Current Integrated Use of Biomass from Forest Treatment

1. Current Integrated Use of Biomass from Forest Treatment Plummer Forest Products

2. Who we are • Where we are located • What we do • How we do what we do • The challenges of Integrated Biomass

3. Who We Are • Plummer Forest Products is the only exclusive small log sawmill in Idaho • Plummer Forest Products is a sawmill/steam (cogeneration) plant that was rebuilt on the remains of a big log sawmill destroyed by fire in 1998 • All of the Forest Resources for our plant come from others, we do not own one acre of land

4. Where we are located

5. What we do 1. 80 million feet of lumber products from trees smaller than 7 inches in diameter

6. What we do 2. 45,000 tons of wood chips used in the pulp and paper industry

7. What we do 3. 40,000 megawatts of electricity

8. Plant History • Our sawmill is three years old and uses high speed computer operated equipment to break down 4 inch to 7 inch logs • Our steam plant was moved to this site in 1982 it was built in 1951 and originally burned coal • Without the sawmill the steam plant would not be viable

9. How we do what we do • Computers make sawing small logs viable • 5 years ago computer technology was not cheap enough and fast enough to put in a sawmill or in the woods • Our mill process 20,000 logs into 60,000 pieces of lumber every day • Computers are at work from the woods to the sawmill

10. Cut to Length

11. Competition/Synergy • Our Sawmill makes lumber out of logs as small as 4 inches on the small end and as short as nine feet long • Our Steam Plant has the appetite to burn bark, sawdust, planer shavings and any log material under 4 inches • We need electricity to make lumber and steam to dry lumber

12. Old mill

13. Sawmill process

14. Log Optimizer

15. Log in Lumber out

16. The stacked lumber is dried

17. The dry lumber is planed smooth

18. Lumber Cars

19. Chips are a by product of the sawmill process

20. Debarked

21. Bark and Sawdust

22. Fire box

23. 4 story fire box

24. turbine

25. Control panel

26. Steam Plant • This facility was operated until the late 1960’s in Iowa • The boilers and turbines were purchased by Yanke Energy and modified to burn sawmill waste material in 1982

27. Steam Plant • One of the boilers and turbines was installed at New Meadows Idaho at a sawmill and is in operation today • The other is in operation at our sawmill in Plummer Idaho • Both plants started operation in 1982

28. Uses for Steam • Lumber Drying and seasonal steam for building heat require about 15,000 pounds per hour • Approximately 55,000 to 65,000 pounds of steam are used to turn the turbine

29. PURPA and QF • The Public Utility Regulatory Policy Act provided rates to the people that built this plant in the range of $72.00 per megawatt • The current rate for a Qualifying facility in Idaho is $40.34 per megawatt • We buy our power for our mill even cheaper than $40.34

30. What it takes • Our plant uses about 41,000 bone dry tons of hog fuel per year • We make about 30,000 bone dry tons of hog fuel at our plant

31. This is Doug Fir and Larch Bark, very good fuel and very good landscape cover, in the summer time the price of this material in big cities goes from $120.00 per truckload to $300.00 per truck load

32. Cost summary without fuel • Labor 575,000/40,000=14.37 per megawatt • R&M 250,000/40,000= 6.25 per megawatt • Chemicals 60,000/40,000= 1.50 per megawatt • Other 125,000/40,000= 3.13 per megawatt Total $1,010,000/40,000= 25.25

33. In Woods Fiber as steam plant fuel • Current cost of fuel removed from forest and processed in woods or transported to mill and processed is $40.00 per ton • It takes 1 to 1.2 tons per megawatt in our plant • If plant ran on 100% in woods fuel cost would be between $40.00 and $48.00 per megawatt just for fuel

34. Cost to build plant • Estimates range from 3 million to 6 million dollars to build a plant similar to ours • 4,000,000 dollars for a twenty year life • 200,000 per year • 200,000/40,000=5.00 per megawatt

35. Revenue Scenario • Presume 40,000 megawatts • $40.34 per megawatt • 40,000*40= 1,613,600 • $1,613,600 Annual Revenue

36. Revenue • 1,613,600 minus 1,010,000 in operating cost equals • 603,600 to cover fuel and capital cost and depreciation • In woods fuel cost would be 1,600,000

37. Not a Big Money Maker • If the plant was not already there we would not be operating it. Obviously revenue from sale of power is key • Fuel is huge consideration as well • Fuel delivered to Plummer averages 60% dry so we are paying for freight on 800 pounds of water for every ton of fuel we buy • Fuel processed in the woods costs over $40.00 per ton

38. Summary • Our steam plant would loose about $1,000,000 per year if we had to buy all our fuel from the outside market • We would need $65.00 per megawatt just to break even in this scenario • We have vast forest resources in our back yard • We haul logs over 300 miles just to get enough to keep running • Functional logging is key if we are to do something

39. Challenges • Supply of Resource and cost of resource • Stand Alone electricity production is not feasible in current and foreseeable electric markets in Idaho • Sawmill subsidizes steam plant • Forest Health and Biomass and sawmills all must work together for any to have a chance HELICOPTER LOGGING AND BUILDING NEW ROADS IN STEEP GROUND WILL NOT BE COST EFFECTIVE TREATMENT

40. Fibre Diet Sale

41. Fibre Diet After

42. We must Haul logs over 300 miles just to get enough to run our little mill

43. The Idaho Forest Is Big 20.5 million acres

44. Idaho Forest Ownership

45. The log we use and where it comes from • We use 750 loads per month • We get less than 5 loads per month from Forest Service land • Less than 30 loads per month from State land

46. Our logs

47. Saw Logs

48. Left side under story, middle small log, right saw log the process will not work unless it is hugely subsidized or all the material is brought out together and processed at a mill like ours, into electricity and lumber. Helicopters and exotic logging will not be even remotely cost effective means to treat our forest

49. The End • This program works if state of the art sawmills team up with biomass users to bring fiber out of the woods in one piece and merchandise the entire segment. • Large capital investment is required • Timber supply is critical to justify the capital investment, even then the return is marginal based on the commodity lumber market