Green Energy

A goal for energy from grass:  make it local first

A dispatch from Ontario and Missouri

There are times when a light turns on, when something that sounds fine in theory presents itself as solid in fact. I had one of those moments on the sweeping plains just a few miles off the north shore of Lake Erie. There in Essex County, Ontario, surrounded by massive greenhouses, this natural skeptic began to believe in Miscanthus giganteus. Miscanthus, the tall-growing perennial grass, has drawn considerable attention in the past few years as a biomass crop for energy production. Still, “considerable attention” doesn’t quite warm up the furnace, nor does it move editors to lift their skepticism. But a greenhouse did.

{gallery}decjan12/Green:210:270:1:2{/gallery}The story of miscanthus in this farming community in Ontario is the story of greenhouses and energy prices. Ontario has about 2,000 acres in greenhouses with the highest concentration of them in Essex County and nearby Chatham-Kent. Greenhouses originally sprung up here because of the coarse, lake-bed soil that lends itself to growing vegetables. Over the years, as hydroponics took over, the greenhouses spread out, and the infrastructure for greenhouse agriculture grew. Vegetables grown here have easy access to Toronto and major U.S. markets along the Great Lakes. Some go by plane to international markets as far away as Hong Kong.

I was in Essex on tour with members of the International Federation of Agricultural Journalists; we’d piled into buses to see the area, and it seemed that each time our tour bus rounded the corner of a massive greenhouse, another sunlight cathedral of tomatoes, cucumbers and sweet peppers was waiting. Greenhouses are also here due to the availability of natural gas; it takes plentiful, and hopefully affordable, natural gas to keep an under-glass growing environment suitable for vegetables.
Standing among 90-foot tomato vines stringing through one of Vic and Mike Tiessen’s greenhouses, Vic explained the brutality of natural gas price spikes in 2001 and 2005. The Tiessens grow vegetables on contract, so, when they lock into a price, their profit margin depends on being able to hold down costs and produce and deliver vegetables efficiently.

An average Canadian greenhouse uses between 8,000 and 10,000 gigajoules of energy per acre per year, at least 40 percent of the operation’s input cost. A gigajoule, in terms of natural gas, is about a million BTUs. The average Canadian home consumes something like 120 gigajoules per year in natural gas. You can see why capping greenhouse energy bills is top of the agenda for the Tiessens.  When gas prices spiked, they hit $14 per gigajoule. Gas is currently around $6 per gigajoule (spurring expansion in area greenhouse acreage). All told, Ontario greenhouses use 25 million gigajoules of energy per year—payable to far-away gas companies rather than local farmers.

“There was a gas price shock in 2001 that hurt growers,” said Vic. “In 2005 prices went up again. That was just after a major expansion for us, and it hurt the bottom line. That’s when they got serious about miscanthus.”

To Vic, “they” more specifically means his nephew, Dean, who also farms in the area and has become something of a biomass evangelist. Our tour had stopped at Dean’s place, Pyramid Farms, prior to coming to Vic’s family greenhouses. And if Dean is an evangelist for miscanthus, Pyramid Farms is his proving ground. On the approach, you can see his work to find the right varieties for the growing conditions in southern Ontario. There is miscanthus growing in various stages of maturity, and with various levels of success in early weed control (a challenge for establishing the crop). Mature miscanthus shades out most other plants.

Dean Tiessen’s goal is to level the fuel costs for his family’s greenhouse operations and ultimately to provide all the energy needed to grow greenhouse crops.
Dean knows the stats by rote. He knows what it will take to get to energy self-sufficiency for some of Essex County’s greenhouses:

“We have about 1,000 acres [of miscanthus] in the community right now and hope to see 10,000. So I’d have a line of sight on 20 to 30 years of fuel. The cost to establish miscanthus was about $2,000 per acre a few years ago, but now we can do it for below $500 per acre. In the first year, the harvest is only one to two tons. The second year it’s five to six tons. In year three you get 10 to 11 tons dry matter per acre, which is full harvest,” he said. “One important thing about miscanthus is it doesn’t break down—you can store the harvested material.”

Because miscanthus does well on marginal ground, Dean Tiessen believes it’s an easy answer to the increasingly asked question: should we be growing food or fuel?

“We can push some of that marginal land back into production,” he said. “It actually boosts organic matter; after 11 years we see organic matter levels at 8 to 11 percent.”

Most importantly for the greenhouse business, though, is the cost of energy for growing vegetables. The Tiessens hope to knock it down to $3 per gigajoule.

That’s when the light went on. You can talk about gigajoules or millions of BTUs, Canadian dollars, U.S. dollars, energy independence, sustainable farming and all the rest of it, but if you can cut your most expensive input cost in half, you can make money growing vegetables under glass. Or, to put a more local frame around it, you can more efficiently grow broilers or turkeys or hogs, and, yes, tomatoes, cucumbers, and peppers.

Of course, I came to that conclusion after spending some time with the Tiessen family, whose foray into renewable energy has grown from on-farm trials and using the crop for energy to running a growing business around miscanthus itself. They are perfecting propagation and harvest equipment as well as root-stock supplies. The family believes in the product. But it also sells it. Salesmanship re-ignites an editor’s skepticism. Plus, there are subsidies for biomass production from Ontario’s provincial government, a government that insists it will have turned off coal power by 2014. Sometimes excitement for a particular product or program is directly related to the quiet check received for participating.

So when I got back, I called on Tom May, director of marketing for MFA Oil. Earlier this year, MFA Oil kicked off a biomass project in conjunction with Aloterra Energy. The venture, dubbed MFA Oil Biomass, secured federal funding for a pilot program to fund establishing miscanthus fields in Missouri and Arkansas.

May said that as of fall 2011, all the MFA Oil Biomass growers who signed up to establish miscanthus through USDA’s Biomass Crop Assistance Program had been accepted into the program. May said depending on weather, there should be some 13,000 acres of miscanthus planted in central and southwest Missouri and Arkansas by spring.

The pellet mill MFA Oil Biomass set up in Aurora, Mo., is operational and currently processing wood pellets until miscanthus is grown and harvested in sufficient tonnage.

I put a lingering question born from listening to Ontario provincial politics to MFA Oil’s Tom May: are we going to be in the same place with biomass as we are with ethanol? Will the market buildout for promised federal subsidies plateau and be toppled if those subsidy levels fall subject to the whim of federal rule makers?

He said, “The good thing about BCAP is that it helps get the project off the ground. Growers are compensated for establishing the grass, then it’s done.”

“When I look at miscanthus in the Midwest,” said May, “I’m looking at MFA Oil customers who don’t have access to natural gas for their farms—they’re using propane. The important thing that an acreage of miscanthus does for those customers is makes a stable energy price, removing some of the volatility seen in the propane market.”

And once the miscanthus is established, May pointed out, the cost of production is annualized to some fertility and harvest costs for the life of the stand (10 to 20 years). “With what I’ve seen, that means that a producer using the energy from miscanthus would be paying the same cost that propane was at 10 or 12 years ago,” he said.

Miscanthus is on the rise in Ontario and should begin proving itself on the Tiessens farms by next year as they build out a pellet facility and begin converting greenhouse furnaces to miscanthus fuel. Here in the Show-Me state, we have a few years to wait, but we might be around the corner from a few acres of local energy independence. If it all works out, I bet that light comes on a little brighter.