The Biomass Promise

Biomass energy promises to change many of the rules the energy world has been operating on for over a century. For rural areas, centralised production and distribution of liquid fuels and electric power by mega-energy corporations, will begin giving way to smaller, de-centralised producers and refiners--closer to the end-consumer.

Brazil and India are at the forefront of this energy revolution.

The Brazilian government has unveiled a multi-billion dollar anti-poverty program to provide jobs, electricity and infrastructures in the poorest, rural parts of the country. Bioenergy and biofuels are a key part of the plan, because the sector offers major opportunities for rural development and poverty alleviation. Biofuels create jobs for the country's vast rural populations, improve incomes and livelihoods, and help boost local access to energy. Modern energy is key to health and development, which is why rural electrification is seen as a priority.___Biopact

India has been at the forefront of the utilisation of Jatropha biodiesel village scale agriculture. The small scale approach has worked for many Indian villages, and promises to bring many more villages into the electricity and communications age. But some in the upper reaches of Indian national government, are looking at going big-time in biofuels. They are considering using GM biotech:

"Biotech can solve bio-fuel needs of the world...India, the second biggest producer of sugar, is likely to gain," James said.

Mayee said India is working towards getting technology for developing GM sugarcane with better ethanol output from Brazil.___Checkbiotech

My advice to India is to stick to small and medium scale projects. Trying to outcompete Brazil in cane ethanol is the last thing India should be trying to do. That is obsolete, last century thinking.In the US, West Virginia is a perennially impoverished state. It is also a US state looking closely at using biomass to reduce its dependence on foreign liquid fossil fuels.

The most common biomass resources are residues - agricultural wastes (corn stalks, cereal straws, sugarcane), forest waste (sawdust, pulp waste from paper mills, wood chips) and municipal solid waste (paper towels, newspaper, cardboard and yard waste). These residues make West Virginia, and other U.S. states with strong timber or agricultural industries, the perfect place to develop these homegrown fuels.___Source

Unfortunately, West Virginia's government appears to be another bureaucracy that is stuck on the idea of bio-ethanol as the be-all and end-all of bio-energy. That is the type of "hick thinking" that could keep West Virginia in the impoverished grouping.Converting bio-mass (including waste and garbage) into electricity is the smartest approach to bio-energy. One company that would be worth including in your stock portfolio is Renegy (NASDAQ: RNGY).

Budd Zuckerman, president of Genesis Select, stated, "Renegy is well positioned to address a growing demand for clean, sustainable power, and to lead the biomass to electricity segment of the renewable energy industry in North America. Its first biomass plant is scheduled to come online in the second quarter of 2008 to supply electrical power to Arizona's two leading utility companies. Renegy has also identified and begun to explore multiple additional biomass to electricity project opportunities totaling more than one gigawatt...of power output. In addition to operating a growing portfolio of renewable energy facilities that convert organic waste into electrical power, Renegy has built a world-class fuel aggregation infrastructure and a solid fuel procurement strategy to harvest, collect and transport wood waste material to power existing and future biomass plants.___Source

What is the overall energy promise of biomass? Theoretically, over 90% of world energy needs could be met by sustainable bio-energy.

Initially, the easiest promise to fulfill is at the local level. Regional crops and bio-residues can be matched to appropriate technology bioreactors and small-scale power plants to produce liquid fuels (biodiesel, bio-alcohols, biocrude), gas fuels (methanol), and electricity.

For the larger scale promise, it will take time to grow the infrastructure to rival the enormous infrastructure devoted to petroleum, coal, and gas. But it will be done, incrementally. As long as petro-fuel prices remain high (above US $70/barrel) the development of the infrastructure for bio-energy will continue, and accelerate.

Image credit to zero.no, fes.ng, and World Bank