[Forest_Biomass] Baker City story: BCAP and Elkhorn

[WEEKS Kevin]

Link to story:
http://www.bakercityherald.com/Local-News/Grants-could-boost-biomass
Grants could boost biomass
Written by ED MERRIMAN Baker City Herald September 30, 2009 03:35 pm

The first of its kind Biomass Crop Assistance Program (BCAP) that kicks off Thursday might turn out to be one of the more popular programs rolled out by the U.S. Department of Agriculture in decades.



Elkhorn Biomass of Baker City is the first firm in Baker County to apply for USDA certification as a biomass conversion facility under the biomass program, which provides matching grants to help pay for harvesting, collecting, storing and transporting biomass from farms, ranches and forests to processing plants such as Elkhorn Biomass.



Biomass can include logging slash from forests as well as crop residue from farms and ranches.



“This has turned out to be an extremely popular program throughout the nation. Not only will it reduce the fuel loading in forests throughout the United States, with the grants we will also be helping biomass businesses that have been marginally viable until now,” said Lois Loop, program manager with the Farm Service Agency state office in Portland, where applications for biomass conversion plants are being processed.



“Elkhorn Biomass has submitted an application and we are reviewing it now,” Loop said. “Hopefully we will have them qualified within 30 days.”



Lane Parry, one of the owners of Elkhorn Biomass, which is located on the former site of the Ellingson Lumber Co. sawmill in west Baker City, said he believes the matching grants could provide the financial incentive needed to spur forest thinning.



That work, besides improving the health of forests, is key to providing the stable long-term supply of woody biomass needed annually — an estimated 50,000 tons — to justify investing $5 million to $10 million in biomass densification and co-generation plants in Baker County.



Elkhorn Biomass now processes woody biomass into bulk firewood sold locally, as well as packaged firewood sold at retail outlets across Oregon and in other states, Parry said.

The Baker City/County economic development team submitted a $4.1 million federal stimulus request last winter to help pay for a combined $9.1 million biomass processing operation that could include a firewood splitting and packaging operation, a wood chips grinder, a densification plant to manufacture compressed wood logs, briquettes or pellets, as well as a co-generation plant for burning biomass to create electricity.



However, since there’s been no response to the stimulus funding request, Parry said Elkhorn Biomass is moving ahead with plans to phase in development of those biomass processing plants and operations over time.



“We are moving forward with that — with or without the stimulus money,” Parry said. “We are getting our firewood operation ramped up again this fall, and we are looking at setting up a densification facility this spring. This BCAP program could work out really well, as far as timing.”



Although grant money will be available starting Thursday, the application period started Sept. 25 for farmers, ranchers, woodland owners and operators of eligible biomass conversion plants, said Lynn Voigt, Oregon state executive director for the Farm Service Agency.



“BCAP will provide financial assistance to owners of eligible material who deliver the material to qualified biomass conversion facilities that use biomass to produce heat, power, bio-based products or advanced biofuels,” Voigt said.



Trent Luschen, supervisor of the FSA office in Baker City, said matching grants are available at a rate of $1 for every $1 per dry-ton equivalent received from a qualified biomass conversion facility, not to exceed $45 per dry-ton equivalent.



For example, if a qualified plant pays a landowner $25 per dry ton for biomass, the landowner could apply for a grant of $25 per dry ton from FSA, making the landowner’s total income $50 per dry ton, Luschen said.



“This came out of the new Farm Bill this year. It’s a brand new program,” Luschen said. “This is the first time we’ve had anything like this” that subsidizes agricultural and forest biomass.



“I think it is going to help the biomass industry get going,” he said.

Under the program, landowners can receive grants for up to two years.



Luschen said an added benefit of the program is that it encourages forest owners to reduce fuel loading, a step that reduces the risk of catastrophic crown fires.



Besides grants for landowners, contractors who harvest biomass from national forests or other public land might also qualify for grants if they sell the biomass to a qualified plant.

However, contractors must work with the Forest Service and comply with the agency’s regulations.



Biomass conversion plants can become “qualified” by signing an agreement with FSA state offices.



“The first step is to get an approved biomass conversion facility for producers to haul to. There are a few that have contacted us and are awaiting approval,” Luschen said.



He said the local FSA office is handling applications from biomass sellers, and the state FSA office is handling applications for biomass conversion facilities.



Loop said Elkhorn Biomass was the first, and so far only, biomass processing plant in Baker County to submit an application. But she said other companies across the state are flooding the FSA office with applications.



“We have a stack of applications from people wanting to get approved,” Loop said. “This program is very popular with the Obama Administration. There is no maximum per producer, believe it or not. It isn’t just woody biomass. There are agricultural biomass material that are eligible too.”



Elsewhere in Oregon, FSA has approved Co-Gen Go. in Prairie City and Co-Gen II in Riddle, both of which sell firewood, wood pellets and compressed fireplace logs.



Between environment regulations, low demand for logs and poor log prices, federal, state and private woodland managers haven’t had much financial incentive to harvest timber.

Loop said the matching grants are designed to make biomass harvesting, gathering and transporting profitable.



“The match goes directly to the producer,” she said.

Each producer approved for the program will be assigned an ID number, which the biomass conversion facility will use to keep track of what each producer delivers and report deliveries to FSA, which will issue the checks directly to producers.



“It’s a two-step process,” she said.



Landowners must also provide a copy of their delivery agreement with the qualified biomass plant.



After the biomass is delivered, a producer must provide FSA with documentation of quantity, quality, and payment rate. County offices then verify payment request information with the biomass plants before making payments to landowners, Loop said.



For biomass material removed from non-industrial private forest land to be eligible for matching payments, the harvesting must comply with a new or amended Forest Stewardship Plan, or other plan approved by the state forester, according to an FSA report describing the program.



 The following materials are ineligible for financial assistance: animal wastes and byproducts including, fats, oils, grease, manure; yard wastes; food waste; algae; and crop residues from crops eligible to receive Title I payments under the 2008 Farm Bill.



Residues from certain crops such as corn, wheat, cotton and sugar are eligible.