May 20, 2014

Mills, Environmentalists Debate Energy Credits for Black Liquor in Maryland

Environmentalists will seek to free up state funds for renewable energy resources by excluding “black liquor” from the list of renewable energy sources eligible for state subsidies, after an effort to do so failed this year.

House Bill 747, which failed in committee during this year’s General Assembly, would have changed the state’s renewable energy portfolio standard to no longer treat the burning of black liquor — a byproduct of the papermaking process that can be burned to produce energy — as a renewable energy source eligible for state funding.

Luke Mill in Western Maryland is the only in-state facility that burns black liquor for energy, but it isn’t the only one that receives funding through Maryland’s portfolio standard, said James McGarry, chief policy analyst for the Chesapeake Climate Action Network.

Energy companies in other states on the same power grid as Maryland — PJM Interconnection provides electricity to 13 states, including Maryland and Washington, D.C. — are eligible for state subsidies. McGarry said the Johnsonburg Mill in Pennsylvania is applying and he expects it to get funding.

Rich Reis, energy committee chair for the Maryland chapter of the Sierra Club, said he wants energy sources that involve the burning of materials to be excluded from state subsidies through the portfolio standard.

By burning black liquor, greenhouse gases are released into the air, although to a much less damaging extent than those emitted through the burning of fossil fuels such as coal. McGarry said he would rather see the portfolio standard money spent on other renewable energy sources, such as solar and wind energy.

“It’s one of the top things that Maryland has to do to achieve its greenhouse gas goals,” McGarry said. “As long as our energy law is broken, we’ll try to fix it.”

Delegate John Olszewski (D-Baltimore County), sponsor of the House bill, said that in 2011, 45 percent of renewable energy subsidies from the state went to black liquor facilities, including Luke Mill.

But in 2013, McGarry said, that number dropped to 26 percent as wind energy increased — from 14 percent in 2011 to 39 percent in 2013.

Mill byproducts such as black liquor will produce the same emissions regardless of whether they are burned for energy, incinerated or left to decay in a landfill or elsewhere, according to a 2011 Environmental Protection Agency report.

Facilities such as Luke Mill aim to harness the black liquor before it releases greenhouse gases without being used to generate energy, said Jessica McFaul, press secretary for the American Forest & Paper Association.
According to a National Council for Air and Stream Improvement report released in October, the use of black liquor prevents a significant amount of emissions of greenhouse gases that would occur if fossil fuels were burned instead.

Maryland’s Greenhouse Gas Reduction Act Plan, released in October, found that diverting portfolio standard funds from black liquor to wind energy would reduce greenhouse gas emissions by 1.4 million metric tons. McGarry said the jury’s out on exactly how the burning of black liquor for energy production contributes to greenhouse gas emissions.

It makes sense for facilities such as Luke Mill to continue using black liquor to generate energy, McGarry said, but it doesn’t make sense to reward companies that have used black liquor for decades. There’s no issue with burning black liquor for energy production, so state funds would be better spent on other, newer renewable energy sources, he said.

McFaul wrote in an email that she could not comment on whether Luke Mill would have had to cut jobs if it lost the funding it receives from the portfolio standard.

The bill would have compensated Luke Mill for losing portfolio standard funds, however, because it is an in-state facility, Olszewski said.

The Sierra Club hasn’t decided how it will approach the portfolio standard’s classification of black liquor next year, Reis said. There should be a similar bill next session, Olszewski said, and he doesn’t expect environmental groups to drop the issue. McGarry said the issue isn’t going away.

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