Costly diesel makes wood look good

New Sealaska-Viking agreement could produce local pellets

Posted: Tuesday, September 23, 2008

Sealaska Corp. and Viking Lumber Inc. are looking for ways to get the Craig lumber mill's wood waste into Southeast boilers.

Anything that's cheaper than fuel oil is hot stuff these days, as Southeast residents are set to be even more strapped this winter. Expenditures for the average household using oil as its primary heating fuel are expected to increase by 30 percent from last winter, according to the U.S. Energy Information Administration.

Since the Legislature uncorked a gusher of alt-energy project funding, geothermal, tidal and wind energy could be on the way. But for now, wood is immediately usable, said Dan Parrent, wood products specialist for the Juneau Economic Development Council. And in terms of economics, because so many people heat with diesel, "heating applications are the low-hanging fruit," he said.

Done right, they burn cleanly and earn the respect of environmentalists. The Southeast Alaska Conservation Council, for example, promotes burning Tongass wood waste in local boilers, though it cautions that they shouldn't use wood "beyond what is truly renewable," said a recent newsletter.

Viking and Sealaska just started working together and haven't yet decided what they'll offer or where it might be available. They're looking at making the wood waste into pellets, briquettes or dry chips for boilers in residential and commercial markets.

"What we're thinking about first is whether we're able to produce the product on an economical basis," Sealaska CEO Chris McNeil said.

Last year, Sealaska, Southeast's regional Alaska Native corporation, cut and sold about 50 million board-feet of timber from its own lands. That's half its production of two years ago, and Sealaska is angling to acquire land it's owed under the Alaska Native Claims Settlement Act that would garner it more wood.

But even at that rate, that's a lot of wood chips. And ordinarily, the company has to do something with them. Selling the wood waste would alleviate the cost of disposing of it.

Making wood pellets or a similar product here might well be competitive, according to Parrent.

"The cost to get pellets delivered to Southeast Alaska is more than the cost of the pellets themselves," he said.

On the consumer end, new boilers may burn whatever the companies come up with. Parrent has helped Southeast school districts, federal agencies and local governments from Prince of Wales to Haines look at whether converting to wood-fired boilers might save them money.

It's not as obvious as comparing the price of wood to the price of heating oil, Parrent said. He looks for projects that will pencil out in 10 years at the longest.

"If they have a reasonably inexpensive source of wood, then the payback can be quite good," he said.

Fueling new interest in wood energy is not only the price of heating oil, but also the grant money on the street. The Alaska Energy Authority has $100 million in funding for alternative energy projects this year, with deadlines in October and November. It expects to have $50 million more for each of the next four years.

"The phone is ringing off the hook with applications," said AEA spokesman Karston Rodvik.

Earlier this year, the city of Craig put in a boiler that runs on sawmill waste to heat two schools and a municipal pool. That project - partly funded by an earlier grant from the state - may save $80,000 to $100,000 a year in heating costs and pay itself off in eight years.

Smaller projects abound, too. On Prince of Wales, Liz Mosenthin is writing a grant to convert the Southeast Island School District's 10 schools to wood instead of heating oil. The economics and solutions for the small, remote schools will differ from the Craig boiler system, she said.

But the desire is the same: avoiding that frighteningly expensive diesel.

"We live in the heart of the Tongass forest, and there's lots of wood available. It just makes sense for us," Mosenthin said.

• Contact reporter Kate Golden at 523-2276 or e-mail

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