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Experts say Arkansas could be biofuels center

Biofuels production in Arkansas has gone from zero last summer to 20 million gallons this summer, and it is projected to be 60 million gallons in 2007.

In a few years, biofuels production could make “energy” a major new commodity for Arkansas farmers and foresters. That was the consensus of industry experts, scientists, legislators and government officials at a workshop in Little Rock, Ark.

Some 250 entrepreneurs, farmers, legislators, scientists and financiers attended a workshop on “Energy and Value-Added Products from Biomass,” hosted by industry groups and state and university agencies.

Rep. Benny Petrus of Stuttgart, Ark., speaker-elect of the Arkansas House of Representatives, said he will promote “an aggressive package of (biofuels) bills” in the 2007 session of the Arkansas legislature. He said he favors limiting the sales tax for biofuels to 2 percent and using that revenue for biofuels production incentives and research.

Arkansas Secretary of Agriculture Richard Bell said a state bioenergy council is developing recommendations. It will address funding for production incentives, infrastructure and research, and other ideas such as fleet directives to use biofuels, he said.

Cal McCastlain of Patriot Biofuels at Stuttgart and Gary McChesney, representing the 2,200-acre Viceroy (formerly Eastman) chemical facility near Batesville, Ark., described current biodiesel production systems in their companies and plans to increase production.

Stephanie Cox of the Potlatch forest products company described plans to use wood to produce biofuels, electricity and co-products at Potlatch's Cypress Bend plant near Arkansas City, Ark.

Although not represented at the workshop, the Arkansas Soy Energy Group has announced plans for a third Arkansas biodiesel plant near Dewitt, Ark.

Congressmen Marion Berry and Vic Snyder said the new federal energy act and initiatives of the U.S. Department of Energy are providing financial and other incentives to strongly encourage biofuels production.

Former U.S. Senator Dale Bumpers, in a keynote luncheon address, said, “The goal we must achieve before long is nationwide availability of biofuels at service stations.”

Milo Shult, the University of Arkansas system's vice president for agriculture, said, “It's going to be an exciting time in our business for the next 10 years. We have strengths and we have holes.”

Shult said a Division of Agriculture biofuels task force is working with industry and government leaders to form a strategic plan for research and development. “We need to lay out a menu of expertise in our state,” he said.

Winrock International bioenergy specialist Jim Wimberly and UA professor of chemical engineering Ed Clausen cited a high level of private investment, not only in already profitable biofuels production, but also in commercial development of new biofuels technology.

Wimberly, Clausen and others advised entrepreneurs to “start with what you can do,” and use proven methods for profitable production of biodiesel or ethanol. They added that producers should plan to add new technology as it becomes commercially feasible.

The consensus of experts was that currently used methods of converting grain, oilseeds and animal fat to biofuel are limited by availability of feedstocks and a relatively small gain of energy output versus the energy used in the process.

“The future is likely lignocellulosics,” Clausen said, which uses entire plants as feedstock and provides up to 1,000 percent greater efficiency than currently used methods. “Dedicated energy crops” such as switchgrass or fast-growing trees could provide abundant lignocellulosic feedstocks.

Lignocellulosic (also called cellulosic) bioenergy technology separates the lignin (which holds the plant together) from the cellulose (the energy component that fuels plant growth). The process is currently limited by high costs of separating the tightly bound lignin and cellulose, Clausen said.

Breakthroughs in reducing the cost of cellulosic methods “will be sooner rather than later,” Clausen said, because of significant investment by industry along with government-funded research and incentives.

Division of Agriculture economist Michael Popp said the emergence of “energy” as a new agricultural commodity can benefit farmers and the environment while creating jobs in rural areas.

Some of the short-term issues, Popp said, are oilseed crushing capacity to provide feedstock for both energy and food markets, mutually beneficial contracting models for farmers and processors, and the infrastructure to deliver biofuels to consumers.

Long-term issues involve the transition from oilseed and animal fat feedstocks to “dedicated energy crops” for cellulosic energy production, Popp said. Research is needed on agronomic, economic and environmental issues related to energy crops, he said.

Matthew Pelkki of the Arkansas Forest Resources Center at Monticello, Ark., said Arkansas companies already use sawdust and other mill residuals as fuel to generate heat and electricity. He and colleagues are testing a one-of-a-kind bundling machine designed to collect in-forest residues after trees are harvested.

In-forest residues are a potential feedstock for future cellulosic biofuels plants as well as for burning to generate heat and electricity, Pelkki said.

Stephanie Cox, senior project engineer at the Potlatch Cypress Bend plant, said bioenergy objectives at Cypress Bend are to produce heat, low-cost electricity and new products from forest residues. She said Potlatch is discussing with other companies a potential partnership to develop a gasification process and convert the gas to liquid fuel.

McCastlain of Patriot Biofuels said biodiesel “is now being distributed in the highway economy of Arkansas.” He said more service stations need facilities to blend biodiesel with petroleum diesel.

“Arkansas can be a center for biofuels production if we want it to be,” McCastlain said. “We have the foundation for the technology. Biodiesel should be looked at as the entry point into the industry.”

Pioneer is supporting a Division of Agriculture plant-breeding program that has developed canola (rapeseed) varieties that perform well under Arkansas conditions.

McChesney said the former Eastman chemical plant, with over 400 employees, was built to produce photographic chemicals and has a long history of innovation to produce a wide range of products. The plant was purchased by the Viceroy Acquisition Corporation with the intention of selling it to a company looking to invest in its current bioenergy initiative, he said.

In addition to its value as fuel, the plant uses biodiesel to produce a range of products as alternatives to petroleum based products, McChesney said. They include lubricants, solvents, hydraulic fluid, spray adjuvants and micronutrients.

The plant uses glycerin, a biodiesel byproduct, to produce antifreeze and other chemicals, he said.

Several speakers said a major infrastructure issue is limited soybean crushing capacity to provide oil for biodiesel feedstock. McChesney said the Viceroy plant is seeking a commercial partner to help develop “a new crushing model that produces three streams of oil, meal and sugar (for bioenergy processing).” Oilseed mills currently produce meal and oil.

The workshop was sponsored by a grant from the Southern States Energy Board with support from the Agricultural Council of Arkansas, Arkansas Farm Bureau, Arkansas Department of Economic Development, The Poultry Federation, University of Arkansas College of Engineering, University of Arkansas System Division of Agriculture, and Winrock International.

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