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CORVALLIS, Ore. – A new study of the potential for bioenergy businesses in Oregon reveals an industry that is already taking off with surprising speed, spurred by business tax credits, aggressive advocacy groups and a streamlined regulation system.

The report, funded by a $40,000 grant from the Oregon University System and the Oregon Economic and Community Development Department, shows that there are few hurdles for proposed new businesses to jump, a lot of private and public interest and a new era of bioenergy production already under way.

“We knew there was a lot of interest in this area and opportunities for growth, but it was very surprising to see how much is already going on,” said Kenneth Williamson, head of chemical engineering at Oregon State University, who coordinated the production of this report.

“It appears the most activity so far has been focused in corn-based ethanol and waste-oil biodiesel production, but we expect the field to broaden beyond that,” Williamson said. “Because electricity from hydroelectric production is so inexpensive in the Pacific Northwest, the production of liquid fuels may continue to be the most promising area, especially in areas like cellulosic ethanol where we have some advantages.”

Another major advance, Williamson said, would be legislative approval and funding for the new BEST, or Bio-Economy and Sustainable Technologies Research Center, that has been proposed by the Oregon Innovation Council as another of the state’s signature research centers. Building on the success of ONAMI in helping the nano- and microtechnology industries, researchers believe that BEST will provide the research and development component for bioenergy and bioproducts that is now lacking.

The initiative is envisioned as a collaboration of OSU, Portland State University, the University of Oregon, and the Oregon Institute of Technology, and could help a “clean energy” industry in the Pacific Northwest grow to $2.5 billion over the next 20 years, organizers project. That would also generate thousands of new jobs and create diverse industries all across the region.

"BEST is the next big step in Oregon research institutions and public policy adopting a startup culture,” said David Chen, general partner of OVP Venture Partners and chair of the Oregon Innovation Council. “By working with industry to identify the key research problems that need to be solved, BEST will catalyze our region's strengths to take advantage of emerging growth markets."

The new survey contacted more than 150 individuals, project developers, permitting agencies and others, and identified 80 bioenergy projects already being considered, planned or operational in Oregon. Almost half of the initiatives were in ethanol, biodiesel, and cellulosic ethanol development – such as an OSU research initiative that is moving new miniaturized biodiesel technology towards commercialization. There were also 17 projects working with co-generation of power from forest fuels, and 22 with biogas from dairies and wastewater.

The survey learned that biofuel project developers had some concerns about available feedstock, identified a need to create higher value with byproducts, and were seeking new markets. Forest biomass also had a need for a more consistent fuel supply, and faced difficulties competing with the low price of Pacific Northwest electricity. Several of these needs, Williamson said, are issues that would be appropriate for BEST research programs.

Among the other findings of the report:

• If all the bioenergy plants under consideration or construction were to be built, they could produce 400 million gallons a year of ethanol, 315 million gallons of biodiesel, 40-60 million gallons cellulosic ethanol, and 150 megawatts of power from biomass burning.
• Incremental improvements could be made in the permitting system, perhaps including the extension of a “one stop” permitting system to smaller projects.
• Access to dependable biomass supplies were cited as a frequent concern, especially as an issue that might interfere with obtaining the needed financing for new production plants.
• Outreach and education to the public is necessary, to help prevent the “not in my backyard” reaction to new power plants.

Some other, smaller projects are being considered in various areas. Plastic disposable products such as bags or plastic eating utensils can be converted to biodiesel, and a Portland manufacturer is exploring this. A Eugene company is demonstrating a system that would hit closer to home, in which domestic waste can be converted to biogas to run a kitchen stove. And Oregon’s only coal-fired power plant might be able to generate algae for biodiesel production.

Survey respondents suggested that an active BEST Center would be able to help provide information on federal and state funding opportunities; develop new technologies to improve feedstock processing; develop business models and technical plans; research policy and technology trends; develop models for small-scale energy applications; bridge the gap between research and working technologies; and assist with many other projects.

Several dozen needs were identified by the study that might be candidates for BEST Center assistance.

Organizers say that Oregon has the potential to become one of the leading states in the nation in the field of bioenergy research, development and production, based in part on the wide diversity and strength of the state’s agricultural and forestry sectors.

The full report can be obtained on the web at http://inr.oregonstate.edu/reports_environment.html