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Oregon Biofuels and Biomass

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Oregon Biofuels and Biomass O REGON B IOFUELS AND BIOMASS Woody Biomass in Oregon - Current Uses, Barriers and Opportunities for Increased Utilization, and Research Needs OSU Chemical Engineering Department OSU Institute for Natural Resources OSU Oregon Wood Innovation Center Preface The Oregon University System, working in partnership with the Oregon Economic & Community Development Department, commissioned a bio-fuels industry readiness survey for Oregon. This report serves as one component of the readiness survey. The report has three primary sections: • An overview of the current forest products industry in Oregon combined with estimates of regional biomass supply; • A review of literature related to use of woody biomass in Oregon for biofuels and bio-based products; and • Interviews with key stakeholders - private landowners and manufacturers that use wood products residues (including wood-based composites and pulp & paper). Information from the three sections is used to determine implications for research needs related to woody biomass utilization in Oregon. Findings of the report are intended to assist decision makers determine how best to focus efforts in this area. Acknowledgements The authors would like to thank the following individuals for their assistance with data collection for this report: Mike Gaudern, Executive Director, and members of the Oregon Small Woodlands Association, Salem OR Greg Latta, Faculty Research Assistant, Forest Economist, Department of Forest Resources, Oregon State University, Corvallis, OR Jim Reeb, Associate Professor, Department of Wood Science & Engineering, Oregon State University, Corvallis, OR Table of Contents Executive Summary............................................................................................................ 1 Introduction......................................................................................................................... 4 1. Oregon’s Existing Wood Products Industry – An Overview.......................................... 6 2. Review of Recent Reports on Woody Biomass Utilization.......................................... 30 Biomass Energy and Biofuels from Oregon’s Forests.................................................. 31 OSU Forest Biomass Utilization Research Program .................................................... 56 Oregon Forest Biomass Working Group ...................................................................... 60 Western Governors’ Association .................................................................................. 63 Forest Products Industry Technology Roadmap........................................................... 66 Summary of Research Recommendations .................................................................... 68 3. Stakeholder Interviews.................................................................................................. 71 Landowners................................................................................................................... 71 Forest Industry .............................................................................................................. 77 Pulp & Paper Industry................................................................................................... 82 Interview Summary....................................................................................................... 84 4. Conclusions & Recommendations................................................................................ 86 Conclusions................................................................................................................... 86 Recommendations......................................................................................................... 89 Literature Cited ................................................................................................................. 96 Executive Summary There is currently a great deal of interest in Oregon, and around the nation, in woody biomass utilization. Biomass utilization has the potential to simultaneously address 3 seemingly unrelated goals – 1) reduced incidence of forest fires; 2) economic development; and 3) renewable energy. While a number of recent reports have addressed utilization of biomass for renewable energy, lesser emphasis has been given to bio- based products or bio-chemicals. Woody biomass is defined here to include logging residues (tree tops, limbs, and non-merchantable logs) from conventional timber harvesting activities and from forest restoration work; residues from existing wood products manufacturing facilities (mill residues); and urban wood waste. Oregon has significant existing industry infrastructure utilizing woody biomass (e.g., wood-based composites and pulp & paper). This fact combined with reports indicating marginal economic feasibility of bioenergy in the absence of value-added markets (OFRI, 2006) suggests the need to consider a wider array of potential products from woody biomass. The Oregon Innovation Council’s plans to form the Bio-Economy and Sustainable Technologies (BEST) Signature Research Center present an opportunity for Oregon to lead the nation in developing renewable and sustainable energy and materials from woody biomass and as a result, realize the three goals described above. However, research is needed all along the value chain – from forest restoration science to biomass harvesting and transportation systems; processing and conversion technologies; bio-based product development and marketing; and understanding consumer demand for end products. This report assesses barriers and opportunities to utilization of woody biomass and implications for research via an overview of Oregon’s current primary forest products manufacturing industry combined with estimates of regional biomass supply, review of recent reports related to use of woody biomass for biofuels and bio-based products, and interviews with private landowners and forest industry personnel. Findings demonstrate that Oregon’s primary forest products manufacturing industry is highly interconnected and interdependent. Biomass users such as pulp and board mills are critically dependent on production from sawmills and veneer mills. Sawmills and veneer mills in turn rely on pulp and board mills as markets for the substantial volume of residues generated in sawmilling and veneer production. Nearly all of the existing mill residues are used. By contrast, markets for logging slash and non-merchantable (i.e., small diameter) timber are currently very limited. The majority of timber supply in Oregon currently comes from private forestlands. The ratio of public/ private forestlands varies significantly county to county. Hence, when discussing potential for increased utilization of woody biomass, it is critical to examine supply and existing markets within a narrowly- defined region (e.g., county or radius around a community). There are substantial inventories of merchantable logs and net biomass on public as well as private lands in southern Oregon. In addition, there is significant existing processing infrastructure. This region appears to have very strong potential for increased biomass utilization. Economic development is needed in most rural areas of the state and in eastern Oregon in particular. Grant County has significant volumes of woody biomass and some processing infrastructure for logs is still in place. However, markets for mill residues such as chips, sawdust/ shavings, and hog fuel are extremely limited. Further, net biomass supply in this area is heavily dependent on the availability of publicly-owned timber. Northwest Oregon has the greatest diversity of both processing infrastructure (sawmills, veneer mills, and pulp & paper) and the most balanced mix of public and private ownership of both merchantable logs and net biomass. Little attention has been given to this area for biomass utilization potential thus far. However, as the only area of the state with existing pulp & paper mills, northwest Oregon is likely to play a role as a 1 biomass ‘test case’ for other areas of the state in that fewer hurdles exist such as dependency on publicly- owned timber and requirements for investing in construction of new processing facilities. Existing primary processing infrastructure in central Oregon is likely to be a limiting factor in near-term utilization of woody biomass. Both infrastructure and available merchantable log volume and net biomass volume are modest. However, central Oregon appears to hold the best potential for western juniper utilization; the greatest concentrations of juniper in the state are in Crook County. Recent reports related to biomass utilization provided significant information related to potential biomass supply, barriers and opportunities related to increased biomass utilization, stakeholder perspectives, and policy and technical recommendations. Stakeholder interviews confirmed the interdependent nature of the industry and that demand for mill residues is currently quite high while supplies are limited. However markets are needed for logging slash; the majority of slash is currently piled and burned on site. Economics drive most landowner decisions with respect to harvesting – if biomass pays its way out of the woods, many landowners will be ‘players’ in the marketplace. Although some landowners also see benefits to thinning overstocked forests beyond pure cost recovery. Discussions of the economic feasibility of harvesting and transporting biomass should consider costs currently
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