California Assessment of Wood Business Innovation Opportunities and Markets (CAWBIOM) Phase I Report: Initial Screening of Potential Business Opportunities Completed for: The National Forest Foundation June 2015 CALIFORNIA ASSESSMENT OF WOOD BUSINESS INNOVATION OPPORTUNITIES AND MARKETS (CAWBIOM) PHASE 1 REPORT: INITIAL SCREENING OF POTENTIAL BUSINESS OPPORTUNITIES PHASE 1 REPORT JUNE 2015 TABLE OF CONTENTS PAGE CHAPTER 1 – EXECUTIVE SUMMARY .............................................................................................. 1 1.1 Introduction ...................................................................................................................................... 1 1.2 Interim Report – brief Summary ...................................................................................................... 1 1.2.1 California’s Forest Products Industry ............................................................................................... 1 1.2.2 Top Technologies .............................................................................................................................. 2 1.2.3 Next Steps ........................................................................................................................................ 3 1.3 Interim Report – Expanded Summary .............................................................................................. 3 1.3.1 California Forest Industry Infrastructure .......................................................................................... 3 1.3.2 Business Opportunity Screening Process ......................................................................................... 5 1.3.3 Opportunities Selected For Detailed Review ................................................................................... 5 1.3.3.1 Cross Laminated Timber ......................................................................................................... 5 1.3.3.2 Oriented Strand Board ........................................................................................................... 6 1.3.3.3 Small Scale Biomass with Co-Located Business(es) ................................................................ 7 1.3.3.4 Veneer – Plywood/Laminated Veneer Lumber (LVL) ............................................................. 8 CHAPTER 2 – INTRODUCTION ...................................................................................................... 10 CHAPTER 3 – CALIFORNIA FOREST INDUSTRY INFRASTRUCTURE REVIEW ...................................... 11 3.1 Forest Products Within California’s Economy ................................................................................ 11 3.2 The Forest Resource in California ................................................................................................... 12 3.3 California Timber Harvest ............................................................................................................... 13 3.4 Primary Forest Products Processing Industry ................................................................................ 15 3.4.1 Raw Material Flow and Final Disposition in California ................................................................... 16 3.4.2 Raw Material Flow and Final Disposition in Oregon....................................................................... 18 3.5 Discussion of Key Observations ...................................................................................................... 21 3.5.1 Raw Material Supply ....................................................................................................................... 21 3.5.2 California Biomass Power Industry Infrastructure ......................................................................... 21 3.5.3 Fruit Growers Supply Company Sawmill in Yreka ........................................................................... 24 CHAPTER 4 – BUSINESS OPPORTUNITY SCREENING PROCESS........................................................ 26 4.1 Listing of Potential Business Opportunities ................................................................................... 26 4.2 Screening Criteria ........................................................................................................................... 27 4.3 Screening Process ........................................................................................................................... 29 4.3.1 Screening Results ........................................................................................................................... 29 4.3.2 Forest Industry Stakeholder Workshop .......................................................................................... 30 4.3.3 Raw Material Supply ....................................................................................................................... 30 TABLE OF CONTENTS PAGE CHAPTER 5 – OPPORTUNITIES SELECTED FOR DETAILED REVIEW .................................................. 31 5.1 Cross Laminated Timber (CLT) ........................................................................................................ 31 5.1.1 CLT General Description ................................................................................................................. 31 5.1.2 Positive Aspects of CLT ................................................................................................................... 32 5.1.3 Negative Aspects of CLT ................................................................................................................. 35 5.1.4 Topics for Further CLT Analysis ...................................................................................................... 36 5.2 Oriented Strand Board (OSB) ......................................................................................................... 36 5.2.1 OSB General Description ................................................................................................................ 36 5.2.2 Positive Aspects of OSB .................................................................................................................. 38 5.2.2.1 Transportation Cost Savings ................................................................................................. 39 5.2.2.2 Market for Sawmill Residuals ............................................................................................... 40 5.2.3 Negative Aspects of OSB ................................................................................................................ 42 5.2.4 Topics for Further OSB Analysis...................................................................................................... 43 5.3 Small Scale Biomass with Co-Located Business(es) ........................................................................ 44 5.3.1 Small Scale Biomass General Description ....................................................................................... 44 5.3.1.1 Co-Located Businesses ......................................................................................................... 44 5.3.1.2 California Senate Bill 1122 ................................................................................................... 45 5.3.1.3 Small Scale Biomass Technologies ....................................................................................... 47 5.3.2 Positive Aspects of Small Scale Biomass......................................................................................... 49 5.3.3 Negative Aspects of Small Scale Biomass ....................................................................................... 50 5.3.4 Topics for Further Small Scale Biomass Analysis ............................................................................ 51 5.4 Veneer – Plywood/LVL ................................................................................................................... 52 5.4.1 Veneer General Description ........................................................................................................... 52 5.4.1.1 Plywood ................................................................................................................................ 53 5.4.1.2 Laminated Veneer Lumber ................................................................................................... 55 5.4.2 Positive Aspects of Veneer – Plywood/LVL .................................................................................... 56 5.4.3 Negative Aspects of Veneer – Plywood/LVL ................................................................................... 59 5.4.4 Topics for Further Veneer – Plywood/LVL Analysis ........................................................................ 59 CHAPTER 6 – APPENDICES ........................................................................................................... 60 6.1 Appendix 1 – Technology “One-Pagers” ........................................................................................ 60 6.1.1 Energy Related Technologies ......................................................................................................... 60 6.1.1.1 Small Scale Biomass Power .................................................................................................. 60 6.1.1.2 Butanol/Other Drop In Fuels ................................................................................................ 65 6.1.1.3 Cellulosic Ethanol ................................................................................................................