FOREST SERVICE:

Project aims to turn beetle-ravaged trees into electricity

BRECKENRIDGE, Colo. -- On a bitter cold December afternoon, white semis rumbled by million-dollar homes in this famous ski town, carrying wood chips from pine trees culled from the national forest.

The trucks were headed 70 miles west on Interstate 70 to a biomass plant in Gypsum, where the wood will be burned to generate electricity for rural residents.

For the next 50 years, the Eagle Valley Clean Energy biomass plant will burn about 10 semi-truck loads -- 250 tons -- of wood daily, almost all of it harvested from the White River National Forest. The 11.5-megawatt plant will bolster Colorado's timber industry and possibly prevent the next catastrophic wildfire.

It's a unique project the Forest Service hopes to replicate across the West, where decades of fire suppression and waning timber harvests have led to a massive buildup of excess trees.

Succored by warmer winters, the mountain pine beetle has devoured tens of millions of acres of national forests, most of them lodgepole pine. While such epidemics are natural, they pose new safety risks as more people move into the wildland-urban interface, where towns and infrastructure abut the forests.

Projects like Eagle Valley provide an important market for the Forest Service to harvest those trees, which are otherwise of no value to sawmills. If left in the forest, the dead trees would topple over, creating a tinderbox for the next lightning bolt or errant campfire to set them ablaze.

While Eagle Valley is not large for a biomass plant, it's one of the biggest to consume primarily beetle-killed trees from a national forest. It goes online later this month.

"The neighbors have said, 'Thank goodness the Forest Service is finally doing it,'" said Cody Neff, who founded West Range Reclamation LLC, the Hotchkiss, Colo.-based company harvesting the trees surrounding Breckenridge. "With the fires and the beetle epidemic, the public has gotten really educated about forest health issues."

West Range last year was awarded an $8.7 million, 10-year stewardship contract to remove trees susceptible to insects and disease on the White River, including lodgepole, subalpine fir, Douglas fir, Engelmann spruce, aspen and ponderosa pine. At least 1,000 acres will be treated annually.

Much, if not most, of the wood will be burned at Eagle Valley.

As with all biomass, the central challenge is how to get it to market.

Wood packs about half the energy of coal. It is also spread across hundreds of millions of acres of rugged and often inaccessible Western forests. Like solar and wind, it's a tantalizing, diffuse energy source.

Without a buyer, wood is piled and burned in the forest.

"There's an abundance of biomass. The problem is getting it to the power plant in an economic way," Neff said during a recent tour of the Breckenridge site, where the temperature hovered around -5 degrees Fahrenheit. "Where that comes in is just tons per day, tons per hour."

The 10-year stewardship contract was a significant piece of the puzzle, he said. The long-term project allowed West Range to invest $4.5 million in equipment and personnel and to sign a 20-year fuel contract with Eagle Valley.

Traditional timber contracts last two or three years with a maximum of five years.

Neff wore a West Range baseball cap and beige North Face jacket and had an REI Nalgene in the cup coaster of his Ford pickup. With a warm smile, the Minnesota native and father of three lacked the grizzled look of a logger.

As his crew worked to thaw the diesel in his company's skidder, Craig Jensen, West Range's division manager, maneuvered a "feller buncher" into a thick stand of lodgepole. The machine's giant claws simultaneously sawed and bundled -- felled and bunched -- up to 10 trees at a time, piling them neatly on the snow-covered landscape.

Trees more than 8 inches thick and 16 feet long will go to sawmills in Eaton or Montrose, but the rest, about 70 percent, will be fed into a blue wood grinder for shipment to the power plant.

Neff's company has been performing stewardship contracts for several years. The contracts, which allow the Forest Service to exchange goods like mill lumber for services such as hazardous fuels removal, have revolutionized his business, he said.

"Before the 10-year stewardship contract, nobody would think about investing that capital," he said.

The investment trickled down to other businesses, too, Neff said. He's hiring local owner operators and contractors for trucking, snow removal and road work in addition to local vendors for fuel, lodging and parts.

When West Range was awarded the Front Range long-term stewardship contract four years ago, Neff said, he was able to promise the Scotts Co., a landscaping firm, a 10-year supply of raw materials within a 60-mile radius of its Colorado operation. Scotts used to import roughly 80 percent of its raw material by rail or truck, but now 80 percent of its supply comes from within the state, he said.

Despite carrying strong bipartisan support, the Forest Service's stewardship contracting authority is set to expire next month.

While the Obama administration and forestry and conservation groups have lobbied for a permanent extension, the proposals have run into budget hurdles since they technically divert revenue from the Treasury. Both the House and Senate farm bills would extend the authority.

Neff said he'd like to see the Forest Service have the authority to issue 20-year contracts.

Dangerous accumulation

The Forest Service estimates about one-third of its 193 million acres is at high or very high risk of fire.

The threat is palpable in Colorado after the Black Forest, Waldo Canyon and High Park fires over the past two summers charred more than 100,000 acres, destroyed more than 1,000 homes and claimed three lives.

One lodgepole stand at the West Range project was packed about 1,800 stems per acre, well above normal, Neff said. While the trees are up to 100 years old, most of their trunks are no larger than a human thigh. Competition with other trees has stunted their growth.

The Forest Service estimates more than 80 percent of mature lodgepole in this area will succumb to the pine beetle.

"It is reasonable to expect that within a 10 year period, many dead lodgepole pines will deteriorate and fall to the ground," the agency said in its record of decision authorizing the 4,400-acre Breckenridge project. "The resulting condition would be heavy fuels accumulations that could support large scale wildfires characterized by high severity-high intensity fire behavior."

The Forest Service would like to thin more hazardous fuels, but it is limited by flat budgets.

That's where the Eagle Valley plant comes in.

The $56 million project provided a market for West Range, allowing it to offer the Forest Service a lower bid -- a boon to taxpayers.

If it weren't for Eagle Valley, the Forest Service would likely have paid three times as much to remove the dead and dying timber, Neff said. "That power plant will save them millions every year," he said.

The Agriculture Department, which includes the Forest Service, saw savings, too, in 2012 when its Rural Utilities Service awarded Eagle Valley a $40 million loan guarantee.

"This Gypsum project is a great example of multiple programs coming together," said Dave Atkins, the Forest Service's woody biomass program manager, based in Washington, D.C.

Biomass utilization is particularly challenging in Colorado because there isn't much of an integrated wood products industry, Atkins said. There are no pulp mills or wood composite plants to buy lower-value timber.

Building markets

Biomass projects have historically struggled to compete for USDA rural energy loans, Atkins said. As a result, the Forest Service reoriented its woody biomass utilization grants to focus on design and preconstruction so projects including Eagle Valley could craft better business plans, he said.

The 8-year-old woody biomass program has spurred the treatment of more than 500,000 acres of forests -- reducing wildfire risks -- and removed and used nearly 5 million green tons of biomass, spending on average $66 per acre, the Forest Service said.

The agency in June announced $2.5 million in new grants, including a $211,000 award to Stoltze Land and Lumber Co., in Columbia Falls, Mont., to develop a 2.5 MW biomass power plant at its sawmill. The power will be sold to the Flathead Electric Cooperative, and the residual steam will be used to dry lumber.

Atkins said he's worked with the Rural Utilities Service to ease concerns over biomass fuel supply.

"I tell them the forests are dynamic," he said. "The beetle kill only affects a portion of the forest, but other areas still need to be thinned out to meet wildfire objectives."

There appears to be no shortage of supply in Colorado.

Since the mountain pine beetle epidemic began in the late 1990s, more than 1.7 million acres of lodgepole and ponderosa pine forests has been affected on Colorado's Medicine Bow-Routt and White River national forests, the Forest Service said.

The Eagle Valley plant is expected to create 12 jobs in Gypsum, a community of about 6,500, and about 30 regional logging jobs, said Kendric Wait, CEO of Evergreen Clean Energy, the plant's developer.

"When the Forest Service first sat down with us two-and-a-half years ago, the first question they asked was, 'Can you build it bigger?'" Wait said over a plate of tacos at Tu Casa Mexican Restaurant next to the power plant on the banks of the Eagle River.

At the plant site, semis dump wood chips into a massive blue bin. From there, a series of conveyor belts transfer the wood to a pair of giant silos or the plant's stockyard, which can store about 800 truckloads.

A separate conveyor belt carries wood from the silos to the plant's boiler room, where it's burned to turn water into steam to power a turbine.

"It's just like building a campfire underneath a tea kettle," Wait said. "It's an ancient energy source. It's an ancient technology."

The plant uses every bit of energy, leaving behind only 84-degree water, Wait said. What little ash comes out is collected in a green box and used as a soil nutrient for hay farmers.

While Colorado has an aggressive renewable portfolio standard, the state provides no carve-out specifically for biomass, Wait said.

The company signed a 20-year contract to sell its power to Holy Cross Energy, which helped the cooperative electric utility meet its goal of generating 20 percent of its electricity from renewable sources by 2015.

Biomass plants are eligible for a production tax credit of up to 2.3 cents per kilowatt-hour, though in practice plants receive half the credit since they are considered "open loop" -- they burn farm or forest wastes as opposed to dedicated biomass crops.

That credit is due to expire at the end of the year.

Concerns over biomass

Environmental groups have looked skeptically at biomass, arguing that while it is theoretically carbon neutral, it fails to curb climate change quickly enough. Greenhouse gases emitted by the combustion of a tree can take several decades to reabsorb.

In addition, many groups are uncomfortable with expanding biomass plants, which encourage logging.

"Current science shows that burning biomass for energy can increase atmospheric CO2 concentrations for many decades, even if it displaces fossil fuels," said a letter last month from more than a dozen groups to U.S. senators, urging an end to the biomass tax credit. "Facing a climate crisis that demands immediate and effective greenhouse gas emissions reductions, we cannot afford to be spending scarce public dollars on 'alternatives' that exacerbate the problem."

Niel Lawrence, a senior attorney at the Natural Resources Defense Council, which signed the letter, said it's a good idea, in theory, to capture heat from biomass that would otherwise swiftly release its carbon.

But creating a new industry across the national forest system would dictate how those forests are managed for decades, he said.

"If what we're talking about is the Forest Service's general enthusiasm for using wood from national forests across the West as a substitute for fossil fuels, it's probably a bad idea," he said.

Lawrence said that many groups support culling trees near communities but that there's less support for logging beetle-killed trees in the backcountry, where heavy machinery can compact soils, introduce nonnative species and "muck up" vulnerable ecosystems.

In addition, claims by the Forest Service and logging proponents that beetle-killed lodgepole are more susceptible to fire are exaggerated, Lawrence argued. Even after they burn or die, lodgepole pines retain much of their carbon, he said.

"The Forest Service and industry could do themselves a huge amount of good by institutionalizing restraint," such as by setting an 8-inch-diameter limit for tree harvests or limiting biomass projects to dry forests in the Southwest, he said. "It would clear away a huge amount of opposition."

Lawrence said he is less than bullish on the industry's future.

"Woody biomass is literally a Stone Age technology," he said. "It's not the future of clean energy."

But without more biomass plants -- and amid flat or declining budgets -- the Forest Service has few options for accelerating the pace of hazardous fuels treatments.

"We think it makes a lot of sense to build a few more of these in Colorado," Dean Rostrom, chairman of Evergreen, the Eagle Valley developer, told the Grand Junction Daily Sentinel in August.

The supply will surely be there.

A 2011 report by the Energy Department noted that federal forest growth exceeds wood harvested by more than 500 percent. What wildfire doesn't burn, biomass companies like Evergreen will buy, provided the Forest Service sells it.

Conservation groups including the Nature Conservancy, Wilderness Society and National Wildlife Federation have rallied around thinning as a way to restore habitat and reduce wildfire risks.

While lawsuits impede some thinning projects, the Breckenridge project -- which consists of patches of clear cuts -- avoided the courtroom.

Said Neff, of West Range, "The public is becoming much more understanding about what it takes to really manage these forests, and that large mechanized equipment is an excellent tool."

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