Over 24 million acres of biomass, an attractive
business climate and suite of incentives is keeping Georgia in the
project spotlight.
The
late Ray Charles once said an old, sweet song kept Georgia on his
mind. Today, it’s the growing biomass production industry that is
keeping pellet producers from forgetting the Empire State of the South.
Georgia’s forestry industry had every right to sing the blues during the Great Recession. In the years between 2006 and 2010, the industry lost 41,235 direct and indirect employees, dealing a horrible blow to Georgia’s second-largest industry and the 47 counties that are dependent on the state’s forests, according to the Georgia Forestry Commission.
With the economy currently rebounding, however, the U.S. Southeast, especially Georgia, has become a hotbed for biomass projects. Georgia’s forestry industry is showing signs of stabilization as of 2011, due in part to the biomass industry. Herty Advanced Materials and Development Center, a "new product accelerator" aligned with Georgia Southern University, currently has 32 bioenergy projects, proposed or in operation, ranking it second in the nation––behind California with 33––according to Jill Stuckey, director of external relations. These projects are investing millions of dollars in rural communities hit hard by the recession and employing dozens of local residents, she says. Germany-based RWE Innogy located its wholly owned subsidiary Georgia Biomass LLC, one of the largest pellet plants in the world, at Waycross, Ga.
Neighboring states are experiencing slower development––Florida currently has 15 bioenergy projects and Alabama has eight. So what makes Georgia the Graceland of southern bioenergy? James Roecker, CEO of Georgia Biomass, says RWE’s decision to locate the company’s first U.S. facility in Georgia was influenced by several factors, largely, Georgia offers an abundant fiber supply in close proximity to the coast. “[And] the Savannah harbor we are utilizing has good capability to handle and ship wood pellets in bulk, and has proven capability and facilities to store and ship other bulk products,” he adds. There is also an established rail corridor that connects the fiber basket with the harbor, plus the city of Waycross has a healthy business climate and provided access to good labor talent, he says. “We received exceptional support from the local, economic development organization, the county, and the state of Georgia.”
Though it isn’t the sole factor, as evidenced by Roecker’s statements, an abundant—and growing—biomass supply is playing a major role in what’s being perceived as a pellet and biomass project boom.
More Biomass, More Business
Georgia has an estimated 24 million acres of trees, which have been growing roughly 30 percent above usage for the past few years, according to Craig Scroggs, a USDA Rural Business and Cooperative specialist. The state forestry commission says that of the 24 million acres, 92 percent is in private hands and ready for commercial use, the highest in the U.S.
Recognizing the value of its largest natural resources, Georgia takes great strides in sustaining its forested lands. According to the forestry commission, the state's forested land has remained stable since the 1950s, and has a greater volume than in the 1930s. Forest loss due to expanding cities is offset by converting old farm lands to forest, the commission says. By responsibly managing its green sea, the forestry industry provides the perfect nest for bioenergy projects and other wood-related businesses. “We have more biomass than anyone in the nation except for Oregon—we plant trees like Iowa plants corn,” Stuckey says.
The business environment is the second reason pellet producers are making Georgia their home. State and local governments cooperate with existing and interested parties to create incentives and an efficient planning process, and it’s that business/government synergy that’s making things happen.
One example is Georgia’s Quick Start program. The program provides free workforce training to qualified businesses in the state, and each training program is tailor-made to the specific company. The program trained 80 employees at Georgia Biomass, and Roecker says the training included team dynamics, problem solving, communications and plant operations. He adds that he has received very favorable feedback from the involved employees.
One Stop Shop, a program established by Herty in 2005, is another tool pellet companies are utilizing. It acts as a networking forum for new and expanding businesses, and includes matching companies to universities and state and federal offices to expedite permitting and explain state and federal policies and procedures. Stuckey says other states have tried to duplicate the program, but was unaware if they were as successful. The Herty program has brought in billions of dollars of new companies to Georgia, and more are coming in, she says.
Herty’s newest pilot pellet mill, at Savannah, Ga., also demonstrates the cooperation between state organizations and private businesses. On Feb. 5, Herty announced the opening of the fully integrated pilot pellet mill, which will provide a facility for producers to validate process technology testing different pellet designs. The plant allows producers to lower risk by testing a pellet design without having to interrupt a plant’s production line.
Georgia also offers tax credits to taxpayers and biomass projects. Taxpayers are eligible for credits when they transport or divert wood waste to biomass facilities on a per-ton basis, and biomass projects are eligible for a clean energy property tax credit. The credit is available to businesses installing renewable energy products and can cover up to 35 percent of the cost.
Even the USDA invests in biomass projects in Georgia. Scroggs says that in 2012, the USDA Rural Development guaranteed a $9.6 million loan for SEGA Biofuels to retool its facility to produce a more desirable wood pellet, and other USDA programs utilized were the Rural Energy for America Program, Woody Biomass Utilization Grant, and the Advanced Biofuel Producer Program. To date, the USDA has invested up to $450 million in biomass projects in the state.
Although Georgia has the natural resources and the government and private programs that assist getting steel in the ground, the existing infrastructure is the last crucial piece of the biomass boom.
Ideal Infrastructure
The cohesion between road, rail, and shipping terminal creates the ideal logistic scenario for producers. As of 2007, Georgia is crisscrossed with over 117,000 miles of public roads, including 18,000 miles of state highway and 1,000-plus miles of major interstate highway. A $119 million expansion of the Jimmy DelLoach Parkway is one of the most recent updates to the state's road system. Set to come online in late 2015, the project is a four-lane extension from Interstate 95 to less than a mile from the Port of Savannah, and aims to make port traffic more efficient and less congested.
With more than 5,000 miles of rail, Georgia’s railroad system could stretch from Chicago to Moscow, attracting many pellet producers to locate their facilities on or near this major line of transportation. Georgia Biomass and SEGA Biofuels are located on the CSX mainline to the Port of Savannah. At the ribbon cutting for Georgia Biomass, Hans Bünting, CEO of RWE Innogy, said the partnership between CSX rail yards and the port in Savannah was one of the most important factors in choosing a location for the project.
Although Georgia’s 100-mile coastline is shorter than its northern and southern neighbors, it is home to the fastest growing deep-water ports in the U.S, and their capabilities are being upgraded. The ports in Savannah and Brunswick are in the process of expanding or renovating their facilities. According to the Georgia Port Authority, Gov. Nathan Deal allocated more than $134.4 million and proposed another $46 million to deepen the Port of Savannah to accommodate super-sized container ships. The GPA predicts the expansion project will prepare the area for larger container ships and lower transportation costs.
Mostly known for its automobile import and export facility, the Port of Brunswick is also receiving a makeover from the state. In order to meet the growing demand for local biomass fuels, the GPA has upgraded the East River Terminal at the Port of Brunswick, which increased output to 1 million tons annually.
Economics 101 says with a boom, there must be a bust. As more and more biomass projects locate to Georgia, it seems that it is only a matter of time before pellet producers have to compete with each other, as well as other forestry-related industries, while remaining sustainable. Scroggs said although biomass production levels have been 20 to 30 percent higher than usage, tremendous growth in the pellet industry in Georgia will move the state towards a one-to-one production-to-usage ratio in the near future.
“The pellet industry is here now and has been really successful and really fast growing,” Stuckey says. While the pellet industry is a wonderful placeholder for the next 10 to 15 years, she adds, where the real future lies will be with companies that can afford to pay more for biomass feedstock to efficiently create crude oil products for drop-in fuel replacements, chemicals and pharmaceuticals. To avoid future feedstock conflicts, Herty is looking at other types of plants that grow faster than pine trees, such as miscanthus and the paulownia tree to create a more sustainable environment, as well as testing different pellet consistencies with Herty’s pilot pellet mill.
Roecker, too, is optimistic about the future. “We strategically located our Waycross facility to be in a fiber basket that is not shared by others in our industry or by sawmills along the coast,” he says. “Based on the studies we have participated in, all indications are that fiber supply will be plentiful for the foreseeable future.”
Author: Chris Hanson
Staff Writer, Biomass Magazine
701-738-4970
chanson@bbiinternational.com
Georgia’s forestry industry had every right to sing the blues during the Great Recession. In the years between 2006 and 2010, the industry lost 41,235 direct and indirect employees, dealing a horrible blow to Georgia’s second-largest industry and the 47 counties that are dependent on the state’s forests, according to the Georgia Forestry Commission.
With the economy currently rebounding, however, the U.S. Southeast, especially Georgia, has become a hotbed for biomass projects. Georgia’s forestry industry is showing signs of stabilization as of 2011, due in part to the biomass industry. Herty Advanced Materials and Development Center, a "new product accelerator" aligned with Georgia Southern University, currently has 32 bioenergy projects, proposed or in operation, ranking it second in the nation––behind California with 33––according to Jill Stuckey, director of external relations. These projects are investing millions of dollars in rural communities hit hard by the recession and employing dozens of local residents, she says. Germany-based RWE Innogy located its wholly owned subsidiary Georgia Biomass LLC, one of the largest pellet plants in the world, at Waycross, Ga.
Neighboring states are experiencing slower development––Florida currently has 15 bioenergy projects and Alabama has eight. So what makes Georgia the Graceland of southern bioenergy? James Roecker, CEO of Georgia Biomass, says RWE’s decision to locate the company’s first U.S. facility in Georgia was influenced by several factors, largely, Georgia offers an abundant fiber supply in close proximity to the coast. “[And] the Savannah harbor we are utilizing has good capability to handle and ship wood pellets in bulk, and has proven capability and facilities to store and ship other bulk products,” he adds. There is also an established rail corridor that connects the fiber basket with the harbor, plus the city of Waycross has a healthy business climate and provided access to good labor talent, he says. “We received exceptional support from the local, economic development organization, the county, and the state of Georgia.”
Though it isn’t the sole factor, as evidenced by Roecker’s statements, an abundant—and growing—biomass supply is playing a major role in what’s being perceived as a pellet and biomass project boom.
More Biomass, More Business
Georgia has an estimated 24 million acres of trees, which have been growing roughly 30 percent above usage for the past few years, according to Craig Scroggs, a USDA Rural Business and Cooperative specialist. The state forestry commission says that of the 24 million acres, 92 percent is in private hands and ready for commercial use, the highest in the U.S.
Recognizing the value of its largest natural resources, Georgia takes great strides in sustaining its forested lands. According to the forestry commission, the state's forested land has remained stable since the 1950s, and has a greater volume than in the 1930s. Forest loss due to expanding cities is offset by converting old farm lands to forest, the commission says. By responsibly managing its green sea, the forestry industry provides the perfect nest for bioenergy projects and other wood-related businesses. “We have more biomass than anyone in the nation except for Oregon—we plant trees like Iowa plants corn,” Stuckey says.
The business environment is the second reason pellet producers are making Georgia their home. State and local governments cooperate with existing and interested parties to create incentives and an efficient planning process, and it’s that business/government synergy that’s making things happen.
One example is Georgia’s Quick Start program. The program provides free workforce training to qualified businesses in the state, and each training program is tailor-made to the specific company. The program trained 80 employees at Georgia Biomass, and Roecker says the training included team dynamics, problem solving, communications and plant operations. He adds that he has received very favorable feedback from the involved employees.
One Stop Shop, a program established by Herty in 2005, is another tool pellet companies are utilizing. It acts as a networking forum for new and expanding businesses, and includes matching companies to universities and state and federal offices to expedite permitting and explain state and federal policies and procedures. Stuckey says other states have tried to duplicate the program, but was unaware if they were as successful. The Herty program has brought in billions of dollars of new companies to Georgia, and more are coming in, she says.
Herty’s newest pilot pellet mill, at Savannah, Ga., also demonstrates the cooperation between state organizations and private businesses. On Feb. 5, Herty announced the opening of the fully integrated pilot pellet mill, which will provide a facility for producers to validate process technology testing different pellet designs. The plant allows producers to lower risk by testing a pellet design without having to interrupt a plant’s production line.
Georgia also offers tax credits to taxpayers and biomass projects. Taxpayers are eligible for credits when they transport or divert wood waste to biomass facilities on a per-ton basis, and biomass projects are eligible for a clean energy property tax credit. The credit is available to businesses installing renewable energy products and can cover up to 35 percent of the cost.
Even the USDA invests in biomass projects in Georgia. Scroggs says that in 2012, the USDA Rural Development guaranteed a $9.6 million loan for SEGA Biofuels to retool its facility to produce a more desirable wood pellet, and other USDA programs utilized were the Rural Energy for America Program, Woody Biomass Utilization Grant, and the Advanced Biofuel Producer Program. To date, the USDA has invested up to $450 million in biomass projects in the state.
Although Georgia has the natural resources and the government and private programs that assist getting steel in the ground, the existing infrastructure is the last crucial piece of the biomass boom.
Ideal Infrastructure
The cohesion between road, rail, and shipping terminal creates the ideal logistic scenario for producers. As of 2007, Georgia is crisscrossed with over 117,000 miles of public roads, including 18,000 miles of state highway and 1,000-plus miles of major interstate highway. A $119 million expansion of the Jimmy DelLoach Parkway is one of the most recent updates to the state's road system. Set to come online in late 2015, the project is a four-lane extension from Interstate 95 to less than a mile from the Port of Savannah, and aims to make port traffic more efficient and less congested.
With more than 5,000 miles of rail, Georgia’s railroad system could stretch from Chicago to Moscow, attracting many pellet producers to locate their facilities on or near this major line of transportation. Georgia Biomass and SEGA Biofuels are located on the CSX mainline to the Port of Savannah. At the ribbon cutting for Georgia Biomass, Hans Bünting, CEO of RWE Innogy, said the partnership between CSX rail yards and the port in Savannah was one of the most important factors in choosing a location for the project.
Although Georgia’s 100-mile coastline is shorter than its northern and southern neighbors, it is home to the fastest growing deep-water ports in the U.S, and their capabilities are being upgraded. The ports in Savannah and Brunswick are in the process of expanding or renovating their facilities. According to the Georgia Port Authority, Gov. Nathan Deal allocated more than $134.4 million and proposed another $46 million to deepen the Port of Savannah to accommodate super-sized container ships. The GPA predicts the expansion project will prepare the area for larger container ships and lower transportation costs.
Mostly known for its automobile import and export facility, the Port of Brunswick is also receiving a makeover from the state. In order to meet the growing demand for local biomass fuels, the GPA has upgraded the East River Terminal at the Port of Brunswick, which increased output to 1 million tons annually.
Economics 101 says with a boom, there must be a bust. As more and more biomass projects locate to Georgia, it seems that it is only a matter of time before pellet producers have to compete with each other, as well as other forestry-related industries, while remaining sustainable. Scroggs said although biomass production levels have been 20 to 30 percent higher than usage, tremendous growth in the pellet industry in Georgia will move the state towards a one-to-one production-to-usage ratio in the near future.
“The pellet industry is here now and has been really successful and really fast growing,” Stuckey says. While the pellet industry is a wonderful placeholder for the next 10 to 15 years, she adds, where the real future lies will be with companies that can afford to pay more for biomass feedstock to efficiently create crude oil products for drop-in fuel replacements, chemicals and pharmaceuticals. To avoid future feedstock conflicts, Herty is looking at other types of plants that grow faster than pine trees, such as miscanthus and the paulownia tree to create a more sustainable environment, as well as testing different pellet consistencies with Herty’s pilot pellet mill.
Roecker, too, is optimistic about the future. “We strategically located our Waycross facility to be in a fiber basket that is not shared by others in our industry or by sawmills along the coast,” he says. “Based on the studies we have participated in, all indications are that fiber supply will be plentiful for the foreseeable future.”
Author: Chris Hanson
Staff Writer, Biomass Magazine
701-738-4970
chanson@bbiinternational.com
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