A University plan to use alternative fuels in the Southeast Steam Plant has drawn criticism from the community.

by Emily Kaiser

Chances are you don’t know where it comes from.

The heat that fills every University building on the East Bank and West Bank, which is enough to heat 55,000 homes, is transported through tunnels from a building nestled along the northern bank of the Mississippi River.

But the way that heat is produced could change.

Although a new proposed way to create heat could save the University $4.5 million, it is a source of controversy among University and environmental officials.

University officials have been aspiring to burn new fuels at the University’s Southeast Steam Plant, which has produced a two-year battle for reduced cost and flexibility.

The Minnesota Pollution Control Agency is reviewing the University’s pending permit that would allow the plant to burn oat hulls and test other forms of biomass.

The permit application, which has taken almost a year and a half of negotiation to be completed, will be out for public review in the next week.

The process caused debate and often frustration, which resulted in an “agreement to disagree,” said the University’s Director of Energy Management Jerome Malmquist.

The primary potential fuel the steam plant would burn is oat hulls, which would offset the use of natural gas in the steam plant.

Oat hulls are a byproduct of General Mills cereals and are considered a renewable resource.

The steam plant test-burned the oat hulls with approval twice in 2003 and sent the results back to MPCA along with the permit amendment to add oat hulls to its fuel list.

Malmquist said the test burns were “excellent” and proved the oat hulls would be a great alternative for the steam plant.

University General Counsel Mark Rotenberg said his office worked with the steam plant to get the permit within the MPCA limitations.

“We believe that this is an appropriate way for the University to engage in energy conservation and utilize renewable resources,” he said.

The test burn emissions results, which measure the amount of pollutants put into the atmosphere, show a decrease in carbon dioxide compared with coal, but a slight increase in nitrogen oxide and particulate matter.

Coal is considered the most polluting fuel because of the amount of greenhouse gases emitted when burned.

“When people look at emissions, they want all of them to drop,” Malmquist said. “We are still below our permitted levels, which is a good thing.”

The major amendment to the permit caused concern among neighborhood associations due to the ambiguity of the effect of future fuels.

Malmquist said the steam plant is never trusted by its neighbors to make environmentally safe decisions.

The original permit listed different forms of biomass, including animal waste, which could be tested in the future.

Neighbors were concerned about the results of burning animal waste and bringing the product near their homes, said Justin Eibenholzl, environment coordinator for Southeast Como Improvement Association.

“People in the community were concerned with truckloads of manure coming into the area and the possible health effects,” he said.

Malmquist said the plant never planned to use animal waste, but it is part of the Environmental Protection Agency’s formal definition of biomass.

Animal waste was removed from the permit after residents at three neighborhood meetings voiced concerns, said MPCA permit engineer Steven Pak.

“Neighborhoods are rightly concerned that we would have the opportunity to bring in biomass that would be unacceptable in an urban setting,” he said. “No way over my dead body would we put animal waste in our boilers.”

Permit amendments

Under the current permit, the steam plant is required to get permission from the MPCA to test-burn a new fuel, and submit the results with a permit amendment application.

Steam plant officials wanted to have a flexible permit, allowing them to test and burn different biomass without going through a formal application process each time, but, Pak said, it is against MPCA’s rules.

The steam plant can’t avoid permit amendments because MPCA needs to evaluate each fuel before it is burned on a large scale, Pak said.

Besides allowing the University to test-burn potential fuels, steam plant officials wanted to burn the fuels, without application, once they produced positive results.

Pak said MPCA does not allow businesses to bypass the amendment process.

“Our position has been that new fuels require a major amendment process, like what they are doing for oat hulls,” he said.

Biomass is a fairly new fuel, and MPCA does not have extensive data on their emissions, Pak said.

“When burning new biomass fuels, we want to look into the history and since we haven’t seen these fuels, we need to look more closely,” he said.

Malmquist said the steam plant wanted a more streamlined process for new fuels due to the small window of time some biomass is available.

“The opportunity for some materials might be very short,” he said. “We have to go back to get a major amendment to use the material, which may take too long.”

There is a lot of competition for potential biomass fuels because they are used by other energy sources or industries, Malmquist said.

Kirstie Foster, spokeswoman for General Mills, said other companies have contracts for oat hulls, but she did not specify the businesses.

Alfalfa cubes, for example, are a potential fuel the steam plant would test-burn, Malmquist said. In order to get alfalfa cubes, the steam plant would be competing with almost every horse owner in the area, he said.

The use of biomass as a source of energy is nothing new to college campuses. The University of Iowa began burning oat hulls in 2003.

The University of Iowa receives oat hulls from Quaker Oats, said Ferman Milster, associate director of Utilities and Energy Management at Iowa.

“We are reducing greenhouse gas emissions and our costs are significantly reduced,” he said. “We are also able to support local business so this is a win for the company and the University.”

The University of Iowa is saving approximately $750,000 on fuel this year, he said.

Once the permit is out for public review this week, the MPCA will accept public comment that will factor into their decision to approve it, Pak said.

One of the primary reasons the University wants to use biomass as a major fuel is current high natural gas costs and the expected increase this winter, said Jerome Malmquist, University director of Energy Management.

Three years ago, the price of natural gas for the University was approximately $3 per million British thermal units, and currently is $13.50 per million Btu, Malmquist said.

In addition to the price of gas, Malmquist said he is confident there will be a shortage of gas.

The University would then be told not to burn gas and required to burn alternative fuels such as fuel oil, coal and wood.

Last winter was mild, but the University was told not to burn gas 13 days of the season. Malmquist said he suspects the number of days could increase to 30 this season.

As of Friday, 56.7 percent of gas in the Gulf of Mexico is still unavailable, Malmquist said. The University receives natural gas from the Gulf as well as Canada.

Natural gas prices were affordable until 2001, when the gap between supply and demand grew smaller, said Ed Legge, spokesman for Xcel Energy.

Demand for natural gas increased as more plants were built to burn it because natural gas was a cleaner fuel than coal, he said.

The use of oat hulls to offset natural gas would save the University $4.5 million during a fiscal year, Malmquist said.

Richard Pfutzenreuter, University chief financial officer, said that if gas prices are higher than their expected increase, the University may go to the state for assistance.

“We are monitoring that situation carefully,” he said. “If the increase in fuel costs is an emergency, I am certainly going to be talking to the (University) president and the Board (of Regents).”

Pfutzenreuter said the University would make the decision for emergency help in November.

Neighborhood groups and residents near the steam plant are closely watching the new permit and the potential effects on the area.

The steam plant is in a visible area near homes and businesses, which is a cause for concern when it comes to emissions and different fuels, said Justin Eibenholzl, environment coordinator for Southeast Como Improvement Association.

The neighborhood wants to push the University to use the best fuel sources possible, he said.

Eibenholzl said the burning of oat hulls is not a concern, but the ambiguity of the other potential fuels leads neighborhood groups to be suspicious.

“The neighborhoods want to know if they are switching to some weird fuel,” he said.

Eibenholzl said neighborhood concerns about noise and pollution were often not addressed by the steam plant, which led neighbors to keep an eye on it.

“Concerns often fall on deaf ears with no course of correction,” he said.

Jerome Malmquist, University director of Energy Management, said trust is the biggest issue with neighbors.

“We are trying our hardest to help our neighbors, but they keep pushing us in the other direction,” he said. “We want to advance the cause of the University and we are getting so much resistance.”

Calder Hibbard, a research specialist at the University and a Como neighborhood resident, said the bordering areas have to watch multiple sites for pollution problems.

“For those in our neighborhood, we are bordered by old industry on all sides,” he said. “When someone tries to change a permit, it’s an entry point for us as a community to voice our concerns.”

Under the pending permit, the Minnesota Pollution Control Agency is not requiring the steam plant to alert neighbors about test burns or new fuels because there would not be a public comment period each time.

Pak said it is not MPCA’s responsibility to require public awareness, but the University could alert neighborhoods before major changes occur.

Malmquist said the University’s first step before test-burning a new fuel would be to alert the neighborhood associations.

The construction of proposed condos at the Pillsbury “A” Mill location could be jeopardized by the steam plant’s potential fuels, said David Frank, project manager for real estate investment company Schafer Richardson.

The condos would be a short distance from the steam plant and possible dangers to his buyers are a big concern in his project, he said.

“If there is danger to people who might buy from us and how we construct, we are not going to do that,” he said.

The proposed building would rise above the smokestacks, which could cause problems if balconies were built at that level, he said.

Factors such as noise, truck activity and potential complaints also are concerns with the project, he said.

If oat hulls were used at the steam plant, four trucks would come through the neighborhood each day, Malmquist said.

The city of Minneapolis and the Sierra Club said they were not involved in the permit process but often submit comments during the public review.

Scott Elkins, Sierra Club state director, said his organization hasn’t dealt with the permit or the steam plant in almost 10 years.

But he said the Sierra Club is planning on looking over the permit and voicing concerns, if necessary, during the public review this month.

The increased natural gas prices and potential use of oat hulls will affect students’ tuition and housing costs, said Jerome Malmquist, director of Energy Management for the University.

University students pay for the heating and hot water in all University buildings through their tuition bills, Malmquist said.

Students pay approximately $200 a year for steam through tuition bills, said Mike Nagel, University assistant director of energy management.

Students living in the residence halls pay approximately $375 a year, in their room and board costs, for steam, said Norman Goranowski, business manager of housing and dining services.

Residence hall energy expenses are a reflection of costs from two years ago, he said.

Goranowski said that if the University faces a deficit in its energy expectations, it would not be seen in room and board prices until two years later.

“Rates have to recover all the costs we incur to provide housing and meals on campus,” he said.

Xcel Energy is warning customers that heating rates in the Twin Cities area will increase at least 40 percent this season, said spokesman for Xcel Energy Ed Legge.

To help keep prices down for the University and the Twin Cities area, Goranowski said conservation is best.

“Anyone would save on heat if they kept their temperature more moderate, weren’t opening windows and generally (were) keeping consumption down,” he said.