ࡱ> sut#` Zbjbj *zR%TTTTTTTh8D4h:hHH"jjjjjj4:6:6:6:6:6:6:;ha>~6:TR!jjR!R!6:TTjjK:'''R!TjTj4:'R!4:''7|TT9j< @aj"08 :a:0:8>#>$9>T9 j4'xjjj6:6:&^jjj:R!R!R!R!hhh$hhhhhhTTTTTT FOREST BIOMASS WORKING GROUP MEETING MINUTES March 12, 2007 Introductions Joe Misek welcomed everyone to the meeting. Self introductions were made and once again the public was invited to participate directly in the discussions of the group. Main topic of the meeting was to look at smaller use of forest biomass. Next Meeting The group agreed that the next meeting should be held after the 2007 session adjourns. Purpose of the meeting will be to look at what was accomplished, say thank you to the members of the group, and have a discussion on where we go from here. Joe will work with a sub-group during the summer to develop a draft document that will be the basis for the groups discussion. Next meeting scheduled for Tuesday September 25, 2007 in the Tillamook Room at the ODF headquarters in Salem from 10am to 3pm. Creative and Smaller users of forest biomass Darren Mahr, Biomass specialist for ODF pulled together a very interesting group of leaders to discuss uses for woody biomass other than electricity for the grid or biofuels which have dominated much of the discussion of this group to date. Lynn Jungwirth (Watershed Training Center, Hayfork, CA) Both Jim and Lynn come from Oregon and worked in a timber dependent community in northern California that in the mid 90s was dying. Lynn started a training program for displaced workers. She worked to keep some loggers in the woods doing watershed assessments, working mostly on harvesting watershed restoration. With the fire frequency in the Shasta Trinity, the buildup of biomass, existing spotted owl issues, and old roads that would need maintaining, Lynn knew they would need some of the logging community to utilize the small diameter material and maintain the forest (keep it from burning up). And the only way to get fire back into the system was to get some of the material out of there. This was back in 1996 and not many folks were thinking of these issues. They started looking for markets, designed specialized equipment in an economizer and different yarders. They learned about batch sorting, grading of the fine grain suppressed trees (#1, #2 structural), experiments with value added products, including flooring and poles, buck and pole fencing. It was a time of learning by trial and error. The group enjoyed looking at many different pieces of equipment on slides, and different products. They are small, but that has advantages to stay flexible with markets. Predictable supply is key and hard to get from either private or federal lands. They are working with USFS through stewardship contracts, and are seeing the timber program into a restoration program where the loggers get some saw material, and also need to address what to do with the small stuff. This is enabling some capital investment in infrastructure businesses need to make. Jim Jungwirth (Jefferson State Forest Products, Hayfork,CA)- Key interest was developing value added products. Early in his business development Jim was at a conference back east and met with the keynote speaker who was head of Whole Foods. Jims interest in doing something socially responsible with materials that were considered waste struck a cord and today Whole Foods represents 72% of the business, and they make over 400 products. Last year they used 600,000 feet of hardwood, and 350,000 of pine and fir. You can see crates and many items used in displays at Whole Foods in the Pearl District in Portland that are made by Jims company. An interesting story Jim shared with the group was a contact with Stanford University who was taking out the old wood benches in its stadium and replacing them. The university wondered if Jim could do anything with the wood. After testing the wood and discovering it was Port Orford cedar they worked with the university in reclaiming about half of it and made benches that sold through the alumni association raising a tidy sum from the project. Jim stressed the key is working with what is left over from other processes, and being creative in marketing. He is very interested in taking material off their forests locally to improve forest health and provide jobs to the local economy. Richard Dodge (Dodge Logging)- Logging since he was 23, Richard moved from Maupin in 1992 to Pendleton with the changes that were taking place on federal lands. There he diversified and now has 4 businesses: Dodge Logging Inc.; Blue Mountain Lumber Products LCC; Boardman Chip Co. Inc.; and Blue Mountain Land Investment. With these 4 businesses they have many different utilization opportunities from which to make products. They are family owned and operated and have about 100 employees. They have wheat ground, cattle, logging sides, do road obliteration and currently have 3 stewardship contracts. In discussing the Stewardship contracts they are aiming for a mosaic across the landscape leaving 80 to 110 square feet basil area, leaving the biggest and best with no trees over 21 inches harvested. Richard ended with a plea for coming together to do something with biomass and thinning the forests. He stressed we dont need to address old growth now for some years, and that we could do a lot of good by reducing the fuel loadings present in eastern Oregon. David Schmidt (Sustainable Northwest) David discussed what Wallowa Resources is doing in Northeast Oregon. When David first started with Sustainable Northwest 2 years ago he began to work with Wallowa Resources in their post and pole operation. Securing supply was a key first issue, and remains an issue today. They had 20 truck loads of material going by them every day going for chip and they knew some of it was post and pole material. But they discovered some of their issues were: they were aiming at too tight a specification for the post and pole, and it wasnt worth it for the loggers to do the sort. they lacked connections to the existing infrastructure (no use for their waste), and had no long-term market connection with suppliers (folks were already used to trucking it to other markets). David pointed to the need for a very integrated system that utilized the wood to produce a number of products (firewood, chips, pellets) that would allow for flexibility in the markets. He shared a diagram with the group showing the long term goals of eventually doing a combined heat and power for drying kilns and heat for schools. Doing all these things in one place makes sense as it cuts down on transportation costs. Currently they have post and pole and firewood, but they are making incremental progress. If we are successful in securing more of a federal supply in the future we will owe the Wallowa Resources, the Dodge logging, and other pioneers a big thank you as it is the chicken and the egg syndrome with needing pioneers to get it started to make it possible. David, in working with Sustainable Northwest and with Wallowa Resources is trying to work with federal agencies in doing a better job of estimating what is out on sales that are made available. Rick Wagner (Oregon Department of Forestry) Rick was introduced as a Department of Forestry Stewardship forester that is psycho about sustainability and biomass. His passion to improve forest health in Oregon is well known in many circles. Rick came to discuss a project he has been working on locally to provide biomass fuel for a school in Enterprise. Rick pointed out that providing fuels for schools is important, not for the amount of biomass removed (it is small scale), but for the social connection or social capacity it can build in a community in understanding biomass utilization issues in the community. Schools are currently facing a train wreck, first with the price of fuel going up and up, and secondly with the deferred maintenance that has occurred with the schools tight budgets over time. So some of the boilers are going down or are in need of maintenance. Some firms (like Semens, McKinstry, etc) are coming in and addressing the need and are suggesting use of efficient biomass boilers (verses continued use of fossil fuels), and showing significant cost savings. Rick discussed the example he had a chance to investigate in Council schools in Idaho. There the kids are enjoying being warmer in the winter and cooler in the spring/summer, and are enjoying side benefits with a greenhouse that has been built utilizing some of the heat and providing added education for the kids. The community also benefited in learning what the sustainable supply of biomass was, and is interested in constructing a small community biomass to electric energy plant. Rick shared some pictures of current burning of material in NEO that could be instead used for heating schools. One large pile that was burned off of federal land represented a 9 year supply for a school. With grant dollars from the USFS Rick shared that the Enterprise school district is moving forward with plans for a biomass boiler, and will likely be a model for other schools to look at in discovering what is possible. Working Lunch (heard from 2 speakers and shared general discussion topics) Marcus Kauffman (Resource Innovation, U of O) Discussed progress with Three Rivers School District, a fuels-for-schools project in southern Oregon that would link to stewardship contracting. Resource Innovation is interested in documenting and using this as a case study for others to learn from in southern Oregon. This is a rural school close to Grants Pass. Marcus worked with a group locally to produce an integrated fire plan for the county. The group then looked to implementing projects for fuel reduction on private lands, and then public lands (stewardship contracting). They are working with both the USFS and BLM and there is a lot of activity in the area with Biomass One, Rough and Ready, Applegate Partnership and others. With this activity as backdrop they are looking at what is possible for the school district, looking at the costs and conservation measures they can take to make good use of a biomass boiler that would be replacing an oil boiler. This project is just getting started and they hope to learn from some of the work Tad Masons company is doing with supply (think it will take about a 100 acres a year to supply the school). They hope to put before the school board a complete package that shows exact technology that make sense, maintenance costs, emissions, etc.. Elaine Prause (Energy Trust of Oregon) Adam Serchuck is usually before you for the Energy Trust as he works with renewables. Elaine works on the opposite side working on the energy efficiency side. The Energy Trust mission there is to reduce the use of electricity and natural gas. She is thinking about biomass in application for commercial boilers. The trust would provide incentives like they do in the solar realm. They have to show benefit cost analysis. So they are looking for a role for the trust in exploring this area and helping it get off the ground and would welcome working with others to better understand risks, costs, benefits to biomass boilers (like the school examples). There is about $40 million they collect from power bills for use in conservation purposes. Again it just needs to show it is cost effective. Marcus Kauffman offered to speak to Elaine as soon as she was finished speaking! Tad Mason was also interested in exploring any role the FBWG might be able to play to bring together these funding sources with viable projects. Discussion ensued that even though the schools couldnt use the tax credits available from the state they could pass them to other entities that could utilize these credits along with possible funding from the Energy Trust. Lunch General Discussion Joe Misek shared with the group the success of working with Mike Cloughesy and the two of them doing a road show on the FBWG report and the OFRI report findings. The Renewable Energy Work Group (REWG) adopted the key findings of the FBWG and recommended that the Governor pursue the actions expressed there. The report was also shared at the World Forestry Center OFRI symposium, with Congresswoman Hooley at a public meeting she held in her capacity serving on Renewable Energy congressional committee; with Linda Goodman and Ed Sheppard at the region office of the USFS and BLM. We have gotten some mileage out of the report, but need to decide as a group where we go from here in furthering biomass utilization in a responsible way. Joe also mentioned he submitted a proposal to showcase the work of the FBWG to the National Society of American Foresters for their national meeting to be held in Portland in October of this year. (We were selected as presenters for this upcoming meeting). Martin Desmond discussed findings of Montana Microbial in their work with grass straw for biofuels. They have a no cook process developed for this fuel that looks promising. They are currently looking at supply with local producers. Martin attended a conference in Klamath Falls on biofuels that had several nationally known speakers. While at the conference he became aware of several grant funding opportunities that he shared with the group. Martin also spoke at a Roseburg biofuels conference and he said interest is high there. He used several of Mike Cloughesy and Russ Hoeflicks slides in his presentation and shared about the FBWG in his presentation. Renewable energy legislation active in the legislature was discussed by Mark Kendall (HB2210 -tax credit for feed stocks, HB 2211- increase of the BETC, and HB 2212 consumer incentives for renewable fuel use/ including new generation wood stoves, pellet stoves with low emissions), SB 373 Renewable Portfiolio Standard (initially developed by REWG with 20% renewable by 2020), HJM12 (15 year stewardship contracts). Members were encouraged to go to ODOEs web site to see more on the RPS. Sandy Lonsdale encouraged those members of the group who could, be active and speak to their representatives regarding renewable legislation. Mark Kendall also shared the various projects going on around the state that ODOE, The Energy Trust and others are working on including both biomass and biofuels. A number of very interesting projects launching around the state. Glenn Montgomery announced Renewable Energy Feasibility Grant Funds that are available now (for municipal entities) and encouraged members to spread the word. Information is available on OECDDs web site. Loren Kellog announced the Skyline Symposium and discussed program content with the group related to biomass utilization. Mike Cloughesy passed around a new 1 pager on biomass and passed around the energy opportunity map. Linc Cannon announced the Western Forest Economist meeting and topics related to biomass that will be discussed. Joe Misek asked group members to share any errors in the FBWG report they noticed so it could be cleaned up for any subsequent new copy orders. Critical Biomass Project Elements Tad Mason (TSS Consultants) has had extensive project experience in making a go of biomass projects. He shared a bit about TSS Consultants and the work they do. Tad mentioned a data base they are maintaining that shows the various technologies that are using biomass for energy world wide (currently 450 vendors). It is currently proprietary information, but USDOE is interested in the data base, so it may change in the future. Tad mentioned he was honored to be a part of the FBWG, and though based in California he has a number of clients throughout the west. Tad pointed out there are a number of promising things to do with biomass. Landscape, soil amendments, biobased products, biofuels, and today he is speaking about use for biopower. This involves two components; combusting biomass and producing heat and steam for power, and also the syngas that comes off the process could be used for an internal combustion engine to produce power. This is not yet proven commercial technology but is promising and they are working on developing it. Tad showed a typical bioenergy project and the focus on emission control (large part of the physical plant). He described to the group how the process works in a biomass plant. For context Tad stated that each MW is enough to power a 1000 homes. Efficiency of biomass is low in comparison to natural gas. Establishing biomass plant costs are about $2 to $2.5 million per megawatt. So a 20 MW plant is about $40 million to get up and running. With the volatility in the energy market recently many are looking at biomass (natural gas spikes). Tad then provided the group his insights into the making of a successful project. The group was very impressed with the depth of knowledge Tad shared. Here are the twelve steps Tads firm uses in evaluating projects: (Im not sure Ive captured the ones Tad had up. Hard to garner them from the discussion. Lets see if you can get his slides Cathy. Thanks) Co-locating of a user of waste heat. Adjacent to transmission system (biomass has some more flexibility in where to locate). Minimum size of 8 acres for 20 to 50 MW plant. Water availability, use 10 to 200 gal. per minute depending on technology. Location incentives (enterprise zones with lower tax rates). Highway and transportation system infrastructure (rail is nice). Ash and water disposal opportunities (fly ash for soil amendment). California use it for rice fields mixed with chicken manure. 20mwplant = 40 loads a day, based on 1 BDT burn rate per MW hour. Transportation look for backhaul opportunities, seeing $15 to $50/BDT delivered depending on available supply. This is 1.5 cents per KW hour. Add maintenance, debt service, etc. On the plus side you have federal tax credit of about 1 cent per kilowatt hour. Fuel Supply Community Support Project economics Appropriate Technology Siting Infrastructure Transmission Highway systems Water Hall costs Environmentally available from a diverse source for 10 years Existing incentives Return on investment (at least 19%) Match proven technology to the fuel supply Appropriate for the local siting Is their a project (preliminary feasibility study) Confirm community support. Assess fuel resource availability assessment Siting infrastructure issues, including environmental permit review Complete due diligence feasibility study (takes 2, 3, 4 for a report) Secure developer or investment banker Complete or negotiate power purchase agreement and thermal delivery agreement enlist equity partners secure financing select EPC firm construct project generate renewable energy Doug Heiken (Oregon Wild) Conservationists concerns about where Forest Biomass is going. Doug shared with the group that his group is interested in how biomass can help the forest in its restoration. They remain cautious about biomass utilization, because some locations may not be appropriate for biomass utilization, and some locations may not be appropriate for all types of treatments. A primary concern is not to let subsidies be the driver, but ensure that public benefits are being achieved with the incentives. There are questions about benefits of the fuel reductions from some studies. If not done right we can make things worse, for fire, wildlife habitat, carbon and climate change, cumulative impacts, and introduction of weeds. Doug challenged the group to consider how we get the tools to address these needs. How can we avoid the bad actions and encourage the good projects on the landscape? Doug challenged the group to consider the difference between the ecologic and economic sweet spots. He is not saying dont thin, they are supporters of thinning, but focus on key areas of need; interface areas, critical ecological resources like old growth pine stands that are rare; focusing on areas that are natural fire corridors. Look instead for strategic areas to get the most bang for the buck. A good dialogue by members of the group ensued in how to move forward in finding the sweet spot in a methodical way. Key question shared is what are the tools we need to get to the sweet spot? It is hard to write legislation to cover the diversity we find in nature. Doug suggested that at least the legislation be couched in the view or goal of restoration so we can holler when it gets off track. Mark Kendall said he would take Dougs concerns as concerns from the FBWG to the Renewable Energy Work Group when we deliver our recommendations to them as a FBWG. Joe Misek - Where do we go from here? Discussion on where the group goes from here was deferred until the group meets again after the close of the session. Joe will be looking for a sub-group that will act to put together a draft of suggestions on where we go from here in the next phase of improving utilization of forest biomass in Oregon. At the next meeting folks will be thanked for their participation in the FBWG and those that want to continue in some fashion addressing the issues will move forward from there. 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