In recent month we have heard a lot about biomass being the next big economic driver for Southeast Alaska energy and perhaps new life for the timber industry. It’s a favorite among politicians, bureaucrats, environmentalists and the Sealaska Corporation. The state of Alaska is promoting biomass to reduce our dependence on imported fuel oil. The Forest Service is making biomass an integral part of their planned forest restoration economy. Biomass also lets environmentalists openly support development while enforcing the Roadless Rule or seeking more de-facto wilderness via in the Sealaska lands legislation.
So with all of this support it is not surprising that biomass dominates the Alaska Energy Authority (AEA) recent draft “Southeast Integrated Resource Plan.” Unfortunately this plan does not adequately address the real economic feasibility of biomass. In fact, the plan only takes a 30,000 foot view of the issue. Recommendations for biomass are simply based on possible cost savings between imported pellets and fuel oil. Other proven options such as new hydro projects are generally dismissed as too expensive. Likewise, alternate energies such as heat pumps are not given fair and equal treatment.
Even with the biomass bias, the cost comparison between imported pellets and fuel oil is flawed. First, pellets’ costs are artificially low and appear to exclude transportation costs. Second, probable price increases for pellets are not forecasted. Simply, fuel oil costs are demonized and comparisons with alternate energy are glossed over.
On the other hand, the AEA plan is quite honest about the uncertainties of a new regional pellet industry. In theory the region could support 1-4 pellet mills depending upon how many residents are willing to convert to pellet boilers and stoves. The AEA plan assumes an 80 percent conversion to pellet heat at a cost of over a half billion dollars. It further assumes sufficient conversion subsidies are available. However, at least one initial customer survey suggests that such a massive conversion is too optimistic.
More important, establishing a regional pellet industry will face major hurdles. Like old-growth, the region’s abundant timber does not mean it is economically feasible. The most feasible fiber supply for current pellet producers are sawmill residues, which have sufficient wood quality and very low procurement costs. However, this material is relatively limited in Southeast — even after 100-plus years of sawmilling.
Other pellet fiber sources could include thinned material from second-growth forests that are associated with Forest Service stewardship/restoration projects. However, the costs to cut and ship this material to a mill have to be next to zero — which is hardly the true cost. Also, the cost of whole tree chipping will be very prohibitive. So this means the natural economic scale of a Southeast Alaska pellet industry is small — basically a Mom and Pop operation and one not easily financed with private money.
Consequently, to establish a larger pellet industry will require two or three additional large subsidies. First, there needs to be a capital subsidy to buy land and build mills. Second, there needs to be operations subsidy to get raw material to the pellet mills (i.e. Forest Service restoration/stewardship contracts). Third, there may be a need for another subsidy at the retail level if the local mills cannot compete with imported pellets.
In any case, AEA’s plan, which costs more than $500,000, does not meaningfully evaluate our future energy options. Unfortunately, it merely attempts to sell the region on biomass. Such an approach discriminates against viable alternatives, such as heat pumps. It may increase future hydro cost as well by delaying development.
• Mehrkens is a retired forest economist who lives in Auke Bay.
Comments (14)
Add commentIs biomass southeast Alaska's energy solution?
No.
Hydroelectricity is southeast Alaska's energy solution.
Build more dams, create an intertie, sell electricity to Canada, southeast Alaska and beyond.
Biomass is a good idea, and it is renewable, unlike heating oil. BUT...biomass creates air pollution. Hydro does not.
Hydro has an expensive start-up, but once the turbines start spinning, we just kick back and collect checks.
We need more investment with hydro. We have so many mountains and water. Just dam a few canyons or tap into some lakes. Isn't that what Ketchikan did?
Problem with dams
Daming a few lakes and streams? Now you've got years of studies to conduct to determine what the impacts are on the environment and fish runs. Not to mention roads to access the plant and powerlines. There is no sitting back and collecting a check, AELP can shed some light on maintenance and costs. Biofuel is a supplement but I don't see it being a replacement.Pursue natural gas.
Right on Jo
Don't forget geothermal of the hot water kind.
I agree, mostly.
I agree with the author that this “study” is badly flawed. It makes a fine example of the kind of thing that has led a large percentage of the public to view the scientific community with a very healthy dose of skepticism.
As far as Heat Pumps go, I think that the jury is still out. There are several examples now operating in Juneau and after a few years, we will have enough hard data to make a good judgment as to their cost effectiveness when applied to large-scale buildings. I am very skeptical of any claims that home sized Heat Pumps are either economical or for that matter even useable in our climate. I have also noted that all of their proponents like to compare them to the cost of using radiant heat from electric resistance type heaters, the most expensive way to heat imaginable (just ask any Douglas condo owner).
Whatever the “answer” is to this dilemma, we really need to take a good hard unbiased look at the options and make a decision and if hydro or pellets are the answer then we will need a firm commitment from the local environmental groups to be a part of the process of moving forward rather than a hindrance. The way things stand now, every log sale is met with a lawsuit and every dam or road requires years of litigation prior to obtaining permits to build it.
@JO,
You must be a AELP shareholder... you can be damm certain that the rest of us are NOT collecting any checks as a result of Juneau's Hydro Power.
Well thought out article - thank you
What a refreshing and well thought out article. Thank you Joe!
It is perhaps not unsurprising, given the leadership by some Southeast participants helping lead the IRP, that biomass came out on top.
I hope this process heads back to the drawing board, because the outcome appears suspect. Hydro and heat pumps seem an excellent combination of production and conservation given our existing resources. I'm not saying biomass does not have place here, however, it seems unwise to put all our resources in to the biomass basket irrespective of other resources our region offers.
Certainly, it should be of concern when our neighbors to the east in BC have problems producing economic efficiencies necessary to produce wood pellets - because BC's climate is a more arid environment than Southeast's highly humid one.
Our region needs to have more balanced plan. Something that spreads risk better. We have heat pumps in use in Juneau at the airport, at the second swimming pool and I think one at an elementary school. They appear to be working, so other communities might want to look at them for their institutions. If they continue to demonstrate benefits, they can be part of a winning equation for energy. One which might involve wood biomass as well, but let's not just have one solution at the expense to others and ourselves.
Hands off our Forests.
Today our forests are too important to us to allow any industry to profit from cutting the trees down.
Our forests are the single most cost effective way to combat our Warming Climate. Our Forests are our life support system. We need them. Our Tongass National Forest is the last remaining Rain Forest in North America, it is of strategic importance to public health that we protect this forest.
So, lets not burn our forests for heat or cut them down for timber because we have other options.
For Energy we have: hydro, geo, tidal, natural gas, etc lets develop these for SE, and NOT reinvigorate an already dying timber industry in SE as a way to produce biomass.
This is just really bad thinking, a quick fix with really bad consequences that we can all SEE.
In this day and age the Timber Industry must now leave our forests alone!
It is high time that this industry be forced to Grow their product just like they do down south where trees are grown in Pine Trees plantations.
Forests on STATE and FEDERAL land belongs to the public NOT to any industry.
Jo and Banditrider
There is an opportunity in Southeast for a few mom and pop pellet mills to supplement the region's energy consumption. Transitioning into an 80% regional dependence on biomass, however, raises a few too many red flags. Biomass could and should supplement heat pump and hydro systems. Commercial-scale ground source heat pumps are feasible (and what about the idea of installing commercial-scale ground source heat pump systems in neighborhoods that multiple residences could tap into)? From the information I've been given by friends in Ketchikan whose homes are heated with air source heat pumps, they seem to be feasible in Southeast at the residential scale. One can supplement the other; it shouldn't be a near exclusive dependence upon one system or another.
In regard to hydro, I know that hydro reservoirs down south are beginning to have problems associated with silt accumulation, effectively limiting the lifespan of most, if not all hydroelectric systems. I agree that we should have more small-scale, community-specific hydro projects in Southeast, but we need to understand that hydro is not an endless supply of energy. Their lifespans, from what I've gathered, are about 100+ years.
An intertie with BC and/or California doesn't make sense when discussing how to resolve our energy issues within our region. That's just another get rich quick scheme, proposing to sell our water in the form of energy to Canadian mines and consumers in California.
I admit I don't know the economics and feasibility of LNG in Southeast, but it sounds like a reasonable supplement to our region's integrated energy mosaic. I know it's opening a can of worms in regard to interior natural gas and the associated pipeline, but Banditrider, I'd be interested in hearing more of what you have to say about LNG in Southeast.
Subsidized Bioma$$ = our Tax $$ and Forests Going up in Smoke
The HEAVILY-subsidized national push to impose forest dependent biomass plants around the country is finally reaching Alaska. There is a rich history of what happens next.
The benefit being, we get to see what happens when outraged communities across the nation find their air quality going to hell, their forests clearcut, their children getting asthma and their roads choked with constant truckloads of logs going by.
See for yourself and read all about it:
Google search terms "Biomass" "Controversy", I just did and got:
"About 1,030,000 results (0.18 seconds)"
Black & Veatch Should Refund Their Contract Award
The flawed concept of biomass wood pellet heat for Southeast is a product of the Tongass Futures Roundtable and Sealaska. The power brokers on the TFR knew full well the public at large would not accept most of their grand schemes - biomass being no exception, and thus we were only allowed a view from the "30,000 foot level". This plan perpetuates that view, and in fact the SEIRP fails on many counts and raises more questions than it answers.
To name but a few:
1. Basic, admitted errors in calculations for the break-even point between wood pellets and conventional heat sources resulting in a flawed plan from the outset;
2. Yet more massive taxpayer funded subsidies to prop up a highly controversial industry with little guarantee of success;
3. Human health concerns due to emissions of ultrafine, "nanoparticle" sized emissions that can travel to the lung aveoli and penetrate directly to the blood - threatening everyone downwind - particularly children, asthmatics, and the elderly;
4. Complex regulatory hurdles, ad infinitum, due emissions;
5. Significant contributions to worldwide CO2 emissions, while reducing the world class carbon sequestration capabilities of forest in SE Alaska.
Why would responsible citizens and lawmakers accept this bio-mess, when cleaner, less expensive, non-controversial, and 21st century solutions are available?
Further, Black & Veatch, the drafter of the SEIRP, is a global company with revenues of $2.3 billion. They have a long record of development of biomass industries and their bias is clear so it is not surprising that they blew basic calculations in the SEIRP so badly. In my view they should refund the lucrative contract monies they received in exchange for the document and the plan should go back to the drawing board. The AEA should find a contractor that could perform these tasks in an unbiased fashion. Anyone know how they secured the contract (competitive bid?) and for how much? I heard it cost the AEA/State $800,000.
Another special interest group.
The whole idea of increasing wood pellet production for consumption is pretty flawed. Sure, we should burn off any by-products from existing wood product producers, but for real energy we will have to look to the future, not the past.
The handful of people behind the recent push for 'bio-mass' production are so out of touch with reality it is embarrasing. None of them should be in future planning anywhere, if they cannot think better than that.
bio-mess
Viapops, nice research and good point. The AEA, B & V, TFR & the ANC, and any others collaborating in this bio-mess should be investigated, and held accountable for misappropriated public or tax-exempt funds.
Response to Ah-Ha (part 1)
Ah-Ha said: "[The IRP] makes a fine example of the kind of thing that has led a large percentage of the public to view the scientific community with a very healthy dose of skepticism."
But Ah-Ha, consultants did the IRP, not "scientists." You say the IRP as "badly flawed," so pin the blame where it belongs -- on the hired hands that wrote it and the state employees who oversaw it.
Ah-Ha also said: "I have also noted that all of [the heat pumps] proponents like to compare them to the cost of using radiant heat from electric resistance type heaters, the most expensive way to heat imaginable ..."
But Ah-ha, in the Feb. 13 op-ed a heat pump proponent compared heat pumps to biomass heat, and biomass came out far more expensive than heat pumps. (And other commenters showed heat pump installation costs as reasonable. Pellet stoves cost, too.)
Response to Ah-Ha (part 2)
Ah-Ha said: "... every log sale is met with a lawsuit ..."
Best not to repeat stuff like that from Parnell. He was straightened out on that in SitNews last year, that in fact only a handfull out of 60-some timber sales in the previous three years had been in court.
Ah-Ha also said: "... every dam or road requires years of litigation prior to obtaining permits to build it."
That simply isn't true.
BUT I DO AGREE WITH YOU THAT the IRP is "badly flawed" and that "we really need to take a good hard unbiased look at the options and make a decision." But please turn the hyperbole down a notch, and make sure you have your gun pointed in the right direction.