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MFA Oil announces renewable energy partnership worth 980 jobs

Project must secure federal funding first
Tuesday, February 15, 2011 | 8:51 p.m. CST; updated 7:09 a.m. CST, Wednesday, February 16, 2011
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MFA Oil announced plans for a new renewable-fuel venture. Click on the numbers below for information on the biofuel process.

JEFFERSON CITY — MFA Oil Co. and an Ohio-based company announced a renewable energy partnership Tuesday morning that is expected to bring 980 jobs to the Columbia area in the next few years.

But the project must secure federal funding through a crop assistance program before it gets off the ground.

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The jobs that could come from the partnership will be in farming, manufacturing and farming services, with indirect jobs created to support the increase in industry.

The majority of the projected jobs will go to farmers contracted to grow a drought-resistant grass for conversion into fuel pellets.

At a news conference Tuesday in Jefferson City, MFA Oil announced its partnership with Aloterra Energy to form a renewable energy company called MFA Oil Biomass.

The entire project encompasses areas around Columbia and Aurora in Missouri and at Paragould, Ark. Altogether, the project will have an estimated $150 million annual economic impact and create 2,700 new jobs, the company announced.

MFA Oil Biomass is set up as a support system for farmers who will grow a grass called Miscanthus giganteus, a source of renewable energy. 

The company will provide farmers with special equipment to plant and harvest the bamboo-like grass, as well as access to processing machines that convert it into pellets for heat or power.

The grass originated in Asia and takes three years to mature as a crop. It requires little maintenance or water, enabling it to grow on land otherwise considered barren.

Since the grass is not a food source, it is only marketable in areas looking for alternative fuel sources.

Columbia was attractive to the new energy consortium because the city and MU are already headed toward reliance on renewable energy. 

The city is required by ordinance to derive 5 percent of its energy from renewable sources by 2012 and 15 percent by 2022.

At Tuesday’s news conference, Mayor Bob McDavid said the 2012 goal will be met through solar energy, wind energy and methane gas emissions from landfills. Biomass energy could help bridge the gap for 2022 when the city must triple the percentage of renewable energy used, McDavid said.

“I see this as the first major initiative to bring low-cost, renewable energy to the area,” he said.

MU’s power plant is replacing its current boiler with one that runs exclusively on biomass. Vice Provost for Economic Development Steve Wyatt said the new boiler will need 100,000 tons of biomass annually, compared to the 6,000 tons it uses now.

The available biomass sources — largely wood and corn — are insufficient to meet future demand, Wyatt said.

McDavid pointed to the economic benefits of producing energy locally. Rather than purchasing coal and paying to transport it here, for example, the grass would be grown and processed in the area.

“When the cycle is local, our entire dividends are local," McDavid said. "Virtually nothing leaves the community.”

An independent study for MFA Oil Biomass predicted that the energy initiative will support 550 jobs in farming, 115 jobs in manufacturing and 100 jobs in farming support services, with 100-200 indirect jobs created to support the increase in industry, Scott Coye-Huhn of Aloterra Energy said.

To get the project off the ground, MFA Oil Biomass must first secure federal funding through the Biomass Crop Assistance Program. Funding is key because it reduces the risk to farmers who plant the drought-resistant grass.

According to the program’s website, up to 75 percent of a farmer’s planting costs would be reimbursed under the assistance program. In addition, the farmer would receive rent as the crop matures and matching payments for the following two years.

For now, the grass will primarily be formed into pellets to be burned as a clean source of power and heat, said Jerry Taylor, MFA’s president and CEO, although the crop also has the potential to be used for fuel.

Approval for funding depends on passage of the federal budget. Congress could cut the biomass program from the budget, but Taylor said he had assurances of support from both Sens. Claire McCaskill and Roy Blunt.

Taylor added that MFA Oil Biomass will continue to push forward with the renewable energy initiative either way.


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Comments

Kate Emerson February 16, 2011 | 10:27 a.m.

They are adding jobs but none for truck drivers

(Report Comment)
Mark Foecking February 16, 2011 | 11:03 a.m.

Well, all of this biomass will have to be trucked from the farm to the pelleting plant. Whether MFA hires them or they contract for them will have to do with the job market and any pertinent union demands.

If it takes 100,000 tons of biomass per year to fire MU's boiler, that makes it approximately a 12 MW (baseload) electrical producer (numbers on request).

According to:

http://en.wikipedia.org/wiki/Miscanthus_...

this grass can produce up to 20 tons/acre, so this would require only 5,000 acres (7.8 square miles). Even if the grass could only be harvested every three years, this gives a reasonable sounding 15,000 acres to fuel the new MU boiler.

However, it can be shown that a comparable power plant producing 100 MW all year will require 150,000 acres (230 sq miles) of switchgrass at 5 tons/acre. So the difference between switchgrass and Miscanthus in energy yield is not great.

The reason is the crop that one uses is less important than the amount of sun that hits a certain area. Photosynthetic yield is not very different between plant species. Miscanthus has the advantage of being easy to grow, but this only partially cancals out the poor efficiency of photosynthesis at producing biomass.

Even 100 MW is only Columbia's baseload, and by 2022 peak demand is projected to be over 350 MW even with $60 million in efficiency improvements. Land requirements for biofuels are enormous at the scale we use electricity, and they cannot provide more than a supplement to fossil fuels. We simply don't have the land, and that is a limitation of solar input, not biofuel source.

There is also the issue of petroleum inputs, as all this grass will be planted, fertilized, harvested, and processed mechanically. Drying the crop will require large amounts of natural gas. If biofuels have to be used to process biofuels, then the net energy of the process becomes even less attractive, and land requirements grow.

MFA will make money at this (and, interestingly, only with federal subsidies). But they won't give us a significant alternative to coal.

DK

(Report Comment)
John Schultz February 16, 2011 | 12:33 p.m.

I find it interesting how McDavid considers the energy cycle local, but isn't considering the federal subsidies that make it all possible. Nor what will happen those taps run dry.

(Report Comment)
Ellis Smith February 16, 2011 | 1:05 p.m.

A key factor when considering fuels for combustion is what's called "caloric value" of a fuel. In the United States the units used to express caloric value are usually BTUs (British Thermal Units) divided by a standard volume of the fuel if the fuel is a gas or liquid or by a standard weight of the fuel if the fuel is a solid.

If the caloric value of a given fuel is rather low, it will require using more fuel to obtain the needed operating temperature and heat work than for a fuel having higher caloric value. Since fuel combustion creates carbon dioxide, using more fuel (than you would with a higher caloric value fuel) is going to put more carbon dioxide (greenhouse gas) into the atmosphere. We really don't need that!

Coal is typically hauled to the point of use by rail, a less expensive form of transportation and with less pollution from diesel engines than from hauling with multiple diesel trucks. Better yet, go with geothermal heat production and you have no fuel transportation costs OR carbon dioxide emissions.

Let's keep agricultural land available for agriculture; in the future we may need it! Another way of putting this is that it's not a good idea to try solving one problem by creating another one.

(Report Comment)
Mark Foecking February 16, 2011 | 2:03 p.m.

Another inconvenient comparison is that an acre of 15% efficient PV panels can make about a megawatt-hour of electricity/day or 360 MWH/yr. An acre's yield per year of grasses, i. e., 5 tons of switchgrass/year (or 6 2/3 tons of Miscanthus), burned in a power plant with a heat input of 10,000 BTU/kwh, can make about 6-8 MWH for that year.

Plants, because they are alive, use most of the sun's energy they capture for living, not producing biomass. That's what makes them inefficient fuel producers.

For a human to go from an 8 pound infant to a 150 pound adult in 18 years requires about 3000 pounds of food. Only 5% of that food goes into making "biomass" (the 150 pounds of body). The rest goes into metabolism.

DK

(Report Comment)
frank christian February 16, 2011 | 4:59 p.m.

Have you scientists notified MFA, McDavid and our Senators of your findings? I guess if I had to pick a fictitious user name, it would be "doubting Thomas".

If all your remarks are true, why on earth would these or anyone consider a project of this nature?

"MFA will make money at this (and, interestingly, only with federal subsidies)." I understand the Ethanol subsidy is on R's cutting table, so would seem that gov't help on a wild idea like this would be a long shot. "Taylor added that MFA Oil Biomass will continue to push forward with the renewable energy initiative either way."

It bothers me that so many want us off of oil but continue to (maybe rightly so)veto everything else suggested. Wind farms unsightly and might kill birds, etc.

How about dissolve the United Nations? Then our emission problems would go away and we could concentrate on exploration for oil and gas.

(Report Comment)
Michael Williams February 16, 2011 | 5:31 p.m.

A couple of points:

I sure hope this grass isn't aggressive and becomes another Johnson grass...both are C4 plants, and in a google search of the plant, those fields sure look "monoculture" to me. What happens to all those wind-blown seeds? Why aren't folks who worry about GMO pollen and seeds blowin' in the wind....not worried about THIS plant?

20 tons/acre is a lot of biomass per acre. It's going to be physically removed from one place (the field) to another (combustion). Along with all that removed carbon, nitrogen, phosphorous, potassium, boron, selenium, iron, calcium, cobalt, and various other macro- and micro- nutrients will be removed and have to be replaced in the soil. Ask 17th century tobacco farmers in SE United States how this works, or you can ask farmers in the Amazon rain forest why they keep cutting down old-growth forests. In normal grass fields (like prairies), those nutrients are recycled after a burn...or by natural death of leaves and remineralization. Things change totally when you start taking a crop from one place to another.

Sooooo, when this goes on-line, we'll sure be wanting to see how the costs for field replenishment (including petro usage in mining, making, trucking, application of the fertilizers) factor into the "savings".

We criticize use of our food for fuel (corn into ethanol). Isn't it a similar thing to use our land that grows our food....for fuel? How much "marginal" land do we have near Columbia, anyway? Last I looked.....not much.

Most of our problems stem NOT from answering questions we think to ask....they stem from NOT knowing WHICH questions to ask.

Can you say "unintended consequences"?

'Cause I bet there are some HUGE ones.

(Report Comment)
Michael Williams February 16, 2011 | 5:33 p.m.

Oh, and on a more humorous side....can you say "snake city"?

Just ask a sugar cane grower.

(Report Comment)
Mark Foecking February 16, 2011 | 6:30 p.m.

Michael Williams wrote:

"What happens to all those wind-blown seeds?"

Miscanthus giganteus is a sterile hybrid, so it only propagates vegetatively (root division or possibly cuttings). So it isn't very invasive. See the link I posted above.

I agree with you about the micronutrients. You can put a lot of those back by spreading the ash, but this means the ash has to be transported back to the fields and spread, at the cost of more energy not available for sale.

frank christian wrote:

"If all your remarks are true, why on earth would these or anyone consider a project of this nature?"

To make money. Solutions are irrelevant here.

I've simply been trying (in a very non-political fashion) to point out the physics of biofuels, and comparing them to other alternative energy sources. I'd be glad to post my calculations.

"It bothers me that so many want us off of oil but continue to (maybe rightly so)veto everything else suggested."

I'm simply pointing out something I've pointed out for a long time - there is no replacement for fossil fuels on the scale at which we use them. If we want a renewable energy future (and we'll have to sooner or later) we'll have to use a lot less energy.

"Then our emission problems would go away and we could concentrate on exploration for oil and gas."

Well, except this just pushes the problem off to future generations.

The easy energy of oil and coal has allowed us to slip into a mindset where we think that out hyper-convenient lifestyle is a matter of our own ingenuity. In fact, we've simply become very ingenious at using irreplaceable resources for everything. Replacing those resources is entirely another animal. I'm simply pointing out the inadequacies of these replacements - and unfortunately, they're matters of physics, not politics. Lawmakers don't make the laws of thermodynamics.

DK

(Report Comment)
Michael Williams February 16, 2011 | 7:42 p.m.

Mark says, "Miscanthus giganteus is a sterile hybrid, so it only propagates vegetatively (root division or possibly cuttings)."
___________________

Good to know about the "sterile hybrid" part.

But I would point out that Johnson grass, once established, propagates vegetatively (underground rhizomes), too. Hopefully it is susceptible to RoundUp or Poast, which would help the farmer next door.

I also wonder at it's palatibility...if it's like Johnson grass. Wild critters looking for forage may not be amused.
_____________________

I also agree with the "to make money" comment. Just like ethanol.

(Report Comment)
Derrick Fogle February 16, 2011 | 8:46 p.m.

It would take all the solar, wind, water, tide, nuclear, geothermal, and (clearly questionable) biomass we can muster, and that will get us down to only needing to cut another 35%-40%* from our current energy use to eliminate fossil fuel dependency.

Conservation is coming. Willingly, or not.

*That's my estimate, Mark may have more accurate figures.

(Report Comment)
frank christian February 16, 2011 | 9:29 p.m.

Mark - You have brought us back to the original position that you like. A business providing a necessary product at the least expense, since 1929 is guilty of "profiteering"? The "lawmakers" who have created and caused our energy problems since early 70's are not to be included in any of your scientific findings. Problem is, they Are, to the extreme. You believe MFA is only in it for money. Who will gain from the billions to be spent on the gov't installation of electric plug-in stations across our country for electric cars which don't yet exist? Obama admin early on, had John Podesta announce, no more funding for shale oil research, though the findings in Dakotas,etc. are beyond exceptional.

I understand your information on other sources is exceptional, but when it comes to oil all I hear is "we can't". If your info on other sources is true, then I have to declare for my side, that we "must"!

(Report Comment)
Mark Foecking February 17, 2011 | 8:22 a.m.

@Derrick:

I pretty much agree with you. People quibble about exact estimates, but it's clear that the easy energy of fossil fuels will be very difficult to replace on the scale we use them.

Here's a couple of articles by an Australian scientist that studies this, Ted Trainer:

http://www.culturechange.org/cms/content...

http://www.mnforsustain.org/trainer_t_re...

frank christian wrote:

"A business providing a necessary product at the least expense, since 1929 is guilty of "profiteering"?"

I never said they were profiteering. They are pursuing a business opportunity by taking advantage of a federal subsidy. I'm not against that, nor against the jobs it will generate. I'm just saying that this is not a significant solution to our liquid fuel issues.

"The "lawmakers" who have created and caused our energy problems since early 70's"

THe root of our energy problems started when US oil production peaked in 1970. Since then, we have drilled and drilled, discovering significant new resources, and proceeded to very efficiently suck them dry, all the time increasing our dependence on foreign oil. Lawmakers had very little to do with it - in fact, there was far more they could have done to restrict energy imports and use. Geology and economics have a lot more to do with our import dependency than legislation.

"no more funding for shale oil research, though the findings in Dakotas,etc. are beyond exceptional."

I understand that has changed, and research into shale oil is moving again. However, having enormous reserves does not mean enormous production - producing oil shale kerogen requires a lot of outside energy and water, both of which are in short supply in the mountain West. There are two promising new technologies for shale oil extraction (in situ extraction, and supercritical CO2) but they're still in very early stages of development and won't help us much in our lifetimes.

The Dakotas are a different issue - there it's really oil, not kerogen, but the problem with it is the formation holding it is so shallow and tight. Wells have to be drilled horizontally, then hydrofractured (like shale gas wells), to obtain meaningful production. The downside of hydrofracturing is the possibility of groundwater contamination, and this may limit its use for both oil and gas. Also, fracked wells run dry a lot faster than conventional ones.

Unconventional oil assures us of some oil far into the future. It just can't be produced fast enough to run the country as we do now.

"If your info on other sources is true, then I have to declare for my side, that we "must"!"

Must what? Blow through our remaining conventional reserves in the hope that technology will somehow save us? Wishing upon a star works for Jiminy Cricket, but citizens and policymakers would be wise not to get too hopeful.

DK

(Report Comment)
Derrick Fogle February 17, 2011 | 9:49 a.m.

Thanks (or not) for the sobering links, DK. How ironic, that I will spend my life riding a bicycle to conserve energy, and about the time I get too old for that to work for me, will probably be about the time it becomes really necessary to survive.

(Report Comment)
Ellis Smith February 17, 2011 | 10:14 a.m.

With apologies to DK I would summarize some of his remarks as follows:

To the technically and/or economically ignorant all things are possible, especially where government subsidies mask the true costs of some energy options. Energy obtained through fuel combustion must take into account effects of carbon dioxide emissions to the atmosphere. Any future energy mix will continue to be a mix of several energy sources, some old and some new, because we should not become dependent on any single energy source.

(Report Comment)
frank christian February 17, 2011 | 10:34 a.m.

Mark, even Jiminy Cricket could not be hopeful after reading one of your posts.
We cannot "get there from here", so,I guess we "must" follow your advice, stay huddled at home except for the bike ride to and from work and school, suffering, yet, happy in the knowledge that when the rest of the world burns all their oil, we'll still have ours. Too hopeful?

(Report Comment)
Jack Hamm February 17, 2011 | 12:17 p.m.

@ Derrick

"and about the time I get too old for that to work for me"

There is no such thing as too old, just ask this guy...

http://www.annarbor.com/news/at-nearly-9...

(Report Comment)
Mark Foecking February 18, 2011 | 3:29 a.m.

frank christian wrote:

"stay huddled at home except for the bike ride to and from work and school, suffering, yet, happy in the knowledge that when the rest of the world burns all their oil, we'll still have ours. Too hopeful?"

Europeans don't stay "huddled in their homes". In fact, most of the Europeans I've worked with in the lab feel their standard of living is every bit as good as ours, and few of them wanted to stay here. They use half the energy per capita that we do.

All I'm saying is we need to recognize the limitations of substitutes for oil and coal. Every unit of energy we can save is one we do not have to replace. There will be both free market and government solutions, and one is not necessarily better than the other. We have to get this issue beyond politics and hyperbole, because it is one of the most important issues of the 21st century.

DK

(Report Comment)

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