The stars are now aligning to move alternative energy production in the U.S. from the back burner to the forefront.
There has been a paradigm shift in the marketplace that means alternative fuels like ethanol and biodiesel, plus alternative sources of electricity generation, are now competitive in the marketplace, says consultant Bruce Crain of Crain Consulting, Jackson, which specializes in helping alternative energy producers put together financing and business plans to be successful.
Higher costs for oil have come at the same time that alternative energy technology has improved greatly.
“We don’t think we will ever see $1 per gallon gasoline again,” Crain said. “Secondly, the technologies that are being put in place to generate alternative energy and power sources are much better now. You can generate energy from wood products and agricultural waste materials at a cost comparable to oil.”
Crain, who has been involved in promoting alternative energy for a decade now, recently spoke at the conference at the University of Florida, Gainesville, on the subject: “Fueling the Future: The Role of Woody Biomass.”
“My role at the conference, once all the innovations and technologies were presented, was to demonstrate how projects can be commercialized using sources of funding from both the public and private sectors,” he said. “There are a lot of new players in the alternative energy market right now. You have people not just from the agricultural and energy sectors, but people with good strong business qualifications who are now looking at alternative energy as a means of generating a profit as well as creating a sustainable source of domestic power and fuel. The price of oil and natural gas has gotten so high that alternate fuels and sources of power are now competitive in the marketplace.”
There are 214 million acres of forest land in the southeastern U.S. A large amount of that forest land in southern parts of Mississippi, Louisiana and Alabama has been destroyed by the hurricane. Crain said technologies exist today to convert that waste material and damaged timberlands to electricity or to fuels such as diesel and possibly ethanol.
“There are companies currently in the U.S. and all over the world who are converting woody biomass and agricultural waste material to electricity and fuels,” Crain said. “The damage created by Katrina presented an opportune time to demonstrate in this country how technologies could be implemented not just to have new fuel and electricity sources, but create new economies based on the natural resources currently available to these small Mississippi communities, many of whom are in dire need of an economic shot in the arm.”
While wood waste is primarily used to fuel boilers, a California company is taking waste from vineyards and orchards to generate electricity that is sold on the grid. Technologies also exist to convert wood waste into diesel (see www.choren.com).
Crain works to take promising alternative energy products from the drawing board to the marketplace by helping clients access all sources of private and public sector financing.
“We show clients how to leverage funding sources to make a project economically feasible,” he said. “Sources of funding may include grants, tax credits, state and local government incentives such as bond programs, government guaranteed loans or direct loans. These programs coupled with private sector equity can be leveraged together to make a project economically feasible.”
Ten to 12 years ago, Crain was working for the USDA when people were first starting to explore ethanol, biodiesel and other forms of alternative energy. At that time, it was primarily the corn growers lobbying for ethanol and soybean growers lobbying for biodiesel. Crain says since that time the supporters for these renewable fuels have expanded to include non-agricultural interests.
“This has been created by new technology and more sophisticated business players in the arena,” Crain said. “There is also an acknowledgement on the part of the American public and Washington that, like never before, we need more reliable domestic sources of renewable fuels and power.”
The 2002 Farm Bill represented major progress. Since then an Energy Bill has been passed. Crain said now with the war in Iraq underscoring problems with reliance on energy imported from volatile Middle Eastern countries, the Bush Administration has expressed strong support for the development and commercialization of renewable fuels and power sources.
“And, unlike before, there is a realization that ethanol and biodiesel can be produced from sources other than corn or soybeans,” Crain said. “The President has expressed support for developing lignocellulosic ethanol and other fuels from other domestic resources.”
Crain explains that the original diesel motor was built to run on peanut oil. The U.S. was basically a carbohydrate based economy before World War II. When World War II occurred, the country needed quick, cheap sources of energy, and oil was available. So the economy quickly changed to one based on carbohydrates to hydrocarbons.
“What we are seeing now is a back to the future syndrome,” Crain said. “We are looking at technologies that were advocated prior to World War II. With market conditions changing, it is now more important than ever to take ideas advocated previously, expand on them and develop sources of fuel and power that can make us more self reliant and at the same time use these new sources of fuels and power to create new economic opportunities for communities in desperately in need of them.
“Congress has a done a good job of developing sources of funding for renewable energy. However, learning of these programs and how they can be used together is still a challenge for entrepreneurs. That is the role of our company and how we are assisting clients all over the country in projects as diverse as an ethanol plant in Kentucky, a municipal solid waste to electricity plant in Utah and a company in Louisiana developing a wood pellet manufacturing plant that will produce pellets for wood burning stoves sold in the Midwest and Northeast, as well as foreign markets.”
In the past five years, Crain consulting has assisted clients in 43 different states. Most of his clients are from outside of Mississippi.
The forest industry has been particularly supportive of alternative fuels.
“The forest industry is really behind the eight ball,” Crain said. “Forestry is the second-largest industry in Mississippi, and that presents great opportunities to produce energy from Mississippi forests. Mississippi is well positioned to take advantage of these technologies because of our vast resources that could be used to convert forestry and agricultural materials to renewable fuels and power.”
Some examples of the type of clients Crain works with include Utah Valley Energy (UVE) of Orem, Utah, an independent renewable energy company that will utilize a unique energy process to produce electric power. This process will take place by converting municipal solid waste or landfill material through gasification into a syngas or biogas much like natural gas.
“This in turn will be used to fuel a turbine generator producing environmentally safe, competitively priced and sustainable electric power,” Crain said. “UVE will utilize or recycle 100% of all waste material entering the facility.”
Crain Consulting also helped obtain a $20-million loan from the U.S. government for a Georgia client, the first loan of its kind made to a privately-owned power company that will produce and sell renewable energy. The new power plant will be located in Central Georgia and will utilize plasma arc technology to convert used automobile and truck tires into energy. Once produced, the energy will be sold to several electric power companies throughout the state. The company plans to construct many similar facilities throughout the nation in the future.
“We are pleased that our client was the first company of its kind to obtain this source of federal funding,” Crain said.
Contact MBJ contributing writer Becky Gillette at firstname.lastname@example.org.