From: HAYES-GORMAN Linda

Sent: Mon Jun 25 16:57:50 2012

To: MASON Palmer; FULLER Brian; PICKERELL Loretta; WILES Wendy

Cc: DRUBACK Lissa; BAILEY Mark

Subject: RE: PGE Plans and CT Rules

Importance: Normal

Attachments: image001.jpg; image002.gif;

 

Likewise – appreciate the information and a heads up. My only request is that we make sure to involve ER-AQ (major permit writer for PGE) in rule review. Danke!

From: MASON Palmer

Sent: Monday, June 25, 2012 4:38 PM

To: FULLER Brian; PICKERELL Loretta; WILES Wendy

Cc: DRUBACK Lissa; HAYES-GORMAN Linda

Subject: RE: PGE Plans and CT Rules

Thanks for heads-up, Brian. Please copy me on the response / answers.

Palmer Mason

Government Relations Manager, J.D.

Oregon Department of Environmental Quality

mason.palmer@deq.state.or.us

503.229.6800

From: FULLER Brian

Sent: Monday, June 25, 2012 4:32 PM

To: PICKERELL Loretta; MASON Palmer; WILES Wendy

Cc: DRUBACK Lissa; HAYES-GORMAN Linda

Subject: PGE Plans and CT Rules

FYI. Potential intersection with the proposed CT rules and PGE.

After the coal shut down the plan is to use biomass to generate electricity.

PGE converting the plant to biomass is “experimental” in a sense. They plan to try different types of biomass sources.

A couple questions arose in our CT advisory committee meeting:

1. Would this facility be considered a Conversion Technology facility?

2. The Arundo donax is being grown as an energy crop so that would not be viewed as a waste. However if PGE tries different agricultural wastes, would DEQ view this as SW and potentially subject the facility to a SW permit and fees?

Our team is working on the answers but I wanted you to be aware of this potential issue and voice any concerns or comments.

Thanks

From: SPENDELOW Peter H

Sent: Monday, June 25, 2012 3:48 PM

To: LUMPER Bruce; BARROWS Bob; FULLER Brian; RAWSON Stephanie

Subject: FW: From Greenwire -- BIOMASS: Mimicking coal with crops could be a lifeline for Ore. power plant

Hi everyone,

Here is a full article on what PGE is planning on doing with growing energy crops and using other forms of biomass at their Boardman plant, in place of coal. This came up a bit at our Conversion Technology meeting, where a PGE representative was wondering if they would be covered under our conversion technology rules if they began accepting waste plant material too.

Peter Spendelow

Oregon Department of Environmental Quality

503-229-5253

From: spendelow.peter@deq.state.or.us [mailto:spendelow.peter@deq.state.or.us]

Sent: Monday, June 25, 2012 2:35 PM

To: SPENDELOW Peter H

Subject: From Greenwire -- BIOMASS: Mimicking coal with crops could be a lifeline for Ore. power plant

E-mail this story, sponsored by the National Biodiesel Board

This Greenwire story was sent to you by: spendelow.peter@deq.state.or.us

Personal message:

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An E&E Publishing Service

BIOMASS: Mimicking coal with crops could be a lifeline for Ore. power plant (Monday, June 25, 2012)

Gabriel Nelson, E&E reporter

There isn't any coal to mine in Morrow County, Ore., but there's a lot of cropland.

Those fields could soon prove useful for more than producing wheat, corn and potatoes. Because Oregon has decided it doesn't want to keep drawing electricity from coal, the owner of the state's only coal-fired power plant is trying its hand at agriculture.

Portland General Electric Co. is betting that a fuel of the future is Arundo donax, or giant cane, which grows wild in Greek backyards and has gained a reputation as a pesky weed in California, Texas and Florida.

With special machines that use a technique similar to roasting coffee, PGE would turn plant material into charred lumps that look like coal and burn like it, too. Fast-growing Arundo -- it can grow as tall as 20 feet in a season -- seems like an especially good feedstock for the fuel, but no one grows the plant commercially in Oregon, so the electric utility has had to figure some things out for itself.

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A farmer near Boardman, Ore., moves a bale of Arundo donax, a fast-growing reed that the state's largest electric utility sees as a promising renewable fuel for one of its power plants. All photos courtesy of Portland General Electric Co.

"We checked all our job descriptions and didn't find a single one that said 'farmer,' so guess what: We have a consultant out there," said Wayne Lei, the company's research and development director.

PGE has three local farmers raising plots of Arundo on 85 acres near the town of Boardman on the southern bank of the Columbia River. They will start harvesting reeds in a few weeks and continue through the fall.

If Arundo and other plants work as fuel, the 585-megawatt boiler in Boardman could end up generating more electricity from biomass than any power station in the country. And perhaps, the researchers working on the project say, it could become the model for utilities that want to cut the carbon emissions of coal plants without laying off longtime workers or making junk out of infrastructure that would cost billions of dollars to replace.

Even under the best circumstances, it will probably cost more to buy treated biomass than coal or natural gas. Coal comes ready to burn, having been cooked into an energy-dense fuel by the heat and pressure of the Earth over a long period of geological time.

But the aptly named Richard Boardman, a researcher at Idaho National Laboratory whose lab is analyzing the 15-plus plants being considered by PGE, hopes the Oregon power plant will start a trend. There is no doubt that American power companies could make major reductions in their carbon emissions if they swapped out some of their coal for biomass, he said.

Boardman and his colleagues at the laboratory are studying how the cost would stack up against other types of renewable energy, such as wind and solar. They have yet to publish their findings, but Boardman is optimistic.

"There's no doubt we'll do it. The question is just when it will be considered favorable because of its benefits," he said of the coal-to-biomass switch. "Speaking just personally, I think that time has arrived."

A few power plants are already built to burn plant material. In fact, biomass currently generates about 1.4 percent of the United States' electricity at a few plants scattered around the country, more than solar and geothermal energy but less than wind and hydropower.

One of the big problems is that mixing more than 10 percent biomass into coal gums up the works at ordinary coal plants. PGE will run tests in 2014 to see whether the Boardman plant can run 24 hours without problems on nothing but biomass.

With the newest roasting machines, that goal is technically achievable, said Stan Rosinski, manager of the renewable energy program at the industry-funded Electric Power Research Institute.

There are questions about whether the price is right, and whether the wide-scale use of biomass would cause environmental problems of its own. Still, as the United States and the world craft policies to deal with climate change, it could help coal plant owners keep a "large and very valuable base of existing assets," said Rosinski, whose research group is testing the roasting machines.

"I think many of our members are interested in following this technology," he said.

Experiment begins

Not many power companies would be willing to get involved with farming, but PGE sees a it as a way to cut its losses.

Under a deal struck with the state in 2010, PGE has until 2020 to stop burning coal at Boardman, the state's last coal plant and a major source of air pollution. But at just 32 years old, the plant is still young by power plant standards, so keeping it running on a new fuel could be more profitable than tearing it down and getting the electricity from somewhere else.

Under state law, Oregon utilities must also get 15 percent of their electricity from renewable sources by 2015, ratcheting up to 25 percent in 2025. PGE has already built a large wind farm and is looking for another 100 megawatts of renewable energy, but a biomass-burning plant would be valuable to the company because it could run even when the wind isn't blowing.

"It's going to be an ongoing need," PGE spokesman Steve Corson said of the renewables law. "If in the end it looks like it would be feasible to go ahead with a conversion at Boardman, that would help us with the problem of putting all our eggs in one basket."

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This power plant, located near the Columbia River in the town of Boardman, Ore., must stop burning coal by 2020 under an agreement with the state. Portland General Electric Co., the owner, hopes a switch to biomass will extend the plant's life.

Owners of coal-burning power stations across the United States are asking similar questions. They know that environmental rules such as the new air quality standards from U.S. EPA, together with future laws to deal with climate change, could quickly make their plants unprofitable.

Complicating matters, these facilities are often major employers in rural areas. Replacing older plants with new energy sources employs workers, too -- sometimes more, sometimes less -- but the churn is undoubtedly painful for the people who lose their jobs.

That is why Oregon's order to stop burning coal disappointed many people in Boardman, where the power plant employs about 110 workers. People are watching closely to see whether biomass keeps the plant open for business and prevents a hit to the economy, said Barry Beyeler, the town's community development director.

Boardman benefits from all parts of the energy industry, surrounded on all sides by wind farms and transmission lines and hydroelectric dams. There's a natural gas plant in town, too.

Some people did not like the coal plant, but most didn't mind it, Beyeler said.

"It only seems to be Washington, D.C., that has a problem with coal-fired plants," he said.

With eight years left on the clock, PGE's race to keep the plant open is well under way.

It started in earnest last spring, when six truckloads of Arundo rootstocks arrived from the wooded banks of the Santa Ana River in Southern California. PGE had ordered them along with clipped-off sprouts from grown-up plants in Washington, Indiana and Georgia, trying to figure out what would grow best.

The farmers stored the roots and sprouts in dry soil and in wet soil, in dry potting mix and in wet potting mix. When planted in the greenhouse, they did merely OK. Planted in the ground, they did a little better.

It was the first time giant cane had been grown in Oregon, and PGE wasn't sure exactly how well the plant would take to the local climate.

As a lucky accident, the water used to irrigate one of the fields came from a potato processing plant, and it was fortified with nutrients like those in fertilizer. The plants on that 4.5-acre plot grew beyond all expectations.

"Trust me, that was a pretty neat trick," Lei said. "That really surprised us."

It has left PGE hopeful that local farmers will learn to grow about 30 dry tons of Arundo per acre, twice the productivity of their cornfields, using a similar amount of water and fertilizer. But growing the plants is just the first step.

Many questions still need to be answered. There are plenty of reasons that few power plants are burning biomass.

'Roll the dice'

The new fuel will almost certainly be more expensive to buy than the coal that comes to Boardman by railroad from Wyoming's Powder River Basin, but it also could end up costing more than other forms of renewable energy, such as that generated by windmills that can be seen on the horizon from the rooftop of the Boardman plant, or by the hydroelectric dams on the nearby Columbia River.

Even with the best pollution controls, biomass would release some soot into the air and leave some haze over the landscape, too.

"No one's ever done a biomass plant of this scale that I'm aware of," said Ivan Maluski, conservation director of the Sierra Club's Oregon chapter. "You're still going to have a smokestack and air quality impacts, and we're not going to even know what those are until sometime down the road."

PGE could add more controls for soot or smog or haze if it needs them, but the carbon dioxide emissions would mainly depend on where the company gets its fuel.

That is something that environmental advocates are grappling with as they decide whether to embrace biomass. EPA has decided to exempt biomass from its climate change rules for three years and assembled a panel of scientists that will soon release a report on the difference between burning whole trees, agricultural waste and fast-growing plants like Arundo donax.

Environmentalists are generally open to the idea of swapping plant scraps and energy crops for fossil fuels, but they are mostly being cautious, suspicious that burning biomass could make climate change worse in the short run. The Natural Resources Defense Council, for instance, has started a campaign called "Our Forests Aren't Fuel," pointing to studies that suggest it could take decades for trees to regrow and absorb enough carbon to make up for an initial rush into the atmosphere.

"If we treat everything the same, even the most high-carbon, damaging forms of biomass would be fair game," said Sasha Lyutse, a policy advocate at NRDC, in an interview. "Cutting down forests and burning them in power plants would be considered a zero-carbon alternative to fossil fuels when we know that's not the case."

Converting the Boardman plant to run on biomass could also change the way agriculture is done for 50 or even 100 miles around, PGE says, because growing enough giant cane to meet that demand around the clock would take more than 60,000 acres, triple the area of Manhattan and a substantial share of the irrigated farmland near Boardman.

The boiler would need to burn 8,000 tons of plant material each day to keep its water steaming and its turbine spinning.

"That doesn't seem like it's something we're going to be able to meet with collateral sources, things like wheat straw that might just be available in the neighborhood," said Corson, the PGE spokesman.

This hunger for biomass could tempt farmers to switch crops, or bring fallow fields into production. And this could lead to a new thirst for irrigation in northern Oregon, where the flows of the salmon-filled Columbia River have long put limits on the amount of desert that can be turned into fertile land.

Adding to all of this, there are worries Arundo could become a pest in Oregon, as it has elsewhere.

In a number of ways, the project is a gamble, according to Dan Hilburn, administrator of the plant division at the Oregon Department of Agriculture. If it succeeds, Oregon could have a locally made, low-carbon source of electricity for the long term and that would be quite a good thing, Hilburn wrote in a blog post last year.

"If it fails, we could have a major ecological problem," he wrote. "That would be a very bad thing."

PGE is looking at other energy crops, like sorghum, wood pellets and scraps from the forest floor, all of which would be hedges against crop blights and other problems.

The company says it is comfortable working with Arundo donax because it doesn't seem to reproduce in northern latitudes. Still, if it gets planted in hundreds of fields and it turns out that the reed can spread, the guerrilla invasion would be difficult to stop.

Under current rules, the experimental giant cane crop is limited to 400 acres, and it cannot be planted within a quarter-mile of water to prevent any buds from floating away and seeding the banks nearby. PGE paid a $1 million bond and promised that it would monitor the fields to make sure the plant is not invading the land around it.

The company has tried to reassure its neighbors, and groups like the state weed board, by saying it is taking precautions similar to those used at nuclear power stations.

And it's worth noting that Oregon does not have any nuclear plants, either.

The only commercial reactor built in Oregon, at the Trojan power station, was dogged by anti-nuclear activists. PGE closed it down in 1992 after a series of cracks and radioactive water leaks.

The plant's cooling tower remained a hulking relic until it was torn down about 15 years later. Without a new fuel clean enough to satisfy the green-minded people in Oregon and cheap enough to satisfy the state's utility commissioners, the Boardman plant may suffer the same fate. But in biomass, there may be an answer that is at least tolerable to everyone, PGE says.

"We are very familiar with the fact that there is no perfect source of energy to produce electricity," Corson said. "That's the basis of our business: There are advantages and disadvantages to whatever path we take."

Some green groups are already coming out against the idea of burning biomass at the Boardman plant. Maluski, of the Sierra Club, said the group is worried that PGE will wait a few years and decide to switch the plant to natural gas, rather than get started now deploying more wind farms and solar panels.

But state regulators and consumer advocates have mostly been willing to see what happens with the biomass tests.

"Good luck PGE, and good luck Oregon," Hilburn wrote in his blog post last year. "Roll the dice."

Mimicking coal

On its own, getting power from biomass is hardly new.

Many industrial outposts, like the paper mills so common in Oregon, burn wood chips, scraps from the forest floor or agricultural waste such as cornstalks for energy. Some ordinary power plants mix coal with as much as 5 or 10 percent biomass to shrink their carbon footprint, and a few scattered plants are custom-built to burn nothing but plant material.

And some of the coal plants in the European Union have been custom-built to run on fuels such as wood pellets, part of a plan to reduce carbon dioxide emissions under Europe's climate change laws.

But beyond the magical 10 percent number, ordinary power stations can rarely handle more plant material without being completely redone, said Boardman of Idaho National Laboratory. One reason is the moisture in plants. But even if the biomass goes through a dryer, it's still springy with cellulose and can't be crushed finely enough to be blown into a pulverized coal boiler.

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These charred chips are plants that have gone through a process called "torrefaction." Using heat and pressure, the new machines leave behind a fuel that is dry, contains more energy per pound than some types of coal and is easily ground up for use in an ordinary utility boiler.

PGE tried burning raw biomass anyway, but it didn't work. Rather than turning into a powder, the plant matter caked and clogged the machinery.

"I was told by one of the shift supervisors that it polished the inside of the pulverizer," Lei said. "Polishing it is pretty good if that's what you want to do, but we were trying to shoot it into the fireball."

The upgrades needed to get past this technical hurdle can cost hundreds of millions of dollars, and they can force a power company to accept a lower electricity output, because wood chips or cornstalks have significantly less energy per pound than coal.

Torrefaction machines could solve all these problems. Charring plants prevents them from rotting and sterilizes them, limiting the risk that a crop will accidentally spread and become an nuisance. It makes the plants hydrophobic, or water resistant, so the fuel can be piled high outdoors just like coal. And it smooths out the natural variability of agriculture.

There are rainy years and dry years, warm years and cool years, years when one crop grows well and another grows poorly. Power companies are notoriously risk-averse, and they won't want to leave their fuel to chance, Boardman said.

He envisions a model closer to that of the oil industry. In underground reservoirs, crude can come in many types, with different chemical formulas. But by the time it reaches the pump, the oil has been refined into specific fuels and octane levels to tell customers what type of product to buy.

If biomass could be sold in a similar way with standard levels of dryness and energy content that could make it into a widely sold commodity, said Rosinski, of the utility-funded research group.

"If you think about it, coal is mined and shipped all over the world now," he said. "If you're mining coal at a facility in Wyoming and shipping it to a power plant in the Southeast, there's no reason you couldn't create a torrefied product there and ship that to the Southeast as well."

A few companies have started making torrefied biomass for commercial sale, mainly eyeing the European market. The oil company ConocoPhillips Co., perhaps seeing a rare chance to create a new global commodity, is working with the Maryland startup Enviva LP to make torrefied wood pellets and plans to start up its first production line next year.

Adoption may be slow in the United States, where most power plants do not face limits on their carbon emissions, but the upstarts know which fuel they will need to displace. Some of them have come up with a catchier name for their product: "biocoal."

The first time someone came to PGE with a sales pitch for biocoal, Lei almost ignored it. With the company under pressure to stop burning coal, he didn't like the name too much. But now he sees the promise in the fuel, and so do his company's executives.

"At this point, 'coal' is a loaded term, and we don't want to mislead people," Lei said. "What we have here is biomass. It could be your lawn clippings, for all we care. We're open to whatever we can get."

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