A basic tenet of successful investing, says Sumesh Arora, is to diversify one's portfolio. “If you look at energy as an investment,” he told members of the Mississippi Agricultural Economics Association at their annual conference at Mississippi State University, “it just makes sense to diversify — and utilizing various forms of renewable energy is one way to accomplish that.”
Arora, who is director of the Strategic Biomass Initiative (SBI) for the Mississippi Technology Alliance and president of the Mississippi Biomass Council, says $3 gasoline and diesel have spurred interest in renewable energy as a national security issue, to increase energy independence, to create more jobs in rural areas, and to achieve environmental benefits.
Biomass research and commercialization may some day reduce the nation's dependence on foreign oil, he says, while creating value-added product opportunities for Mississippi farmers.
The SBI is funded by the Department of Energy to work with universities and the private sector to find near-term opportunities in biomass, with a goal of strengthening targeted biomass research and development and breaking down the hurdles to commercializing renewable energy resources.
“Mississippi is rich in biomass materials; the state is mostly agriculture or forest land, both of which can provide really huge amounts of biomass.”
There is also potential to grow large acreages of biomass “crops” such as switchgrass or woody trees to make cellulosic ethanol. Poultry farms and livestock operations generate large amounts of animal wastes that can be used to generate methane. Food processing wastes can also be converted to energy.
“We have a good mix of ingredients for biomass production in Mississippi,” Arora says, “and with energy costs expected to continue escalating, it makes good economic sense to pursue these opportunities.”
Three systems utilizing anerobic digesters are being constructed in the state to use dairy, poultry, and swine manure for energy. “We call it ‘poop to power,’” he laughs.
“We have the first system in the country that uses poultry waste to produce methane gas. It's a highly computerized system, and is very efficient.” It will cost about $60,000, he said.
In addition to the energy produced, there will be an environmental benefit, Arora says. “There are some really severe environmental issues related to the waste from poultry facilities, and this offers an opportunity to help resolve that problem while obtaining an economic benefit.”
While much of the alternative energy focus in the United States is on ethanol derived from corn, he says “that's a pretty expensive fuel” when considering the total cost from field to pump. Cellulosic ethanol, which can be derived from a wide variety of feedstocks, including agricultural plant wastes, sawdust, etc., may be a cheaper product, he notes, particularly with the state's vast potential for biomass production.
Two plants are currently under construction to produce ethanol from biomass, one at Aberdeen, Miss., the other at Winona, Miss.
Biodiesel also has a lot of potential, Arora says, because of Mississippi's large soybean acreages. “But soybeans need to be crushed to extract the oil, and there's only one crushing facility in the state. And the longer-term question is, why compete with food crops for fuel production when ethanol and biodiesel can be produced from biomass?”
The federal government wants renewable energy to make up 7.5 percent of U.S. energy use by 2013, he says, and millions of dollars are being poured into the effort.
“Big Oil gets it. BP, Shell, and Chevron have invested more than $500 million in renewable energy over the past five years. BP and Chevron are among the largest manufacturers of solar panels in the world. Automakers are jumping on the renewable energy bandwagon with flex-fuel and hybrid vehicles. Major corporations such as ADM, Cargill, and Bunge are investing heavily in ethanol.”
Although solar is still “the most expensive way to produce electricity,” it does offer some relatively inexpensive options for agriculture, including pumping water for livestock, aerating ponds, and heating water, Arora says.
There are a number of funding sources for renewable energy projects, he notes, and some offer tax credits that “can help provide some pretty decent returns.”
Among challenges for alternate energy: “Costs of some of these technologies are quite steep, the technologies themselves still need more work, and legislators and the general public need to be better educated about these technologies.”
Perhaps the biggest challenge, Arora says, is “integrating renewable energy products into the current infrastructure — getting these products into the mainstream.”
Several states have signed onto the 25×25 Initiative, a coalition of business, labor, conservation, and religious groups supporting the goal of realizing 25 percent of the country's energy needs from renewable energy by 2025.