Fueling the future at Rock-Tenn

Keep burning fuel oil and natural gas or move on to something greener? That’s the question up for debate at Rock-Tenn, and tomorrow (August 4) is a big date for the decision process. While research about wood and agricultural by-products and garbage fuels has been piling up for more than a year, the August 4 Rock-Tenn Community Advisory Panel (RCAP) meeting will be the first time that financial data on anaerobic digestion is presented. That, according to everyone involved, is potentially a really big deal.

Background: Rock-Tenn and fuel issues The Rock-Tenn plant, which began as family-owned Waldorf Paper in 1908 and was bought by Rock-Tenn corporation in 1997, processes half of all paper recycled in Minnesota, about one thousand tons daily. Rock-Tenn is an international recycling and manufacturing firm, with about 10,000 employees in plants in the United States, Canada, Mexico and Chile. In St. Paul, Rock-Tenn employs about 500 people, at an average salary of $60,000, and spends about $75 million annually on goods and services. Rock-Tenn occupies 42 acres of prime industrial property just north of Interstate 94 at Cretin-Vandalia. From 1984 to 2007, Rock-Tenn energy needs were met by the coal-burning Xcel High Bridge power plant. With the conversion of the High Bridge plant (owned by Xcel) to cleaner-burning natural gas, it could no longer meet the steam and energy needs of Rock-Tenn. Rock-Tenn, and many public officials, agreed that the company was “the victim of good public policy.” TC Daily Planet coverage Last week: Burning questions about health Last year: Re-fueling Rock Tenn: environmental and economic challenges Who’s on First? Keeping track of the players Following the money: who pays and who profits Garbage or green energy: a look at the issues around RDF

Rock-Tenn Community Advisory Panel
Meeting Monday, August 4, 7 p.m.
Wilder Center, 451 N. Lexington, St. Paul

Right now, Rock-Tenn is burning natural gas and Number 6 fuel oil (the cheapest fuel around), using boilers built in 1928, 1942, 1947 and 1964. More than a year of debate has focused on a variety of “bio-mass” fuels.

Analyzing anaerobic

Anaerobic digestion would start with agricultural or food processing byproducts as fuel and bacteria as the agent to turn that fuel into methane (also called bio-gas.) Anaerobic digestion for production of industrial quantities of methane is a relatively new technology.

While a “Scenario Grid” compares costs and environmental impacts of eight different energy sources, the column for anaerobic digestion is incomplete. Information on costs and on available fuel sources and sites and methods for production was scheduled for presentation to RCAP by the St. Paul Port Authority on July 21. That meeting was postponed to August 4 to allow more time for information gathering.

Support for anaerobic digestion comes from diverse sources. Theresa Olsen, of Neighbors Against the Burner, says that anaerobic digestion “is our preferred combustible fuel option, after conservation and truly clean renewable energy sources from solar and wind are seriously considered.”

In a June 17 letter to the St. Paul Port Authority, Xcel Energy said:

Xcel Energy would like to reiterate its support for the biogas option for Rock-Tenn. Xcel Energy believes biogas can have a major role in the supply of renewable energy to our state and can provide local economic development and improved product utilization for our farms and businesses.

Gerry Parzino, the United Steel Workers representative on RCAP, says anaerobic digestion is a possibility, but:

At this point, we’d like to see entire grid completed., comparison grid with fuels and emissions and costs and everything. We’d like to complete that process so we don’t jump to conclusions on another possible item.

Burning wood

Woody biomass is another fuel option. As little as 15 months ago, experts from the Green Institute studied the issue, extrapolated from Forest Service data, and concluded that Rock-Tenn couldn’t get enough wood to fuel its plant.

This year, they took another look.

“For the second study,” says Carl Nelson of the Green Institute, “we talked to actual loggers and asked them how much they would be able to deliver. This was really the practical step. ... The answer was, yes, there’s several lgoging operations that could supply the full amount, at a certain price. ... The biomass sources are the lowest on the totem pole – the tops and the limbs.”

Choosing wood is not the end game. At least two competing technologies offer ways to turn treetops into fuel.

Fluidized bed technology is better-known and more widely-used, according to Peter Klein of the St. Paul Port Authority. Gasification is a newer technology. According to Klein, questions remain about “how long will equipment hold up, and how does it produce …. But [gasification] has technical advantages, possibly including emissions benefits. On the financing side, it’s easier to get investment in better-known technology. But with a government guarantee [for the loans], investors won’t care.”

Garbage in, fuel out?

Then there’s garbage. Ramsey and Washington County pay trash haulers to dump their loads at a plant in Newport. The plant—built with public money about 20 years ago, but now privately owned—processes the garbage (municipal solid waste) into “Refuse-Derived Fuel” or RDF. Then the plant “sells” the fuel to Xcel, which burns it in Mankato and Red Wing, in combination with more efficient fuels.

RDF is difficult to manage, expensive to burn, and requires extensive emissions control equipment. Xcel does not pay for the RDF produced in Newport, but is paid to take the fuel. RDF has a “negative price point.” Instead of paying for it, the end user (Xcel now, and possibly Rock-Tenn in the future) is paid to take it.

Money talks

Financing and subsidies for various fuels play a big part in determining financial viability. Because RDF is a waste product, the federal government will provide a more favorable interest rate for financing RDF infrastructure. Even more significant, Ramsey and Washington counties and the city of St. Paul have been subsidizing RDF manufacture and sale for 20 years, and government officials appear ready to continue taxpayer subsidies.

David Briere, Rock-Tenn Vice President and General Manager of the St. Paul plant, says that woody biomass and RDF are not economically feasible options. Though the studies produced for RCAP show similar costs for natural gas/fuel oil combinations and the biomass options, he says the studies were flawed. They looked at natural gas and fuel oil prices at a single point in time, says Briere, and that was the highest price point. The average price over the past year shows a substantially lower cost for these fuels. Moreover, says Briere, the price of natural gas has dropped by 38 percent in the past two weeks.

Briere believes that the only economically feasible route for the plant is to continue using natural gas and fuel oil—unless anaerobic digestion can provide a feasible, economical alternative.

What’s next?

After the August 4 meeting, the St. Paul Port Authority will decide what its recommendations will be. Once these recommendations are issued, there will be public hearings, and RCAP will also respond, probably with its own recommendations. Eventually, the St. Paul City Council may weigh in, too.

“Hopefully,” says Gerry Parzino, “we’ll find a safe, green energy that can be a model for future mills and industries in the area and across the country.”

After all of the discussion of fuel alternatives, financing, health considerations, and environmental impacts, however, the final decision on what fuel will be use to generate steam is up to Rock-Tenn.

Mary Turck is the editor of the Twin Cities Daily Planet. She has written extensively on Rock-Tenn issues, and lives in St. Paul, near the Rock-Tenn plant.