Bioenergy use growing in South

Bioenergy facilities that currently operate in the South utilize 18 million tons of forest biomass. Others in development could likely utilize an additional 21 million tons by 2023, according to a report for the Southern Agriculture and Forestry Energy Resource Alliance (SAFER) by Nathan McClure of the Georgia Forestry Commission.

There are at least 18 industrial sized wood pellet mills operating or being constructed across the South, from Texas to Virginia. These facilities would utilize over 12 million tons of biomass if operated at full capacity.

There are six pellet mills and three biomass-to-electricity mills in the active planning and pre-construction phase in Georgia alone, with numerous others likely across the region. This developing biomass part of the industry is becoming integral to the whole of forestry, and symbiotic, if not dependent relationships are developing that affect mills, loggers, landowners, and the forests themselves, says the McClure report.

Further excerpts from the McCLure report state: Biomass as an integrated part of the forest industry is not "waste." Woody biomass cannot be sourced from waste streams in the vast majority of situations. Only material that is diverted from landfills is truly waste. Transporting, collection, and growth of biomass all bear costs, just as for other forest products.

Current viable bioenergy conversion techniques only need a material that can be combusted (burned) or pelletized in preparation for combustion. This presents an opportunity for woody biomass sourcing of lower value "co-products" from the forest system that has been established to produce lumber, veneer, paper, and other higher value products. The biomass "co-products" are on the low range of value, but they do have a marketable value.

Pine sawmills manufacture lumber from 45 percent of the biomass volume in a log. The remaining 55 percent goes to chips, sawdust, shavings, and bark. The relationship is similar in hardwood sawmills. So, the minority of the purchased material is used for lumber, and the majority is used for co-products. Markets for these co-products can enable companies to operate during times of depressed lumber markets.

Mill managers in Georgia attested to co-product values keeping their operations running during the recession in 2009.

While pulp mills provide a strong market in some locations for residue chips, pellet mills prefer sawdust and shavings as feedstock. In turn, established sawmills can serve as long term and relatively secure suppliers of biomass feedstock. These types of relationships are likely to increase in the South, as there are 411 million tons more pine sawtimber growing in private forests than existed in those same forests in the early 1990s.

Logging residues were the original target of bioenergy facilities that were developed in the 1980s. R3ecently, tyhis interest has resurfaced as biomass-to-electricyty facilities have been proposed throughout the region. Logging residues compose five to 21 percent of the total above-ground biomass in harvested trees, dependent upon size and species. Other trees in the understory and midstory of harvested forest stands do not meet the size and quantity standards for lumber, but can also be used for bioenergy. Together these sources provide significant production opportunities for loggers, who already operate harvesting and loading equipment. Whole tree harvesting is predominant in Southern forestry operation. This system involves felling and skidding whole trees, including tops and branches, to a log loading area. All the costs of logging are borne by the value of the traditional products being produced. The use of the tops and branches as biomass provides additional production for loggers, as well as improving logging efficiency and logging cost recovery. Loggers who are equipped with chippers or grinders to process logging residues also provide a stable, multi-season source of biomass supply for energy facilities.

Woody biomass markets provide additional incomes for forest owners both directly and indirectly. The most prevalent direct impact is through sales of small diameter trees to pellet mills. The pulp and paper industry provides markets for small diameter trees, but not in all locations and not always to the extent that yields attractive values for landowners.

The majority of small diameter trees are harvested during thinning of pine forests. The management of pine forests in the South is typically focused on producing higher value saw timber. To achieve this, it is necessary to thin forests at least once, and usually twice, during the forest growth period. As is the case with mill production, the fiber produced in this thinning is a co-product of the forest management system. The value of biomass obtained through forest thinning may by only one-third the value of saw timber, but landowners benefit because it provides an income much sooner than saw timber and can offset the initial reforestation costs.

Increases in income to landowners can also be a result of the indirect impact of higher stumpage prices for small diameter trees caused by stronger competition in the market place.This is especially true in areas where pulp markets have been historically low.

The use of logging residue by electricity generating plants also provides additional income to landowners that has not existed in the past. his can be a direct payment for the harvested material, but in many locations it will provide an indirect benefit by decreasing the cost of forest management. The removal of a portion of then logging debris decreases the need for intensive land clearing practices in preparation for tree planting.

The existence of forests depends upon the motivations of then owners. In the South, these motivations direct the nature and actual existence of 87 percent of the forests.

Most corporate landowners pursue maximum values of the forestlands with wood utilization as the primary income producer. Other individual landowners are pursuing wildlife habitat as a main land use objective. Still others hold their family lands with heritage in mind. Whatever the reason, a minimum level of financial capital is necessary to maintain forestland. Taxes must be paid and the landowner must view the land value as higher in a forested state than in other uses.

A comparison of the 1996-2000 and the 2001-2005 time period provides additional insight into the impacts of wood markets on reforestation levels. Using South Georgia as an example, the 20th century ended with five-year average timber prices of $14 per ton for pine pulpwood and $38 per ton for pine sawtimber. By 2008 the five-year averages had dropped to $7 and $28 per ton respectively. Tree planting levels in Georgia dropped from 431,000 acres per year to 284,000 acres per year during the same time period. While timber harvest levels decreased somewhat, it was not in the same proportion as decreases in prices and tree planting. This shows that additional incomes and stumpage price increases resulting from biomass markets can lead to higher reforestation and forest retention rates. In addition, stronger markets can also influence landowners to secure more professional forestry assistance in managing their lands.

Wood pellet plants currently in operation in the South, and capacity in metric tons per year, quoted from Biomass Magazine in the McClure report, by state, are:
Equustock, 36,000; Lee Energy solutions, 110,000; Nature's Earth Pellets, 75,000; Westervelt Renewable Energy, 309,000;
Energy Products, 11,000; Fiber Resources, undisclosed.
Equustock, 40,000; Green Circle BioEnergy, 560,000.
Appling County Pellets, 200,000; RWE Innogy Georgia Biomass, 825,000; SEGA Biofuels, 150,000; Varn Wood Products, 80,000.
Anderson Hardwood Pellets, 25,000; Somerset Pellet Fuel, 50,000; Southern Kentucky Pellet Mill, 12,000.
Bayou Wood Pellets, 60,000. Plans for two additional Louisiana mills have been announced, by German Pellets, GmbH, at Urania LA, and Drax Biomass International, at Bastrop, LA. due for construction and production next year.
Ozark Hardwood Products, 85,000; ShowMe Energy Cooperative, 15,000.
Enviva Pellets, Armory, 100,000; Enviva Pellets, Wiggins, 150,000. New Biomass Energy, 250,000.
North Carolina
Enviva Pellets, Ahoskie 385,000; Enviva Pellets, Northampton, 500,000.
South Carolina
Low County Biomass, 240,000.
Ace Pellet Co., 10,000; Hassell & Hughes, 30,000; Henry County Hardwoods, 40,000.
Zilkha Biomass Energy, 44,000; German Pellets, 560,000; Patterson Wood Products 40,000.
American Wood Fibers, 75,000; Biomass Energy, 115,000; Equustock, Chester, 80,000; Equustock, Troy, 40,000; Lignetics, 70,000; O'Malley Woods Pellets, 40,000; Potomac Supply LLC, 50,000; Turman Hardwood Pellets, 26,000.
West Virginia
Hamer Pellet Fuel, 60,000; Lignetics, 125,000.