A. U. S. Markets

As mentioned in the introduction to this chapter, biomass energy is already a substantial contributor to commercial primary energy demand. Market pene­tration is significant and is expected to increase. A comparison of U. S. consump­tion of biomass energy in 1990 with projections for 2000 (Table 2.9) (Klass, 1994) shows that consumption in 2000 is expected to be about 50% greater. This assessment is based on the following assumptions: Noncrisis conditions prevail; the U. S. tax incentives in place continue and are not changed; no

TABLE 2.9 Consumption of Biomass Energy in United States in 1990 and Projected for 2000“

1990 2000

Resource EJ BOE/day EJ BOE/day

“Klass (1994) and U. S. Department of Energy (1990) for 1990; Klass (1990, 1994) for 2000. hither estimates range from 3.5 to 5.8 EJ/year in 2000 (с/. Hohenstein and Wright, 1994).

legislative mandates to embark on an off-oil campaign via fossil carbon con­sumption taxes or related disincentives to use fossil fuels, such as those in place in certain parts of Europe, are enacted; and total energy consumption in 2000 is 92 EJ (87 quad).

In 1990, industrial and residential utilization of biomass energy as wood and wood wastes was responsible for almost 84% of total biomass energy consumption, while MSW contributed about 10%. When these figures are compared with the estimated recoverable amounts of biomass energy available in the United States in 2000 (Table 2.7), it is evident that biomass energy consumption can be substantially increased. The development of large-scale biomass energy plantations in which system designs incorporate total replace­ment of virgin biomass resources as utilized could provide much larger in­creases in biomass energy consumption beyond these estimates. At an average U. S. wellhead price of petroleum of $20/bbl in 1990, total biomass consumption in 1990 was equivalent to about $27.4 million per day retained in the country and not expended on fossil fuels. There are clearly strong beneficial economic impacts of biomass energy consumption on U. S. trade deficits, a good portion of which is caused by oil imports.

A few comments are in order regarding the utilization of fuel ethanol, most of which is manufactured from corn in the United States. Fuel ethanol is used in motor gasoline blends as an octane enhancer and as an oxygenate to reduce emissions. The Clean Air Act Amendments of 1990 (U. S. Public Law 101­549) mandate the use of oxygenates in reformulated gasolines, and the market for ethanol from biomass is therefore expected to exhibit substantial growth as time passes, provided the tax incentives in place for fuel ethanol from biomass continue or fossil fuel consumption taxes are implemented to attempt to reduce atmospheric pollution. As will be shown in later chapters, advanced technologies may eventually make it possible for fuel ethanol to be manufac­tured from low-grade cellulosic biomass feedstocks and to be economically competitive with motor gasolines without the need for tax incentives. In the mid-1990s, the production capacity for fuel ethanol from biomass was about 4.2 billion L/year, or 0.088 EJ. Total U. S. production of fuel ethanol has increased by more than an order of magnitude since it was first marketed in modern times in the United States as a gasoline extender and octane enhancer in 1979. Fuel ethanol is a major biomass energy commodity, the production of which is expected to increase by another 2.3 billion L/year as the Clean Air Act Amendments are fully implemented. But note that the U. S. motor gasoline market in the mid-1990s was more than 379 billion L/year (100 billion galJ yr), so fuel ethanol only displaced about 1% by volume of petroleum gasolines.

The estimate of U. S. biomass energy usage in 2000 (Table 2.9) indicates that the largest contributions are still expected to come from wood and wood wastes in the industrial and residential sectors, or about three-quarters of total estimated U. S. biomass energy consumption. Because of the technical and economic problems associated with solid waste disposal, the increasing amounts of MSW generated by increasing urban populations, and the phase­out of sanitary landfilling as a preferred method of MSW disposal, the contribu­tion of MSW to biomass energy usage is expected to double by 2000.

A projection of biomass energy consumption for the United States is shown for the years 2000, 2010, 2020, and 2030 by end-use sector in Table 2.10 (U. S. Dept, of Energy, 1990). This particular analysis is based on a national premiums scenario which assumes specific market incentives are applied to all new renewable energy technology deployment and continue to 2030. The premiums are 2<t/kWh on electricity generation from fossil fuels, $1.90/GJ ($2.00/106 Btu) on direct coal and petroleum consumption, and $0.95/GJ ($1.00/106 Btu) on direct natural gas consumption. This scenario depends on the enactment of federal legislation that is equivalent to a fossil fuel consump­tion tax. Any incentives over and above those assumed for the assessment in Table 2.9 can be a strong stimulus to increase biomass energy consumption.

The market penetration of synthetic fuels from virgin and waste biomass in the United States depends on several basic factors such as demand, price, performance, competitive feedstock uses, government incentives, whether an established fuel is replaced by a chemically identical fuel or a different fuel, and the cost and availability of other fuels such as oil and natural gas. Many detailed analyses have been performed to predict the market penetration of biomass energy over the next 10 to 50 years. There seems to be a range from about 4 to 20 quads per year that characterize the growth of biomass energy consumption. All of these projections of future market penetrations for biomass energy in the United States should be viewed in the proper perspective.

The potential of biomass energy is easily demonstrated as shown in this chapter, but the necessary infrastructure does not exist to realize this potential without large investments by industry. Government incentives will probably be necessary too. U. S. capacity for producing virtually all biofuels manufac­tured by biological or thermal conversion of biomass would have to be dramati­cally increased to approach the potential contributions of virgin and waste biomass. For example, an incremental quad per year of methane from biomass feedstocks in the United States requires about 200 times the biological methane production capacity in place, and an incremental quad per year of fuel ethanol requires about 13 to 14 times the existing plant capacity to manufacture fermentation ethanol. Given the long lead times necessary to design and con­struct large biomass conversion plants, it is unrealistic to assume that sufficient capacity and the associated infrastructure could be placed on-line in the near term to satisfy quad-blocks of energy demand. This is not to say that plant capacities cannot be rapidly increased if a concerted effort is made by the private sector to do so.

Conversely, the upside of any assessment of virgin biomass feedstocks is that energy and fuel markets are very large and expand with the population, so there should be no shortage of demand for economically competitive energy supplies in the foreseeable future. Systems that offer improved waste disposal together with efficient energy recovery are also expected to fare quite well.

Projections of market penetrations and contributions to primary energy demand by biomass can contain significant errors. It is important, therefore, to keep in mind that even though some of these projections may turn out to be incorrect, they are still necessary to assess the future role and impact of renewable energy resources. They are also of great help in deciding whether a potential renewable energy resource should be developed and commercialized.