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Bioenergy '94 focuses on sustainable development, economic and environmental benefits of bioenergy
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Bioenergy '94 focuses on sustainable development, economic and environmental benefits of bioenergy BIOENERGY '94, a four-day conference in Reno, Nevada, USA, from October 3 to 6, 1994, attracted more than 300 participants from several countries with expertise in every area of the bioenergy industry. More than 80 speakers addressed issues ranging from production of liquid fuels to production and harvesting of bioenergy crops and institutional barriers to bioenergy development. A poster session featured 17 additional papers and an exhibition featured displays from more than 20 industrial, educational, and governmental entities. Hosted by the Western Regional Biomass Energy Program (WRBEP), Bioenergy '94 was the Sixth National Bioenergy Conference. In a plenary session on Bioenergy and the Environment, David Morris, Vice-President of the Institute for Local Self-Reliance, addressed the transition of the U.S. from a hydrocarbon (petroleum-based) to a carbohydrate (biomass-based) economy. The institute is based in Minneapolis and Washington, D.C. Morris said that 150 years ago the U.S. economy was carbohydratebased. The vast majority of our fuels, paints, chemicals, clothing, inks, dyes, and a good portion of our construction materials came from plant matter. The first plastic was synthesized from cotton, and the first manmade fiber, rayon, was produced from wood pulp. Then petroleum and coal replaced plant matter. By the 1970s, 70 percent of U.S. clothing fiber came from petroleum. Today the idea of "sustainable development" is making a carbohydrate economy attractive again. Technological advances and environmental regulations are combining to make plant matter-derived fuels and industrial materials more competitive with fossil fuels. 10
In 1980 over half of industrial ethanol was derived from petroleum; today the majority is from plant biomass. Approximately 4 percent of U.S. electricity comes from wood. Morris said that biomass differs from other renewable and sustainable energy technologies. Solar, wind and geothermal energy are "there for the taking," so those industries need only improved and cheaper conversion technology. Biomass feedstocks, however, must be planted, cultivated, and harvested to extract the energy, and the conversion process can produce undesirable side-effects such as soil erosion, pesticide runoff, air pollution from combustion, and the takeover of fertile land that could otherwise be used for producing food. The U.S. government's renewable energy development program has not recognized the special needs of bioenergy. To become economical, the biomass energy industry also must exploit the value of byproducts and coproducts. Just as every barrel ofpetroleum is processed to yield the optimum mix of high-value fuels and chemicals, biomass energy power plants must do the same to make bioenergy economically feasible. Current governmental tax incentives for biomass energy do not recognize this basic economic fact. Morris cited the reauthorization of the Farm Bill in 1995 as an opportunity to promote biomass. Christopher Flavin, Vice-President of the Worldwatch Institute, provided insights based on his new book, Power Surge: a Guide to the Coming Energy Revolution. Flavin challenged what he called the current unspoken paradigm that the energy industry changes very slowly. For example, between 1890 and 1910, the typical U.S. urban street went from horse-drawn carriages and gas lights to gasoline cars and electric
street lights. While the utility industry may not change as quickly as the electronics and telecommunications industry, the current environment of electric competition requires rapid adaptation. Flavin stressed four key themes: • "Sustainable energy" should be emphasized rather than "renewable energy": the former pertains to the fuel's environmental effects while the latter refers to the fuel's nondepletable qualities. For example, U.S. coal reserves are sufficient for several hundred years, but carbon dioxide emissions will limit its use well before then. • The gap between food supply and demand will narrow significantly in the next 5-10 years. This will lead to higher food prices and a consequent increase in the value of crop land, which will make production of bioenergy crops more expensive. This must be considered by bioenergy producers in planning. • Restructuring of the electrical power industry and retail competition has brought down the cost of new gas-fired electricity to 4-5 cents/kWh. This is a stringent environment in which renewables must compete. But the good news is that the new high-efficiency turbines can also convert biogas more efficiently, if it can be cleaned up. • We will soon move from liquid fuels to gaseous fuels. Gaseous fuels burn cleaner, can be moved cheaply by pipeline without much environmental risk, and can be used directly in fuel cells. The main constraint is storage. He said more research and development funds should be spent on gasification. Flavin noted that increases in per capita energy consumption in Asia - par-
Energy for Sustainable Development. Volume I No.4. November 1994
News
ticularly China - will drive changes in world energy consumption. Robert Tamaro of TAZCOGEN Development, Inc., and a member of the National Bioenergy Industries Association, talked about the "1 O-year cliff" faced by biomass energy producers in California. Many companies received energy payments for 10 years based on projected costs of natural gas. When these projects started, natural gas prices were expected to increase significantly over the 10-year period, allowing the biomass projects to become established and fmancially viable. Instead, natural gas prices dropped, creating the possibility of many businesses failing after the 10-year period expires. Tamaro pointed out that many plants began operation in 1984, making 1994 vital for the continuing viability of the biomass industry in the state. Since California is the leading producer of biomass in the United States, this could have a national impact on the industry. Tamaro pointed out that factoring environmental costs into energy prices would help biomass compete against fossil fuels. If, however, the industry is deregulated and biomass must compete based on short-term costs, the industry could be in serious trouble. He pointed out that biomass is environmentally benign and helps the United States increase its energy self-reliance. He stressed the need for action to prevent the industry from experiencing a serious "shakeout". Joe Kruger, chief of the Energy Efficiency and Renewable Energy Section of the United States Environmental Protection Agency, discussed the Acid Rain Program, which allows energy producers to buy and sell sulfur dioxide (S02) allowances. One allowance equals one tonne of S02. Unlike traditional EPA programs and requirements, the Acid Rain Program requires no specific technologies. It gives utilities the flexibility to find the best method of reducing emissions with the lowest cost. Utilities that achieve S02 emission levels below the required level may sell their excess allotments to other utili-
ties with higher emission levels, giving them a monetary incentive for reduced emissions. The allowance level for all U.S. utilities is set at approximately 50 percent of 1980 utility emissions. Kruger said this is probably the largest reduction in air pollution that the U.S. Congress has ever required. The program opens the door for a wide array of technologies, he said, including scrubbing, switching fuels, buying and selling allowances, and using energy efficiency and renewable energy. Utilities also may earn special bonus allowances through use of renewable fuels. There are 300,000 bonus allowances available for utilities using renewable generation initiated since January 1, 1992. The utilities must also have integrated resource
Today the idea of "sustainable development" is making a carbohydrate economy attractive again. Technological advances and environmental regulations are combining to make plant matter-derived fuels and industrial materials more competitive with fossil fuels. plans certified by their public utility commissions. To date, approximately 3,000 bonus allowances have been awarded to 17 utilities. Kruger noted that the United States utility industry is undergoing drastic changes. Environmental considerations will drive renewable energy technologies in the future. Jeff Serfass, Executive Director of the Utility Biomass Energy Commercialization Association, discussed the organization's program for rural energy and economic development. Formed to promote use of biomass in the utility industry, UBECA is a relatively new organization. Serfass described biomass as perhaps the most promising - and least understood - renewable energy technology today. He cited significant opportunities for short-term deve-
lopment of agricultural and wood residues and the longer-term promise of dedicated energy crops and coprocessing applications. In the United States, Serfass said, there currently is about 7,000 MW of grid-connected energy produced from biomass and a similar amount of gridindependent generation. Very little is in the traditional electric utility industry, which was a driving factor leading to the creation of UBECA. He described biomass energy as a significant path leading to an improved environment and rural economic development. In addition, energy crops can be grown on land depleted of soil carbon and therefore unsuitable for traditional crop production. Its economic development potential also is great, with an estimated two fuel-supply jobs created per megawatt of bioenergy and additional jobs in fuel handling and operation. To encourage the realization of this potential, UBECA is launching a Rural Economic Development Initiative to encourage public-private partnerships. It has three elements: resource development, conversion technology development, and economic development. Serfass believes UBECA is the right forum for promoting biomass use in the utility sector, providing a collective voice for the industry and a focal point for gathering and sharing information. John Ferrell of the U.S. Department of Energy's Biomass Energy Program presented the conference's keynote speech. He stressed the importance of recognizing that the bioenergy industry is a strong industry that creates thousands of jobs and creates revenues, and that it is important for all facets of the industry to work together. Ferrell summarized the opportunities that exist for the bioenergy industry. Recent government policies such as the Clean Air Act and Amendments, the Global Climate Action Plan, and others have produced a positive environment for expanded bioenergy production. Other recent events such as the National Biomass Roundtable, which involved interac-
Energy for Sustainable Development. Volume I No.4. November 1994
11
News
tion between the bioenergy and environmental communities, also are positive developments. He noted several groups attending the conference that have been instrumental in strengthening the bioenergy industry, including the National Biodiesel Board, the Governors' Ethanol Coalition, DBECA, the Biomass Processors' Association, the Pellet Fuels Institute, and the Ethanol Pro-
ducers' and Consumers' Association. Despite the promise of biomass, Ferrell noted, the industry also faces challenges. He mentioned the potential plant closings and loss of jobs in California resulting from the "10year cliff" and cited the lessons of the late 1970s, adding that decisions must be made based on "real economics" of projects. It's easy to get caught up in the en-
thusiasm, he said, but it's also important to be realistic and to promote open and honest communication throughout the bioenergy industry. •
Judy Farrell, US Department of Energy, Western Area Power Administration, A 7100, P. O. Box 3402, 1627 Colo Boulevard, Building 18, Golden, Colorado 80401, USA.
Eighth European Conference on Biomass AFTER THE KEYNOTE speeches, plenary sessions, overviews, and parallel sessions of the first and second days, workshops and summing up of the final day, this conference (held at Vienna, Austria, from 3 to 5 October, 1994) will be seen as a significant step forward for EU biomass conferences. Some of the more memorable moments are highlighted below.
stressed the advantages of biomass amongst the renewable energy options, primarily its employment and land-use in the rural sector, and its ability to store solar energy.
The major news to break at the conference was that only six days earlier the EU Parliament ratified the 1. About the conference When this conference is discussed in non-nuclear energy budget for the future, it will perhaps be remem- the new Framework IV R&D bered most for its sense of timing. programme. The major news to break at the conference was that only six days earlier the ED Parliament ratified the nonnuclear energy budget for the new Framework IV R&D programme. This new ECD 1.1 billion (US$ 1.35 billion) budget for non-nuclear energy contains a substantial element relating directly to the bioenergy field. In fact, 45% (over ECD 450 million) of the total non-nuclear energy budget has been allocated to renewable energy, twice the allocation under the previous Framework III budget. As the conference proceeded the ED's plans for a sustainable and environmentally acceptable future energy supply emerged. It became clear that, despite the present low world (conventional) energy prices, the driving forces of environment, rural development, the new Common Agricultural Policy (CAP) and energy security dictate that indigenous renewable energy technologies are here to stay. Furthermore, many speakers 12
This vision of an ED energy sector supplied by a renewable energy supply, with biomass as the prime player, will not be brought to fruition simply by "business-as-usual" policies. This realisation is not new. However, rising industrial interest and the large expansion in funding for biomass within the ED, not only for R&D, but also, importantly, for demonstration (announced during the conference) should set bioenergy technologies frrrnly on the path to widescale market penetration and public acceptance. It was also acknowledged that imperfect implementation of bioenergy technologies could lead to many pitfalls. Public acceptability of largescale bioenergy options is essential and this served to focus the collective conference mind. More than 550 participants from 35 countries were present, with Austria (56), France (52), UK (48), Denmark and Germany (37 each), and Italy
(35) providing the bulk. 2. Points of view
Tom Beenackers (University of Groningen, The Netherlands). It is a difficult task to sum up the wealth of information and diversity seen at this three-day conference. It is my task to summarise the technical aspects of this conference. The EU continues to gain comparable data on perspective biomass resources, mostly as a result of its excellent research networks. These networks are providing Europe-wide data on yields, nutrient and trace element balances and above all energy output-to- input ratios. Whilst many bioenergy conversion technologies are proven mature technologies, there is still a need to refme these technologies to reduce costs. For instance, in the bioethanol and biopolymer sector there needs to be a concurrent reduction in enzyme requirements and improved productivity in the bioprocesses. Even where R&D has been successful in the development of new technologies which fulfil both environmental and economic criteria, market penetration has often not been successful. The relatively high capital cost and long lead times associated with such technologies are to blame. To reduce risk and promote these technologies to market status the ED (through its THERMIE programme) will demonstrate three integrated electricity-from-biomass projects during the next Framework IV period. Other technological gaps which
Energy for Sustainable Development • Volume I NO.4. November 1994
Bioenergy '94 focuses on sustainable development, economic and environmental benefits of bioenergy BIOENERGY '94, a four-day conference in Reno, Nevada, USA, from October 3 to 6, 1994, attracted more than 300 participants from several countries with expertise in every area of the bioenergy industry. More than 80 speakers addressed issues ranging from production of liquid fuels to production and harvesting of bioenergy crops and institutional barriers to bioenergy development. A poster session featured 17 additional papers and an exhibition featured displays from more than 20 industrial, educational, and governmental entities. Hosted by the Western Regional Biomass Energy Program (WRBEP), Bioenergy '94 was the Sixth National Bioenergy Conference. In a plenary session on Bioenergy and the Environment, David Morris, Vice-President of the Institute for Local Self-Reliance, addressed the transition of the U.S. from a hydrocarbon (petroleum-based) to a carbohydrate (biomass-based) economy. The institute is based in Minneapolis and Washington, D.C. Morris said that 150 years ago the U.S. economy was carbohydratebased. The vast majority of our fuels, paints, chemicals, clothing, inks, dyes, and a good portion of our construction materials came from plant matter. The first plastic was synthesized from cotton, and the first manmade fiber, rayon, was produced from wood pulp. Then petroleum and coal replaced plant matter. By the 1970s, 70 percent of U.S. clothing fiber came from petroleum. Today the idea of "sustainable development" is making a carbohydrate economy attractive again. Technological advances and environmental regulations are combining to make plant matter-derived fuels and industrial materials more competitive with fossil fuels. 10
In 1980 over half of industrial ethanol was derived from petroleum; today the majority is from plant biomass. Approximately 4 percent of U.S. electricity comes from wood. Morris said that biomass differs from other renewable and sustainable energy technologies. Solar, wind and geothermal energy are "there for the taking," so those industries need only improved and cheaper conversion technology. Biomass feedstocks, however, must be planted, cultivated, and harvested to extract the energy, and the conversion process can produce undesirable side-effects such as soil erosion, pesticide runoff, air pollution from combustion, and the takeover of fertile land that could otherwise be used for producing food. The U.S. government's renewable energy development program has not recognized the special needs of bioenergy. To become economical, the biomass energy industry also must exploit the value of byproducts and coproducts. Just as every barrel ofpetroleum is processed to yield the optimum mix of high-value fuels and chemicals, biomass energy power plants must do the same to make bioenergy economically feasible. Current governmental tax incentives for biomass energy do not recognize this basic economic fact. Morris cited the reauthorization of the Farm Bill in 1995 as an opportunity to promote biomass. Christopher Flavin, Vice-President of the Worldwatch Institute, provided insights based on his new book, Power Surge: a Guide to the Coming Energy Revolution. Flavin challenged what he called the current unspoken paradigm that the energy industry changes very slowly. For example, between 1890 and 1910, the typical U.S. urban street went from horse-drawn carriages and gas lights to gasoline cars and electric
street lights. While the utility industry may not change as quickly as the electronics and telecommunications industry, the current environment of electric competition requires rapid adaptation. Flavin stressed four key themes: • "Sustainable energy" should be emphasized rather than "renewable energy": the former pertains to the fuel's environmental effects while the latter refers to the fuel's nondepletable qualities. For example, U.S. coal reserves are sufficient for several hundred years, but carbon dioxide emissions will limit its use well before then. • The gap between food supply and demand will narrow significantly in the next 5-10 years. This will lead to higher food prices and a consequent increase in the value of crop land, which will make production of bioenergy crops more expensive. This must be considered by bioenergy producers in planning. • Restructuring of the electrical power industry and retail competition has brought down the cost of new gas-fired electricity to 4-5 cents/kWh. This is a stringent environment in which renewables must compete. But the good news is that the new high-efficiency turbines can also convert biogas more efficiently, if it can be cleaned up. • We will soon move from liquid fuels to gaseous fuels. Gaseous fuels burn cleaner, can be moved cheaply by pipeline without much environmental risk, and can be used directly in fuel cells. The main constraint is storage. He said more research and development funds should be spent on gasification. Flavin noted that increases in per capita energy consumption in Asia - par-
Energy for Sustainable Development. Volume I No.4. November 1994
News
ticularly China - will drive changes in world energy consumption. Robert Tamaro of TAZCOGEN Development, Inc., and a member of the National Bioenergy Industries Association, talked about the "1 O-year cliff" faced by biomass energy producers in California. Many companies received energy payments for 10 years based on projected costs of natural gas. When these projects started, natural gas prices were expected to increase significantly over the 10-year period, allowing the biomass projects to become established and fmancially viable. Instead, natural gas prices dropped, creating the possibility of many businesses failing after the 10-year period expires. Tamaro pointed out that many plants began operation in 1984, making 1994 vital for the continuing viability of the biomass industry in the state. Since California is the leading producer of biomass in the United States, this could have a national impact on the industry. Tamaro pointed out that factoring environmental costs into energy prices would help biomass compete against fossil fuels. If, however, the industry is deregulated and biomass must compete based on short-term costs, the industry could be in serious trouble. He pointed out that biomass is environmentally benign and helps the United States increase its energy self-reliance. He stressed the need for action to prevent the industry from experiencing a serious "shakeout". Joe Kruger, chief of the Energy Efficiency and Renewable Energy Section of the United States Environmental Protection Agency, discussed the Acid Rain Program, which allows energy producers to buy and sell sulfur dioxide (S02) allowances. One allowance equals one tonne of S02. Unlike traditional EPA programs and requirements, the Acid Rain Program requires no specific technologies. It gives utilities the flexibility to find the best method of reducing emissions with the lowest cost. Utilities that achieve S02 emission levels below the required level may sell their excess allotments to other utili-
ties with higher emission levels, giving them a monetary incentive for reduced emissions. The allowance level for all U.S. utilities is set at approximately 50 percent of 1980 utility emissions. Kruger said this is probably the largest reduction in air pollution that the U.S. Congress has ever required. The program opens the door for a wide array of technologies, he said, including scrubbing, switching fuels, buying and selling allowances, and using energy efficiency and renewable energy. Utilities also may earn special bonus allowances through use of renewable fuels. There are 300,000 bonus allowances available for utilities using renewable generation initiated since January 1, 1992. The utilities must also have integrated resource
Today the idea of "sustainable development" is making a carbohydrate economy attractive again. Technological advances and environmental regulations are combining to make plant matter-derived fuels and industrial materials more competitive with fossil fuels. plans certified by their public utility commissions. To date, approximately 3,000 bonus allowances have been awarded to 17 utilities. Kruger noted that the United States utility industry is undergoing drastic changes. Environmental considerations will drive renewable energy technologies in the future. Jeff Serfass, Executive Director of the Utility Biomass Energy Commercialization Association, discussed the organization's program for rural energy and economic development. Formed to promote use of biomass in the utility industry, UBECA is a relatively new organization. Serfass described biomass as perhaps the most promising - and least understood - renewable energy technology today. He cited significant opportunities for short-term deve-
lopment of agricultural and wood residues and the longer-term promise of dedicated energy crops and coprocessing applications. In the United States, Serfass said, there currently is about 7,000 MW of grid-connected energy produced from biomass and a similar amount of gridindependent generation. Very little is in the traditional electric utility industry, which was a driving factor leading to the creation of UBECA. He described biomass energy as a significant path leading to an improved environment and rural economic development. In addition, energy crops can be grown on land depleted of soil carbon and therefore unsuitable for traditional crop production. Its economic development potential also is great, with an estimated two fuel-supply jobs created per megawatt of bioenergy and additional jobs in fuel handling and operation. To encourage the realization of this potential, UBECA is launching a Rural Economic Development Initiative to encourage public-private partnerships. It has three elements: resource development, conversion technology development, and economic development. Serfass believes UBECA is the right forum for promoting biomass use in the utility sector, providing a collective voice for the industry and a focal point for gathering and sharing information. John Ferrell of the U.S. Department of Energy's Biomass Energy Program presented the conference's keynote speech. He stressed the importance of recognizing that the bioenergy industry is a strong industry that creates thousands of jobs and creates revenues, and that it is important for all facets of the industry to work together. Ferrell summarized the opportunities that exist for the bioenergy industry. Recent government policies such as the Clean Air Act and Amendments, the Global Climate Action Plan, and others have produced a positive environment for expanded bioenergy production. Other recent events such as the National Biomass Roundtable, which involved interac-
Energy for Sustainable Development. Volume I No.4. November 1994
11
News
tion between the bioenergy and environmental communities, also are positive developments. He noted several groups attending the conference that have been instrumental in strengthening the bioenergy industry, including the National Biodiesel Board, the Governors' Ethanol Coalition, DBECA, the Biomass Processors' Association, the Pellet Fuels Institute, and the Ethanol Pro-
ducers' and Consumers' Association. Despite the promise of biomass, Ferrell noted, the industry also faces challenges. He mentioned the potential plant closings and loss of jobs in California resulting from the "10year cliff" and cited the lessons of the late 1970s, adding that decisions must be made based on "real economics" of projects. It's easy to get caught up in the en-
thusiasm, he said, but it's also important to be realistic and to promote open and honest communication throughout the bioenergy industry. •
Judy Farrell, US Department of Energy, Western Area Power Administration, A 7100, P. O. Box 3402, 1627 Colo Boulevard, Building 18, Golden, Colorado 80401, USA.
Eighth European Conference on Biomass AFTER THE KEYNOTE speeches, plenary sessions, overviews, and parallel sessions of the first and second days, workshops and summing up of the final day, this conference (held at Vienna, Austria, from 3 to 5 October, 1994) will be seen as a significant step forward for EU biomass conferences. Some of the more memorable moments are highlighted below.
stressed the advantages of biomass amongst the renewable energy options, primarily its employment and land-use in the rural sector, and its ability to store solar energy.
The major news to break at the conference was that only six days earlier the EU Parliament ratified the 1. About the conference When this conference is discussed in non-nuclear energy budget for the future, it will perhaps be remem- the new Framework IV R&D bered most for its sense of timing. programme. The major news to break at the conference was that only six days earlier the ED Parliament ratified the nonnuclear energy budget for the new Framework IV R&D programme. This new ECD 1.1 billion (US$ 1.35 billion) budget for non-nuclear energy contains a substantial element relating directly to the bioenergy field. In fact, 45% (over ECD 450 million) of the total non-nuclear energy budget has been allocated to renewable energy, twice the allocation under the previous Framework III budget. As the conference proceeded the ED's plans for a sustainable and environmentally acceptable future energy supply emerged. It became clear that, despite the present low world (conventional) energy prices, the driving forces of environment, rural development, the new Common Agricultural Policy (CAP) and energy security dictate that indigenous renewable energy technologies are here to stay. Furthermore, many speakers 12
This vision of an ED energy sector supplied by a renewable energy supply, with biomass as the prime player, will not be brought to fruition simply by "business-as-usual" policies. This realisation is not new. However, rising industrial interest and the large expansion in funding for biomass within the ED, not only for R&D, but also, importantly, for demonstration (announced during the conference) should set bioenergy technologies frrrnly on the path to widescale market penetration and public acceptance. It was also acknowledged that imperfect implementation of bioenergy technologies could lead to many pitfalls. Public acceptability of largescale bioenergy options is essential and this served to focus the collective conference mind. More than 550 participants from 35 countries were present, with Austria (56), France (52), UK (48), Denmark and Germany (37 each), and Italy
(35) providing the bulk. 2. Points of view
Tom Beenackers (University of Groningen, The Netherlands). It is a difficult task to sum up the wealth of information and diversity seen at this three-day conference. It is my task to summarise the technical aspects of this conference. The EU continues to gain comparable data on perspective biomass resources, mostly as a result of its excellent research networks. These networks are providing Europe-wide data on yields, nutrient and trace element balances and above all energy output-to- input ratios. Whilst many bioenergy conversion technologies are proven mature technologies, there is still a need to refme these technologies to reduce costs. For instance, in the bioethanol and biopolymer sector there needs to be a concurrent reduction in enzyme requirements and improved productivity in the bioprocesses. Even where R&D has been successful in the development of new technologies which fulfil both environmental and economic criteria, market penetration has often not been successful. The relatively high capital cost and long lead times associated with such technologies are to blame. To reduce risk and promote these technologies to market status the ED (through its THERMIE programme) will demonstrate three integrated electricity-from-biomass projects during the next Framework IV period. Other technological gaps which
Energy for Sustainable Development • Volume I NO.4. November 1994