Coos Economic Action Plan
Wood Products Technical Review Committee
Second Meeting Summary
Lancaster, NH
January 17, 2008
The meeting was opened by Brad Wyman, Chair. Introductions were made of the following people participating:
Roy Amey, R&L Amey, Inc
Bill Andreas, BEDCO
Allen Bouthillier, AB Logging, Inc
Phil Bryce, NH Div of Forests & Lands
Ron Bugeau, Hancock Lumber Co.
Marty Driscoll, North Country Procurement
Jill Kelly, NH Fish and Game Dept.
Bob Perras, Perras Lumber
Jasen Stock, NH Timberland Owners Assn
Matt Tansey, NH Div of Forests & Lands
Katie Stuart, US Forest Service
Don Tase, Upland Forestry Consultants
Brad Wyman (Chair)
Jeff Hayes (representing the EAP Steering Committee), North Country Council
Peter Riviere (representing the EAP Steering Committee), CEDC
Jim Wagner, NCIC Economic Development Director
Beno Lamontagne, DRED
Bob Berti, North Country Procurement
Sam Stoddard (facilitator), UNH Cooperative Extension
Sue Buteau (recorder), UNH Cooperative Extension
Brad presented an anti-trust admonition saying that we needed to exercise due diligence and avoid talking about prices, anticompetitive matters. If anyone feels we have crossed the line into that area to please advise the chair, and if that feeling continues should feel free to leave the room and make note of the circumstances for the record.
Brad distributed copies of the summary report of the December meeting, and presented an oral summary of committee progress to date--- the establishment of five key elements:
1) Forest Development Center
2) fiber sustainability
3) energy efficiency in the wood products industry
4) market diversity (steering investments and expand the diversity of the market and value-added products)
5) existing business and labor.
It was decided to combine market diversity with the forest development center. In fact, as Bill Andreas pointed out there may be good reason to consider the forest development center as a subset of market diversity, which is the larger topic.
The “business and labor” topic is being addressed by Sarah Smith with Berlin Technical College and results are pending. Therefore, this topic was not covered in today’s meeting.
Sam presented a short demonstration about the ways the TRC blog can be used. He covered the many different ways of searching for information within the blog, and how to subscribe to email distribution of new postings. At the last meeting Steve Roberge compiled a list of pertinent websites which have been posted in the blog. Anyone wishing to have new information posted to the blog should send it to Sam Stoddard.
Benoit (Beno) Lamontagne presented a summary of his function and responsibilities with DRED. Beno works within Business Resource Center of the Economic Development Division of DRED. He focuses on three things: one-stop resource for all businesses; help businesses to expand; recruitment, especially from Canada. His office is in Bethlehem, but is moving to Emerson’s in Groveton.
Beno said that knowing what we have for wood products inventory is most important. There are a lot of conflicting opinions out there about what wood is available and what isn’t. For example, a Canadian company would like to set up a fire log production business that would use 100 percent biomass and using about 0.5 million tons of chips per year. Along the way he has asked several people in New Hampshire what biomass is available and how much longer will it be available. We really need an inventory in hand to adequately inform wood-related companies about wood supply.
Any wood supply analysis needs to look beyond New Hampshire’s borders to include the regional wood basket, which is full source of Coos County’s wood products industry.
Also, changes in the wood market need to be kept in mind. For example, in Maine today a large sawmill is shutting down for four months and laying off 70 people. Also, the paper mill in Rumford is shutting down a paper machine and laying off 60 people. The paper machine shut-down will probably not affect fiber draw from the region, because the fiber will probably be sold on the open market, rather than being consumed here.
We can look at wood supply in any number of ways, but we need to look beyond biological capacity and include: projected consumption. TOA is concerned about prospective companies being skittish about investing based on usage at present, which may not accurately reflect future availability of fiber. This matter will be further discussed in a forum being developed by Phil Bryce.
Also, need to consider the work force available to produce fiber, and keep the work force viable. Diversification is the key to success. However, the logging work force cannot wait five years for market sustainability.
Peter said that new biomass plants are five years away, because we do not have the transmission capacity in place. If we started tomorrow we would not have the transmission capacity for five years---it is a five-year process.
Phil Bryce presented a summary of the timber availability study proposal. He passed out a copy of the scope of work and a draft outline for a conference to be held in March 3rd or 4th. Phil pointed out that he would like to know if something is missing from the scope of work, or if there is something not appropriate in the draft, or if there is other information that needs to be incorporated.
Phil described that from “total land” or “total wood supply”, you have a subset of land that is available for production, and you have to factor in resource condition and growth capability and then you have the competition for the wood resource. Our objective is to get to what is really available.
There is a huge difference in going from “total land” to “land available”. Then you go into legally restricted lands; such as conservation easements. Then you go into other restricted lands, such as WMNF and wilderness areas; and landowner attitudes toward harvests. There is some information available for some ownerships, especially some larger ownerships. You can make some assumptions about what NGOs and TIMOs will be doing. You can look at historical data to make assumptions about landowner attitudes toward harvesting. You can then make projections out 15-20 years. So, you have “land available” and within that how much wood is available to harvest. Now, what is the competition for it?
The initial proposal included logging capacity, but logging capacity depends a lot on price. --- in answering the question: where should the State be putting its resources? the State concluded that it should not be getting involved in things related to price (logging capacity). At least at this point, since this project needs to be done by June, 2008, price and logging capacity would be left out of the study. Fundamentally, we want to know what wood is really available. The scope of work provides the study question, the study area, and deliverables. Phil hopes to get the RFP out next week.
The purpose of the conference is to provide a broad understanding of the existing information and explore issues regarding wood availability for new wood-using facilities in the North Country. The audience is basically anyone interested in wood availability for new wood-using facilities in the North Country. The morning would be for the purpose of presentation of information. The idea is to get everyone aware of what is out there. The ultimate objective is to engender support for new wood facility development in the North Country, or make sure we don’t make any major mistakes by over-developing. The more understanding we will have out there, the better. Detailed presentations will be made about the various studies that have been done. Matt will have timber tax data. We will have someone from FIA. We will discuss some of the major reports that are available. In the afternoon there will be a panel discussion. A question for the TRC: what would be useful in terms of people to talk? – a developer?; a conservation community representative?; someone from logging or a mill? --- who might you suggest for names to invite to participate on the panel?
Brad stated that the TRC could be a good co-sponsor of the conference. It would give the TRC visibility in this context when the conference takes place. However, the schedule does not line up so much with the TRC’s calendar, because we will be reporting to the steering committee in February and the wood supply conference would be held in March. Jeff Hayes pointed out that the steering committee will meet two more times after the February meeting, so there should be time for at least some information to be available for consideration by the TRC and steering committee. Phil stated that his agency has been involved from the beginning [The Balsams event], so there is already a linkage, and it makes sense to further develop that linkage.
In response to Don Tase’s question as to why the study question would only cover wood availability for a facility to replace the market lost with the closure of the pulp mill in Berlin, it was stated that the study question should also cover wood availability for Groveton.
Don thought the study question ultimately should not be driven by replacement of a lost market, but should be driven by the available volume to support markets going forward.
Peter favors testing landowner preferences for transportation fuels operations or higher-value use of low-grade woods in comparison to biomass electrical operations. It would be interesting to know, for example, would TNC support use of their wood for ethanol production and perhaps not 30 percent-efficient biomass electricity production.
The committee broke down into three small groups for further discussion of our key topics:
1) Fiber sustainability (Bob Berti, Marty Driscoll, Katie Stuart, Phil Bryce, Jill Kelly, Jasen Stock, and Matt Tansey)
2) Energy (Don Tase, Roy Amey, and Peter Riviere)
3) Market diversity (Jim Wagner, Ron Bugeau, Bill Andreas, Jeff Hayes, Allen Bouthillier, and Bob Perras)
Following lunch Brad explained our process looking ahead: once everyone has had a chance to hear what all the small groups have done we would ask the groups to use the next almost two weeks to sketch out reports of their key points in the report format that has been provided. The TRC will further work on these reports at the next meeting on January 30th, after which Brad and Sam will endeavor to write a draft report for the steering committee to get their feedback.
Oral reports were presented by representatives of each of the small groups:
ENERGY (reported by Don Tase)
Biofuels/Biodiesel:
This is not so much producing raw material to make biodiesel as it is literally making biodiesel locally. The idea is to try and manufacture biodiesel fuel locally. It is an idea that until we look into doing it, we won’t know if it is impossible. What need to know? – what is the amount of fuel consumption for cutting skidding, de-limbing, and trucking. We have a better handle on fuel used for trucks. It is more difficult to get a handle on the logging side of fuel consumption, because of the lack of odometers and meters on logging equipment, although some equipment has accurate per hour consumption rates. (AB said cost calculator analysis can be used very accurately to obtain cost per ton.)
“Production methodology” refers to how you make biodiesel fuel.
“Potential investors” refers to who would be interested in doing it. It might be able to be done cooperatively among wood producers and consumers in the area.
Who can provide the information/what can it be found? – USDA, DOE, universities
Cooperative Fuel Purchasing:
The idea is that all timber producers in Coos County get together and buy all their fuel in one block--- a huge buying organization. We need to know: the amount of fuel consumption; potential suppliers of fuel; what the distribution process would be (e.g.: one set of tanks and everyone drive to it, or provide deliveries); need a sense of the cost savings (if buy you buy large quantity how much do you save); who would do it? (a private supplier, or a coop, or Timber Harvesting Council); get info from equipment manufacturers or loggers and truckers.
Transportation Cooperative (operational and/or ownership):
There might be cooperative to take care of the transportation of forest products. It might be a cooperative that owns the vehicles, or it might be a cooperative that simply dispatches separately owned vehicles. It would allow for better efficiency of backhauls. Could use central dispatch. Can this increase individual truck efficiency? Can this reduce energy consumption and can this also reduce the number of trucks on the road. What do we need to know? -- we would need to do some sensing around the willingness to participate; we would have to develop accountability processes; who would dictate the cost of the service? There are all kinds of questions. We would have to do some analysis of the current size of the fleet. There is variability of demand (more products are hauled during January-March than any other time of year, so while they are fully used in the spring how can they best be used at other times of year (e.g. dispatch them to Massachusetts)? This would require diversity in the trucking utilization, and could consider working with leasing or trucking firms, etc.
Regulatory Initiatives:
The goal would be consistency of trucking regulations throughout the northeast. If you are involved in trucking you probably spend about 25 percent of your time in NH and 75 percent of the time in other states or provinces. Federal load limit on much of the Interstate road system is set at 80,000 pounds--- what’s with that? We need to look at fuel tax abatements and the issue of taxes going to the general fund instead of to roads. [Jasen injected that there is a bill in the Legislature now, HB1618, proposing that two thirds of the fuel tax revenue go to DOT to make into improvements in road infrastructure.] Reduce speed limit and enforcement: this is from a fuel conservation standpoint.
Short Term Conservation Initiatives:
Develop Best Management Practices (BMPs) to conserve fuel and equipment in the wood products industry. New BMPs should cover such subjects as:
backhauls
no idling
aerodynamic trucks
reduced skidding distances
cooperative use of logging equipment (shears, etc.)
commuting in log trucks
labor workforce
MARKET DIVERSITY (reported by Jeff Hayes)
1. We need to know about new and emerging products that have commercial feasibility. This information can be found at universities and R&D labs, such as the Forest Products Laboratory in Wisconsin, and the University of Maine. Thad and Sarah Smith could get the information.
2. We need to know why it takes five years to upgrade transmission lines for the region. More importantly we need to know how that can be changed and put on a fast track. This problem is holding back up to about five biomass industry proposals. The information might be found at PUC, FERC, or local, state and federal government. Politicians (for example Ray Burton) could probably obtain information quickly.
3. We need to know who the likely investors in new and emerging products are. This information could be obtained from DRED, CEDC, AVER, BEDCO and other development corporations. Peter Riviere, Bill Andreas, Jim Wagner, and Beno could get this information.
4. We need to identify who and where are the entrepreneurs, for example Mascoma Corp, etc. This information might be found at DRED, banks and/or investment firms. Jim Tibbitts and other bankers, SBDC, and Microcredit could obtain more information.
5. We need to know who and where are the academic/collegiate partners. This information can be found at university and academic institutions. Sarah Smith and Thad could get this information.
6. We need to know what are the new products that have not yet been commercialized. The Forest Products Laboratory has several hundred products that have been researched but not commercialized. We would then need to examine how these products might be commercialized. This information can be found at forest product laboratories. Sarah Smith could get this information.
7. SUBSEQUENT DISCUSSION REVEALED THIS IS PROBABLY THE MAIN CORE ITEM UNDER THIS TOPIC. We need to know the mechanism to marry R&D, investors and entrepreneurs, in order to bring new products to market. This is essentially the basis for a forest products development center. It could be an extension of Beno’s function. It does not need to be an expensive facility, but initially it needs to be a mechanism for R&D, investors and entrepreneurs to exchange information. Further information could be obtained from DRED, and Beno is the person to get it. --- Footnote: everyone wants to help Coos County right now, but that is only one crisis away from changing. There is presently a lot of political attention and resources focused on Coos County. We have a window of opportunity right now to identify what we need and go after it.
8. We need to know the unique motivating factors that would attract investors to locate in Coos County. Investors decide to locate is a particular region for all kinds of different reasons, not always economic; for example: summer home here; family nearby; cultural connection with Canada; went to school here; etc. This information could be obtained from market research (DRED has a contract with a market research firm). Marketing firms could provide this information.
FIBER SUSTAINABILITY (reported by Matt Tansey)
Timber availability study:
A lot of the FIA data is in cords or cubic feet per acre, and that is not always the best unit of measure when dealing with biomass. Tons per acre per year of growth would be more useful. Tons per acre of biomass is very important if that is the market you are in. (Don Tase pointed out that the present methodology of cruising timber measures volume not tons, so somehow the volume will need to be converted to weight which is always problematic.) Even though we may be interested in biomass right now, quality is important too---we need to know the amount of roundwood pulpwood and quality sawlogs that are out there in addition to biomass. If we are talking about sawlogs we need some idea of the quality, and FIA data does not always mesh with the market’s quality criteria. For example, FIA’s number 2 sawlog may not represent the same specification as the market’s number 2 sawlog. (Don Tase commented that it needs to be kept in mind that it is important that we not only look at wood chips—we need to look at sawlogs of various grades. It is value-added products from quality sawlogs that keep landowners owning land. Landowners don’t own land to grow chips in today’s market.)
Land base/ownership analysis:
Land ownership and the land base: a lot of Coos land has been put under easement and those easement requirements vary—some are liberal and some are more restrictive. Easement land tends to be larger ownerships, e.g. Errol Town Forest and Randolph Community Forest.
Present harvest levels:
Some of this easement properties have management plans that are public documents, so reasonable projections can be made about how much wood will be harvested from those properties. Connecticut Lakes Headwaters Forest is a little different. If you look at any land that is wide open with no restrictions, we will have to parse that out in terms of geographic data and really look at what type of resource we can expect off individual land ownerships. State and federal lands would go into this as well.
Information about this topic can come from FIA, GRANIT, TNC, the Mahoosic Initiative has done some GIS assessment. Also, state data, prior studies and easements would be helpful. DRED (Matt Tansey) and whoever gets the DRED contract will be gathering the information.
* * *
Brad sees some significant coalescing of ideas around these three major points. It seems like some good progress was made today. If we could get those who were working on this today to go home and prepare a draft of what we developed today using the format we were given. In the process you may come up with some refinements, changes or eliminations, etc. while you are doing that. Then at our January 30th meeting we could focus on those drafts and any additional ideas or thoughts to improve upon them. Then Sam and Brad would have something to work with to take to the steering committee meeting.
Each group should designate a point person to take the lead in preparing the drafts and coordinating a review within their group before the January 30th meeting. At the January 30th meeting, the point person will present their draft to the TRC.
Brad concluded that it appears we have three main action items that the group favors to put forward to the steering committee as the most important things that need to be acted upon---
1. Fiber sustainability, which is essentially the timber availability study.
2. Market diversity, which emphasis on creating a forest products development center.
3. Energy with its various initiatives to make our region more energy efficient.
The remaining topic, “existing business and labor”, is being done elsewhere right now.
The format that needs to be followed in composing the draft is shown in Appendix A of today’s meeting agenda.
Ron Bugeau volunteered to take the lead on the market diversity topic.
Jill Kelly volunteered to take the lead on the fiber sustainability topic.
Don Tase volunteered to take the lead on the energy topic.
Sam is available to help with adapting the ideas to the format. He will also post information to the blog as soon as it becomes available.