Crop pellets prove to be hot idea
Farmer sees a profitable future in turning crops like oats and switchgrass into biofuel

By Frances Anderson, Ontario Farmer staff
Ontario Farmer © Copyright 2006, Sun Media Corporation
Tuesday, April 4, 2006

Last fall cash cropper Don Nott got a phone call that has changed his life. The caller wanted to know whether Nott thought the oat pellets he markets would burn.

Nott has been pelletizing the hulls and other by-products of his oat milling business for nearly a decade, but he'd not considered them for fuel until the day that Roger Samson called.

Six months later, the pellets have proven they burn hot and clean and cheap enough in boilers that greenhouse operators are impressed, and Nott is a man converted, preparing for the end of the age of oil, and a future for farmers in growing fuel - oats in the short term, and switch grass down the road.

"Agriculture has a bright future for some pretty dark reasons," quips Samson, who declares "the grass farmers of North America will outproduce the tar sands one day."

Samson has been trying to promote biofuel for the past 15 years, as a
founding member and executive director of the non-profit registered charity, REAP Canada (Resource Efficient Agricultural Production) to conduct research. The stars have finally aligned because energy costs are rising, the technology to burn these fuels has advanced significantly, and biofuels are more ozone friendly than petrochemicals. "We're currently working with four different industrial-style boilers," said Nott.

The economics of cash cropping are a factor as well. Faced with the choice of growing corn at a loss, Nott has let go several thousand acres, and is selling his cash crop equipment. He'll contract the work on the remaining 5,300 acres.

Four hundred of those acres will become part of a major experiment in growing switchgrass. Why? Samson's research suggests it's the most energy-efficient choice.

And, Nott says there's not enough oat pellets in North America to meet the needs of the biomass industry in the future.

Nott is currently charging $105 a tonne for his "densified" fuel pellets and figures greenhouse growers can expect to use an average of .82 tonne a day - spread over 12 months - to heat an acre of glass. That's less than $100 a day per acre for heating over 365 days. "We are currently running $2/gigajoule, delivered, below the current spot price of natural gas, which is about $9.5/gigajoule," said Nott. (One gigajoule equals 943,000 BTUs.)

The switchgrass is a warm season perennial, native to the mid-West. It's slow to establish, but the stand may last 20 years. The Caven Rock species that Nott has purchased will grow six to seven feet high. The farmer is debating with his agronomist and the researcher how to plant the crop - whether to loose-seed it like alfalfa, and follow with a packer, or establish a stale seedbed and no till the seed into the ground. It needs a firm seedbed.

Harvesting will be the next challenge, since there's a very narrow window to cut and bale the crop after the first frost. Nott plans to experiment with letting the switch grass dry in the swath over the winter, and turning it in the spring when everyone else is out cultivating.

Meanwhile, Nott has purchased 50 bales of switchgrass from a grower in Eastern Ontario and he intends to experiment with pelletizing it this summer.

Nott is trying to be conservative, but Samson is gungho. "I think that this is the biggest new opportunity for Ontario farmers....The solution for the farm sector is to create new non-food markets with proven production capacity," Samson enthuses.

"There's a million acres that's been grown in the U.S. on set-aside programs, so it's not a new crop for North America. It's the same as growing timothy."

The researcher is encouraging farmers to "plant small acreages if they want to try it." They may have to mix the switch grass with hay for dry cows or sell it for straw initially, he said, but "we're confident the market will emerge."

"We think that the farmer needs to be paid $75/MT for the grass, delivered to the plant to make it worth their while," said Samson. That's assuming a 10 T/ha or 4T/ac yields. "Your input costs are really low and the farm machinery is probably kicking around at that time of year (late in the spring.)"

Nott will be growing switchgrass solely for its fuel value, and hasn't built any government incentives into his business case. "If you wait for government, you get nowhere," he said.

But Samson sees the potential for carbon credits. "These grasses are like closed loop carbon sources." There's some emissions associated with harvesting, but they keep 93 per cent of the carbon in the loop, mainly in the root system.

Given Prime Minister Stephen Harper's commitment to a 'Made in Canada' solution to the country's greenhouse gas emissions, Samson anticipates payments of $10 a tonne for every tonne of CO2 stored. There's 12 tonne of CO2 tied up in the eight tonnes of root systems for every hectare of switch grass. So that could provide switch grass growers an additional payment of $120/ha.

"With that, it should greatly encourage biomass production," said Samson.

In fact, REAP estimates the province's farmers could quickly convert 1.5 million acres to biofuel, taking 10 per cent of the cash crop land and a third of the forage acreage. At four tonnes per acre, this would produce six million tonnes of biofuel - the equivalent of 18 million barrel of oil - enough to heat two million homes.

While Samson races ahead, Nott's goals are more modest. "We'll be two years before we get any product off. If we were even at one-third of the greenhouse business down the road, it would require 50,000 acres of switchgrass," said Nott.

For that "we have to put up a pelletizing plant." It would be "completely energy-efficient" using biomass to produce the electricity or steam power for pelletizing.

And because biomass is expensive to transport it would have to be right in the backyard of the industrial users.

OACC gratefully acknowledges Ontario Farmer for permission to post this article on our website.