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Existing Wood-Based Production and Logistics Infrastructure Tom Barnes, Executive Director, Michigan Association of Timbermen MREP Bioenergy & Geothermal.

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Presentation on theme: "Existing Wood-Based Production and Logistics Infrastructure Tom Barnes, Executive Director, Michigan Association of Timbermen MREP Bioenergy & Geothermal."— Presentation transcript:

1 Existing Wood-Based Production and Logistics Infrastructure Tom Barnes, Executive Director, Michigan Association of Timbermen MREP Bioenergy & Geothermal Committee Meeting Michigan Public Service Commission 6 October 2010 Traverse City Michigan 5/2/20151

2 Logging Capacity Michigan has roughly 1500 Logging Companies Michigan has roughly 1500 Logging Companies Harvesting approximately 4,000,000 cords annually Harvesting approximately 4,000,000 cords annually Two primary harvesting systems are Cut-to-Length (CTL) Mechanized and Whole Tree Mechanized Two primary harvesting systems are Cut-to-Length (CTL) Mechanized and Whole Tree Mechanized Products range from high valued veneer logs to energy chips Products range from high valued veneer logs to energy chips 5/2/20152

3 Logging Capacity Challenges Dwindling forest industry markets. Three pulp mills lost between 2005 and One million tons of consumption lost! Dwindling forest industry markets. Three pulp mills lost between 2005 and One million tons of consumption lost! Operating cost continue to rise Operating cost continue to rise Lack of stability in existing markets Lack of stability in existing markets Work force challenges Work force challenges Finding or creating new markets to maintain our logging capacity Finding or creating new markets to maintain our logging capacity End result will and are going out of business End result will and are going out of business Concern of having enough logging capacity once things turn around Concern of having enough logging capacity once things turn around 5/2/20153

4 Opportunities Michigan has the 5 th largest timberland resource Michigan has the 5 th largest timberland resource Woody biomass includes entire living and dead trees, brush, stems, logs and forest product manufacturing residues Woody biomass includes entire living and dead trees, brush, stems, logs and forest product manufacturing residues Some woody biomass components are un- utilized Some woody biomass components are un- utilized Existing infrastructure utilizing and producing woody biomass Existing infrastructure utilizing and producing woody biomass Potential for integrated forest manufacturing processes to utilize multiple forms of fiber Potential for integrated forest manufacturing processes to utilize multiple forms of fiber 5/2/20154

5 Michigan Forest Inventory Analysis 2004 FIA Data – Million Oven Dry Tons, Percent Source – LaCourt, Donna Wood Fiber and the Bioeconomy. Powerpoint Presentation. September 11, /2/20155

6 Forestland Ownership Source – LaCourt, Donna Wood Fiber and the Bioeconomy. Powerpoint Presentation. September 11, /2/20156

7 Growth to Removal Ratios Source – LaCourt, Donna Wood Fiber and the Bioeconomy. Powerpoint Presentation. September 11, /2/20157

8 Availability of Unharvested Growth Social Social Public policy impacts fiber availability on public and private lands Landowner behavior research indicates only 17% of Michigan non-industrial/non-institutional landowners unwilling to harvest Economic Economic Competition with other markets Delivered wood cost Source – LaCourt, Donna Wood Fiber and the Bioeconomy. Powerpoint Presentation. September 11, /2/20158

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11 MillTypeLocationVolumeSpecies MenashaPulpOtsego 400 MTons Mixed Hardwood, Sawmill Chips Aspen Bay Pulp & Fibre PulpMenominee 400 MTons Softwood, Aspen & Maple SAPPI Fine Paper PulpMuskegon 500 MTons Aspen & Mixed Hardwood GFP Strandwood Molding Corp Particle Board Hancock 20 MTons Aspen Georgia-Pacific Particle Board Gaylord 600 MTons Mixed Hardwoods, Aspen, Red and Jack Pine, Mill Residues Buskirk Lumber Co SawmillFreeport 50 MTons Hardwoods Michigan Primary Mill Closures From 2003 To The Present Source – Weatherspoon, Anthony Michigan Woody Biomass Inventory. Powerpoint Presentation. May 8, /2/201511

12 Harvesting Types Cut-to-length 5/2/201512

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14 145/2/2015

15 Harvesting Cost Cut-to-Length Cutting & Forwarding ($/Ton)Transportation($/Ton) Transportation Per Mile After First 20 Miles ($/Mile) $15.25$9.75$0.15 Source – Personal communication with MAT Board Members 5/2/201515

16 Operational Cost To Harvest Forest Residue (Cut-to-Length Harvest 1 ) ** Sold tops on landing to a commercial chipping operation 5/2/201516

17 Whole Tree 5/2/201517

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19 195/2/2015

20 Harvesting Cost Cutting, Skidding & Chipping ($/Ton)Transportation($/Ton) Transportation Per Mile After First 20 Miles ($/Mile) $15.25$8$2 Source – Personal communication with MAT Board Members Cutting & Skidding ($/Ton) Loader Cost ($/Ton)Transportation($/Ton) Transportation Per Mile After First 20 Miles ($/Mile)$8$2$9$0.50 Whole Tree including Chipping Chainsaw Logging 5/2/201520

21 Operational Cost To Harvest Forest Residue (Whole Tree Harvest 1 ) 5/2/201521

22 Biomass Inventory Source – Weatherspoon, Anthony Michigan Woody Biomass Inventory. Powerpoint Presentation. May 8, /2/201522

23 Growing stock (commercial) Growing stock (commercial) Cull Cull Species Species Possible at county level Possible at county level Does not address availability Does not address availability Source – Weatherspoon, Anthony Michigan Woody Biomass Inventory. Powerpoint Presentation. May 8, /2/201523

24 John Deere Wood Energy Harvester 1490D 5/2/201524

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28 Bundling Cost 2 Potential production rate of 20 bundles per machine hour (8 bone dry tons {bdt}). Cost of colleting biomass and creating “Composite Residue Logs” (CRL) would be about $16 per bdt. Forwarding is estimated to cost $5 per bdt based on 4 loads per productive hour. With a hauling cost of $0.10 to $0.20/ton-mile, a 50-mile haul would add $5 to $10 per bdt. Chipping at the energy facility may incur an additional $3 per bdt. Total cost to deliver chipped hog fuel from CRL’s would be about $29 to $34 per bdt. Approximately half the total delivered cost is due to bundling function. 5/2/201528

29 Bundle Facts 3 Standard Bundle 30” x 10’ Standard Bundle 30” x 10’ Standard Bundle weighs an average of 1,000lb Standard Bundle weighs an average of 1,000lb Average Production 15 – 30 Bundles/hour Average Production 15 – 30 Bundles/hour Standard Bundle contains enough heat energy to produce 1MW of electrical power Standard Bundle contains enough heat energy to produce 1MW of electrical power Approximately 16 bundles could power the average home for 1 year Approximately 16 bundles could power the average home for 1 year 2 standard bundles equals the amount of energy in a refined barrel of oil and equal 6 mcf of natural gas 2 standard bundles equals the amount of energy in a refined barrel of oil and equal 6 mcf of natural gas Biomass is carbon neutral Biomass is carbon neutral 5/2/201529

30 Retail Price for the 1490D is $450,000. Retail Price for the 1490D is $450,000. Hourly owning cost would be roughly $58/scheduled machine hour (smh). Hourly owning cost would be roughly $58/scheduled machine hour (smh). Operating cost includes fuel, lube, repair and maintenance, chainsaw and twine operating cost would be $50/smh Operating cost includes fuel, lube, repair and maintenance, chainsaw and twine operating cost would be $50/smh Adding Labor total cost to operate $130/smh. Adding Labor total cost to operate $130/smh. 5/2/201530

31 Summary 5/2/201531

32 Markets Biomass Co-Generation Co-Generation Combined Heat and Power Facilities Combined Heat and Power Facilities Wood pellet production Wood pellet production Residential Grade Residential Grade Industrial Grade Industrial Grade Wood to Ethanol Production Wood to Ethanol ProductionTraditional High and Low Grade Sawmills High and Low Grade Sawmills Pallet Mills Pallet Mills Board Production – OSB, Particle, Paneling etc Board Production – OSB, Particle, Paneling etc Pulp Pulp 5/2/201532

33 Timber Harvesting Issues Transportation Transportation Biomass facility delivery distance less then 50 miles Biomass facility delivery distance less then 50 miles Rising fuel cost will increase production costs Rising fuel cost will increase production costs Stumpage price Stumpage price Ever increasing stumpage prices Ever increasing stumpage prices Many cases stumpage prices for forest residue are excessive Many cases stumpage prices for forest residue are excessive Delivery Prices Delivery Prices Prices for biomass are typically lower then production cost Prices for biomass are typically lower then production cost Raw material cost typically largest expense Raw material cost typically largest expense 5/2/201533

34 Harvest Removal Concerns Site Quality Site Quality Nutrient depletions Nutrient depletions Increased site temperatures Increased site temperatures Greatest impact on poor sites Greatest impact on poor sites Deer/Elk Densities Deer/Elk Densities Increased browsing on natural regeneration Increased browsing on natural regeneration Forest residue protects regeneration Forest residue protects regeneration Seed Source Seed Source Removal of forest residue could impact natrual regneration for certain tree species, ie Jack Pine. Removal of forest residue could impact natrual regneration for certain tree species, ie Jack Pine. 5/2/201534

35 Benefits of Biomass Removal Creates a “park-like” appearance for the landowner Creates a “park-like” appearance for the landowner Job creation in rural communities Job creation in rural communities Hazardous fuel reduction, lowers fire risk Hazardous fuel reduction, lowers fire risk Markets for non-merchantable fiber Markets for non-merchantable fiber Salvage Timber – insect or fire damage Salvage Timber – insect or fire damage Lowers dependency on petroleum based products Lowers dependency on petroleum based products Increases utilization of our renewable resource Increases utilization of our renewable resource 5/2/201535

36 Wood Is Good!  Wood is available year round.  Logging & transportation infrastructure for wood is well developed and proven.  Forestry for energy production is environmentally sound  Less site disturbance  We’ll make more 5/2/201536

37 Any Questions? 5/2/201537

38 References 1. Peterson, Donald; The Cost of Extracting Logging Residues for Biomass Fuels, Great Lakes Region, September Rummer, Bob; Len, Dan; and O’Brien, Obie; Forest Residues Bundling Project: New Technology for Residue Removal, May Southern Research Station, Auburn, Alabama. 3. Timber Jack 1490D Product Brochure. 4. The use of trade names or references to specific company or products in this publication does not imply endorsement; they are intended only as an aid to the reader. 5/2/201538


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