Biomass subsidy may aid wood products industry

By Nick Sambides Jr., BDN Staff
Posted Oct. 01, 2009, at 9:01 p.m.

EAST MILLINOCKET, Maine — Paper sales are down. The economy is in the doldrums. Foresters and woodsmen are, like their fellow workers in Maine paper mills, happy to be getting a paycheck whenever they get one.

That’s why Jim Perz thinks the federal Biomass Crop Assistance Program couldn’t be coming on line at a better time.

Perz is the fiber procurement manager at the Katahdin Paper Co. LLC mill on Main Street, one of a dozen such biomass-producing or -utilizing businesses statewide that have qualified as a biomass conversion facility. The mill did so last week. Lincoln Paper & Tissue Co. LLC, Corinth Wood Pellets Inc. and the Verso mills in Jay and Bucksport are among the rest that have qualified since August.

For the next two years, the federal Farm Service Agency program will pay qualified biomass suppliers — including agricultural and forest land owners and operators — dollar for dollar for the amount paid for the collection, harvest, storage and transportation of eligible dry biomass material by the qualified facilities.

Don Todd, state Farm Service Agency executive director, said the program likely will be a huge shot in the arm for the state forest products industry’s woodsmen, effectively doubling their payments while encouraging biomass boiler users such as the Katahdin mill to burn more biomass instead of foreign oil to heat or power their mills.

“It’s one of the many initiatives by President Obama to get this country off foreign oil and onto alternative energy sources,” Todd said Thursday. “This one happens to be especially good for this state, with its forest products industry.

“We’re still not sure exactly how much money the state’s industries will get out of it, but it could be millions of dollars,” Todd added.

Effectively a price control, the match per dry ton lapses in two years and has a maximum allowed price for biomass materials — typically wood wastes left over from tree-cutting operations — of $45 per dry ton, according to the Web site fsa.usda.gov/FSA.

The East Millinocket mill took its first truckload of certified biomass Thursday.

Todd and Brian Souers of Treeline Inc. of Lincoln, one of the first biomass suppliers certified under the program, forecast that this eventually will lower the price of biomass. That will in turn allow harvesters to get more biomass wood from forests, increase the state’s paper, tissue and pellet mills’ ability to compete with foreign manufacturers, and decrease the amount of oil burned to heat or power mills, they said.

“Probably one of the greatest benefits of this program is that it will allow us to manage our natural resources better,” Souers said. “Until now, a lot of biomass went unharvested because it wasn’t economical to get all of it out of the woods. Now there will enough money to do that.”

The East Millinocket mill burns about $3 million worth of oil annually with its furnaces. Its biomass boilers handle most of the mill’s heating, which is crucial to its papermaking. The mill makes directory-grade paper and newsprint.

In the month since the program began, it has pumped $12.5 million into biomass production nationwide, Perz said — a minuscule amount, but promising, given that many forestry companies and mills are still working to get their certifications.

http://bangordailynews.com/2009/10/01/business/biomass-subsidy-may-aid-wood-products-industry/ printed on August 22, 2014