Source: McCall Library


The power station at Cascade   used  the Payette River's force to generate energy for local consumption (photo inset) .  The station  produced power from this renewable source, without relying on external suppliers.   Energy independence drove the cents that enabled a forest products industry to produce lumber for decades.  Hallack and Howard Lumber Company operated a sawmill in Cascade until they sold to Boise Cascade in 1960.  Forest products continued as an economic mainstay until the mill closed in 2001, part of the Boise Cascade transition to an office products company.  The mill closure impacted the community, and residents have explored other economic development prospects, including recreation development.

A workshop  held in the Cascade American Legion Hall April 16th explored a very different  future for a forest based industry in the region - small wood  biomass as a renewable energy source.   The speakers covered a range of market strategies distinct from the traditional sawlog based forest industry of the region.  The Payette Power station, and the 1940's dam that created Cascade Reservoir, produced energy to convert logs to lumber.  The potential  21st century forest industry  will convert  biomass to energy.  The product, electricity, would be transported to energy buyers on the grid.   National and state energy policy has set the target - 25% of electricity sourced from renewable resources by the year 2025.  The goal has created a cascade of interest in forest biomass, as well as wind, solar and geothermal.
 

Source: Parma Post & Pole Workshop presenters highlighted the status of the current market for small logs.  Not all of the market represents a pure energy demand.   For example, Parma Post & Pole established  a business in 1982, and their production relies on small diameter lodgepole from National Forests.  A policy on the National Forests in eastern Oregon enables the company to source 80% of their logs from the timber sales on those forests.  The policy requires removal of the small logs, rather than burning them in slash piles on the timber sale site.  The underlying message from Mike Sperling, owner and manager, was that a similar policy on the southwestern Idaho forests (Boise, Payette, and Sawtooth) would contribute to a forest biomass supply in the region.  Biomass for energy is a secondary product for the company;  they sell 2,000 cords of firewood annually.


The Council School District is  a current biomass buyer in the area, purchasing 300 tons per year for a biomass furnace that heats the school.  The annual volume is relatively small, but  the biomass furnace  demonstrates the technology and the cost savings to a community.


OreIda, the largest potato processor in the nation, may become a significant biomass purchaser.  The company plans to construct a co-generation plant in Ontario, Oregon that would require 140,000 tons of biomass annually.  The Parma and Council experiences demonstrate to OreIda  that harvest and conversion technologies are feasible, both technically and economically.  The issue for OreIda is one of long-term supply.   The magnitude of the capital investment dictates a supply agreement to ensure the raw material will be available.  The well publicized fuel conditions on National Forests provide a potential regional supply.  For example, the Payette National Forest staff estimates the forest could provide 30-50,000 tons annually, initially from a thinning program on some 50,000 acres of maturing plantations.  Stewardship contracts with durations of 10 years or longer would support financing  a co-generation plant.


Industrial forestlands also have a role in the market.  Joe Koontz, manager of Potlatch Corporation's Payette Resource Management Unit, has over 20 years experience marketing biomass.  He estimates that the 180,000 acres under his management could annually produce 20-30,000 tons of biomass.  Koontz cautioned that today's market prices limit haul distances to 40 miles or less.  The biomass price per ton would need to increase prior to hauling 70 miles to Ontario.


The atlas below provides an overview of the supply and demand components for this emerging forest biomass market.  Click on the individual map symbols for a description of the supply or demand factor.  The atlas is best viewed by clicking  the option to View Biomass: Makings of a Market in a Larger Map.





View Biomass: Makings of a Market in a larger map
 

Enlarge the map (pdf file)

Attracting energy investment is a classic case of which comes first - the supply or the demand.  Financial perspective doesn't change if a public entity solicits financing for the investment or a corporation like OreIda.  David Naccarato,  an engineer from McKinstry Company, described the Idaho statutes that enable counties and municipalities to generate and sell power.  The enabling legislation authorizes energy sales as a legitimate revenue stream for local government within the state.  These public entities can finance a project with tax free revenue bonds, and attract investments in a public utility.  Power companies will pay a premium price for electricity generated from renewable resources, and  also commit to a twenty year contract  However, an agreement will require the investor to document biomass supply commitments with a duration of ten years or longer.   The supply question is a major constraint to investment.


The need for a long-term supply agreement raises questions regarding the biomass supply on National Forests, particularly in states that include large blocks of federal forest ownership.  Three factors related to supply are relevant:  the physical inventory of biomass; planned timber sale offerings; and the cost to harvest and deliver the biomass.  The national Forest Inventory and Analysis Program (FIA) conducted by the Forest Service is the country's accounting of forest resources.  The sample design provides an estimate of the physical resource, qualified by sampling error.  However, the reports of growing stock inventory on  National Forests do not inform the investor about the timing of timber sale offerings.  Analysis products, like the map inset above, estimate total standing inventory, not planned production. 


Investors, both public and private, need to analyze the potential production of biomass presented as an offering of timber sales over time.  Catherine Mater, Mater Engineering, reviewed a project called the Coordinated Resource Offering Protocol.  CROP was designed to meet this information need.  The work includes a significant data gathering effort involving Forest Service Ranger Districts and Field Offices of the Bureau of Land Management.  The compiled data will be available on the Web, with tools to summarize species, volume,  and diameter size by location and year scheduled. 

Utah's CROP database is available today (see example bellow);  the Idaho project, currently underway, will be completed and published midsummer.  The deliverable products from CROP make a significant step from physical inventory to planned offerings, an egg in the chicken and egg  investor dilemma.  The investor has additional due diligence to unscramble the report contents, evaluate the inherent risks of reported volumes and phasing, as well as estimating costs to purchase the logs or chips delivered to proposed sites.  The investor is not quite ready to come home to roost, but the data allows an analyst to evaluate alternative  locations for a facility.

    Utah CROP Website
 

In the search for renewable energy, forest biomass is a candidate that merits evaluation and long-term planning.  Land managers recognize biomass as  one of many forest resource goods and services.  Removal of small wood to service biomass markets for heat or electricity complements forest management objectives to improve  conditions degenerating timber stands.  In many locations, these stand conditions represent a public hazard and high risk to wildfire with associated public costs.  The resource managers will need to consider other resource conditions and values in the pursuit of a renewable energy source.

A combined effort of Natural Resource Defense Council (NRDC), the Audubon Society, and Google Earth analyzed sensitive areas in the West.  The analysis  provides a baseline of protected areas at a regional scale (see map below).  The Cascade workshop organizers recognize the importance of these considerations in collaborative efforts.  A post-workshop meeting gathered stakeholders to initiate discussions about biomass project plans on the Payette National Forest.  Observing the level of energy represented by workshop participants, the collaborative force will easily match that 19040s power station on the Payette River.  Given the right mix of collaborators, renewable energy projects combined with stewardship contracts could revitalize a rural community, improve forest health conditions, and contribute to a national  energy objective.