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Shell says ‘Filler-up’ with straw and wood chips please

Posted by Stephen on March 5, 2007

Is America beginning to do more then play lip service to alternative forms of fuel and energy?

Shell, in partnership with the German bio-fuel company Choren, is planning to make a new road fuel made from wood chips and straw. The synthetic diesel, made using a novel biomass-to-liquids (BTL) process, will shift the bio-diesel industry into a higher gear by using waste plant material instead of valuable food crops.

There is growing pressure on energy companies to find low-carbon alternatives to conventional road fuels. However, increased use of first-generation bio-fuels, such as ethanol and bio-diesel made from rape-seed or palm-oil, has caused the price of food crops, such as corn, to soar.

The cost of BTL is high compared with oil at $60 to $70 a barrel, admitted Ken Fisher, vice-president for strategy at Shell, but he’s confident the company can bring down the price with much higher volumes.

Erik Curren, editor of Conserve Magazine, says buyers should beware, “The announcement has all the getting-something-from-nothing excitement typical of bio-fuels news. But, as with all ideas to create liquid fuels that are not petroleum-based, the devil is in the details.”

Curren is concerned that taxpayer subsidies are artificially keeping the price per barrel of Shell’s bio-diesel low today versus gasoline. “Of course, in the future, that may not matter, because the price of oil is bound to rise, either from global warming taxes or depletion of world oil reserves, or both. But in the meantime, subsidies make bio-fuels look cheaper than they really are.”

The discovery of better catalysts and the rising price of crude is improving the commercial equation. Shell is building Pearl, a GTL plant in Qatar that will produce 140,000 barrels per day of synthetic diesel, an odorless fuel with zero sulfur emissions.

Lumber companies believe they can cash in by using logging debris to produce electricity that can be sold at green tag premium.

“There are the economic benefits, the benefits of healthy forests, and the benefit of a country needing renewable energy, clean energy,” said Rough and Ready President Link Phillippi. There is also a chance to assist the logging industry balance out the cost of thinning forests to prevent insect infestation, disease, and forest fires.

The idea of burning wood waste, known as hog fuel, to produce energy at wood products and pulp mills is one that dates back to at least the 1930’s, but was going nowhere as long as fossil fuels were cheap, and logging was cut back to protect fish and wildlife habitat.

Environmentalists are wary. Although they like the idea that biomass generation can help pay for forest thinning, they want natural fire to take over once the thinning is done.

“One should not consider biomass energy sustainable or renewable,” said environmental consultant Andy Kerr, who has been working to help more biomass projects get up and running. “Because for the most part, after these forests have been thinned, you don’t want them to get thick again, certainly not thick enough to be economically feasible to cut the trees down and haul them to the biomass energy incinerator.”

Curren asks a more fundamental question. “First, will they actually work? It’s hard enough to get liquid fuel from the parts of crops we normally use for food, like the kernel of the corn or the nut of a soybean,” adds Curren, “As to wood chips and straw? Compared to a corn kernel or a soy nut, they’re little sugar and mostly fiber. That means there’s much less energy to work with per pound of material, which means more processing and thus, more energy required to get less energy out.”

Perhaps America hasn’t determined the final solution for renewable sources of energy, but at least the conversation is beginning to take shape. It is long overdue.

Stephen Winslow is the executive editor of Conservative Viewpoints.

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