Beer mash fattening cows, trimming costs in Colorado

Denver Post, Business Section | 5/5/2012

By Steve Raabe

The Denver Post

Explosive growth in Colorado’s craft-brewing industry produces not only more beer, but more beer byproducts.

That means the hamburger you eat next week may come from a steer happily fed last week with brewing leftovers.

Using spent grains for livestock feed dates to the advent of beer. But with corn and other commodity prices sky high, feedyards increasingly are using brewing byproducts to help fatten cattle in preparation for slaughter.

“They say that Colorado is the Napa Valley of beer, and there are a lot of breweries here producing a lot of spent grain,” said Joe Schiraldi, vice president of brewing operations for Boulder-based Left Hand Brewing.

Shipping processed barley to livestock feeders “really helps their economics,” Schiraldi said. “It’s a great way to direct that waste stream.”

Some brewers give their spent mash away. Others receive about $5 to $10 per ton for the wet grains.

Either way, it must go. Craft brewers have little storage for used grain, and production bottlenecks quickly materialize without disposal.

Oskar Blues owner Dale Katechis sends a portion of the brewery’s waste grain to his 50-acre Hops & Heifers Farm in Longmont, where a handful of cattle are raised and brewing hops are grown.

“We’re trying to vertically integrate what we do with the brewery and the restaurants,” said head brewer Dave Chichura.

Several Front Range breweries contract with Ulrich Farms, a cattle-feeding operation near Platteville, to have spent grains hauled away.

Rex Beall, an Ulrich owner and manager, said the nonalcoholic, recycled grain constitutes about one-quarter of his cattle’s feed. A third comes from corn, and the remainder is a mixture of hay and other agricultural byproducts.

“Today’s market has changed so much because of corn prices,” Beall said. “There is value to us in using the brewers’ grains.”

The process of beer brewing and ethanol production removes starches and sugars from barley and corn. The remaining spent grains have reduced caloric content but provide protein and fiber that can supplement corn for cattle feed.

Corn prices have more than doubled in the past six years. Much of the corn that formerly was used for livestock feed now is diverted to ethanol production. The increased demand has been a major cause of rising prices.

Colorado’s largest feedyard, the JBS-owned Five Rivers Kuner lot near Greeley, uses dry distillers grain, the corn waste left over from ethanol production.

“We’ve been feeding it as a protein source for about five years, ever since the ethanol industry really got going,” said general manager Nolan Stone.

MillerCoors did not respond to questions on how it deals with brewing waste from its Golden brewery, one of the largest in the world.

The relationship between brewers and feeders helps the economics on both sides, said Stephen Koontz, an agricultural economist at Colorado State University.

“The distiller or brewer has a lot of byproduct,” he said. “Conveniently, cattle do well with this feed. So it is a good match.”

Steve Raabe: 303-954-1948 orsraabe@denverpost.com
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Protected Public Lands Promote Jobs and Higher Incomes, Part One

Pagosa Daily Post

Muriel Eason | 1/3/13

As the Pagosa Springs Community Development Corporation (PSCDC) evolves and makes new plans to enhance and diversify our local economy, we are learning about our unique assets and opportunities to grow our economy without becoming “Every Town” USA.  Archuleta County is unique in so many respects and the challenge is to retain that uniqueness and use it to become a truly special place, but also a place where our young people can stay, raise families and find good jobs.  As the PSCDC is learning of our opportunities, we want to share that learning with members of the community, so this is the first of a series of articles on our natural opportunities for growth.

Pagosa Springs is surrounded by vast public lands and wilderness.  Only 31% of Archuleta County is privately owned and 49% is managed by the U.S. Forest Service.  According to Headwaters Economics, an independent, nonprofit research group whose mission is to improve community development and land management decisions in the West, these public lands create a competitive economic advantage—one that we have not recognized and capitalized on as yet.

Headwaters Economics released a research report in November, 2012 that found that the West’s popular national parks, monuments, wilderness areas and other public lands offer its growing high-tech and services industries a competitive advantage, which is a major reason why the western economy has outperformed the rest of the U.S. economy in key measures of growth—employment, population, and personal income—during the last four decades.

The economy of the West, like that of the U.S. and other industrialized economies, has shifted over time from a primary reliance on the extraction and processing of raw materials to the deployment of human skills, technology, and innovation.  In today’s economy, the West’s largest economic drivers are not directly tied to wood, gold, cattle, or other basic commodities, but rather stem from the growing value-added contributions of knowledge-based sectors across the region. In addition, as the West’s economy shifts toward a knowledge-based economy, new research shows that protected federal public lands support faster rates of job growth and are correlated with higher levels of per capita income.

Western non-metropolitan counties like Archuleta County, with more than 30 percent of the county’s land base in federal protected status such as national parks, monuments, wilderness, and other similar designations increased jobs by 345 percent over the last 40 years. By comparison, similar counties with no protected federal public lands increased employment by only 83 percent.  In 2010, per capita income in western non-metropolitan counties with 100,000 acres of protected public lands is on average $4,360 higher than per capita income in similar counties with no protected public lands.

A high-quality outdoor environment along with a culture of innovation gives the West a unique competitive advantage that helps explain why the region’s economy is the fastest-growing in the country. As the structure of the U.S. economy and new growth opportunities have shifted to knowledge-based occupations and industries, the factors that determine the location of companies are shifting. Traditional location factors are relatively less important to firms in knowledge-based enterprises. Thanks to advances in transportation and communication, these companies now have far fewer constraints on where they conduct business. As “footloose” businesses, whose success is relatively independent of location, such companies are less focused on traditional cost factors and more sensitive to the preferences of CEOs and recruitment and retention factors such as access to outdoor recreation and natural landscapes.

What do communities need to attract the best and the brightest? They require good schools and transportation infrastructure, and high-speed Internet. Increasingly, they also need a high quality of life, with clean air and water, ample recreation opportunities, scenic vistas, and other amenities that draw entrepreneurs and a skilled workforce.  This is precisely where the West excels. The region’s wide-open spaces, mountains, canyons, and other spectacular natural features set the West apart from the rest of the country. Because significant portions of these lands are public, and protected as national parks and monuments for example, they are accessible and enjoyed by the West’s residents at higher rates than in the rest of the country.

Oil Could Ignite San Juan Revival

Albuquerque Journal | September 17, 2012

By Kevin Robinson-Avila / Journal Staff Writer on Mon, Sep 17, 2012

Copyright © 2012 Albuquerque Journal

The good times may soon return to the San Juan Basin in northwestern New Mexico, thanks to oil deposits buried in shale beds alongside the region’s abundant natural gas fields.

Two large companies, Canada’s Encana Corp. and Bill Barrett Corp. of Denver, have partnered with local producers in Farmington to dig wells in the Mancos Shale, a hard-rock layer rich in liquid fuels that rests between 5,000 feet and 12,000 feet below ground.

That layer is located amid dry natural gas reservoirs above and below it that have sustained the industry in the Four Corners area for decades. But with dry

natural gas prices at 10-year lows, and a market glut likely to keep it that way for the foreseeable future, producers are turning to oil and other liquid fuels trapped in the Mancos as a potential ticket to economic recovery.

“The Mancos oil play is the real deal,” said T. Greg Merrion, president of Farmington-based Merrion Oil and Gas Corp., which partnered with Bill Barrett to explore for oil. “We could be on the cusp of another energy boom here in the San Juan Basin.”

30 billion barrels

Merrion and Bill Barrett estimate up to 30 billion barrels of oil are trapped in the New Mexico portion of the Mancos Shale bed, which stretches into Colorado, Utah and Wyoming. They believe at least 5 percent, or about 1.5 billion barrels, can be economically recovered.

But that may be conservative.

“Encana Corp. estimates like twice that amount of oil is in the play, and they say up to 8 percent can be recovered,” Merrion said. “The numbers are not set in stone. The jury is still out.”

Encana’s USA Division created a special team in Denver solely dedicated to oil exploration in the play, said spokesman Doug Hock.

“We believe it’s a very prospective area,” Hock said. “We tend to be conservative, taking one step at a time, but we’re encouraged by the initial results of exploration. The fact that we put together a dedicated development team is a significant step for us.”

Efforts to extract oil mark a significant shift in the basin, which was hit hard by the recession, and by vast new shale gas plays in the Northeast, Midwest and South that have flooded the market and driven prices down. The price per 1,000 cubic feet of natural gas fell from about $6 in early 2008 to below $3 after the economy tanked, and has yet to climb back.

This rig, northwest of Farmington, is drilling into the Mancos Shale as part of Encana Corp.’s efforts to explore for commercial quantities of oil and liquid natural gas. Photo Credit – Courtesy Of Encana Corp.

Dry gas problem

Four Corners producers have particularly suffered because most natural gas there is dry. In contrast, gas in the oil-rich Permian Basin in southeastern New Mexico has high liquid content, allowing processors to extract fuels like propane to sell separately from dry natural gas, boosting income.

In addition, while the Oil Patch enjoys a boom in crude production thanks to today’s high oil prices, San Juan Basin operators almost exclusively produce natural gas, not crude.

Consequently, New Mexico’s natural gas output plummeted 18 percent from 2007 to 2011, reaching its lowest level in 20 years. About a dozen drilling rigs now operate in the San Juan area, down from about 40 before the recession.

“The basin just continues to suffer,” said Jason Sandel, executive vice president at Aztec Well Servicing in Farmington. “It’s really brutal up here.”

That could change if extraction of Mancos oil proves commercially viable.

The basin has produced crude in the past, starting early last century and gaining momentum in the 1950s. But it petered out because low oil prices made extraction less economical and drilling technology needed improvement to bust open hard-shale rock. Instead, companies focus on easier-to-crack sandstone beds to exploit natural gas.

But with oil prices now fluctuating from $80 to $100 a barrel, plus modern hydraulic fracturing and horizontal drilling technologies making it easier to permeate shale beds like the Mancos, oil extraction in the San Juan Basin appears more attractive.

Weighing the costs

The question is whether companies can extract enough crude and liquid gas from Mancos wells to make the high cost of drilling worth the investment, said Kurt Reinecke, Bill Barrett Corp.’s executive vice president for exploration.

The company will drill two exploratory wells this fall.

“We don’t know what the full cost of these wells will be yet,” Reinecke said. “It could be upwards of $6 million, so we’ll need more than that in oil to recover costs.”

Barrett partnered with Merrion to gain access to about 25,000 acres of mineral rights held by the latter. Merrion needed a company with deep pockets and experience.

“We bring acreage, they bring people, capital and expertise,” Merrion said.

Once Barrett begins drilling, it can reduce production costs by operating multiple wells on a single site with shared facilities. But the company will need total output of at least 250,000 or more barrels of oil and liquid gas equivalent from each well, or between 300 and 500 barrels of equivalent per day over the life of a well, to make it profitable, Reinecke said.

Initial results from Encana Corp. exploration indicate potentially good returns.

Encana drilled seven wells so far this year, and plans at least four more by December, Hock said. The first well produced an average of 438 barrels of oil equivalent per day in its first 30 days of operation.

Encana has partnered with Dugan Production Corp. in Farmington, which controls 174,000 net acres of mineral rights in the Mancos.

“Encana is starting to drill its eighth well now,” said Dugan owner Tom Dugan. “The first ones look fairly good.” Encana’s initial success could encourage more companies to explore for oil.

“There’s lots of talk about other folks planning to drill test wells,” said Merrion Investment Manager George Sharpe. “I expect some bigger operators will start testing their positions and switch some of their active rigs from gas to oil.”

Barrett Corp. drilling plans pushed back

By Chuck Slothower cslothower@daily-times.com

Updated:   11/01/2012 10:28:37 PM MDT

FARMINGTON — Bill Barrett Corp.’s plans to drill two wells in the San Juan Basin may be pushed to early 2013.The Denver company plans to drill the wells “in the coming months,” said Chief Operating Officer Scot Woodall in an investor conference call Thursday.

A Barrett spokeswoman said the date for initial drilling of the wells may be closer to the end of 2012 or early 2013. Barrett is partnering with Merrion Oil & Gas Co. to explore for oil in the basin. Merrion has leasing rights in the area.

Drilling may not occur until early next year because of delays in obtaining drilling permits. Surveys for threatened and endangered species and cultural sites took longer than Barrett expected, said Steve Dunn, Merrion’s drilling and production manager.

Barrett has completed a three-dimensional seismic survey and intends to target the Tocito-Gallup-Niobrara formation, a geologic layer approximately 6,500 feet underground. The company has approximately 36,800 net acres in the prospect.

One well is slated for Jicarilla Apache land. The other will be near Dzilth-Na-O-Dith-Hle, a small Navajo village along U.S. Highway 550. The drilling rig will be visible from the highway, Dunn said.

Like many oil and gas producers, Barrett is trying to shift from natural gas to oil because of a wide gap in the commodities’ prices. Barrett’s oil production was up 80 percent during the third quarter compared to a year earlier, the company said in an investor release Wednesday.

Barrett posted a loss of $52.6 million during the quarter, due in part to low natural gas prices and two unsuccessful exploration wells in the Paradox Basin of Utah and Colorado. The company earned $20.6 million during the same period a year earlier.

Barrett is following Encana Corp.’s lead into the San Juan Basin oil play. Encana, based in Canada, has completed five wells, and plans to have eight done by the end of the year. An Encana spokesman recently described the preliminary results as “mixed.”

It is unclear who will drill Barrett’s wells in the basin. The Barrett spokeswoman, Jennifer Martin, said she did not know who the drilling contractor would be.

Aztec Well Servicing is drilling the Encana wells, and is the only local drilling contractor with top-drive rigs. But Aztec and Barrett do not have a deal in place for the two wells, said Jason Sandel, Aztec’s executive vice president.

Barrett could potentially bring in a driller from outside the basin, an expensive proposition.

Local business and civic officials hope a boom in San Juan Basin oil could bring jobs to the area and improve the economy. However, the search for oil in the Mancos Shale and related formations remains in an early phase.

“I’m cautiously optimistic at this point,” said Dunn. “I’ve seen encouraging results, but nothing that would be a slam-dunk at this time.”

Across the nation, about two-thirds of drilling rigs are searching for oil. That has reversed within the past three years, when most rigs were drilling for natural gas, Dunn said.

“The economics are best in oil, and that’s where everybody’s going,” Dunn said.

2 firms to drill San Juan Basin for gas, oil Fracking behind new activity

Article published Sep 17, 2012

Fracking behind new activity


The Associated Press

ALBUQUERQUE – Two large energy companies have teamed up with local producers in the San Juan Basin in northwestern New Mexico to drill wells for liquid natural gas and oil.

The Albuquerque Journal reported that Canada’s Encana Corp. and Bill Barrett Corp., of Denver, are working with local partners to explore the Mancos Shale, a hard-rock layer rich in liquid fuels that rests between 5,000 feet and 12,000 feet below ground.

That layer is located amid natural-gas reservoirs above and below it that have sustained the industry in the Four Corners for decades. Producers are turning to oil and other liquid fuels trapped in the Mancos as a potential ticket to economic recovery after natural-gas prices have suffered from 10-year lows.

Bill Barrett Corp. and a local partner estimate up to 30 billion barrels of oil are trapped in the New Mexico portion of the Mancos Shale bed, which stretches into Colorado, Utah and Wyoming. They believe at least 5 percent, or about 1.5 billion barrels, can be economically recovered.

Efforts to extract oil mark a significant shift in the basin, which was hit hard by the recession, and by vast new shale gas plays elsewhere that have flooded the market and driven prices down. The price per 1,000 cubic feet of natural gas fell from about $6 in early 2008 to below $3 after the economy tanked, and it has yet to climb back.

Four Corners producers have particularly suffered because most natural gas there is in gas form. In contrast, liquid gas in the oil-rich Permian Basin in southeastern New Mexico, allows processors to extract fuels such as propane to sell separately from natural gas, boosting income.

In addition, while the oil patch enjoys a boom in crude production because of today’s high oil prices, San Juan Basin operators almost exclusively produce natural gas, not crude.

Consequently, New Mexico’s natural-gas output plummeted 18 percent from 2007 to 2011, reaching its lowest level in 20 years. About a dozen drilling rigs now operate in the San Juan area, down from about 40 before the recession.

The basin has produced crude oil in the past, starting early last century and gaining momentum in the 1950s. But production decreased because low oil prices made extraction less economical, and drilling technology needed improvement to bust open hard-shale rock. Instead, companies focus on easier-to-crack sandstone beds to exploit natural gas.

But with oil prices now fluctuating from $80 to $100 a barrel, plus modern hydraulic fracturing and horizontal drilling technologies making it easier to permeate shale beds like the Mancos, oil extraction in the San Juan Basin appears more attractive.

Bill Barrett Corp. will drill two exploratory wells this fall.

Initial results from Encana Corp. exploration indicate potentially good returns. The company said it drilled seven wells so far this year and plans at least four more by December.

Merrion Oil & Gas Co. announces Mancos Shale partnership

By Chuck Slothower cslothower@daily-times.com

Updated:   07/26/2012 10:48:04 PM MDT

FARMINGTON — Merrion Oil & Gas Co. announced this week that it has formed a partnership with Bill Barrett Corp. of Denver to test the potential for oil production in the Mancos Shale.

Merrion, a Farmington-based independent producer, had previously said it was partnering with a major company to explore the Mancos Shale. But Merrion had declined to identify its partner until Tuesday.

Barrett plans to drill two horizontal wells on Merrion acreage beginning this fall, assuming that all necessary permits are timely secured, Merrion Oil & Gas announced.

Geologists believe the Mancos Shale is rich in oil across a swath of the south San Juan Basin. Targeting the shale requires expensive horizontal wells and multistage hydraulic fracturing to free the oil. Horizontal wells cost several million dollars, while a traditional vertical well can be drilled into the Mancos Shale for less than $1 million.

Unlike in other shale plays, most acreage in the San Juan Basin is covered by existing leases after decades of natural gas production here. That gives the local independent companies that hold the leases a substantial bargaining chip.

“We have an acreage position, which is very difficult to come by in the San Juan Basin,” said George Sharpe, investments manager for Merrion Oil & Gas. “What they bring to the partnership is capital and expertise.”

Merrion has 25,000 acres available to drill, Sharpe said. The company has 19 employees.

Small independent companies do not have the resources to experiment with high-tech horizontal drilling. Larger companies such as Barrett do.

“There’s a learning curve that is expensive, and they’ve got the capital to sustain that, and they’ve got the drilling expertise of having completed similar wells in other basins,” Sharpe said. “They’re a great company. They’re very innovative.”

According to the deal, Barrett must drill two wells on Merrion’s acreage by the end of the year. The company may opt to drill more wells.

The first wells are set to be drilled in September near Huerfano, Sharpe said.

Merrion and Barrett are not the only companies exploring the Mancos Shale. Encana Corp., based in Canada, is partnering with Dugan Production Corp. to drill 12 wells targeting Mancos Shale oil.

The first well, Lybrook H36, yielded a 30-day initial production rate of about 440 barrels of oil per day, Encana disclosed to investors last month. Located about 50 miles south of Bloomfield in Sandoval County, the well was drilled to a lateral length of 4,100 feet and at a cost of $4.3 million.

“Those initial results were very promising and are certainly producing economical rates,” Sharpe said.

Encana has a 174,000 net-acre position in the basin, the company said.

Drillers throughout the nation are pursuing oil production while backing away from natural gas projects. Prices are driving the switch, industry officials say.

After dipping below $2 per thousand cubic feet in April for the first time in a decade, natural gas has somewhat recovered, settling at $3.13 on Thursday, according to the Henry Hub spot price.

Oil remains far more valuable, trading at $89.35 per barrel Thursday on the New York Mercantile Exchange.

Additional companies also are rumored to be pursuing partnerships targeting Mancos Shale oil.

Barrett in its most recent investor release touted its exploration in the Uinta Basin in Utah. The company also is exploring several basins in Colorado.

“I have emphasized the importance of execution in 2012 and our team is delivering,” chief executive Fred Barrett said.

Bill Barrett Corp. is traded on the New York Stock Exchange under the symbol “BBG.” Its stock closed at $19.66 per share Thursday.

While Mancos Shale exploration is in its early stages, the presence of oil holds out the hope of a major boom like that seen in the Bakken Shale of North Dakota.

“I’ll believe it when I see it, but that’s the hope — that it’ll rejuvenate the basin,” Sharpe said.

In North Dakota towns where the boom is happening, it’s impossible to rent a hotel room because they’ve been purchased by energy companies, Sharpe said.

“It’s not necessarily good to be that overwhelmed by success,” he said. “But it’d be nice to get a little bit of that.”

Fuel From Waste, Poised at a Milestone

November 13, 2012
By , NY Times

WASHINGTON — For years, scientists and engineers have been juggling various combinations of acids, steam, bacteria, catalysts and the digestive juices of microorganisms to convert agricultural waste and even household garbage into motor fuel.

So far, such alternative fuels have not moved beyond small pilot plants, despite federal incentives to encourage companies to develop them.

But that could be about to change.

Officials at two companies that have built multimillion-dollar factories say they are very close to beginning large-scale, commercial production of these so-called cellulosic biofuels, and others are predicting success in the months to come.

In Columbus, Miss., KiOR has spent more than $200 million on a plant that is supposed to mix shredded wood waste with a patented catalyst, powdered to talcumlike consistency. Its process does in a few seconds what takes nature millions of years: removes the oxygen from the biomass and converts the other main ingredients, hydrogen and carbon, into molecules that can then be processed into gasoline and diesel fuel.

KiOR aims to turn out 13 million gallons of fuel a year and has already lined up three companies to buy its output, including FedEx and a joint venture of Weyerhauser and Chevron. KiOR said on Thursday that it had begun producing what it called “renewable crude” and intended to refine that into gasoline and diesel that it would begin shipping by the end of the month.

And Ineos, a European oil and chemical company, is putting the final touches on a plant in Vero Beach, Fla., that would cook wood and woody garbage until they broke down into tiny molecules of hydrogen and carbon monoxide. Those molecules would be pumped into a giant steel tank, where bacteria would eat them and excrete ethanol. The company has spent $130 million on the plant, which is supposed to make eight million gallons a year, about 1 percent of Florida’s ethanol demand. The plant is next to a county landfill, and executives covet the incoming garbage.

Both plants are far smaller than typical oil refineries, but commercial production at either one — or at any of several of the plants that are a step behind them — would be a major milestone in renewable energy.

At such plants, the goal is sometimes to make ethanol and sometimes gasoline or diesel fuel or their ingredients. The pathways to make the biofuels are varied. But the feedstocks have something in common: they are derived from plants and trees, but not from food crops like corn kernels, which are the basis of most of the biofuel currently made in the United States.

Often, the raw ingredients for the cellulosic biofuels are the wastes of farms, paper mills or households, with a value that is low or even negative, meaning people will pay the fuel producers to dispose of them. And the companies developing the new fuels say that their products produce far fewer carbon emissions than petroleum-based gasoline and diesel.

KiOR says that its fuel will release one-sixth the amount of carbon dioxide as an equivalent amount of petroleum fuel. That is mostly because every tree or woody plant fed into its process will eventually be replaced by a new tree or plant, which will suck carbon dioxide out of the atmosphere. And a byproduct of its factory is surplus electricity, which will be exported to the grid, displacing electricity that would otherwise be generated from natural gas or coal.

Ineos goes a step further, saying its production process actually reduces the overall amount of carbon in the atmosphere. “We could make the argument that we’re carbon-negative,” said Peter Williams, the chief executive. The reason, he said, is that electricity produced from its plant averts emissions that would have come from other electricity sources.

Just becoming the first company to produce commercial volumes of these alternative biofuels is no guarantee of commercial success. That depends on further optimizing production processes to get more gallons of fuel per ton of raw materials at lower operating costs.

Industry officials say that profits also depend on continued high prices for oil, the commodity that biofuels would replace, and a continuation of a federal government mandate that requires fuel blenders to mix a certain percentage of biofuels into the gasoline sold at service stations.

“Sustainability requires good economics,” Mr. Williams said.

Many companies have produced biofuel successfully, but only in quantities characteristic of a factory that makes fine whisky or perhaps perfume. The trick is to get reliability up and costs down to a level that allows operation on a large scale.

Government policy has anticipated far more technical progress than the industry has made. Congress set a goal of 250 million gallons of cellulosic biofuel for 2011 and 500 million gallons for this year, but the Environmental Protection Agency cut the requirement to six million gallons for 2012 because of the lack of commercial production.

Six governors, oil refiners and companies hurt by high corn prices have asked the agency to waive its requirements for ethanol and other renewable fuels. Some single out the corn ethanol mandate, but others want the quota for cellulosic fuels waived, too, partly because there is no actual production.

The cellulosic biofuel industry has asked the E.P.A. to keep all the rules intact. Waiving the rule for corn ethanol would discourage investment in advanced biofuels as well, said Brent Erickson, a spokesman for BIO, a trade organization. “You can’t de-link them,” he said.

The agency was expected to rule on Tuesday, but instead said it would rule “shortly.” To grant the waiver, it would have to find severe harm to the economy. Energy experts say that eventually renewable motor fuel could have a much bigger impact on the United States economy than renewable electricity from wind farms or solar cells. Renewable electricity saves coal and natural gas, which are cheap and domestically plentiful. Renewable motor fuel displaces oil, which is much more expensive and often imported, which poses a host of national security and trade issues.

If either Ineos or KiOR began commercial production, it would break a long string of overly optimistic promises made by the industry and the government.

In October 1998, for example, the Energy Department showed off a plant in Jennings, La., that made ethanol from sugar cane wastes; the department said it would reach commercial production within a few years. At the time the plant was owned by a government-subsidized firm called BC International, which was later reorganized and renamed Celunol. Then it was taken over by Verenium, which, with backing from BP, tried another method. BP announced on Oct. 25 that it was dropping plans for a commercial plant based on technology piloted at Jennings, although it still does research there.

Mascoma, based in Cambridge, Mass., and backed by General Motors and Khosla Ventures, among others, is trying to make ethanol from wood waste. Samir Kaul, a board member representing Khosla, confidently predicted in 2006 that it would be in commercial production by 2008, but that goal remains elusive.

Iogen, an established Canadian producer of enzymes, began producing ethanol from wheat straw in 2004, and said in the fall of 2005 that it hoped to announce plans for a commercial plant by the end of that year. Eventually, it announced plans for a plant in southern Manitoba, but in April of this year it dropped that idea, and laid off some workers at its Ottawa headquarters.

But new chemistry technology, like hope, springs eternal.

POET, a major producer of ethanol by conventional means, is building a plant in Emmetsburg, Iowa, that is supposed to digest 700 tons of corn cobs a day and feed the resulting sugars into a conventional ethanol plant next door. The goal of the project, which is supposed to be ready by late 2013, is to produce 20 million gallons of cellulosic ethanol a year.

Abengoa, a Spanish firm, has been running a pilot plant in Salamanca, Spain, and in June 2011, broke ground on a $350 million commercial plant in Hugoton, Kan., that is now 50 percent complete, according to Manuel Sanchez Ortega, the chief executive. It is currently slated to open in the third quarter of next year and is supposed to make 25 million gallons of ethanol a year from agricultural waste, wood waste and nonfood crops.

And a variety of smaller companies are a step behind.

The holy grail is to find a way to profitably make renewable fuels from otherwise wasted biomass, as opposed to valuable food crops.

“If we can do it with biomass, then there is no more discussion of food versus fuel; it’s over,” Mr. Ortega said.

http://www.nytimes.com/2012/11/14/business/energy-environment/alternative-fuels-long-delayed-promise-might-be-near-fruition.html?emc=eta1&_r=0

Sawmill will be part of biomass project

By Lindsey Bright

PagosaSUN.com staff

Thursday, August 2, 2012

It was at the beginning of June that J.R. Ford’s Pagosa Land Co., in collaboration with his company Renewable Forest Energy, LLC, was awarded the Pagosa Area Biomass Long-Term Stewardship contract by the U.S. Forest Service.

Ford’s company will remove biomass and thin the forest on public lands in a 50-mile radius of Pagosa Springs. The typical trees to be cut down in this contract will be in the 6- to 14-inch diameter range.

Ford will then use this biomass and, through the process of gasification, turn it into 5MWe of electricity. To do this, Ford plans to build a gasification and power plant near Cloman Boulevard, adjacent to property currently zoned for light industrial use.

However, this plant will not be the only thing built on this plot of land. Ford will also build a sawmill at the same location.

“The goal is to take and cut logs into squares and sizes that can be sold on the commercial open market,” Ford said. Ford added that he has no intention of selling timber at retail.

Ford also explained that the sawmill will enable his company to fulfill the contract’s obligation of only one entrance into the forest, thus minimizing machine impact to the forest land. The logs can quickly be cut into squares, which will allow the company to haul twice the capacity than it could if the wood was still logs. Some squares will be chipped and used in the gasification process while others will be sold in the wholesale timber market.

Ford is currently in the planning process for both the sawmill and the gasification plant. In order to more efficiently deal with the wood products, Ford said that the sawmill will be built first. He hopes to start construction by September.

lindsey@pagosasun.com

Landowners unite to deal with drilling companies

March 29, 2012 9:49 pm

Pittsburgh Post Gazette

By Sean D. Hamill / Pittsburgh Post-Gazette

The temperature was in single digits, even colder with the 50-mph wind gusts that created near-whiteout conditions at times with falling and fallen snow in Loretto by 7 p.m. Wednesday.

In short, it was a good night to stay home.

Even so, about 500 people from the surrounding area of Cambria County braved the local roads to come to a community meeting at Our Lady of Loretto Community Hall. Why go through all of this? What could be so important?

“Well, some of them might become rich from the Marcellus Shale,” said Raymond Seymour, a high school history teacher who made his way to the meeting.

Those who came out were all members, or prospective members, of the Loretto Landowners Group, which collectively represents about 35,000 acres in Cambria County.

The group, like many others that have sprung up in the Marcellus Shale natural gas boom of the last four years in Pennsylvania and New York, is organized to negotiate collectively with gas companies for the right to drill for the natural gas underneath their property.

These groups, whether they’re in Tioga County, N.Y., or Tioga County, Pa., have one basic principle.

“We have to stick together. It’s the strength-in-numbers strategy,” the Loretto group’s lead organizer, Lee Wyland, told his members at the beginning of the two-hour-long meeting. “If we don’t, they will pick us apart one-by-one — there’s no doubt about it.”

“They” are the landmen working on behalf of the now dozens of gas companies trying to snap up mineral rights in the region. Many of the landmen work for companies that merely lease the land and then sell the leases back to gas companies. They’re seeking to secure deals on more industry-friendly terms, with less in upfront fees and royalties than the landowners groups would like.

And that, the groups say, is exactly the point.
Read more: http://www.post-gazette.com/stories/local/marcellusshale/landowners-unite-to-deal-with-drilling-companies-213172/#ixzz29lvDQOfR

 

Feasibility study underway for forest health project

By Lindsey Bright
PagosaSUN.com staff
Thursday, July 26, 2012
lindsey@pagosasun.com

Many people drive through an area, take a look at the scenery, perhaps they even get out and take a nature walk or a decent hike. They breathe deep the mountain air, feel revived, and then, they leave.However, when the mountain areas of the West have a fire season like the one experienced this year, people take a second glance and perhaps learn what those who know the land, those who work the land and run cattle, and the foresters have known all along — the forest is unhealthy.

With over 135 years of fire suppression, the forest is changing. There is a surplus of dead trees and limbs, and the timber market, with the housing market, took a dive. There are budget slashes in the Forest Service budget on both state and national levels.

But, there are efforts underway to deal with the problem of an unhealthy forest.

At the beginning of this month, the Chama Peak Landowner Alliance was awarded a $50,000 grant from the USDA-NM Rural Business Enterprise Granting program to conduct a feasibility study for a Chama Wood & Watershed Cooperative.

“The goal of the Cooperative is to bring together private agricultural landowners in the region to create an ecologically and economically viable business to utilize wood resources in a variety of forms from the Chama region in a way that promotes forest restoration, healthy wildlife populations, and a local, renewable, carbon neutral energy source,” a release from the Land Alliance stated.

The timeline for completing the feasibility study is July 1, 2012 to Dec. 31, 2012.

The ultimate purpose of this study is to find out whether or not there is a way to treat the forests in a cost-effective manner, perhaps even coming out with a sustainable business in the end. This business, for the purposes of the grant, would be based in Chama, N.M.

Cooperative chair Richard Gooding, a landowner in Archuleta County, explained that, right now, slash piles are burned. Each time, he said, he watches and is torn because a useful product could be made from the slash.

The feasibility study will look at what areas of the forest within a 100-mile radius of Chama could be cost-effectively thinned with the biomass used for some as-yet unknown product. Co-op members are not yet sure, however, how the 100 miles will be measured, whether by road miles or as the crow flies.

Last Thursday, a group of around 20 stakeholders met to discuss the prospect of this grant, what might be encompassed by, and incorporated into the feasibility study.

Among those in attendance were ranch managers from Banded Peaks Ranch and Eagle Peak Ranch, two other landowners, representatives from Region 3 of the U.S. Forest Service, from the New Mexico State Forestry, the Rio Grande National Forest and the San Juan National Forest, as well as from Eco-sphere, which will help the new co-op carry out the grant.

Steve Hartvigsen, silviculturist for the Pagosa Ranger District, was there to share with the group what he had learned, having just participated with planning and awarding of the Pagosa Area Biomass Long-term Stewardship Contract, awarded to J.R. Ford’s company Renewable Energy last month. A major point to consider, Hartvigsen said, is the distance the product would be hauled. For the stewardship contract, he explained, anything hauled over 50 miles would entail losing money.

Private landowners, business, federal, state and local government stakeholders are all interested in the outcome of this study.