Biomass Energy Outlook

BioCycle November 2009, Vol. 50, No. 11, p. 45

USDA BIOPREFERRED — A “GOOD” CARBON REGULATION

Mark Jenner

OVER the last three or four weeks, my newsletter, Burning Bio News, has been oddly extreme. Timothy Searchinger, Princeton University, is churning out more antibiofuel hearsay. Dennis Avery, Hudson Institute, was in the news again putting a counter-spin on climate change. The U.S.EPA released its proposed rule for regulation of Greenhouse Gases (GHG) that includes industrial facilities that emit too much carbon dioxide. While this may be necessary, it will also increase compliance costs without increasing income for the regulated firm, as the economy continues to flounder. And then I heard a Senate version of their climate bill was being rushed through Committee in time for Copenhagen, and suddenly the chaos began to make some sense. It’s all about green politics … Copenhagen is the site of the 2009 United Nations Climate Conference in December.

Amidst the chaos, the great news in climate policy is that the U.S. Department of Agriculture (USDA) keeps releasing more biobased product definitions for the federal BioPreferred Program authorized in the last two farm bills (see “Uncle Sam Buys Green,” BioCycle May 2009). The federal government is required to buy biobased products when available. And USDA is to develop market standards for each biobased product that the federal government buys. The number of these products keeps growing and this rule provides us a model of a good regulation. A good regulation might sound a bit oxymoronic, but I define a good regulation as having a benefit that is greater than the cost of implementation. It is a bit ironic, but when a regulation is “working,” almost no attention gets paid to it politically.

Plants, or new biomass, have a chemical composition of carbon, hydrogen and oxygen (75 to 95 percent by weight), small amounts of nitrogen, sulfur, chlorine and ash (other salts and minerals). These are the basic building blocks of life, so the biomass “leftovers,” pollutants, wastes and residuals, are just the ingredients of life that are in the wrong place. BioCycle is the conduit we all use to pull these ingredients back into the economy by adding value. This is also the beauty of the Biopreferred Program. Based largely on chemical composition or material quality, USDA is developing access to markets for all manner of biobased products.

5,600 BIOBASED PRODUCTS AND COUNTING
While the political dignitaries are tittering and clucking to shape the discussions in Copenhagen, USDA quietly released Round 5 of the BioPreferred Designated Items. These include: chain and cable lubricants, corrosion preventatives, food cleaners, forming lubricants, gear lubricants, general purpose household cleaners, industrial cleaners, multipurpose cleaners and parts wash solutions. This Round 5 release adds more than 1,000 biobased products for preferred purchasing consideration by all Federal government agencies, contractors and the military.

The BioPreferred program has identified nearly 5,600 biobased products available in 42 BioPreferred Designated Items, which can be found at www.biopreferred.gov. Some 240 of these products are biobased fertilizers. All of these U.S. biopreferred products have a specified “minimum biobased content.” Each product is evaluated with a BEES score (Building for Environmental and Economic Sustainability).

The BEES score includes two components: an environmental performance indicator and economic performance indicator. The economic score is based on the initial cost and a future cost component. The environmental performance score includes factors for global warming, acidification, eutrophication, fossil fuel depletion, indoor air quality, habitat alteration, water intake, criterion air pollutants, human health, smog, ozone depletion and ecological toxicity. Based on the BEES documentation, it looks like that about covers the environmental gamut.

Regulations that create value-adding standards allocate responsibility between the regulatory agency and the private firm. The public agency responsibility is to keep the cost of participation lower than the value the producer can receive from participating. The producer then has the responsibility of delivering a quality product that meets the standard in order to enter into the value-added market. The result is a regulation whose benefits exceed the costs, or a good regulation. If participation costs more than a producer benefits, then no one plays.

VALUE-ADDED REGULATIONS
There are many of these quietly working regulations in place. Most often these are commercial regulations that lower the cost of our sales transactions. Many of our financial regulations fall into these categories, but also regulations on weights and measures. Most State Departments of Agriculture check our gas pumps to make sure that we actually get a gallon of gasoline when we pay for a gallon of gasoline.

Of course these standard-based regulations don’t all work so well. One commercial regulation on which BioCycle keeps us updated — thanks to Ron Alexander, R. Alexander Associates — is the state fertilizer regulations (an update is scheduled for the January 2010 issue). The state fertilizer laws call for a guaranteed nutrient analysis — which is not so easy with highly variable organic nutrients. All industries get stove-piped through the regulatory process, so as the organic nutrient market grows the commercial fertilizer regulations must be adapted to include new products. It is the clash of a former undervalued regulated waste with a value-added regulated commodity. This kind of regulatory evolution is invaluable.

The standards must also be technically achievable. The problem with EPA’s proposed Renewable Fuels Standard regulation, for example, is that much of their analysis relied on constructed values that were not measurable (see “Legal Limits Of Math,” September 2009.) EPA set the biofuels industry on fire when it selected a lifecycle methodology that designated corn-based ethanol with a lower environmental benefit than gasoline. The California Air Resources Board has set the industry achievable standard for nitrous oxide (NOx) from stationary power generation engines at a level that appears unachievable by anyone in industry. Thus this has ended the biogas power generation expansion in California.

In the midst of all the politically-charged emerging climate policies it is reassuring to have the USDA BioPreferred Program as a functional model that adds value to biomass in a way that enhances the environmental goals.

Mark Jenner, PhD, operates Biomass Rules, LLC and has over 25 years of biomass utilization expertise. Burning Bio News, the Biomass Rules newsletter, is available at www.biomassrules.com.

Copyright 2009, The JG Press, Inc.