Fully integrated agricultural forest products biorefinery in southeast arkansas
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Fully Integrated Agricultural & Forest Products Biorefinery in Southeast Arkansas ARKANSAS GENERAL ASSEMBLY JOINT INTERIM COMMITTEES Tommy Smith, Cypress Bend Mill Manager Potlatch Corporation February 27, 2006 Fully Integrated Agricultural & Forest Products Biorefinery in Arkansas

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Fully Integrated Agricultural & Forest Products Biorefinery in Southeast Arkansas

  • ARKANSAS GENERAL ASSEMBLY

    JOINT INTERIM COMMITTEES

  • Tommy Smith, Cypress Bend Mill Manager

  • Potlatch Corporation

  • February 27, 2006


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Fully Integrated Agricultural & Forest Products Biorefinery in Southeast Arkansasin Arkansas

Meeting Objectives

  • Enhance attendees understanding of

    • The fully integrated agricultural and forest products biorefinery

    • Potential opportunities and benefits for Arkansas

  • Next Steps

  • Partners and Supporters


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Background in Southeast Arkansas

The Energy Policy Act of 2005 has provisions to encourage the annual production of 1 billion GPY of biofuels from cellulosic sources by 2015.

  • Primary feedstocks - forest and agricultural residues and energy crops

  • Thermochemical (gasification) technology can effectively process biomass feedstocks, be built on a large scale, achieve high conversion efficiencies, and be rapidly replicated nationwide.

  • Working together, the agricultural, petrochemical, and forest products industries have the resources, infrastructure, and technical skills needed to produce, collect, and convert the target biomass at commercial scale.


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Background in Southeast Arkansas(Continued)

  • Technologies currently exist to build a fully integrated biorefinery capable of producing transportation grade fuels from untapped sources of biomass.

  • Using thermochemical (gasification) technologies, virtually any biomass feedstock can be converted to higher value products.

  • Sufficient low cost biomass exists (agricultural residues, forest residues, pre-commercial thinnings, woody debris, and black liquor) to support numerous biorefineries in Arkansas and the U.S.

  • In addition, many more could be deployed in areas such as the Delta region using dedicated energy crops.


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Agenda 2020: Integrated Forest Products Biorefinery (IFBP) Concept

Recovery/ Power Plant

Building Products Mill

Paper, Board, Other Mills

Pulp Mill

Forest

Pulp

Energy

Energy

Chips

Black Liquor

Optimized Plantations

Fuels/ Chemicals

Fuels/ Chemicals

Hemi Extraction and Conversion

Gasifier

Biomass

Boards, Paneling,

Etc.

Ethanol,

Polymers,

Etc.

Ethanol,

DME,

Others

Paper, Boxes/Cartons, Tissue/Diapers, Specialties


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National Perspective ConceptIntegrated Forest Products Biorefineries

  • Fully developed and commercialized, IFPB technologies have potential for significant national benefits:

    • Diversified, more secure national energy supply

    • Significant rural economic development

    • Geographically distributed supply source

    • Reduced environmental impacts

    • Improved energy efficiencies


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National Perspective Concept(Continued)

  • Quantified Potential Benefits

    • $9 billion/year new revenues throughout industry

    • 175 MM bbl/year in energy savings

    • 150 MM tons/year positive impact on carbon balance

    • 165,000 new jobs in primarily rural communities


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Arkansas Perspective ConceptFully Integrated Agricultural & Forest Products Biorefineries (IAFPB)

  • Fully developed and commercialized, IAFPB technologies have potential for significant statewide benefits:

    • New markets for existing industries

    • Additional revenues for business and state

    • Improved economics for existing agricultural & forest industry

    • Significant rural economic development


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A Fully Integrated Agricultural and Forest Products Biorefinery (IAFPB) at Cypress Bend

  • The thermochemical (gasification and gas-to- liquids technologies) and bioconversion (fermentation) pathways would be used to process biomass and black liquor.

  • The eventual biorefinery would be sized to convert up to 8,000 dry TPD of forest and agricultural residuals and 1,300 dry TPD of black liquor solids into higher value biofuels.

  • It is anticipated that the biorefinery would eventually include the equipment needed to extract hemicellulose from the wood chips prior to pulping and convert it to ethanol.


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Flow Diag. Biorefinery (IAFPB)


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Potential Biorefinery Products Biorefinery (IAFPB)

  • The fully developed biorefinery could produce up to 10,000 barrels/day of transportation grade biofuels (eg. FT diesel, ethanol, others).

  • Most of Cypress Bend’s energy needs would be met from biorefinery waste heat.

  • Some of the syngas would be used in the plant’s existing lime kiln.

  • This project would also indirectly reduce green house gas emissions by an estimated 2MM TPY.

  • The ash may be recovered and converted to higher value chemicals.


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Cypress Bend as the First Site Biorefinery (IAFPB)

  • Single line Pulp & Paper Mill

  • Produces 300,000 TPY of bleached coated food board

  • Consumes 550,000 dry TPY of wood chips

  • 350 employees

  • Two boilers

  • One gas-fired lime kiln

  • Technical skills exist to operate complex chemical processes

  • Potlatch has been developing and implementing energy conservation strategies to reduce costs.


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 Cypress Bend as the First Site Biorefinery (IAFPB)(Continued)

  • The mill could utilize the waste heat from the biorefinery to reduce natural gas use.

  • There is adequate agricultural and forest based biomass available within 100 miles to support a refinery at Cypress Bend.

  • Cypress Bend is located on the Mississippi River in the Southeast corner of Arkansas, making fuel shipment and feedstock deliveries by barge possible.

  • The mill is also located in a sparsely populated, economically depressed area where local and state governments are eager for industrial development.

  • Cost models indicate ROI would be acceptable


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Risk Biorefinery (IAFPB)

  • Partners are needed to minimize financial and technical risk.

    • This would be a first-of-a-kind plant. No one has attempted to marry biomass gasifiers to a gas-to-liquid plant and integrate both units with a pulp mill.

    • Potlatch has limited expertise in operating gas-to-liquid technologies.

    • Potlatch has limited experience marketing liquid biofuels.

    • The project would be large and technically complicated.


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 Path Forward Biorefinery (IAFPB)

  • Validate the preliminary system design and assumptions (a detailed assessment is in process)

  • Break the project into three major phases

    • Phase I is focused on producing biofuel from biomass

    • Phase 2 would focus on producing fuels from black liquor

    • Phase 3 would focus on extracting the hemicellulose from wood chips prior to pulping and converting it to ethanol

  • Target support / partnerships:

    • A company that has gas-to-liquids expertise (in process)

    • A company that has liquid fuelsmarketing expertise

  • Government support needed to off-set first-generation risks

    • Grant to offset biorefinery capital cost

    • Loan guarantee(s) for other debt


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First Commercial Biorefinery Phase I Scope Biorefinery (IAFPB)

  • Gasification and gas-to-liquids technologies would be used to process the biomass.

  • The gasifiers and GTL plant would be sized to significantly reduce the mill’s current consumption of natural gas.

  • Up to 1,500 dry TPD of forest and agricultural residuals will be converted into higher value biofuels.

  • Feedstocks analyses show agricultural residues could supply 40% to 50% of the feedstock.

  • The phase 1 plant could produce up to 2,000 barrels/day of transportation grade bio-fuels (e.g., FT diesel, ethanol).


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Potlatch’s Intention Biorefinery (IAFPB)

  • Potlatch’s full commitment to this initiative is subject to:

    • Positive outcome of the feasibility assessment

    • Engaging an experienced GTL partner

    • Identifying markets for biorefinery products

    • Securing funding to move forward

      • Including government support to off-set

        first-generation risks

    • Management approval


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Public Policy Considerations Biorefinery (IAFPB)

  • Incentives for landowners and farmers

    • energy crop production

    • field residue harvesting

  • Renewable fuel standard (state/federal)

  • Green power purchase incentives

  • Biomass transportation considerations

  • Strengthen SE Arkansas infrastructure

    • I-530, I-69, Great River Bridge, Yellow Bend Port, Wilmar Intermodal, Rail Options/Upgrades


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Feasibility Biorefinery (IAFPB)AssessmentPartners

  • Potlatch

  • Arkansas Department of Economic Development

  • American Forest and Paper Association

    • Agenda 2020 Technology Alliance

  • Winrock International

  • University of Arkansas at Monticello

  • Price Industries


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Supporters Biorefinery (IAFPB)

  • Crossett Economic Development Foundation

  • Riceland Foods Foundation

  • McGehee/Dermott Industrial Corporation

  • Dumas Chamber of Commerce

  • Merchants and Farmers Bank of Dumas

  • McGehee Industrial Foundation

  • McGehee Bank

  • First National Bank of McGehee


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Letters of Support Biorefinery (IAFPB)

  • AR Congressional Delegation

  • Governor Huckabee

  • Delta Regional Authority

  • AR Farm Bureau Federation

  • Murphy Oil

  • Georgia Pacific, Crossett Operations

  • Chicot-Desha Metropolitan Port Authority

  • Pulp and Paperworkers’ Resource Council

  • Arkansas Association of Conservation Districts

  • Industrial Development Organizations

    • Bradley County

    • Monticello

    • Southeast Arkansas Cornerstone Coalition


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