State of the Industry—U.S. Northwest 

From the December 2010 Forest2Fuel newsletter.

While the U.S. Northwest may not be experiencing the same number of project announcements and updates as other U.S. regions (the South in particular), that does not mean that the wood biomass based bioenergy industry in the region is static or weak. With an established wood products industry and a sustainable supply of woody biomass, the Northwest is well positioned, with some biofuel and biomass power projects in advanced stages of the permitting process and others already in the construction phase.

Between the unproven state of advanced cellulosic biofuels and volatile economic conditions, securing financing for ventures like the ZeaChem Inc. plant in Boardman, Ore. can become an insurmountable hurdle that can derail projects with even the most promising technology. Despite these odds, ZeaChem, a producer of biofuels and biochemicals, has recently met two pivotal financial objectives. The first was the finalizing of a guaranteed maximum price for the construction of the core facility through an Engineering, Procurement and Construction (EPC) agreement with an engineering firm. The second was obtaining the full funding amount necessary for constructing the core facility through receiving a $25 million U.S. DOE grant. Through reaching these targets, ZeaChem has been able to start the construction phase of the project and is currently pouring foundations. When completed in late 2011, the facility will produce 250,000 gallons per year of advanced biofuels as well as biochemicals.

Those who produce biomass power are currently the primary wood bioenergy players in the Northwest. Three of these biomass power projects are expanding or converting existing boilers in wood products mills. The Sierra Pacific sawmill in Anderson, California plans to expand its current boiler capacity from 5MW to 31MW. They will use residuals that, prior to last year, were sold to a nearby pulp mill that has since closed. With the upgrade, the plant will be able to sell the surplus electricity and replace the income stream lost after the pulp mill closed.

Nippon Paper Industries USA, Inc. also plans to expand its current biomass boiler at its pulp and paper mill in Port Angeles, Wash. to produce 20MW of electricity. This expansion will cost $71 million and create 20 jobs. “The cogeneration of steam and electricity from this project will take our business to a new and more sustainable level and allow us to continue to improve our paper making business,” said Harold Norlund, manager of the Port Angeles mill. Port Townsend’s paper mill also sees the benefits of producing electricity from waste wood as they are in the process of converting their main boiler to generate 24MW of biomass power for $55 million. The construction phase for both of these projects has been delayed for now, due to their permits being appealed at the state level by several environmental groups who contend that the boiler changes would increase air pollution and threaten forest health due to the remove of logging slash.

The region also has several companies in various stages of receiving permits and approvals or starting construction on standalone biomass power projects. The Adage Mason County plant, a joint venture by Adage and Duke Energy, has signed a feedstock contract with Green Diamond Resource Company that will provide 20 percent of the fuel needed to power the plant. They are presently waiting to receive air-quality and land-use permits with the intent of starting construction in early 2011. Biogreen Sustainable Energy is waiting for city council approval of its La Pine, Ore. plant after receiving approval from Deschutes County. The council is planning on making a decision at their Dec. 29 meeting which should allow the plant to begin construction in 2011. The 26.8MW Lakeview, Ore. plant planned by Iberdrola Renewables is steps ahead of the others and has already begun construction. When completed, the plant will source its fuel from the Collins Pine Company Fremont Mill that sits next door to the 26.8MW plant. The Fremont Mill will in turn buy the equivalent of 2MW of steam from the facility to partially run its lumber-drying process. As part of the necessary financing for the project, Iberdrola received $1.7 million of federal stimulus money, but to receive the funding, the plant must be running by mid-February 2012.

With the advancements made in the last year, the bioenergy industry in the Pacific Northwest is better positioned than it was this time last year. As these facilities become realities, new projects—ones with sound financial, environmental and technological foundations—will have a roadmap for continued success.

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