Biomass Summit, Panel 1: Success Stories and Lessons Learned

By Janel Ruehl, Central Oregon Intergovernmental Council

Panel Summary

Although many people have heard the phrase “biomass” at some point in the last decade or two, few are knowledgeable about the wide range of utilization strategies available today. The widely publicized closure of a number of large-scale electrical generation projects and the difficulty of competing with subsidized renewable energy sources such as solar and wind have made some cynical of the potential for successful biomass utilization projects. What does success look like in this current landscape, and what can we learn from the lessons successful project developers have learned along the way? Panel one focused on modern success stories from four biomass utilization projects in the Pacific Northwest region, giving us insight into potential pitfalls and opportunities.

You might hear Wallowa Resources Community Solutions, Inc. referred to as “a diversified biomass campus” or a “forest products business cluster”. These titles both point to the success that Wallowa Resources has found through product diversification. Matt King, Wallowa Resources’ Energy Program Advisor, demonstrated the established relationship between project scale and complexity/cost: the more biomass volume is utilized, the more complex and costly the project. By integrating a number of smaller, diversified product streams Wallowa Resources has found greater project sustainability. Matt highlighted five primary benefits of integration: 1) reduced in-woods harvesting and trucking costs, and lesser site impacts; 2) integrated and diversified merchandising and marketing; 3) economic diversity, predictability, and stability; 4) increased forest health and restoration; and 5) additional supply to regional mills and industrial forest products customers. Unlike a “typical” forest products supply chain, Wallowa Resources draws on small-diameter wood from forest restoration to make an array of products including small saw logs, posts and poles, animal bedding, wood hog fuel for energy use, particleboard furnish, bundled and bulk firewood, and energy. This model has created a sustaining niche market for Wallowa Resources, but not without challenges. Matt and his colleagues are still wrestling with the low value of small-diameter wood products, the difficulty of finding equity partners, a lack of ancillary forest products businesses to support the mill supply chain, and limited supply due to limited forest stewardship.

Nick Johnson is interim Executive Director of Lake County Resources Initiative (LCRI). As a non-profit organization focused on renewable energy, forest research, and economic development, LCRI has partnered on the Red Rock Biofuels project in Lakeview, OR. While not the direct operator, LCRI’s partnership has enabled this large-scale biomass utilization project to move beyond development and into implementation. What does it take to get a large-scale project off the ground in today’s environment? According to Nick and LCRI, you must consider communication, collaboration, and availability. Good communication builds vital community support, and LCRI has leveraged their communication networks to organize public events and encourage transparency throughout the development phase of the Red Rocks project. Collaboration with the stakeholders of the Klamath Forest Health Partnership has maximized their ability to leverage funds. In addition to helping secure USFS supply chains, LCRI has helped tap into the abundant supply of biomass on private lands throughout the county by coordinating with landowners. LCRI has an ongoing interest in biomass utilization as it relates to economic development and job creation in their region, and their success with the Red Rock Biofuels project highlights how non-profits can play a vital role in development. However, the project still faces many hurdles as it moves into implementation in 2018 and beyond, including securing adequate and consistent supply for such a large scale.

In the Hood River area, the Wind River Biomass Utility (WRBU) is gaining ground on their combined heat and power biomass utilization project. Norman Ward, one of four founding members of the utility, explained that WRBU will produce electrical power for commercial & residential use, thermal power for commercial & residential use, biochar for agriculture, and firewood for camping & home heating. When in full operation, the facility is expected to process 12,000 dry tons annually. To date, the project has found success by focusing on their firewood operation. Starting in 2016, WRBU produced 15.5 cords of seasoned firewood from small-diameter wood, more than quadrupling this by 2018, with 95.5 cords produced. They deliver bundled firewood to four state parks and six USFS campgrounds, along with one private campground/RV park and one grocery store. This portion of the facility currently employs three people but is anticipated to represent just 22% of the overall project revenue once the facility is fully operational. Meanwhile, the WRBU team has been busy securing grants and investment funding to scale up their operations, delivering a Combined Heat and Power Feasibility Study with the Skamania Co. Port, a Small Generator Interconnection Report, and a Thermal Greenhouse Feasibility Study between 2014 and 2018. They’ve completed design and engineering plans for the full facility secured a long-term lease for 25 acres in the Wind River Business Park and acquired most of their necessary operating equipment. The team has incorporated new ideas as they go, including an innovative design for onsite greenhouses utilizing biomass heat to expand the local food system. Like Wallowa Resources, WBRU will be considered an “integrated campus” when fully operational, utilizing a diversity of products and income streams to be sustainable and competitive in the market.

Biomass torrefaction process.

Here in our own backyard, the Ochoco Lumber Company has been partnering on biomass utilization efforts for years. Founded 93 years ago, Ochoco Lumber has seen huge change in the forest products industry in Crook County. With zero operational mills in Prineville today, Ochoco Lumber recognizes that there is currently a huge issue with forest health and density. From their mill in John Day, Ochoco Lumber processes small-diameter wood products and torrefaction is their newest project. Torrefaction is a thermal process to convert biomass into a coal-like material, which has better fuel characteristics than the original biomass. Torrefied biomass is more brittle, making grinding easier and less energy intensive (learn more about torrefaction in our Panel 3 post). Bruce Daucsavage, CEO of Ochoco Lumber, shared some project statistics. The torrefaction project will cost less than $20 million with zero debt incurred. It will process over 200,000 green tons of biomass annually. The project is well supported by a range of stakeholders, including Oregon Senators and Congress members, environmental groups, and community members. Several Oregon banks have expressed an interest in kick-starting the project. According to Bruce, Ochoco Lumber is also interested in opening a new mill in Prineville, but the undertaking is expensive. Investment in equipment is particularly costly, and estimates from a recent mill opening in Idaho put the total project cost around $80 million.

All of the success stories highlighted in panel one share the themes of diversification/ integration and collaboration. While WRBU is working off a tiered system of implementation starting with firewood, Red Rock Biofuels worked in partnership with LCRI to develop and launch a large-scale project. There is no one-size-fits-all pathway to success, but it’s clear that flexibility and innovation are important elements in today’s successful biomass utilization projects.

Key Takeaways

• Integration of multiple technologies and products can actually make projects less costly and complex.
• Collaboration, communication, and a solid supply chain are crucial elements to any project’s success.
• Consider a tiered implementation approach: start with a product line that has a lower barrier to entry such as firewood and works your way into full operations. How can a project support other local industries, like agriculture (ie: WBRU’s greenhouses).
• Diversification of existing mills and forest infrastructure is significantly less expensive than building new