Proposed biomass legislation would negatively affect existing timber industry, Temple-Inland spokesman says

LUFKIN — An amendment to a pending energy bill would help give East Texas better footing to compete with renewable wind energy production in West Texas, possibly at the cost of out-sourcing existing wood mills for wood chips and log waste used for boiler fuel and other products.

State Rep. Wayne Christian, R-Center, authored the amendment to House Bill 483, modeled after his stand-alone bill HB 1214, to require an additional 500 megawatts of renewable electric generation to the grid, by sources other than windmills.

"The amendment creates a mandatory non-wind goal within the Texas renewable portfolio standard," Christian's office stated in a press release. "The amendment would bring over $126 million in savings to Texas electricity consumers by 2015, improve the state's air and water quality, create thousands of jobs, reduce Texas consumer's use of fossil energy sources and bring millions of dollars a year in investment to local economies."

Is there enough wood debris in Deep East Texas to support two proposed biomass power plants in Angelina and Nacogdoches counties?

The answer depends on who you are asking.

There is enough to keep the existing market competitive, according to Lufkin entrepreneur Danny Vines, president of Aspen Power LLC. In an interview at his office outside Hudson earlier this month, Vines pointed to a map of East Texas marked by color coded pins. Each pin represented an existing wood products mill surveyed by a forestry consultant who was paid by Aspen Power to document the amount of wood chip waste produced at every mill within a certain radius of Lufkin, as well as potential biomass fuel from logging productions.

Proximity to either power plant will be key, as transportation costs will be the driving factor, according to Scott Beasley, Ph.D., dean of the Arthur Temple College of Forestry and Agriculture at Stephen F. Austin State University.

Based on several ground and aerial studies of a four-county region — Angelina, Nacogdoches, Shelby and San Augustine — there should be enough debris to feed the proposed power plants while continuing to meet the demand of existing mills.

Not so, said Tony Bennett, vice president of government affairs for Temple-Inland, who maintains the amendment and its attached incentives will give the proposed biomass power plants an edge on a discounted market, the cost of which will be carried by mills like Temple-Inland.

"Those (credits) are basically the subsidy that the state can pass on to these projects through the public utility commission," Bennett said. "These energy bills would discount the price of waste 50 percent for power plants, while mills would pay full retail price. And according to market data would be paying 100-200 percent more. That means millions of dollars in increased costs for a paper mill and hundreds of thousands dollars more for a saw mill."

There is already a strong market for sawdust, bark, and wood chip waste, he said.

"A round log goes through the saw mill, and the slabs that are cut off goes through a hog, or chipper, and are ground up. That's why they call it hog fuel. That wood waste is worth a whole lot of money," Bennett said.

"There is a market for bark, and sawdust. It is highly sought after by us to feed the boilers to make steam, turn a turbine and produce electricity and reduce our electric costs by decreasing natural gas usage."

Bennett is skeptical that the power plants would use as much urban wood waste and timberland waste as purported. Collecting logging waste from cleared timberlands isn't economically feasible, he said.

"If there was wood waste that has been overlooked, don't you think Temple-Inland would have done something to procure that waste? We are always looking for ways to cut costs.," Bennett said. "We disagree that they are going to run out there and start picking up logging slash and limbs. It's never been economical to go pick up logging slash, grind it up and bring it in. It's still too costly."

Collecting and grinding woody matter from tree thinnings and land clearings is an untapped market, Beasley agreed. However, he added, this potential market of tree limbs, tree tops and diseased trees burned on site today does have the potential to be efficiently harvested and ground for use as fuel based on other SFA studies, he added.

State Sen. Robert Nichols, R-Jacksonville, supports East Texas-based renewable energy power plants, according to his spokeswoman Alicia Phillips.

"One thing that is important to understand," she said, "is wood for electricity is going to fetch a higher price for energy than paper."

This is because the energy producers, contributing to the grid which mills do not, would get a subsidy from the federal government, she said.

"We need to look at our resource: How much do we have? Can we provide biomass and still have a sustainable forest?" said Ron Hufford, vice president of Texas Forestry Association.

Hufford encouraged East Texas timberland owners to attend a two-day TFA/SFA-sponsored conference addressing these bio-energy issues and other timber production concerns May 17 and 18 in Nacogdoches.