I am a project manager with a company called Metasource, which was formed in April of this year. I am a mechanical engineer. Up to three of four months ago, I actually had no knowledge in terms of agricultural-type biomass energy things. This is something that our company is moving into, so it has been a fairly steep learning curve.

Metasource itself is a division of Woodside Energy. We were the business development division which was spun off recently to form a company looking at sustainable energy. Woodside is WA's largest company with capitalisation in excess of $10 billion. Woodside is also Australia's largest independent oil and gas producer. Biomass is using wood and things like that as a fuel source. There are several other companies in Australia doing a similar sort of thing, like Pacific Hydro, Stanwell Energy. A lot of the time these companies tend to pursue one type of power technology or one energy source, rather than a range.

We are an integrator in terms of sustainable energy projects. We have a whole lot of investments in various technologies, and we bring them all together in order to meet someone's power generation requirements. So, rather than pushing one particular technology, we more or less mix and match to bring the best to a customer's requirements. Essentially, we have skills in efficient energy use, investments in fuel cells. We also have quite a bit of knowledge in terms of greenhouse strategies. Our division handles all of Woodside's greenhouse gas strategies, which is becoming a big issue these days for bigger corporates.

We also have a lot of investment in 'smart gas' as we call it. You may have heard of the west Kimberly power generation project; we are involved in that with Energy Equity. We are actually carting, supplying natural gas to the various distributive power stations. We have investments in hydrates, which is a solid natural gas. We are looking at storing natural gas in a form of ice. It is interesting stuff.

Finally, something else we are concentrating on is renewable energy. We have an investment in a wave power company, which more or less takes energy out of waves. We also have a keen interest in biomass, basically using wood as a power source, wood or trees, plants, organic matter. Solar and wind, as well. We have a whole portfolio of products that we bring together to a client to meet all their requirements, and hope to be able to bundle some green energy in there. When I say 'client' I refer to an industrial end user. A lot of the renewable energy-type things, whether it is biomass, wind, solar, whatever, tends to be a little unreliable in some way, in the sense, for example, that the sun doesn't shine all the time, the wind doesn't blow all the time. We are looking at bundling these things with the cleanest possible fuel, which is gas, that can provide a base-load, so when the wind isn't blowing or the sun shining, the client is still provided with energy. You wouldn't get a project up and running purely upon solar, or purely on wind.

We are talking about rather small capacity. We have one project in the order of 25 MWatt capacity. The west Kimberley project which is running pure gas is about 40 MW capacity in various power stations. It does scale up or down anything from a couple of mega watts up to quite large quantities.

Metasource's interest in the biomass market is that we formed a strategic alliance last year with the Oil Mallee Corporation. Its basic target is the use of oil mallee as a bioenergy crop in WA. One of the conditions necessary to use biomass is that the feed source has to be reliable. For power generation has got to have a reliable power source. As part of the alliance with the Oil Mallee Corporation, we are providing capital to them to develop an oil mallee harvester. There are two projects going on at the moment. There is Western Power's pilot plant which is at Narrogin. Oil Mallee Corporation is involved with them as well. They have a harvester, but it is non-commercial in the sense that there is a lot of work to be done. Woodside is providing capital to assist in the development of that harvester. The more efficient the harvesting becomes, the more economical is the operation and the source of that particular biomass. At the moment, oil mallees tend to be used solely for oil generation, which is really a cottage-type industry. If you want to harvest a 100 tonnes per annum as a fuel source, you have to be fairly efficient.

In November last year, we submitted a bid to the Office of Energy to construct a power station in Esperance. Our proposal was based on a biomass power station with natural gas, and also taking power from wind power farm in Esperance. As part of this concept of having a reliable fuel source, we had to make sure there was enough oil mallees, so we purchased one million oil mallee seedlings which are being planted in the Esperance region. Basically, we will go to farmers and enter into agreements with them to grow them on their land: an arrangement similar to the scheme for planting blue gums on private land. It is similar to the blue gum tree crop sort of thing, similar nurseries, similar contracts. Near Esperance, we will need about 4,000 hectares planted to oil mallees. To plant a million trees, we were looking to target about five farmers, about 100 hectares each. It is not all one big block, but planted throughout their lands. There are already more than 7,000,000 trees planted in the Esperance region. The only reason we are not using them is that they are further out, up to 100 km out. Transportation is a problem, and also the age of them. As trees age, it becomes harder to harvest them, especially when they are planted in blocks. It is hard to get the mechanical harvesters down the rows. We probably will look at using some of this feed stock as a supplement, but at this stage we want to put in new trees.

Oil mallee is basically a multi-stemmed, woody ligno-tuber. As I said earlier, my background is as an engineer, so I may have to defer questions that are too technical about horticulture matters. They have reasonable salt tolerance, so you can plant them in the eastern wheat belt where the soil is getting a bit salty. You can't plant them in a salinity-affected area, but they do have some tolerance. They are fairly deep-rooted and are effective in lowering the water table. When they are planted in an agricultural setting, they don't compete with the crops because of the deep roots. You can still run your wheat.

There are quite a number of varieties. OMC and CALM have been doing a lot of research on different varieties, taking genetic material from local natural stocks and developing them to improve their oil production, salinity tolerance, etc. So you can choose what features you want, high oil content, high biomass.

Depending on their growing conditions and where they are, they can be harvested in as little as three years. They are rapid growers. Down in Esperance, conditions are not as good as in Narrogin or Katanning, so it may be five years before you can cut them. When the young plants grow, at first they are a single stem. During harvest, this is cut off and the base regrows, usually multi-stemmed. They can be coppiced regularly, depending on growing conditions, sometimes as often as every two years. In Esperance, we are planning to do it every three years. In coppicing, leaves are separated and the oil is extracted from the leaves. Depending on the contractual agreement with the farmers, they can be grown primarily for oil or for biomass production, with oil as a byproduct.

Revenue for farmers is mainly from oil production. A lot of oil mallees were planted primarily as land care, reducing salt and improving the condition of the soil. They were getting up to 3% Eucalyptus oil content, and that is being improved all the time. Oil mallee also has a very high cinneol content, which is a more pharmaceutical grade of eucalyptus oil. Cinneol can be used as a solvent and there is a lot of research into whether it can be used to replace oil-based solvents, industrial solvents. Most of Australia's eucalyptus oil is actually imported from China, from blue gum plantations in China. Australia's production is only about five to six hundred tonnes per annum, and we import 3000 tonnes.

On the biomass side of production, there is about 25 kg per tree, which includes wood and leaves. Wet biomass has about 10 gigajoules value, and dry about 25 gigajoules. If the oil is not extracted, obviously the biomass value is greater. A power station using biomass reduces its emissions considerably in comparison with conventional power generation, particularly diesel. While we do emit carbon dioxide by burning the wood, this is carbon dioxide which came out of the air in the first place, and we are just putting it back, unlike fossil fuels which just add carbon dioxide. And with biomass, there are no NOX or sulfur dioxide being emitted. Power stations can get credits from the government for using renewable energy, which help bring down the cost of power. We can sell our power for little bit more money. Renewable energy credits are from the federal government. A possible future source of income might be from the sale of these credits.

The other possible source of revenue for farmers is the carbon sequestration, which means using the trees as carbon sinks, or carbon credits, to help Australia meet its Kyoto requirements in 2008. Basically 30% of the carbon dioxide the trees pull in end up in the roots. The oil mallees have absolutely huge roots. They were the bane of farmers' lives when they cleared land, ripping out huge mallee roots. From the perspective of a company like Woodside, the carbon sequestration, the ability to get carbon credits, is something they are interested in, possibly to offset their own emissions.

Finally, from a farmer's point of view, the prospect of salinity control, just planting these trees helps them not to lose land because of salinity. It helps them to stop salinity from affecting the rest of their land, which can have an economic benefit, and keep them in business. Trees are planted on an integrated basis, planted amongst existing crops or livestock. When the plants are growing, they need to be protected from livestock. They are pretty hardy once they are established. They can be planted in a hedge, or alley, or in a belt around the perimeter of a farm or paddock. They can also be planted in a block like blue gum plantations. The problem with that is that some of the inner rows tend not to survive. They don't get enough nutrients and sun. Growth tends not to be so vigourous in a block.

They are usually planted 1.5m to 2m between trees, basically in big, long runs, about 2,600 per hectare. Quite often planted in alleys with about 3m between them, then about 100m of crop and another alley. It allows the farmers to get harvesters in, sprayers and booms, and still get the benefits of the crop. Plantation methods are similar to what they use with blue gums. Basically the same type of machinery, tree plantation type of thing.

There are quite a few environmental benefits in using mallee biomass in power generation: a reduction in salinity by lowering water tables, helping prevent the encroachment of salinity. Landcare benefits - reduced nutrient and water run-off. Bands of trees stop wind erosion, and stops carry-over when they are spraying and fertilising. The trees actually capture a lot of that stuff. Corridors of diversity, alleys of trees in your paddocks, means having a lot more life.

There are other potential benefits from developing the use of oil mallees. If the supply exists, other products can be developed, such as particle board or other carbon products.

With the concept we have for Esperance, we look to integrate a biomass power station with a normal power station, to make sure we have reliability of supply. We are actually planning to ship liquified natural gas down from Burrup to Esperance. We had something like 3 triple road trains planned per week to bring gas all the way. We then have the gas generation side. The engines use both gas and diesel. We are also planning to import power in from existing wind farms. Western Power would sell us the wind power and we would combine it with ours and sell it back to them. For the biomasscomponent of the power station, we are talking about 5.5 MW of electrical generation from a biomass plant which would require about 12 million oil mallee trees growing to produce about 70,000 tonnes of biomass per annum, about 4000 hectares. It is quite a project. The electrical output will be 5.5 MW, which will require an input of about 30 MW of thermal energy derived from combusting the biomass. A gasifier is more or less just a combuster, it burns the wood to create steam, but in a low oxygen environment to provide a cleaner combustion. It is pretty basic. The conversion efficiency is about 16%. This power plant is projected to have a life span of 18 years. Our contract is to supply power for 18 years to Western Power, but there is nothing to stop it going on longer. At the end of the 18 years, the trees would still remain in the ground and be transferred to the farmers at no cost, or whoever was running the power station could continue to purchase the biomass. The life of an oil mallee is in the order of 100 years. It can be harvested for that long period, as well.

We are planting 4 million trees a year for three years. On a 3-year cropping schedule, after an initial 5-year growth period, we expect 70,000 tonnes of biomass each year. Out of the costs the plant pays for biomass, approximately half will go to farmers, a third for transport and remainder for harvesting. A truck carries 45 tonnes, and we are talking triple road trains here, not single trucks. If you are talking about the total life cycle energy, the result is positive. One of the premises of this power plant was that we were pulling from a 50 km radius, so that transport would not consume too much energy. And the harvesting has to be very efficient and economical. The whole plant gets chipped and then the leaves are separated at the station.

We believe an investment of about $7 million is required to plant these 12 million trees. The power plant, in buying the mallee, will be returning a couple of million dollars per year to the Esperance community. There are a lot of peaks and troughs in the utilisation of farming infrastructure, especially in transport and cropping. Because mallee will be continuously used throughout the year there will be opportunities to use these things in the flat part of the year, contractors will be able to invest in gear.

These are the elements of the power station in terms of the biomass. There are the oil mallee plantations, which are on the farmers' land, there is the biomass harvesting, the harvester moving through and chopping all the time. There is the transport side of things. There is receival at the plant. There is separation of leaves and wood. There is feed drying, to take water out so it can be burned. There is the gasifier and steam boiler. The gasifier is a rotating bed continuous combuster which creates steam. The waste heat will be used to dry the feed before it gets to the gasifier. The steam raised from the steam turbine makes electricity. Feeding on from this, there is the oil distillation where the steam is being used, it is all very basic stuff. There is eucalyptus oil which is a byproduct. There is wood ash from the gasifier which is returned to the farmer using the same trucks, to be spread over the land. This returns some of the nutrients.

This is a combined cycle, a 17% efficient type, relatively inefficient in terms of power generation. Waste heat is not used. This was in the original proposal five years ago. But technology moves on, and a more efficient, in the order of 35 - 40% more, system is proposed. If we put this system in, the number of oil mallee trees required will be smaller. Maybe 40,000 tonnes per annum would be required to produce 5.5 MW of electricity.

The possibility of using waste heat to benefit a community was considered. It depended on where the plant was located and being able to use it, for example, the local swimming pool or local industry. It really depends on what is nearby. Costs of piping hot steam can be quite expensive.

We also looked at using municipal waste. It is a relatively cheap source, councils pay you to take it away, you can make some money out of it. The problem is in separating it, in order to burn it, and in order to remove things that can cause problems with emissions. It depended upon how clean and separated the waste was. It also depends on the volume of waste you have to handle, and the capital you have to handle it. Some gasifiers can handle anything, chicken litter, straw, blue gum thinnings, etc. Always, you need a good reliable supply.

This is similar to what Western Power is doing at Narrogin, their integrated tree plant. They are taking the charcoal, the products of combustion out of the gas chamber and adding some steam, looking to produce activated charcoal. That is another byproduct.

We at Metasource, at Woodside, see oil mallee as an excellent prospect as bio energy in the region of the wheat belt and other tree crops, depending on where the project is located. Up in the north end of the state some of the more tropical varieties might be a better source of biomass than the arid types like oil mallee. That is what we are looking at in terms of other sources of biomass crop for power generation. Obviously, it provides excellent land care and environmental benefits, and regional opportunities in terms of industries and transport. And it retains a large proportion of money in the local community, because they are getting paid for the power that is generated.

Unfortunately, I found out a few days ago that we had the second best bid for Esperance, we didn't get the job, so to speak. We lost out to a gas pipeline from Kalgoorlie. We are a little disappointed about it. We are keen to look for similar opportunities in other areas; we have done a lot of work on this sort of thing. We think it is a very viable thing to do.

We are still in a non-deregulated market in Australia, unlike N.Z., where power generation has been split away from transmission and retail. There is a lot of distributed power in WA, the Office of Energy and Western Power are putting to tender a lot of regional power generation, calling for others to come forward with innovative, renewable energy solutions. There is more and more of that happening, so hopefully, we will get one of these across the line. If you go to our web site at metasource.com.au, you will find out what we generally do. It is all fairly new.

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