Biomass in Massachusetts – Recent DevelopmentsAugust 2010 – Advisories
In June 2010, the Commonwealth of Massachusetts Department of Energy Resources (“DOER”) released a study regarding the role biomass should play as a renewable or alternative energy resource. The Biomass Sustainability and Carbon Policy Study was prepared by the Manomet Center for Conservation. This scientific analysis of the use of forest biomass in Massachusetts makes no policy recommendations, but draws substantive conclusions that will likely influence policy-making, that will in turn determine the role biomass will play in the energy future of Massachusetts. Some key features of the report are:
- An exclusive focus on new wood specifically harvested from forests for use as biomass. The study mentions other possible sources of biomass (e.g., roadside pruning) only in passing. It likewise does not address the use of wood waste from construction sites, or municipal waste. It does acknowledge that they could be a part of the biomass economy in the future.
- The study examines how much wood can be taken from Massachusetts forests in such a way that the forests can regrow, and wildlife, recreation, water quality, and other concerns can be met. While the study presents several different possible scenarios, it is clear that current regulations are inadequate to ensure proper statewide forest management if forest-based biomass is increasingly used for electricity and thermal generation.
- Major findings with likely policy implications are:
- Burning biomass initially creates a “carbon debt.” That is, it releases more CO2 into the atmosphere than using fossil fuels to produce an equivalent amount of energy. However, because forests regrow, the CO2 is eventually recaptured, “repaying” this carbon debt and, eventually, yielding a “carbon dividend”.
- The time it takes for the carbon debt to be repaid varies enormously, depending on what fossil fuel is being replaced, and how the fossil fuel is used. For example, when replacing fuel oil for heating, the debt can be repaid in as little as 7 years, but when replacing natural gas for large-scale generation of electricity, repaying the carbon debt can take over 90 years. After the carbon debt has been repaid, biomass does result in a net reduction in carbon emissions, as it provides a carbon dividend relative to the fossil fuel it has replaced.
- The study estimates that, at current stumpage prices, Massachusetts forests can produce 150,000 to 250,000 tons of wood per year. This could rise as high as 885,000 tons per year if the price increased substantially. This is near the upper limit of the study’s estimate of what is “sustainable” harvesting.
- As to the development of a biomass industry, the study finds that key factors are the level of governmental support, the amount of wood available, and the price of electricity. Biomass would be a more viable power generating option at electricity prices that are higher than current prices. However, since Massachusetts currently has the fourth highest average electricity prices in the country, it is unlikely that prices will rise significantly.
DOER will be using the findings of the Biomass Sustainability and Carbon Policy Study, as well as public comments received at hearings conducted in July, 2010, to guide revisions to the regulations governing the role of biomass in the alternative and renewable energy policy of the Commonwealth. We will keep you updated as those regulations emerge.
For questions about the information contained in this advisory, please contact your usual Goulston & Storrs attorney or:
This G&S Advisory should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer concerning your situation and any specific legal questions you may have.
Pursuant to IRS Circular 230, please be advised that, this communication is not intended to be, was not written to be and cannot be used by any taxpayer for the purpose of (i) avoiding penalties under U.S. federal tax law or (ii) promoting, marketing or recommending to another taxpayer any transaction or matter addressed herein.
© 2010 Goulston & Storrs – A Professional Corporation All Rights Reserved