The struggling biomass energy industry hopes to make the most of the state?s renewables portfolio standard to increase its presence in the California market. But it faces formidable hurdles, including high fuel costs and inefficiencies that undermine its ability to compete. At a California Biomass Collaborative meeting held January 9, John Shelly, University of California researcher in the Division of Agriculture and Natural Resources, characterized the industry, launched in the late 1970s, as one of ?relative stability punctuated by moments of sheer terror.? The state program that subsidizes biomass plants? costs for fuel from agricultural waste at $10 a ton expires at the end of this year. Furthermore, the hoped-for production tax credit included in the stalled national energy bill, which would give the industry a shot in the arm, remains in limbo. ?There may be real opportunities and other ways to help incentivize biomass,? said Terry Tamminen, California Environmental Protection Agency secretary. Biomass plants burn agricultural and timber waste, municipal solid waste, and manure?turning them into electricity. Many at the meeting commented that the recent Southern California fires highlighted the need to thin chaparral and trees in the region, which could fuel biomass facilities and simultaneously reduce the fire risks. ?How many times do we need to reminded of the social cost?? asked Jim Boyd, a California Energy Commission member. Biomass benefits include improved air quality, increased energy diversity, reduced waste, more jobs, and potentially fewer wildfires. However, there are no biomass power plants or transmission lines near the burn area, and the costs of transporting the material make it an uneconomic prospect if only fuel costs are factored in. Biomass produces nearly 1,000 MW in California today. There is the potential to increase biomass generation by another 2,700 MW, but its development will depend on economics. The burnable fuel ranges in price and availability, from a few dollars a ton to about $25\/ton. A 25 MW plant will use about 40 truckloads of waste a day. Possible funding areas to offset the fuel costs include the public-goods charge set aside for renewables projects and a $760 million allocation in the so-called federal Healthy Forests Initiative to thin timber near urban areas. Of the waste resources from forest thinning, farms, homes and businesses, and livestock, only about 10 percent of them is burned to create energy, said Bryan Jenkins, executive director of the biomass collaborative and University of California, Davis, professor. Farmers need a financial incentive to send their crop and orchard waste to a biomass plant. Otherwise there is the ?matchbook option??open-field burning, which fouls the air?according to Tony Wetzel, principal with Energy Project Consulting.