TERU Focus Report - California Bioresources - Part 1

Analysis of the EPA's 6th Annual Symposium on Regional Organic Residuals
September 18, 2011 -- Michael Theroux

Introduction

On September 13 and 14, 2011, Region 9 of the Environmental Protection Agency (EPA) hosted the California Bioresources Alliance 6th Annual Symposium, (was the Pacific Southwest Organic Residual Symposium) in downtown Sacramento. The moderated panel discussions were intended to "bring together organic residuals industry professionals, municipalities, regulators, legislators, researchers, financers, and other stakeholders to find the best management options for bioresources, including manures, biosolids, food wastes, green wastes, animal wastes, and other organic residuals."

The event drew perhaps 60 agency and industry folks, almost all tightly focused on the general topic of increasing beneficial use of biomass resources - the organic residuals from agriculture, forestry, industry and municipal waste. With the recent completion of the State Water Resource Control Board (SWRCB) Program Environmental Impact Report (PEIR) addressing statewide dairy digester development and the near-completion of the Department of Resources Recycling and Recovery's (CalRecycle) separate PEIR on the broader topic of anaerobic digestion, the overall theme of the event heavily favored "digesters" and the biogas and useful residuals such equipment generates.

Day 1: Setting the "Bioresource Alliance" Tone

United States Department of Agriculture (USDA) State Conservationist Ed Burton got everyone settled and turned the podium over to Sarah Michael, Advisor to Vice Chair of the Energy Commission Jim Boyd,  who spoke of the new Governor's intent to restart the Bioenergy Action Plan. Data shows a rather meager reinvigoration at best; only 11% of the Renewable Portfolio Standard targeted 20% is from active bioenergy generation. The drop in solar energy installation cost seems to have cut into Bioenergy's share. Yet Bioenergy provides baseload power, that constant-on bottom line always critical for a stabile energy delivery. Of all the Utilities, only the Sacramento Municipal Utility District (SMUD) has a 50% bioenergy baseline goal.

The legislature saw fit to not re-authorize California's Public Interest Energy Research (PIER) and Renewables programs in their voting last week. Air Resources Board lead Mary Nichols provides this thought regarding the constant opposition: Figure out which communities DO want bioenergy/biofuels projects and work with them. Governor Brown has asked the agencies to determine and monetize the environmental and social benefits of bioenergy and to spread the cost across the entire public, not just utility rate-payers. New Secretary of the California Department of Food and Agriculture (CDFA) Karen Ross is an avid supporter of beneficial bioresource utilization, needed with Commissioner Boyd retiring January 1st of next year. The CEC for their part continues support with up-coming AB 118 solicitations boosting biomethane and fuel production projects. The PIER program has two remaining solicitations, the first planned for September 30th focused on Combined Heat and Power (CHP) from Biogas. A second solicitation later this fall is again aimed at developing Energy Secure Communities based on renewable biomass/solar and/or biomass/geothermal combinations.

The Symposium attendees took a moment to recognize the constant bio-leadership provided by EPA Region 9's Lauren Fondahl, who once again pulled this symposium together. Lauren is the unofficial head of the less-than official and newly-renamed California Bioresources Alliance, a trooper who is clearly not seeking the spot-light, just doing the heavy lifting.

Pricing - The Bottom Line?

Karen Ross' new CDFA deputy secretary, Jim Houston, keynoted the first main session on Pricing and reflected on Sarah Michael's note regarding Solar leading the race, finding this NOT surprising. The Bioresources sector sends ONE lobbyist before the Legislature, while the Solar Industry continues to fill the Hallowed Halls (and coffers) with vocal proponents and an entrenched opposition beleaguers all with their plaintive whine. It is hard to get and keep the Capital Attention with long pay-back bioenergy proposals, when only the Quick Fix is interesting. Legislators need to hear WHY biomass is important.

Jim indicated their agency would prefer to see local use for distributed projects, rather than long-hauling urban wood waste, noting that we communally need to focus on reducing the feedstock transport distance and aggregation cost to make bioresources projects economically acceptable.

Pricing Overview

Dave Warner, Director of the San Joaquin Valley Air Pollution Control District (SJVAPD), introduced the first subject and moderated the Pricing Overview panel discussion. SJVAPDC and the South Coast Air Quality Management District (SCAQMD) have oversight of the main Northern and Southern California air basins and are responsible for cleaning up the very worst air in our nation. To do that task, the two air quality agencies administer the most stringent air quality rules in the country and, arguably, in the world.

The San Joaquin Valley is home to 85% of California's dairy cows, which contribute some 200 million pounds of manure and urine to our environment every day. California's Climate bill AB 32 asked dairy owners to install digesters; greenhouse gas (GHG) credits seem available and a trading market is now under development with the California Cap and Trade program coming on line. Why aren't there more digesters? What governs the pricing policies? What would it take to resolve the issues?

With all the dairies and cows, digester development remains nearly impossible. We Have: Technology, Project developers and even the Financers; the critical Co-digestion substrates are readily available, as are the Production sites. We Need: Friendly regulatory framework and the infrastructure to get from resource through processing to product to consumer. The Primary barrier: biogas generation from manure alone is simply not economically effective at this time, given the weight of the regulations and the lack of a viable value chain.

Consider the solar industry's deeply funded history; Remember that 20 years ago, the early proposals for incentives for solar development were also killed by the legislature; let's hope that convincing "the powers that be" of the benefits of biomass doesn't take that long. California now needs a similarly funded "Biogas Incubation Program" that can pump $150 million into the fledgling bioresources utilization industry over the next five years, coupled with a viable Carbon Market, and recognition of the true environmental benefits to reduced GHG from of digesters. Governor Brown's administration "gets" the need for Distributed Generation. Net Energy Metering must expand to all forms of renewable generation and be allowed to generate above plant load. As it is, the small amount of energy a dairy needs doesn't justify a scaled-to-fit approach, while the amount of feedstock available is almost certainly capable of fueling far more generation than the dairy could consume. The expedited SB 32 implementation process is underway at the Public Utilities Commission with a Sept 26th "pricing workshop" scheduled; proponents are trying for 14 to 18 cents per kilowatt. The IOUs don't help when they work up an 80-page contract for a small scale digester that the Germans manage with a 2-page document.

An incubator program for digesters is already advocated in the Bioenergy Action Plan, recognizing that stronger legislative support is needed to lower cost of deployment and this takes time. Utilities CAN be partners; consider Southern California Gas Company's partnership with the City of Escondido in researching and demonstrating biogas clean-up. A larger problem: California projects are not allowed to inject in-state bio-methane from landfills into pipelines, while we allow import of various forms of biogas from out-of-state. The Gas Technology Institute (GTI) is currently working on Pipeline Quality Standards for injection, with the final report due this winter. The CEC has scheduled what is sure to be a well-attended hearing next week, Sept 20, to review that policy.

Transportation Case Studies: Stationary versus Mobile Source Emissions

Kathleen Ave, Energy Research & Development Department, Sacramento Municipal Utility District (SMUD) and Kerry Drake, Associate Director of Region 9 EPA's Air Division, moderated the afternoon panel. The topic explored why mobile and stationary source emissions management remains so different, with so little ability to off-set emissions in one sector with reduction in emissions in the other. How can this be resolved to arrive at the lowest net emissions? What are the agencies doing to promote bioresource beneficial use?

An example from a northern San Diego County wastewater treatment plant (WWTP) provided a glimpse of the decision-making process that must unfold during a "biosolids crisis" situation in which input continues to increase, systems remain static and options for output are curtailed. Transport off-site involves trucking large quantities of wet materials greater and greater distances, as urban, in-region alternatives are progressively eliminated. On-site combustion and even simple storage are increasingly restricted if not prohibited. Solution: dried and pelletized biosolids became permitted fuel for a regional cement plant, partially replacing the plant's dirtier feedstock. This reduced residual requiring removal from the WWTP site, from 125 wet tons per day to 125 dry tons per week and thus dramatically reduced the cost of transport and the mobile source emissions without increasing on-site stationary emissions at the source or at the point of disposal. Increased cost of drying was off-set by reduced cost of transport. With the pressure off temporarily, management can now explore alternative ways to dry the biosolids, including integration of engines generating heat and power from their biogas.

Los Angeles basin municipal solid waste and biosolids management challenges, options, and decisions provided a second example, with quantities requiring handling of two orders of magnitude larger at about 20,000 tons per day. With the massive La Puente Landfill's closure imminent and no local alternatives available, options considered were long-haul transport and really long-haul transport outside of the region. New landfills and new waste to energy plants almost certainly will not be permitted within the Basin and near-term development of large-scale conversion seems similarly unattainable, even with aggressive programs for just such in-basin conversion, all while there is no stop to the tsunami of trash. Planning needed for this eventuality began well over a decade ago to include negotiation for rights of solid waste disposal in desert landfills over 200 miles distant and land application of biosolids, equally remote. Set-aside emissions allowances under air quality standards for specific public-good actions continue to facilitate use of landfilling while these same credits are unavailable for most conversion alternatives; this factor alone may be sufficient to tip the balance to disposal instead of recovery, where there simply are no large-scale emissions credits to be purchased. Certainly, a more holistic Basin-wide approach is warranted where new cleaner management methods are permitted to incrementally replace older, dirtier methods. Until those regulatory and social policy changes are made, this scale of resource waste will continue.

Continue to Part 2