By Josh McDaniel
With global warming taking hold, forests across the western U.S. are threatened by large, catastrophic wildfires. Luckily, bioenergy is emerging as a new industry, with the potential to provide substantial amounts of energy using woody biomass as fuel.
According to John Zerbe, an energy specialist with the Forest Products Laboratory in Madison, Wisconsin, the U.S. could feasibly derive 10% of its energy from wood (currently 3.1%). He believes that a combination of technologies and wood supply systems, adapted to local situations could offset fossil fuel use and contribute to forest health.
In the White Mountains of Arizona, a group is building a community-based woody biomass industry, creating business opportunities for local small businesses based on hazardous fuel reduction and treatment programs.
Thinning forests is an increasingly important tool in preventing large wildfires. Woody biomass is the material that’s left over from thinning – small trees, limbs, tops, needles, and leaves – material normally isn’t marketable.
Contract Stimulates Small Business Growth
The White Mountain Stewardship Contract of the Apache-Sitgreaves National Forest was established after the devastating 486,000 acre Rodeo-Chedeski Fire of 2002. It is designed to stimulate a local industry that harvests, processes, and markets the woody biomass produced during fuel treatments that have expanded in the Forest since the fire.
This Contract is the largest of its kind, covering fuel reduction and treatment of up to 15,000 acres per year for the next ten years.
The stewardship contract was awarded to Future Forest, LLC, a partnership between W.B. Contracting, a wood contracting business, and Forest Energy Corporation, a manufacturer of wood pellets for heating wood stoves. Another local business, a 3 megawatt bioenergy plant in Eager, Arizona is purchasing 50,000 tons of limbs, tree tops, and small trees from Future Forest every year. A 20 megawatt power plant is being constructed in the area to produce green power credits for Arizona power companies. The plant is expected to buy 170,000 green tons of biomass annually.
Bioenergy businesses aren’t the only enterprises popping up to take advantage of the contract. A custom log home business, a post & pole operation, a chemical wood hardening company, and a small-diameter sawmill have all emerged to take advantage of the woody materials that Future Forest can provide.
What’s different about this contract? The ten year guarantee of raw material provided by the Forest Service is a completely new way of doing business, and that long-term commitment has been the economic stimulus. It allowed many of the companies to get loans to buy equipment. Rob Davis, owner of the Forest Energy Corporation, explains it this way, “Nobody in finance is comfortable with wood industries, especially in the West. The stewardship contract has helped give them a level of comfort. The contract showed the government commitment to making the material available, and environmental groups have lined up behind the contract, meaning that that there was less likelihood for hold-ups.”
Most of the biomass produced from the White Mountain stewardship contract ends up as wood pellets for bioheating. Forest Energy received 150,000 tons of green biomass for their wood pellet plant in 2005, resulting in the production of over 70,000 tons of wood pellets. Since the start of the contract, Forest Energy has increased manufacturing capacity by 40% at its plant – and doubled its supply contract with Home Depot.
This past winter when natural gas prices spiked, sales of wood pellet stoves took off. Forest Energy couldn’t keep up with demand; retailers such as Home Depot more than doubled the retail price for pellets and placed restrictions on the number of bags that could be purchased at one time. “Customers knew the days that our trucks were making deliveries to the stores, and they would start lining up in the morning,” says Rob Davis, President of Forest Energy.
According to the Pellet Fuels Institute, sales of pellet stoves in the U.S. increased by 74% in 2005 compared to 2004. In Canada, sales increased by 98% over the same period. Says Rob Davis, does not believe that the pellet industry is as tied to natural gas prices as it was in the past. “Switching to renewable energy is a long-term trend. The jump in natural gas prices has people looking for alternatives and they are ready to make the switch. Once people make it, they like the predictability and stability in price.”
Forest Energy is expanding its base of industrial and institutional heating customers, supplying pellets for new boilers in town offices for Eager and Springerville, Arizona, and the Apache-Sitgreaves. Local schools, hospitals and other institutions can construct their heating systems around pellet fuel since they’re in close proximity to a National Forest. “It sets an example that community leaders value forest health, diverse local economies, and more efficient use of energy,” adds Davis.
Building Community-Based Forest Industry
Forest Service stewardship contracts are unique in that local economic development drives the bidding process. This allows the forest administrators to take factors other than bid price into consideration when awarding the contract. Issues such as the creation of local jobs, how the material would be utilized, and the use of local subcontractors were important aspects of the decision. Their roots in the local economy allowed Future Forest to outbid big timber industry for the contract.
The positive effect on the economy occurred rapidly. A University of Arizona study shows there are now 13 firms in the region purchasing products from these stewardship activities, with local expenditures of about $12 million annually. These firms employ 450 full-time employees who live in the communities in and around the forest.
Environmental organizations have expressed support for the contract because it’s building a community-based forest economy. Todd Schulke at the Center for Biological Diversity has a long history of contentious relations with the Forest Service, but he’s a strong supporter of the businesses that have emerged as a result of the stewardship contract.
Schulke says the Forest Service decision to keep large timber companies out of the region was important in garnering his organization’s support. “In the past, the timber companies have driven the agenda for forest management, but we felt comfortable that in this case that the needs of the land were driving the contract rather than what the land could produce.”
Sue Sitko of The Nature Conservancy adds, “We agree that the region needs a diverse economy based on wood products, and that the program should support local businesses focused on using the small diameter materials coming out of the forest. With that foundation in place, we were able to bring some very diverse groups together to support what the Forest Service wanted to do.”
Elaine Zieroth, Forest Supervisor for the Apache-Sitgreaves, is optimistic about the developing markets for biomass from thinning and fuel reduction treatments. “Right now we are on a bioenergy wave. This can be seen with the development of state renewable standards across the country. If this trend continues, fuel treatment programs will become even more cost effective. Right now we are paying contractors to grind up material and turn it into heat and electricity. Soon, they will be paying us.”
These developing markets have helped the Apache-Sitgreaves National Forests reduce costs for fuel treatments. Prior to the stewardship contract, treatment costs were $800 to $900 per acre. Now, the cost is $350 to $550 per acre, the lowest t
reatment cost for a national forest in the Southwest. Project leaders are hopeful that, as more companies come into the market to use biomass, and as consumers begin turning to biofuels for heat and power, the costs for thinning and fuel treatments will drop even further.
Making It Work Elsewhere
Western communities and public land managers have been struggling for years to develop markets for the small trees and woody material that are harvested in fuel reduction treatments. Indeed, the lack of markets for woody biomass has been the largest obstacle to ramping up forest restoration and fuel reduction efforts.
The White Mountain leaders think they’ve found a model that works – clusters of small businesses scaled to fit with the management needs of the local forest.
Curtis Rogers, general manager of the Forest Energy pellet plant, says that bioenergy producers always have to keep scale in mind. “The Forest Service decides how much biomass is coming out of the forest; they make that decision based on forest restoration and community protection needs. We’re here to provide a market for that material. We recognize it has to be done with sustainability in mind – what’s good for the forest. Wood pellets from the White Mountain forests could heat all of the hospitals in Arizona, but they could not cool all of the homes in Phoenix.”
Project leaders say the White Mountain experience can be replicated in other places, but it can’t be done overnight. Bringing people together, building trust between individuals and organizations takes time. A wide range of people have to understand the problem and what you are trying to accomplish before you start. Todd Schulke says, “There was a lot of disagreement, but we also found that we agreed on some things, especially the need to get those small trees out of the forest. If we just work on the things on which we agree, we can get a lot done.”
Sue Sitko says the White Mountains are lucky to have skilled and conscientious business leaders. “We have people who have hung on – I give them the greatest credit. They are champions for the forest and are building their businesses around what they think is right for the forest.
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Adapted from an article on wildfirelessons.net
Josh McDaniel is editor of Advances in Fire Practice, Benchmark Research & Safety, Inc.
Contact him.
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