Assessment of Biomass Technical Report

NREL/TP-7A2-48073
Pelletization Options for May 2010
Greensburg, Kansas
S. Haase
Assessment of Biomass Technical Report
NREL/TP-7A2-48073
Pelletization Options for May 2010
Greensburg, Kansas
S. Haase
Prepared under Task No. IDKS.1070

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NREL Contacts

Laboratory Point Scott Haase

of Contact: Phone: 303-275-3057

[Link]@[Link]

Project Team: Scott Haase

Lynn Billman
Anelia Milbrandt
Dave Peterson
Chris Gaul
Rachel Gelman
Alexander Dane

Project Name: Assessment of Biomass Pelletization Options for Greensburg, Kansas

iii
Acknowledgments
This work was conducted by the U.S. Department of Energy’s (DOE) National Renewable
Energy Laboratory (NREL) to provide input on the potential to establish a biomass pelletization
or briquetting plant in or around the community of Greensburg, Kansas.

A number of organizations and individuals contributed information that was useful in the
analysis. The authors wish to thank the following persons and organizations for their assistance
with this project (listed alphabetically):

• Bob Dickson, Mayor of Greensburg, Kansas

• Kelly Estes, BTI Industries
• Mike Estes, BTI Industries
• Josh Harden, Biomass Energy Development Company
• Steve Hewitt, Greensburg City Administrator
• Brian Hoffman, Pratt Area Chamber of Commerce
• Roger Masenthin, USDA, Sunflower Resource Conservation and Development (RC&D)
Program
• Mike Mayberry, USDA, Sunflower RC&D Program
• Don Queal, Queal Enterprises
• Jeanette Siemens, Kiowa County Economic Development
• Terry Studer, Local Agricultural Producer.

At NREL, staff who contributed to the effort in addition to the main author include: Lynn
Billman, Alexander Dane, Chris Gaul, Rachel Gelman, Anelia Milbrandt, and Dave Peterson.

iv
 Table of Contents
NREL Contacts .............................................................................................................................. iii
Acknowledgments.......................................................................................................................... iv
Table of Contents ............................................................................................................................ v
Figures............................................................................................................................................ vi
Tables ............................................................................................................................................ vii
1. Introduction ................................................................................................................................. 1
1.1 Study Goal and Objectives.................................................................................................... 1
1.2 Study Area ............................................................................................................................ 2
2. Biomass Resource Assessment ................................................................................................... 3
2.1 Biomass Residues ................................................................................................................. 3
2.2 Results for Immediate Vicinity near Greensburg and Pratt ................................................ 13
2.3 Costs of Residue Collection ................................................................................................ 19
2.4 Feedstock Summary ............................................................................................................ 21
3. Market Demand and Competing Fuels ..................................................................................... 22
3.1 Cost Comparison with Other Fuels ..................................................................................... 22
3.2 Regional Natural Gas Market ............................................................................................. 24
3.3 Potential Customers ............................................................................................................ 29
3.4 Competitor Analysis ........................................................................................................... 30
3.5 Are Pellets The Best Solution as an Alternative to Fossil Fuels? ....................................... 32
3.6 Summary of Market Potential ............................................................................................. 33
4. Densification Plants—Process Flows and Equipment .............................................................. 34
4.1 Feedstock Consistency ........................................................................................................ 34
4.2 Compressed Biomass Forms ............................................................................................... 34
4.3 Pellet Manufacturing........................................................................................................... 35
4.4 Briquetting .......................................................................................................................... 43
4.5 Bripells ................................................................................................................................ 45
4.6 Comparison of Pellets, Briquettes and Bripells .................................................................. 46
5. Biomass Conversion Technologies ........................................................................................... 47
5.1 Combustion ......................................................................................................................... 47
5.2 Gasification ......................................................................................................................... 48
5.3 Pellets vs. Chips or Bales .................................................................................................... 48
5.4 Biopower Resource Requirements ...................................................................................... 48
6. Conclusions ............................................................................................................................... 49
7. Next Steps ................................................................................................................................. 50
Appendix A: Biomass Resource Assessment ............................................................................... 51
Methodology ............................................................................................................................. 51
Counties .................................................................................................................................... 52
Biomass Feedstocks .................................................................................................................. 52
Other Sources ............................................................................................................................ 54
Appendix B: Analysis of Physical and Chemical Characteristics of Local Biomass Resources.. 56
Appendix C: Natural Gas Demand Maps ..................................................................................... 65
Appendix D: Potential Customers ................................................................................................ 72
Appendix E: List of Biomass Conversion Technology Manufacturers ........................................ 74

v
 Figures
Figure 1. Twenty-five- and 50-mile radius circles from Greensburg and Pratt .............................. 2
Figure 2. Map of residue generation ............................................................................................... 4
Figure 3. Estimated annual residue production, by county ............................................................. 5
Figure 4. Percentage breakdown of feedstock types in the entire region ....................................... 5
Figure 5. Residue yields by county and feedstock .......................................................................... 7
Figure 6. Residue yields per acre, by feedstock type and county ................................................... 8
Figure 7. Encroachment of eastern red cedars, Barber County, Kansas ....................................... 10
Figure 8. Eastern red cedars ready for field burning .................................................................... 10
Figure 9. Feedstock collection zones around Greensburg ............................................................ 13
Figure 10. Feedstock collection zones around Pratt ..................................................................... 14
Figure 11. Satellite image of 25-mile radius of Greensburg, Kansas ........................................... 15
Figure 12. Satellite image of 25-mile radius of Pratt, Kansas ...................................................... 15
Figure 13. Feedstock costs - $/Mbtu equivalent ........................................................................... 19
Figure 14. Delivered cost of energy for various fuels ($/Million Btu) ......................................... 23
Figure 15. Five-year price chart for natural gas (Source: EIA) .................................................... 24
Figure 16. Kansas industrial customer natural gas prices (1970-January 2009) .......................... 25
Figure 17. Gas utility service territories in the study area ............................................................ 26
Figure 18. Industrial natural gas usage (therms) ........................................................................... 27
Figure 19. General pellet mill layout ............................................................................................ 36
Figure 20. Production costs versus plant capacity (source: Campbell) ........................................ 43
Figure 21. Sample briquettes ........................................................................................................ 44

vi
 Tables
Table 1. All Agricultural and Logging Residues Generated in the Study Area ............................. 4
Table 2. Wheat, Sorghum and Corn Residues Technically Available in the Study Area (bdt/yr) . 6
Table 3. Acres Harvested—Wheat, Sorghum, and Corn (10-Year Average) ................................ 7
Table 4. Estimated Per-Acre Residue Yields (bdt/acre) by Feedstock Type and County .............. 8
Table 5. CRP Acres for Counties Near Greensburg ..................................................................... 11
Table 6. Ten-Year Average of Corn Acres Harvested in the Study Area..................................... 12
Table 7. Overall Summary of Biomass Feedstocks for Study Area ............................................. 13
Table 8. Summary of Residue Availability Within 25 and 50 Miles of Pratt and Greensburg .... 14
Table 9. Number of Acres Needed to Produce 25,000 bdt/yr Residue ......................................... 16
Table 10. Summary of Lab Results for Biomass Samples............................................................ 18
Table 11. Summary of Feedstock Collection Costs ...................................................................... 20
Table 12. Cost Comparison of Various Fuels ($/MMbtu Delivered to the Building) .................. 23
Table 13. Average 2008 Monthly Natural Gas Prices in Kansas, by Customer Type .................. 25
Table 14. Regional Demand for Natural Gas by Customer Type ................................................. 27
Table 15. Estimated Tons of Pellets Equivalent to Regional Natural Gas Consumption ............ 28
Table 16. Capital Cost Estimates for Various Sized Pellet Mills (Campbell, 2007) .................... 40
Table 17. Estimated Labor Costs of Pellet Manufacturing ($/ton) ............................................... 41
Table 18. Estimated Electrical Requirements for a 24,000-Ton-Per-Year Pellet Mill ................. 41
Table 19. Estimated Manufacturing Costs of Pellets ($/ton) ........................................................ 42
Table 20. Estimated Labor Costs of Briquette Manufacturing ($/ton) ......................................... 44
Table 21. Estimated Labor Costs of Bripell Manufacturing ($/ton) ............................................. 45
Table 22. Estimated Labor Costs of Bripell Manufacturing ($/ton) ............................................. 45
Table 23. Summary Cost Estimates .............................................................................................. 46

vii
 1. Introduction
On May 4, 2007, the farming community of Greensburg, Kansas, was hit by an EF-5 tornado,
resulting in the destruction of 90% of the community. After this event, Greensburg community
leaders made a commitment to rebuilding as a sustainable community, emphasizing goals for
energy efficiency and the use of renewable energy. The U.S. Department of Energy funded the
National Renewable Energy Laboratory (NREL) to provide technical assistance to the
community in support of their efforts.

In November 2009, NREL released a comprehensive case study describing those activities. 1 One
of the findings from a study upon which the report was based was that there are opportunities for
residents and businesses in the area to use biomass resources, particularly agricultural residues,
as a source of thermal energy. Specifically, the report stated:

NREL recommended in April 2008 that entities in Greensburg consider using

biomass, especially agricultural wastes, for various solid fuel, commercially
proven, heating applications. Boilers are available that will burn almost any type
of dry biomass to generate hot water; and heaters are available that will burn corn
or biomass pellets, briquettes, or other solid or loose forms of material. Boilers
and heaters need to have emissions acceptable to Kansas and EPA regulations.
Collecting and supplying waste biomass to use with boilers in the community, or
pelletizing biomass into a solid fuel for customers using heaters in the
community, could represent a business opportunity for an entrepreneur. 2
Based on the study findings, NREL conducted a more detailed analysis of market opportunities
to establish a biomass densification facility in or near the Greensburg, Kansas, area. The
densification technologies considered in this report include pellets, briquettes, and bripells. Each
has pros and cons that will be discussed later in the report.

Note that throughout the study, we use the terms agricultural pellets, ag pellets, or biomass
pellets interchangeably to refer to a densified product that can be made from a wood/agricultural
residue blend. The product may end up being a pellet, a bripell (a larger pellet approximately 1-
½ inch in diameter), or a briquette. The final product to be manufactured must ultimately be the
choice of the project developer.

Also note that the study does not represent a feasibility study for any one specific business or
model. We attempted to compile detailed, unbiased information on the potential business
opportunity in one location. We hope that a potential entrepreneur or developer who is interested
in the potential opportunity will use this information as a starting point to guide their own
detailed analysis and feasibility study. This report should not be taken as investment advice, and
any potential project developer must do his or her own due diligence.

1.1 Study Goal and Objectives

The goal of this study is to assess the business case of establishing a biomass pelletization or
briquetting plant in or around Greensburg, Kansas. The objectives of the study were as follows:

1
Billman, Lynn. Rebuilding Greensburg, Kansas, as a Model Green Community: A Case Study. NREL's Technical
Assistance to Greensburg June 2007-May 2009. Technical Report NREL/TP-6A2-45135. November 2009.
Available online at: [Link]
2
Ibid., page 42

1
• Estimate the sustainable supply of biomass feedstock in the region. Determine feedstock
types, locations, quantities, physical and chemical characteristics, and estimated collection
costs.
• Evaluate the potential market for biomass pellets or briquettes in the region.
• Evaluate the process manufacturing technologies for making pellets, briquettes or bripells.
• Provide an overview of commercially available end-use technologies (e.g. boilers and
furnaces) suitable for utilizing agricultural biomass feedstocks as a fuel source.
• Compile economic information related to the project feasibility.

1.2 Study Area

Figure 1 shows the project study area, which consists of all or part of 15 counties in western
Kansas. A county was included only if all or most of the it lies within a 50-mile radius of either
Pratt or Greensburg. Therefore, in the figure below, Ford County is included but the counties of
Gray and Meade are not.

Figure 1. Twenty-five- and 50-mile radius circles from Greensburg and Pratt

The following counties are included in the study area: Barber, Barton, Clark, Comanche,
Edwards, Ford, Harper, Hodgeman, Kingman, Kiowa, Pawnee, Pratt, Reno, Rice, and Stafford.
NREL also assessed potential demand for agricultural/pellets in the region. In addition to the
counties mentioned above, Sedgwick County is included in the market assessment portion of the
study, as this county contains Wichita, which may be a good regional outlet for ag pellets.

2
 2. Biomass Resource Assessment
As with any biomass energy project, it is very important to develop a thorough understanding of
the local biomass supply through a detailed feedstock assessment. The biomass resource
assessment:

• Helps define the size of the plant

• Provide an estimate of supply sustainability
• Gives an idea for the collection area needed in terms of acres and farmers
• Determines cost and logistics of collecting the feedstock and transporting it to the plant.
o Because feedstock cost is typically the largest component of the operating costs of
any biomass project—whether it is biofuels, biopower, or pellets—we have spent
a lot of time trying to define the local resource.

The specific objective of this resource assessment is to determine the quantity, quality, types, and
costs of potential biomass feedstocks located within a 50-mile radius of both Pratt and
Greensburg.

2.1 Biomass Residues

2.1.1 All Residues
The analysis of agricultural residues is based on data from the U.S. Department of Agriculture’s
(USDA) National Agricultural Statistics Service (NASS). Results are based on each county’s 10-
year average number of acres harvested and total yields for the period from 1998-2007. Detailed
information about the methodology, data sources, and analysis techniques used is shown in
Appendix A. This section summarizes the overall results of the assessment.

Table 1 shows the quantities of all residues available in the study area, including wheat straw,
sorghum, corn stover, soybean, sunflower, cotton, logging wastes, and corn cobs. Alfalfa and hay
are not included, since we assume they have higher value for animal feed than energy. As
expected, the biomass resource base in the region is dominated by agricultural residues. NREL
estimates that there are more than 1.7 million bone dry tons per year (bdt/yr) of residues
currently produced within the study area. Converting some Conservation Reserve Program
(CRP) land to switchgrass could produce an additional 100,000 bdt/yr.

3
 Table 1. All Agricultural and Logging Residues Generated in the Study Area
Residues Available (bdt/yr)
Other
Logging
County Wheat Corn Sorghum Soybean Sunflower Cotton Forestry Corn Cobs Total
Residues
Removals
Barber 25,283 407 4,004 1,337 46 210 161 2,818 623 34,888
Barton 74,604 17,556 47,399 14,320 222 - 22 14,760 168,882
Clark 469 9,681 345 - - - 218 10,713
Comanche 3,835 285 5,357 627 - - - 450 10,554
Edwards 31,955 39,921 18,599 21,961 60 - - 31,913 144,409
Ford 55,368 22,632 53,883 10,214 136 - - 21,533 163,765
Harper 96,815 146 9,270 1,821 65 436 0 135 108,687
Hodgeman 21,536 2,228 18,130 1,287 - - - 4,200 47,380
Kingman 78,586 5,270 8,869 6,458 185 - - 3,810 103,177
Kiowa 17,281 15,562 12,205 12,255 24 - - 15,113 72,438
Pawnee 59,127 21,710 35,327 16,494 52 - - 18,915 151,626
Pratt 58,679 38,472 19,270 17,711 377 1,122 12,500 33,533 181,663
Reno 89,693 13,495 51,240 22,829 1,253 - 15 13,118 191,642
Rice 111,254 14,194 50,816 15,130 931 - 24 8,190 200,539
Stafford 35,258 18,182 20,366 14,845 85 - - 31,935 120,670
Total 759,742 210,058 364,416 157,632 3,435 1,768 222 15,318 198,443 1,711,034

Figure 2 shows a map of residue distribution by county. The greatest concentration of residue is
in the eastern region of the study area, particularly Barton, Rice, and Reno counties. However,
when looking closer to Greensburg itself, it can be seen that Edwards, Ford, Kiowa, and Pratt
counties also have significant quantities of biomass. Quantities differ depending upon feedstock
type desired.

Figure 2. Map of residue generation

Figure 3 shows average annual residue totals by county, based on data for the period 1998–2007.
The top five counties, in terms of total production, are Rice, Reno, Pratt, Barton, and Ford, with
each one producing more than 150,000 bdt/yr. Kiowa County produces approximately 75,000
bdt/yr.

4
 Average Resiude Production (bdt/yr for 1998-2007)

250000

Corn Cobs
200000
Other Forestry Removals
Logging Residues
150000 Cotton
bdt/yr

Sunflower Residue
100000 Soybean Residue
Corn Stover
Sorghum Residue
50000
Wheat Straw

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Figure 3. Estimated annual residue production, by county

Residue Production by Type

Sunflower Residue Logging Residues

Other Forestry Removals
0% 0%
1%
Cotton
Soybean Residue 0%
9%

Corn Cobs
9%

Wheat Straw
46%

Corn Stover
13%

Sorghum Residue
22%

Figure 4. Percentage breakdown of feedstock types in the entire region

5
2.1.2 Major Crop Residues
Table 2 summarizes the results of the analysis for wheat straw, sorghum, and corn stover, the
three predominant resources in the study area. The table lists the quantity of residue expected to
be technically available and already accounts for materials that must be left in the field for
nutrient cycling and erosion protection. Other crops planted in the area include alfalfa, soybeans,
cotton, and sunflowers. Those residues will be discussed separately.

Table 2. Wheat, Sorghum and Corn Residues Technically Available in the Study Area (bdt/yr)
Wheat (bdt/yr) Sorghum Residues (bdt/yr) Corn (bdt/yr)
County Non- Non- Non- Total
Irrigated irrigated Total Irrigated irrigated Total Irrigated irrigated Total
Barber 881 24,401 25,283 - - 4,004 407 - 407 29,694
Barton 795 73,809 74,604 2,965 23,686 47,399 17,556 - 17,556 139,559
Clark 469 - 469 232 4,313 9,681 - - - 10,150
Comanche 979 2,856 3,835 443 899 5,357 285 - 285 9,477
Edwards 9,198 22,757 31,955 3,490 9,488 18,599 39,921 - 39,921 90,476
Ford 8,846 46,522 55,368 12,791 41,092 53,883 22,632 - 22,632 131,882
Harper 18 96,797 96,815 - - 9,270 146 - 146 106,231
Hodgeman 5,167 16,369 21,536 2,911 13,951 18,130 2,228 - 2,228 41,893
Kingman 3,746 74,840 78,586 825 3,450 8,869 5,270 - 5,270 92,725
Kiowa 4,025 13,256 17,281 2,569 5,239 12,205 15,562 - 15,562 45,047
Pawnee 9,040 50,087 59,127 5,898 18,477 35,327 21,710 - 21,710 116,165
Pratt 6,375 52,304 58,679 2,895 8,558 19,270 38,472 - 38,472 116,420
Reno 5,528 84,165 89,693 3,424 29,647 51,240 13,495 - 13,495 154,428
Rice 658 110,596 111,254 824 9,894 50,816 14,194 - 14,194 176,264
Stafford 7,116 28,142 35,258 2,985 10,960 20,366 18,182 - 18,182 73,805
Total 62,841 696,901 759,742 42,252 179,653 364,416 210,058 - 210,058 1,334,216

We estimate that approximately 1.3 million bdt/yr of wheat straw, corn stover, and sorghum
residue are potentially available in the area. These three feedstocks represent more than 70% of
the total resource base in the region on a total-tonnage basis.

Table 2 shows that no stover is available from corn produced on non-irrigated lands. This is
because the amount of material that must be left in the fields exceeds the estimated amount of
residues produced. In fact, in some counties the residues produced were less than the amount
recommended to be left behind, resulting in a net deficit. . For this reason, we assume that any
corn stover collected for pelletization must come from irrigated acres only.

For wheat and sorghum, the total amount available from non-irrigated acres far exceeds
production from irrigated acres, although as will be shown later, the per-acre yields from
irrigated lands exceed the per-acre yields from non-irrigated lands.
In addition to residue totals, it is useful to know the number of acres harvested for each of the
crops (see Table 3), and then calculate an estimated production value (tons per acre). Note that
the irrigated acres and non-irrigated acres do not always add up to the total acres. This is because
in some cases data were not broken down further than “total” by either USDA or the producers.

6
 Table 3. Acres Harvested—Wheat, Sorghum, and Corn (10-Year Average)
Irrigated Non-irrigated Total
Irrigated Non-irrigated Total Corn Sorghum Sorghum Sorghum All Irrigated All Non-irrigated Total Wheat
County Corn Acres Corn Acres Acres Acres Acres Acres Wheat Acres Wheat Acres Acres
Barber 830 610 2,300 0 0 8,030 1,690 112,340 114,030
Barton 19,680 6,640 26,320 2,190 29,770 55,230 1,190 160,470 161,660
Clark 290 90 1,030 190 6,150 14,910 1,720 57,230 58,950
Comanche 600 140 1,260 360 2,450 9,800 2,240 60,060 62,300
Edwards 42,550 8,850 62,370 3,080 15,920 26,300 13,110 84,440 97,550
Ford 28,710 1,900 46,860 9,990 57,700 67,690 15,540 150,570 166,110
Harper 180 250 1,080 0 0 16,300 30 218,790 218,820
Hodgeman 5,600 1,510 9,680 2,680 21,800 26,100 8,080 96,690 104,770
Kingman 5,080 1,440 7,950 690 6,380 14,970 5,460 187,270 192,730
Kiowa 20,150 4,440 27,610 2,030 8,270 16,710 8,540 60,720 69,260
Pawnee 25,220 3,900 31,400 4,580 25,330 42,760 12,170 118,640 130,810
Pratt 44,710 8,650 59,780 2,320 13,420 27,440 11,040 134,620 145,660
Reno 17,490 7,860 25,350 2,930 44,360 71,870 8,130 225,930 234,060
Rice 10,920 10,770 21,690 770 15,760 59,820 1,150 147,870 149,020
Stafford 42,580 18,870 61,450 2,400 15,910 27,210 12,780 123,420 136,200
Total 264,590 75,920 386,130 49,100 339,970 578,040 158,790 2,108,690 2,267,480

Figure 5 shows the average per-acre residue yields by feedstock and county, based on the values
for “total residues produced” (from Table 2) divided by the total acres column for each of the
three feedstocks (as shown in Table 3).

The highest yield value is in Rice County, which produces more than 2.0 tons per acre of corn
stover and cobs on irrigated land. As the figure shows, the per-acre yields of corn and sorghum
residues exceed the yield of wheat straw in every county.

Residue Yields (bdt/acre) by County and Type

2.50

2.00

1.50
Wheat Total
bdt/acre

Sorghum Total
Corn Stover and Cobs
1.00

0.50

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Figure 5. Residue yields by county and feedstock

7
Table 4 shows the specific values for average residue yields for irrigated acres, non-irrigated
acres, and total acres (with the exception of corn, which is irrigated only) by feedstock type and
county. As would be expected, the residue yields from irrigated wheat and irrigated sorghum are
more than twice the yields from non-irrigated acres. Figure 6 shows the data from Table 4
graphically (for the irrigated and non-irrigated lands) by crop and county.

Table 4. Estimated Per-Acre Residue Yields (bdt/acre) by Feedstock Type and County
Corn
Wheat (bdt/acre) Sorghum Residues (bdt/acre) (bdt/acre)
County Wheat Non- Sorghum Non- Sorghum Corn Stover
Wheat Irrigated irrigated Wheat Total Sorghum Irrigated irrigated Total and Cobs
Barber 0.52 0.22 0.22 0.50 1.24
Barton 0.67 0.46 0.46 1.35 0.80 0.86 1.64
Clark 0.27 - 0.01 1.22 0.70 0.65 0.75
Comanche 0.44 0.05 0.06 1.23 0.37 0.55 1.23
Edwards 0.70 0.27 0.33 1.13 0.60 0.71 1.69
Ford 0.57 0.31 0.33 1.28 0.71 0.80 1.54
Harper 0.61 0.44 0.44 0.57 1.56
Hodgeman 0.64 0.17 0.21 1.09 0.64 0.69 1.15
Kingman 0.69 0.40 0.41 1.20 0.54 0.59 1.79
Kiowa 0.47 0.22 0.25 1.27 0.63 0.73 1.52
Pawnee 0.74 0.42 0.45 1.29 0.73 0.83 1.61
Pratt 0.58 0.39 0.40 1.25 0.64 0.70 1.61
Reno 0.68 0.37 0.38 1.17 0.67 0.71 1.52
Rice 0.57 0.75 0.75 1.07 0.63 0.85 2.05
Stafford 0.56 0.23 0.26 1.24 0.69 0.75 1.18
Average 0.51 0.26 0.28 1.05 0.52 0.58 1.47

The data in Table 4 and Figure 6 indicate that we should look more closely at corn and sorghum
residues in the study area. Higher yields per acre means it will take less total acres to supply the
pellet plant with these two feedstocks than it would if using wheat straw. This statement
presumes that corn (stover and/or cobs) and sorghum residues are suitable for producing a
quality pellet or briquette when combined with cedar—something that must be investigated
further.

Residue Yields for Irrigated vs. Non-irrigated Acres

2.50

2.00
bdt/acre/year

1.50

1.00

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Ki
od
C

County
Wheat Irrigated Wheat Non-irrigated Sorghum Irrigated Sorghum Non-irrigated Corn Stover and Cobs

Figure 6. Residue yields per acre, by feedstock type and county

8
Looking at the results from Figure 6, twelve out of 15 counties have the highest per acre biomass
yields from corn. In 11 of the 15 counties, irrigated sorghum is the second highest yielding
feedstock, behind corn.

Clearly if one wants to reduce the number of acres required to supply a plant (and hence reduce
the collection costs and transport distance), the initial emphasis for feedstock infrastructure
development should be on sorghum residues (depending upon the tons needed), corn stover and
perhaps corn cobs.

2.1.3 Woody Biomass Residues – Logging and Other Removals

As one would expect, there are minimal residues from logging in the region. The logging that is
conducted is typically small-scale and focuses on small removals from private lands along river
bottoms.

In Table 1, the Pratt County figure for “other forestry removals” of 12,500 bdt/yr is based on an
interview with Don Queal of Queal Enterprises. The company, which is in Pratt County,
conducts mitigation of eastern red cedar trees from agricultural lands around the area. Therefore,
we have attributed the residues to Pratt County. There may be other similar companies in the
area that we did not identify.

Eastern red cedar—which is actually a juniper and not a true cedar—is the only evergreen tree
native to Kansas. 3 Red cedar was once found only where fire did not occur, such as on rock
bluffs and in deep canyons. However, in the last 50 years or so it has spread invasively over a
wide region, mainly in Oklahoma and into southern Kansas. While the tree has many beneficial
uses, such as habitat for wildlife, forage for birds, and as a windbreak, it also spreads rapidly if
left unchecked and can have many negative impacts on agricultural lands and operations.

A study conducted by Oklahoma State University (Fact Sheet No. 2868) showed that a red cedar
with a 6-foot crown diameter can cover an area 28 square feet in size. The study also showed that
on shallow prairie soils otherwise capable of producing 3,000 pounds of forage per acre in a
good year, the presence of 250 red cedars per acre reduced forage yields by 50%. In addition, red
cedar displaces desirable plants, decreasing plant diversity and water infiltration into the soil, and
increasing the risk of wildfire, soil erosion, and pollen levels, the latter causing a greater number
of allergic reactions. 4 Because the spread of red cedar has significant impacts on the availability
and productivity of grazing lands, the U.S. Department of Agriculture subsidizes landowners to
remove these trees.

No detailed information was available on the extent of eastern red cedar coverage in the study
area. One report states that in Oklahoma, red cedars had invaded 1.5 million acres by the 1950s;
by 2007, that number had risen to 9 million acres. The Natural Resources Conservation Service
NRCS estimates that 760 acres per day, or more than 270,000 acres per year, are being lost to red
cedar. 5 Based on conversations with Don Queal and other producers in the study region, the
extent of red cedar coverage in southwestern Kansas is significant and spreading rapidly,

3
[Link]
4
[Link]
5
Truitt, John-Kyle. The Silent Invader. Speech given at the Oklahoma Chapter of the FFA, April 17, 2007.
Accessed online, November 15th, 2008 [Link]

9
particularly in Comanche, Clark, Barber, Pratt, and Kiowa counties. Figure 7 shows a view of
red cedars in one location of Barber County. Figure 8 shows cedars that have been cut and piled
and are ready for burning.

Figure 7. Encroachment of eastern red cedars, Barber County, Kansas

Figure 8. Eastern red cedars ready for field burning

Mr. Queal estimates that he could easily collect at least 25,000 green tons per year of eastern red
cedar chips. He is currently limited in his ability to collect materials by a shortage of labor and a
lack of market outlets. He does chip some of the material and sells it as mulch. The mulch
market is rather small, however, so most of the cedar is either chipped in the field, or piled and
burned a year or so after it is cut.
10
2.1.4 CRP Land
An additional potential source of biomass feedstock in the study area, not shown in Table 1, is
CRP land. As shown in Table 5, there are more than 300,000 acres of CRP land in the counties
immediately surrounding Greensburg. There may be potential opportunities to convert this land
to biomass energy crops. The median estimated mature yield for switchgrass in this area is 4.5
dry tons per acre per year. 6 Assuming that 10% of CRP lands could be converted to switchgrass
production, an additional 120,000 dry tons per year of feedstock could be produced for a
bioenergy facility.
Table 5. CRP Acres for Counties Near Greensburg
County CRP Acres
Kiowa 53,337
Comanche 43010
Clark 52,114
Barber 21,018
Pratt 47,750
Ford 59,469
Edwards 34,101
Total 310,799

2.1.5 Other Potential Sources

Corn Cobs. The production of corn cobs is primarily a function of corn yield per acre. Cobs
typically represent 15% to 25% of the stover in the field. Corn cobs are typically discarded in the
field and could be collected as a feedstock. Several companies are developing cob harvesting
equipment, including attachments to existing combines and development of new combines. For
example, POET is focusing on the collection of cobs as feedstock for its pilot cellulosic ethnol
plant in Emmetsburg, Iowa. POET believes that collection of cobs will improve both yields of
biomass per acre and ethanol at minimal additional costs. 7

As shown in Table 6, 386,000 acres of corn are harvested in the counties covered by the study,
265,000 of which are irrigated, 76,000 are non-irrigated, and about 45,000 are not defined in the
data. Yields of cobs are estimated to range between 0.6 and 1 ton per acre, depending upon
moisture content and corn yield. 8,9 Assuming cobs will be collected from irrigated acres only,
with an average yield of 1 ton per acre and an average moisture content of 25% on a wet basis,
we estimate that approximately 198,000 bdt of cobs that could be collected on an annual basis
from the study area. Adding Gray and Meade counties, which were excluded from the study area,
an additional 88,000 bdt/yr would be available.

6
Billman, Lynn. Volume I. Near Term Energy Strategy Recommendations for Greensburg, Kansas. Draft Report.
NREL Technical Report NREL/TP-670-43014. May, 2008. Available on-line at:
[Link]
7
Hoskins, Tim. Ethanol Distiller Announces Breakthrough. Iowa Farmer Today. Accessed on-line at
[Link]
8
Thomas, Robert E. MU tests mixing corn cobs with coal to fuel campus power plant. Accessed on-line at:
[Link]
9
[Link]

11
 Table 6. Ten-Year Average of Corn Acres Harvested in the Study Area

Irrigated Non-irrigated Total Corn

County Corn Acres Corn Acres Acres
Barber 830 610 2,300
Barton 19,680 6,640 26,320
Clark 290 90 1,030
Comanche 600 140 1,260
Edwards 42,550 8,850 62,370
Ford 28,710 1,900 46,860
Harper 180 250 1,080
Hodgeman 5,600 1,510 9,680
Kingman 5,080 1,440 7,950
Kiowa 20,150 4,440 27,610
Pawnee 25,220 3,900 31,400
Pratt 44,710 8,650 59,780
Reno 17,490 7,860 25,350
Rice 10,920 10,770 21,690
Stafford 42,580 18,870 61,450
Total 264,590 75,920 386,130

Any potential pellet plant operator interested in using cobs should send them to a lab for ultimate
and proximate analysis, and sample cob/wood pellets should be produced to determine their
performance characteristics in a boiler or furnace.

Cotton Gin Trash. High Plains Cotton Gin is a small cotton gin located on Highway 54 between
Pratt and Greensburg. We learned that all of their gin trash is sold to a broker in Wichita under a
long-term contract. The material ends up primarily as animal feed for feedlots. The person at the
gin to whom we spoke was not familiar with the terms of the contract. We have not included any
material from this source as a potential feedstock because it is likely to have higher value as feed
than as an energy source.

2.1.6 Summary – All Residues Including CRP

Table 7 shows the overall feedstock summaries for the entire study area. In all, we estimate that
more than 1.8 million dry tons per year of biomass feedstock could be produced in the study
area, including possible switchgrass production in the future.

The total energy content of all the biomass is 28,000,000 million British thermal units (Mbtu), or
280 million therms. As will be shown in Section 3, this is more than enough biomass to offset the
entire demand of natural gas consumed in the region, including the Wichita area. While we are
not suggesting that biomass could replace the entire supply of gas in the region, it gives the
reader an order-of-magnitude estimate of the amount of energy that not being collected at present
that could potentially be made available in the region.

12
 Table 7. Overall Summary of Biomass Feedstocks for Study Area

Energy
Bone dry Equivalent
Feedstock equivalent
tons/year Therms/yr
(MMBtu/yr)
Agricultural residues 1,497,051 23,054,588 230,545,879
Cedar and other wood 15,540 273,501 2,735,014
10% CRP Land 120,000 1,752,000 17,520,000
Corn cobs 198,000 3,168,000 31,680,000
Total 1,830,591 28,248,089 282,480,893

2.2 Results for Immediate Vicinity near Greensburg and Pratt

Because transportation costs represent a large portion of the delivered cost of biomass to a
bioenergy facility, it is desirable to place a facility as close as possible to a large concentration of
residues, while balancing the needs for the plant to be located in a community with good
transportation access, reliable and affordable utilities, and access to strong local and regional
market outlets. For these reasons, we narrowed the feedstock assessment to look at how much
material is produced within a 25- and 50-mile radius of Greensburg and Pratt. The 25- and 50-
mile radii from Greensburg (Figure 9) and Pratt (Figure 10) are shown below.

Figure 9. Feedstock collection zones around Greensburg

13
 Figure 10. Feedstock collection zones around Pratt

Table 8 shows the residue available within 25 and 50 miles of both Greensburg and Pratt. The
results indicate that there is a greater quantity of residues within 25 miles of Greensburg
(266,000 bdt/yr) than there are within 25 miles of Pratt (217,000 bdt/yr). However, when looking
at a 50-mile radius, Pratt has about 200,000 more tons per year, though both locations contain
well over 1 million bdt/yr of residue. These results do not include cobs.

Table 8. Summary of Residue Availability Within 25 and 50 Miles of Pratt and Greensburg
bdt/yr within 25 Mile Radius bdt/yr within 50 mile radius
Logging Urban Logging Urban
and Wood and and Wood and
Primary Secondary Primary Secondary
Crop Mill Mill Crop Mill Mill
Residues Residues Residues Total Residues Residues Residues Total
Pratt 199,100 16,755 1,470 217,325 1,320,000 16,777 9,363 1,346,140
Greensburg 266,200 - - 266,200 1,100,000 16,755 7,480 1,124,235

Figure 11 shows a satellite image centered on the Greensburg area with a 25-mile radius drawn
as an overlay (the dark brown swaths are the result of different satellite sources or processing
techniques used to prepare the images.) Note the large number of center pivot irrigation circles in
the northern half of the circle, and the encroaching eastern red cedars in the southwestern and
southeastern parts of the circle. Figure 12 below shows a satellite image and 25-mile radius circle
centered on Pratt. The eastern red cedars can be seen in the southwestern part of the circle. 10

10
Source: Google Earth
14
Figure 11. Satellite image of 25-mile radius of Greensburg, Kansas

Figure 12. Satellite image of 25-mile radius of Pratt, Kansas

15
If the plant is to be located in Pratt, residues from Pratt, Kiowa, Kingman, and Reno counties
alone would provide more than 500,000 bdt/year. If the plant were to be located in Greensburg,
residues from Kiowa, Pratt, Edwards, and Ford counties would also total more than 500,000
bdt/yr.

2.2.1 Sizing the Plant Based on Resource

To reduce transportation costs, a developer of a biomass densification facility should seek to
keep the distance from which feedstock is collected to a minimum. Also, a rule of thumb in the
biomass industry is to be sure that the estimated supply in a given area is at least three times
above the amount of material that a proposed plant will require. So for both the Pratt and
Greensburg sites, the best size for a densification plant would be one that uses no more than
about 70,000 bdt/yr to 80,000 bdt/yr based on feedstock generated in the 25-mile radius of
approximately three times the expected plant requirements. Depending upon the moisture content
of incoming feedstock and actual feedstock throughput rates, this plant would produce 40,000
tons to 70,000 tons per year of finished pellets or briquettes.

A larger plant could be built if residues are acquired from a greater distance. However, this
would increase the delivered cost of biomass to the plant, especially if fossil fuel prices return to
levels seen in the summer of 2008. Keeping biomass sourced from as close as possible to the
field will reduce feedstock collection costs and help ensure that the end product is as cost-
competitive as possible with other choices in the marketplace.

In addition to resources, the size of the plant will also be influenced by the potential demand for
the finished product in the region. Potential regional demand will be discussed in greater detail in
Section 3 of this report.

2.2.2 Land Requirements

For illustrative purposes, let’s assume that a pellet plant needs 25,000 bdt of agricultural residues
as feedstock, perhaps to be blended with 25,000 tons of cedar. How much land would be
required to procure this feedstock? The answer depends on which specific ag residues we wish to
collect.

Table 9 shows the number of acres, sections, and center pivot circles needed to produce 25,000
bdt/yr. For sorghum residues, one would need 23,750 acres annually to supply the material.
Accounting for crop rotations, one would need access to nearly all of the irrigated sorghum acres
in the entire study area, making the collection costs much higher than for other residues.

Table 9. Number of Acres Needed to Produce 25,000 bdt/yr Residue

Number of Center
Feedstock Type Acres Needed/yr Sections Pivot Circles (126
acre)
Irrigated Wheat 48,804 76 387
Non-irrigated Wheat 95,907 150
Irrigated Sorghum 23,756 37 189
Non-irrigated Sorghum 47,972 75
Irrigated Corn Stover 34,654 54 275
Corn cobs from irigated corn 33,333 52 265
Half corn stover/half cob 16,997 27 135
Switchgrass @ 5 bdt/acre 5,000 8 40

16
A better option may be to focus on corn stover and cobs. Presuming that we can get at least
three-quarters of a ton of cobs and three-quarters of a ton of stover from each irrigated acre, the
plant would require 17,000 acres (27 sections, 135 circles) of irrigated corn per year. As shown
in Table 6, Pratt and Kiowa counties combined contain approximately 65,000 acres of irrigated
corn, or about 3.5 times the amount required to supply the plant with 25,000 bdt/yr. A larger
plant would require more acres.

Switchgrass. Additional research needs to be done on the pelletization of switchgrass, since

production would require the fewest acres. However, several studies have found that pelletizing
switchgrass presents several challenges. It is a difficult material to pelletize, according to one
pellet manufacturer, and has less-than-optimal binding characteristics and large fine
production. 11 Also, the costs are estimated to be $115 to $125 per ton delivered to the plant.
Other than quantifying the potential resource base in the region, we do not investigate the
concept of converting switchgrass to pellets in any greater detail in this study.

2.2.3 Physical and Chemical Properties of Biomass Feedstocks

The physical and chemical characteristics of biomass that is used as input for a pelletization or
briquette mill will directly impact the performance of the product in potential end-use conversion
technologies. To determine the quality of local feedstocks, NREL sent several samples of
potential feedstocks to Hazen Laboratories in Golden, Colorado, for ultimate and proximate
analyses and several additional tests.

NREL collected samples of wheat straw, freshly cut cedar (approximately 1 week to 2 weeks
old) and seasoned cedar (12 months old). We also obtained samples of the pellets being made by
Show Me Energy Cooperative (SMEC) of Centerview, Missouri. SMEC makes a blended pellet
consisting of wheat straw and wood waste, so potentially it will have similar properties to any
pellets made of straw and cedar in the Greensburg region. 12 We did not obtain any samples of
corn stover, corn cobs, cotton gin trash, sorghum residue, or soybean residue because of the time
of year when the samples were collected (June 2008). These materials represent additional
potential feedstocks for a local pellet or briquette mill, and if a developer wishes to use these,
tests should be conducted on samples of these materials as well.

Table 10 summarizes the major test results from Hazen. Appendix B contains the detailed lab
results for these samples, as well as the results for analysis of samples of corn stover, corn cobs,
and sorghum residue.

The value of lb alkali/Mbtu is an important measure. Research conducted by Tom Miles and
NREL 13 indicates that fuels with alkali values above .4 lb/Mbtu are likely to exhibit slagging and
fouling in conventional biomass boilers. Alkali levels in agricultural residues are typically well
over this threshold value. Slagging is caused by minerals in the feedstock melting during
combustion and then cooling to form a hard glass-like or rock-like substance within the burn
chamber or on the fire tubes of boilers. Formation of this material reduces combustion efficiency,

11
As documented in Ken Campbell. A Feasibility Study for an Agricultural Biomass Pellet Company. Agricultural
Utilization Research Institute. November 2007. pg 43.
12
While the pellets may have similar characteristics. It is not known exactly what feedstocks went into the batch of
pellets (they told us straw and wood waste) that SMEC sent. Also, if a local pellet is blended with cedar, it may
improve the characteristics.
13
Miles, Tom; Tom Miles Jr; [Link]. Alkali Deposits Found in Biomass Power plants: A Preliminary Investigation of
Their Extent and Nature. April, 1995. NREL Subcontract TZ-2-11226-1. Accessed online on Ocotber 6, 2008:
[Link]
17
impacts boiler operation, and can be difficult and time-consuming to remove. While there are
adjustments that can be made to firing conditions, and limestone can be injected to reduce boiler
fouling, there will still be increased O&M requirements compared to natural gas and even wood-
fired boilers. Related to this project, the samples for wheat straw and the SMEC pellets are both
well above 0.4 lb/Mbtu alkalis.

Table 10. Summary of Lab Results for Biomass Samples

Wheat Freshly Cut Seasoned SMEC
Value Straw Cedar Cedar Pellets
Btu content as received HHV (Btu/lb) 7,125 8,143 8,056 7,059
Btu content bone dry (Btu/lb) 7,709 8,827 8,976 7,680
Moisture content as received (%) 7.57 7.75 10.25 8.09
Percentage Ash (%) 7.83 1.63 0.88 9.04
Lbs Alkali/Mmbtu 1.3 0.08 0.05 1.44
Lbs ash/MMBtu 10.99 2.00 1.09 12.81
Potassium in ash as K2O (%) 11.4 3.25 4.55 10.8

There are several issues that should be noted with the data in Table 10.

Cedar. The first issue is the difference in the values for the freshly cut cedar and the seasoned
cedar. Based on the results, it would appear that the samples may have been mixed up, as one
would expect the seasoned cedar to have a lower moisture content and higher “as received”
energy value than the freshly cut cedar. But the opposite is true. There may have been rain in the
area before the samples were collected, and the seasoned cedar had been stored outside in an
open pile for a long time, so moisture may have been absorbed this way. Nevertheless, both
cedar samples indicate a very low moisture content of between 7% and 10%, and high energy
content of about 8,100 Btu/lb. Cedar is also very low in ash percentage (.9% – 1.6%) as well as
in pounds of alkali per Mbtu.

Red cedar represents an important feedstock for the potential pellet manufacturer in the region
because it can be blended with agricultural residues to increase the energy content and reduce the
ash and alkali content of the finished product. Depending upon the percentage of cedar needed to
make a high quality biomass pellet, the ability to collect sufficient cedar may be the limiting
factor in the sizing of any potential plant to be established in the region.

Wheat Straw. The wheat straw is high in ash and high in alkalis. Though not analyzed for this
report, corn stover will exhibit similar characteristics to wheat straw—about 8,000 Btu/lb and
8% to10% ash, according to a U.S. Department of Energy Web site. The site presents chemical
composition and physical property data on more than150 samples, including corn stover, wheat
straw, switchgrass, and sorghum. 14 Cotton gin trash and other crop residues will exhibit similar
properties. Switchgrass actually seems to be fairly high in energy content.

SMEC Pellets. The results for the SMEC pellets indicate a moisture content of 8% and an
energy content of 7,059 Btu/lb. The pellets were at 9% ash, 11% potassium (K2O) in the ash, and
1.44 pounds of alkali per Mbtu. Any conversion technology that is going to use pellets similar to
this as a feedstock must be designed to handle at least 9% ash as well as fuels that are high in

14
Biomass Feedstock Composition and Property Database. U.S. Department of Energy, Energy Efficiency and
Renewable Energy Biomass Program. [Link]

18
alkali. As a comparison, premium hardwood pellets are typically less than 1% ash and well
below 0.4 lbs alkali/Mbtu.

2.2.4 Impacts of Feedstock Characteristics on Pellet/Briquette Quality

Based on the data shown in Table 10, most of the biomass in the region will be high in ash and
alkalis. Any pellets or briquettes made from these feedstocks may present challenges in
combustion appliances if they are not designed to handle high ash and high alkali fuels.

Consistent blends of ag residue and wood (cedar) will be necessary to produce a higher quality
fuel, and any planned facility should have various blend percentages tested to optimize and
balance combustion characteristics, binding quality, and overall costs of production. It is also
essential that potential end users understand the characteristics of the fuel prior to designing and
installing a biomass energy system to use it.

2.3 Costs of Residue Collection

Feedstock cost is the greatest factor impacting the economics of a biomass densification plant. A
great deal of research has been conducted over the past 10 years on the economics of collecting,
transporting, and storing agricultural residues. In addition to the actual costs associated with
equipment and labor to collect and transport the feedstocks, one must also consider the potential
value of alternative uses of the biomass, as well as the lost nutrient value of any material
removed from the land.

Importantly, the price paid for feedstock must work for both the agricultural producer as well as
the pelletizer. If the price offered is too low, it will not be worth the producer’s time and effort to
collect the feedstock. If the cost to the facility is too high, the manufacturing costs may be too
high and the finished product will not be cost-competitive with other fuels such as natural gas
and propane. Figure 13, for example, shows the cost of biomass in $/Mbtu for various collection
costs per ton (assuming an average of 7,000 Btu/lb for the biomass).

$6.00

$5.00 $5.00

$4.29
$4.00
$3.57
$/Mmbtu

$3.00
$2.86

$2.14
$2.00

$1.43
$1.00

$-
$20 $30 $40 $50 $60 $70
$/ton delivered

Figure 13. Feedstock costs - $/Mbtu equivalent

19
As can be seen, if the facility were to pay an average price of $40 per ton for material delivered
to the plant, the cost of feedstock alone would be $2.86/Mbtu. If the feedstock were delivered for
$60 per ton, the cost would be $4.29/Mbtu. In addition to feedstock, pelletization costs include
on-site fuel handling, labor, electricity, equipment amortization and depreciation, bagging or
bulk storage, and customer delivery.

It is generally accepted that feedstock costs represent 40% to 60% of the final pellet cost.
Assuming that feedstock is 50% of the cost, then pellets using $40 per ton feedstock would cost
at least $80 per ton to manufacture, or $5.75/Mbtu, prior to facility profit and delivery to the
customer. Additional costs incurred by the end user include on-site storage and fuel handling
costs, labor for boiler operation and maintenance, ash removal, and potentially lower appliance
efficiency compared to natural gas. The end user will also need to purchase or lease a biomass
furnace or boiler, which is more expensive than a comparable natural gas appliance and may
require financing. Adding all of these, the delivered cost of energy using pellets compared to
today’s natural gas price is going to be a good deal higher (more about this in Section 3).

Any pellet plant will need to keep the delivered cost of feedstock as low as possible. Given
today’s low price of competing fuels, it will be difficult to make the economics work if a pellet
plant has to pay more than an average of $40 per ton, and $30 would be better. It should be
mentioned that the ability to get sufficient feedstock for a plant at $40 per ton is by no means
assured. It will take careful planning and large numbers of efficient producers who are located
near the pellet plant. Residue collection will need to be highly optimized.

However, we feel it is highly likely that feedstock will be in the $55 to $65 per ton range by the
time it is input to the process at the pellet mill. This is based on conversations with other biomass
pellet producers, as well as documentation provided by Campbell. 15 Campbell summarizes
several other feedstock cost analysis reports, including one performed by Perlack and
Turnhollow of Oak Ridge National Labs (ORNL) 16 and one by the Center for Agricultural and
Rural Development (CARD) of Iowa State University. 17 Campbell also develops his own
estimates. The results of these studies are summarized in Table 11.

Table 11. Summary of Feedstock Collection Costs

Feedstock Source Delivered Cost ($/bdt)
Corn stover (500 to 2000 bdt/day) ORNL, 2002 $52.00 - $56.00 (in 2008 $)
Corn stover CARD, 2007 $68.50 ($58.26 per 15%
moisture content ton)
Corn stover Campbell $61.52
Soybean straw Campbell $40.70
Wheat straw Campbell $62.90

15
Campbell, Ken. A Feasibility Study for an Agricultural Biomass Pellet Company. Agricultural Utilization
Research Institute. November 2007. Pgs 27-42
16
Perlack, Robert D. and Anthony F. Turhollow. Assessment of Options for the Collection, Handling, and
Transport of Corn Stover. Oak Ridge National Laboratory, Department of Energy, Oak Ridge, Tennessee,
September 2002.
17
Tokgoz, Simla, Amani Elobeid, Jacinto Fabiosa, Dermot J. Hayes, Bruce A. Babcock, Tun-Hsiang (Edward)
Yu, Fengxia Dong, Chad E. Hart and John C Beghin, Emerging Biofuels: Outlook of Effects on U.S. Grain,
Oilseed, and Livestock Markets. Center for Agricultural and Rural Development, Iowa State University, Ames,
Iowa, May 2007.
20
NREL interviewed several producers in the region as part of this study, and the results are worth
noting. One told us that it cost at least $20 in terms of time, fuel, and equipment for him to make
a bale of wheat straw (this was during the summer of 2008). We estimate that it would take
another $5 per bale to get it to the roadside. Assuming the producer will want at least a $5 per
bale profit, we estimate the roadside cost is $30 per bale. Assuming further a cost of $0.25 per
ton mile and an average haul distance of 20 miles, add another $5 per bale. Loading and
unloading and profit for the hauler adds another $7. Thus the final cost is approximately $42 per
bale. Assuming that a 5 ft x 6 ft round bale weighs an average of 0.75 per ton, the cost of the bale
delivered to the plant would be $55 per ton, or $3.93/Mbtu. This figure does not contain any
payment to the producer for lost nutrient value, annual acreage reservation, or additional on-site
processing costs at the mill such as grinding or drying. Costs for cedar are estimated to be in the
range of $50 per green ton. 18

2.4 Feedstock Summary

The ultimate decision as to which feedstocks to use is largely dependent on final product quality
of the blend selected, as opposed to the trade-off in biomass availability and collection costs.
Cedar is the highest quality and lowest cost feedstock in the region. For agricultural residues, the
data indicate there should be lower per-ton collection costs associated with residues collected
from irrigated sorghum and irrigated corn acres because of the higher yields of residues per acre.
Potential entrepreneurs evaluating this business opportunity should develop test blends of eastern
red cedar, corn stover, corn cobs, and sorghum residues in various percentages, and test the
resulting pellets in the lab as well as in appliances. This will help guide the feedstock selection
process.

Entrepreneurs should also evaluate in detail producer interest in supplying the plant. The key will
be to identify and contact the local landowners (focusing on largest-acreage landowners first),
interview them regarding their cropping patterns and interest in providing residues, and then
secure rights to the necessary acres to provide the feedstock for the plant on an annual basis.

There are numerous feedstock contracting methods available, but we strongly encourage that, at
a minimum, the plant owner include an annual per-acre “reservation” payment to effectively
ensure that sufficient acres of feedstock are under contract. This reservation payment would be
made in addition to payments for nutrient values, biomass values, and collection and delivery
costs. As mentioned earlier, it must be worth the producers’ time to interest them in providing
feedstock. Another model would be for the producers to become owners of the pellet mill
through a co-op structure, and then the producers/owners become feedstock suppliers. The
potential pellet mill owner should give careful consideration to feedstock supply and ensure that
an adequate supply is placed under a long-term contract.

Without a return to high natural gas prices of summer 2007, or some type of carbon tax or other
incentive/regulatory program that will make biomass pellets more competitive on a cost basis
with natural gas, the incentive for customers to switch from a clean-burning, low-maintenance,
low-cost fuel such as natural gas to a more expensive, high-ash, high-labor fuel such as pellets
will be minimal.

18
Personal communication, Don Queal, Queal Enterprises.
21
 3. Market Demand and Competing Fuels
This section outlines the potential demand for agricultural biomass pellets or briquettes in the
study area. While there are certainly also opportunities to ship the product to other locations, we
limit our focus to the local market, again trying to keep transportation and end-user costs as low
as possible.

It is difficult to estimate the demand for pellets in a given region. Natural gas is the primary fuel
used to provide thermal energy in the study area, thus it is the primary fuel that pellets must
compete against. When gas prices are high, people tend to look for alternatives. When gas prices
are low, people tend to rely on natural gas. However, because a heating project at an end-use site
can take a year or more to develop, the time to build awareness and interest among potential
customers is now.

Other fuels in the region include propane, fuel oil, and electricity. We did not quantify the use of
these fuels as part of this study. However, ag pellets will be more cost effective compared to
these fuels because they each have a higher delivered fuel cost. Any facility currently using
propane, fuel oil, or electricity should evaluate biomass options even under today’s conditions.

Natural gas is convenient, safe, easy to use, clean burning and, for many consumers, virtually
maintenance free. The major concerns over natural gas are price volatility, delivered cost, and
the fact that natural gas is a fossil fuel and therefore will most likely face a carbon tax. Also, at
some point in the future, we will again face supply constraints and higher prices since natural gas
is a nonrenewable resource.

It is not known how much a carbon tax or cap and trade system might add to the cost of natural
gas. On the other hand, biomass will at least be treated as carbon neutral, and there are strong
arguments for the case that biomass should be considered to actually reduce greenhouse gases
and therefore should get a credit under any type of climate change program implemented in the
U.S. 19

3.1 Cost Comparison with Other Fuels

Table 12 shows the delivered cost of energy (taking into account likely appliance efficiencies) of
various fuels. So the value listed under the column entitled “$/Mbtu” represents the output side
of the conversion appliance. The following assumptions are used in the table:

• Chipped cedar is based on the estimated costs of having a third party chip and deliver a
ton of air-dried, eastern red cedar chips to an end user, assuming a delivered moisture
content of 25% and a Btu content of 8,800 Btu/dry lb.
• The cost of straw bales is the estimated cost of collecting and delivering a bale of field-
dried straw to a consumer (7,000 Btu/lb as delivered), plus $5 per ton on-site processing.
• Natural gas prices are based on the April-December 2008 average value for Kansas
(Table 13, Section 3.2).
• Price and energy content for hardwood pellets was obtained from Ozark Hardwood
Products in Seymour, Missouri (closest wood pellet plant to the study area).

19
Morris, Greg. Bioenergy and Greenhouse Gasses. The Green Power Institute, May 2008.
[Link]

22
• The price of wood/straw agricultural pellets is based on estimated costs (sales price freight on
board the plant plus transportation) from Show Me Energy Cooperative (SMEC) in
Missouri, using 7,500 Btu/lb as the energy content. If Btu content were higher, delivered cost
would be lower.
• Fuel oil and propane prices are from the Energy Information Administration (EIA) data for
the Midwest region (Petroleum Administration for Defense Districts II (PADD II)).

Figure 14 shows the data from Table 12 in graph form. Note that the lowest cost biomass
feedstocks are also the ones that are processed the least. As discussed earlier, while these fuels
may cost less, they typically have higher labor requirements for fuel preparation, delivery to the
boiler/furnace, and ash removal. These bulk fuels also require large space for fuel storage when
compared to pellets. Densified fuels are typically more consistent, easier to handle, take up less
space, produce lower ash (compared to bulk fuels), and have a higher Btu content because they
have been dried.
Table 12. Cost Comparison of Various Fuels ($/MMbtu Delivered to the Building)
Cost to Appliance
Source Units Btu/unit $/MMBtu
User ($) Efficiency
Chipped cedar $/green ton $ 50.00 75% 13,200,000 $ 5.05
Wheat straw bales $/ton $ 55.00 70% 14,000,000 $ 5.61
Natural gas (industrial) $/therm $ 0.69 80% 100,000 $ 8.63
Wood/ag pellets ($130/ton) $/ton $ 130.00 80% 15,000,000 $ 10.83
Wood/ag pellets ($160/ton) $/ton $ 160.00 80% 15,000,000 $ 13.33
Hardwood pellets $/ton $ 185.00 80% 16,600,000 $ 13.93
Natural gas (commercial) $/therm $ 1.50 80% 100,000 $ 18.75
Fuel oil $/gallon $ 2.17 85% 135,000 $ 18.91
Natural gas (residential) $/therm $ 2.10 80% 100,000 $ 26.25
Propane $/gallon $ 2.13 85% 91,600 $ 27.36
Electricity $/kWh $ 0.10 100% 3,413 $ 29.30

$35.00

$29.30
$30.00
$27.36
$26.25

$25.00
$/MMbtu

$20.00 $18.75 $18.91

$15.00 $13.33 $13.93

$10.83
$10.00 $8.63

$5.05 $5.61
$5.00

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Figure 14. Delivered cost of energy for various fuels ($/Million Btu)
23
Chipped cedar at $50 per ton has the lowest delivered cost, followed by straw bales. However,
the use of these fuels will require additional on-site labor and higher up-front capital costs
compared with systems that burn pellets or other densified fuels. Note that wood/ag pellets at
$130 per ton are about $0.67 less per Mbtu than the cost of energy at the average industrial rate
for gas in Kansas. It is difficult to compete with natural gas if your fuel is just slightly less
expensive yet takes more labor and maintenance, and requires an up-front purchase of a new
appliance. Ag pellets at $130 per ton compare nicely, however, with hardwood pellets at $185
per ton, fuel oil at $2.17 per gallon, propane at $2.13 per gallon, and electrical resistance heat at
$0.10 per kilowatt-hour (kWh). Ag pellets also compare well with commercial natural gas rates
of $19.63/Mbtu. Ag pellets at $160 per ton compare favorably with fuel oil, commercial and
residential gas, propane, and electricity. It must be noted that it may be a challenge for a pellet
plant to deliver wood/ag pellets to its customers at $130 per ton, even if using bulk shipments
instead of plastic bags. A cost of $160 per ton for bulk pellets delivered to a regional customer is
more likely.

3.2 Regional Natural Gas Market

The U.S. Department of Energy EIA states that the November 2008 Henry Hub price for natural
gas was $6.87 per thousand cubic feet (Mcf) ($6.87/Mbtu). Although there are important
regional differences, the Henry Hub price is a major trading point for natural gas and thus
reflects general market conditions for U.S. natural gas. Compare the November 2008 price with
the summer of 2008, when Henry Hub natural gas prices reached nearly $14/Mbtu ($1.40/therm).
Natural gas prices have fallen over the past several months for several reasons, predominantly
because of increased U.S. production, weakness in the U.S. and global economy, and the
collapse of oil prices. 20 The EIA projects that the Henry Hub price of gas will average $6.25/Mcf
in 2009. Figure 15 shows the 5-year price chart for U.S. natural gas prices.

Natural Gas Prices

Residential Price Forecast

20
Henry Hub Spot Price
Composite Wellhead Price

15
Dollars
per
thousand
10
cubic feet

0
Jan 2004 Jan 2005 Jan 2006 Jan 2007 Jan 2008 Jan 2009

Short-Term Energy Outlook, December 2008

Figure 15. Five-year price chart for natural gas (Source: EIA)

20
Source: U.S. Dept of Energy, Energy Information Administration (EIA). Available on-line at
[Link]
24
Note that residential retail prices are significantly higher than Henry Hub (wholesale) prices. The
cost of gas delivered to customers includes distribution and pipeline costs as well as metering,
taxes, and other costs from the local utility. Commercial and industrial customers typically pay
lower rates than residential customers. Table 13 shows the average natural gas rates in Kansas by
customer type through December 2008. 21 It is likely that in the near term these rates will show a
continued downtrend. The value for “electric power price” is the rate paid for gas used to
generate electricity. EIA reports the data in terms of $/Mcf. We have reported these values in
$/Mbtu to be consistent with the other units used in this report.

Table 13. Average 2008 Monthly Natural Gas Prices in Kansas, by Customer Type

Sector/ $/MMBtu Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Average
Residential Price 15.29 17.14 22.41 23.81 24.90 21.82 18.73 12.71 10.41 18.58
Commercial Price 14.57 15.71 18.61 19.11 19.32 17.54 15.15 11.64 10.06 15.75
Industrial Price 9.30 9.64 10.09 11.09 10.11 8.35 6.95 7.84 9.25 9.18

Electric Power Price 10.22 10.98 11.65 10.85 8.97 6.67 4.50 4.88 8.59

Figure 16 shows the historic price of Kansas natural gas, adjusted to 2008 dollars. Prices have
experienced significant volatility over the 36-year period. From the early 1990s until
approximately 2000, prices were near or below $4/Mbtu and relatively stable. Since the year
2000, prices had been on a steady upward trend until the fall of 2008. With the recent economic
downturn, prices have fallen significantly. On January 22, 2009, the Henry Hub natural gas price
closed at $4.72/Mbtu. Although prices have fallen precipitously over the last few months, the
long-term trend line is still upward, at least for now.

Kansas Natural gas Price in Real Dollars

$12.00

$10.00

$8.00
$/MMBtu

$6.00

$4.00

$2.00

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20

20

- A 20

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Year

Figure 16. Kansas industrial customer natural gas prices (1970-January 2009)

21
Source: EIA Natural Gas Navigator, [Link]
25
3.2.1 Regional Demand for Natural Gas
The primary providers of natural gas in the study area are Kansas Gas Service and Black Hills
Energy (formerly Aquila). Figure 17 shows the approximate service territory boundaries for the
natural gas providers in the region.

Figure 17. Gas utility service territories in the study area

NREL contacted the gas providers, who provided aggregate data on customer demand by zip
code or town/city place name. NREL staff then aggregated these data to the county level. Table
14 shows the estimated regional demand for thermal energy based on natural gas consumption.
These numbers do not account for customers heating with propane, fuel oil, or other sources such
as electricity, corn, or wood pellets. Overall, nearly 235 million therms of natural gas are
consumed each year by more than 225,000 customers in the study area. The largest county in
terms of both consumption and number of users is Sedgwick, which contains Wichita.

26
 Table 14. Regional Demand for Natural Gas by Customer Type
RESIDENTIAL COMMERCIAL INDUSTRIAL Total
County Therms # of Average Therms # of Average Therms # of Average Therms # of Users
Users Use Users Use Users Use
Barber 1,040,442 1,481 702 391,788 256 1,532 0 0 0 1,432,230 1,737
Clark 576,868 777 743 181,722 133 1,366 233,991 7 33,427 992,581 917
Comanche 457,942 626 732 266,810 128 2,089 0 0 0 724,752 753
Edwards 691,173 911 758 500,976 188 2,660 142,831 16 8,927 1,334,980 1,116
Ford 6,609,854 10,616 623 4,433,399 1,071 4,139 14,841,118 189 78,524 25,884,371 11,876
Kingman 1,354,386 1,990 680 588,138 306 1,919 180,679 5 35,543 2,123,203 2,302
Kiowa 634,912 689 922 285,830 135 2,111 408,839 37 11,050 1,329,581 861
Pawnee 1,528,536 2,029 753 529,844 256 2,069 169,351 8 21,169 2,227,731 2,293
Prattt 2,386,993 3,201 746 1,498,291 487 3,074 234,771 18 13,043 4,120,055 3,706
Reno 13,864,507 20,655 671 4,683,720 1,907 2,457 23,068,579 27 854,392 41,616,806 22,588
Sedgwick 106,217,438 162,805 652 34,022,082 12,565 2,708 11,267,245 75 150,230 151,506,766 175,445
Stafford 1,032,418 1,348 766 398,222 257 1,549 84,910 9 9,434 1,515,550 1,615
Total 136,395,468 207,128 47,780,823 17,690 50,632,314 391 234,808,605 225,209

Figure 18. Industrial natural gas usage (therms)

27
The maps showing number of users, therms per user, and total therms are shown in Appendix C
for each of the three customer segments. Looking at the map above and the maps in Appendix C,
it is clear that the largest potential customer base is in Wichita, Hutchinson, and Dodge City,
collectively, with the exception of some scattered larger facilities across the region.

3.2.2 Potential Demand for Pellets Based on Regional Natural Gas Use
Table 15 shows the tons-of-pellet equivalents if all natural gas usage in the region was converted
to pellets. Clearly pellets will not replace 100% of gas usage, although the annual consumption
of natural gas in the region is equivalent to approximately 1.6 million tons of pellets, assuming
7,000 Btu/lb for the pellets.

Table 15. Estimated Tons of Pellets Equivalent to Regional Natural Gas Consumption
RESIDENTIAL COMMERCIAL INDUSTRIAL Total
County Tons # of Average Tons # of Average Tons # of Average Tons # of Users
Users Use Users Use Users Use
Barber 7,432 1,481 5.02 2,798 256 10.95 0 0 10,230 1,737
Clark 4,120 777 5.30 1,298 133 9.76 1,671 7 238.77 7,090 917
Comanche 3,271 626 5.23 1,906 128 14.92 0 0 5,177 753
Edwards 4,937 911 5.42 3,578 188 19.00 1,020 16 63.76 9,536 1,116
Ford 47,213 10,616 4.45 31,667 1,071 29.56 106,008 189 560.89 184,888 11,876
Kingman 9,674 1,990 4.86 4,201 306 13.71 1,291 5 253.88 15,166 2,302
Kiowa 4,535 689 6.59 2,042 135 15.08 2,920 37 78.93 9,497 861
Pawnee 10,918 2,029 5.38 3,785 256 14.78 1,210 8 151.21 15,912 2,293
Prattt 17,050 3,201 5.33 10,702 487 21.96 1,677 18 93.16 29,429 3,706
Reno 99,032 20,655 4.79 33,455 1,907 17.55 164,776 27 6,102.80 297,263 22,588
Sedgwick 758,696 162,805 4.66 243,015 12,565 19.34 80,480 75 1,073.07 1,082,191 175,445
Stafford 7,374 1,348 5.47 2,844 257 11.06 606 9 67.39 10,825 1,615
Total 974,253 207,128 341,292 17,690 361,659 391 1,677,204 225,209

The data in Table 14 and Table 15 show that Ford, Reno, and Sedgwick counties are by far the
largest consumers of natural gas in the region. The best opportunities to identify potential users
of biomass pellets will be within the consumer and industrial sectors. Totaling the pellet potential
across these two sectors, we get approximately 700,000 tons maximum potential per year.
Assuming pellets can capture 5% of this market, we get a total of approximately 35,000 tons per
year potential in the local market place. This is not to suggest that the market in the area is
limited to 35,000 tons. It may be possible to identify several larger potential customers that could
consume more than 35,000 tons at a single facility. These large potential users should be
contacted directly to discuss their possible interest in biomass pellets. It is also possible to
develop markets outside of the local area, especially if pellets can be loaded onto rail cars at the
plant.

The residential sector may have some interest in biomass pellets as well, but consumers must be
made aware that they will need to purchase an appliance that can handle the higher-ash pellets.

Entrepreneurs interested in starting a pellet facility should be prepared spend signification

amounts of time educating potential end users and developing the market prior to constructing
the facility. One of the biggest challenges of building a facility to make ag pellets is that there are
no existing customers. This is the proverbial “chicken and egg” problem — end users will only
be willing to invest in the conversion technologies to burn pellets if there is a reliable, affordable,
high quality product available, and the builders of a pellet mill must have a reliable, credit-
worthy customer base to ensure that the product they make can be sold. Under current market
conditions, there are not many compelling reasons to be an early adopter.

28
3.3 Potential Customers
There are no real incentives or rewards for customers to implement biomass heating at this time.
Most consumers will make a decision on which fuel to use based on price and convenience. If
natural gas is the most convenient reliable, lowest cost, and cleanest burning fuel, then that is a
clear market advantage. Consumers may be willing to switch to biomass, but they will want a
price concession to offset on-site fuel handling, ash disposal, appliance costs, and increased labor
costs.

However, American consumers have short memories, and they tend to grow complacent when
fossil fuel prices are low. When natural gas prices start creeping up again, or when some kind of
carbon accounting mechanism is implemented, interest in the biomass concept will once more
develop. Project proponents should be spending this time educating the market and developing
the groundwork for potential projects that can move forward rapidly when market conditions
change. Proponents should also be spending time developing fuel supply contracts.

Appendix D contains a listing of the largest potential customers we could identify in the study
area. The list is certainly not all-inclusive because we did not perform a thorough search,
especially in the Wichita area. We attempted to obtain a state-wide database of boilers, available
from the Kansas Department of Labor, but received only an Adobe PDF copy of a directory,
sorted alphabetically by company name for the entire state. The data could not be sorted or
manipulated in any way. After repeated attempts to obtain the data behind the PDF, we gave up
and did not use the list.

3.3.1 Potential Large Industrial Customers

One of the things that would make life easier for a potential pellet plant developer is to identify
potential large commercial or industrial customers who may be interested in switching from their
current heating technology to ag pellets. The residential sector is also a possible market outlet as
long as the consumer has a stove that can handle the fuel characteristics of the pellets being
produced. It will take perseverance and staying power for project proponents to educate and
develop a customer base in the region.

A successful large-scale, biomass fuel production facility in the Greensburg/Pratt area would
likely need long-term supply contracts with consumers in order to obtain financing. Two
industrial plants in the area meet the criteria for significant year-round use: Orion Ethanol in
Pratt and National Gypsum in Medicine Lodge. The Pratt ethanol plant is not operating at this
writing but presumably could be reactivated when more favorable business conditions return.

The National Gypsum drywall manufacturing plant in Medicine Lodge, Kansas, could also
utilize biomass fuel. The plant currently consumes about 900,000 Mbtu per year of natural gas in
its dryers. Offsetting 75% of this load would require on the order of 45,000 tons of biomass
pellets (or 50,000 tons of 25% moisture content cedar chips) per year. As of February 2009,
National Gypsum Manager Jim Ruggerio is interested in exploring the economics of switching
from gas to biomass. 22 He envisions adding biomass-fired dryers to supplement the existing gas
burners and prefers a compacted fuel to alleviate large quantities of baled biomass on the plant
site.

Mr. Ruggerio stated that biomass costs must compete with natural gas. National Gypsum
currently purchases natural gas for the NYMEX price, plus about 45 cents for delivery. The
delivered cost of gas is presently about $5.00/Mbtu, although this price fluctuates daily. We do
22
Personal communication with Chris Gaul of NREL, August 2008, February 2009.

29
not believe that biomass pellets can be delivered to National Gypsum for $5 per million. If 1 ton
of biomass pellets has 15 Mbtu, then the delivered cost would need to be $75 per ton to meet
$5/Mbtu gas. About the only biomass that comes close to meeting this cost is cedar chips.

It is interesting to consider emissions of carbon dioxide. Consumption of 675,000 Mbtu/yr of

natural gas (75% of National Gypsum’s consumption) emits 39,500 tons of CO2/yr. Since
biomass is considered CO2 neutral, conversion to biomass could potentially make available
carbon credits for National Gypsum under a cap and trade system. Some of these credits may
need to be given to the biomass supply company to offset the emissions of the biomass pellet
operation (from field to customer). NREL has not calculated the total life-cycle cost of biomass
pelletization. Alternatively, the price of natural gas would go up by approximately $1.20/Mbtu if
CO2 is taxed at $20 per ton. This would make biomass pellets more attractive to the plant.

National Gypsum and interested entrepreneurs should explore the economics in greater detail and
monitor market conditions. A customer of this size would allow for a pellet mill in the region
large enough to take advantage of economies of scale associated with equipment sizing and
reduced processing costs. Pellets or briquettes could be truck shipped to Medicine Lodge, which
is 30 miles from Pratt and 60 miles from Greensburg.

Other large industrial customers would include meat packing and other agricultural processing
facilities in Dodge City, and many potential users in Wichita. (See Appendix D for a partial list.)
No other potential large customers were contacted in this study.

3.3.2 Other Potential Customers

Other potential biomass end-users include schools and universities, large agricultural operations,
federal facilities (which are required to install renewable energy systems and reduce fossil fuel
usage), hospitals, state and local government buildings, industrial parks, and large commercial
users (e.g. Boeing in Wichita). Appendix D shows a partial list of these customers.

In addition, as Greensburg constructs new infrastructure, we strongly suggest that biomass be

evaluated as a heating technology. For example, the new municipal buildings and hospital could
easily be heated with biomass pellet technology.

3.4 Competitor Analysis

Currently, there are not any other biomass pelletization companies in the local area, so direct
competition is limited. There are, however, at least two agricultural pellet manufacturers located
within a few hundred miles of Pratt/Greensburg.

SMEC, in Centerview, Missouri, organized a cooperative to collect and pelletize agricultural

residues. SMEC, which is 340 miles from Greensburg and 236 miles from Wichita, was one of,
if not the first, large-scale pelletizer of ag residues for the thermal energy market. Early adopters
experience a steeper learning curve. SMEC has had various production and market-development
issues to overcome, including improperly sized motors for the local electrical system. Currently,
they are producing 30,000 tons per year rather than the planned 60,000 tons. SMEC uses a 50-50
blend of ag residues (currently old hay) and wood (pine and/or oak). As documented in Section
2, we tested samples of their pellets and found them to have an energy content of about 7,059
Btu/lb, 9% ash, and 1.44 lbs alkali/Mbtu. The current selling price FOB at the plant in
Centerview is $130 per ton, or about $9/Mbtu. The plant is also selling undensified biomass—
essentially ground up straw or hay—to a coal-fired power plant located about 50 miles away.
The coal plant is also purchasing pellets and, presumably, is comparing the performance of the
densified versus undensified form.
30
The developers of this plant have expressed interest in helping others who want to start similar
plants, either as a partner in a new facility or through provision of consulting services.

Prairie Fire Bioenergy Cooperative in Healy, Kansas, also has a new pellet operation. At
present, they are producing about 26,000 tons per year. They describe their raw material as
“agrifiber material (crop wastes like straw and stalks, perennial native grasses, weeds and ditch
grass, wood wastes, paper and cardboard)…blended, chopped, dried and milled.” Production
capacity is claimed to be seven to eight tons per hour. Prairie Fire is presently making a blend of
85% wood and 15% ag residue. They are bagging their product and selling it into the residential
pellet market, meeting the Standard Grade of the Pellet Fuels Institute (less than 3% ash). The
product is being sold in eight locations in Kansas, including Dodge City and Scott City on the
west, and as far east as Manhattan.

Prairie Fire’s original business model was based on finding a heavy industrial user and replacing
gas and/or coal. Densification was used only to get trucks fully loaded to 23 tons so pellets
could be shipped to the SMEC plant in Centerview, Missouri. From there, agricultural residue
pellets would go by rail to a seaport and be shipped to Europe. This scheme collapsed with the
2008 recession.

Prairie Fire also proposed to a nearby ethanol plant the retrofit a Uniconfort biomass-fueled
gasifier to provide steam (provided by AES/Wichita Boilers). Prairie Fire proposed that they
would finance, install, and own the boiler, and sell steam at the equivalent price of $6.25/Mbtu
natural gas price in a typical Energy Service Performance Contract arrangement. Prairie Fire
told NREL that the ethanol plant was not interested in using biomass fuel, even when natural gas
was more than $8/Mbtu. Prairie Fire could have readily provided 80,000 tons per year for the
ethanol plant.

Finally, Prairie Fire switched its emphasis to producing fuel meeting Pellet Fuel Institute
Standard Grade specifications. Their pellet contains 15% agricultural residues (85% wood) to
meet the >3% ash requirement of the institute. With this restriction, the plant can produce 26,000
tons per year. On agricultural residues alone, their annual output could be 50,000 tons.

Ozark Hardwood Products is a wood pellet manufacturer located in Seymour, Missouri. Ozark
is the closest wood pellet manufacturer to potential end users in the study area. Ozark hardwoods
is presently selling high Btu (> 8,000 Btu/lb), low ash (<1 %) oak pellets (as of December 2008)
for $130 per ton FOB Missouri. Ozark provided an estimated delivery cost to Greensburg of $55
per ton using bulk delivery (not bagged). As shown earlier in Table 12, biomass pellets at $160
per ton would be only $0.60 per Mbtu cheaper than Ozark’s pellets at $185 per ton. It is not
likely that end users would be willing to deal with a higher ash biomass pellet which requires a
high-ash appliance if premium pellets (which can be burned in any pellet or corn burning
appliance on the market) are available for only $0.60/Mbtu more.

Ozark Hardwoods has also begun offering a new service whereby they sell a pre-packaged pellet
boiler/storage system that is assembled in a shipping container and shipped to the customer site,
where it is then connected to existing equipment. Ozark provides the end-user with the boiler and
bulk pellets. The end-user must sign a long term contract with Ozark for supply of pellets.

Abengoa Ethanol Plant. As of the summer of 2008, Abengoa was proceeding with plans to
build a combination corn ethanol/cellulosic ethanol plant in Hugoton, Kansas, which is 130 miles
from Greensburg. Current plans call for production of 88 million gallons of ethanol per year
from approximately 32 million bushels of corn. The plant will also produce 12 million gallons
31
per year of ethanol from cellulosic biomass, requiring over 490,000 “as is” tons of feedstock per
year. Abengoa states that they will require 10%-12% of the biomass within a 50 mile radius of
Hugoton. With this plant being 130 miles away from Greensburg, we do not see it as being a
competitor for feedstocks in the Pratt or Greensburg area. Of particular interest with this facility
is their plan for biomass procurement. Summary information on the plan is provided below:

• Producers obtain a contract signing bonus of $1 per acre for signing up as a supplier.
• Abengoa pays an annual reservation payment to each producer of $0.50 per acre. This is
paid to the supplier every year even if Abengoa does not need the biomass from that
supplier.
• Nutrients (P and K) returned to producers (residues from ethanol plant are high in P and
K). Producers will be given coupons to replace the N removed in the harvested feedstock.
• Base payment
o Abengoa pays a single negotiated per ton price to every supplier in its network.
o Abengoa equipment and labor collect the biomass (or use contract harvester).
• Revenue sharing payment (optional)
o Producer accepts lower base payment for some biomass and takes share of ethanol plant
profit.

3.5 Are Pellets The Best Solution as an Alternative to Fossil Fuels?

So far, this chapter has focused on potential opportunities for pellets to act as a substitute for
fossil fuels, primarily natural gas. To date, the U.S. pellet market has been dominated by
premium wood pellets sold to the residential sector. Small commercial applications are
beginning to come on line but have not yet taken off in a meaningful way.

As Campbell discusses in his report, for the industrial, institutional, and utility sectors, it would
be instructive to consider whether biomass pellets are a superior solution (rather than a viable
product). After all, pelletizing biomass requires equipment, energy, and labor. One should incur
the costs to pelletize biomass if pelletizing appears to be the only solution or the most cost
effective solution to a problem or challenge. For the large industrial customer, this is not always
the case. 23

Pellets have some excellent characteristics, including consistency of shape, density, moisture
content, and energy value; and pellets can be blended and pulverized with coal, unlike some
other biomass forms. Pellets can also be stored vertically in silos and thus do not require bulk
storage of bales or large wood chip bunkers. Because the fuel is uniform and low moisture, the
boiler or appliances can be significantly smaller (hence, lower capital costs) when compared to
bulk fossil fuels. However, pellets can disintegrate in mechanical handling systems, they are
more expensive than bulk biomass, and they lose functionality when they absorb moisture.

Campbell documents that in the past decade, there have been numerous opportunities to choose
the solution of pelletizing biomass for large-scale biomass projects in the upper Midwest, but
pelletizing was not selected:

• For the Chariton Valley switchgrass/coal co-firing project, the fuel processing solution is to
deliver bales of switchgrass to a processing facility adjoining the Ottumwa Generating

23
The bulk of the discussion in this section comes from Campbell’s report.

32
 Station. The bales are shredded, and the switchgrass is blown into the boiler. This is a
sufficient processing solution to convert farmers large round bales of switchgrass into boiler
fuel.
• The Fibrominn power plant in Benson, Minnesota has arrangements for turkey litter to be
shipped from western Wisconsin, a distance of more than 200 miles. This solution does not
entail pelleting the turkey litter to improve its hauling and handling characteristics.
• The University of Minnesota is receiving large quantities of oat hulls at its Twin Cities
campus for co-firing with coal in the Southeast Steam Plant. Oat hulls do not have ideal
physical characteristics, but there is no need to incur the expense of pelleting the oat hulls for
transportation, storage, or blending.
• When the St. Paul cogeneration facility had quality control problems with its wood supply,
its solution was not to contract for pellets. Instead, an off-site receiving and processing
station with grinding and screening equipment was developed to ensure that wood delivered
to the cogeneration plant meets fuel specifications.
• At the University of Minnesota, Morris, a biomass gasification facility is under construction.
The primary fuel is intended to be corn stover. To date, the project team has apparently not
anticipated a problem for which pelleting the corn stover is the only solution or the most
cost-effective solution.
Biomass pellets would work in all of these facilities, but pellets simply aren’t necessary. For
these facilities, pelletizing the biomass would be over-processing; it would not make economic
sense to pay for the added costs when all they need is grinding and/or drying to make the
combustion or gasification process work.

The examples above are relatively large-scale. It could be that the economics and physical
possibilities are different for smaller-scale industrial, institutional, and utility plants, especially
those located in areas with restricted space. For them, buying, storing, and using pellets may be a
more cost-effective solution. To date, however, there does not seem to be a market for biomass
pellets to fuel heating and power systems in these large sectors. Thus, the viability of this
solution is not evident in the United States, although it should be mentioned that Europe has
implemented many large-scale pellet heating systems. The present economic and political
policies in Europe are driving the markets in those countries.

3.6 Summary of Market Potential

For a compressed agricultural residue product to be commercially viable, it has to have a cost
advantage over more convenient and widely available fuels. This includes wood pellets as well
as fossil fuels. The Pellet Fuel Institute has established wood pellet specifications to assure
consumers and heating equipment manufacturers of a consistent product. Thus wood pellets are
truly a commodity product. A lower-cost producer can ship farther and thus compete with
smaller, higher-production cost pellet mills, even in the smaller mill’s own back yard.
Agricultural residue pellets are generally lower grade than wood pellets. If agricultural residue
pellets are available in the same market as wood pellets they would have to sell at a lower price
to compete with both wood pellets and natural gas. Biomass pellets are likely to compete very
favorably with propane, fuel oil, commercial natural gas rates, and electricity, but so will wood
pellets.

Any entrepreneur who seeks to develop a biomass pelletization facility in the Greensburg/Pratt
region should be prepared to spend considerable time and effort to educate potential consumers
and develop the market.
33
 4. Densification Plants—Process Flows and Equipment
This section draws heavily from “A Feasibility Study Guide for an Agricultural Biomass Pellet
Company” by Ken Campbell, produced under contract for Agricultural Utilization Research
Institute by Cooperative Development Services of Madison, Wisconsin and Campbell Consulting
LLC, of Shoreview, Minnesota.

A biomass or wood pellet plant has a receiving area, unload facilities, a tub grinder to reduce
wood or baled biomass into smaller particles, and equipment for drying, extruding, cooling, and
packaging. The plant will have a storage area for pellet production to continue in the slow
summer season. Pellet plants are capital intensive, producing a low-value commodity product.
Pellets must compete against fossil fuel on a cost basis. This will be the case until a carbon tax,
renewable energy standard, or some other financial incentive exists to use pellets.

4.1 Feedstock Consistency

It is important to note that feedstock consistency is an important aspect of the pellet
manufacturing process. Inconsistencies can be experienced in supply and quality. Inconsistencies
in supply of the raw material will cause inefficiencies in plant productivity, which in turn will
cause operating costs to be higher because processing equipment is designed to operate at full
capacity.

Variations in feedstock quality will have a detrimental effect on final product quality. A
premium quality wood pellet, as defined by the Pellet Fuels Institute, states that ash content must
be below 1%. With wood biomass, the highest source of ash is bark; therefore, woody biomass is
typically debarked prior to processing. In residential or commercial use, burning pellets that have
high ash content results in increased maintenance because of the need to remove excess ash.
Therefore, high ash pellets currently are not used extensively.

It is also possible for “tramp” or foreign material to be present in the feedstock. Tramp material
can include stones, glass, metal, dirt, and other contaminants. Multiple magnets should be
inserted before the hammermill or dryer. It is important for all tramp material to be removed
prior to the raw material being introduced to the processing equipment. Tramp material that is
present while in the processing equipment can significantly reduce the expected lifetime of
consumable components (i.e., hammermill screens, pellet mill dies, etc.).

4.2 Compressed Biomass Forms

Pellets that are ¼ in. or 5/16 in. in diameter are the most costly compressed biomass form. It
appears from the literature that the term briquette can be applied to any compressed biomass
form larger than a pellet. Typically, briquettes are square or rectangular and can range in size
from that of the typical backyard-barbeque fuel to the size of a building brick. Bripells are the
same shape as pellets but are 1-1/2 in. in diameter. They are so named because they are between
briquettes and pellets in size.

Pellets are a refined product and require the most expensive processing. The higher fuel cost is
offset by the convenience of fuel burning equipment that can be automated and needs minimal
attention when compared to bulk biomass systems. This is important when competing against
almost zero-maintenance natural gas, propane, or electric heat. Larger compressed agricultural-
residue fuel forms require less energy input and can have simpler production methods.

34
Equipment ranges from industrial sized that makes many tons per hour to trailer-mounted
machines towable by a pickup that produce 600 pounds per hour.

With briquettes the supplier will want to provide a quality-consistent product, but that product is
not competing head-to-head with wood pellets. When moving from pellets to briquettes, a solid
fuel manufacturer leaves the pellet fuel commodity market. Briquette manufacturing is reported
to have lower capital costs and lower manufacturing costs when compared with pellets. There are
several manufacturers with products on the market. We obtained information from A3 Energy
Partners of Oregon, which is a U.S. distributor for the RUF briquetting machine (from
Germany). Renew Energy Systems of Osage, Iowa, represents a different machine (CF Nielsen
from Denmark).

Information from Bioenergy Investments LLC on bripell production claims a $6 per ton cost
advantage on electricity input as compared to pellets. Their production equipment uses fines
from biomass processing to fuel the dryer. Using data from Campbell, this saves another $4 per
ton on natural gas. Bioenergy Investments LLC sold a bripell plant in August 2008 to Raceland
Raw Sugar in Louisiana to compress bagasse. Equipment and spare parts for the 75 ton per day
plant was $950,000. Production is scalable by adding additional bripell machines while utilizing
common raw and finished material handling equipment.

4.3 Pellet Manufacturing

4.3.1 Costs of Production and Economies of Scale
Pellet mill technology has evolved from pelletization of various agricultural crops. The
technology is mature, there are vendors with many years of operating experience, and plant
operations are well understood. Figure 19 shows a general layout for a wood pellet mill.

While the proposed project for this study is a combination of wood and agricultural residues, the
general layout, equipment and process flows will be the same. The wood-pellet mill business is
dominated by three firms: California Pellet Mills, Bliss Industries, and Andritz-Sprout.
Numerous smaller manufacturers are also available. In addition, there is used and refurbished
equipment on the market.

The general process is as follows. 24 Raw material is brought to the pellet manufacturing facility,
where it is then fed into a hammermill and reduced in size, if necessary. The raw material is then
dried before being processed in the pellet mill. The finished pellets are then cooled and packaged
(if selling into the retail market), then shipped out or moved to storage, where they await
delivery.

If initial raw material sizes are uniform and small (generally less than ¾ in.), then it may make
sense to run the material through a dryer prior to hammermilling, because the small particle size
will allow for complete drying and hammermilling dry feedstock takes less energy and leads to
less wear and tear on the hammermill when compared to wetter feedstock.

24
Most of the material in this section was adapted from personal communications provided by Jack Whittier of
CH2MHill.

35
 Figure 19. General pellet mill layout
The following contains a general discussion of the equipment needed for a pellet mill.

Front-end Loader or Forklift. A front-end loader or forklift (in the case of bales) is used to
move raw material from the main feedstock storage area into the processing stream. Forklifts are
also used after bagging to stack bagged pellets on pallets. A forklift is used to transport the
palleted fuel to storage and to assist in loading and unloading.

Primary Grinder (not shown in figure). The primary grinder reduces raw material into 1-1/2
in. to 2 in. x 1/4 in. chips (approximately the size of a matchbook). A primary grinder can be
either a chipper, large hammermill, tub mill, or “hog.” The material is then able to be processed
by a hammermill and dryer. Bales of ag residues will need to be ground prior to additional
processing.

Conveyors. Screw conveyors, air conveyors, cyclones, and high-speed elevators are used to
transport raw materials in the pellet plant. Belt conveyors, chain drags, and low-speed elevators
are used to transport pellets because pellets are more fragile than the raw material.

Dryer and Burner Assembly. A dryer is usually a rotary drum with an attached burner that
blows heated air through the tumbling raw material. The drum is designed as either a one-pass
(once through) or three-pass system. If the raw material is wet, drying is necessary. If the
moisture content of the incoming biomass is less than 10% to 15%, no dryer is needed. Moisture
content is reduced to approximately 8% to 10% in the dryer. Dryers can run on fossil fuels or
biomass. If running on biomass, it is important to budget for the raw material needed to supply

36
the dryer. A commonly used assumption based on operational experience is that 15% of the raw
material will be used by the burner in the drying process. 25 Therefore, a 50,000-ton-per-year
pellet mill (output) would require an additional 9,000 tons per year for dryer fuel.

Feed Hopper. A feed hopper is used to feed material to the hammermill using a screw conveyor.

Hammermill. A hammermill reduces the particle size to 1/8 in. nominal size or less. This
particle size allows the downstream pellet mill to operate efficiently and to produce a more
presentable and durable pellet. In this process, a large amount of stress is placed on the screens,
which have a limited life and must be replaced regularly.

Conditioner. A boiler or hot water heater is often used to create steam that lubricates and heats
the fiber to make it easier for the material to pass through the pellet mill die. The heat also
softens the lignin in the feedstock so the pellet binds better and further lubricates the die.
Because the cost of a boiler is excessive for smaller installations, a hot water heater can also be
used although it is not as effective.

Feed Hopper. A bin or hopper must be placed directly before the pellet mill to ensure a steady
flow of material for the pellet mill’s feed screw. The pellet mill will not work properly unless its
feed rate can be controlled independently from the rest of the plant. Since biomass does not feed
well in ground form, it is important to have this bin furnished with a screw auger to keep the
material flowing. The screw in the bottom of this bin should be driven by a variable speed drive
that controls the feed rate of the pellet mill.

Pellet Mill. During the pellet process, the biomass is pressed through a rotating or stationary die
with holes the same diameter as the desired pellet. For typical pellets, the size is 1/4 in. or 5/16in.
The pellets are cut off after exiting the die by knives or by centrifugal force to a length of not
more than approximately 1 inch. At this point, the pellets are hot (190 to 220°F) and fragile
because to the moisture from steam and/or water added by the conditioner. The densification rate
of the finished product should be 40 to 44 pounds per cubic foot of volume, or more than twice
the density of the incoming material. A great deal of stress is placed on the die in the pellet mill;
therefore dies must be replaced regularly.

Pellet Cooler. The temperature of the hot pellets must be reduced in order to harden and
strengthen the pellets prior to bagging. Cooling also stabilizes the pellet moisture levels and
prevents “sweating” in the bag when the pellets are stored. The pellet cooler does this by
drawing ambient air through the pellets as they pass through the holding compartment of the
machine. The counter-flow cooler, which uses evaporative and convective cooling techniques, is
most widely used for this application.

Pellet Shaker. The pellet shaker or screening device separates whole pellets from broken pellets
and fines that are created in the manufacturing process. Excessive fines can cause problems in
pellet stoves and create dust as the bag of pellets is emptied, therefore fines should not be
bagged. Fines are returned to surge bins and are either used as fuel for the dryer or reintroduced
in the process line.

Bagging Bin and Bagger. A bagging system is either automatic or manual. An automatic
bagging system represents a significant capital cost; on the other hand, it mitigates the labor costs
associated with manual bagging. In both processes, the finished pellets are moved to a surge bin

25
Google video. [Link]

37
prior to bagging. A metering device ensures the proper amount of pellets is being placed in each
bag, which should contain 40 pounds of pellets. A bagger is needed only if selling to the
residential market.

Buildings. Typically, most of the processing machinery will need to be housed in a building. The
building should also be used for storage of the finished pellets.

Fire Suppression System. For drying and grinding systems, some plants add fire suppression
systems, an electronic spark detection and suppression system that helps control costly fires and
subsequent down time. The benefits of adding this type of equipment vary widely and are
dictated by the cleanliness of the raw material (e.g., stones, metal, etc.). Often times the
installation of fire suppression equipment is required by law and will result in lower annual
insurance premiums.

Cyclone. A cyclone is used in the dust separation process. The fine particles can either be
removed from the system or used as fuel for the burner.

4.3.1 Capital Costs Estimates

This section provides general information on the approximate costs of setting up a pellet mill in
the study area. It is important to note that these costs are only estimates and do not represent a
project budget. They are intended to give the entrepreneur an idea of the amount of capital
required to start and operate a plant.

Based on the feedstock in the region, we estimate the costs for setting up a 4 dry ton per hour
(dtph) pellet mill. This number is derived as follows. A pellet mill will operate year round, 16
hours a day for 6 days per week, 50 weeks per year. This is equivalent to 4,800 operating hours
per year, or production of 19,200 dtph. We feel this is the minimum size of plant that one could
build and still hope to be economically viable. Assuming that 15% of the feedstock input will
need to be used to fuel the dryer, and that 15% will be lost in processing, approximately 26,500
dtpy will be needed to feed the plant. Depending upon the moisture content, this equates to raw
feedstock requirements of 35,000 to 52,000 tons per year. In general terms, this is a small pellet
mill, and larger mills will have better economies of scale. Moving to a third shift and running 7
days a week would increase the production of this plant to 33,000 tons per year.

Assuming a cedar resource of 12,500 bdt/yr, this means an additional 14,000 bdt/yr of ag
residues will need to be procured for the plant. This total feedstock requirement seems to be in
line with the feedstock constraints in the region (e.g., that there are only 12,500 bdt/yr of cedar
available and that the target blend would be a minimum of 50-50 wood/ag). The pellets from this
plant would be approximately 50% wood and 50% ag residues, assuming that ag residues can be
used to fuel the dryer. Remember that SMEC is a 50-50 wood/ag blend, and Prairie Fire is an 85-
15 wood/ag blend.

Based on data from Campbell 26, a 4 ton per hour pellet mill will not be as cost effective as a
larger plant. In fact, Campbell finds that the costs of building larger plants do not increase
linearly (e.g., the cost of an 8 dtph mill is only about 50% higher than the cost of a 4 dtph mill).
Campbell goes into great detail on the estimated capital costs of various sized pellet mills (see
chapter 13 of Campbell’s report for more detailed information).

26
Ken Campbell. A Feasibility Study for an Agricultural Biomass Pellet Company. Agricultural Utilization
Research Institute. November 2007, pg. 84.

38
As Campbell stresses, the cost estimates in his report are just that—estimates—and they should
not be used as a basis for financial decisions. The same can be said for this report. Any
entrepreneur seeking to build a pellet mill in the region should obtain detailed, site-specific cost
estimates from reliable equipment suppliers. Campbell only considers new equipment and does
not look into used or refurbished equipment. While refurbished equipment may have lower up-
front costs, the warranties and performance are not likely to be as good as that of new equipment.
Any pellet mill developer will need to weigh the pros and cons of new versus used equipment for
his or her particular case.

Table 16 shows Campbell’s cost estimates for various sized pellet mills. The 2-ton-per-hour mill
is a “farm-scale” operation that only produces about 4,000 tons of pellets per year. This is a bare
bones plant that we feel is really not a suitable model for a commercial enterprise, because the
costs of production will be quite high on a per-ton basis and the market outlets will be limited.
We believe that a 4-ton-per-hour plant is the smallest plant one would build if trying to develop a
viable commercial business.

As can be seen in the table, the installed cost (per ton of manufacturing capacity) decreases as the
plant gets larger. This supports the case for building the largest plant that the local biomass
resource will support. A 4 ton per hour plant will cost approximately $5.5 million to construct,
not including financing charges. Campbell provides two separate estimates for a 14 ton per hour
plant.

39
 Table 16. Capital Cost Estimates for Various Sized Pellet Mills (Campbell, 2007)

4.3.2 Costs of Production

This section provides a general estimate for the cost of making pellets for a 3 dtph pellet mill
(approximately 24,000 tons per year capacity). Much of the data from this section are taken from
a presentation given by Jack Whittier at a biomass energy utilization course held at Colorado

40
State University in 2007. 27 Mr. Whittier presented the results of a detailed economic analysis for
a hypothetical pellet plant sized at either 1 or 3 dtph. The 1 dtph plant was found to be too small
to be economically feasible.

Table 17 shows the estimated labor requirements for the plant. Total labor requirements are 15
full time employee equivalents (FTEs) with an annual payroll of $473,000. The operations
manager charges only 50% of his time to this plant and is engaged in other activities the
remaining 50% of the time.

Table 17. Estimated Labor Costs of Pellet Manufacturing ($/ton)

Classification Rate Number Labor Charge Benefits @35% Payroll
Operations Mgr. $ 50,000 0.5 $ 25,000 $ 8,750 $ 33,750
Operators $ 30,000 4 $ 120,000 $ 42,000 $ 162,000
Fuel Handling $ 30,000 3 $ 90,000 $ 31,500 $ 121,500
Maintenance $ 28,000 3 $ 84,000 $ 29,400 $ 113,400
Baggers $ 28,000 3 $ 84,000 $ 29,400 $ 113,400
Sales & Marketing $ 60,000 1 $ 60,000 $ 21,000 $ 81,000
Administration $ 20,000 0.5 $ 10,000 $ 3,500 $ 13,500
Total 15 $ 473,000 $ 165,550 $ 638,550

Table 18 shows the estimated power requirement for the mill. These numbers were used to
determine the costs of electricity for the plant. The total power demand for the 3 tph machine
(dtph) is estimated to be 773 kW.

Table 18. Estimated Electrical Requirements for a 24,000-Ton-Per-Year Pellet Mill

Machine 3 tph 1 tph
Raw Material Feeders 10 10
Conveyor system
Transfer conveyor (recapture to screen) 5 5
Drag conveyor (from dryer to hammermill) 1 1
Bucket elevator (from hammermill to pellet mill) 3 3
Bagger Conveyor 1 1
Screen
Screw 2 2
Rotary dryer 350
Hammermill 150 75
Wood chipper 40
Live Bottom/Mixing Surge Bin 10 10
Pellet Mill, (2 motors @ 200 hp for 3 tph) 400 100
Pellet Cooler 15 15
Bagging system 50
Total Horsepower 1,037 222
Total Power (kW) 773 166

Table 19 shows the total estimated manufacturing costs for pellets. Note that feedstock costs are
listed at $25.70 per dry ton. The estimate we are using for this study is $65 per dry ton, so the
costs are estimated to be $40 per ton higher, or $159 per ton. Assuming 15 Mbtu/ton for a
wood/ag residue blend, this is equivalent to a cost of $10.60/Mbtu. Also note that the estimate of

27
Whittier, Jack. Presentation entitled “United States Pellet Systems: A Business Plan” May 2007.

41
$159 includes $24.30 for bagging. Removing the bagging operation would reduce the production
costs to approximately $135 per ton, or $8.93/Mbtu for wood/ag pellets. If the pellets are 100%
cedar, the cost would be approximately $8.44/Mbtu.

Table 19. Estimated Manufacturing Costs of Pellets ($/ton)

Expense Category Total $ $/ton

Payroll $ 638,550 $ 30.37
Feedstock cost $ 540,317 $ 25.70
Packaging $ 510,924 $ 24.30
Utilities $ 325,645 $ 15.49
Debt repayment $ 212,178 $ 10.09
Front-end loader operation $ 109,601 $ 5.21
Advertising and sales $ 77,100 $ 3.67
Dyes and rollers $ 41,120 $ 1.96
Dryer fuel $ 25,052 $ 1.19
Repairs and maintenance $ 10,280 $ 0.49
Insurance $ 2,570 $ 0.12
Legal $ 2,570 $ 0.12
Total $ 2,495,907 $ 118.72

4.3.2 Economies of Scale

The larger the plant, the lower the per-ton costs will be. As shown in Figure 20, Campbell found
a 14-ton-per-hour pellet mill to have the lowest production costs and hence the best chances of
business success. In his study, each individual piece of process equipment was matched in
capacity, i.e., a 14-ton-per-hour grinder, dryer, pellet mill, etc. The costs shown do not include
feedstock costs, and the units are in metric tonnes, not short tons (one metric tonne = 1.1 short
ton).

In the chart, Campbell shows that a 3-ton- per-hour plant (approximately 24,000 tons per year)
has a manufacturing cost of $60 per metric tonne, which is equal to a manufacturing cost of $55
per short ton. Adding in feedstock collection costs of $65 per ton brings the estimated production
costs to $120 per ton. This does not include any profit for the plant owner, or loading, shipping
and unloading costs associated with moving the product to the final customer’s site. Any
assumptions Campbell made in developing the estimates for operating and capital costs are not
known.

42
 Figure 20. Production costs versus plant capacity (source: Campbell)
4.3.2 Summary of Pellet Economics
We estimate that the capital cost for a 24,000-ton-per-year pellet mill will be approximately $5.5
million if new equipment is used. The cost can likely be reduced considerably if high-quality
used equipment is used instead. Estimated production costs will be between $120 to $160 per
ton.

4.4 Briquetting
Briquetting is an alternative densification process of possible interest in the Greensburg region.
The briquetting process and the flow of materials are demonstrated in an online video on
YouTube™. 28 Two recent articles in Biomass Magazine (April 2008; November 2008) discuss
the briquetting process and two different machines. 29, 30 Briquette production requires less
energy, labor, and maintenance than does pellet production. Briquette machines use a high-
pressure mechanical press, a screw auger, or an extrusion process similar to pellet making. A
number of manufacturers offer briquette machines. 31 Briquettes can be either square or round
(see Figure 21).

28
[Link]
29
Ebert, Jessica. “The Beauty of Biomass Briquettes,” Biomass Magazine, April, 2008.
[Link]
30
Schmidt, Suzanne H. “Betting on Biobriks,” Biomass Magazine, November, 2008.
[Link]
31
Manufactures include RUF and CF Nielsen. There are several US distributors for these machines.

43
 Figure 21. Sample briquettes
4.4.1 Costs
We received a detailed pro forma and capital-cost estimate for a 24,000-ton-per-year briquetting
line from A3 Energy Partners of Portland, Oregon. 32 A3 did not want us to include their pro
forma in this report because they consider it to be proprietary; however, they did say that we
could summarize the results.

The estimated greenfield cost of developing a 25,000-ton-per–year, turn-key briquette plant is

$4.75 million. This includes all civil/structural work, a dryer, all feedstock handling and
briquette processing equipment, a bagger, engineering and design, electrical and mechanical
hook-up, indirect costs (engineering, construction management, controls, testing) freight,
contingency, and a spare parts allowance. The plant is assumed to operate 23 hours a day, 6 days
a week, producing 3.6 tons per hour of briquettes (84 tons per day, 25,000 tons per year).

The A3 cost estimate for manufacturing these briquettes includes biomass at $65/bdt; plastic
packaging; salaries and benefits; utilities; repairs; delivery; facility lease; legal fees; and
insurance, general, and administrative costs. NREL added the cost of debt repayment (principal
and interest), assuming that $4.7 million is financed. We estimate the total manufacturing cost to
be $143 per ton, including bagging costs (see Table 20) and delivery costs of up to 36 miles
distant. Assuming 100% cedar briquettes (16 Mbtu/ton) and removing the $20 bagging expenses
yields a bulk cost of $7.66/Mbtu, including delivery.

Table 20. Estimated Labor Costs of Briquette Manufacturing ($/ton)

Feedstock $ 65.00 $/ton
Bagging and plastic wrap $ 20.03 $/ton
Labor & fringe $ 12.00 $/ton
Utilities $ 17.49 $/ton
Repair and maintenance $ 3.00 $/ton
Delivery expense $ 3.68 $/ton
Rent and lease $ 2.40 $/ton
Debt repayment (P&I) $ 18.94 $/ton
Total $ 142.54 $/ton

32
See [Link] for additional information. A3 is also a U.S. distributor for Kob boilers, a high-
efficiency commercial boiler from Europe.

44
4.5 Bripells
Bripells are larger than pellets but smaller than briquettes. Bioenergy Investments LLC
distributes a bripell manufacturing system developed and manufactured in Brazil. 33 Bioenergy
Investments states that the equipment cost for a one-line plant with one year of spare parts
(capacity of 12,000 to 15,000 tons per year of bripells) is about $980,000. Two lines would be
roughly $2 million in capital costs for the equipment. Additional costs would include engineering
and design, land, building, concrete pad, access roads, fuel storage, front-end loader, and fork
lift, among others. The total cost is estimated to be $4 million for a 24,000-ton-per-year plant.
The additional $2 million above the $2 million quoted by the vendor is an NREL estimate only
and is not based on any information provided by Bioenergy Investments.

Table 21 shows the estimated per-ton costs of bripell manufacturing for the first year of a plant’s
operation. It must be stressed that this is an estimate for illustrative purposes only. Project
developers should develop their own pro-forma analyses before any investment decisions are
made. NREL did not take into account the time value of money, inflation, selling price of
bripells, risk, or market conditions. It is assumed that two bripell lines will be required (12,000
tons each), and the total amount financed will be $4 million at 6% interest over 15 years. The
estimates for electrical and spare parts were provided by Bioenergy Investments, and the value
for maintenance is an estimate by NREL. Note that there are no provisions for bagging the
finished product in this example. The total estimated cost is $134 per finished ton, or $8.36/Mbtu
for cedar and $8.92/Mbtu for a cedar/ag blend.

Table 21. Estimated Labor Costs of Bripell Manufacturing ($/ton)

Labor Costs/Ton $ 19.17 $/ton
Energy $ 6.00 $/ton
Spares/maintenance $ 5.00 $/ton
Feedstock loading/unloading $ 5.00 $/ton
Debt repayment (P&I)) $ 33.59 $/ton
Feedstock $ 65.00 $/ton
Total $ 133.76 $/ton
Cedar (16 MMBtu/ton) $ 8.36 $/Mmbtu
Ag/cedar blend (15 MMBtu/ton) $ 8.92 $/Mmbtu

Table 22 shows a breakdown of the estimated labor costs for the plant. We estimate 3 shifts per
day, 6 days a week will be required to produce 24,000 finished tons per year. An additional 10%
of the input biomass will be required to run the dryer. All told, this plant will require about
52,000 green tons per year of feedstock. Approximately 10 people would be employed.

Table 22. Estimated Labor Costs of Bripell Manufacturing ($/ton)

Fully Loaded
Labor Number Rate ($/hr) Fringe Hourly Rate Hrs/shift Shifts Daily Total
General labor 2 $ 12.00 0.35 $ 32.40 8 3 $ 777.60
Operator 1 $ 16.00 0.35 $ 21.60 8 3 $ 518.40
Plant Manager 1 $ 22.00 0.35 $ 29.70 8 1 $ 237.60
Daily Cost $ 1,533.60
Cost/ton for 80 ton/day capacity $ 19.17

33
See [Link] for additional information.

45
4.6 Comparison of Pellets, Briquettes and Bripells
Table 23 shows an estimated cost comparison between pellets, briquettes, and bripells for both
bagged and bulk products. How well bripells lend themselves to bagging or what that cost would
be is not known, but we add $20 per ton to the bulk cost for comparative purposes. An advantage
of bagging for any product is that it opens up residential or small consumer markets in addition
to bulk markets. The pellet and bripell plants would employ more people than the briquette plant,
although briquette manufacturing appears to have the lowest costs of production (about $7.66 per
Mbtu for 100% bulk cedar briquettes).

The cost of briquette manufacturing includes an estimate for product delivery of $3.68 per ton
for an average 36-mile delivery, whereas the estimates for pellets and bripells do not include a
delivery charge. Excluding delivery, the manufactured cost for briquettes is approximately $120
per ton.

Table 23. Summary Cost Estimates

Cost for 50/50

Estimated Cost for Ag-Cedar
Plant Cost Estimated 100% Cedar Blend
Capacity Capital Employees Bagged Cost Bulk ($/MMBtu ($/MMBtu
Product (tons/year) Costs ($) (FTEs) ($/ton) ($/ton) Bulk) Bulk)
Pellets 24,000 $ 5,500,000 15 $ 159 $ 135 $ 8.42 $ 8.98
Briquettes 25,000 $ 4,700,000 6 $ 143 $ 123 $ 7.66 $ 8.17
Bripells 24,000 $ 3,000,000 10 $ 154 $ 134 $ 8.36 $ 8.92

It must be stressed that these are estimated values only, and no investment decisions should be
made based on the numbers presented here. Interested entrepreneurs are encouraged to perform
their own economic analysis and develop their own detailed pro-forma models.

46
 5. Biomass Conversion Technologies
There are numerous commercial technologies available to convert biomass pellets or briquettes
to heat, power, or combined heat and power (CHP). Proper feedstock handling systems can be
designed to handle any feedstock type—pellets, briquettes, chips, bales, or ground. The focus of
this report is on the potential to convert biomass to thermal energy.

NREL recently completed a study for the Clean Energy States Alliance on the commercial status
of small-scale gasification and combustion technologies and companies. 34 The study document
provides an in-depth discussion of the status of these technologies. The main results are
summarized below.

5.1 Combustion
In the United States and around the world, direct combustion is the most common method of
converting biomass resources into heat, power, or combined heat and power (CHP). A direct
combustion system burns the biomass to generate hot flue gas, which is used directly to provide
heat or fed into a boiler to provide hot water or steam. In a boiler system, the steam can be used
to provide heat for industrial processes or space heating; a steam turbine can be added to
generate electricity. Biomass boilers have thermal conversion efficiencies in the range of 80% to
93%, while direct combustion biomass facilities that produce electricity through a steam turbine
have conversion efficiency in the range of 20% to 25%. CHP systems can have overall
efficiencies in the range of 70% to 80%. Although most CHP direct combustion systems
generate power utilizing a steam-driven turbine, a limited number of companies are developing
CHP direct combustion technologies that use hot, pressurized air or another medium to drive the
turbine.

Another emerging application is the potential to couple an Organic Rankine Cycle (ORC) power
generator to a biomass hot water source. ORC technology uses hot water to heat up a compressed
working fluid that has a lower boiling point than water. In this manner, electricity can be
produced from low temperature (approximately 185°F and up), low pressure sources such as
biomass hot water boilers, or waste industrial heat. 35

The two principle types of direct combustion boiler systems that utilize biomass are fixed bed
(stoker) and fluidized bed systems. In a fixed bed system, the biomass is fed onto a grate where it
is burned as air passes through the fuel, releasing the hot flue gases into the heat exchanger
section of the boiler to generate steam, hot water, or hot air (in the case of a furnace). A fluidized
bed system instead feeds the biomass into a hot bed of suspended, incombustible particles (such
as sand), where the biomass combusts to release the hot flue gas. The advantage of a fluidized
bed system is that it produces a more complete combustion of the feedstock, resulting in reduced
SO2 and NOx emissions and improved system efficiency. Fluidized-bed boilers can also utilize a
wider range of feedstocks, while meeting stringent emission limitations.

The efficiency of a direct combustion biomass boiler system is largely influenced by the
following factors: (1) the moisture content of the biomass, (2) the amount of air introduced into
the combustion chamber, and (3) the percentage of biomass left unburned by the system.

34
Peterson, Dave and Scott Haase. A Market Assessment of Gasification and Combustion Technology for Small and
Medium Scale Applications. NREL. March, 2009.
35
For additional information on ORC, see [Link] or
[Link]

47
5.2 Gasification
Instead of directly burning the fuel to generate heat, gasification systems convert biomass into a
low-Btu to medium-Btu content combustible gas, which is a mixture of carbon monoxide,
hydrogen, water vapor, carbon dioxide, tar vapor, and ash particles. In gasification, biomass is
heated with a reduced amount of air or oxygen, driving off the combustible gasses. In a close-
coupled gasification system, the gas is ignited without further clean-up for space heat or drying,
or burned in a boiler to produce steam. Alternatively, the gas can be cleaned up by filters and
gas-scrubbers removing tars and particulate matter, resulting in a cleaner gas that is suitable for
use in a generator, gas turbine, or other application requiring a high-quality gas.

Although most biomass resources are suitable for gasification systems, certain high moisture
fuels may be uneconomic because of high drying costs. In addition, some agricultural residues
generate a combustible gas that requires special processing before it can be utilized in a boiler,
turbine, or engine.

5.3 Pellets vs. Chips or Bales

There are many technologies that can use wood chips, straw bales, briquettes, bripells, or pellets
for thermal-energy production. The specific end-use conversion technology to be used for any
given application will be selected based on the needs of the facility being served, as well as the
biomass product being used (e.g., pellets, briquettes, bripells, straw bales, or cedar chips).
Appendix E contains a partial list of potential biomass vendors. Interested parties should contact
these vendors directly.

Many of the vendors sell both chip and pellet systems. Any of the chip systems could be retrofit
with a fuel chopper to break up bripells or briquettes into particles the correct size for a chip
boiler. In general, pellet burning appliances will have a smaller footprint and cost less than chip
systems because pellet fuel is more uniform, more compact, and has lower moisture than raw
chipped biomass. Pellets can also be stored in silos and do not require the construction of bulky
fuel storage containers that are a hallmark of bulk biomass systems.

Interested end-users will need to conduct their own analysis of the pros and cons of using pellets
(or briquettes, bripells) rather than chips or other bulk biomass products.

5.4 Biopower Resource Requirements

The focus of this report is on producing thermal energy from biomass. NREL did not evaluate
biomass power generation options as part of this effort, and a separate study would be required to
do so. However, a general rule of thumb in the biomass power industry is that a power plant
requires 1 bdt/h/MW of capacity. Thus, a 20-MW biomass power plant operating at an 80%
capacity factor would require approximately 140,000 bdt of biomass per year.

48
 6. Conclusions
The major goal of this assessment was to evaluate the potential opportunity for an entrepreneur
to construct a pellet mill in or around the vicinity of Greensburg, Kansas.

Based on the analysis, NREL believes that there is sufficient feedstock in the region to support a
pellet, bripell, or briquette plant. A key decision for the interested entrepreneur to make is which
specific feedstock to use, and the blend percentage between cedar and agricultural residues.
Cedar is the highest-quality feedstock in the region and will have the highest Btu content, lowest
ash, and lowest alkali percentage. Agricultural residues are higher in ash and alkalis and lower in
energy content. When making pellets, briquettes, or bripells, consistency in the blend is
extremely important. The plant owner should not use corn stover one day, wheat straw the next,
and then sorghum another. The plant must make a consistent, uniform product so that end-users
will be assured that each batch of product will burn the same.

Feedstock cost is extremely important in the overall economics of pellet or briquette production.
The plant owner must keep feedstock costs low enough to make the economics of the plant work,
but at the same time, the price paid has to be attractive enough to producers that they will collect
the material. If plant owners are depending upon agricultural residues, they must be able to
demonstrate to investors that they hold contracts for the acres necessary to supply the plant on a
long-term basis. Feedstock collection costs are estimated to be in the range of $50 to $65/bdt in
the region.

Based on an analysis of natural gas usage in the area, demand for thermal energy from the
commercial and industrial sector appears to be sufficient in the region. There are no utility power
plants in the region, although it may be possible to ship the finished product to utilities interested
in co-firing biomass and coal. Any end-users interested in converting their facilities to biomass
heat should understand the characteristics of the fuel they are purchasing and the boiler or
furnace they are installing. The plant owner will need to work with potential customers to
educate them about the nuances of using biomass as a thermal energy source. Market
development efforts will be needed to create regional outlets for densified biomass.

The plant owner is advised to contact potential end-use customers, help them understand
biomass, assist with the economic evaluation of converting their facility, and help identify
appropriate end-use technologies and financing sources. Inform end-users that they should
identify appliances designed to handle high-ash fuels, or else be ready to remove ash more
frequently than they would expect. A target list of potential customers has been generated in the
report. Another potential customer is Abengoa. Although located more than 100 miles away,
Abengoa has plans to construct a cellulosic ethanol plant in Hugoton, Kansas. It may be possible
for a biomass plant to supply densified feedstock to the Abengoa plant.

The current low price of natural gas has reduced demand for alternative fuels such as biomass.
Because installing a new biomass conversion device is expensive, the savings of pellet use
compared with gas (only a few dollars per Mbtu for residential and commercial customers, and
even less for industrial customers) may not be realized for a longer period of time, if at all. Many
industries and commercial users are unwilling to implement projects that take longer than five
years to show a return on their investment. Should fossil fuel prices increase or some form of
greenhouse gas reduction strategy be implemented in the United States, then biomass will
become more competitive.

49
 7. Next Steps
This report has confirmed that there is a potential business opportunity in the region to develop
some form of densified biomass business, be it pellets, bripells or briquettes. The following
actions are suggested as potential next steps for interested parties:

• Product Development
o Make sample blends of various feedstock combinations (e.g. cedar/corn stover,
cedar/sorghum) in various percentage mixtures
o Send samples to the lab for chemical analysis, especially to asses ash percentages, Btu
content and alkali content
o If possible, conduct test burns of products in candidate appliances to assess ash, feed
handling, slagging and odor.
• Feedstock Procurement
o Identify producers interested in biomass supply options
o Develop contract mechanisms for biomass supply
o Assess potential for planting CRP land in switchgrass, mixed grass prairie or other
biomass for specific production of biomass for pellets or bricks. Some sample questions
to answer would be:
o What is the best mix of plants for the local region?
o What are the yields and economics versus alternative CRP options?
o What is the best mix of plants in terms of energy content and use?
• Market Development
o Perform additional market development efforts and educate potential end users about
biomass energy
o Seek state support to organize a local biomass heating workshop in the region
o Contact large commercial loads to analyze their actual energy usage and costs. Potential
targets for example would include National Gypsum in Medicine Lodge, the VA hospital
in Wichita, the new hospital in Greensburg, community college in Pratt, agricultural
processing plants in Dodge City, and any federal facilities
o Continue to identify end-use technologies that are commercially available and can be
deployed at customer sites.
• Business Analysis
o Conduct detailed pro forma analyses for bripells, briquettes, and pellets
o Develop a business plan and conduct a detailed plant design.

50
Appendix A: Biomass Resource Assessment
This appendix contains information on the potential biomass resource base in the region
surrounding Pratt and Greensburg, Kansas. The results of the study are based on analysis of
existing data, interviews with local producers and USDA representatives, and information
obtained from third-party sources. We did not contact local producers to discuss specific
quantities of biomass produced on a farm-by-farm basis, and we did not ascertain the interest of
the producers in providing material to a potential pelletization or briquetting facility. Our
assessment does, however, provide information on potential quantities of feedstock in the region,
as well as the estimated costs of collecting that material.

If a developer decides to build a biomass plant in the region, a detailed “on-the-ground” resource
assessment should be performed. This can be accomplished by directly contacting potential
suppliers to determine their interest in the concept, their willingness to enter into supply
contracts, price points that will ensure adequate supply, potential competing uses, and any
potential infrastructure needs. For crop residues, it will be important to consider collection
infrastructure, the amount of residue that must be left on the ground for nutrient cycling and
erosion prevention, and competing regional uses for the feedstock.

Methodology
The following steps were undertaken to define the biomass resources in the region:

• Identify the counties that are intersected by a 50-mile radius from Greensburg and Pratt
accomplished using a geographic information system (GIS) and drawing circles from Pratt
and Greensburg.
• Download from the USDA National Agricultural Statistics Service Web site the past 10 years
of crop production and yield data for primary crops grown in the target counties 36.
• Calculate the 10-year average of acres planted, yield, and harvest.
• Apply standard factors based on crop yield to estimate the quantity of residue produced per
acre for each crop type grown in the study area. (These factors will be listed in a later section
of this appendix.)
• Using “residue-leave” factors (tons of residue per acre to leave on the ground for nutrient
cycling and erosion purposes), estimate the quantity of residue potentially available for
collection. These county-specific factors were developed by Dr. Richard Nelson of Kansas
State University for corn and wheat (for both irrigated and nonirrigated lands). 37
• Estimate the collection and transportation costs of the feedstock.

36
USDA National Agricultural Statistics Service, 1998-2007 data. Accessed online August 2008
[Link]
37
Dr. Nelson’s methodology is documented in the following paper: Nelson, Richard G. Resource assessment and
removal analysis for corn stover and wheat straw in the Eastern and Midwestern United States – rainfall and wind-
induced erosion methodology. Biomass and Bioenergy 22 (2002) 349-363.

51
Counties
The following counties were included in the initial list for data collection: Barber, Barton, Clark,
Comanche, Edwards, Ford, Gray, Harper, Hodgeman, Kingman, Kiowa, Meade, Pawnee, Pratt,
Reno, Rice, and Stafford. Gray and Meade counties were excluded because they intersect a 50-
mile radius circle from Greensburg by only a very slight margin.

Biomass Feedstocks 38
This section discusses the feedstocks used in the analysis.

Crop Residues. NREL analyzed production data for corn, wheat, soybeans, cotton, sorghum,
hay, and sunflowers. The quantities of crop residues potentially available in each county are
estimated using total grain production, crop to residue ratio, moisture content, and the amount of
residue that must be left on the field for soil protection, grazing, and other agricultural
activities. 39

Depending upon the units in which the crop production is reported, the following equations were
used to estimate residue weights in bone dry tons:

For crops reported in pounds (cotton, sunflowers):

BDT residue = crop production * crop to residue ratio * Dry Matter % / 2205

For crops reported in bushels (BU) (corn, sorghum, soybeans, wheat):

BDT residue = crop production * crop to residue ratio * Dry Matter % / K

Where:
• BDT – Bone dry tonnes
• BU – Bushel
• 1 metric ton (MT) = 2,205 pounds
• K = BU to MT conversion or 2,205 / bushel weight (in lb), see Table A-1
• 0.9072 – conversion from short (U.S.) tons to metric tons

38
For a detailed description of the methodology on how tons of residue are calculated for each feedstock, see the
following report: A. Milbrant. A Geographic Perspective on the Current Biomass Resource Availability in the
United States. NREL Technical Report NREL/TP-560-39181, December, 2005. Available on-line at:
[Link]
39
Data for the target counties were obtained from the USDA National Agricultural Statistics Service, 1998-2007
data. [Link]/

52
 Table A-1: Crop to Residue Ratio and Moisture Content of Selected Crops
Crop Ratio of Residue Moisture Content Bushel Weight
to Crop Volume* (Percent)** (lb)***

Corn 1.0 15.5 56

Cotton 4.5 12.0 32
Sorghum 1.4 12.0 56
Soybeans 2.1 13.0 60
Sunflower 2.1 10.0 30
Wheat 1.3 13.5 60

Quantities that must remain on the field for erosion control differ by crop type, soil type, weather
conditions, and the tillage system used. It was assumed that 30% residue cover is reasonable for
soil protection. 40 Animals seldom consume more than 20% to 25% of the stover in grazing, and
we presume about 10% to 15% of the crop residue is used for other purposes such as bedding
and silage. Therefore, it was assumed that approximately 35% of the total residue could be
collected as biomass. This methodology was applied to sorghum, soybeans, alfalfa, hay,
sunflowers, and cotton.

For corn and wheat resides, a more detailed, site-specific analyses was available. 41 In his paper,
Nelson calculates the quantity of residues (in bdt/acre) that must be left on the land for erosion
protection for both irrigated and nonirrigated wheat and corn crops in Kansas, by county. So for
wheat and corn, NREL estimated the total amount of residue that is produced, and then
subtracted the amount that Nelson said should be left on the land. Based on these numbers, it was
quite apparent that no residues would be available for collection from nonirrigated corn land
throughout the study area. In fact, many nonirrigated corn acres were at a net deficit, meaning
that more residues than are produced should be left on the land.

Forest Residues. Forest residues are logging residues and other removable material left after
silviculture operations and site conversions. Logging residue consists of unused portions of trees
cut or killed by logging and left in the woods. Other removable materials are the unused volume
of trees cut or killed during logging operations. 42 Only Barber, Barton, Bourbon, Harper, Reno,
and Rice counties had data for logging residues. Seventy-five percent of the feedstock is listed as
coming from Bourbon County.

Primary Mill Residues. Primary mill residues include wood materials (coarse and fine) and
bark generated at manufacturing plants (primary wood-using mills). The residues are produced
when round wood products are processed into primary wood products such as slabs, edgings,
trimmings, sawdust, veneer clippings and cores, and pulp screenings. 43 Standard factors of metric
tonnes per company type per year were applied to the data. There are minimal primary mill
residues in the region.

40
In general, tillage practices that maintain between 30% and 50% groundcover throughout the period when no crop
is growing that will adequately protect soil from erosion due to wind and water.
41
Nelson, Richard G. “Resource assessment and removal analysis for corn stover and wheat straw in the Eastern
and Midwestern United States—rainfall and wind-induced soil erosion methodology,” Biomass and Bioenergy 22
(2002) 349 – 363.
42
USDA Forest Service, Timber Product Output database, 2002.
43
USDA Forest Service, Timber Product Output database, 2002.

53
Secondary Mill Residues. Secondary mill residues include wood scraps and sawdust from
woodworking shops—furniture factories, truss manufacturing, wood container and pallet mills,
and wholesale lumberyards. Data on the number of businesses by county were gathered from the
U.S. Census Bureau. 44 Standard factors of metric tonnes per company type per year were then
applied to the data. There are minimal secondary mill residues in the region.

Urban Wood Waste. This analysis includes wood residues from municipal solid waste (wood
chips and pallets), utility tree trimming, private tree companies, and construction and demolition
sites. 45 Data are calculated by applying a factor based on pounds of residue generation per person
per day.

Minimal amounts of urban wood waste and secondary mill residues are produced in the study
area—less than 9,000 tons per year from both sources.

Other Sources
Eastern Red Cedar. Significant quantities of red cedar in the region are also potentially
available for harvest. Red cedar is viewed primarily as a detrimental species in the region
because they spread rapidly and reduce the amount of rangeland available for farming. USDA
pays producers a portion of the cost of removing these trees from their lands. One producer in the
region, Don Queal of Queal Enterprises, a cedar mitigation business, sells some material as
mulch, but the market is limited in the area. Much of the material is piled in the field and burned
the following year. Mr. Queal estimates that if he had the labor crews available, he could readily
collect 25,000 green tons per year, or 12,500 bdt/yr.

Cotton Gin Trash. Limited amounts of gin trash may be available on a periodic basis from a
cotton gin located between Pratt and Greensburg. . The amount of cotton planted in the region
has dropped significantly over the past several years as farmers plant greater amounts of corn,
sorghum, soybeans, and wheat in response to higher prices for those products. The cotton gin
reports that all of its feedstock is sold to a broker in Wichita under a long-term contract. If any
potential pellet producer were interested in this feedstock, they would need to contact the mill
and determine specific prices paid and then beat that price. Before doing so, however, we would
suggest that a sample of the gin trash be analyzed at a lab to determine physical and chemical
properties. It may not be an ideal feedstock for the pellet plant.

Corn Cobs. The following table shows the average acres of corn harvested in the study area over
the 10-year period from 1998-2007. Assuming 0.75 bdt of cobs per acre harvested, an estimated
480,000 tons of cobs are potentially available in the region, including Gray and Meade counties.
Excluding these 2 counties, we estimate a total of 198,000 bdt/yr.

44
2002 County Business Patterns.
45
U.S. Census Bureau, 2000 population data; BioCycle Journal, State of Garbage in America, January 2004; County
Business Patterns 2002.

54
 Table A-2: Average Acres of Corn Harvested 1998-2007

Total
Corn
County Acres
Barber 2,300
Barton 26,320
Brown 98,550
Clark 1,030
Comanche 1,260
Edwards 62,370
Ford 46,860
Gray 83,070
Harper 1,080
Hodgeman 9,680
Kingman 7,950
Kiowa 27,610
Meade 72,950
Pawnee 31,400
Pratt 59,780
Reno 25,350
Rice 21,690
Stafford 61,450
Total 640,700

CRP Lands. Dedicated energy crops (switch grass, willow, hybrid poplar, etc.) can often be
grown economically on land that is not suitable for conventional crops, and it can provide
erosion protection for agricultural set-aside or CRP lands. The CRP is a voluntary program for
agricultural landowners, administered by the USDA Farm Service Agency. It provides technical
and financial assistance to eligible farmers and ranchers to address soil, water, and other related
natural resource concerns on their lands.

Data on the CRP acres by county were obtained from the USDA’s Farm Service Agency.
Examining some of the core counties in the study shows there are more than 300,000 acres of
CRP land near Greensburg. Some of this land could possibly be converted to fast-growing
energy crops. Yields of 4 tons per acre could be expected. So, if 10% of the CRP land is planted
in a crop such as switchgrass, total yields of biomass of approximately 120,000 bone dry tons per
year could be expected.

Table A-3: CRP Acres by County

County CRP Acres

Kiowa 53,337
Comanche 43010
Clark 52,114
Barber 21,018
Pratt 47,750
Ford 59,469
Edwards 34,101
Total 310,799

55
Appendix B: Analysis of Physical and Chemical Characteristics
of Local Biomass Resources
The figures on the following pages show lab analyses for various biomass feedstocks collected in
the study area. The following samples were tested:

• Wheat straw collected from a field about 5 miles southeast of Pratt

• Seasoned cedar mulch that had been sitting out for several months from Don Queal
• Freshly cut cedar mulch that had been chipped a few days before
• Sample pellets made by Show Me Energy Cooperative (SMEC). The pellets that SMEC
provided were a blend of wood and ag residues (blend percentage is not known but suspected
to be about 50/50).
• Corn stover
• Corn cobs
• Sorghum residues

56
Figure B-1: Lab analyses for wheat straw

57
Figure B-2: Lab analyses for seasoned cedar mulch

58
Figure B-3: Lab analyses for freshly cut cedar mulch

59
60
Figure B-4: Lab analyses for biomass pellet samples

61
Figure B-5: Lab analyses for corn cobs

62
63
Figure B-6: Lab analyses for sorghum residues

64
Appendix C: Natural Gas Demand Maps

Figure C-1: Total commercial users

65
Figure C-2: Therms per commercial user

66
Figure C-3: Total therms in industrial use

67
Figure C-4: Total industrial users

68
Figure C-5: Therms per industrial user

69
Figure C-6: Total therms in residential use

70
Figure C-7: Therms per residential user

71
Appendix D: Potential Customers
(Excluding Wichita)

Table D-1: Hospitals

Name County Town Beds Contact

Kiowa County Memorial Hospital Kiowa Greensburg 12
Pratt Regional Medical Center Pratt Pratt [Link]
Western Plains Medical Complex Ford Dodge City [Link]
Kiowa District Hospital Barber Kiowa 620-825-4131
Minneola District Hospital Clark Minneola 54 620-885-4264
Ashland Health Center Clark Ashland 12 620-635-2241
Kingman Community Hospital Kingman Kingman [Link]

Table D-2: Industrial Facilities

Name Type County City Contact

Cross Manufacturing Hydrolic Components Pratt Pratt [Link]
Orion Ethanol Ethanol Pratt Pratt [Link]
National Gypsum Co Building Products Barber Medicine Lodge
Polymer Group, Inc (PGI) Polysynthetic Twine Kingman Kingman 620-532-5141
[Link]
Doskocil Foods/FoodBrands America/Tyson Food Products Reno South Hutchinson cations/[Link] ;

72
 Table D-3: Schools and Universities

Year Built
Name County Town (Rennovations) Link
Pratt Community College Pratt Pratt [Link]
Haskins Elementary Pratt Pratt [Link]
Southwest Elementary Pratt Pratt [Link]
Liberty Middle Pratt Pratt [Link]
Pratt High Pratt Pratt [Link]
Skyline School Pratt Pratt [Link]
Sacred Heart/Holy Child Pratt Pratt [Link]/sacredheartholychild
Beeson Elementary Ford Dodge City 1995 [Link]/
Central Elementary Ford Dodge City 1927 (2006, 2007) [Link]/
Linn Elementary Ford Dodge City 1995 [Link]/
Miller Elementary Ford Dodge City 1951 (1991, 2001) [Link]/
Northwest Elementary Ford Dodge City 1957 [Link]/
Ross Elementary Ford Dodge City 2000 [Link]/
Sunnyside Elementary Ford Dodge City 1956 (1995) [Link]/
Wilroads Gardens Elementary Ford Dodge City 1964 [Link]/
Comanche Intermediate Ford Dodge City 1924 [Link]/
Soule Intermediate Ford Dodge City 1995 [Link]/
Dodge City Middle Ford Dodge City 1956 [Link]/
Dodge City High Ford Dodge City 2001 [Link]/
Dodge City Community College Ford Dodge City [Link]
[Link]
Kansas State U at Dodge City Ford Dodge City [Link]/affiliations/westernkansas
South Barber High Barber Kiowa [Link]
South Barber K-8 Barber Kiowa [Link]
Medicine Lodge Primary Barber Medicine Lodge [Link]
Medicine Lodge Middle Barber Medicine Lodge [Link]
Medicine Lodge High Barber Medicine Lodge [Link]
Minneola Grade Clark Minneola [Link]
Minneola High Clark Minneola [Link]
Ashland Grade Clark Ashland [Link]
Ashland High Clark Ashland [Link]
Bucklin Elementary Ford Bucklin [Link]
Bucklin Middle Ford Bucklin [Link]
Bucklin High Ford Bucklin [Link]
Kingman K-8 Kingman Kingman [Link]
Kingman High Kingman Kingman [Link]
Norwich K-12 Kingman Norwich [Link]
Mullinville K-6 Kiowa Mullinville [Link]
Mullinville Junior High Kiowa Mullinville [Link]
Mullinville High Kiowa Mullinville [Link]
Greensburg High Kiowa Greensburg [Link]
Greensburg Junior High Kiowa Greensburg [Link]
Greensburg K-8 Kiowa Greensburg [Link]
Haviland High Kiowa Haviland [Link]
Kinsley-Offerle High Edwards Kinsley [Link]
Kinsley-Offerle Junior High Edwards Kinsley [Link]
Kinsley-Offerle Elementary Edwards Kinsley [Link]
South Central High Comanche Coldwater [Link]
South Central Middle Comanche Coldwater [Link]
South Central Elementary Comanche Coldwater [Link]

Table D-4: Ag Producers

Name Type County Town Contact

Pratt Feeders, LLC feedlot Pratt Pratt
Great Plains Alfalfa Alfalfa Pellets Pratt Pratt
High Plains Cotton Gin cotton gin Pratt Pratt
X-tra Factors, Inc animal feed supplements Pratt Pratt
Coake Feeding Co. Inc. feedlot Ford Dodge City 620-227-2673
Dodge City Leeders, Inc. feedlot Ford Dodge City 620-227-9700
Ford County Feed Yard Inc. feedlot Ford Dodge City 620-369-2250
National Beef Packing Co. Beef Processing Ford Dodge City 620-338-4339
Excel/Cargill Meat Solutions Beef Processing Ford Dodge City 620-225-2610
U.S. Premium Beef Beef Processing Ford Dodge City 620-225-1811

73
Appendix E: List of Biomass Conversion Technology
Manufacturers
Table E-1: Direct Combustion System Manufacturers

Company Biomass System

Comments Contact Info
Headquarters Fuels Size
Andrew Haden
Wide 0.25 - A3 Energy Partners
A3 Energy Distributor of
range of 8.5 andrew@[Link]
Partners KÖB Systems
fuels. Mbtu/h 503-706-6187

Advanced
Wide 814-834-4470
Recycling 0.75-60 Fixed bed boiler
range of areinc@[Link]
Equipment Mbtu/h systems for heat.
biomass [Link]
St. Marys, PA
AFS Energy 717-763-0286
3 - 27 Fixed bed boiler
Systems Wood info@[Link]
Mbtu/h systems for heat
Lemoyne, PA [Link]
Bioheat USA Pellets, 0.07 – 800-782-9927
Fixed bed boiler
(Fröling) Wood 0.2+ info@[Link]
systems for heat
Lyme, NH chips Mbtu/h [Link]
Biomass
508-798-5970
Combustion 3 - 40 Fixed bed boiler
Wood info@[Link]
Systems Mbtu/h systems for heat.
[Link]
Worcester, MA
Small-scale
Wood
furnace for forced 218-782-2575
Central Boiler (pallets, 0.25 - 2
air, boiler, or infor@[Link]
Greenbush, MN crates, Mbtu/h
radiant floor [Link]
etc)
heating system
Fluidized bed
Energy Products Wide 208-765-1611
15 - 160 boiler systems for
of Idaho range of epi2@[Link]
Mbtu/h heat, power, or
Coeur d'Alene, ID biomass [Link]
CHP
Fixed bed boiler
systems for heat;
Fink Machine 0.27 - 250-838-0077
Fink Machine is
(KÖB) Wood 8.5 info@[Link]
the Canadian
Enderby, BC Mbtu/h [Link]
vendor for KÖB
(Austria)
0.45 - 218-386-2769
Heatmor Small-scale
Wood 0.8 woodheat@[Link]
Warroad, MN furnace
Mbtu/h [Link]
Fixed bed boilers
Hurst Boilers Wide for heat; can be 877-994-8778
0.4 - 56
South Coolidge, range of used for power info@[Link]
Mbtu/h
GA biomass production via a [Link]
steam turbine
King Coal Fixed bed, staged 701-255-6406
3.4 - 34
Furnace Corp Wood combustion kingcoal@[Link]
Mbtu/h
Bismarck, ND system [Link]

74
 Medium to large
770-925-7100
McBurney 20 - 80 scale boiler
Wood info@[Link]
Norcross, GA Mbtu/h systems for
[Link]
industry
906-466-9010
Messersmith 0.5 -10 Fixed bed boiler
Wood sales@[Link]
Bark River, MI Mbtu/h systems for heat
[Link]
Pre-Fab makes
Pro-Fab 0.75 - 204-364-2211
Wood, the Pelco, a light
Industries 2.5 info@[Link]
corn industrial, hot
Arborg, Manitoba Mbtu/h [Link]
water boiler
Boiler systems
360-750-3500
Wellons, Inc 5 - 10 designed for the
Wood sales@[Link]
Vancouver, WA Mbtu/h forest products
[Link]
industry

75
 Table E-2: Direct Combustion, Non-boiler Combined Heat and Power Technology Companies

Approximate
Company System # Units
Fuels Comments Contact Info
Headquarters Size operating in
the US
Utilizes an
"open" Brayton
Cycle process in
516-829-2000
AgriPower, Inc. Variety 300 kW 1 CHP unit, using
[Link]
hot air (the
working fluid) to
drive the turbine.
CHP
pressurized
direct
combustion
Zilkha Biomass system; only 713-979-9962
1.5 -
Energy Wood 1 operating unit is lweick@[Link]
4.5MW
Houston, TX co-located with a [Link]
New England
wood pellet
production
facility.

76
 Table E-3: Gasification Technology Companies

Approximate
Company Use of System # Units
Fuels Comments Contact Info
Headquarters Gas Size operating in
the US
Alternative
Energy
Solutions, a
subsidiary of
Wichita Boiler, is
1; 25 in
Alternative the exclusive
development
Energy Wood, ag. North American 316-201-4143
Close- 1 - 20 for 2009-2010
Solutions Residues, licensee for info@[Link]
coupled Mbtu/h in U.S.; 3,500
(Uniconfort) pellets Uniconfort [Link]
installed world-
Wichita, KS (Italy); close-
wide
coupled
gasification
systems that
produce heat,
power, and CHP
Crossdraft boiler
ChipTec
1.5 - systems; Large 800-244-4146
Wood Energy Close-
Wood 125 175+ scale close- chiptec@[Link]
South coupled
Mbtu/h coupled [Link]
Burlington, VT
gasifiers
Systems are
operating at
pulp-paper mills;
0; 3 in
system to be
operation in
Nexterra Wood, built at Oak
Canada; 4 in 604-637-2502
Energy Close- switchgrass, 7 - 144 Ridge National
development, cdunaway@[Link]
Vancouver, coupled egrass, Mbtu/h Lab to displace
including at [Link]/
BC misc, paper existing natural
Oak Ridge
gas steam plant
National Lab
utilizing locally
sourced woody
biomass

Updraft, fixed
bed gasification
Wood, corn 18 918-835-1011
Primenergy Close- systems; most
fiber, carpet Mbtu/h 6; 1 in Italy bteitze@[Link]
Tulsa, OK coupled systems have
scraps and up [Link]
on-site
feedstocks

Close-coupled
gasification
systems that
13 -
PRM Energy Variety of produce heat,
118 501-767-2100
Systems Close- biomass; 5 - 6 in U.S.; power, and
Mbtu/h; info@[Link]
Hot Springs, coupled rice 25 world-wide CHP; most
1- [Link]
AR husk/straw, systems have
15MW
on-site
feedstock; one
project has

77
 wood waste
brought to an
ethanol plant to
provide heat for
one project

The integrated
biomass
gasification
system currently
Wood
Frontline in operation
Two- residues, 100 515-292-1200
Bioenergy 1 utilizes wood
staged corn stover, Mbtu/h [Link]
Ames, IA and ag wastes
switchgrass
to offset natural
gas use at an
ethanol plant in
Minnesota.
Small-scale,
1 operating modular gasifier-
Community 303 933-3135
Two- Variety of 5 -100 24/7; 6 genset unit
Power Corp. rwalt@[Link]
staged biomass kW demonstration designed to
Littleton, CO [Link]
units provide
distributed CHP.
Developing a
micorgasification
Energy &
technology that
Environmental
utilizes the
Research 701-777-5120
Two- Variety of 100 kW 2 (both combustible gas
Center dschmidt@[Link]
staged biomass - 1 MW demonstration) in a piston
(EERC) [Link]
engine
Grand Forks,
generator for
ND
power
production
Developing a
5, 10, pressurized 806 327 5220
Cratech Diverse Variety of 0; 2 in
and 20 fluidized bed info@[Link]
Tahoka, TX Use biomass development
MW gas turbine [Link]
system
Developing a
Diversified 50 - molten metals- 480-507-0297
Diverse Variety of
Energy 300 1 (pilot plant) based business@[Link]
Use biomass
Gilbert, AZ Mbtu/h gasification [Link]
technology
Bottom fed
Thermogenics 505-463-8422
Diverse Variety of 2 -200 inverted
Albuquerque, 1 thermogenics@[Link]
Use biomass Mbtu/h downdraft
NM [Link]
gasifier

78
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