Estimating Available Forest Biomass for Large-Scale Utilization: Forest BiomassGIS, a cost-benefit model for assessing forest biomass availability

August 26th, 2009

ABSTRACT: Federal and state governments are encouraging private investment into biomass-to-energy projects in several western states, based on gross estimates of harvestable biomass. These estimates provide an idea of standing biomass over a region, but do not reflect the range of costs and constraints associated with diverse management objectives (shaped by ownership priorities) and site conditions. Long-term investments will require more precision in estimating available biomass if sustainability and forest health are management objectives. These estimates will require a framework that accounts for forest production rates (growth-and-yield) and harvest and haul costs at the forest stand level. The forest stand is the correct unit of analysis and accounting for such estimates, as it is the largest contiguous area with a homogenous forest covertype, and it is the unit at which treatments are administered. Forest Biomass GIS employs a unique framework for assessing available forest biomass by modeling the financial costs and benefits, the energy costs and benefits, and the carbon footprint associated with biomass hauling and harvesting from a stand to a processing facility. The model factors-in a range of cost factors related to terrain, stocking, and equipment capabilities.

Introduction

In western Montana the federal and state governments are vocally encouraging development of forest biomass production and use, primarily for biofuel, but for other uses as well. The Montana Department of Natural Resources and Conservation estimates the availability of 70.6 million dry tons for Montana (the sum harvest benefit from all trees less than 7” DBH). Within Helena, for example, the DNRC estimates 4.9 million dry tons within a half-mile of an existing road, on slopes less than forty-percent. Some business interests seem to be interested in capitalizing on these resources. The Stoltze Lumber Mill in the Flathead Valley (Montana) that is considering the installation of a 12MW co-generation plant to provide power to 10,000 homes. Stoltze plans to use biomass from its own lands (38,000 acres) from within a 75-mile radius. In nearby northern Idaho, a consortium of large energy interests, including Energy Northwest and Duke Energy, is considering installing one or more 50 MW power generation plants that will depend upon biomass located within 50 miles of a facility.

These estimates provide a starting point for assessing biomass stocks, but they are rough and lack some of the specific considerations that will be important when making investment decisions. For instance, they do not address harvest and hauling costs, variability of terrain, and a diversity of stand-level objectives, which guide management. Furthermore, they do not address variations in stand volume production, variations that can easily doom a financial investment in long-term sustained yield of biomass. If some stands are not economically productive in relationship to the costs of harvesting them and hauling the materials, they cannot be counted as long-term sources of biomass feedstock.

Thus, I propose an assessment framework that addresses comprehensive relevant cost factors and constraints in relation to clearly-defined stand-management objectives and valid stand-volume inventories and growth-and-yield estimates. A valid resource assessment will consider available forest biomass based upon stand-management objectives and desired future conditions, current stocking and growth-and-yield estimates, and stand-level harvest, haul and processing costs, including energy use and carbon-footprint. Forest Biomass GIS (FBG) integrates these vital factors into a user-friendly geographical information system, bringing a great deal of precision to investment decisions.

In this paper, I will briefly discuss the importance of using the forest stand as the basic land-unit for biomass assessment and planning, and then briefly discuss the factors relevant to a biomass volume assessment based on stand factors. Finally, I will briefly introduce and describe Forest Biomass GIS.

The Forest Stand

The forest stand is the basic, atomistic unit for forest analysis, planning and management. A stand is generally a contiguous, homogenous area in terms of composition (species mix) and structure (size distribution), and is usually circumscribed by differences or thresholds in slope and aspect, ownership, past management, disturbance history, roads, etc. Thus, as the smallest contiguous unit with homogeneity of composition and structure, the stand is the smallest land unit sampled for forest structure. The results are tabulated into stand tables, which commonly report trees per acre and basal area for various tree species and diameter-classes.

Likewise, the stand is the smallest planning unit, and forest production for a stand is reported in per/area units for that stand. Differences in management objectives become apparent at the stand level. For example, a stand managed for elk hiding cover will differ dramatically than one managed for biomass. As such, the stand is the first level at which a planner determines the sustainability and efficiency of a project – in relation to the management objective. The planner assesses and expresses forest productivity at the stand level in terms of its growth-and-yield, and, likewise, measures costs and constraints at the stand level. Given our management objective or objectives, and given a stand inventory, the planner can determine standing volume as well as projecting growth and yield in the future.

In terms of the larger ecosystem, the stand is the basic building block of the watershed, which consists of a mosaic of varying stands – some of which might easily share the same compositional and structural qualities. Stand objective formulation is constrained or determined by watershed (also known as landscape) level considerations. For example, an overall landscape objective might require limiting the number of stands managed for biomass to an area below some threshold.

Production Cost Factors

As analysis and assessment occurs at the stand level, so do management treatments, for example, timber harvesting, biomass harvesting, and sanitation-thinning. Thus, costs and benefits manifest at the stand level, and generally, costs and benefits will be homogenous across the stand.

Central to measuring costs and benefits is the awareness of stand productivity, which is measured in terms of growth-and-yield of above-ground, tree-based biomass. Given defined constraints for harvesting (yield), planners typically use a computer application to determine growth-and-yield for a stand, and usually the model is calibrated to a specific region.

Likewise, harvest financial costs will be unique to a stand, due to stocking differences, slope differences, prescription provisions, ownership, and other stand factors. Further, different operators employ differing production systems – production systems being a combination of operator/contractor and the constellation of equipment used on the site. Each of these systems has different costs, which can be compared at the stand level.

Harvest cost inputs will rely upon operations research on a number of relationships involved with biomass harvest and haul operations for projection modeling and for current-cost modeling. Current-cost data from these operations should improve operations cost-inputs for projection modeling. Harvest cost factors include terrain, haul distance, equipment type, stocking, prescription, and several other factors, including fuel-use and associated energy use and CO2 emissions.

To assure that long-term management is sustainable, planners should be able to conduct financial and energy-use cost-benefit tracking through all phases of production, as well as a carbon accounting, and should be able to compare cost-benefit ratios (energy and finance) between stands and for and between groups of stands, in the past and present. Likewise, planners should be able to rank stands based on terrain, stocking, and haul distance, and other parameters. Linked to tables from a good G&Y model, a firm should be able to plan for sustained yield of biomass through long-term planning horizons.

Thus equipped, planners can analyze an individual stand, an entire landscape area or watershed, a region, or a set of fragmented stands and ownerships. This type of analysis could be useful to resource agencies, municipalities, or private interests analyzing the resource base for forest biomass development, whether it is a commercial biochar operation, an electrical power generator, or a fuels-for-schools program.

Forest Biomass GIS (FBG)

Forest Biomass GIS (FBG) is a model for determining forest biomass availability in a geographical area based on forest stand management objectives, stand structure and productivity (short and long term) and production costs and constraints. FBG maintains data on production-related costs (in good detail), energy use, and atmospheric carbon emissions for harvesting and hauling biomass from a stand or group of stands as well as calculating efficiencies (for example, energy returned over energy invested, ERoEI).

FBG will help the production planner to conduct financial and energy-use cost-benefit tracking through all phases of production (harvest and hauling), as well as a carbon accounting. Thus, a planner can answer the question, “How much money must I spend harvesting these three stands, and how many BTUs will the equipment use? How much income am I gaining by selling the biomass? How much energy am I using to harvest compared to the energy embodied in the biomass?” The model can compare cost-benefit ratios (energy and finance) between stands and for and between groups of stands, in the past and present. “Which ten stands have the lowest cost-benefit?” Likewise, FBG can rank stands based on terrain, stocking, and haul distance, and other parameters. Linked to tables from a good growth-and-yield model, FBG can easily be used to plan for sustained yield of biomass through long-term planning horizons.

Currently FBGIS models harvest and haul systems, although biomass processing at facilities could easily be assimilated into the model, as can the related process of sequestering carbon (for example, though charring or pyrolysis). The model treats harvest systems and haul systems separately as combinations of operators and equipment. They are constrained primarily by slope, stocking, and other site factors. Harvest costs can be aggregated or disaggregated at varying texture (coarse or fine), as can the study of productive process (time and motion). The model will be explicit about a methodology for this aggregation and analysis. Likewise, FBG also treats haul systems as combinations of operators and equipment. Cost constraints include slope, weight, road grade, and distance.

To determine biomass loading – or the amount of forest biomass that will be harvested – FBM requires input from at least one other model – the user’s preferred regional stand-based growth-and-yield (G&Y) planning and projection model. The G&Y model determines expected harvest yield in relationship to the prescribed treatment at the stand level. A regional G&Y model, in turn, depends upon a cruise or other sampling approach for basic inventory data and site-index or species library for growth rates. For yield rates, the model depends upon compiled inventory data and treatment parameters (level of cut, desired residual structure, etc.).

Harvest cost inputs will rely upon operations research on a number of relationships involved with biomass harvest and haul operations for projection modeling and for current-cost modeling. Current-cost data will improve operations cost-inputs for cost-projection modeling. Harvest cost factors include terrain, haul distance, equipment type, stocking, prescription, and several other factors, including fuel-use and associated energy use and CO2 emissions.

Balancing out the modeling equation, FBG also addresses the energy and financial yields associated with forest biomass in its various forms. Thus, the energy content in green and dry wood is considered, as are current prices and other relevant attributes. The model accounts for (input) energy and financial qualities for various grades of forest biomass stock – including price per ton, energy content and carbon emission.

Conclusion

The ability to assess the availability of forest biomass based on stand productivity and on harvest and haul costs from the stand will allow investment planners to gain a realistic view of their potential returns or losses. As such an approach will allow investors much more granularity in their land-use decision-making, managers can avoid harvest and haul operations that will not pay for themselves. Further, because most of the forest biomass harvested will supply biomass-to-energy projects, the ability to analyze energy use and carbon emission from a stand will allow a stand-based appraisal of energy efficiency and carbon footprint for a project.

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Let’s take a look at biochar

May 5th, 2009

While “biochar” might not be a common household name, charcoal certainly is — or it was before the days of propane barbeques. If you take that charcoal and bury it underneath some soil you have biochar. And that’s what biochar is: cellulosic charcoal buried in the ground to enhance agricultural production and sequester carbon. “Sooooo,” you might ask, “what’s the big deal?” Well, biochar has recently been the object of much discussion, research, and advocacy from a variety of people with interests ranging from sustainable agriculture to carbon sequestration and greenhouse-effect mitigation to forest biomass production. (1) Though biochar is relatively new to the forest and agricultural industries and relatively unknown from a research perspective, it is gaining ground. For example, see the recently published Biochar for Environmental Management: Science and Technology as cited below (fn. 2). (I have a copy at my elbow, and it’s well worth reading.) And, apparently, biochar has been used as an agricultural input for thousands of years. Of course, the emphasis on carbon sequestration is new, but it makes biochar especially interesting and potentially relevant to forest practitioners in this region.

All in all, I think that biochar production is worth a serious consideration as another use for forest biomass, and could perhaps be a part of a sustainable biomass industry. In this missive, I’ll say a bit more about what biochar is and address some current criticisms.

In physical terms, biochar is merely charcoal made by pyrolyzing woody materials – cooking them at low temperatures in a reductive atmosphere (less than 700 f. and lacking oxygen). During pyrolysis, the woody feedstock releases high energy gases that a plant can easily concentrate into a liquid fuel (synfuel) or burn to power the pyrolysis process. (In an open fire, these gases burn, giving us the open flames to which we’re accustomed.) The black mass left behind is biochar or charcoal – depending upon what you do with it. As biochar, you can bury the mass in the soil, and as charcoal, you can burn it to cook food. (Even though charcoal has been charred, it retains energy content; the energy is embodied in the chemical bonds holding the mass together.)

In some environments, biochar will significantly increase productivity gains from other fertilizer inputs, though, in and of itself, it will not increase productivity. Apparently, this gain is due to two factors linked to its physical structure: its ability to retain moisture and its suitability for beneficial fungi and bacteria — key factors to any healthy soil. Both factors follow from biochar’s physical structure, which is characterized by countless gaps and spaces (nano-porosity and macro porosity) and high surfaces that provide surface tension and storage space for water and niches for the various microbes (which also hold water). And, because biochar tends to retain its structure for long periods (centuries), its advantages are long lasting; researchers believe that biochar was the determining component of the Terra Preta soils found intermittently in the Amazon Basin thousands of years after they were created. Entire cities sustained their agricultural production based on mixing biochar with these otherwise agriculturally-challenged clay soils.

Biochar, however, has its problems, which, more or less, fall into three main categories. To begin with, biochar production has the potential to be highly destructive to forests. This problem is particularly acute in underdeveloped countries lacking effective environmental regulations, where dislocation, disenfranchisement, theft, and abuse of the local peoples typically accompany large-scale resource extraction. Furthermore, if additional value can be extracted for carbon sequestration schemes, the incentive for abuse increases. And, of course, forest destruction has characterized most resource development and extraction in our own region, as well.

However, our situation is somewhat different than in other regions in the world. We do have some environmental regulations in effect, though they are often not fully enforced or are subverted. And, we have some valuable knowledge. Because we have experienced the harsh effects of boom-and-bust development and would prefer long-term, sustainable economic development, we are more-or-less aware that we need to follow some guidelines and do some long-term planning and management. I’ve argued in my previous two posts and I’ll argue again that we need to base our harvest levels on a comprehensive set of stand-level considerations. If we do that, perhaps we can build a sustainable, equitable long-term biomass industry. Since we are at the beginning of the industry cycle (of biomass and biochar), perhaps we can get it right from the start. We have an amazing opportunity to learn from our past mistakes and create a long-term regional biomass industry that includes biochar products.

Another problem with biochar is that we don’t yet know enough about it to make large-scale planning and investment decisions. Our body of knowledge is yet quite limited. However, that situation is changing, and all results to date are pretty interesting. For instance, see the book referenced below, Biochar for Environmental Management: Science and Technology. Several interests are committing resources to further researching biochar, including Sustainable Obtainable Solutions, a non-profit organization in Montana. (In the spirit of “full disclosure,” I’m a board member and active supporter of SOS.)

And, of course, biochar is an idea and product with no proven market, and a market takes time to develop. I know that I haven’t seen or heard of a market analysis for a biochar product, though one could easily exist. For that matter, I haven’t yet seen or heard of a specific product line (with specific size, feedstock, etc.). But, I can’t imagine that a preliminary market analysis and plan for a hypothetical product line could be too cumbersome or expensive to produce – a simple document that could portray a general “topology” of the market. If the biochar works as has been claimed, and if it is cost-effective to produce and use, then I would hypothesize that we can build a regional or national market.

In the meantime, we’ll need to answer a few questions. For instance, will biochar and related product-lines work in a wide range of agricultural situations – a range wide enough to constitute a market threshold? Can we legitimately use biochar to create carbon credits? Can we produce it cost-effectively and on a sustained basis without diminishing stand and forest health?

I can’t yet answer these questions, but I think they’re worth investigating. So far, the research looks interesting, and I intend to encourage and partake in yet more biochar research and some product development as well. I’ll post the really interesting news to this blog. And, as usual, please send me any news you hear.

(1) In  April 2009, international representatives to the U.N. Framework Convention on Climate Change, held in Bonn, Germany, to discuss including biochar as a carbon offset source during the 2012 talks.

(2)Lehmann, Johannes and Stephen Joseph, 2009, Biochar for Environmental Management: Science and Technology, London: Earthscan Pub.

Also, see… http://www.biochar-international.org/home.html

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Determining the Availability of Forest Biomass in Montana

April 16th, 2009

As I mentioned in the blog entry, “Forestry, Forest Biomass, and BioEnergy Production in Montana – a Primer,” several federal and state agencies and industry players are pushing for an increase in forest biomass production in Montana (and other places). The U.S. Department of Energy, for example, asserts that U.S. forests will be able to contribute 368 million dry tons, annually, to the biomass feedstock.(1) The Montana DNRC’s Forestry Division claims 70.6 million dry tons for Montana, from trees less than 7” DBH. Within 50 miles of Helena, working on stands within ½ mile of an existing road and on reasonable slopes (< 40%), they estimate 4.9 million dry tons.(2) That’s a great deal of forest biomass.

These figures give us a general idea of what’s out there so we can get some perspective on our potential for growth. For instance, 4.9 million tons would feed, roughly, 490 times the current use of ALL Schools for Fuels programs in Montana. (The sum of all use by Fuels for Schools in Montana is estimated at 10,000 dry tons per year.) We can clearly see that we have plenty of room to expand.

But, given the myriad costs that ultimately bear upon any forestry operation, can we be sure that all this material is economically (or politically) available? Ultimately, I would argue that we’ll need to refine our inventory, addressing such considerations as diverse ownerships and management objectives, stand structures, terrain, and accessibility.

I would also argue that we should address these considerations, immediately, so we can use this information to guide the sustainable growth of this forest biomass industry. We’re still at the early stages of development of this potentially explosive industry, and the potential resources seem infinite – especially in comparison with the current rates of production. But, in reality, as with all resources, the resources are finite, so we should build our industry from a realistic, informed understanding of what our resources are.

In this respect, I argue that we should focus our attention on available forest biomass, and that we should ground all our forest biomass assessment and management in sound silviculture and forest planning principles. I would especially make this argument for biomass management on public and industrial lands. In this respect, available forest biomass includes biomass removed from a stand during a treatment that follows from a stand-management plan, which is constrained by available stocking, growth-and-yield constraints, harvest and haul costs, law, ownership, and other determinants relevant to objective formulation. Again, the consideration of available forest biomass should be based on sound silviculture principles.

So, what are “sound silviculture principles”? Well, to begin with, silviculture is about managing forest vegetation according to management objectives – statements about what the owner/manager wants to accomplish in the long-run on a forest stand. (By long-run, I mean culmination of mean annual increment for the dominant species, consistent with the stand’s fire regime.) Common forest management objectives in this region typically include timber management, wildfire fuels management, stand restoration, stand health, and forest aesthetics. Underlying the choice of any objective should be an understanding of the current stand structure and growth-and-yield limits for the long run and an understanding of the stand’s ecological history – including a generalized understanding of its fire history and regime. (An important part of the plan, especially for forest restoration, stand health, and aesthetic objectives is a target stand – an operational description of “desired future conditions” that comes in the form of a stand table, defining targets for mean DBH, total basal area, trees per acre, density measures, and so forth.) The silviculture plan should guide all forest operations, and will determine how much forest biomass is available in light of long-term objectives.

Sound silviculture also factors management constraints and optimizes against them. For instance, a minimum residual BA constraint might dictate that a treated stand retain a basal area no less than 60 square feet/acre. A DBH constraint my dictate that a treatment cannot cut trees larger than 13-inches DBH, or no tree less than 6-inches DIB at the end of the first log. Constraints usually follow from the relations between conflicting objectives. For example, a timber harvest might be limited to a set harvest amount due to wildlife or aesthetic considerations. Therefore, the wildlife objective becomes a constraint to the timber objective.

Of course, forest management objectives and constraints reflect social values and tastes, and they are an outcome of the manager’s or owner’s priorities. Thus, for example, forest biomass management could become a primary objective or a co-objective as a result of the current political and social interest in bioenergy. In the case of forest biomass to energy projects, “energy returned over energy invested” (ERoEI) will be an obvious constraint. ERoEI is the ratio between the energy returned from the woodchips to the energy used to obtain them. Projects with an ERoEI equal to or less than 1.0 at the stand level should, of course, be scuttled, when bioenergy production is the primary objective. In the future, the carbon footprint of an operation will become a constraint, perhaps based on the ratio between energy returned and carbon emitted. But, whatever the management objectives and constraints are, all treatments should support them. Thus, any treatment should leave residual conditions that are specified for the stand at the time of treatment. Harvest levels for any treatment should result from this specification.

Further, for any stand, treatment benefits should exceed costs – in terms of finance and ERoEI. Costs and benefits, of course, will vary with fuel prices, labor rates, equipment costs (including amortization), distance, administrative costs, biomass prices, quality of biomass, terrain, season, and so forth. Depending upon how these variables line-up, stand treatments may or may not be profitable.

Of course, currently, forest biomass production is usually a byproduct of treatments for other objectives, especially fuel management and timber objectives. In these cases, the benefits and costs of biomass processing should be subsumed within the larger cost-benefit analysis, given one exists. In many cases, benefits might produce enough value to add up to a profit, though often they provide only a cost-offset. And, of course, on small private lands, a silviculture plan is often (or usually) completely absent – perhaps to the detriment of the long-term resource. And, until demands picks up considerably, forest biomass production in Montana will continue to be a by-product for other objectives.

But, if and when the forest biomass industry does significantly expand in Montana, and if it is to play a large and sustainable role in our larger economy of energy feed-stock and production, then we will see more management for biomass as an objective function. In that case, we should get it right from the beginning.

(1) Perlak, Robert D., et.al., US Department of Agriculture and US Department of Energy, Biomass as a Feedstock for Bioenergy and Bioproducts Industry: The Technical Feasibility of a Billion-ton Annual Supply, April, 2005.

(2) Angela Farr, Montana DNRC, “Montana’s Biomass Supply.” Biomass to Energy Workshop, December 9, 2008 (U.S. Forest Service, Helena Ranger District). Helena, MT.

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Building a Forest Biomass Industry in Montana

April 14th, 2009

Abstract: The forest biomass industry, under current production conditions, cannot pay for itself and is not self-sustaining. However, with some encouragement and investment from the various federal and state agencies and some long-term agreements on sustainable resource use, perhaps a strong, sustainable industry can emerge. Such an industry – scaled in relationship to established forest stocking levels (available forest biomass) – might thrive on feedstock produced in WUI fuel management operations, and shared costs between fuels treatments and biomass production certainly could improve economies for these projects.

Introduction

Here comes bioenergy. Oil price-drops notwithstanding, the drums of bioenergy and biomass-based products are beating. Of course, forest biomass is already used as feedstock for various forms of energy in Montana, but foresters, forest operators, government agencies, landowners, and conservationists are calling for an increase in scale that would dwarf our current production. Just recently, the Helena National Forest hosted a “Biomass-to-Energy” workshop in Helena, Montana. And, bioenergy production is now a federal mandate, with supporting language in the 2007 Energy Independence and Security Act and the 2008 Food, Conservation, and Energy Act (the Farm Bill).(1) The U.S. Department of Energy aims to replace 30 percent of our current petroleum use with “biofuels,” to which forest biomass will contribute roughly 25 percent of the feedstock – or 368 million dry tons, annually.(2) According to the Forest Guild, this increase in forest biomass amounts to an increase of 25 times the current use.(3) And, on the private level, several firms are researching, developing, and marketing equipment for forest biomass processing.(4) Only last February, Energy Northwest and ADAGE (a joint venture between AREVA and Duke Energy) announced they would be opening at least one 50 megawatt plant in northern Idaho.

Meanwhile, Montana has been host to a long and ferocious run of record-breaking forest fires, most with significant impact in the Wildland Urban Interface (WUI). During the 2006 and 2007 fire seasons, the State of Montana (DNRC) and all federal agencies spent roughly $23 million and $68 million, respectively, to protect 83,727 WUI acres in 2006 and 54,632 WUI acres in 2007. That works out to about $555 per acre protected for emergency wildfire costs. (5) To these costs we could add the economic costs of evacuation, work stops (in the woods), travel restrictions, and poor air quality.

Given these costs, most resource managers would agree that pre-fire risk mitigation is far more cost-effective, acre for acre, than emergency fire suppression, and almost everyone would agree on the public health and aesthetic advantages. Accomplishing fuel management and forest restoration objectives in the WUI – near the urban centers where bioenergy facilities will be located – would stimulate local economies, mitigate the risk of catastrophic fires, and feed the bioenergy facilities that we envision.

Yet, despite all the good intentions, the abundance of dense, overstocked, fire-prone forests, the availability of skilled operators, and a growing energy market, forest-fed bioenergy production in Montana seems to be… err, smoldering, at best. So… what’s the hold-up, here?

This question brings me to the reason for this posting: In the simplest of terms, the forest biomass industry, under current production conditions, simply cannot pay for itself. In today’s (global) market, the industry is just not self-sustaining. However, with some encouragement and investment from the various federal and state agencies and some long-term agreements on sustainable resource use, perhaps a strong, sustainable industry can emerge. I hypothesize that such an industry – scaled in relationship to established forest stocking levels (available forest biomass) – could easily thrive on feedstock produced in WUI fuel management operations; shared costs between fuels treatments and biomass production might, in many cases, make projects pay themselves. Why not create energy feedstock by carrying out WUI fuels management and forest restoration?

Benefits and Costs

But first, back to the basics. Under current market conditions in Montana, prices paid to the forest operators harvesting biomass are far too low to support a self-sustaining industry, and very few buyers are available. Only one mill in Montana – Smurfit-Stone, actually uses hog fuel (the lowest grade of biofuel) hauled from the site; this mill generates most of its annual use of 360,000 green tons from its own waste and residues, and pays little if anything for hauled fuel. And, while eleven public schools are buying chips through the schools-for-fuels programs at $35 to $55 per green ton, the state total use for the program is less than 10,000 green tons per year.

Now, compare these prices to operator costs. On good ground workable with the equipment currently used in Montana, fuel management can cost between $600-$4,000 per acre, and an acre might yield ten to thirty green tons of biomass. (The higher costs usually accompany jobs for residential owners, who can be fastidious with treatment considerations.) So, given treatment costs of, say, $2,000 per acre for treatment, and biomass loading of, say, 20 green tons per acre, costs for generating a ton of green biomass easily exceed $100 per ton. And, this figure doesn’t include haul costs. At roughly 10 cents per mile per ton (a conservative estimate that does not account for rate differences between dirt, gravel, and highway), the haul is guaranteed to increase the per-ton cost of handling forest biofuels — even excluding base costs or fuel surcharges. Clearly, haul distance is important, and mills and school boilers are far and few between.

So, forest biomass production for fuel clearly doesn’t pay for itself under current market conditions. In fact, it doesn’t even come close to paying. Within our region, market prices and the quantity demanded are far to low to justify management exclusively for forest biomass production objectives. As a result of low prices and limited markets, virtually all of the bioenergy feedstock comes from residues and leftovers from logging or thinning treatments for objectives other than biomass harvest — objectives like wildfire fuels hazard mitigation, timber production, forest restoration, aesthetics, and others. Much of this work is paid for by small-lot residential owners in the WUI (10-100 acres) with poor-to-marginal timber quality. And, with current timber and pulp prices fetching bottom-dollar prices, cost offsets for timber sales – which usually subsidize biomass harvesting – don’t hold much promise.

But, even though the market is small, it is at least something. A few schools and mills are paying money for chips and hog fuel, so it does generate some level of income offering some cost-offsets for harvest and hauling. This cost reduction is especially helpful in cases where fuels need to be removed from the site (anywhere that fire behavior is a concern!). In these cases, owners (and operators) face two possibilities: 1. chipping/grinding and hauling, or 2: slash-piling and burning. Usually, burning is more expensive (as it takes longer, if done safely). So, in some cases, even the availability of a site for free dumping (of chips) can offer a cost reduction (over burning). In those cases where mills pay for biofuel, the added income is, of course, much appreciated. Sometimes, the cost reduction is significant enough to induce a client to hire a fuels management job, or a restoration job, or a marginal timber job. As I said, the current forest biomass market is, at least, something.

But, it isn’t much. So, what do we do to invigorate this biomass industry?

Many would sensibly argue that we should increase productivity by purchasing more efficient equipment. For instance, European equipment manufacturers have been developing dexterous, low-impact harvesters that can be coupled with industrial sized (36-inch) chippers to dramatically increase harvest productivity. With the ability to remove and process trees without damaging the remaining trees (often the most ecologically and financially valuable), these machines would increase the area treated per dollar and per hour, making treatments less expensive and therefore more affordable to the wildland-urban interface landowner. Since biomass is distributed spatially, the ability to extend production spatially really counts.

However, these machines are expensive and current market conditions don’t justify them. Let’s take a conservative, hypothetical example. A state-of-the-art chip-and-haul system might include the following equipment:

a. Dexterous, small-diameter harvester/excavator;

b. Forwarder or skidder with grapple;

c. Skidsteer for feeding the chipper;

d. Industrial chipper (36-inch).

e. Roll-off container hauling system – a logging truck and trailer with pup for carrying two containers for a total 28-ton load (generally).

Such a system would create whole-tree or bole chips and would require a skilled operator, as dirty fuels (dirt and rocks) create large costs (wearing teeth and worse). For the purpose of this posting, I’ll assume that on average ground with average stocking (ok, I know, average anything doesn’t exist in the woods), such a system should move through 6 acres per day at 20/tons per acre. The yield (20 tons/acre) assumes that fuel management is the primary management objective, with cutting-from-below as the selection method. (The estimates come from the research of an experienced operator in Montana.)

Capitalizing the above harvest/haul equipment assemblage would carry a principal cost of about $1 million – or $200,000 per year over five years (not counting interest). At 1,800 hours per year (forty-five 40-hour weeks), payments on the principal would cost $111.00 per hour. Add this rate to the minimal business costs:

Capitalization (no interest) 111.00

Interest, Insurance, and Taxes (15% of principal) 16.50

Operation Costs (20% of principal) 22.00

Labor costs ($40/hr including workman’s comp and

Insurance for 5 laborers) 200.00

Risk and Profit 1.00

Total 350.50

To pay only the principal costs of the equipment and break even (no profit), a state-of-the-art biomass harvest system would require an income of $350.50 per hour. (By the way, if we consider per diem costs for 5 laborers working away from their homes, we can add a minimum of $600, or an additional $75/hr. For this example, I won’t factor these costs.) At a working rate of 6 acres per day (3/4-acre per hour) and a harvest rate of 20 tons per acre (assuming whole tree chipping), this system would require a production of 120 green tons/day – or 15 tons per hour at $23.37 per ton in costs – just to break even.

On a yearly basis (1,800 hours), the break-even point is $630,900 per year, requiring a market for 27,000 tons of chipped whole-trees. Put another way, breaking even would require treating a minimum of 1,350 acres (just over 2 square miles) at $467.40/acre for the conditions given in this example.

Such a market, of course, does not exist – even for one operator. Smurfit-Stone pays little to nothing for its supply, and the Schools for Fuels program uses less than half of the stock an efficient operator could produce in a year. Given the uncertainty of the national and global economies (which are currently facing deflationary spirals), it’s a no-brainer that an operator can’t afford this equipment under these conditions, especially not a small-operator.

So, what do we do? We want to build a sustainable biomass industry but the market will not sustain one. In fact, in and of itself, the current biomass won’t even sustain one dedicated operator. (Most clients are paying for aesthetic and fuel-management treatments.)

Clearly, if we as a society want to stimulate a forest biomass energy industry, we will have to offer up some subsidies, and we will have to be creative. We all know that throwing money at any industry is not helpful. Intelligent investment, though, might prove to be successful.

On the demand side, we might start by funding more fuels-for-schools projects and expanding the program to include other public buildings. Heating is currently the most efficient use of bioenergy (contrasted with electrical generation, for instance.) This idea also makes sense from an energetic perspective, as efficiencies are much higher for heating than for electrical generation. For the sake of conversation, I’ll propose a 5-year goal of tripling fuels-for-schools type programs (applied to other public buildings), from 10,000 tons to 30,000 tons per year. At 20 tons per acre, this increase in tonnage would require an increase from 500 acres treated per year to 1,500 acres – a pretty conservative increase. And, as a target for statewide bioenergy use, why not meet… say, one quarter of Smurfit-Stone’s current use of 300,000 green tons per year (that is, before they closed) at 75,000 tons. At 20 tons per acre, this supply would require a mere 3,750 acres – or 6 square miles (roughly). That’s a small fraction of the wildland-urban interface that needs to be treated.

Likewise, we should be funding research and development of small-scale, residential chip burning boilers. And, electrical generation, though less efficient with the conversion than boilers, might still offer a profitable market that makes sense from an energy and carbon point of view. The BioMax 25, for instance, produces 25 kw per hour based on about 50 lbs (per hour) of dried-feedstock, as well as producing 200,000 BTU/hr and some “biochar” for dressings. (The unit dries its own chips.) I would argue for offering tax credits for pioneers willing to invest in this technology.

On the supply side, several measures make sense to me. The first approach is for federal and state agencies to guarantee a minimum number of acres, per year, in the wildland-urban interface to be treated (by contract) for fuel management. (6) To gain some perspective, consider a scenario wherein we invest as much money per year in fuels treatments as we’ve spent per year, on average, over the last five years. From 2003 to 2007 (five years), federal agencies and the state of Montana paid roughly $25 million per year to protect homes in the WUI. At $555 per acre, $25 million will protect roughly 45,000 acres (70 square miles). At $467 per acre for treatment costs, we can treat over 53,500 acres (83 square miles) for the same $25 million. Within a three or four years, at this rate, severe fire behavior would not be a threat within a large area of WUI in Montana, and emergency fire suppression costs would diminish.

Now, if we scaled back this projection target to a level that we could sustain over a few decades, we would create an industry, dramatically reduce public forest management costs, and enjoy a much better bang for our collective buck.

Of course, any management treatment should follow from a silviculture plan at the stand and landscape level, and should be commensurate with all legal obligations, particularly those concerning wildlife biology and stand health objectives.

Funding formats could vary, including, for example, tax write-offs for private research and investment, public funding of research at the university level, guaranteed loans, and grants. A parallel approach is to offer grants (outright, matching, etc.) to private, WUI owners for fuels management work. Or, another source of support would be loan guarantees and or tax write-offs for contract operators to buy efficient equipment.

However we create it, the synthesis between bioenergy production and wildfire fuels management in the WUI offers some interesting opportunities for building a biomass industry and a healthy, fire-wise WUI for the long-term. I think it’s worth some serious consideration.

(1) Biomass Research and Development Board, Federal Interagency Biomass Research and Development Initiative, US Department of Energy, National Biofuels Action Plan, October 2008.

(2) Perlak, Robert D., et.al., US Department of Agriculture and US Department of Energy, Biomass as a Feedstock for Bioenergy and Bioproducts Industry: The Technical Feasibility of a Billion-ton Annual Supply, April, 2005.

(3) Evans, Zander, “Lessons Learned and Strategies for Success,” Forest Wisdom, Issue 11, fall 2008.

(4) See, for example, the Smallwood 2008 and Bioenergy and Wood Products: www.forestprod.org/smallwood08powerpoints.html

(5) Gude, P.H., Cookson, J.A., Greenwood, M.C., Haggerty, M. 2009. In Review. “Homes in Wildfire-Prone Areas: An Empirical Analysis of Wildfire Suppression Costs and Climate Change. International Journal of Wildland Fire.

(6) According to a Montana DNRC publication assessing fuel stocks for the Schools for Fuels Program, “the most notable limitation to feedstock availability is that the federal government currently does not enter long-term contracts for harvesting on National Forest lands, which is usually required for financing.” Potential for Expanding the Fuels for Schools Concept to other Institutions and Industries. December, 2004. Bitterroot RC&D. p. 21.

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Welcome to the Forest Biomass Blog.

April 10th, 2009

Welcome to the Forest Biomass Blog. This blog is a forum for discussing forest biomass production in the Intermountain region — Montana and surrounding forests with similar ecosystems. To learn more about this site, its mission, and so forth, please see the About the Forest Biomass Blog page.

My first two posts are entitled “Building a Forest Biomass Industry in Montana,” and “Determining the Availability of Forest Biomass in Montana.” Please read and comment.

The Forest Biomass Blog is a new site currently under construction. Excuse the gaffs… or report them to the administrator. (That’s me, and thanks for your help!)

For the present, I’ll make registration open. If we start experiencing annoying comments and spam, I’ll start screening members — with ample notice to legitimate readers and participants.

Also, if you’re interested in being a contributer, write me a note and we’ll negotiate. My e-mail address is available on the About Page.

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