1(1S) 2(2S) 1(1S) 6(6U) 6(1S,5U) 4(1S,2U,1N)Tennessee 1(S) 2(1S,1U) 2(2S) 3(2S,1U) 1(S) 1(S)Texas 1(1S) 1(1S) 27(25U,2L) 2(2S) 2(2S) 1(1S) 2(2U)Virginia 1(1S) 1(1S) 1(1S) 1(1S) 1(1U)Total 9 15 6 6 88 10 48 7 20

Source: Database of State Incentives for Renewables and Efficiency (2010).

Regulations and support programs—AttheFederallevel,theEnergyPolicyActof2005establishedRenewableFuelStandards,whichmandatedthattransportationfuelscontainaminimumvolumeofrenewablefuels,startingwith4billiongallonsin2006and7.5billiongallonsby2012.TheEnergyIndependenceSecurityAct(2007)calledforproductionof36billiongallonsofbiofuelsby2022,ofwhich21billiongallonsmustbecellulosicbiofuel.The2008FarmBillauthorizedmandatoryfundingof$1.1billionforthe2008to2012,providinggrantsandloanstopromotealternativefeedstockresourcesincludingwoodybiomass.InterconnectionstandardsandgreenpowerpurchasinghavealsobeenformulatedattheFederallevel.

ConstructionanddesignsupportforestablishmentofbioenergyproductionfacilitiesandnetmeteringavailabletobiomassbasedenergyfacilitiessotheycansellpowerbacktothegridarethemostemployedState-levelpoliciesintheSouthand10SouthernStateshavealsoformulatedrenewableportfoliostandardsastargetsforusingcleanersourcesofenergyinutilitiesandindustries.

Extensionandsupportactivitieshavefacilitatedknowledgetransfers,technologydemonstrations,andinformationsharingsessions;andhavedevelopedmulti-stakeholderpartnershipstoreducegreenhousegasemissions.Extensionagentsandspecialistsatland-grantuniversitiesandgovernmentinstitutionstransferknowledgeaboutnaturalresourcemanagement(includingwoodybiomass-basedenergy)toclientgroups,suchasforestowners,forestersandothernaturalresourcemanagers,treegrowers,loggers,andforestworkers.Non-StateeffortsaimedatlandownersincludeaStateTreeFarmprogramthatrecognizeslandownerswhoaredoingagoodjobofmanagingtheirlandwithacertificate,subscriptiontoTreeFarmmagazine,andTreeFarmsigntodisplayontheirproperty.Regularinteractionbetweenlandownersandprofessionalforestersisfacilitatedthroughperiodicvisitsbyforesters.

TherehavebeennumberofeffortsbypolicymakersintheUnitedStatestocreatemarketsasamechanismtoregulateGHGemissions,althoughnobillhasyetbecomelaw.Forexample,theHousepassedtheAmericanCleanEnergyandSecurityAct(a.k.a.Waxman-Markey)onJune26,2009,andthreeotherbillsweresubmittedtotheSenatein2009and2010:theCleanEnergyJobsandAmericanPowerAct(Kerry-Boxer),theAmericanPowerAct(Kerry-Lieberman),andtheCarbonLimitsandEnergyforAmerica’sRenewalAct(Cantwell-Collins).Waxman-Markey,Kerry-Boxer,andKerry-Liebermanwouldcreatemarketsforemittingandoffsettingcarbondioxideandpermitthepurchaseofupto2billionmetrictonsofcarbonoffsetsannually(Mercerandothers2011).GorteandRamseur’s(2008)estimatethatataCO2epriceof$50permetricton,morethan800millionmetrictonofCO2ecouldbesequesteredthrough

afforestationactivities,andapproximately380millionmetrictonthroughimprovedforestmanagementactivities.Since2010,littlecongressionalefforthasfocusedonclimateingeneralandcarbonsequestrationpoliciesinparticular.

Forestryoffsetprojectsincludingmitigationofgreenhousegasesthroughbioenergyproductioncanpotentiallyaccruecarboncreditsbuttheaccountingischallenging.Assumingthatenergycropsdonotleadtolandusechanges,lifecycleanalysesofdifferentbiofuels(includingwoodybiomass)suggestoverallgreenhousegasreductions(BlottnitzandCurran2006,Erikssonandothers2007,Gustavssonandothers2007).Searchingerandothers(2008)arguethatlifecyclestudieshavefailedtofactorinindirectlandusechangeeffects,andsuggestthatusingU.S.croplandsorforestlandsforbiofuelsresultsinadverselanduseeffectselsewhere,thusharmingtheenvironmentratherthanhelpingit.Indirectlandusechangeeffectsaredifficulttoassess,andtodaythereisnogenerallyacceptedmethodologyfordeterminingsucheffects.Fritscheandothers(2006)argueforassessingindirectinfluenceofbioenergyonlandusechangethroughmeasuressuchaslandpricesandrents.However,conductingsuchassessmentsatthesitelevelandtranslatingthesetooperationalindicatorsisquitecostly.Asatisfactorymethodologyforincorporatingtheeffectsofindirectlandusechangesintothelifecyclegreenhousegasemissionsoffuelsremainsanimportantchallenge.

TherearealsopoliciesandregulationsthatcouldlimitdevelopmentofabioenergyindustryintheSouth.TheEnvironmentalProtectionAgency’sfinalGreenhouseGasTailoringRule,doesnotexemptbiomasspowerproducersfromgreenhousegaspermittingrequirements,andmightacttolimittheestablishmentofbioenergyconversionplants(Mendellandothers2010).Thisruletreatscarbonemissionsfrombiomasscombustionidenticallytofossilfuelsemissionsandincreasescostsassociatedwithobtainingpermitsandcostsassociatedwithtechnologyrequirements,suchasBestAvailableControlTechnology.Mendellandothers(2010)suggestthatregulatoryuncertaintycreatedduetothisregulationcouldaffectestablishmentof130renewableenergyprojects,and$18billionincapitalinvestmentacrossthecountry.Similarly,theEnvironmentalProtectionAgency’sairqualitypermittingforbiomassboilersimpactsbiomassbasedelectricityproducersadversely.

Assessing efficacy of policies—Anumberofresearcherssuggestthatprivatelandownersarebyandlargeunresponsivetopropertytaxandcapitalgainsprovisions,andthatforestpropertytaxprogramsareonlymodestlysuccessfulinachievingtheirgoals(Greeneandothers2005,Jacobsonandothers2009,Kilgoreandothers2007).Manyauthorshavefoundthatlandownersarelargelyunawareoftheexistenceofincentivesordonotunderstandhowincentivesmightapplytothem.Forexample,Butler(2008)based

onlandownerresponsestotheForestService’sNationalWoodlandOwnerSurvey,concludedthatnotalllandownersareprice-responsive.Factorssuchasmaintainingforestlandforaestheticsorwildlifeconservation,aswellamovementtowardssmallerownerships,mightberesponsibleforthispriceunresponsiveness.Nevertheless,ataggregatelevel,theseincentivebasedpoliciesresultinincreasedwelfare,asshownbyHuang(2010)whofoundthatwhencombinedwithinvestmentintechnology,theycanresultinoverallpositiveoutcomesfortheSouth’seconomyandhouseholdwelfare.

Beachandothers(2005)andGreeneandothers(2005)foundthatnonindustrialprivateforestownersmoreoftenrespondtotargetedgovernmentprogramsthantomarketpricesorotherfinancialincentives.Theyalsosuggestthattechnicalassistance,cost-sharepayments,anddirectcontactwithprofessionalforestersornaturalresourcespecialistsmoreoftenthannotsucceedinchangingforestmanagementdecisions.AuthorslikeHaines(2002)andArnold(2000)haveproposedintegratinglanduseplanning(andwoodybiomass-basedenergyuse)intoextensionprograms.Educatinglandownersandthegeneralpublicaboutthebenefitsderivedfromcleanerenergysourcessuchaswoodybiomasswillimproveandincreaseinterestinforestbiomassutilization.Mayfieldandothers(2008)indicatedthateducationandcommunityengagementplayimportantrolesinthedevelopmentofcleanertechnologylikewood-basedenergy.JoshiandArano(2009)agreethatlandownersarelargelyunawareofincentiveprogramsavailabletothem,andthusarguethatmuchremainstobedonetoencourageprivateinvestmentinforestryactivities.Inlightofthesefindings,extensionandoutreachsupportprogramsbecomeimportantforincreasingtheacceptabilityofwood-for-energytechnologyoptionsandimprovingforestandlandmanagementpractices.

Sustainability

Thedevelopmentofforestbioenergysystemspresentsnewopportunitiesaswellasrisks.Manysustainabilityconcernsarebeingraisedaboutwoodbiomassutilizationforenergy.Theseconcernsrangefromproductionprocessestoconsumptionprocesses—feedstockproduction,harvesting,transport,conversion,distribution,consumption,andwastedisposal—andincludeissuesofjobcreationandsocietalbenefitdistribution.

Forestsprovidenotonlywoodfortraditionalusesbutalsoseveralecosystemservicessuchascleanwaterandbiodiversity(Amacherandothers2008,Neary2002,Stupakandothers2007).Thesepotentialimpacts—groupedintoproductivity,waterquality,andbiodiversitycategories—aredescribedindetailbelow.

Productivity—Theforestflooraccumulatesnitrogen,phosphorus,calcium,andothernutrientsthatareessentialfortreegrowth.Unliketraditionaltimberharvests,biomassharvestsforenergyproductioncouldimpactregenerationandsiteproductivityunlessproductivityreductionsassociatedwithsitequalityareoffsetbyfertilization.Studiesofforestbiomassbasedenergyproductionraiseconcernsregardingsoilcompactionandrutting(Reijnders2006),decreasedamountsofdecayingwoodonforestedlandscapes,changesinthechemicalandphysicalenvironmentofsoils(Astromandothers2005),increaseduseofagrochemicals(Fritscheandothers2006),increasedsoilerosion(Burger2002),andnutrientloss(Burger2002).Theseissuessuggestaneedforintensifiedsiteandoff-sitemonitoringwhereforestmanagementisintensified.

Themachineryusedtobuildroadsandinfrastructureforbiomassharvestingbiomassforenergymightbedifferentfromwhatwasusedintraditionaltimberharvestingandharvestingmighttakeplaceinareaswheretimberharvestingistraditionallynotundertaken,resultinginnewroadsorpathways(Lalandothers2011,SmithandLattimore2008).Frequencyofharvestsforbiomassremovalcouldalsobegenerallyhigherthanfortraditionalharvests,andsecondoperationsorharvestresiduecollectionsmightresultinvehiclere-entryatthesite(Lalandothers2009).Intensiveremovalsofforestbiomassforbioenergymightreducesoilcarbonandorganicmattertolevelsthatareinadequateforsustainingforestproductivity.Hope(2007)throughtheirsiteexperimentsinBritishColumbiaobservedthatstumpremovaldecreasesthesoilstockofcarbonby53percent,nitrogenby60percent,andphosphorusby50percent;andthattheforestfloordepthwasdecreasedby20to50percent.Pengandothers(2002)throughtheirstudyinCentralCanadareportedthatwhole-treeharvestingproducesanadditional32percentlossofsoilcarboncomparedtoconventionaltreeharvesting.SmithandLattimore(2008),whilediscussingpotentialenvironmentalimpactsofbioenergyharvestingonbiodiversitylistcontributingactivitiessuchasmechanicaldamagetoresidualtrees;expandedroadnetworks;increasedremovalsandlandusechangesthatmightimpactproductiveanddiverseecosystems.ScottandDean’s(2006)LongTermSiteProductivityStudyfoundthatwhole-treeharvestingreducedproductivityonover75percentofthestudyblocksinSouthbyanaverageof18percent.However,theyalsofoundthataone-timeapplicationofnitrogenandphosphorusfertilizermaintainedproductivityandincreasedproductivitybyanadditional47percentabovethestem-onlyharvestlevel.

Harvestingslashremainingafterconventionalharvestingofloblollypine(Pinustaeda)intheCoastalPlainalongtheGulfofMexicoreducedsiteproductivity,decreasingsoilorganicmatterandassociatednutrientsby18percent(Scott

andDean2006).Reductionsofjackpine(P.banksiana)heightgrowthof18percentonwhole-treeharvestedplotsinsitesofQuebecregionofCanadawereattributedtolowersoilmoistureandnutrientavailability(Thiffaultandothers2006).Toavoiddecreasedproductivityfromsoilcompactionduringbiomassharvesting,JanowiakandWebster(2010),afterreviewingthestateofknowledgeregardingtheimpactsofintensiveforestrywithrespecttoissuesrelevanttobioenergyproduction,recommendedusingmachinerythatissimilartowhatisusedinconventionalharvesting.

Water quality—Increasedbiomassharvestingactivitiesforawood-to-energymarketmighthaveadverseimpactsonwaterqualityinstreams,rivers,andlakes.Increasedroadconstructionrequiredforwoodybiomassharvestingmightleadtosoilerosion,highsoilmoisture,andincreasedrunoffandsedimentsfromforestroadsandlandings(JanowiakandWebster2010).Increasedmachineryusemightalsoimpactthewatertableattheharvestsite,leadingtoimpermeablesoilsfromcompaction.Removalofyoungertreesandloppingandtoppingduringbiomassharvestsmightdecreaseleafsurfacearea,resultingindecreasedtranspirationandinterception(Lalandothers2009).

Machinere-entryatharvestsitesmightincreasesedimentationandflowlevelsinwaterways,increasingthechancesofsedimentmovementintowetlandsthroughdamagederosioncontrolfeatures.Frequentharvestsmightincreasesuspendedsolidsandaluminumlevelsinwater,raisingacidificationlevelsandnegativelyimpactingfishandotheraquaticorganisms(Grigal2000).Inaddition,woodybiomassharvestingadjacenttowaterwaysmightincreasetheprobabilityofhigherwatertemperatures,disturbedchemistry,andreducedclaritythatwoulddamagebiologicalcommunitiesandalterecologicalprocesses(JanowiakandWebster2010).AustandBlinn(2004)reviewedbestmanagementpracticesfortimberharvestingandsitepreparationintheeasternUnitedStatesintermsofwaterqualityandproductivityresearchduringforthetimeperiodbetween1982and2002,andconcludedthateffectsofharvestingonforesthydrologyarehighlyvariableacrosssitesandtimeperiods.However,harvestingimpactsonforesthydrologyarelikelytobegreaterimmediatelyfollowingharvest,withtherecoverytopreharvestconditionstakingupto5years

Biodiversity—Theextractionofadditionalbiomassforbioenergycoulddegradehabitatsbeyondtherangeofnaturalvariabilityandproducenegativeeffectsonsomespecies(JanowiakandWebster2010).Increasedaccessandintensityofharvestcanalsofragmenthabitatsandadverselyimpactwildlifecorridors(Fletcherandothers2011,Lalandothers2009).Naturaldisturbancessuchasfire,wind,andpestoutbreakspermitacontinuoussupplyofdeadwoodinunmanagedforests.Intensiveforestmanagementleadingto

removalofstumpsmightreducetheamountofdeadwoodthatisconsideredessentialtoforestecosystemsandprovideshabitatsfordifferentorganisms(Humphreyandothers2002).

Theremovalofresiduesandstumpsmightnegativelyaltertheentiresoilfaunacommunityandstructureofthefoodweb,harmingsmallmammals,andreducingecologicalniches,therebyloweringdiversityandnumbersofinvertebratessuchasspidersandpredatoryinsects(Eckeandothers2002).Thereisalsoachanceofinsectsorotherwood-colonizingspeciesgettingtrappedinwoodburntforfuel.

However,intensiveforestmanagementpracticescontrollingpestsanddiseasecanalsoimproveforesthabitats.Forexample,certainfungispeciescauserootandbuttrotdiseasetoconifersworldwide.Stumpremovalassociatedwithwhole-treeharvestinggenerallyleadstosignificantreductionsintheareaofthestumpcolonizedbythesefungi,reducingtheriskofattack(ThorandStenlid2005).Conversely,theharvestingofforestresiduesandstumpswouldalsofavorpioneeringspeciesofflorathatarealsomoretolerantofexposureandsoilmoisturelevels.Whenallbiomassisremoved,growththesespeciesismorevigorous,particularlytheinvasivenonforestfieldvegetation,which—ifitisnotmanaged—mightleadtoareductionintimberproductivity(WalmsleyandGodbold2010).ScottandDean(2006)alsosuggestthatintheGulfCoastalPlain,soilanalysescouldbeusedtoidentifyharvestingsitesatriskofharvesting-inducedproductivityloss,andfertilizationtreatmentcouldbeusedtoavoidproductivitylosscausedbywhole-treeharvesting.

Meta-analysisbyFletcherandothers(2011)ofstudiesoncropsbeingusedorconsideredintheUnitedStates,foundthatvertebratediversityandabundancearegenerallylowerinbiofuelcrophabitatsrelativetothenon-crophabitats.Theyfounddiversityeffectsarelowerforpineandpoplarthanforcorn,andbirdsofconservationconcernexperiencelowernegativeeffects.However,forminimizingimpactsofbiofuelcropsonbiodiversity,theysuggestpracticesthatreducechemicalinputs,increaseheterogeneitywithinfields,anddelayharvestsuntilafterbirdbreeding.ManyofthesepracticesmightalreadybeincorporatedunderintensivemanagementregimesinSouthandcouldbeincorporatedintobiomassproductionsystemsandmanagementplanningusedtoavoidadverseimpactonforestedlandscapes.

Resultsofdirectandindirectlandusechangetoagriculturalrowsystemscanalsocausehabitatloss(Jonsell2007).Thelandusechangefromnaturalforeststoforestplantations,includingshortrotationwoodycrops,isofthegreatestconcernfromanecologicalpointofview(Wearandothers2010).Interventionsfocusedonecologicalrestorationorfuelreductionactivitiesassociatedwithwoodybiomasswouldalsobenefitwildlifehabitat(JanowiakandWebster2010).

However,biomassproductionmightalsohavenegativeconsequencesunlesscoordinatedwithbreedingandnestingseasonsandmaintainingcoverforoverwinteringsmallmammalspecies(Bies2006).

Justasimportanttosoutherners,butlessquantifiable,arethepotentialimpactsofincreasedwoodybiomassremovalsonquality-of-lifeissues:aesthetics,communityrelationships,andappreciationofforestlandasanintegralpartofthesocialandphysicallandscape(Wearandothers2010).

DiScuSSioN AND coNcluSioNS

markets

Ourdemandanalysisshowsthattheconsumptionrequirementsforwoodfrombioenergymarketswouldnotlikelybemetbyurbanwoodwastealone,andthatdemandsforwoodybiomasswouldrequireharvestingresiduesorbiomassfromtimbermarketsby2013(fig.10.2).Pricesforallforestproductswouldlikelyincrease,resultinginincreasedreturnstoforestlandowners.Pricechangesaregreaterthanchangesinremovalsorinventory,consistentwithaninelasticmarketresponse.Althoughremovalsareresponsivetopricechanges(higherremovalsathigherprices),forestinventorieswillalsodependonfactorslikeforestgrowth,afforestationofagriculturalorpasturelands,intensivemanagementofforestland,andincreasedplantationsoffastgrowingspecies.Themodelsusedforouranalysisattempttoaccountforthesefactors,butfutureconditionsarecloudedbylargeuncertaintiesaboutdemandandsupplyfactors.Consistentwithchapter4,themarketmodelindicatesthatincreasedpricesunderbioenergyfutureswouldmitigatethelossofforestlandinthefuture.Plantedpineforestareaisthemostresponsivetothesepricetrends.Bioenergydemandswouldresultindeclininguseoftimberbyforestindustry,withimpactsmorepronouncedforpulp-basedindustriesthanforsawtimberindustries.

Withhighdemandforwoodybiomass,sawtimberindustriescouldalsobeimpacted,althoughatlowerlevels.ThisprojectionisconsistentwithstudiesbyAulisiandothers(2007)andGalikandothers(2009),whofoundthatpulpwoodmarketsaremorelikelytobeimpactedbyanemergingwood-basedenergyindustry.Furthermore,Aulisiandothers(2007)suggestthatsawmillsmightbenefitfromthehigherpricespaidbybioenergymarketsforsecondaryproductssuchassawdustandchips.Oursimulationindicatesthatathighlevelsofbioenergydemands,thesoftwoodsawtimberindustrywouldeventuallybeadverselyimpacted.

Forestindustrymightalsofaceincreasedfeedstockpricesfortheirpulpandsawtimberoperations.Inthelongrun,price

increasesforsoftwoodnonsawtimberarelessseverethanforhardwoodnonsawtimberbecausepineplantationareacanrespondquickly,andhardwoodplantationsarenotcommonintheSouth.

Increasedforestproductivitycouldmoderatepricegrowthandresultinhigherratesofremovalsandinventories.AlthoughproductivityhasgrownsubstantiallyintheSouthasaresponsetointensivemanagementandgeneticimprovements,productivityeffectsarenotlimitedtosoftwoods.Priceincreasesaresmallestwithproductivitygrowthstrategiesthatextendtoallmanagementtypesalongwithanincreaseinshortrotationplantations.Expandingdemandsforbioenergywouldnotnecessarilyreducethelevelsofforestinventories.Oursimulationsshowthatanincreaseindemandfromtheenergyindustry,coupledwithproductivityincreases,couldleadtohigherlevelsofbothremovalsandinventory.

Withmanagementandtechnologicaladvancements,woodybioenergymarketscouldresultinincreasesininventory,removals,forestacreage,andreturnstolandowners.Southernforestscouldbemanagedtoproducesubstantiallymoretimberforbioenergyandotherforestproductsconsistentwiththeprojectionsshowninchapter9.

Theseresultsindicatethatthefuturetrajectoryofsouthernforestswilldependonthestateofwood-basedenergymarketsasinfluencedbytechnologicaldevelopmentsandcostconsiderations.Marketswillalsobeshapedbyotherunknowns,includingtheamountofrenewableenergythatwillcomefromsolar,wind,andothersourcesofrenewableenergy.Similartoanynascentindustry,thefutureofwood-basedenergywilldependonanumberofuncertainties,includingthecostsofproduction,technologicalbreakthroughs,thegovernmentpoliciesthatsupportrenewabletechnologies,forestproductivitydecisions,andtheexpansionofshortrotationwoodycrops.Alongtheselines,ifcarbonmarketsemergeandcarboncreditsfordisplacingfossilfuelswithwoodybioenergyareconsidered,morechangesinforestmanagementandshortrotationwoodycropsmightbeexpected,butinclusionofthesedetailsisbeyondthescopeofthischapter.

Technologies

Onthewoodybiomass-basedenergytechnologyfront,thereisnoemergentfavorite.Evensupposedly“low-hangingfruits”suchasco-firingfacesignificantchallenges,suchasboilerashdeposition,corrosion,andfeedstockselection.FederalandStategovernments,alongwithforestindustry,areinvestingresearchdollarsintothesetechnologieswithhopesofcommercialsuccess.Differenttypesofwoodybioenergyoccupydifferentplacesonthecostfeasibilityspectrum.Woodpelletsarealreadyfeasibleundercurrent

markets,whilebiofuelsarenoteconomicallycompetitiveatthecurrentleveloftechnology.

Advantagesofwoodpelletizationincludehighenergy-to-weightratio,lowercapitalrequirements,abilitytooperateproductionfacilitiesatavarietyofscalesbasedondemandorwoodsupply,lowercostsofshippingthefinalproduct,easierhandling,and,mostofall,highdemandinEuropeancountries.Conversely,preferredconversiontechnologiesforwood-basedfuelsremainlargelyuncertainbecauseofthehighcostofproduction,project-specificfactors,andenvironmentalstandards(McKendry2002).Thehighunitcostofwoodybiomass-basedenergyislargelyattributedtohighharvestingandtransportcosts;forexample,makingwoodybiomass-basedethanolcompetitivewithstarch-basedethanolorgasolinewouldrequirereducedcapitalcoststhroughtechnologyimprovements,reducedfeedstockcosts(primarilyfromyieldimprovement),anddensificationofwoodattheharvestsitetolowerharvestingcosts(AlavalapatiandLal2009,Dwivediandothers2009,Jacksonandothers2010).Thecostoftransportfromthesupplysource(forexample,theforest)totheconversionplantalsodeterminestheviabilityofthemanufacturedproduct(electricity,heat,orliquidfuels).Overcomingthissignificantchallengerequiresthatplantshaveeasyaccesstothewoodsupplyandtodistributionmarkets.

Nospeciesgrouphasemergedasafavoriteforwoodybioenergy.Bothsoftwoodsandhardwoodscanbeco-firedwithcoal,usedincombinedheatingandpowerplants,andcompressedforwoodpelletproduction(SpelterandToth2009).Evidencesupportingaclearpreferenceforhardwoodorsoftwoodspeciesforwood-basedliquidfuelislackingaswell.ZhuandPan(2010)suggestthatsulfitepretreatmenttoovercomelignocellulosesrecalcitranceprocessholdspromiseforwoodybiomassconversion,especiallyforsoftwoodspecies.However,softwoodscontainmoreligninthanhardwoods(GalbeandZacchi2002),meaningthattheconversiontoliquidfuelsmightbelessefficientinsoftwoodsbecauseligninneedstoberemovedduringthepretreatmentprocess.EvenZhuandPan(2010)notedthatinoneofthemostcommonpretreatmentprocesses(acidcatalyzedsteamexplosion)sugarwassuccessfullyrecoveredfromhardwoods(forexample,65to80percentrecoveryfrompoplars)comparedtolessencouragingresultsforsoftwoodspecies.

Regardlessoftheconversiontechnologyemployed,acontinuouslong-termflowofwoodwouldbeneededasrawmaterial.BecausemanySouthernStatesareemphasizingrenewabletechnologies,newco-firingandcombinedheatandpowerplantsandethanolbiorefineriesarelikelytobeestablishedinthefuture.Expansionofthissector—morewoodybiomass-basedenergyplantsorexpansionofexisting

facilitiestoachieveeconomiesofscale—willbeassociatedwithanincreaseinthedemandforwoodfiber.TomeettheburgeoningdemandforwoodybiomassforenergyestimatedbySRTSsimulationruns,merchantabletimberandsmall-diameterwoodwouldberequiredinadditiontologgingresiduesorwoodwastesuchassawdust,shavings,andchipsfromotherwoodproductmanufacturingprocesses.

Technologicaladvancementsareessentialformakingwoodenergycompetitivewithothersourcessuchasgasolineandcoal.Policysupportforwoodybiomass-basedenergy,anascentindustry,mighthelpinattainingcommercialviabilityanddevelopingamaturemarket.

Policies

Availablepolicyinstrumentshaveadvantagesanddisadvantages(AguilarandSaunders2010,Alavalapatiandothers2009).Financialincentivesallowdirectlymeasurementsoftheirimpactonprices.Moreover,theycanpromotesustaineddemandforandsupplyofenergyfeedstocks,andcanlowerthecapitalcostsofinvestments.However,fundingfortheseprogramsisvulnerableduringhardeconomictimes.Regulationssuchasrenewableportfoliostandardsareeasytoadopt,andproducersgenerallybearincurredcosts.However,thesetypesofpoliciesmightsufferfrominflexibility,andinformationneededforeffectivetargetingcanbeelusive.Abetteroptionmightbetodevelopasuiteofpolicyoptionsgearedtowardswoodybiomass-basedenergy.Forexample,anEnvironmentalandEnergyStudyInstituteproposal(2010)suggeststhatinuncertaintimes,anintegratedpolicyapproachforbioenergymightinclude:inventoryingbioenergyresourcesandmarketsanddevelopingalongrangebioenergyplan;developingsustainablefeedstockproductionguidelines;developinglocallyappropriatefeedstocksandconversiontechnologies;creatingeasementprogramsforsustainablefeedstockproduction;establishingminimumrenewablefuelstandards;enactingalowcarbonfuelstandard;promotinginteragencycooperationandcooperationwithotherStates;providingtaxincentivesforproducersandretaildistributors;andleveragingStateresourcesthroughFederalandprivatepartnerships.

Givencurrentlogisticalandtechnologicalchallenges,developingamaturewoodybiomass-basedenergymarketwouldlikelydependonsomelevelofgovernmentsupportthatincludesfinancialincentivesandotherregulatoryandsupportpolicies.Indeed,suchpolicieshaveemergedinvariousforms,includingresearchanddevelopment,consumptionincentives(suchasfueltaxreductions),productionincentives(suchastaxincentives,directsubsidies,andloanguarantees),andmandatoryconsumptionrequirements.Theseandfuturepoliciesforproduction,conversiontechnologies,andmarkets

anddistributioncanpotentiallyimpacttheproductionandcommercializationofwoodybiomassforenergy,butmightalsoaltertheecosystemservicesprovidedbyforests.

Financialincentivesmightfacilitatetheincreasedproductionanddiversionofwoodybiomass,likelyincreasingwooddemandandaddingtotheprofitabilityoflandownersandthoseengagedinwood-to-energyconversion.StandimprovementandrestorationactivitiesprioritizedbyStates,suchaslandrecoveryandcostshareprograms,mighthelplandownersmakethelong-terminvestments.Supportforweedandpestmanagement,suchasthepinebarkbeetlepreventionprograminVirginia,mightalsoincreasebiomassavailability.Bestmanagementpracticesandharvestingguidelinesdevelopedespeciallyforbioenergycouldrestrictwoodavailabilitybyreducingharvestingimpactsthroughminimumtillageandreducedapplicationsoffertilizersandpesticides;protectingwildlifecorridors,riparianzones,andothersensitiveareas;andadoptingwildlifehabitatenhancementmeasuressuchasleavingpatchesofundisturbedareas,promotingcertainspeciesmixturesandcroprotations,andretainingquantitiesofharvestresidues,litter,deadwood,snags,anddentrees.

Researchandtechnologygrants,coupledwithsubsidies,couldhelpdevelopcurrentandfuturewood-for-energymarkets.Otherfinancialincentivestargetingenergyproducersmightalsofavortheprogressofnewconversiontechnologiesandtheintegrationofnewtechnologieswithexistingones.Policyeffortsgearedtowardsdevelopmentofgasificationtechniquesoranintegratedprocesswithbiomass-basedelectricitygenerationwouldlikelyincreasetheproductionofwoodybiomass-basedenergy.Technologicalinnovationschanneledtowardsreducingfeedstockproductioncostsaresignificant,astheyarelikelytospikethedemandofwood,luringawaysomesharefromtraditionalforestindustries.

Awidearrayofpolicyinstrumentsgearedtowardsimprovingthemarketinganddistributionofwoodybiomass-basedbioenergy—suchasapplianceefficiencystandards,mandatoryutilitygreenpoweroptions,andrenewableportfoliostandards—couldplayapivotalroleindecidingwherethewood–to-energyconversionplantsanddistributioncentersaresetup.Becauselocationofinfrastructuretranslatestoincreaseddemandforforestbiomass,theconditionsofnearbyforestsmightchange.

Economicandtechnologicaluncertaintiesmightinfluencetheimpactsthatcurrentandfuturepolicieshaveonsouthernforests.However,thegreatvarietyofpolicies—andthemultitudeofwaysinwhichthecaninteract—confoundseffortstopredicttheirpotentialeffects.Policiesaddressingotherenvironmentalandsocietalbenefitsassociatedwithforestsandwood-to-energymarketsmightalsoalterthe

impactsofbioenergypolicies.Inparticular,emergenceofcarbonmarketscouldspurfurthergrowthinthewood-to-energyindustry,butformulatingapolicymechanismtorealizecarbonpaymentsisahugechallenge.Forexample,undertheCarbonCapandTradeBillcurrentlyintheU.S.Congress,manyforestlandownerswouldnotqualifyforcarbonmarketbenefitsbecausetheywouldnotgetcreditforexistinglevelsofcarbonsequestration,norcouldtheymeetsequestrationpermanencestandards.

Sustainability issues

Productionofwoodybiomassforbioenergycanhelpmeetenergygoals,butcanalsostimulateacceleratedharvesting,withpotentiallynegativeimplicationsforforestecosystems.Reductionofsoilnutrientsaswellassoilcompactionwouldlikelydecreaseforestproductivity.Intensivebiomassremovalmightaffectaquaticcommunitiesbyincreasingerosion,runoff,andwaterwaysedimentation.Intensiveforestmanagementmightalsodegradeforesthabitatconditions,negativelyaffectingfloraandfaunaandreducingbiodiversity.Landusechangesfromnaturalforesttomanagedplantationsmightadverselyaffectimperiledspeciesincertainlocations(seechapter14).However,changesfromagriculturalsystemstoforestsmightimprovehabitatconditions.Further,thehighgradingofstandsgenerallyobservedduringsometimberharvestingmightbeeliminatedwithbiomassharvesting.

Intensivewoodybiomassremovalmightalsohavesomenegativeimplicationsforcommunityrelationships,aesthetics,andpublicperceptionsaboutforestlandasanintegralcomponentofsouthernecosystems.Potentialimpactsonforestecosystemsatlocalandregionallevelsismostlikelytochallengetheforestrycommunitytoconsultnewresearchfindingslikethosesummarizedbelowandupdateexistingcertificationsystemswithguidelinesonhow,when,andwherewoodybiomassremovalsshouldbeconducted:

JanowiakandWebster(2010)provideaframeworkthatincludesadaptingmanagementtositeconditions,increasingforestedlandwherefeasible,usingbiomassharvestsasarestorationtool,evaluatingthepossibilityoffertilizationandwoodashrecycling,andretainingdeadwoodandstructuralheterogeneityforbiodiversity.

Hennenbergandothers(2009)suggestcreatingprotectedareasthatcanbeusedtoconserverelevantportionsofbiodiversity.

Lalandothers(2011)similarlyreportasetofninecriteriathatarenecessarytothepursuitofsustainablewoodybiomassextraction:reforestationandproductivecapacity,landusechange,biodiversityconservation,soilquality

anderosionprevention,hydrologicprocesses,profitability,communitybenefits,stakeholderparticipation,andcommunityandhumanrights.

Fletcherandothers(2011)recommendthefollowingstrategiestoensurehabitatforbiodiversity:reducingharvestingimpactsthroughminimumtillageandreducedfertilizersandpesticides;protectingwildlifecorridors,riparianzones,andothersensitiveareas;andadoptingwildlifehabitatenhancementmeasuressuchasleavingpatchesofundisturbedareas,promotingcertainspeciesmixturesandcroprotations,andretainingquantitiesofharvestresidues,litter,deadwood,snags,anddentrees.

Multi-stakeholdereffortssuchastheRoundtableonSustainableBiofuelsandtheGlobalBioenergyPartnershipforbiomassharvestingarealreadyunderway.TheRoundtableonSustainableBiofuelsandGlobalBioenergyPartnershipareintheprocessofdevelopingglobalprinciplesandcriteriafordevelopingasetofglobal,science-basedcriteriaandindicatorscoupledwithfieldexamplesandbestpractices(includingbenchmarks)forbioenergysustainability.

Inadditiontotheoverallscaleofbiomassproduction,thelocationandmethodsofwoodybiomassharvestswouldaffectthehealth,vitality,andecologicalfunctionofsouthernforests.ExistingcertificationsystemssuchastheForestStewardshipCouncil,AmericanTreeFarmSystem,andSustainableForestryInitiativehavecriteriaandindicatorstosafeguardsiteproductivity,waterquality,andbiodiversitybutsomeadditionalindicatorsmayberequiredforwoodybiomassharvests.Forexample,anindicatormightbeneededtoaddressharvestresiduesleftonsitetomaintainhabitatforsmallmammals,insects,reptiles,andamphibians.Levelsofnecessaryresidueswoulddependonsite-specificconditions,althoughgeneralguidelinescouldbeformulatedatStateorSouthwidelevels.Similarly,erosion-preventingindicators(suchasthoseprohibitingharvestsonshallowandnutrient-poorsoils)wouldneedtoconsiderspecificsoilconditionssuchasdepthofsoils,nutrientconditions,andregenerationpotential.

Biomassharvestingatthelevelsexploredinthischaptercouldhavenegativeimplicationsforfutureforestconditionsandecosystemservicesflowingfromsouthernforestsincludingwater(chapter13)andwildlife/biodiversity(chapter14).Theseoutcomesdependontheamountandlocationofharvesting,butperhapsmorecriticallyonthemanagementstrategiesused.Theresearchdescribedaboveindicatesthatmanagementsystemscanbedesignedtomitigatedamagestovariousecosystemservices.Ofcourse,thisrequiresmanagementplanningthataddressesmanagementobjectivesinthecontextoflocalconditions.

Theneedforadditionalbestmanagementpracticesorotherguidelineswilldependontherateofdevelopmentofthebioenergysector,whichishighlyuncertain.Theacceptabilityoftheseapproacheswoulddependontheprocessofupdatingbestmanagementpractices,whichwouldideallycombinepublicinvolvementwithascience-basedprocessatappropriatescales(AlavalapatiandLal2009).

SummARy

Wood-basedenergymarketshavebeenproposedasameanstoensuresustainableforests,enhanceenergysecurity,promoteenvironmentalquality,andrealizesocialbenefits.However,severalcomplexissuesareinfluencingtheabilitytodevelopthesemarketsineconomicallyefficient,environmentallybenign,andsociallydesirableways.Theseissuesincludebiomassavailabilityorsupply,marketcompetitivenessandtechnologydevelopment,supportiveFederalandStatepolicies,tradeoffswithtraditionalforestproductindustries,sustainability,andecosystemintegrity.

Thischapterhasfocusedonfourinterrelateddimensionsofbioenergyfuturesrelatedtosouthernforests:markets,technologies,policies,andsustainability.Acrossthevariousbioenergyscenarios,thesenewdemandswouldaffectthemarketsforallwoodproductsandleadtopriceincreasesfortimberproductsandhigherreturnstoprivatelandowners.Thedegreetowhichotherwoodconsumersareimpactedwoulddependonexpansioninsupply,whichinturndependsonintensificationofforestmanagementandchangesinlanduse(primarilyfromagriculturaltoforestry).

Newdemandsforbioenergywillbedeterminedbyexpansionofexistingtechnologies—forexample,pelletsandco-firingwithcoal—butmorecriticallyontheemergenceofnewtechnologiesthatarenotyeteconomicallyviable.AcceleratedtechnologicaldevelopmentsandreducedproductioncostsmightbeachievedthroughvariouspoliciesatFederalandStatelevels.ThesustainabilityissuessurroundingbioenergyaredefinedbythenegativeexternalitiesassociatedwithacceleratedharvestingintheSouth.Researchindicatesthatmanagementsystemsandstandardscanbedesignedtoprotectthesevalues,defininganotherinterfacewithfuturepolicy.

Allofthesedimensionsarefraughtwithuncertainty.Marketfuturesdependondemandsfortraditionalwoodproductsandonenergyprices.Technologydevelopmentdependsonresearchfundingbutalsoonunknowablelimitstotechnicalfeasibilityandtheprospectofeconomicreturns.Policydevelopmentishighlyuncertainandfundamentallyengagestradeoffsamongenergy,environment,community,andother

societalobjectives.Therelationshipbetweenharvestingatunprecedentedlevelsandforestecosystemservicesisnotfullyknown.

Thischapterlaysoutabroadrangeofpotentialdevelopmentsandmanagementoptions.Clearlythepathtosustainablebioenergyfutureswillinvolveenhancingknowledge,monitoringchanges,updatingexpectations,andnarrowingtheoveralluncertaintyaboutfutureprospects.Theseissueswilllikelybethefocusofforestassessmentsforyearstocome.

kNoWleDGe AND iNFoRmATioN GAPS

Thefutureofwoodybioenergymarketsdependsonamultitudeoffactorssuchassupplyandavailabilityofwoodbiomass;advancementsinconversiontechnologies;improvementsinharvesting,collection,storage,densification,preprocessing,andtransportation;productpricesandelasticities;infrastructure;andproductivityincreases.

Determiningmanysuchfactorswithconfidencewasdifficult,andouranalysistoolswerelimited.Thebioeconomicmodelthatweemployedformarketanalysiscalculatesharvestlevels,relatedprices,inventory,andacreageasfunctionsofinputdemands,productivityincreases,andvariousassumedparameters.Theserelationshipsarenotknownwithhighprecision,andthemarketanalysiscannotaccountforeveryeconomicvariableandstrategicresponsetotheimpactsonenergymarkets.Applyingthemodelstoalargenumberofscenariosprovidesinsightsintotherangeofpotentialmarketresponsesinthefuture.Improvedestimatesofthevarioussupply,demand,andproductionrelationshipswouldenhanceforecastsoffuturemarketdevelopments.What’smore,high-demandbioenergyfuturesimplyimportanttradesbetweenwoodproductssectorswithimplicationsforemployment,income,andruraleconomiesthatwarrantadditionalstudy.

Ourstylizedapproachtoconstructingconsumptionprojectionsfortheregionleavescertainaspectsofbioenergyfuturesunaddressed.Importantly,questionsregardinginterregionalandinternationaltradeinwoodproductsthatcouldaffecttheultimateexpressionofregionaldemandswerenotdirectlyaddressed.TrademodelingwasbeyondthescopeoftheFuturesProjectandexplainswhyabroadrangeoffutureswasevaluated—i.e.,tocaptureareasonablerangeoffuturesregardlessofthemechanismsleadingtodemandoutcomes.Thenationalassessmentoftimberandwoodproductsmarketscontainedinthe2010RPAAssessment(Inceandothers2011)explorestradeundersimilarscenariosandservesasausefulreference.

Woodybioenergyproductionmightbemorecostcompetitiveunderagreenhousegasreductionstrategythatassignsamarketvaluetocarbonemissions,ineffectallowingsocialandenvironmentalbenefitstobeaccruedtowoodybioenergy.Thisapproachcouldmonetizethebenefitsgainedthroughgreenhousegasreduction,andthosegainscouldbetradedinacarbonmarket.Althoughlikelytospurfurthergrowthinabioenergyindustry,thecarbonmarketapproachhasyettoformulateaviablemechanismforrealizingcarbonpaymentstoforestlandowners.

Thelegaldefinitionsofwhatqualifiesas‘forestbiomass’underdifferentpolicydescriptionswouldgeneratelargevariationsinforestbiomassutilizationandthereforerequireresearchattention.Forexample,theEnergyIndependenceSecurityAct(2007)providesarestricteddefinitionbyexcludingbiomassfrompublicforestsandnaturallyregeneratedprivateforests.Conversely,the2008FarmBillprovidesacomprehensivedefinitionforforestbiomass.

Estimatesofthevolumeofwoodymaterialthatcanusedforenergyproductionatsecondarywoodproductsmanufacturingfacilitiesareimpreciseandbasedonvaryingassumptionsaboutproductionfacilitiesandper-unitproductionpotential.Alsoneedingresearchattentioniscomprehensiveanalysesofshortrotationwoodycropsthatcanbemadeavailableforenergyuse;landusetradeoffsofshortrotationwoodycropswithagriculture,pastures,andforestland;andpotentialforpine-switchgrassandotheragroforestrysystemstoexpand.Productivitygainsfromchangingthegeographicrangeofagricultureandwoodybiomassfeedstocksandimprovingmanagementisanotherresearchareathatwarrantsfurtherattention,asisdocumentinglandownerwillingnesstoparticipateinforestbiomassmarketsandincorporatingthisinformationintowoodybiomasssupplyfunctions.

Additionalresearchisneededtoidentifysustainabilityissuessurroundingwoodybiomassutilizationforenergy.Thefocusoftheseconcernsrangesfromproductionprocessestoconsumptionprocesses(feedstockproduction,harvesting,transport,conversion,distribution,consumption,andwastedisposal)tojobcreationandsocietalbenefitdistribution.Futureresearchwouldnecessarilyfocusonthetradeoffsarisingfromwoodybiomassdiversionforenergyuse,andthelevelatwhichwoodybioenergymightbecomeecologically,economically,andsociallyundesirable.

AckNoWleDGmeNTS

TheauthorswishtothankRobertJ.Huggett,Jr.,andKarenL.Abt,U.S.DepartmentofAgriculture,ForestService,SouthernResearchStation;andFrederickJ.Rossi,Schoolof

ForestResourcesandConservation,UniversityofFlorida,fortheirsupportandinsights.ThanksarealsoduetoCarolWhitlockandShawnaReidfromtheU.S.DepartmentofAgricultureForestService,SouthernResearchStation,fortechnicaleditsandhelpinpreparingGISmapsrespectively.

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Weassigned36percentofthegrid’soutputtotheSouthernStates—Texas,Oklahoma,Arkansas,andLouisiana.

AnEastCentralAreaReliabilityCoordinationAgreementstate,nowmergedintoReliabilityFirstCorporation,servesportionsofKentuckyandVirginia.Weassigned18percentofthegrid’soutputtothoseStates.

WesternTexasalsoreceivessomeelectricityfromtheWesternElectricityGrid.RatherthanapportioningpartoftheWesternGridsupply,weinflatedtheelectricitysupplyofthemajorsupplierintheState(ElectricReliabilityCouncilofTexas)by6percent.

Usingthepercentageapportioningdescribedabove,wescaleddataonthetotalU.S.annualelectricitysalesoutlinedinEnergyInformationAdministration(2010)referencecasescenariototheSouthernStates.

Weestimatedtheshareofwoodybiomass-basedelectricity,usingthesamedatasource(EnergyInformationAdministration2010)fortheelectricitygrids.Thesedataarebrokendownbythetypeofrenewableenergy—includingconventionalhydroelectric,geothermal,woodandotherbiomass,biogenicmunicipalwaste,wind,photovoltaic,andsolarthermalsources;butexcludingethanol,netelectricityimports,andnonmarketedrenewableenergyconsumptionforgeothermalheatpumps,buildingsphotovoltaicsystems,andsolarthermalhotwaterheaters—andscaleddownaccordingtothepercentagefactorsusedtoderivetotaloutputfortheSouth.Usingtotalelectricitydemanded,totalrenewableelectricity,andtotalwoodyandotherbiomass-basedelectricitydata,wederivedtheshareofrenewablesinthetotalelectricityportfoliooftheregion,aswellastheshareofwood-basedbiomasselectricitywithintherenewables.FollowingGalikandothers(2009),weassumedthatallenergyfromwoodandotherbiomasssourcesoutlinedbytheEnergyInformationAdministration(2010)iscompletelycomposedofwood.ThewoodybiomassdemandspecifiedaselectricityinbillionkWhwasconvertedtowoodybiomassinthermalenergytermsoftrillionBtu.FollowingRossiandothers(2010),weusedaconversionfactorof13,648BtuperkWh,whichisthestandardelectricitytothermalenergyconversionfactor(3,412Btuper

Thisappendixaccompanieschapter10.EstimationofthewoodybiomassrequiredforelectricityproductionbeganwithEnergyInformationAdministration(2010)dataonelectricitygeneration,inbillionkilowatthours(kWh),fortheelectricitygridsthatsupplycustomersintheSouthernUnitedStates.Thegrid-basedsalesdataisavailableonlyuntil2035,butweextrapolateditto2050byapplyingtheaveragegrowthratecalculatedoverthefiveprecedingyears.Determiningtheamountofelectricityconsumedinthe13SouthernStatesischallengingbecausetheelectricgridnetworksdonottrackthevolumeofpowerflowingtoorfromindividualareas,nordotheybreakouttheelectricitysalesinformationbyStates.1

We assumed that a fixed percentage of individual grid electricity caters to the South (Galik and others 2009, Rossi and others 2010) and based estimates of that percentage on expert opinions. Our underlying assumption was that the electricity demand storyline will not drastically change, with little alterations in percentages.

TheFloridaReliabilityCoordinatingCouncilandElectricReliabilityCouncilofTexasgridsonlyservecustomersintheSouth,soweassumedthatalloftheirsalesarewithintheSouth.OtherelectricgridscatertocustomersoutsidetheSouthaswell:

TheSoutheastReliabilityCorporationservescustomersthroughoutMissouri,Alabama,Tennessee,NorthCarolina,SouthCarolina,Georgia,andMississippi;aswellasportionsofIowa,Illinois,Kentucky,Virginia,Oklahoma,Arkansas,Louisiana,Texas,andFlorida.ToaccountforsuppliesgoingoutsidetheSouth—mostofMissouriandportionsofIowaandIllinois—wesubtracted16percentofthegridtotalelectricity.

TheSouthwestPowerPoolservescustomersthroughoutKansasaswellasportionsofNewMexico,Texas,Oklahoma,Arkansas,Louisiana,Missouri,andNebraska.

1Personalcommunication,2010.R.J.Robertson,Manager,CustomerRelations.SouthwestPowerPool,415NorthMcKinley,#140PlazaWest,LittleRock,AR72205;andTeresaGlaze,DataAnalyst,SERCReliabilityCorporation,2815ColiseumCentreDrive,Suite500,Charlotte,NC28217.

appeNDIX B. Total Wood Demand for energy estimation

kWh)ata25percentlevelofefficiency.ThisiscongruentwiththeWiltsee(2000)studyofbiomass-fuelledpowerplants,whichreportedthetypicalhigherheatingvaluetobeapproximately14,000BtuperkWh(24.4percentefficiency).

Toaccountforconversionefficiencyincreasesresultingfromfactorssuchasincreaseduseofco-firingwithcoalinthefuture,replacingoldercombustionsteamturbineswithgasificationcombinedcycleplants,andtechnologicaladvancestoalltypesofbiomasspowerplants,weassumedagradualincreaseinthermalefficiencyafter2020toamaximumof40percentin2050.WeconvertedBtuvaluestomassingreentonsbyapplyingaconversionfactorof8.6milliongreentonsperBtuoutlinedbytheForestService(2004)forgreenwood(50percentmoisturecontent).Nextweneededtoallocatehowmuchofthetotalbiomassusedforenergyissourcedfromsoftwoodsversushardwoods.Thisischallengingasweight-to-volumeconversionfactorsvarywithstemsizeandspecificgravityofspecies.Galikandothers(2009)estimatedconversionfactorsfortreesofaveragediametersbasedonTimberMart-South2007data.Wefollowedtheirconversionfactors—34.44greentonsperthousandcubicfeetforsoftwoodsand35.98greentonsperthousandcubicfeetforhardwoods.

eSTimATiNG DemAND

Wood-Based liquid Fuels

EstimationofthewoodybiomassrequiredforliquidfuelsproductionbeganwithEnergyInformationAdministration(2010)projectionsofenergyconsumptionbysectorandsource.Weusedthisinformationtodeterminetheshareofcellulosicethanolwithrespecttothetotaldomesticethanolproduction.Whileextrapolatingethanolproductionfrom2036to2050,wepeggedthecornandstarchethanolproductionvalueatthe2035levelandassumedthatincreasedethanolproductionwillcomefromcellulosicsourcesalone.ThisisinsyncwithcurrentRenewableFuelStandardtargetofpeggingcornandstarchethanolproductionatafixedlevelandallowsforincreaseinethanolproductionthroughcellulosicsourcesalone,althoughtheEnergyInformationAdministration(2010)projectionsassumethattheRenewableFuelStandardtargetofcellulosicethanolwillnotbemetby2022.

Weestimatedtotaldomesticcellulosicethanolproduction(inmillionbarrelsperday)basedonpercentagesharedataonestimatesofliquidfuelssupplyanddisposition,andaddeddataforotherbiomass-derivedliquidssuchaspyrolysisoils,biomass-derivedFischer-Tropschliquids,andrenewablefeedstocksusedfortheproductionofgreendieselandgasoline,gatheredfromthesamesource,togettotalliquidfuelsthatcanbeproducedfromwoodorothercellulosicsources(EnergyInformationAdministration2010).

Wescaledcellulosicliquidfuelsdemandatthenationalleveldowntosouthernlevelsbasedontheassumptionthat55percentofthenationaldemandwillbemetbythe13SouthernStates.Becausewoodisahigh-volumelow-valueproduct,transportationcostslimititstransporttoconversionplantsfarfromharvestingareas.Inthislight,55percentisconservative,as57percentofwoodharvestingoccursintheSouth(Hansonandothers2010).

Asuiteoffeedstocks(includingwood,paperandpulpliquors,algae,switchgrass,andagriculturalresidue)canbeusedtoproducecellulosicethanolorotherbio-oils.Becausethefutureofliquidfuelfrombiomasssourcesisuncertainandwedonotknowhowmuchcellulosicethanolandotherbio-oilswillcomefromwoodsources,weassumedthat30percentofthetotalcellulosicfuelsandbio-oilsarefromwood.Weconvertedbarrel-per-daydemandtogallonsperdayaccordingtoOakRidgeNationalLaboratory(2010)protocols,whichdefined1barrelas42gallons.Weconverteddailyconsumptiondatatoannuallevelsbymultiplyingbyafactorof365.242andconvertedgallonsofethanolandbio-oilstogreentonsofwoodusinganethanolyieldcalculator(http://www1.eere.energy.gov/biomass/ethanol_yield_calculator.html),establishingthatagreentonofsoftwoodsproduces40.75gallons,50.4gallonsforhardwoods.Wefurtherconvertedthewooddemandinthousandcubicfeetbyapplyingthevolume-to-weightconversionfactorsdevelopedbyGalikandothers(2009).

Wood Pellets

TheU.S.woodpelletindustryisalreadyestablished,incontrasttothewoodelectricityandwoodfuelsindustries(AlavalapatiandLal2009,SpelterandToth2009).However,toalargeextent,itisbeingdrivenbyEuropeandemand(Gold2009).ThisalongwiththeuseofwoodpelletsfordomesticheatingratherthangridelectricitymightresultinincompleteaccountingbytheEnergyInformationAdministration(2010),whererenewableelectricityproductionestimatesarebasedsolelyonelectricitygridsales.Thispromptedustoaccountforwoodpelletdemandseparatefromwoodbasedelectricitydemand.SpelterandToth(2009)estimatedsouthernpelletplantcapacitytobe1.85milliontonsin2009;basedontheirassessmentthatU.S.plantsoperateatanaverageefficiencyof66percent,weestimatedthedemandforwoodforpelletsinthesouthernregiontobe1.22milliontons.BecausemanyStatesareencouragingtheuseofrenewables,domesticdemandislikelytoincreaseinfuture.Toaccountforexpecteddemandincreaseinfuture,weassumeda0.5-percentannualincreaseinthecapacityofpelletplantsfrom2011onwards.ThecurrentcapacityutilizationofU.S.pelletplantsislowerthancountrieslikeCanada,whichhaveutilizationefficiencyof81percent.SpelterandToth(2009)attributedthistoreasonssuchasnewerplants,normalstartupproblems,andlimits

onfiberavailability.However,theyalsosaythataspelletplantsbecomeolder,theU.S.capacityutilizationisexpectedtoincrease.Toaccountfortechnologicaladvancements,weassumedthatoverallcapacityutilizationincreasesby1percentperyearfrom2015untilitreaches85percent.

harvesting Residues and urban Wood Waste

Currentliterature(Perlackandothers2005,Galikandothers2009,EnergyInformationAdministration2010)indicatesthatharvestingresidues—discardedtreetopsandlimbsgeneratedduringtheharvestingprocess—currentlybeingleftonthegroundcanbeusedaswoodybiomass-basedenergyfeedstocks.Recentanalyses(Galikandothers2009,Rossiandothers2010)suggestthatharvestingresiduescouldbeusedtoavoiddivertingsomemerchantabletimberforenergyproduction.Rossiandothers(2010)alsoarguethattheprojectionsofwoodybiomassdemandforenergyproductionneedtobescaleddownfurthertoaccountforurbanwoodwaste.Forthisreason,wedroppedurbanwoodwastefromthetotalamountofwoodybiomassconsumption.Thisessentiallygivesusthemerchantabletimberthatwillberequiredforenergyproduction(totalwoodybiomassminusurbanwoodwaste).Notethattheresiduefromadditionalharvestingwashandledendogenously.Themodelcalculatessoftwoodandhardwoodharvestingresiduesalongwiththemerchantabletimberthatcanbeharvestedinaparticularyear.Foreachyear,theamountofharvestingresiduesthatcanbemadeavailableisestimatedalongwiththeharvestlevelsofsoftwoodandhardwoodpulpwoodandsawtimber.Becauseitignoresurbanwoodwaste,wenettedouturbanwoodwastefromtotalwoodybiomassconsumptionandfedtheremainderintothemodel.

Theharvestresiduethatcanbeusedforenergyproductiondependsontotalharvestaswellastheresidueutilizationfactor(thepercentageofharvestresiduethatcanbeconvertedtoenergy).Increasedharvestingefficiencycanreducetheavailabilityofforestresidues(Grusheckyandothers2007).Ratherthanhavingaconstantharvestingresidueutilizationfactor—40percentforWalshandothers(2008),45percentforRossiandothers(2010),and50percentforGalikandothers(2009)—weassume45percentin2010,increasingto67percentin2025,andremainingpeggedatthisleveluntil2050.Webelievethatthistrendcharacterizestheeffectsofcurrentharvestefficienciesandtechnologyimprovementsalongwithpotentialdevelopmentsoftheforestresiduesmarket.Becauseforestresidueremovalalsohasthepotentialforadverseimpactsonsiteproductivityandbiodiversity(Lalandothers2009),someStatebiomassharvestingguidelinesareaimedatretainingof10to33percentforestresiduesonharvestingsites(Lalandothers2011).Consequently,weassumethatnotmorethan67percentofharvestresiduesareremovedandutilizedforenergyproduction.

TotalharvestinformationfordifferenttimeperiodsisestimatedthroughanauxiliarySubregionalTimberSupplymodel,(Abtandothers2000),whichcalculatesgrossharvestresidues.Themodifiedmodelusesresidualfactors(Johnsonandothers2009)toestimatesoftwoodandhardwoodharvestingresiduesproducedfordifferentwoodybiomassconsumptionscenarios.Fortheforestsurveyunitsinthisstudy,theharvestingresidualfactorsforsoftwoodrangesfrom0.049to0.161(percubicfootofremovals)forgrowingstock,and0.091and0.357fornongrowingstock,comparedto0.106to0.247forgrowingstockand0.1945and0.3783fornongrowingstockforhardwoods.

Thesubregionalsupplymodelrunallocatesharvestresiduesbasedonspecies(hardwoodversussoftwood)ratherthantohardwoodandsoftwoodproducts(sawtimberversusnonsawtimber).Todistributeresiduestothefourproducts,weusedaverageproductsharesoftheseproductsasinitialparametervaluesandcalculatedtheaverageproductsharesbasedontheTimberProductOutputsdata(Bentley2003;Johnsonandothers2006,2008,2009).Weestimatedtheresiduesat55.51percentforsoftwoodsawtimber,44.48percentforsoftwoodnonsawtimber,39.74percentforhardwoodsawtimber,and60.25percentforhardwoodnonsawtimber.

Wiltsee(1998)estimatedpercapitaurbanwoodwasteat0.203greentonsperyear,whichweused—alongwiththeyearlyestimatesoffuturepopulationoftheSouthernStatesthrough2050fromtheU.S.CensusBureauStatesInterimPopulationProjectionsbyAgeandSexdatasets(http://www.census.gov/population/www/projections/projectionsagesex.html)—tocalculatetheannualamountofurbanwoodwastegeneratedintheregion.Becausesomeurbanwoodwastewillnotbedivertedforenergyuse,wescaledthepercapitaurbanwoodwasteestimationbyautilizationfactorof60percent(Carterandothers2007).

AllocATiNG meRchANTABle TimBeR iNTo FouR PRoDucTS

Todeterminethepercentagesharewithinaspeciesgroup,weallocatedwoodybiomassrequirement(minusharvestingresidues)onlytothepulpwoodmarket,assawtimberandotherhighervalueforestresourcesmightbetooexpensivetobeusedforbioenergyproduction.Thenonsawtimber-basedfeedstockpreferencecanalsobeobservedinarecentstudybyRossiandothers(2010)inFlorida,whichassumedthat88percentofthetotaltimberdivertedforenergycomesfromnonsawtimbersources.However,Perlackandothers(2005)outlinethepossibilitythathighoilpricesandlowtimberpricesmaycreateconditionswherebypulpwoodorevensmallsawtimberresourcescouldbeusedforbioenergy.Weassumedthatnonsawtimberwillbeusedforenergyproductionearlierthanhighvaluesawtimber.However,at

higherlevelofwoodybiomassconsumption,wedeterminedhowmuchofthewoodybiomassrequirementexceedswhatcanbemetbynonsawtimber.Wepositthatthisextrarequirementofbiomass(overandabovetheharvestlevelsdepictedbythemodelruns)issourcedbydisplacingsoftwoodsandhardwoodssawtimberfromforestindustries.

Thesubregionalsupplymodelutilizesdiameterdistributionsforeachsubregion,owner,managementtype,andageclasstocalculateproductremovalsandinventoryvolumesbyageclass.Wemodifiedageclassinthesubregionalsupplymodelfromafive-yearperiodtoannuallevelssothatthesupplyresponsecouldbeconsistentwithconsumptiondata.Furthermore,themodelrequiresaspecificcullfactorandadiameterrangethatdetermineshowmuchvolume(ineachproductcategory)contributestononsawtimber.WeusedthecullfactoroutlinedinAbtandothers(2009,2010)anddemarcatedsawtimberversusnonsawtimberbasedondiameteratbreastheight(d.b.h.)definitionsfromtheForestServiceForestInventoryandAnalysisprogram:5–8.9inchesforsoftwoodnonsawtimber,5–10.9inchesforhardwoodnonsawtimber,>9.0inchesforsoftwoodsawtimber,and≥11.0inchesforhardwoodsawtimber.Trees<5inchesd.b.h.areconsideredtobesaplings.

Themodifiedsubregionalsupplymodelrequiresthatconsumptionbeinputaccordingtothesoftwoodandhardwoodcategoriesspecifiedbytheuser.Weapportionedtotalwoodybiomassconsumed(bothforenergyandfortraditionalforestindustryrequirements)foraparticularscenarioamongthehardwoodandsoftwoodsasthestartingpoint.Lookingatroundwoodoutputdataforthepastdecade(Bentley2003;Johnsonandothers2006,2008,2009),weobservedthatthesoftwoodscompriseapproximately70percentofthetotaltimberoutput,comparedto30percentforhardwoods.

Asmostofthetechnologyforwoodybioenergyproductionisinnascentstageandnospeciesgrouphasbeenestablishedasfavored,wefollowedthisgenerictimberoutputtrendandparameterizedtheinitialmodelrunbyassumingthat70percentofwoodusedforenergyorbyindustryissourcedfromsoftwood,andtheremaining30percentisfromhardwoods.

Chapter 10. Forest Biomass-Based energy...213 chAPTeR 10. Forest Biomass-Based Energy Janaki R. R....

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