The University could save $2 million to $4 million in fuel costs by using oat hulls to heat the Minneapolis campus, according to Kathleen O'Brien, vice president of University Services.
"The University spends $91 million on utilities for the Twin Cities campus," she said. "Saving $3 million a year could be very helpful in providing available dollars for student services or controlling costs."
Jerome Malmquist, director of energy management, said the oat hull project is an effort to reduce the University's dependence on fossil fuels and reduce greenhouse gas emissions.
The permit has been granted to the University and the benefits are apparent, but obtaining the oat hulls is posing a hindrance.
Malmquist said the University hoped to obtain the hulls from General Mills, but because of high demand, the milling company could not supply them.General Mills signed a contract with U.S. Steel to send its hulls to fuel the company's facilities on the Iron Range.
General Mills spokeswoman Kristie Foster said the company sells its oat hulls to other companies as well.
Mike Nagel, assistant director of energy management, said General Mills is not willing to tell the University how much it receives for its hulls.
"We can't really offer anything, and cannot determine a price until we have a contract," he said.
General Mills and Quaker Oats are the two largest milling operations in the country. General Mills produces 60,000 tons of oat hulls a year.
Nagel said General Mills is the closest and most desirable company from which to buy hulls.
"The farther we have to transport the hulls, the less economic it is for us," he said.
He said the University is putting out a request proposal for suppliers of oat hulls.
If General Mills chooses to respond as a supplier, that would be wonderful, Nagel said."We have been talking with General Mills for many years and we know they are businessmen that have found other markets," he said.
"If they cannot provide us with the material, we'll look at others who can."
Malmquist said the University is looking beyond just oat hulls and researching other potential forms of fuels.
He said the University is researching seed corn and various forms of wood, and recently, barley needles.
"The barley needles are used in the malting operation in making beer and could work as a very good fuel, but is expensive to burn," he said.
"If fuel prices stay up, (the barley needles) may be worth pursuing."
Malmquist said there is a competitive market for biomass.
MPCA permit engineer Steve Pak reviewed the University's permit application to burn the hulls.
"The driving need for oat hulls is the skyrocketing cost of fuel," he said.
"The University has gone beyond their budget as far as fuels go and they are taking a hit with the high costs of natural gas," Pak said.
Despite the University's desire for the hulls, there are certain concerns and drawbacks.
It takes more oat hulls to produce the same amount of energy as coal. Malmquist said oat hulls cost 20 percent more than natural gas.
Pak said coal has a higher heating value compared with oat hulls and more energy per pound and that there are pluses and minuses in changing from natural gas to a biomass fuel such as oat hulls.
"A large disadvantage of switching from natural gas to a biomass is an expected increase in some pollutants," Pak said.
Nagel said the University of Iowa has used oat hulls for a year and a half and "it is not just an experiment, it's their source of heat."
He said that with time, the oat hulls could prove successful for the University of Minnesota as well.
The burning of oat hulls is not funded by the state or grants, Malmquist said, and is part of the University's operational budget.
"We're like any other business trying to improve our processes and reduce costs," he said.
"Sometimes that means sticking your neck out and taking risks."