Biomass: Boon or Boondoggle?

As Oregon communities struggle through this recession, they are looking for an economic “silver bullet” to help them survive and to become a foundation for future economic prosperity. Renewable energy has been thought to be one of those “silver bullets,” due to Oregon’s Renewable Portfolio mandate and the vast amount of government funds devoted to these energy technologies. With Oregon’s expansive forestlands, woody biomass, at first glance, seems to present an opportunity both to put more people to work in rural communities and to provide a renewable energy source.

But is biomass truly a boon for Oregon, or is it a boondoggle? Two recent studies pertaining to the woody biomass industry lead to the conclusion that while Oregon could lead the biomass evolution, unless there is a change in the management of our federal forestlands, we likely will be watching the South become the U.S. leader instead.

The potential for biomass to be a boon for Oregon exists, but that potential comes with numerous caveats. First and foremost, woody biomass is dependent on the residues from an economically viable logging operation of merchantable timber. It should be a waste capture operation supported by active commercial forestry management. Second, most, if not all, logging residue materials in the northwest are currently used by existing biomass facilities and other building material processes. Therefore, government subsidies should not be provided, as they would displace other viable products already being produced. This reemphasizes the fact that federal forestlands must be opened to long-term sustainable timber harvests if any opportunity is to develop for a viable biomass industry in Oregon.

The federal government controls 60% of Oregon’s forestlands, yet continues to send mixed signals to Oregon’s industries. A number of American Recovery and Reinvestment Act grants have been provided to build, modernize or retrofit businesses to use biomass as an energy source. However, there seems to be no recognition that taxpayer dollars are supporting long-term projects that have no new stable source of materials being added into the supply chain.

According to a recent study by the American Forest and Paper Association on the availability and sustainability of wood resources for energy, demand in the western U.S. is outpacing the availability of materials from private forestlands. Federal lands must play a role in creating a long-term consistent supply of merchantable timber and logging residues. Simply providing grants for biomass facilities that create a greater demand for biomass feedstuffs, without any significant movement toward providing long-term access to the captured supply of merchantable timber and logging residues on federal forestlands, is setting up an industry for economic failure.

A boon of new job opportunities has been touted as a possible benefit of the woody biomass industry, ranging from the building of new facilities to the current thinning projects being conducted on overstocked federal forestlands which are producing feedstuff for biomass energy generation. However, a recent study by the American Forest and Paper Association on the employment impacts of the emerging bioenergy sector (woody biomass in pellet and cellulosic ethanol, and electric utility) concluded otherwise.

The study stated: “The results indicate, that the U.S. combined forest product industry creates 5 times as many jobs as the alternative energy sector for the same volume of wood consumed. If the downstream and upstream employment is considered the impact is 9 times higher for the combined forest product industry.” This is critical when realizing the impacts of a potential direct materials subsidy (on an already limited supply of feedstuffs) for biomass over other competing products currently being produced from the same materials and which are likely creating more jobs. Creating new jobs in Oregon forestlands and in an emerging bioenergy sector is a great possibility, but this requires federal forestlands to be managed beyond short-term thinning and for sustainable long-term harvests rotation. Without that, the health of Oregon forestlands will be at risk, and jobs will continue to be tenuous.

“Boondoggle” was first used in 1935 to describe a useless program for the jobless created by the government out of political favoritism under the guise of the New Deal. Is it appropriate to apply this term to the biomass industry in 2010? Is biomass a boon or a boondoggle? No doubt, Oregon has enough material within our forestlands to sustain a long-term woody biomass industry, but much of that material is unavailable due to lack of management of federal forestlands. More jobs are created when the forest products industry is primary and bioenergy is a subsidiary of it. And when government heavily subsidizes other renewable energies like solar and wind power, which in turn creates the need to subsidize woody biomass to be competitive, you get a potential economic boon turned into a government boondoggle.

Karla Kay Edwards is Rural Policy Analyst at Cascade Policy Institute. She has held positions of leadership in numerous organizations focusing on agricultural and rural industries and issues, including the Fresno (California) Farm Bureau, Washington Cattlemen’s Association and the Oregon Department of Agriculture.