Cristopher Wilson, associate real estate professional of Bobby Fisher Mississippi Farmland Investments, have been working with a national company to procure sites for the growth of crops to be utilized in biomass production as part of the second generation of biofuels. Miscanthus promises to be the most profitable of the second generation crops – surpassing the profitability of native switchgrass. Miscanthus crop production has begun in the Mississippi Delta, and the investment opportunities created are exciting.
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There are profitable investment opportunities currently available in developing Mississippi Delta Farmland Energy Plantations. Most of the university studies dealing with second generation biofuel crops have focused on native switchgrass. However, private industry studies have indicated that Miscanthus is a crop which generates more biomass than native switchgrass.
Miscanthus is a sterile cane crop which is hand planted by breaking apart clusters of rhizome grown in propagation fields and transplanting these rhizome to producing cane fields. Currently Cris and Wesley are assisting a company in identifying locations in the Mississippi Delta for the propagation fields. These must be irrigated, sandy soil locations. Miscanthus rhizome are transported from nurseries in Florida and planted in the Mississippi Delta propagation fields from April – July, thus allowing them to take root and become established prior to severe winter weather. After a year, the resulting Miscanthus will be dug up and the rhizome clusters in the plants’ root system separated and relocated to producing cane fields. Over the next six years, this company alone plans to plant 1 million acres of Miscanthus nationwide with 100,000 to 150,000 of the acres to be located in Mississippi. They are currently looking for farmland owners to partner with them in producing the crop and have requested that Cris and Wesley assist in making the introductions. Federal funds are available for offsetting the expenses to the landowner of establishing the crop.
Miscanthus harvested from the cane fields will be pelletized and transported to the end user – primarily biomass power plants for electricity generation which use a combination of the biomass crop and powdered coal. In addition to purchasing the Miscanthus crop, these end users will also be interested in purchasing the 50 metric tons of carbon credits generated per acre by growing Miscanthus. For example, if a generating plant which has been assigned a quota of 100,000 metric tons of greenhouse gas emissions in a year, exceeds this quota, the energy producer can offset the emissions overage through the purchase of carbon credits from the Miscanthus farm producer.
As a matter of background, currently the most efficient means of utilizing biofuels is in some combination with fossil fuels such as adding ethanol to gasoline. However, automobile engines are only one of the contributing sources of carbon dioxide in the atmosphere. Fossil fuel power plants for electricity generation are another major source. With the international focus on global warming caused by the excess carbon dioxide being released into the atmosphere, processes reducing the amount of carbon dioxide released as well as means of sequestering that being released are coming to the forefront.
Soil of farms and forests offers significant carbon sequestration potential. The soil found on the nation’s farms and in its forests has the capacity to store 650 million metric tons of carbon dioxide a year. One of the means of accomplishing this is through the reforestation of marginal crop and pasture lands to transfer carbon dioxide from the atmosphere. The federal government has committed to this through the CRP and WRP programs where landowners are compensated for converting existing cropland to forest. Feel free to talk with Cris or Wesley about how you can benefit from one of these programs. The current focus of this property entry, however, is the opportunity available to real estate investors in utilizing croplands to produce biomass crops.
Energy Secretary Steven Chu has come out in support of clean coal technology. For use in thermal power plants, coal is ground into dust using a device called a powdered coal mill. The resulting product, called powdered coal, is then used in a fossil fuel power plant for energy generation by exhausting the powdered coal into the broiler as fuel. Biomass crops can be added to this process by grinding pelletized forms of the crop in the same manner as the coal is ground and introducing the resulting powder as fuel for the broiler in combination with the powdered coal. This helps to carry out the idea of clean coal technology by reducing the carbon footprint left by the energy generating process.
Carbon sequestration is a geoengineering technique for the long-term storage of carbon dioxide for the mitigation of global warming. Capturing carbon dioxide from the atmosphere through biological processes has been proposed as one of the ways to mitigate the accumulation of greenhouse gases in the atmosphere released by the burning of fossil fuels. During their growing process, plants capture carbon dioxide by photosynthesis, thus reducing the level of carbon dioxide in the atmosphere. Plant matter can then be burned directly to produce biofuel. Using this technology with sustainably produced biomass will result in net-negative carbon emissions, as the carbon sequestered during the growth of the biomass will be captured and stored – removing carbon dioxide from the atmosphere.
As policies are developed and implemented to control the overall carbon footprint of energy production, carbon credits are becoming a key component of national and international attempts to mitigate the growth in concentrations of greenhouse gases. The concept of carbon credits has been implemented as a means of controlling the emission levels. Energy producers can earn credits or can purchase them from companies that sell carbon credits to entities interested in lowering their carbon footprint on a voluntary basis or as a result of increasing regulation. Carbon credits create a market for reducing greenhouse emissions by giving a monetary value to the cost of polluting the air. Emissions become an internal cost of doing business and naturally the cost is ultimately passed on to the consumer through increased utility bills for example. Biofuel crops are a viable means of creating carbon credits. In analyzing the effectiveness of a crop, not only is the amount of energy the crop can produce a factor, but, also, the number of carbon credits the crop can generate by sequestering carbon in the growing process.
Additional Information
Bobby Fisher Mississippi Farmland Investments, Inc. believes that Miscanthus holds a bright future in the arena of second generation biofuel crops. Contact Cris or Wesley to see how this new crop can benefit you and your Mississippi Delta real estate farmland investment.
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