Wisconsin Public Television University Place Wednesday Nite at the Lab  Gary Radloff and Carol Barford   July 13, 2011 UP604   cc >> Melissa Breunig: Hello and welcome to Wednesday Nite at the Lab. Tonight we'll be having Dr. Gary Radloff and Dr. Carol Barford from the Great Lakes Bioenergy Research Center. A little bit about Gary Radloff is he is the Midwest Energy Policy Analysis Director with the Wisconsin Bioenergy Initiative here at UW-Madison. This program was created in 2007 in partnership with the UW and the College of Agriculture and Life Science, and the Wisconsin Bioenergy Initiative, WBI, seeks to cultivate bioenergy expertise among UW-Madison, UW System, and Wisconsin stakeholders to achieve the initiative research that is being conducted within our great state. The WBI is a university-based coalition, did I just read that, that helps talent across Wisconsin and create commercialize and promote bio-based solutions. With the WBI, Radloff has coordinated many projects involving on-farm energy opportunities with biomass and biogas technologies. These include recently publishing the report, The Biogas Opportunity in Wisconsin: 2011 Strategic Plan, and co-authoring the Wisconsin Sustainable Planting and Harvest Guidelines for Nonforest Biomass on Public and Private Land. And Dr. Carol Barford is an associate scientist and interim director of the Center of Sustainability of the Global Environment, or SAGE, a cross-disciplinary research center based in the Nelson Institute for Environmental Studies at the University of Wisconsin-Madison. She studies agriculture and land use in the context of shifting demands for bioenergy, environmental quality, economic income, and food. Barford earned her BA in biology from Boston University and her PhD in environmental engineering from Harvard University. 

Before joining SAGE, Barford did postdoctoral work on whole ecosystem CO2 storage at Harvard Forest. Please welcome them to Wednesday Nite at the Lab. [APPLAUSE]  >> Gary Radloff: Can you hear me okay? We've just switched mics so I want to make sure that's all working well. Welcome this evening. Appreciate your coming out on this lovely evening and I know you had to turn down Concerts on the Square, so thanks. I'm the interim director of the Wisconsin Bioenergy Initiative, and we are actually the state match to the Department of Energy grant that created the Great Lakes Bioenergy Research Center. So I'm actually not a direct part of GLBRC but a partner in their work, and their mission is to perform basic research that generates technologies to convert cellulosic biomass to ethanol and make other advanced biofuels. What some people sort of term breaking the cellulosic bottleneck. And it's exciting work that I think will really create the energies of the future. WBI, as its state partner, also is a research institution, but we also work in other spaces including education and outreach and policy work. 

And our business model is all about collaboration. We work with other academic institutions. We work with industry. We work a lot with government agencies and a lot with the NGOs. But in our research capacity we've really just kind of boosted that up, if you will. A major focus in 2010 was actually hiring our faculty who are dedicated to increasing the depth here at the University of Wisconsin Madison in bioenergy expertise, and we really recruited a multidisciplinary faculty team with people working in biological systems, engineering, bacteriology, agriculture and applied economics, genetics, geography, and also the Nelson Institute for Environmental Studies, which SAGE is a part where Carol and I are both a part of that team as well. First off, I think we kind of have to put this into context. We're going to try to answer the question about sustainable bioenergy in Wisconsin, how could it work? Really what's driving this are just significant global problems that I'm sure all of you are concerned about, at least some of these, if not all of them, and I hope not all of them. We're running out of fossil fuels, and I'm going to talk about that a little more directly in a couple of slides. We have a changing climate. 

There's some debate out there what that means. We clearly have challenges throughout the globe on water and air quality. We have an increasing global population especially with our developing nations putting pressure on that energy system. And those energy demands just keep increasing even as we really do find greater efficiencies. So just very quickly want to take a quick look at Wisconsin and the nation in terms of kind of our energy picture today. You can see that right now renewables are a pretty small part of our portfolio. This is the most recent data from the Office of Energy Independence. This was report was just released and we're at 6.5% renewables. We have a long way to go and we need to get there. The renewable energy mix right now is primarily biomass and that's biomass for thermal, primarily, but there are increasing uses of wind in the utility sector and one that I'm really excited about is biogas and again I may talk a little bit more about that later as well. 

Just by comparison here's sort of the US numbers. These are 2008 numbers. The previous ones were from 2009. So we've improved a little bit here in the renewable energy sector nationwide. But again, it's a pretty small part of our mix. I actually think this slide though depicts it a little bit better in terms of Wisconsin versus the US. We are very, very much a coal state, as you can see there. And, likewise, heavily dependent on petroleum. These are all imported and so we need to have more of what I like to call home-grown energy which can come from biomass and biogas and the like. So our topic here is sustainability, and I thought this slide shows very well the challenge of sustainability. 

It's a very messy slide because this is a very messy issue. It does a nice job in many ways of depicting the complexity of the question about sustainable energy systems that our scientists, our policymakers, and the public are having to deal with. And this slide doesn't even really include the economic dimensions. But you can see on the slide here that this is showing a number of the challenges on the landscape as well as some of the environmental issues. And look at all of the decisions that have to be made to create a sustainable bioenergy system that are depicted on this slide. So we have our work cut out, but I think we're up to the task. This slide shows us really one of the big global challenges that I alluded to on that earlier slide. Some people call this peak oil. Peak oil means that global liquid fuel demand exceeds the global oil and discovery and production. It's a controversial area and even conservative organizations such as the International Energy Agency, IEA, say global oil and gas reserves are sufficient to sustain economic growth for the foreseeable future. 

I don't find that particularly reassuring. But yet in 2008 the International Energy Agency did a comprehensive study of the 800 largest oil fields in the globe, and they rather dramatically adjusted their numbers through that study. They went from an annual decline rate of 3.7% annually to 6.7% annually, and I'm betting if they update that study again in a few more years they will increase that number. So there's reason to be concerned. And over in the UK that concern went public and hit the newspapers a while back when their energy office was discussing strategic plans as to what Great Britain would do if peak energy occurs in 2030. That's 19 years away. Even Goldman Sachs, a conservative investment group of financial advisers, now maintains that Saudi Arabia reached its peak oil production in 2008 and it will never reach that level again. For those of you who are old enough to remember the oil embargo in the 1970s, that was triggered in part by the equivalent of a 5% drop in OPEC supply, the largest oil cartel in the world. So we are walking on some dangerous ground here, and I think there is reason for concern. Hence, we are looking at bioenergy technologies. 

These are just a simple list of sort of the current technologies that are out there. We can pelletize grasses and woods for combustion and we do, particularly common on the east coast, a little bit up in the northern part of Wisconsin. We have options for gasification and pyrolysis. We currently make what is called the first generation biofuel, corn ethanol. Not without its own controversy. And we have another first generation fuel in biodiesel from primarily oil products, can be made from food and rendering waste. The one I really like is anaerobic digesters to make biogas from renewable waste. I think that's a tremendous opportunity for Wisconsin. We have over a thousand food processing plants here in the state. That waste right now goes to waste water treatment plants and landfills. 

We could be running that through digesters and making biogas and reducing the waste, taking pressure off our waste water treatment plants. Similarly, dairy waste, cow manure, we have obviously one of the largest dairy production states. Likewise, that can be run through anaerobic digesters to make energy. And it also helps with nutrient management which is a polite term for keeping that nasty stuff out of our waterways. Right now Wisconsin is really the leading state in anaerobic digesters with about 30 on-farm systems and maybe 40 total systems. By contrast, we took a group of grad students over to Germany to really look at what is the global leader in anaerobic digester systems. They have 5,000 anaerobic digester systems operating in Germany, they call them biogas plants. 3,000 are on farms. There's no reason Wisconsin can't get up to a thousand as we said in a report we recently issued. The other one, the bottom one there, is the advanced biofuels which is where most of the work GLBRC and WBI are occurring. 

And here's just kind of another way to look at, again, some of these advanced biofuel opportunities and the conversion technologies for them, the biological, the chemical, and the thermal chemical. Not all of these will be commercialized, not all of these will be big successes, but there's a lot of research activity and there's also a lot of entrepreneurial actively going on in this space. We do have three commercial cellulosic plants in Iowa that are either about to open or are being built. So we really are starting to go beyond the lab and into commercialization, but tremendous hurdles still exist, don't get me wrong. This is more in the power and heat sector. These are our two models. The model that we currently have primarily in place is the central power generation model on the left there. And the distributive energy model which I think really is the model of the future. A distributive energy generation means the source of your heat and light would be closer to your home or business. In technical terms, distributive generation refers to small generation systems close to load centers, which is a term for residential, commercial, and industrial buildings. 

A distributive energy system could include on-site generation, self-generation, co-generation, any small scale power generation that's not provided by that traditional central power plant system. Again, I like to call it home-grown energy. We can really generate this energy at our home, at our businesses. I like to sort of challenge people to think about we all are energy users, we're very dependent on energy, there's no reason why we could not be energy producers. A solar panel on your house, an anaerobic digester at a business. Again, over in Germany when we were driving through the German countryside, those 3,000 farms that had digesters, many of them had solar panels on the barn as well. Many of them were near wind turbines. So they had three or four renewable generation systems at one farm or at least near that farm. So, again, I think the future is in distributive energy but the utility sector might disagree with me on that. This slide I like because this is where I'm going to issue my challenge tonight, which is I want to ask you the question, do you want to top down decision making energy system or do you want a bottom up decision making energy system? Well, if you want it to be bottom up, that local community part of that diagram there is so critical. 

If our local communities don't become more active in bioenergy, this bioenergy intersection that you see here, I think you should be prepared for an energy system that you may not like. Truly, if we reach the crisis stage of peak oil and some of the other concerns out there, the decision making will come from the Department of Defense, the Department of Energy, and the utility sector and the oil industry. So I think as a global community we have a great opportunity here with renewable energy and bioenergy but we have to step up to the plate, if you will. But with biomass, which I think is one of the great opportunities for Wisconsin, we also have to be very honest that we're competing for land use here. And we have some very traditional industries in this state that use our land. Agriculture, obviously for food and fiber, our forest sector for paper and pulp, it's still one of the best sectors in our country. So they're country concerned about the impacts on cost and the impacts on their sector. As we bring in these knew opportunities there on the bottom of biopower, biorefineries, and cellulosic fuel, but I do think we have to think about this a little bit. Right now the joke amongst us bioenergy geeks like myself is $7 corn and $3 and $4 natural gas will kill just about any bioenergy project, and that's why you don't see them all over the landscape in the US. Most people out there are saying they're really bullish on natural gas. 

They think it's going to stay cheap. They think it's the silver bullet. I'm not a big fan of silver bullet solutions. I don't think they really exist in the energy sector. I think we need a lot of solutions. I remind a lot of people that when you look at commodity prices or any kind of pricing even in energy systems, you have to look over longer periods of time. So even if you just took from 2002 to 2010, natural gas prices ranged from $2 per MBTU to $14 per MBTU. Now at $14 we definitely can compete with all of these bioenergy solutions, $2 we can't. But I think we have to watch that closely. I really fear we're on the verge again of high oil prices that may push up natural gas prices with it. 

And I really stay away from conjecture on corn prices. They're up and down and any time you've tracked commodities they usually stay up and down. But right now they're very high, as are soy beans as well. But that's really what's driving us to a piece of policy that I'd like to talk about that we've been working on here in the state of Wisconsin. And this is a document that sort of officially about to be released next week. It is out for review right now. It's called the Wisconsin Sustainable Planting and Harvesting Guidelines for Nonforest Biomass on Public and Private Lands. And this document resulted from some discussions that occurred primarily as we saw, it looked like a few years ago that we were going to have several sort of industrial scale biomass plants in the state from the utility sector, even the Charter Street facility here on campus. So we thought we better ramp it up here and get working on some sustainable planting and harvesting guidelines because the Wisconsin landscape was just going to be filled with all these biomass energy crops. That didn't quite occur. 

We've had a number of those projects get shelved. The governor decided not to fund Charter Street. So in some ways it gave us a little breathing room, which is a good thing. So we went to work on this project nonetheless. It was a collaborative effort to address concerns raised by environmental groups and state agencies and others about this whole topic of can we grow these bioenergy crops sustainably and also really possibly enhance the ecosystem benefits. So the DNR, the Wisconsin Department of Ag, Trade and Consumer Protection, and the University of Wisconsin Madison's College of Agriculture and Life Sciences signed a memorandum of understanding to develop these voluntary bioenergy guidelines. We put together a technical team that started work in November of 2009, and it's a great team. Steve Ventura out there in the audience is on the team. I want to acknowledge him. And we met periodically to basically try and figure out a methodology to recommend these voluntary guidelines so that we can grow these bioenergy crops in a sustainable manner. 

We developed science-based guidelines which were really a synthesis of the current literature of biomass planting and harvesting techniques, again to ensure positive outcomes for the natural resources of our state. And as I mentioned, this document is now on the Department of Ag, Trade, and Consumer Protection website. Look under the Bioenergy Council which is a statutory council that will review the recommendations. So again, what are we talking about with nonforest biomass? Grasslands, something maybe like a switch grass, miscanthus, we're not too sure how much miscanthus we can grow in Wisconsin but certainly in Illinois and nearby, trees and shrubs, short rotation, hybrid willow, hybrid poplar, crop residues, corn stover, the corncob, etc, would likely be, again, what these are talking about. There are some sustainable harvesting guidelines for woody biomass, and I think they may be updated in the next few years. So this will be a complementary document. It's about a 90-page report. But we realized right away we had to define sustainability. And that only took us, what, three or four meetings to define sustainability. But stewardship of the land and resources dedicated to nonforest biomass production in ways that are environmentally, socially, and economically sound across a broad range of scales, that does not negatively impact other ecosystems and that can meet societal needs both now and into the future. 

So that's the definition and we're sticking with it. As we worked on this document, though, it was also helpful that we developed a set of guiding principles. And I actually found that we went back to these more than once. And we started off with just sort of the do no harm, which I thought was a good place to start, but then we took it a little further and said we can maintain and improve soil quantity, including carbon, water quantity, the quality and quantity of wildlife habitat and biodiversity, and avoid native habitat conversion and incorporate socioeconomic factors. And so this is if we do it right. And with bioenergy and biomass we have to do it right. I think we have a unique opportunity to do it right. But as we look at this landscape discussion is really important and I hope you can see this on the map. I know it's a little hard but it shows really the amazing diversity of this state's landscape. I think as we look forward to future guidelines for planting and harvesting these crops, it's really going to be driven by the specifics of landscapes. 

So the central sands there, located right there, I think are going to be much different than how we manage systems in the northern part of the state or the southeastern part of the state. The other thing that's very important on this slide over there on the right, we want to have a multifunctional landscape when we plant these biomass crops and that could mean are real diversity of species. And then there's a lot of discussion around marginal lands. People feel like energy crops should be grown on marginal lands but that, in itself, presents some challenges because there's probably a reason why something isn't being grown on that land. I can't go in this in great depth because this is about 70 of the 90 pages of the report. It's the specific recommendations or guidelines for these crops. But again, it was taking a look at the best available science that was out there and kind of synthesizing that. When we put this document together, we made a commitment that it would definitely be updated within, we haven't put a number on it, but let's say five years just to give everybody a little bit of breathing room. But there were really some challenges with this document. I'll maybe touch on some of this at the end. 

First off, we weren't really sure who was the audience. It was a diverse audience. Most of it was geared toward the landowner, the farmer, the wood lot owner, but we recognized that it had policy impacts and so we kind of addressed a little of both. We also got into this issue of multiple scales. I really thought it was important that we look at this as sort of a systems-based solution and look at the landscape scale, not just the farm scale. And the document did attempt to do that. I think there's a little more work to be done there. And then also just, we were looking at so many crop types. We realized we couldn't address everything, and the literature wasn't quite as robust as we would have liked for all the crops. So now to transition just a little bit, this is one slide that shows everything the Great Lakes Bioenergy Research Center is doing on its sustainability track. 

That's why it's a pretty busy slide. The Great Lakes Bioenergy Research Center project is doing field test trials at the Michigan Kellogg Research Station and the Wisconsin Arlington Research Station. As you can see on the slide here, I'll circle it here for our viewers and then for you, down here is really the core of the research that our research team is working on. Tracking energy inputs and plant and microbial outputs for production. Assessing soil, carbon, water and greenhouse gas effects. Quantifying pest disease and ecosystem services. Doing life cycle scenario testing of the biophysical land use and marketplaces responses. And this is five years of research work now, and we're looking to another five year renewal. Also, if you can look right up here, it's kind of hard, it's small print and on our screen I bet it doesn't show up too well at all, but that kind of shows you, again, sort of the range of crops and things that you can look at. And on the bottom there you see the low diversity/high input of corn and soy beans, and on the top you see high diversity/low input of our restored prairie. 

And our bioenergy crops that we're doing most of the analysis on there fall sort of in the middle of this. Another tool that we have for analysis on sustainability is called life cycle assessment. And in very simple terms, it's pretty complex assessment, but it calculates the net amount of energy entering and leaving the system. And we're looking for the efficiencies within this system. I did want to also briefly touch on policy. There is policy that's clearly driving this discussion. Congress did pass something called the Energy Independence and Security Act in 2007. And it basically mandated advanced biofuels. And I kind of jokingly call it the congressional leap of faith because in 2007 there was no cellulosic biofuels. So they took a leap of faith and said we will create these. 

Just if you're curious, corn ethanol there, we pretty much produce about 12 billion gallons now, maybe a little higher even, and this peaks at around 15 billion so clearly that's not the fuel of the future. One other thing about this law that I kind of like was it did mandate, again, that these fuels have to meet a higher standard. They have to reduce greenhouse gases. So the advanced biofuels there kind of in the sky blue have to have a 50% greenhouse gas reduction compared to petroleum. And the cellulosic ethanol has to have a 60% reduction. So to transition over to a couple other areas of research, and I'll try to wrap it up here, we really want the future energy crops to really improve our landscape. And so the challenge here is can we take ecosystem services, which are on the left there, and then the energy crops, running on the top of the screen, these are the ecosystem services and these are the energy crops, and can we start to measure this and really see the benefits? And so our team of scientists here on the Madison campus and the Michigan State campus and elsewhere are developing a couple of tools to look at this. The first one is called the land lab. And so we sort of pose the question of where will these feedstocks be grown. Well, obviously for starters they have to be grown on lands where they can grow. 

That's probably a simple way of putting item number one. And where they can have really a use for energy. There's physical, ecological, and social dimensions to this. So our PIs, primary investigators, from Wisconsin, Minnesota, and Michigan put together this approach called the land lab. And really again what it's trying to achieve is the ideal. Right now with the cropping system for corn and soy beans, you can see, again it's kind of hard to see but in that flower diagram it doesn't really do too well in providing us with lots of other benefits, but if we look at the future ecosystem of restored cropland using maybe energy crops, it could potentially benefit all the systems. Now that's sort of the ideal where we fall, possibly it would be somewhere in the middle. So here's kind of a tricky little set of slides, isn't this nifty stuff, to try to explain what the land labs are. The land lab will focus on systems for efficient production, harvest, and transport of superior genotypes of dedicated biomass feedstocks, coupled with energy densification at regional biomass processing depots. So that's sort of on the left there, again for our viewers and for you right there. 

The goal is multifunctional systems that hopefully promote social benefits, economic value and ecosystem services as I've alluded to, and it will depend on site specific combinations of these dimensions of sustainability. We really believe that this process also needs sort of a feedback loop, which is really where the public, I think, comes into play. And I talked again about that local community dimension. So you'll see here where there's sort of this engagement process around what is it you want this to achieve for your landscape and your community. So that's sort of the system and then the ideal, and then here's just another depiction of what it could look like as well. So this is research that we're funding, and it's just getting started here in terms of actual fieldwork and development. Randy Jackson here on the Madison campus is the lead investigator. The second team is also working on another interesting tool, and again it's to hold us to this sustainability standard. It's called the decision support system or sustainability decision support system. And, likewise again, it's looking at these services there in the middle, across the landscape. 

And then it's going to actually try to develop measurements for this, metrics, and then on the far right you'll see we'll actually model this out. This is research that's really just now being formulated and we'll hopefully start, we have about a five-year project that will be launched a little more robustly in the next year. Claudio Gratton is the lead PI on this. But in the color, the tables represent a different set of provisioning or cultural supporting landscape services. We can use things like life cycle assessment, etc, and the millennium ecosystem assessment to build this up further. Certainly, we can add things as we go. We'll have multiple indices which we envision there will be several measures to represent any one landscape service in evaluating a bioenergy scenario. And again it can be normalized or it can be integrated into a life cycle system. One of the tricky parts with the metrics will be how will be weigh these functions. Again, I think this is where the public feedback will come into this. 

The metrics can be computed for each landscape, good, and service. They can be instilled further with this waiting schemes. The waiting schemes could be made constant based on an average coming from a group of citizens or stakeholders or residents, and the waiting scheme could also be nonlinear, spatially explicit and could even reflect the uncertainty of the estimation technique. We think the sensible scale is the watershed, but we're not completely bound to that. We think maybe an annual assessment would make sense. So then what you would have is you could actually measure the energy crops. Let's say this was a switch grass against corn and sort of see how you did on the score of sustainability. And again just to take that further and match up those two things. So, again, this is very early work, but I think it will be successful for us in measuring sustainability. There's just so many people working on these projects, and I really want to thank our team first on the sustainable planting and harvesting guidelines which are all of those folks from the Department of Natural Resources, the Department of Ag, from our UW team, again Steve Ventura out here. 

We recognize there's limits even on index and metrics. And how we weighed these is really going to be important. I've been in many discussions where people only say greenhouse gases, greenhouse gases, that's the number one issue. And other people say no habitat protection, habitat protection. Okay, so that's what we're going to have to figure out how you balance that, how you depict those tradeoffs, and that's, again, if you go back to those schematics I showed you how we hope we can come to some consensus on that. Also multiple scales. This is just going to continue to be an issue. Clearly, initially, you have to target the landowner, whoever is going to be growing these crops. But I do think we have to think about the watershed, the foodshed nearby, and the fuelshed and think about that this really could have some very significant impacts on public policy. So thank you very much. 

I'm going to turn it over to Carol. [APPLAUSE]  >> Carol Barford: Okay, can you hear? All right, okay. All right, well thanks to Gary for a very thorough, broad, and timely analysis. I'm going to continue and really slow down and talk about one or two single projects that deal with just the state of Wisconsin and very much looking at the sustainability and feasibility of growing crops for bioenergy from the farm perspective. I'm not going to talk about the broad set of biomass and biogas that Gary did. I'm only going to talk about switch grass and specifically using switch grass to generate heat and electricity. Not as a cellulosic feedstock for production of transportation fuel or any of those other things. So this is very much more narrow and specific. Growing switch grass on Wisconsin farms to make heat and to make electricity. So the slide that I just went past I should mention that this is work by master students Mitch Meyer and Keith Cronin did most of the number crunching for the slides that you will see. 

So as Gary summarized we have a lot of high hopes for bioenergy here in our country and we also know that there are risks involved, there are costs and benefits. So sometimes they are in the same category. We love bioenergy because it could be good for the environment. It could reduce greenhouse gas production. Also, it could be bad for the environment. What if we start using fragile lands? What if we start putting a lot of nitrogen in the waterways. So there are balances even in the same category. But for farmers they have to think about these other goals. Their net income. They also have to think about other uses for their land. 

The funds that they have available to invest in infrastructure, to invest in equipment. So there are a lot of things that have to be balanced on the farm. So you're looking for, perhaps, a highly constrained sweet spot. In that sense, I mean where a combination of factors suggest a suitable solution. So in what places can we produce switch grass for bioheat and power, using what management methods on the farm, and how would the power actually be produced? How would we get it for market? Where do all those things work for make a little bit of money for the farmer and not do the harm, do no harm? So the specific factors that I've looked at in these couple projects with the master students are we explore biomass yield and how that varies across the state as sort of the first element of sustainability and of feasibility. It depends how much biomass your land can produce. And then looking at what lands are suitable and available, what are the other production costs for the farmer in growing this switch grass, and then different kinds of energy systems also affect the feasibility and the bottom line for the farmer. Is he going to burn the biomass on his farm? Does he have use for that? Can he offset other costs by doing that? Is it going to be sold to a bioenergy plant and perhaps replace natural gas or perhaps replace coal? And then what are the transportation costs involved in those choices? So, like I said, first of all, what could be the yield of switch grass across the state of Wisconsin? Well, it depends on heat, which we quantify in terms of growing degree days during the growing season, and then also on precipitation. So that's pretty elementary. To grow crops you need sun and you need the rain. 

So across the state you can see it varies quite a bit. It's warmer in the south, colder in the north. Also, it tends to rain more closer to the Mississippi river, it's a little bit dryer over in Door County. So that's sort of the baseline that we have to deal with. Also, in the lower figures, that's showing the variability across a number of years, 56 years, at a given, in Dane County. So you can see that the amount of heat that we get can vary quite a bit and the amount of precipitation that we get in one place can also vary quite a bit. So this variability is going to impact the yield and it affects the kind of risk that the farmer is taking because he could get a good year or he could get a bad year or a set of such years. So in the analysis of sustainability we wanted to preserve this variation and express our answers in terms of a confidence interval. So to do that we used Monte Carlo methods which is essentially just using a computer to bang on that data hard many times over and over and give you an answer in terms of what is the confidence interval in yield. And this is a generalized slide. 

You can just imagine that yield is Q and we've made a regression model based on precipitation, which would be Y, and growing degree days, which would be X, to calculate yield. And by sampling from our distributions of heat and of precipitations many, many times and calculating that regression equation, we can come up with a range and a median of the expected yield for a given location. So we did that all over the state and then preserved that variability in the rest of our calculations trying to get an idea for how variability in yield might stack up against variability in other things like the price of natural gas or the variability in the price of propane or the cost of borrowing money, other things that the farmer might have to worry about. So lo and behold, switch grass yield is higher where it's warmer down in the south and wetter in the west. Also, you notice that little Marquette County there, kind of smack in the middle, where there is a little bit higher yield than its neighbors. That's because also part of the regression to calculate yield was soil texture. And it tends to be sandier there and sandy soils do better than clayey soils which is the other end of the spectrum in the field stations where switch grass has been grown to test. So because that area is sandy it looks better than its neighbors. But if you can just keep this in mind. So depending on the year that you might get, down in the south you can get as high at 14 metric tons of switch grass per hectare. 

You would just basically have to cut that in half to get per acre. And then in the north in a bad year it could be as low as around two. So that's quite a range. Between two metric tons per hectare and 14 depending on what kind of year it is and where you are. So that was yield. That is the productivity per area of land, but then if you want to think about the total production in the state, just the overall tons, you have to know which land are you growing on. How much land is available? So as Gary mentioned, not all land is equal. And furthermore, we have in mind the goal of not displacing food production on the most productive land generally. So folks have talked about growing biomass on fallow land, also on what's called CRP. That stands for conservation reserve program. 

That is basically set aside land which tends, on average, to be a little bit less fertile, and it's not prime farm land necessarily. Marginal lands, which again Steve Ventura touted up for us for the whole state, that's a much broader category. It includes things like public parks, rights of way on highways, institutional grounds, other places where you could grow biomass but not necessarily on a farm. And then the last one is 10% of crop land. And you can see these land categories are distributed differently across the state. Some of them are a little more concentrated in the south like the crop land. Some go way up into the north like the marginal land, and then CRP land tends to be more in the west where there are a lot of soils that need protection in the driftless area and other areas. So these are not all equal, they're not all distributed equally, and the amount of biomass that you get from these different schemes varies by nearly a factor of two. So that's the variability across land. Production also varies, of course, across the climate variability. 

So if you take one land scenario, in this case we're saying let's use that marginal land, and then you look at the variability across the possible climate that you can get, again there's a wide range of total production possibility from the state. Everything from two to four and a half million metric tons. And just to put this in perspective, in 2005 there was a report come out from the Department of Energy saying that the US could come up with a billion tons of biomass per year, a billion, towards all of its bioenergy goals. So this is two million. It's .2% of that big goal. And you would think Wisconsin, being one state out of 50, should be able to come up with at least 2% but instead it's .2%. Which is not totally fair because there are other biomass resources. There's wood and in addition there's biogas. So switch grass could never be the whole story. But an order of magnitude is a long way off. 

So we're not talking about meeting national goals here by growing switch grass on marginal land. Instead what I'm going to focus on later as I go on describing the project is how you can make the best use of this biomass in a very targeted and very specific way. So seeing what production is possible then to derive sustainability for the farmer you have to think about his costs. So he's not got materials costs, equipment costs, and then fuel, labor, other things, transport, and then the cost of land which I'm not including the opportunity cost of growing other things. I'm only talking about rental cost of land. So across the state of Wisconsin in this study these costs were all fixed. These were all the same costs no matter where you are except for the cost of land. That was divided into three tiers. The way you USDA does it where there's actually cheaper land up north on down to the most expensive rental rates in the south. All the other costs were fixed across the state. 

So just to give an idea with two different pretend transit distances, say the farmer has to sell his switch grass, he has to bail it and put it on truck and sell it some place far away and he's going to truck it there, that the costs vary quite a bit across the state. From a high of up above $120 per metric ton in the north to, I can't see the colors very well from this angle, but down to $60-ish, $50-ish being about the lowest cost that we can manage here in the state of Wisconsin and that's because of the yield. Up north where the yields are low, each bit of grass is costing the farmer a lot to produce. In the south, it's costing less because he's getting more biomass off each bit of land. Notice that again that little central area, especially will Marquette County, looks like good and that's partly because of farm size. The bigger the farm, the more the equipment cost can be spread over a great deal of production and the better the net costs look for the farmer. Actually we did this both ways, assuming owned equipment and assuming rented equipment and then we took the best. But you can see that in general the net cost map doesn't look exactly like the yield map, partly because of the cost of land being higher down in the very southern tier of states. So even though yields are higher there, their land cost is higher too so the net comes out not quite as high as you might think. So then the farmer has to know what he's doing with this switch grass. 

Is he going to burn it on his own farm and offset his own energy costs? Is it going to be shipped to a small plant that produces district heat or in a business that would potentially be burning natural gas otherwise? Or might it be going to a large power plant and potentially even competing with coal as the feedstock for electricity production? So those were the three scenarios that I looked at in terms of the final destination of the biomass. So if was on-farm, which would be a small system, 50-kilowatt system, and then a system competing with natural gas and then a very large system that might be competing with coal for electricity generation. So the on-farm option came out the best, just as Gary suggested. That sort of bottom up distributed energy system looks the best for biomass in the state of Wisconsin. That's partly because of what the biomass would be replacing. In this case, we're talking about replacing natural gas or propane. This is where the propane would be generating electricity to be sold on to the grid, which is possible in the state of Wisconsin. And then the excess heat could be used as well. So it's a combined heat and power unit, a CHP unit. So I'll just walk you through this plot on the top which shows how much heat has to be used, how much of the total energy of the system has to be used as heat to make the system break even at different natural gas prices of interest. 

So the green is the natural gas price in 2007, the horizontal green line. The other two horizontal lines show the top and the bottom natural gas prices in the last 10 years. So at 2007 prices, if you're burning this switch grass on-farm, you have to be using about 50% of the energy as heat to break even, which requires a very specific set of needs on the farm. This could be used to dry grain, this could be used to heat a dairy barn, this could be used to heat the home on the farm, but it requires that the farmer knows exactly what he's going to do with that electricity and with that heat. The lower natural gas prices might be the less constrained this system is. You could maybe, at the lower natural gas price you maybe only have to use 30% of the heat. A higher natural gas price, you have to use-- basically you could only be running a heater. You couldn't be doing electricity replacement at all. So the price of natural gas is dictating whether this whole enterprise is profitable for the farmer. The bottom graph is showing how much net money the median farmer in Wisconsin could make or offset, the cost that he could offset depending on the natural gas price. 

So here my prices are vertical and there's actually switch grass on the graph going up diagonally and corn stover as well. I don't know if you noticed if you're quick at reading the graphs but corn stover looks a lot more feasible for the farmers over a broad set of energy prices because of the way the production costs get allocated to the grain corn and to the corn stover. So it's sort of a freebie and it comes out, at least in this economic analysis, as a lot more having a broader sweet spot for the farmer. So you can see that at some natural gas prices at the lower natural gas prices, the farmer isn't going to be able to save himself much money by producing biomass and burning it on the farm. This is really the same thing for propane. Natural gas isn't maybe the most relevant comparison because a lot of farms don't have natural gas service in the state and they have delivered LP gas. And so actually what the farmer might be replacing would be propane which actually is more expensive than the natural gas so the whole sweet spot is just a little bit bigger. The graph on the left, again, is the break even price of propane and how much heat you would have to utilize to break even at that price. And so in the median case it's more like 30% heat rather than 50%. So allowing the farmer a little bit more flexibility is what he can do with the end use of that energy. 

And then, again, over on the right the net income to the farmer and at just about any propane price that we've had in the last 20 years ranges from about $.20 to about $.60 per liter. At about any of those propane price points the farmer would make money or he would offset real costs by using the biomass instead of the propane. So in the case, not of burning the biomass on farm, but of shipping it away to, perhaps, a larger facility that would probably be competing with a cheaper fuel than propane. Either competing with natural gas or potentially coal, which is cheaper yet, the farm income, it depends very much on the price that the farmer can get for the switch grass. So if the buyer is only paying $40, or even $80, the farmer is completely going to be in the red for the switch grass that he has grown, which is not going to work. For the median production cost in the state is about $89 per metric ton. So obviously the price that the farmer gets in the median case is going to have to be greater than $89 which is not a price that farmers are realizing right now for switch grass. Prices are more on the order of $50, $40-ish-$50-ish dollars per metric ton. So this is showing that at the current state of affairs farmer cannot make money on market price for switch grass either in the north or in the south. So what could change? What could change that sweet spot? What in the future might make this is a viable enterprise for the farmer? Well, if you assume that corn prices, which Gary said was a shaky assumption, if you assumed recent corn yields in prices, if you assumed sort of a state median seven metric tons per hectare of switch grass yield and you assumed somehow that the farmer could get $150 per metric ton, if you can just suspend disbelief for a minute and think that there are all these great government programs or circumstances that are going to make this possible, that would require a 400% coal price increase to make the farmer to make it feasible to replace corn production with switch grass production. 

Or a 60% increase in the price of natural gas. That would do it as well. Or a low carbon scenario in which the price of producing, the cost of producing CO2 was so high that the farmer could be credited with some money for growing switch grass based on its capacity to, based essentially on its renewability in terms of the carbon cycle. So some of those things don't look too immediate. 400% coal price increase, 60% natural gas price increase, how can you count on those things in the shorter term? Well, people are thinking about the other ecosystem services, the other things that are valuable, potentially, about growing a perennial crop like switch grass. A crop that doesn't get cultivated and plowed every year potentially could receive less chemical inputs. Although, if it receives less chemical inputs, the yields are going to be lower than what I'm showing here. All the regressions that I used were based on field studies in which the inputs were very much conventional agriculture. A hundred pounds of nitrogen per acre, that's pretty standard stuff, a high amount of nitrogen fertilization and if it goes down from there, the amount of switch grass that is produced goes down from there. So management is an important factor here, not only in how the ecosystem responds but also in the economic feasibility of the whole proposition. 

So this is a slide showing the carbon balance of growing different crops in the state of Wisconsin. And by carbon balance I mean what's the net effect between the CO2 produced by the farming activity, burning diesel, getting the equipment out in the field, and also the production of all the inputs to the farming process. Production of the nitrogen fertilizers, very energy intensive, puts out a lot of CO2. All the chemicals, I don't know if you can read them there, that are involved in producing switch grass in the way that the agronomists tell us that we should, at least in some cases. The phosphorous, potassium, lime, producing lime makes a lot of CO2 and sometimes you just have to have lime in the field. So all of those are making positive contributions to the CO2 production. Those are the pieces that are above the zero mark. That's CO2 producing to the atmosphere. The parts of the bar below the zero mark are CO2 sequestering in the soil. So that's where the biological activity of the crop is keeping the carbon in the soil. 

So you can see that some of our very characteristic dairy related rotations of crops in Wisconsin, the ones involving the alfalfa, the oats the corn silage, those produce quite a bit, the net production of CO2 is high because all of that biomass is being removed from the field and used in some way for the cows, whether bedding or for the feed, and it's basically being turned into CO2 in short order when the analysis is not including the fate of, say, the meat or anything like that. Soy beans also don't leave much soy bean material in the field, and so that is also a net CO2 producing activity. The dark purple, I'm not sure if you can see, is the soil erosion that may be associated with each kind of crop production just because of how much time the crop is covering the soil and because of how closely it's planted and how the residue is managed, some crops are associated with more erosion than others. And then the bottom parts, the parts below zero have to do with how much residue is remaining on the soil and keeping carbon in that soil system. So you can see that corn actually looks pretty good when you're only thinking about carbon, which is worth noting here. Corn is a very productive crop. It makes a lot of biomass. And if you leave on the field the amount of residue you're supposed to, the agronomists tell you to, you sequester some carbon. Likewise, switch grass sequesters some carbon, it keeps some carbon in the system, but not as much as corn, not after the establishment year. The establishment year is the year that you seed it and you don't cut it. 

After that, when you're actually harvesting it every year, you lose quite a bit of carbon because it's being burned in the combined heat and power system. So the question here is, can we credit farmers who are growing switch grass with carbon sequestration and pay them for it? Because that's been done in the state of Wisconsin, actually, on the now defunct Chicago Climate Exchange, but there was a means for farmers to get paid for sequestering carbon. The question is, sequestering more than what? Well, it's not sequestering more than corn. So there's a long way to go in figuring out the details and the baseline for this kind of potential compensation for farmers for sequestering carbon which is doing a thing that as a society we probably would like them to do, all things being equal. So I would just point out that there are some gaps in the work that I've showed you here which is sort of analogous to the new work that Gary was talking about in terms of transportation, processing and storage. Those things all impact the feasibility, that sweet spot for farmers in ways that we don't understand all that well yet. Biomass is very bulky compared to fossil fuels and so the transportation costs more per BTU and the storage costs a lot more because it doesn't come in pipelines, it has to sit in the shed or sit in the barn. These are serious considerations, actually. The yield we could know more about that, especially how the yield works on marginal lands and how different kinds of management and different kinds of species would influence the bottom line, the feasibility for farmers. And then also the policy world in the case of biomass is just now getting going. 

It's just now forming and we're thinking about other ecosystem goods and services. Another thing to think about is risk. Farmers are already taking a lot of risk all the time. Can we ask them to shoulder this risk too which is dependent not only on prices of energy but also the opportunity costs of prices of food, the other things that they could be doing with their land. How can we put all this together and make a feasible place for biomass to be produced and make energy? So those conclusions for my little piece of the talk is that the capacity for biomass production in the case of switch grass varies widely across the state. Some counties could be in the game, some counties really couldn't in terms of farm-based biomass. Fortunately, the places where farm-based biomass is less feasible usually are more likely to be able to produce woody biomass. And the woody biomass markets and actually much longer established and better understood than the farm-based markets. The details on individual farms, including the soil types and the land costs and the equipment ownership, have a big deal to do with feasibility. The management also have to do with feasibility, exactly how the crops are grown in the field. 

And lastly that the feasibility altogether is going to depend on policy tools for the near future. There's not a market, at least in Wisconsin right now, to support this activity so we have to think carefully as a group what we value in this enterprise. So I'd like to thank other folks who have helped out with this work, including Gary and Steve Ventura and lots of other people here in Madison at the UW and the USDA. Thanks very much. [APPLAUSE]