While the Industrial Revolution changed the foundations of the United States' economy, the dependence on fossil fuels to spur it along created the need a century later for what some have dubbed a "bio-based revolution" emphasizing the use of alternative and renewable energy as the foundation of the future.
Within Wisconsin's 16 million acres of public and private forest land there lies a key piece of that renewable energy future in woody biomass collecting throughout the forest floor. The tops of trees, branches and other dispersed, gnarly bunches of slash that loggers previously left in the woods is attracting more and more commercial attention for its possible usage as wood pellets for heat and power, and fuel for utility company boilers.
But is there enough? Consider some of the competitors for the resource:
� There are at least seven pellet plants in the state and Superior Wood Products is hopeful it will receive permits needed to construct its own pellet plant in Ino, located in Bayfield County. The company aims to produce 100,000 oven-dried tons of pellets each year, which could generate up to 4,775 kilowatt hours (kWh), according to the company's Web site.
To produce the pellets - and the heat to dry wood that becomes a pellet - the company will need about 200,000 tons of green wood, said Don Peterson of Renewable Resource Solutions, a consulting firm assisting Superior Wood Products.
� Northern States Power's Bay Front plant in Ashland will convert a coal-fired boiler to one using wood waste to create synthetic gas. If the plant comes online in 2012 as expected, the plant will nearly double its use of woody biomass, from 200,000 tons to between 330,000 and 360,000, said Dave Donovan, Xcel's manager of regulatory policy.
� Flambeau River Biofuels in Park Falls obtained a $30 million grant from the U.S. Department of Energy toward a plant that will convert 1,900 tons of forest residue into 40 million gallons of fuel and 2 trillion Btu of heat and power.
� Even schools like Glidden in Ashland County have installed wood-fired boilers to help offset their energy needs with renewable fuel.
All told, the state could experience a demand for an additional 640,000 to 1 million cords of wood within the next four years, according to a June report on future biomass demand from DNR officials Terry Mace, Vern Everson and Mark Heyde.
The expected demand for 360,000 cords of wood needed for pellets alone is likely to come from the forest because much of the fine residue from mill plants is already spoken for through existing contracts, the officials wrote. Mace later said that could be tempered by an additional 1.6 million tons of logging residue left in the woods that could be sustainably removed.
But that's just in the near term. The DNR's projections on demand typically look ahead five years, Mace later said in a telephone interview. Studies for the private sector generally don't go much farther, and Myron Schuster, executive director of the Northwest Regional Planning Commission, said one problem with those studies is they're usually completed in isolation without taking into account other demand.
As part of its work in economic development, NWRPC works with startup businesses to facilitate loans and other financial assistance, and Schuster said his phone rings every week with calls about breaking into biomass
Xcel isn't counting on the forests, however. The company secured a deal with Midwest Products of Illinois to supply ground railroad ties for use at the Bay Front plant. And Donovan said the company is also pushing for further research into short rotation woody crops, which basically are tree farms specifically designed to supply biomass.
Double-edged wooden sword
The growth of biomass, its harvesting and all of the associated uses for the product create several double-sided issues.
It's literally homegrown energy and creates another market for the state's timber harvesting industry.
"If the profits are there and the money is good, I think the workforce will grow again, but times are tough all over and we've lost quite a few loggers in the last year and a half," said Henry Schienebeck, executive director of the Great Lakes Timber Professionals Association.
Charly Ray, executive director of the Living Forest Cooperative, said if harvested the right way, biomass could grow into several markets.
"Pellet plants and chips, ethanol and all of that, could fill that niche and be done in a good way - knock on wood," he said.
However, depending on supply of resources, increased biomass harvesting could create more competition for feedstock used by the state's pulp and paper industry, which is itself already facing increasing global competition from China and parts of Europe.
Wisconsin has lost several paper mills in recent years. Tax incentives and subsidies designed to spur growth in the biomass industry could ultimately hurt pulp and paper mills, several state and industry officials said.
Transportation also plays a role in the biomass industry, since fuel prices can determine how far a company can reach to obtain their woody material.
Superior Wood Products hopes to stick to a 50-mile radius, Peterson said, although he feels more comfortable with a 30-mile radius.
Not only does the high cost of production reduce the value of biomass, but enough miles of travel can make biomass economically worthless to harvest even if it's free, Schienebeck said.
Another issue is that with an investment in the right equipment, biomass harvesting could become a more efficient and economical way of forest management, since loggers are already in the field for timber.
Despite encouraging signs in the biomass market, harvesters might find it difficult to invest in equipment that Schienebeck said could top $1.5 million.
State contributes to demand
The demand is caused in part by renewable portfolio standards requiring electricity providers to obtain various percentages of renewable fuel to produce power.
Wisconsin has a portfolio standard to reach 10 percent by 2015, and Gov. Jim Doyle recently announced the "Energy Independent Communities" initiative, setting a non-binding goal of 25 percent by 2025.
Doyle also announced a separate goal for the state to capture 10 percent of the national market for bioindustry and renewable energy - a market in which biomass will certainly play a role.
Some state and industry officials say the forests can take it; there's enough woody biomass to supply the demand, and many businesses don't follow through with plans to use it for commercial purposes.
"Once people get into a business plan or feasibility study and start looking at it, for every 20 companies that talk about it, there's one that's actually going to get down to doing something," Peterson said.
In fact, increased competition could limit the competition to serious inquiries only - at least when it comes to pellet plants, said Scott Bowe, associate professor and wood products specialist at UW-Madison.
"The capital cost investment to produce a pellet, with the machinery and everything else you'd need to buy, you'd need to be pretty committed to do this so it would limit the fly-by-night folks," he said.
Others with knowledge of the timber industry aren't so sure there's enough supply, and there's only so much to go around to ensure the various operations will turn a buck.
"My concern is, nobody has a real good handle on how much of this raw material - feedstock, if you will - we have available in a given geographic area," said Schuster of the Northwest Regional Planning Commission, in a telephone interview. "If, all of a sudden, we have three different plants saying we're all going to use the same feedstock, something's not going to work."
What is currently lacking, he said, is a comprehensive inventory of commercial forest resources. Schuster raised the issue with Department of Natural Resources Secretary Matt Frank at a July 22 meeting in Ashland.
"We get to the point of saying, 'Well, wait a minute, is there really enough there?'" he said during the meeting.
Frank responded that multiple state agencies are all working together to determine "the actual potential harvest at a state level of our land that can support this new economy," an effort that also includes help from the private sector.
If the industry continues to grow, Schienebeck said more engagement with the U.S. Forest Service would be necessary to extract more product out of the Chequamegon-Nicolet National Forest.
A diverse group of stakeholders is also working with the DNR and the state's Council on Forestry to establish harvest guidelines specifically addressing woody biomass, guidelines that are now open for public comment and are expected to be finalized by the end of the year.
While the harvesting guidelines address sustainability issues such as soil nutrients and biodiversity in the context of best management practices, they do not address issues of resource availability and economics.
Until either the resource collection or the guidelines are complete, it's up to industry and groups like NWRPC to compile their own information. And it's reaching the point of first-come, first-served.
"I get a call, at least one a week, where they think 'I'm going to make a buck and start making wood pellets,' but everybody and their brother's had the same idea," Bowe said.
Pellets versus Pulp and Paper
Time will tell whether enough biomass exists decades from now to support an industry, once the impact of DNR's harvest guidelines and increased competition is better established.
There are definite concerns across the board, however, that if too much biomass is consumed for pellets or power, those companies might look toward the supply upon which the state's pulp and paper industries depend.
"Once you've committed yourself to using wood for energy - it might be a school that's put in a heating boiler or a utility that's revised its equipment - they will be after the wood," said Earl Gustafson, vice president of energy, forestry and human resources for the Wisconsin Paper Council. "If biomass starts to run in short supply, we're concerned that pulpwood might start to look attractive, particularly as chips."
Gustafson said the paper industry could even see a double-whammy under a scenario in which utilities receive incentives, buy up more pulpwood, build the purchase into their market rates and charge paper mills for the use of wood they once claimed.
Yet Schienebeck of the Great Lakes Timber Professionals Association, which has representatives of both industries on its board, said subsidies and incentives helped the pulp and paper industry grow, too.
"If I look back at the history of everything, I can't think of anybody that hasn't had some kind of subsidy or grant for some portion of their mill," he said. "What's fair and what's unfair? I don't know."
So it's a balance between doing right by the existing paper mills while taking advantage of a new opportunity, Schienebeck added.
The DNR's Mace agreed that too much encouragement for biomass could upset the balance among the various facets of the state's wood products industry.
"If subsidization gets too heavy and all of a sudden, instead of taking the biomass they start taking the pulpwood, which pushes the pulpwood prices up and causes a mill to close, that doesn't help the management of the forest and that doesn't help the economy," he said.
One factor that could help the biomass industry without hurting paper is that utilities and pellet plants can use all types of wood, Peterson said.
"Whatever wood energy product it is - whether it's chips or pellets - they can utilize that material," he said. "If you have an insect go through or a fire go through, you can salvage that wood and use it in a product, whereas the pulp and paper industry won't take it once it's dead."
A continued decline in the pulp and paper industry would no doubt affect hundreds, if not thousands, of jobs. But the flip side of increasing usage of biomass is another market for loggers, said Joe Kramer, senior project manager for Energy Center of Wisconsin, which completed a resource assessment on behalf of Xcel.
"The harvesters that I talk with, for the most part, welcome additional biomass users into the area because it means they have a more stable business," he said. "If a pulp and paper mill closes, which has been happening, they can conceivably switch and instead supply directly to the biomass end user and have a reasonable assurance their business can keep going."
Tomorrow: The ecological impacts of extracting more woody biomass out of the state's forests.Ashland Daily Press
