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State developing, researching alternative fuels industry Sunday, Aug 5, 2007 By Jason Wiest Arkansas News Bureau LITTLE ROCK - No matter the density of the forests nor the ampleness of the soybean harvests, nature alone will not transform the Natural State into an alternative fuels hub. Decades of research, development and investment separate Arkansas from its potential as the Silicon Valley of alternative fuels that Gov. Mike Beebe envisions for eastern and southern parts of the state, officials say. "When we talk about Arkansas' potential, we're really talking about long-term fuels," not the common soybean-based biodiesel or corn-based ethanol, said Chris Benson, director of the Arkansas Energy Office of the Arkansas Economic Development Commission. Arkansas' future lies in ethanol produced from cellulosic biomass, such as switchgrass and forestry byproducts, experts say. Researchers are also exploring how alternative fuels developed from biomass could be processed in conjunction with synthetic fuels developed from Arkansas' large lignite reserves, according to Benson. "It's just mind boggling," Benson said of the realm of alternative fuels possibilities in the state. "We're at the very, very beginnings." Slow Start Lawmakers, entrepreneurs and scientists are working to advance the alternative fuels industry in Arkansas, which currently consists of two soybean-based biodiesel plants and about 60 service stations selling biodiesel or ethanol, according to the Arkansas Agriculture Department. Together, Patriot BioFuels in Stuttgart and FutureFuel Chemical Co. in Batesville have the capacity to produce about 27 million gallons of biodiesel annually, a minute portion of the 6 billion to 7 billion gallons of renewable fuels produced nationwide each year. "Arkansas is late coming to the field," said state Agriculture Secretary Richard Bell. "That's because if you look at our location and our river system, our agriculture crops - we're a great export state and that's because of our location." A number of states in the Southeast and Midwest outpace Arkansas in production of alternative fuels, partly because higher transportation costs make exporting crops from those states more expensive, Bell said. Another factor in Arkansas' slow progress, he said, is that the state has just two plants producing soybean oil. "They're doing it for the food oils, which are earning premiums over what you'd probably get for biodiesel," he said. In fact, Patriot BioFuels temporarily stopped production early this year because of the high price of soy oil and a declining price for petroleum diesel. Addressing the Obstacles The Legislature adopted measures this year intended to solve those problems and grow the alternative fuels industry. The new laws require state-owned diesel-powered vehicles to use a biodiesel blend, provide producers with tax credits and distribute money to producers and distributors of alternative fuels. The state Agriculture Department is drafting the rules and regulations for the Arkansas Alternative Fuels Development Program, which will provide a $20 million boost to the industry through multiple grants to plants that produce and service stations that sell alternative fuels. Up-for-grabs cash has sparked the interest of entrepreneurs who are planning new plants in Arkansas. However, it's difficult to tell how many plans are out there and which ones are legitimate, Benson said. "It's a crapshoot," he said. "We're getting calls literally every day about people's plans, their ideas, visions, some of them concrete, some of them not." But making Arkansas a major player in the industry is not as simple as building more biodiesel plants or a corn-based ethanol plant, of which the state currently has none because little corn is produced here. "The problem is we're increasing food prices and feed for cattle," said Matthew Pelkki, a faculty member in the School of Forest Resources at the University of Arkansas at Monticello. "Milk and beef prices are going up because we're putting a strain on the system." Milk prices are expected to soar to $5 a gallon by the end of the summer, in part because of the increased demand for corn by ethanol plants, according to agriculture experts. By driving up demand for such products, the alternative fuels industry's costs are also increasing. "If you want to use soybean oil to make biodiesel, you just have to pay the price for the oil," said Howell Medders, a spokesman for the agriculture department at the University of Arkansas in Fayetteville. Tapping Sources Increasing costs have prompted researchers to develop alternative feedstocks for alternative fuels. For the past 12 years, plant breeders at the University of Arkansas have been working to develop improved varieties of canola that would be better suited for growth in Arkansas. Researchers also are doing the same for other oil seed crops. The oil is used to produce biodiesel. Canola is 40 percent oil, compared to 18 percent oil for soybeans. But other resources already existing in Arkansas could ignite a boom in the industry, experts say. An Arkansas resource more likely to grow the industry without raising grocery prices for consumers is its forests. With nearly 19 million acres of forestland and active logging and milling operations, experts estimate Arkansas could generate 5 million to 7 million dry tons of logging slash - tree tops, leaves, needles, bark and other leftovers - annually to feed the alternative fuels industry. "Can you imagine the Delta and South Arkansas becoming the Silicon Valley of alternative fuels by having the kind of investment and job opportunities and new markets for all of our people to be able to make renewable sources of energy? We can do these things if we have courage and willpower," Beebe said in a January speech on revitalizing the Arkansas Delta, one of the most economically depressed regions in the nation. But before logging slash can be put to use, experts must first determine how collecting it will affect the environment. "If we start siphoning out a lot of this biomass, there's a question as to what's going to happen to soil quality in our forests," Pelkki said. "What (would that) do to that eco-system that's important to maintaining our forest products industry?" Pelkki said it would take a few more years to learn the affect of removing biomass and just how much could be removed safely. Currently estimates suggest one-third to one-half of the biomass could be harvested safely, he said. Technology would have to be developed to collect the material and also to clean it, Pelkki said. The economics of using biomass also must be studied. "It's expensive to pick up and transport, but it's cheap and it's available," he said. From Forest to Fuel But there's still one more hurdle to tapping one of the state's largest potential alternative fuels resources, and experts say it might be the biggest challenge of all: Scientists still have not identified a way to efficiently produce ethanol from cellulose. With current technology, it costs about $2.37 a gallon to produce cellulosic ethanol, compared to $1.10 a gallon to produce ethanol from corn starch, according to Julie Carrier, an associate professor of bioengineering at the University of Arkansas. Carrier's research aims to lower ethanol production costs by unlocking more material from the feedstock and turning it into fuel. Currently, her research is not funded by grants from the state. Experts at Arkansas State University in Jonesboro are researching enzymes that can be used in the fermentation process to produce cellulosic ethanol. "If technology goes the way everyone says it should, in 25 years the forest production end will probably be as big as the ag side of fuel production in the state," Pelkki said. Arkansas' forest products industry will closely monitor the successes of the nation's first cellulosic ethanol plant to be built in Soperton, Ga. by Range Fuels, with the assistance of a $76 million U.S. Department of Energy grant. The first phase of construction is scheduled for completion next year. The plant would produce ethanol in a two-step process that does not involve enzymes. "If that process works, a lot of forest product industries in Arkansas will pick up on this immediately," Pelkki said. Bio-refineries could sprout up alongside Arkansas papermills, he said. "Most will bring in 500,000 tons or more of logs every year to turn into paper, and another 1,000 tons per day of tree tops and other biomass," Pelkki said. "It's not a big stretch for them to bring in the additional treetops and other material." Those papermills could fast-track Arkansas' alternative fuels industry, he said. "If this country moves in a big way toward bioenergy ... forest biomass is going to be very important because it doesn't compete with food and in Arkansas we grow an awful lot of it," he said. Although it could take years before Arkansas alternative fuels industry takes off with cellulosic ethanol plants, the abundance of biomass in the state provides some insurance to it actually happening, Carrier said. "The big trick here is that you can't be transporting feedstock to New York state. That wouldn't be economical," Carrier said. "You have to have your processing facility close to your feedstock." |
