Psst! Heard on the Floor at the International Bioenergy Conference

by Jim Lane (Biofuels Digest) ... The eyes of the world might well be on tiny Prince George, British Columbia these days — because that is the proposed site of Canfor’s commercial-scale biofuels and chemicals project. The success of such a venture could well signal the long-awaited opening of the North American pulp & paper industry as potential sites for biofuels projects using woody biomass as a feedstock.

It may catch industry observers by surprise that the wood-rich Southeast, which has been home to so much lower-value pellet mill activity, would not have been the location of a first commercial-scale project for a miller. Or that the technology would have been Licella’s, “the Wonder from Down Under”, instead one of the many originally developed in the US. But Prince George and Licella may well take the prize, though feasibility, engineering and construction activity lies ahead and it will be some time before the project is in operation.

John Martin, Parliamentary Secretary to the Minister of Forests, Lands and Natural Resource Operations, highlighted the province’s Fiber Action Plan — especially as it aims to remove excess fiber and residue not suitable for traditional markets. “We know that challenges lie ahead,” Martin asserted, “but we are confident that we have the tools to meet those challenges.”

Warren Mabee of the Queen’s Institute for Energy and Environmental Policy said that Western Canada could support up to 1 million barrels per year of fuels and chemicals from softwoods, and 1 million barrels from hardwoods, out of a total Canadian demand of 96 million barrels per year.

He described wood as “a chemical and energy storage system” with a wide diversity and opportunities varying widely based on species.

He (Don Roberts, CEO of Nawitka Capital Advisors) said that the industry needs “to focus on what is truly unique about biomass,” especially its ability to produce things other than electrons — incouding liquid fuels, chemicals and advanced materials” and said that we would learn more “in the next 12-24 months than we have in the past 50 years” about the future of cellulosic biofuels.

“Government must get out of the business of picking winners and losers and instead recognize the cost of carbon.”

In a keynote address, Jeff Rubin, former Chief Economist at CIBC World Markets, and now author of The Carbon Bubble and The End of Growth, said that it is not Alberta or Canada’s emissions relating to oil sands that would be a defining issue for Canada’s energy prospects.

“The world is implementing a 450 ppm threshold for greenhouse gases, aimed at capping climate change to 2 degrees. Capping at 450 implies not only dramatic changes in use, but imminent change in the use of fossil fuels.”

Business as usual, he said, based on growth in energy demand would leave the world flirting with 700 parts per million greenhouse levels by the end of the century. “That would cause rising seas, 600 million people at direct risk, dramatically changing precipitation, and extreme climate events.”

“So, to cap emissions at 450 parts per million, we have 1000 Gigatons left to emit, and that may not seem like a problem, but last year we emitted 32 gigatons globally. So we have 30 years left, then the whole global economy has to shift 100% to renewables. We can extend that by 60 years with a 50% reduction. But we are looking at dramatic and sustained reduction.”

How do we achieve that? Rubin highlighted two paths. One, deep decarbonization. Two, no growth, or even decline, in the world economy.

Rubin said that oil sands struggle today, with demand in the 90 million barrels per day range, to remain viable. “Much of what has been shut in, won’t come back, there’s no room for high cost oil.”

But Rubin warned that markets are not getting right signal on decarbonizing, He said the real battle is going to be in transport and industrials and that’s where carbon taxes are essential.

He said that Canada would need $30 as an entry point for carbon prices, not as an end point, and $50 by 2020, to have a chance to meet emission targets.

The solution, he said, is to be found not just in carbon prices but in carbon tariffs. “Canadians have the right to expect a level playing field, and a carbon border is the answer. A carbon tariff, that is, with a carbon price on imports the same as on the price of carbon exports. That would meet world trade rules, and Canada can pursue bilateral agreements as it did with NAFTA.

“Critics say that carbon prices hurt jobs, but a carbon tariff would bring jobs back home instead of sending them overseas but placing emphasis on new technologies. There would be a sunset on old industry but a sunrise on renewable technology. READ MORE