Special Report: Is Wood a Good Green Fuel? Maybe Not

Controversy dogs this biomass energy source.

Wood was humanity’s first fuel, with our ancestors clustered around campfires hundreds of thousands of years ago. Some hope that timber—converted into pellets that are fed into furnaces—will have a big place in our future energy needs as it did for Homo erectus. That is far from certain, though, and it may well remain a niche source.

The trouble is that there’s controversy over whether burning wood is less greenhouse-gas producing than burning coal. Scientists are divided on the subject. The upshot is that wood-based energy “is not a very big growth area,” said Scott Barrington, CEO of North Sky Capital, which prefers investing in the likes of solar and wind.

Depending on how wood burning is measured, it likely produces less greenhouse gas emissions than coal, but more than natural gas, some scientists say. The pro-wood forces insist that the calculation must include how much the trees that replace it contribute to removing carbon from the air.

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To its advocates, wood is a green way to produce energy. Enviva, the largest US wood biomass company, argues that it can reduce a converted coal plant’s carbon footprint by up to 85%. In Europe, officials in 2009 endorsed wood-burning power and declared it “carbon neutral,” meaning that the trees that replaced those felled for burning offset any energy-production pollution, by reabsorbing the carbon dioxide that combustion releases.

To critics of wood-to-energy, such positions are misleading and overly simplistic. Emission-free solar and wind power are better bets, they say. They say favoring wood could actually boost carbon emissions, not reduce them, for many decades. A study by John Sterman, a Massachusetts Institute of Technology (MIT) professor, declared that the payback from replacement trees could take a half-century or more to overcome the damage done by wood-burning emissions.

The Center for Biological Diversity pronounced in a paper that “even when biomass is burned as a substitute for fossil fuels, the resulting CO2 emissions may actually be worse for decades or even centuries to come.” What’s more, some scientists warn that promoting wood fuels could spawn a global logging boom that would smash forest biodiversity in the name of climate defense.

Biomass makes up just 1.4% of US energy generation, mostly from wood, with all renewables constituting almost 20%, according to the US Energy Information Administration (EIA).

Nonetheless, harvesting wood is a thriving industry, albeit a small one. Much of the world’s supply of pellets for burning comes from forests in the Southeast, where 23 mills operate to churn out the burnable product. In Britain, 14% of energy comes from wood burning. In the European Union, wood is even wider spread as a power producer. US mills in the Southeast ship tons of wood chips across the Atlantic to that humming market.

In the US, wood hasn’t caught on as readily, perhaps because this country has abundant resources of fossil fuels, in particular natural gas. Some American utilities do use it, however. Georgia Power burns wood from the state’s abundant forests.

Wood isn’t the sole biomass fuel. In the biomass area, wood is the predominant source, at 0.9% of total electrical output, with landfill gas and municipal garbage burning a mere 0.3% and 0.2%, respectively.

Energy from trash incineration has a mixed record, as it depends on expensive plants. In Harrisburg, Pennsylvania, a costly incinerator operated for four decades, with frequent breakdowns, explosions, and fires. It also was a terrible polluter, emitting noxious dioxins. The finale was that the plant pushed the city of Harrisburg into bankruptcy in 2011, thanks to $400 million in debt, mostly from the incinerator.

Today, Covanta Energy and several other utility companies burn garbage to generate power. They’ve been much more financially successful at it than Harrisburg. Covanta, now part of EQT Infrastructure V fund, touts a strong record of reducing emissions. Meanwhile, DTE Energy, formerly known as Detroit Edison, started a biomass busines in 1988 that extracts methane gas from landfills, with operations in 25 locales throughout the US.

That said, critics contend that pollution from such plants still is too high, albeit not from greenhouse gases. An environmental group called the Institute for Local Self-Reliance says the facilities release dioxin, lead, and mercury.

Money may not grow on trees, or in landfills, but biomass controversy burgeons anew.

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Special Report: Green Jobs Have a Nice Future … But Fossil Fuel Work Will Persist

While oil and gas workforces are projected to shrink, they aren’t expected to vanish for some time.

Amid a rush of institutional investments, renewable energy seems to have a bright future. And President Joe Biden is committed, one way or another, to create what he calls “good quality jobs” in green energy. Available evidence suggests that plenty of these jobs will come to fruition. But, at the same time, declining oil and gas industry work will not go up in smoke.

That’s because, while renewables such as solar and wind energy have good prospects, traditional carbon-based energy providers are viewed as necessary to bridge the gap to a total clean energy future, which likely will take longer than many environmentalists hope. Fossil fuels make up 60% of US electricity generation, and nuclear plants contribute another 20%, according to the US Energy Information Administration (EIA). Yes, the renewable choices appear to be gaining, and fossil fuels and nuclear power are projected to fall behind as a share of power output, at least under many scenarios. That said, plenty of jobs in oil and gas will remain, albeit not as many as now.

EIA forecasts show natural gas use in power generation will continue to ascend by 2050, although renewables will be ahead—levels will near 2 trillion kilowatts hours for gas and 2.5 trillion for renewables by then. Reason: Demand for natural gas probably will survive, as renewables won’t be ready to take all the reins.

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Oil use in transportation is expected to be flat from now until 2050. Still, said Raoul LeBlanc, a vice president at research firm IHS Markit, it will take decades for the vast fleets of petroleum-powered aircraft, automobiles, and trucks to be replaced by electric vehicles (EVs) or other non-carbon-oriented propulsion systems.

Traditional energy, a boom and bust world that has seen progressively more busts in recent years, is no place for secure employment. Oil prices skidded at the onset of the pandemic in 2020, which prompted the fastest layoffs in the US oil and gas industry’s history. Although prices have sprung back and even gone higher than before, only about 50% of the lost jobs have returned, a Deloitte report concludes. The cyclical hiring and shedding of employees—plus the industry’s aging workforce—is reducing legacy energy providers’ talent pool, the study says. US oil and gas production jobs hit a low this February and then started to add some back, reaching a total of 652,000 positions in October. That is nowhere near the 780,000 level in pre-coronavirus 2019.

If any traditional energy jobs will zero out, they are likely in the coal mining segment, which is shrinking as the result of decreased demand for this most dirty fuel. Coal mining has seen a steeper decline in jobs than oil and gas, as public utilities switch to natural gas. There are currently about 42,500 coal jobs, down by 4,000 from pre-pandemic, and half the count of 10 years ago. Protests that good-paying coal jobs should be allowed to come back ring hollow with Elizabeth Levy, a portfolio manager at Trillium Asset Management, as they now are a tiny fraction of the nation’s labor force. “It’s less than the population of Cedar Rapids, Iowa,” she observed.

Renewables’ employment got hurt in the 2020 economic downturn, as well. An estimated 3 million Americans now work in clean energy, down by about a tenth from last year. But a recovery is underway, with more robust growth forecast for later on. The US Department of Energy found small boosts as of mid-year, with a 1% increase in battery storage jobs, a 6% rise in hybrid electric vehicle positions, and a 2% increase in wind generation positions. These jobs are projected to keep growing, up 8% over the next 10 years, which is as fast as the expected average U.S. job growth rate.

The category totals aren’t strictly comparable for legacy companies and renewable energy, because employment in solar, wind, and the like is spread over a lot of areas and requires more assembly than fossil fuel rigs. While extraction, transportation, and refining of fossil fuel products are concentrated, renewable work encompasses a vast array of fields, including roof installations of solar panels and production of wind turbine blades.

One advantage of solar and wind is that, unlike fossil fuels, they won’t at some point be exhausted, noted Shawn Reynolds, portfolio manager for VanEck’s global resources and environmental sustainability strategies. “Wind and solar farms can be replaced” if they wear out, he said.

A lot of money is expected to be invested in renewables, buoying their future as job growers. The International Energy Agency (IEA) reports that renewables are expected to dominate 2021 energy investments, making up about 70% of the $530 billion countries spend on new power. Wind turbine service technicians and solar photovoltaic installers top the list of fast-growing jobs as more companies and homeowners eye renewable electricity sources, IEA says.

Certainly, oil and gas companies also are spending millions in exploration and added capacity. Liquified natural gas terminals are being built worldwide to transport the stuff to nations with none of their own deposits. Tellingly, though, parts of the traditional energy industry are starting their own initiatives to get into renewables. Oil-and-gas service companies Halliburton and Baker Hughes have set up research centers to accelerate renewable technology development. BP, Royal Dutch Shell, and other European energy companies are selling off oil fields, planning major carbon emission reductions, and investing billions in renewable energy. (By contrast, US giants Chevron and ExxonMobil have just tiny renewable projects and focus on traditional fuels.)

How well do renewable jobs pay? Although the data is spotty, there’s some evidence that workers’ compensation in renewables is comparable to that of carbon-centered jobs, at least in skilled trades. Take electricians: The Bureau of Labor Statistics (BLS) says worker compensation in solar industries is on par with similar positions in legacy energy, as well as other industries.

Biden’s just-enacted infrastructure bill and his social spending measure, now before the Senate, are aimed at bolstered the US’s decaying electrical grid, of help to all energy sources, whether from below the ground or above. And the persistence of fossil fuel availability should give renewable energy producers flexibility, should the wind wane or the sun not shine, while sufficient storage isn’t yet available, Trillium’s Levy points out. So, net-net, green jobs should keep on sprouting.

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