Feel the Burn

Renewable energy remains an economic sector that is attracting investment attention, including dollars invested in biomass-fed energy systems.

Determining where scrap wood fits into the overall renewable energy market remains unclear. Recyclers in some regions are pleased with their end market options while recyclers in other areas have yet to see new energy markets provide new destinations for their scrap wood.

The federal government plays a number of roles in the sector, with the Department of Energy (DOE) and the Environmental Protection Agency (EPA) each able to make decisions that can either open or shut doors for wood recyclers.
 

PLENTY OF PROJECTS
Among the $788 billion in spending tied to the American Recovery and Reinvestment Act (ARRA) of 2009, was $3 billion to be disbursed by the DOE “for the development of renewable energy projects around the country,” according to a DOE news release issued at the time. “The program will provide direct payments in lieu of tax credits in support of an estimated 5,000 bio-mass, solar, wind, and other types of renewable energy production facilities,” wrote the DOE.

According to the www.recovery.gov website, this amount includes $800 million for biomass and bio-refinery systems research and development. In addition to the DOE funds, the Department of Agriculture has also extended grants to biomass facilities that will use forest resources.

Some of these funds have been disbursed to state agencies and energy departments but other loans or grants have been directed toward the private sector and specific project sites.

In late 2009, the Department of Agriculture awarded $2.4 million to Buena Vista Biomass Power LLC to re-open an 18.4-megawatt woody biomass renewable energy electric generation facility in Buena Vista, Calif., about 40 miles southeast of Sacramento.

The ARRA funds are being used to buy and restore equipment for the facility so it can return to commercial operation by early 2011. Approximately one-third of the fuel procured for the plant “will be sourced directly from forest fuels treatment/forest restoration activities,” according to the grant’s description, meaning another two-thirds will be purchased from other sources.

In Lancaster, Calif., near Los Angeles, DOE funding tracing back to 2005 is helping BlueFire Renewables prepare its cellulosic ethanol facility for production. The company says its Lancaster plant—and another being constructed in Fulton, Miss.—will produce “bio-fuels from urban trash (post-sorted MSW), rice and wheat straws, wood waste and other agricultural residues.”

The company says it will “deploy a concentrated acid hydrolysis technology process for the profitable conversion of ‘green waste’ to renewable fuel sources including cellulosic ethanol, bio-diesel [and] bio-jet fuel.”

BlueFire says its Lancaster facility will be able to produce approximately 3.9 million gallons of fuel-grade ethanol each year while the Mississippi plant will be able to produce approximately 19 million gallons of ethanol each year “from woody biomass, mill residue and other cellulosic waste.”

Across the country, Construction Materials Recycling Association (CMRA) Immediate Past President Jim Taylor and his company, Taylor Recycling Facility LLC, are in the process of securing a $100 million loan guarantee from the

DOE to construct a biomass gasification plant in Montgomery, N.Y.

The DOE says it has begun its final due diligence review to the fund the project. If built, the site would be among the nation’s first commercially-sized biomass gasification facilities using municipal solid waste to produce electricity. (See a news item on this project on page 10.)

The development of such projects seems to be putting materials such as scrap wood on the cusp of enjoying new levels of demand as a secondary commodity. According to wood recyclers, in some parts of the country that additional demand is needed.
 

DULL AND BRIGHT SPOTS
The status of scrap wood markets in the third quarter of 2010 varies from region to region, according to recyclers in different parts of the country.

Sorting Through It

In 2005, Florida Wood Recycling, Medley, Fla., cooperated with researchers at the University of Florida and the University of Miami for a project that resulted in an 18-page document titled “Augmented Sorting of Recovered Wood Waste Using Stain and X-ray Technologies.” The project, funded by the Florida Department of Environmental Protection, was designed to evaluate the use of visual sorting, PAN Indicator Stain methods and X-ray fluorescence (XRF) technology to identify chromated copper arsenate (CCA)-treated wood within the overall stream of material entering the recycling plant. Among the study’s conclusions, it found “The costs associated with sorting commingled C&D wood using hand-held XRF units is high due to labor costs. Efforts should focus on developing on-line sorting systems for commingled C&D wood [that could] greatly decrease labor costs.” The document, published in January of 2006, is accessible on the University of Miami website at http://cae.miami.edu/~hmsolo/medley/final_medley_text.pdf.

A mixed C&D recycler in Massachusetts says he has more scrap wood in inventory than he would prefer, a situation that can be ascribed to it being off-season for mulch buying and the closing off of some end markets for scrap wood in the fuels sector. New England states have been placing restrictions on the use of scrap lumber as a fuel, fearing the presence of contaminants such as lead-based paint and wood treatment additives.

In the Miami, Fla., area, Harvey Schneider, the owner of Florida Wood Recycling, says the flow of material into his facility has been slow. “This past couple of years have been, to say the least, difficult,” says Schneider.

Coupled with less construction and demolition scrap coming in has been reduced demand for the landscaping products Florida Wood Recycling makes. “A few years back, there seemed to be shortage of wood; now there seems to be an excess of it,” Schneider comments.

Supply is not too far out of balance with demand, though, he adds. “It’s funny, water always seems to find its own level,” he remarks.

Mike Morris of Green Tech Transfer & Recycling LLC, South Bend, Ind., has been able to grow his company’s wood recycling activities even in the lackluster economy of the past two years.

“We opened on Earth Day 2008 (April 22) with one employee and today employ over 30 people and operate at a tonnage level that is exceeding our business model,” says Morris.

The company’s material recycling facility (MRF) and transfer station accepts mixed C&D materials as well as cardboard, scrap paper, scrap metal, appliances, wood pallets and crates, asphalt shingles and curbside recyclables.

Since opening, Morris says Green Tech’s access to material has grown steadily, and he’s been encouraged by the variety of end markets emerging for scrap wood.

In addition to sourcing wood from the construction and demolition sectors, Morris says Green Tech is also working to offer its recycling services to northern Indiana’s sizable manufactured housing industry.

“The RV and manufactured home industry is looking for an alternative for the wood it generates,” says Morris. “We hope to divert as much of that material as we can process.”

The framing and window trimming operations of manufactured housing plants generate clean one-by-two and other dimensional lumber scrap, says Morris. “In this region, it amounts to thousands of yards per day,” he comments.

Morris estimates that 20 truck loads, perhaps 400 tons per day, of such scrap wood is generated in Elkhart County, Ind. “There is a real desire in this area to recycle the wood; we need the right end market,” he comments.

In its two years of operating, Green Tech has concentrated on producing mulch, but Morris says, “We just started in the wood fuel market. We’re buying a new grinder that will allow us to process wood for fuel and also handle asphalt shingles,” says Morris.

Morris says the Indiana prison system is using wood fuel at three of its facilities and Morris says he also will be approaching universities in Indiana about switching some of their coal boiler capacity to wood-fueled boilers.
 

“You can build a [biomass] plant, but if you don’t have a steady supply, your plant is in essence unable to operate. Recyclers play a large role [in where] the biomass plants are being situated. We make a material they can use.”
– Harvey Schneider, Florida Wood Recycling

 

CONTROLLED BURN
Ongoing research, funding, permitting and finally construction in the energy sector is starting to contribute to a more widespread and steady market for scrap wood.

Wood recyclers, even those who have traditionally focused on mulch and landscaping products such as Schneider’s Florida Wood Recycling, are poised to benefit from the years of research and development.

“I think we’ve progressed to a point [in this country] where we want to be energy self-sufficient,” says Schneider. “Those potential uses of renewable resources are going to be more and more prominent in our society; I believe that.”

Morris has begun to find that a ready market already exists in Indiana. “If you make a clean product, the consumers will find you,” he comments.

He says that after a news item ran on Green Tech being awarded a state grant to purchase its wood fuel grinder, “We had two consumers showing up looking for wood, and they’re paying a fair market price.”

Grinders operated by wood recyclers and mixed C&D plant operators are likely to churn out more wood fuel in the next several years as more biomass-burning plants come online in the U.S.

Making a quality product will be a key to find favor with these consumers, says Morris. “If you try to send them crap, they’ll blow you off and find someone else. Consistently work with your consumers and offer them a quality product at a fair price.”

He’s optimistic that the approach will bode well for Green Tech in the long run, noting the benefits of serving steady fuel markets as opposed to chasing a series of “one-time mulch buys.”

Schneider says he expects these steady markets will soon be the norm for wood recyclers throughout the country. “You can build a [biomass] plant, but if you don’t have a steady supply, your plant is in essence unable to operate,” he remarks. “Recyclers play a large role [in where] the biomass plants are being situated. We make a material they can use.”

The veteran recycler draws a comparison between the biomass energy sector and the evolution of the steel industry to smaller, regional electric arc furnace mini-mills. “I think where we’re headed is like the steel mini-mills. They work regionally and within their own market. We’re going to see technology evolve to where there will be smaller regional facilities that are able to convert renewables into energy,” says Schneider.

“When it comes to transportation and logistics, you’re talking about a material that doesn’t have a large value per ton,” he notes. “You need to do things in close proximity so you can minimize the cost of trucking. I think an industry developing like that is going to be a good thing, and I look forward to it.”