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The Future of Energy in the Post-Kyoto World


July 1, 2005
By Pulp & Paper Canada

There is no getting around the fact that the Canadian industrial sector, of which pulp and paper forms a large and important part, has to do something to reduce its energy consumption….

There is no getting around the fact that the Canadian industrial sector, of which pulp and paper forms a large and important part, has to do something to reduce its energy consumption.

Energy represents up to one-quarter of the costs associated with production, thus any subsequent reduction or technological advancement will aid the profitability of Canadian companies, many of which are suffering the weight of high costs and increased competition from world markets.

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The news is not all bleak, however. The Kyoto Agreement represents an opportunity for the Canadian forestry sector to capitalize on its rich wood-based natural resources. If forecasts hold true, wood-derived energy will become a hot commodity among Kyoto signatory nations seeking to replace fossil-fuel-derived energy with cleaner fuels, or green energy.

Although all the details of carbon trading have not yet been fully worked out, when implemented green energy producers will be able to trade carbon credits with high GHG producers such as petrochemical, coal mining and automobile manufacturing. “The economic benefits arising from reducing energy consumption may exceed the energy cost savings,” says Thomas Browne, program manager (sustainability and environment, mechanical pulping) for Paprican in Pointe Claire, QC. “And it could include a credit for every tonne of CO2 emissions reduction achieved by either reducing fossil fuel consumption or switching from a dirty fuel to a cleaner one.”

To be sure, there is a direct relationship between energy reduction and the use of clean or green energy. Towards that goal, and to its credit, the Canadian forestry sector has been a leader in its reduction of Green House Gases (GHGs). Since 1990, the Canadian industry has reduced total GHG emissions by almost 28%, which far exceeds Canada’s international commitment to decrease emissions 6% less than 1990 levels. (See sidebar: Canada falls short of Kyoto.)

Equally important, FPAC has made a commitment to reduce GHG emissions by an additional 1.4 Mt of CO2. (In total Canada has made a commitment to reduce GHG emissions by 250 Mt of CO2, of which 55 Mt must come from industry.)

“The industry mainly achieved that by replacing fossil fuels with biomass,” says Paul Stuart, a professor at University of Montreal’s department of chemical engineering. “Biomass is a so-called green power, an environmentally positive thing to do.”

Leading in Biomass and Cogen

Biomass feeds nicely into the co-generation story. Mills that have put in bubbling fluidized bed boilers (BFB), or upgraded their boilers to operate at higher pressures can generate more pounds of steam at higher pressures, which spin the turbines. It’s called co-generation because the low-pressure steam satisfies the mill’s steam requirements, and the high-pressure steam generates electricity. “You need a good steam host to have co-gen, and mills make a good steam host,” Stuart says.

The Canadian pulp and paper industry is the unquestioned leader of biomass use, operating 45 co-generation plants nationwide, which combined produce 1,500 megawatts of electric power and process steam from wood waste. And its use is growing. For example, a new 48-MW co-generation plant is scheduled to come on-line at Canfor’s facility in Prince George, BC.

Such is the good news. But there are some far-reaching concerns. As the use of biomass and co-generation increases, so does the demand for bark and wood chips, the chief fuel sources for co-generation plants. “Producers are not taking it for granted that they can get chips and bark at very competitive prices,” Stuart points out. “Mills that have sawmills geographically near their pulp and paper operations are, thus, in a much better position than those who have to rely on outside sources.”

“In our post-Kyoto world, wood-derived energy is preferred over fossil energy,” says Mike Bradley, director of technology for Canfor Pulp and Paper Marketing in Vancouver (see PPC, April 2005). “This has the immediate and practical consequence that wood will command a premium from customers who want to displace fossil fuels to avoid paying carbon taxes or credits.”

That’s an unquestionably good start, says Bob Eamer, a consultant with Target Forest in Pointe Claire, QC. Nevertheless, as is always the case, we can do more. The question in Bob Eamer’s mind, however, is how serious a contender Canada wants to be in the business of carbon credits and alternate means of energy production. “There is a lot of opportunity within the industry, but it will take co-operation with various levels of government, notably the federal government.” It would require government policies that would encourage the industry to take advantage of its resources.

Although it is hard to compare accurately, there is consensus that energy costs are higher in Canada than in Finland and Sweden, much of it attributed to provincial turf wars among utilities and government policy on energy and environment. For Canadian mills, energy represents between 15% and 25% of the total production cost. “Canadian pulp and paper producers have to find ways to cut $100/tonne from their production costs,” Eamer says. Energy reduction and efficiency is a good place to start. There are reams of information available, including the Energy Technology Data Exchange, a program of the International Energy Agency. (See sidebar: Keeping track of energy.)

Commitment to Change

To be sure, benchmarking studies over the years, notably by Paprican and PAPTAC’s Energy Committee, have shown the state of energy consumption. In these studies, mills tend to follow a Bell curve: Of the 150 mills studied, 20 are exceptional, 20 are poor and the balance forms a characteristic bulge in the centre. Perhaps, surprising, the age of a mill does not always relate to its efficiency. In the same study that Paprican conducted five years ago for PAPTAC, two of the older mills had good energy efficiency.

Given such a scenario, Eamer is hard-pressed to remain optimistic about the status quo. “You can count on one hand the number of Canadian pulp and paper mills that can look forward to competing in the global market in the years to come.”

Even so, mill practices greatly contribute to a mill’s energy efficiency. For example, when mills update their equipment, they often neglect auxiliary equipment such as steam- and water-supply systems. The mills might have installed new effluent systems, and even new boilers and cogeneration plants. But it is akin to putting new wine in old wineskins, or shifting the problem from one area to another area of the mill. As Paprican’s Browne puts it, “In such a complex process, it is difficult to ensure that energy savings in one part of the operation do not lead to losses elsewhere.”

Computer modelling (including thermal Pinch analysis) is one tool that mills have been increasingly turning to in the last decade. Pinch analysis is a steady-state computer simulation to identify areas in which heat exchangers can be installed to reduce energy use. “More mills are doing pinch analysis and implementing energy-saving projects,” Stuart says of the holistic approach to energy analysis.

Although it has been often said, it still holds true: Management has to take energy efficiency more seriously. “The implementation of an energy-conservation program frequently requires a change in culture of a mill,” Browne says. “Cultural changes must start with senior management, who must be committed to the process, develop a sound plan of action, provide the leadership and secure the resources.”

Tembec’s Approach

One company that is doing a noteworthy job with energy conservation is Tembec Inc., based in Tmiscaming, QC. “Energy efficiency is an area that the industry in general has neglected for years, especially in Canada, where energy prices were low in many parts of the country,” says Paul Dottori, vice-president (energy and major projects). But with gas and electricity prices forecasted to remai
n high for years to come, it is important to focus on this area,” Dottori says.

To emphasize its importance, Tembec has set up a corporate department dedicated to energy. “As well, at each mill we implemented an energy coordinator, whose mandate is to reduce energy costs, Dottori says. “Energy is such a significant cost right now that we are looking at all ways to actively reduce costs.”

Tembec has set a goal of reducing its energy use by 10% a year. This includes not only steam and electricity but also water. “By reducing water you can reduce your thermal load, and by increasing power generation from liquor and bark, you can reduce your electrical purchase load.”

Its alternative energy sources like biomass, liquor cogeneration and hydro generate about 180 MW a year of power — representing about 25% of Tembec’s energy needs. It is operating an ethanol plant in Tmiscaming that converts spent sulphite liquor to ethanol, which it then sells. Another energy-related project is a second anaerobic effluent-treatment plant, which will generate methane gas, thus displacing purchased natural gas.

Dottori says that efficiency is an important area in energy reduction. “In the next five to 10 years, I expect to see a lot of activity in the area of achieving higher thermal efficiencies in conversion equipment.”

For one, many mills waste a lot of energy in needless steam production, Browne points out. This is borne out in a report that PAPTAC’s Energy Committee and Paprican prepared: Energy Cost Reduction in the Pulp and paper Industry — An Energy Benchmarking Perspective. One notable point is that there is a great potential for energy reduction in pulp and paper mills.

For example, a model kraft mill can be operated with 9.9 GJ/adt process steam, 1.2 GJ/adt process fossil fuel and 578-kWh/adt process electricity. In the model, process steam and electricity demands can be met by burning the spent pulping liquor and hog fuel associated with the chip supply. The only purchased energy is the 1.2-GJ/adt of fossil fuel for the lime kiln. The average existing kraft mill, however, purchases considerable more energy: an additional 5.99 GJ/adt of fossil fuel and 272 kWh/adt of electricity.

Biogas, generated from the decomposition of non-recyclable waste captured at landfills, is another noteworthy initiative. For example, Cascades Fine Papers Group (Rolland Division) in Sainte-Jrme, QC has begun to use biogas, captured at a landfill in Sainte-Sophie and transported via a 13-kilometre pipeline to the mill. Cascades forecasts that biogas will fulfill 75% of its requirements for thermal power. Cascades invested $2-million in the project, which is a partnership with Intersan, a waste-management company, and Gaz Metro, a leading energy company.

One of the most interesting initiatives in the United States is Agenda 2020, which began in 1994 as a partnership between the forest-products sector and the US government’s Department of Energy. Agenda 2020’s chief purpose is to accelerate the research, development and deployment of new technologies. Among the areas it is looking at are Breakthrough Manufacturing Technologies, Positively Impacting the Environment and Advancing the Forest Bio-Refinery. (See sidebar: Agenda 2020.)

Research Initiatives

Among the leading research initiatives taking place in Canada, similar to Agenda 2020, is at Alberta Research Council in Edmonton, whose Forestry Unit is looking at areas such as bio-fuels and bio-refining. “There is a wide spectrum of residues that come out of sawmills and pulp mills that can be converted to bio-fuels,” says Yamin Boluk, a scientist at ARC. Boluk’s research centres on fractionation of wood residues by chemical methods and converting sugar with the purpose of manufacturing bio-chemicals like ethanol. “We are trying to bring some sugar-based chemicals and incorporate them in ethylene chemistry,” Boluk says. “Our product development is complementary, not replacement.”

As Boluk sees it, the chemicals will be produced either from petrochemical-based products or from bio-based sources like wood and pulp residues. “One objective is to incorporate renewable chemicals into the ethylene building block. There is a huge opportunity to use such wood residues for bio-refining.” And all this would be done without changing the process conditions of the mill, whether the source is black liquor, sludge or effluents.

As a comparison, Boluk cites the extraction process used in oil refining. “The residues of oil production that are not converted to fuel are used to produce the building blocks for chemicals. In the same way, the residues from conventional wood, pulp and paper production can potentially be used for chemical production.”

As for when this will take place, he foresees some products being released in two to five years, and others in 10 years or more. “The ones that are easier to extract will be released sooner,” he says.

The solution will be found from many sources, including biofuels (bio-oils and biogas), energy reduction, and research into alternative fuels. “A national consortium to discuss the energy problem would be a step in the right direction,” Browne says.

The line from here to there is not a straight one. And although it has been said previously in so many ways — “the energy problem is a difficult one” — it does have a solution. “The industry has done great,” Stuart says. “But they need to maximize this opportunity. Don’t miss the Kyoto opportunity.”

Perry J. Greenbaum, a freelance business and technology writer, can be reached at pjgreenbaum@metrocast.net.

Canada falls short of Kyoto

Canada signed and ratified the Kyoto accord, making a commitment to cut greenhouse gas emissions between 2008 and 2012 to 6% below 1990 levels, yet emissions now have risen to 24% above 1990 levels. (For example, CO2 emissions are 532 Mt.) The powerful domestic oil industry has lobbied effectively to guarantee that the development of oil sands — a particularly noxious source of carbon dioxide — will go on expanding. This makes the forest-products sector’s efforts in reducing emissions even more striking — 28% lower than 1990 levels. Some skeptics contend, however, that the reduction was achieved in part by mill shutdowns.

Keeping track of energy

The Energy Technology Data Exchange, a program of the International Energy Agency, has a comprehensive website (www/etde.org/ETDEWEB), which is dedicated to the environmental effect of energy production and use, including climate change, energy policy and renewable energy technologies. It contains more than three million bibliographic records.

Agenda 2020

The Agenda 2020 program is an initiative among government, industry and academia in the United States to increase energy efficiency, reduce environmental effects and improve industry economics. “They are looking at some very innovative things, including black liquor gasification,” says Paul Stuart, a professor at Ecole Polytechnique’s department of chemical engineering in Montreal about the BLG process. “BLG falls under the heading of bio-refining.”

The BLG process holds much promise to not only produce “green power,” but also open a new market for pulp and paper companies. “[Recent} studies suggest that valuable products like synthetic diesel fuel and selected hydrocarbon products can be economically produced from hydrogen-rich BLG off-gases,” says a recent Agenda 2020 Progress Report. “Profits from future sales of these ‘new products’ could exceed profits from the sale of traditional; pulp and paper products.”


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