Considering the Counterfactuals
On July 24th my colleague, Erin Voegele published this story which reported the publication of a scientific inquiry about the greenhouse gas implications of making power in the United Kingdom from pellet manufactured in North America. We rightly published the story with the headline “U.K. DECC model confirms GHG benefits of North American pellets”. The report is worth digging into. That said, it is a heady document that is a remarkable exhibit of the complexities of greenhouse gas accounting.
The report’s executive summary is where I’ve spent most of my time. The first page does a nice job of setting the table about where the Department of Energy and Climate Change is headed and how it will measure its progress toward that goal.
These items jumped out at me:
1. The Climate Change Act of 2008 mandates that the UK will reduce its GHG emissions by 80% from 1990 levels by 2050.
2. Life Cycle Assessments will be used to calculate the carbon intensity of energy production from every pathway under consideration. To qualify for support under the Renewable Obligation the number to beat is 200kg C02e/MWh (carbon dioxide equivalent per megawatt hour).
3. For comparison’s sake electricity from natural gas is calculated at 437kg C02e/MWh and coal comes in at 1018kg C02e/MWh.
So the number to beat is 200. If the calculations for a given approach come in at 240, the juice won’t qualify for RO support which will negatively impact the financials and likely result in the project never getting off the ground.
My concern with the report comes in the pages that follow. The authors of this report, Dr. Anna L Stephenson and David J C MacKay spend a lot of time calculating the greenhouse gas benefit by considering the counterfactual. The counterfactual attempts to define what would happen with the carbon tied up in these biomass inputs if they weren’t converted to pellets and used to produce electric power. The authors assert and report in Figure 1 on page 7 of the executive summary that as counterfactuals change, the resultant carbon intensity of the biomass input changes. With some counterfactuals, the range of greenhouse gas intensity of the power made from biomass exceeds not only the 200kg CO2e/MWh metric required to qualify for RO support, but also the 437kg number of electricity made from natural gas. These are the situations opponents and critics of what we are up to as an industry have and will continue to point toward. In fact, in a chart on page 12 of the executive summary the authors identify four different scenarios where power made from biomass inputs has a greater greenhouse gas intensity than coal stoking the “biomass is dirtier than coal” debate.
My struggle is that I don’t see a counterfactual the closely aligns with what I’ve heard and witnessed first hand when it comes to forest management in the American Southeast. Loblolly pine stands in the southeast are grown intentionally, harvested intentionally and replanted intentionally to satisfy existing markets. Some markets are in decline. Some markets are emerging. These market forces are dynamic and can change year to year. I think any approach that hinges on “what may have been” or “if/then logic” run a high risk of being used to forward many different agendas. Our industry championed this report because there were instances where the assumptions and facts concluded what we all believe, that biomass derived energy offers robust greenhouse gas benefits. That said, this same report will be used to argue against the further growth of the industry, if it hasn’t already.