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Existing Wood-Based Production and Logistics Infrastructure. MREP Bioenergy & Geothermal Committee Meeting Michigan Public Service Commission 6 October 2010 Traverse City Michigan. Tom Barnes, Executive Director, Michigan Association of Timbermen. Logging Capacity.

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existing wood based production and logistics infrastructure

Existing Wood-Based Production and Logistics Infrastructure

MREP Bioenergy & Geothermal Committee Meeting

Michigan Public Service Commission

6 October 2010

Traverse City Michigan

Tom Barnes, Executive Director, Michigan Association of Timbermen

logging capacity
Logging Capacity
  • Michigan has roughly 1500 Logging Companies
  • Harvesting approximately 4,000,000 cords annually
  • Two primary harvesting systems are Cut-to-Length (CTL) Mechanized and Whole Tree Mechanized
  • Products range from high valued veneer logs to energy chips
logging capacity challenges
Logging CapacityChallenges
  • Dwindling forest industry markets. Three pulp mills lost between 2005 and 2006. One million tons of consumption lost!
  • Operating cost continue to rise
  • Lack of stability in existing markets
  • Work force challenges
  • Finding or creating new markets to maintain our logging capacity
  • End result will and are going out of business
  • Concern of having enough logging capacity once things turn around
opportunities
Opportunities
  • Michigan has the 5th largest timberland resource
  • Woody biomass includes entire living and dead trees, brush, stems, logs and forest product manufacturing residues
  • Some woody biomass components are un-utilized
  • Existing infrastructure utilizing and producing woody biomass
  • Potential for integrated forest manufacturing processes to utilize multiple forms of fiber
michigan forest inventory analysis 2004 fia data million oven dry tons percent
Michigan Forest Inventory Analysis2004 FIA Data – Million Oven Dry Tons, Percent

Source – LaCourt, Donna .2007. Wood Fiber and the Bioeconomy. Powerpoint Presentation. September 11, 2007

forestland ownership
Forestland Ownership

Source – LaCourt, Donna .2007. Wood Fiber and the Bioeconomy. Powerpoint Presentation. September 11, 2007

growth to removal ratios
Growth to Removal Ratios

Source – LaCourt, Donna .2007. Wood Fiber and the Bioeconomy. Powerpoint Presentation. September 11, 2007

availability of unharvested growth
Availability of Unharvested Growth
  • 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
    • Competition with other markets
    • Delivered wood cost

Source – LaCourt, Donna .2007. Wood Fiber and the Bioeconomy. Powerpoint Presentation. September 11, 2007

slide11

Michigan Primary Mill Closures From 2003 To The Present

Source – Weatherspoon, Anthony. 2007. Michigan Woody Biomass Inventory. Powerpoint Presentation. May 8, 2007

harvesting types

Harvesting Types

Cut-to-length

harvesting cost cut to length
Harvesting CostCut-to-Length

Source – Personal communication with MAT Board Members

operational cost to harvest forest residue cut to length harvest 1
Operational Cost To Harvest Forest Residue(Cut-to-Length Harvest1)

** Sold tops on landing to a commercial chipping operation

harvesting cost
Harvesting Cost

Whole Tree including Chipping

Chainsaw Logging

Source – Personal communication with MAT Board Members

biomass inventory
Biomass Inventory

Source – Weatherspoon, Anthony. 2007. Michigan Woody Biomass Inventory. Powerpoint Presentation. May 8, 2007

slide23
Growing stock (commercial)

Cull

Species

Possible at county level

Does not address availability

Source – Weatherspoon, Anthony. 2007. Michigan Woody Biomass Inventory. Powerpoint Presentation. May 8, 2007

bundling cost 2
Bundling Cost2
  • 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.
bundle facts 3
Bundle Facts3
  • Standard Bundle 30” x 10’
  • Standard Bundle weighs an average of 1,000lb
  • Average Production 15 – 30 Bundles/hour
  • Standard Bundle contains enough heat energy to produce 1MW of electrical power
  • 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
  • Biomass is carbon neutral
slide30
Retail Price for the 1490D is $450,000.
  • 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
  • Adding Labor total cost to operate $130/smh.
markets
Markets

Biomass

  • Co-Generation
  • Combined Heat and Power Facilities
  • Wood pellet production
    • Residential Grade
    • Industrial Grade
  • Wood to Ethanol Production

Traditional

  • High and Low Grade Sawmills
  • Pallet Mills
  • Board Production – OSB, Particle, Paneling etc
  • Pulp
timber harvesting issues
Timber Harvesting Issues
  • Transportation
    • Biomass facility delivery distance less then 50 miles
    • Rising fuel cost will increase production costs
  • Stumpage price
    • Ever increasing stumpage prices
    • Many cases stumpage prices for forest residue are excessive
  • Delivery Prices
    • Prices for biomass are typically lower then production cost
    • Raw material cost typically largest expense
harvest removal concerns
Harvest Removal Concerns
  • Site Quality
    • Nutrient depletions
    • Increased site temperatures
    • Greatest impact on poor sites
  • Deer/Elk Densities
    • Increased browsing on natural regeneration
    • Forest residue protects regeneration
  • Seed Source
    • Removal of forest residue could impact natrual regneration for certain tree species, ie Jack Pine.
benefits of biomass removal
Benefits of Biomass Removal
  • Creates a “park-like” appearance for the landowner
  • Job creation in rural communities
  • Hazardous fuel reduction, lowers fire risk
  • Markets for non-merchantable fiber
    • Salvage Timber – insect or fire damage
  • Lowers dependency on petroleum based products
  • Increases utilization of our renewable resource
slide36

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
references
References
  • Peterson, Donald; The Cost of Extracting Logging Residues for Biomass Fuels, Great Lakes Region, September 2005.
  • Rummer, Bob; Len, Dan; and O’Brien, Obie; Forest Residues Bundling Project: New Technology for Residue Removal, May 2004. Southern Research Station, Auburn, Alabama.
  • Timber Jack 1490D Product Brochure.
  • 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.