Wood Ethanol is in an identity crises

Wood Ethanol is in an identity crises
by Rex Storm, Forest Policy Manager
Associated Oregon Loggers

Wood Ethanol Plant Shuts: After making just one batch of ethanol, one of the five commercial wood ethanol producers in the US, Range Fuels, announced it would shut down its plant in Soperton, Georgia. To build the cellulosic biofuel plant, Range had secured investments including, a USDOE grant of $76 million, a USDA loan guarantee of $80 million, and over $100 million from private & public investors eager to gamble on this green energy venture. The US EPA expects Range to produce 100,000 gallons of cellulosic ethanol and 2.9 million gallons of methanol in 2011.

Another Wood Ethanol Plant: Mascoma Corp, Frontier Renewable Resources LLC, and Valero Energy Corp announced in January their planned construction of a commercial-scale refinery to produce wood ethanol in Michigan’s Upper Peninsula. Planned to begin construction in 2011, the biorefinery promises to produce 40 million gallons/year of cellulosic ethanol. A Mascoma plant in NY state produced 200,000 gallons of wood ethanol last year.

Wood Ethanol Promises Unmet: The EPA has now projected that the five firms receiving huge federal subsidies would make just 6.6 million gallons of cellulosic biofuel in 2011. Under 1 million gallons of wood ethanol were produced in 2010. Congress in 2007 had set a 2010 cellulosic biofuel target at 100 million gal. This lofty green target for wood ethanol has proven impossible, even with hundreds of millions of dollars in federal subsidies. In perspective, Oregon’s E10 ethanol mandate for gasoline consumed about 3 million gallons of corn ethanol in 2010.

Trucking Just Gets Brutal: Forest product truckers are battling through a host of issues that have made business difficult at the start of 2011. In the face of purchaser pressure to drop rates, operating costs continue to rise for nearly every trucking factor, including: higher fuel & insurance costs, rising fees & taxes, driver wage & benefit costs, fewer operating days, federal hours-of-service limits, federal emissions & safety standards, rising depreciation & falling salvage, and increased truck repair & replacement prices. Adding insult to injury, cut-throat rate practices from purchasers, and capacity surpluses, can pull trucking rates below the cost of operation—and force a trucking business into below-cost performance, as a desperate alternative to insolvency. Because this dysfunction transcends all forest contracting—not just trucking—the contract sector faces extraordinary financial challenges that cannot easily be healed upon economic recovery of Oregon’s forest sector.

Forest Literacy in Oregon Schools: Oregon’s K-12 schools now have a ready-to-use framework for helping teachers educate students about forests and the importance of the state’s forest sector. This new ‘Conceptual Guide to Teaching & Learning about Oregon Forests’ was developed by Oregon Forest Resources Institute (OFRI), OR Dept. of Education, and Tillamook School District, in cooperation with educators and forest industry representatives—including AOL. To learn more about the OR Forest Literacy Program, visit OFRI online at: oregonforests.org

Diesel Price Climbs: The average price of Oregon diesel fuel jumped 11 cents per gallon in the last month to $3.48 per gallon, according to AAA’s Fuel Gauge Report (1/20/11). Nationally, the diesel rate is 17% above prices at this time last year. Oregon’s diesel fuel price at the pump ranks the 13th highest in the US, compared to the nationwide average of $3.40/gal. Oregon truckers and forest contractors were also hit by new state fuel tax increases on Jan. 1st, which pushed pump prices up 6 cents for highway fuel. Daily fuel & gas prices are reported online: www.fuelgaugereport.com

Oregon Employment Information Online: Forest contractors and employers looking for information about Oregon employment should go online to the WorkSource Oregon Employment Department website. The site includes job listings, employment opportunities, workforce & economic data, wages & income, forecasts of occupational & industrial employment, and sources of education & training. Business owners or jobseekers may find this site useful: www.qualityinfo.org

EPA Delays Co-Gen Plant Emissions Rule: In January, the federal Environmental Protection Agency announced a temporary three-year exemption for biomass power plants—from the EPA’s new greenhouse gas regulations (Tailoring Rule). Had these regulations become effective Jan. 2, 2011, then new investment in biomass power production would have stopped. Biomass has long been considered a “carbon-neutral” energy source that should not be subject to carbon-limiting regulation, because it burns renewable wood from trees that reduce carbon from the air.

Prineville Biomass Plant Proposed: HM3 Energy, a Gresham-based company, recently announced its intent to construct a biomass briquette facility in Prineville. The briquettes are to be used as a clean-burning supplement at power plants, and would be manufactured from timber mill residuals and forest biomass. Construction is slated to begin in 2011, and operational in 2012, employing 50 people.
Woody Biomass Utilization Grants: The US Forest Service is accepting proposals until March 1st to offer $3.7 million under the Woody Biomass Utilization Grant program (WBU). Up to $250,000 per project will be granted to proposals aimed at completing feasibility & design work for wood-to-energy projects that will use woody biomass removed from forest restorations. A 20% fund match required. Federal grant funding is contingent upon a 2011 appropriation by Congress. For more information: www.fpl.fs.fed.us/research/units/tmu/tmugrants.shtml

Last Sawmill Standing Seeks Aid: Colorado’s only sawmill, Intermountain Resources LLC of Montrose, may get federal subsidy help to continue operating through its bankruptcy receivership process. Intermountain, which also has a mill in Wyoming, is under court-ordered receivership after mill shut in May. For the first time, the US Forest Service admits that a sawmill is critical to manage the unhealthy national forests in the state. USDA Undersecretary for Resources, Harris Sherman, in December met with the Forest Service and others to discuss ways to retain the last mill standing.

West Adds Four Congressmen: The 2010 census shows that Western US population increases will result in a gain of four seats to the 435-member US House of Representatives, beginning in the 2012 election. The West gains one seat each in WA, AZ, NV and UT, while the remaining western states keep their current number of representatives. Oregon has no change from its five congressional seats. States losing seats include: NY, OH, IL, IA, LS, MA, MI, MO, NJ and PA. For more information on census results see: http://2010.census.gov/2010census/data/apportionment-data-text.php

BLM Land Prohibition: Quietly on Dec. 22nd, without any warning, US Interior Secretary Salazar issued Executive Order No. 3310, which puts prohibitions on wide swaths of Bureau of Land Management lands nationwide. The order dictates that BLM lands with so-called “potential wilderness characteristics” would off-limits to any altering activities—effectively making up to 140 million acres defacto Wilderness. This alarming prohibition impacts energy & mining exploration, timber harvest, grazing, water development and easements on federal lands across the West.

Disclaimer: Articles featured on Oregon Report are the creation, responsibility and opinion of the authoring individual or organization which is featured at the top of every article.