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Wood-Peat Municipal Solid Waste Agricultural ByproductsAlaska Bioenergy Program Quarterly Report Jan 1993-Mar 1993
wood - peat municipal solid waste agricultural byproducts Alaska Bioenergy Program Quarterly Report January 1993 - March 1993 Alaska Energy Authority wood - peat municipal solid waste agricultural byproducts Alaska Bioenergy Program Quarterly Report January 1993 - March 1993 Alaska Energy Authority TABLE OF CONTENTS I. TASK FORCE ACTIVITIES ..0000..00..00..cc ccc ceccceceeeeseeeeeeeeeeteeeeseeesseee oa 2 ll. INFORMATION AND TECHNICAL ASSISTANCE ............0...0.ce 2 lll INTERAGENCY AND INDUSTRY CONTACTS & PROJECT De eee ee eee EE et ML MM ne led eu 3 IV. INDUSTRY ACTIVITIES IN ALASKA ...0000000.. ce ccceeeeteeeetteeeeees 16 A. Tongass National Forest .........00..0ccceecceceseceeeeeeeeeeesteeeceeneeeeneeeneeees 16 B. State and Private Forest Lands ...............0ccccccccceccceeessseeeeeeeeessseeeeenes 16 e Timber Harvest Planned in Copper River Area ¢ Circle DE Pacific Operation Continues e Chugach Alaska Sawmill Re-opens e State Assesses Interior Fiber Potential ee ee ts Det eee Lian Medbetpuantedba teens tetreas HEMET t 17 APPENDICES Appendix A Quarterly Project Status Reports State of Alaska Bioenergy Technical Assistance Program Small Commercial Wood-Fired Boiler Demonstration Seward Spring Creek Prefeasibility Analysis Juneau Lemon Creek Prefeasibility Analysis Fairbanks Waste-to-Energy Sitka Co-Generation South Tongass Wood-Waste Appendix B_ Project Development Correspondence and Information e Letters to Senator Ted Stevens, Senator Frank Murkowski, and Representative Young in support of the regional bioenergy program Appendix C Current Industry-Related News Articles Appendix D South Tongass Wood Waste RFP TASK FORCE ACTIVITIES Alaska Energy Authority participated in the February 20-24, 1992, Regional Bioenergy Task Force program planning at the Montana DNRC office in Helena. The purposes of the meeting were 1) to be briefed by industry on technology developments, 2) to report on activities of the Alaska Bioenergy Program and be briefed on activities of other task force members, and 3) to reach agreement on program goals and project screening and selection methods for RFP's to be issued by BPA on behalf of the regional program. Both Peter Crimp and Pat Woodell attended the meeting. In March, we prepared letters to Senator Stevens, Senator Murkowski, and Representative Young in support of continued funding of the regional biomass programs. Copies of these letters are included in the Appendix B. Peter Crimp, a forester from Anchorage, began work as the Alaska Bioenergy Program Coordinator on January 19. In March we provided Bob Wilson, Oak Ridge National Laboratory, information on past projects and began recording information on forms that were distributed at the regional planning meeting. The information will be used in the evaluation of the regional bioenergy program. Also in March we provided comments to the regional bioenergy program on the methods to be used to determine the manner in which activities and projects should be funded by the regional program. INFORMATION AND TECHNICAL ASSISTANCE The Bioenergy News was not prepared and distributed this quarter due to time constraints. We will continue to distribute the News in the future. The Alaska Bioenergy Program responded to requests for information on waste to energy, densified fuels, and existing state biomass facilities. In late December we were contacted by and provided advice to a Kalskag teacher who was interested in developing a forest management program. We linked Chugachmiut Corporation and the village of Chenega Bay with an incineration specialist upon their request for assistance in determining whether or not to purchase an incinerator. We also passed along information on pellet mill vendors to individuals interested in developing a pellet industry on the Kenai Peninsula. Page 2 INTERAGENCY AND INDUSTRY CONTACTS & PROJECT DEVELOPMENT The Alaska Bioenergy Program's focus has continued to be directed toward establishing biomass energy development projects, and the majority of contacts with the private and public sectors during this quarter have been related to a number of current or planned projects. The South Tongass Wood Waste resource assessment project has involved considerable interaction with engineering and environmental services firms. A request for proposals (see Appendix D), released in mid-March, drew proposals from eight firms. Energy Authority and U.S. Forest Service staff coordinated in the proposal review and selection process. A detailed description of the wood waste resource assessment project is included in appendix A. The contract for the project is expected to be signed on March 31. With the recent reopening of a sawmill in Seward the opportunity for establishing a hog fuel-fired plant has returned. We met with Chugach Alaska Corporation chief executive officer Mike Brown this quarter to kick off a prefeasibility analysis of the potential for using the estimated 150 tons per day of wood waste from the mill to produce heat and perhaps electricity for the mill and the nearby Spring Creek Correctional Facility. A meeting between Energy Authority executive director Ron Garzini and Department of Correction's facility management staff established the department's interest and cooperation in this project and the Lemon Creek project described below. We also had discussions with Seward Ship Chandlery, which is planning a 30,000 square foot building near the sawmill and is interested in inexpensive heat. In trying to line up other sources of biomass to use as secondary fuels for the Seward Spring Creek project we have been in contact with Kenai Pacific Lumber Company, whose in-woods chipping operation near Ninilchik could benefit from a demand for bark and other residue which is piling up at landings. We are also working with the Kenai Peninsula Borough to look at the possibility of using local waste paper as a secondary fuel source. The Borough is currently trucking 5,500 tons per year of MSW 100 miles from Seward to Soldotna because the landfill is at capacity. Discussions with Suneel Corporation and Afognak Logging Co. in Seward have provided us with an estimated cost of purchasing sub- bituminous coal from the rail yard in Seward and transporting it to the vicinity of the mill. (See Appendix A for more detail.) In January Robert Martin, General Manager of Tlingit Haida Regional Electrical Authority requested that we assist Channel Corporation in Page 3 determining the feasibility of recovering heat from the 20,000 tons of MSW per year they now incinerate at their Lemon Creek facility. Since then we have been working with Channel Corporation and the Department of Corrections to assess available heat energy from the incinerators, levels and costs of oil consumption at the Lemon Creek Correctional Facility, and capital costs of a district heat loop and heat recovery boilers. In mid-March Costco announced that they were buying land roughly between the incinerator and the prison and planned to build an 80,000 square foot store this year. Costco is potentially interested in waste heat, and we are working with their engineers to determine their annual heating requirements. (See Appendix A for more detail.) In late December Alaska Power and Telephone (AP&T) announced their interest in recovering heat from diesel generators in Tok and piping it to the planned Tok school, a project that presents a heating alternative in addition to the wood heat system analyzed by the bioenergy program last year. This quarter the Energy Authority has worked with the school district's general contractor and consultants, AP&T, and wood heat system vendor Sylva Energy Systems of Ontario to refine cost estimates of the alternatives. We will release a comparative cost analysis of the three systems this April. We have continued to monitor developments in state legislation and regulations concerning solid waste and air quality management, especially as they relate to current projects. Preliminary draft regulations for solid waste management were released by the Department of Environmental Conservation on March 25 for informal review. We will comment on them in April. The Regional Solid Waste Management Plan process for the Fairbanks North Star Borough began this quarter. The Alaska bioenergy program, which is funding the Borough to consider waste-to-energy options, will respond to draft recommendations for solid waste management next quarter. (See appendix A for more detail.) Page 4 Alaska Bioenergy Program DATE December/ January December 20 December 22 December 22 December 24 January 4 January 14 January 19 January 21 January 22 January 22 List of Contacts January to March 1993 CONTACT Ray Kraemer Tok Mark Leary Kalskag School District Kalskag Don Mahon Alaska Power and Telephone Tok Mike Jens Management Analysis Co Anchorage Spike Jorgenson Gateway School District Tok Yvonne Weber USFS PNW Research Sta. Portland Cal Kerr America North/EMCON Anchorage Doyle Miller Baugh Construction Anchorage Lee Spratt Alaska Dept. Corrections Sutton Pat Fox Bonneville Power Auth. Portland Page 5 DESCRIPTION Gateway School District consideration of a waste heat system as alternative to wood- fired plant under study Timber and wood energy development potential for lower Kuskokwim River. Interest in waste heat system for new Tok school Discussion of Gateway School District's concerns about wood-fired plant alternative for Tok school Discussion of Gateway School District's interest in wood-fired plant alternative for Tok school Discussion about potential for coordinating on wood chips/coal project in Fairbanks Weyerhaeuser and Prince of Wales Island activities Mobile crane availability, labor costs, utility connection costs for Tok boiler house Discussion of fuel data and information for Seward Spring Creek and Juneau Lemon Creek projects DoE organization structure and management of bioenergy programs January 26 January 26 January 26 January 26 January 26 January 26 January 27 January 27 January 27 January 28 January 28 January 28 January 28 Terry Gunnell Sylva Energy Systems Thunder Bay, Ontario Doyle Miller Baugh Construction Anchorage Howard Haines Montana DNRC Helena, MT George Sampson USFS Institute Northern Forestry Fairbanks Roger Kolb International Power Systems Anchorage John Hall Taiga Resource Consultants Girdv.ood Craig Chase Chase and Associates Bellevue, WA Robert Newman SCS Engineering Bellevue Kerry Martin Asst. City Manager Seward Alaska Steel Company Anchorage Craig Chase Chase and Associates Bellevue, WA Terry Gunnell Sylva Energy Systems Thunder Bay, Ontario Don Mahon Alaska Power and Telephone Tok Page 6 Refined costs of wood-fired boiler for Tok school Ask for estimated cost of Tok boiler house Arrangements for regional Bioenergy Task Force annual planning meeting South Tongass wood waste assessment project Interest in RFP for South Tongass wood waste assessment project Kenai Peninsula bark beetle timber salvage assessment status Plans and direction for annual PNWA meeting Interest in RFP for South Tongass wood waste assessment project Background for Seward Spring Creek prefeasibility analysis Price of steel and fabrication for Tok boiler house cost estimation Discussion of upcoming regional bioenergy program planning meeting Electrical and O and M requirements for Tok boiler house cost estimate Labor costs in Tok January 28 January 28 January 29 January 29 February February 2 February 2 February 3 February 3 February 3 February 3 February 3 February 3 Rick Rogers Univ. Alaska Land Mgt, Anchorage Mike Jens Management Analysis Co Anchorage Dean Argyle USFS R10 Timber Appraisal Juneau Ginny Moore Alaska Housing Finance Corp. Anchorage Chad Converse USFS State and Private Forestry, Anchorage Mike Tavella Public Utilities Commission Anchorage Mike Brown Chugach Alaska Corp. Anchorage Martin Maricle Alaska DNR Division of Forestry, Glenallen Jim Cucullu Power Engineers, Inc. Eagle River Eric Yould Ebasco Environmental Anchorage Chris Maisch Tanana Chiefs Conference Fairbanks Roger Kolb International Power Systems Anchorage Page 7 Potential Tok boiler house location Potential Tok boiler house location, relative merit of waste heat system Timber management issues on Tongass National Forest DoE NICE**3 grant inquiry Offer of help on South Tongass wood waste project, request for RFP PUC regulations' affect on potential power sales from cogeneration plant in Seward Kickoff meeting for Seward Spring Creek prefeasibility analysis project Invitation to speak at Upper Tanana/Copper River Forest Management Council Meeting South Tongass wood waste RFP questions Request for Energy Authority report Request for densified fuel publication. Discussion about Tanana wood waste assessment project Discussion about various boilers suitable to tural Alaska needs February 4 February 5 February 5 February 5 February 8 February 8 February 8 February 8 February 8 February 9 February 9 February 10 February 10 Louie Bencardino Seward City Council Jeff James Department of Energy Seattle, WA George Sampson USFS Institute Northern Forestry Fairbanks Eric Yould Ebasco Environmental Anchorage Terry Gunnell Sylva Energy Systems Thunder Bay, Ontario George Sampson USFS Inst. Northern Forestry Fairbanks Jim Cucullu Power Engineers Eagle River Fred Metzel Biofuel Broker Brentwood, CA Brennan Fleener Arctic Slope Consulting Group, Anchorage Kathy Christy/Ted Kinney Alaska Dept. Corrections Anchorage Emie Polley Channel Corporation Juneau Dick Smith Public Works Dept. Sitka Kerry Martin Asst. City Manager Seward Page 8 General discussion about Seward Spring Creek prefeasibility project Questions about DoE NICE**3 grant Crimp request that Sampson participate in South Tongass wood waste proposal review. Discussion of kilns in Southcentral Alaska Questions on South Tongass wood waste RFP Discussion of Gunnell's estimate of Tok wood boiler house cost Meeting with Energy Authority staff for review of South Tongass wood waste proposals Questions on South Tongass wood waste RFP Cost of transporting hog fuel to Lower 48. Description of EcoTech (Vancouver, BC) process of wood densification Request for MSW Resource Assessment in researching alternatives for Kotzebue Kickoff meeting for Seward Spring Creek and Juneau Lemon Creek prefeasibility analysis projects. Discussion of feasibility of providing heat energy to the two correctional facilities nearby. Coordination for Juneau Lemon Creek Prefeasibility Analysis Status of Sitka WTE Cogeneration project and desirability of 10 mW wood/RDF-fired plant for Sitka in future Aerial photo coverage of prison and sawmill in Seward February 11 February 11 February 11 February 12 February 16 February 16 February 16 February 16 February 16 February 16 February 17 February 17 February 17 Karl Woodruff North Star Borough Landfill Fairbanks Jim Cucullu Power Engineers Eagle River Glenn Miller Alaska Dept. Environmental Conservation, Juneau Greg Staunton forest engineer Ketchikan John Vranizan Carroll, Hatch, and Assoc. Portland, OR Pat Stroud Anchorage Frank Seymour Alaska Dept. of Commerce Juneau Dave Wallingford Alaska DNR Division of Forestry, Anchorage Ted Kinney Department of Corrections Anchorage David Junge University of Alaska Anchorage Terry Gunnell Sylva Energy Systems Thunder Bay, Ontario George Pine Pine's Sawmill Tok Bill Cheeseman Channel Corporation Juneau Page 9 Status of Fairbanks WTE project and discussion of likely MSW management alternatives Request for Metlakatla wood waste report and questions about South Tongass wood waste RFP Status of current solid waste legislation and contacts in Southcentral Alaska Questions about South Tongass wood waste RFP South Tongass wood waste RFP Interest in developing pellet industry in Kenai Peninsula General discussion of timber industry in Alaska Discussion of potential timber supply for Seward mill Long term waste heat sales contract between Bethel Utilities and Dept. Corrections Discussion of suitable level of detail for wood fuel quality assessments for South Tongass wood waste RFP Need for construction supervision, engineering in developing cost estimates for Tok wood boiler house Status of his milling operations as related to Tok wood heat project Incineration schedule and possible end users of waste heat from Lemon Creek incinerators February 17 February 17 February 18 February 18 February 18 February 18 February 20- 24 February 25 February 25 February 26 February 26 February 26 Bill MacClarence Alaska Dept. Environmental Conservation, Anchorage Barbara Sear Tacoma City Light, WA Horace Smith Sitka Cal Kerr America North/EMCON Anchorage Bruce Rene USFS Region 10 Juneau Richard Atkins Environmental Risk Ltd. Bloomfield, CT Tim Lane National Wood Energy Assoc. Washington, DC Paul Jackson Chugachmiut Corp. Anchorage Steve Phillips Alaska DNR Division of Forestry, Anchorage Craig Chase Chase and Associates Bellevue, WA Leo Wakefield Seward Page 10 MTBE controversy in Alaska and possible need for PSD permit for Seward mill Tacoma City Light's fuel standards for hog fuel suppliers South Tongass wood waste RFP interest Request for Energy Authority library database search re salt content in rafted logs Status of Tongass NF land management plan South Tongass wood waste RFP Regional Bioenergy meeting Request for information re bioenergy usage in Alaska Request for assistance regarding potential MSW incinerator in Chenega Bay Timber supply analysis in interior Alaska Congressional support for regional bioenergy programs Interest in developing wood pellet industry on Kenai Peninsula March March 1 March 2 March 2 March 2 March 2 March 3 March 3 March 4 March 4 March 4 March 4 March 4 (Crimp on leave) Mark Lee Alaska DNR Division of Forestry, Fairbanks George Sampson USFS Institute of Northem Forestry, Fairbanks Leo Wakefield Seward Jim Morgan Seward Forest Products Seward Bob Wilson Oak Ridge National Lab Oak Ridge, TE Terry Gunnell Sylva Energy Systems Thunder Bay, Ontario Chris James EPA Region 10 Seattle Jim Evers Johnson Controls Anchorage Frank Wareham Pacific Generation Co Portland, OR Bob Wilson Oak Ridge National Lab Oak Ridge, TE Louis Bencardino Seward City Council Seward Page 11 Current logging and transportation costs and stumpage prices for interior Alaska South Tongass wood waste proposal review Kenai Peninsula wood pelletization industry development Discussed Seward Spring Creek prefeasibility analysis, current mill production, and arrangements to obtain fuel production and energy usage data PNWA Bioenergy program evaluation re Fairbanks North Star Borough, Tanana Wood Chips, and South Tongass wood waste projects Status of Tok school energy alternatives assessment Effect of air quality regulation revisions on Juneau Lemon Creek waste heat recovery prefeasibility analysis Crimp inquiry into potential interest in their operation of Tok wood heat plant Crimp inquiry into potential interest in their operation of Tok wood heat plant PNWA Bioenergy Program evaluation questions Update on Seward project. Discussion of MSW transport from Anchorage/Fairbanks to Seward March 5 March 5 March 5 March 8& March 9 March 9 March 10 March 10 March 10 March 10 March 10 March 10 March 11 Ted Setzer UFSF PNW lab Anchorage Ed Soto Hyda Corporation Hydaburg Dan Golden Alaska DNR Forestry, Anchorage Troy Sanders Seward Peter Jones Northwest Territories Pat Stroud Anchorage Marilyn Chase Chase and Associates Bellevue, WA Bob Wilson Oak Ridge National Lab Oak Ridge, TE Bill MacClarence Alaska DEC Air Quality Anchorage Russel Rink VRCA/Entech Anchorage Karl Woodruff North Star Borough landfill Fairbanks Mark Fryer/Bill Ballard FPE Roen Engineering Anchorage Louie Bencardino Seward City Council Page 12 Availability of equations predicting logging and mill residue quantities Interested in development of wood-waste fired cogeneration on Prince of Wales Island Forest health initiative in Copper Valley area Pelletization on Kenai Peninsula. Inquiry about used pellet mills for Wood pellet and gasification projects planned for Fort Simpson and Hay River Pelletization on Kenai Peninsula. Vendor for pellet mill Arrangements to bring biodiesel truck to Alaska State Fair Half-hour interview related to evaluation of PNWA Bioenergy Program Alaska projects Chenega Bay MSW disposal options and desirability of incineration. EPA sustainability program Entech is developing small mobile incinerator suitable for small communities. Rink agreed to help Chenega Bay consider MSW options Discussion about public meetings in early March public meetings on MSW. management in Fairbanks Questions about South Tongass wood waste RFP Contacts for secondary fuel sources re Seward Spring Creek Prefeasibility analysis March 11 March 11 March 11 March 12 March 12 March 12 March 12 March 15 March 15 March 15 March 15 March 16 March 16 Cathy Mayer and Ted Frothingham, Kenai Borough landfill Bill Noll consultant for Suneel Corp. Anchorage DJ Whitman Seward Ship Chandlery Seward Crystal Keener Northwest Environmental Anchorage Ralph LaSalle Fort Wainwright power plant Fairbanks Pat Fox Bonneville Power Admin. Portland, OR Neil Marchbanks US Weather Service Anchorage Jeff George Consummat Systems Richmond, VA Bill Cheeseman and Emie Polley, Channel Corporation Juneau Rick Rogers Univ. Alaska Land Mgt Anchorage DJ Whitman Seward Ship Chandlery Seward Paul Jackson Chugachmiut Corp. Anchorage Ted Kinney Alaska Dept. Corrections Anchorage Page 13 Quantities and quality of MSW from Seward and costs of disposal and transportation to Soldotna Contacts for obtaining and transporting coal in Seward Interest in purchasing waste heat from wood waste fired plant in Seward. Annual heating demand and plans for new construction Availability of waste oil as possible fuel for possible Seward wood waste boiler Btu content in Healy coal PNWA Bioenergy Program evaluation Weather data for Juneau Ballpark estimates for incinerator boilers Request latest results on Juneau Lemon Creek prefeasibility analysis. Discussion of Costco as heat customer Tok school heating alternatives analysis Waste oil usage to heat current building Status of Chenega Bay MSW disposal issue. Referred him to Russel Rink Oil consumption for Seward Spring Creek Correctional Center March 16-23 March 16 March 17 March 17 March 17 March 18 March 18 March 18 March 18 March 22 March 22 March 22 March 23 Costco Corporate Offices Kirkland Tom Reese Suneel Coal Corporation Seward Al Schaeffer Afognak Logging Company Seward Mark Harlan Kenai Pacific Lumber Co Anchorage/Homer Pat Brown Seward Pollard University of Alaska Anchorage Bill Cheeseman Channel Corporation Juneau Dan Gaber Juneau Pioneers Home Juneau David Grant Grants Plaza Juneau Dave Heimbigner Coca Cola Bottling Co Juneau Craig Chase Chase and Associates Bellevue, WA Cal Kerr America North/EMCON Anchorage Eric Yould Ebasco Environmental Anchorage Page 14 Repeated calls to determine interest in waste heat from Juneau Lemon Creek incinerator Possible purchase of Suneel coal for secondary fuel for Seward Spring Creek wood waste boiler Cost of transporting coal from rail yard to industrial park in Seward In-woods chipping operation as potential source of hog fuel for Seward Spring Creek boiler Discussion of prototype hog fuel boiler and potential for using for Seward Spring Creek project Weather data for Seward Plans for wet scrubber for Lemon Creek incinerators Interest in waste heat from Lemon Creek incinerators. Heating system and annual oil consumption estimate Possible interest in Lemon Creek incinerator waste heat Same as above Update on projects and activities South Tongass wood waste assessment contract Debriefing on South Tongass RFP process March 23 March 23 March 23 March 23 March 23 March 23 March 24 March 24 Dean Nordenson Juneau Water Dept. Mark Leary Kalskag School District Kalskag Alfred Bohm Alaska DEC Air Quality Juneau Craig Chase Chase and Associates Bellevue, WA Delta Western Juneau Ernie Polley Channel Corporation Juneau Steve Clautice Alaska DNR Forestry Fairbanks Jim Cucullu Power Engineers Eagle River Page 15 Possible interest in Lemon Creek incinerator waste heat Status of his timber development plans for lower Kuskokwim area Permit requirements for Juneau Lemon Creek incinerators under various situations Crimp request for assistance in contacting Costco and KMart re waste heat from Juneau Lemon Creek incinerators. Air quality permitting situation with facility. Current price of heating oil Current results of Juneau Lemon Creek Prefeasibility analysis Allowable cut for Tok area Debrief on South Tongass wood waste RFP process IV. INDUSTRY ACTIVITIES INALASKA A. Tongass National Forest The U.S. Forest Service has decided to delay the final draft of the Tongass Land Management Plan until September or later so that it can conduct a peer review of an in-house study on the effects of logging on deer, eagle, black bear, and hairy woodpecker habitat. The study, which environmentalists claim the Forest Service tried to suppress, projects substantial harm to habitat on Prince of Wales Island resulting from the 2,000 acre per year harvest necessary to satisfy the 50 year contract with Ketchikan Pulp Company (KPC). The Forest Service is also being criticized for underestimating the net revenue losses due to the timber program. Late in March, KPC announced that it would shut down its pulp mill for about 30 days starting in April and decrease pulp production by 25% afterwards for an unspecified period. The company says the move is necessary because the Forest Service has provided 30 to 40 MMBF less timber than they were bound to under the long-term contract, which expires in 2005. The long-term effects of the above developments on timber supply is difficult to predict. Prince of Wales Island is the prime source of raw material for the KPC sawmill and pulp operations from which wood waste would be derived to fuel a potential power plant in the south Tongass area. Despite the delay in the plan, however, it appears unlikely at this point that the current controversy will result in a catastrophic decrease in the 418 million board feet per year allowable timber sale quantity that is currently proposed. B. State and Private Forest Lands The spruce bark beetle infestation in Southcentral Alaska and strong log and chip markets continue to be the prime motivators for timber management in the Copper River Valley and the Kenai Peninsula. Ahtna Inc. and Chitina Native Corporation, two Native corporations, announced their intentions to begin harvest of up to 50,000 acres of white spruce near Glenallen this summer. Chips and higher grade logs would be transported to Valdez, where they would be exported to Pacific Rim markets. Logging access would be via winter roads and ice bridges. Circle DE Pacific's logging and in-woods chipping show on the southern Kenai Peninsula has been in operation since November. The joint venture has produced enough chips to fill up most of their first ship at the new storage facility in Homer. A ship holds around 1,000 van loads or 27,000 tons. The operation, Page 16 which has generated significant piles of logging and chipping residues at landings, is expecting to continue for the next fifteen years.. Although Circle DE's operations are confined to Native corporation land, the state has proposed to log another 5,300 acres of beetle-killed or threatened timber in the vicinity. The University of Alaska is currently working on timber plans for the area. The Chugach Alaska Corporation reopened their state-of-the-art mill in Seward in late February. The mill, currently running at one shift, produces around 125 MBF of dimension lumber per shift. Raw material for the mill is expected to come from Native land in Prince William Sound and, to a lesser extent, the Kenai Peninsula. Around 60,000 cubic yards of bark, sawdust, and shavings are stockpiled uncovered in the mill yard. In the Interior, as part of a move to bring in industry which can use the region's vast hardwood resource, the state has recalculated potential allowable sale quantities for timber in the Tanana Valley. Up to 20 to 26 MMCF per year of sawtimber and fiber is available, subject to economic feasibility and effects on other resources. Consistent with events of the past, the state is being criticized by environmental groups on its harvest plans for the Kenai Peninula and Tanana Valley for ignoring fish and wildlife and recreational values in the areas. Cc. MTBE Effects Debated Health effects of MTBE (methyl-tertiary-butyl-ether) have been hotly debated this winter in Fairbanks and Anchorage, where "oxyfuels" were required because of non-attainment of carbon monoxide target levels. Despite evidence that the additive has reduced CO levels (and added 10-15 cents to the price of gas), reports of respiratory effects increased to the point that the state epidemiologist recommended that the program be halted. Governor Walter Hickel suspended the program in Fairbanks with the EPA's concurrence, but the Anchorage program remained in place during the winter. Page 17 APPENDIX A Quarterly Project Summary Reports State of Alaska Bioenergy Technical Assistance Program Small Commercial Wood-Fired Boiler Demonstration Fairbanks Waste-to-Energy Sitka Co-Generation South Tongass Wood-Waste Page 18 Project Summary Report Title: State of Alaska Bioenergy Technical Assistance Program Brief Description These are the "core" activities of the Alaska Bioenergy Program, which promote the development of biomass resources for energy production through information transfer and technical assistance, facilitate project development and comment on state policies related to the use of biomass for energy.. Identification Number DE-FG79-84-BP14984, A014 Grantee Alaska Energy Authority, P.O. Box 190869, Anchorage, AK 99519-0869 Project Manager Peter Crimp, 907/561-7877 Department of Commerce and Economic Development, Alaska Energy Authority, Anchorage, AK 99519-0869 Regional Bioenergy Program Funds Current year: $75,000 plus $90,000 for special projects described separately Cumulative through FY 92 : $811,297 Cost Sharing Alaska Energy Authority: Cumulative through Federal FY 92, $196,458 Expanded Description See project objectives and approach for expanded project description. Need Addressed One of Alaska's largest energy challenges is the high cost of fuel oil, particularly in rural areas. Biomass has the potential to provide alternatives to this conventional fuel. Alaska's location often makes it difficult to receive information on product development, new trends in industry and items that are pertinent to its economy and infrastructure. The Bioenergy Technical Assistance Program provides an in-state biomass center for receiving and distributing this information. Awareness of biomass opportunities improves the economics of use in related industries. This program supports State policies which influence the use of biomass as an energy resource. Page 19 Project Objectives The Alaska State Program objectives include the following: 1) to promote the efficient and environmentally sound use of biomass for energy and other applications in Alaska; 2) to assist in resolving institutional barriers to biomass production and use. This includes education and information to policy makers who can influence resolutions to institutional problems; 3) to direct program activities and information towards self-sustaining biomass production and consumption activities. This includes an emphasis on economics, environmental and technical feasibility for industry and municipal projects; 4) to clarify major, environmental resource recovery and use issues and to seek solutions to environmental problems; 5) to continue technology transfer to target users. Economic, environmental and technical feasibility for industry and municipal projects are emphasized in these objectives, and 6) to continue development and operation of a state-wide institutional framework to promote biomass development issues. Approach Activities under the State Technical Assistance Program are divided into the following work areas: Task Force and Policy Group Participation - Attend regional meetings, participate in regional planning activities, and support the regional program through effective communication of in-state bioenergy activities, goals and policies. Development and evaluation activities for the regional program are also included in this section. Information and Technology Transfer - Emphasis is to increase public awareness of opportunities to use biomass as an energy resource. The goal here is to maintain an effective network of information on technologies, resource management techniques and other topics applicable to the private and public sectors. Technical Assistance - Identification of biomass use barriers and assistance to industry and public agencies in developing biomass use opportunities are the major goals in this area. Interagency Coordination - Determining common interests in the development of biomass use opportunities is emphasized. Coordination also helps define common problems among agencies in project implementation. Successful interagency planning improves likelihood of project success. * Institutional Barriers - This area focuses on identifying state regulatory requirements and procedures that affect the development and use of forest and mill residues, non-commercial stands of timber, and municipal solid waste as energy options. This area also includes identification of environmental impacts and tradeoffs associated with using biomass energy fuels, and recommending solutions consistent with state environmental policies and laws. Field Projects - As part of this year's project activities, the Alaska program will complete the installation of a wood waste fired boiler at the Alaska Correctional Industries greenhouse complex in Sutton. Page 20 Major Milestones Performance will be monitored and project results will be published in a final report after a mutually agreed-upon performance period. Additionally the Alaska program is conducting prefeasibility analyses for a wood-waste-fired boiler in Seward and a district system for MSW- generated heat in Juneau. Status: See project reports. The Alaska program will prepare an analysis on wood heating options for facilities in the Alaska Gateway School District in the Eastern Interior of Alaska. Status: Report completed, but soon afterwards the local utility, Alaska Power and Telephone, proposed waste heat recovery and a heat loop from the diesel generators 6,000 feet to the school. AEA is assisting the school district in evaluating the three heating options, and will produce a report in April which presents its analysis and recommendations. The program will evaluate export opportunities for densified wood fuels produced from wood residues in Alaska. Status: Ongoing. An update of the programs permit guidebook will be prepared to assist project developers with regulatory issues. Status: Deferred based on recommendation of program management consultant. All work is on-going with accomplishments reported in quarterly reports. Results A full reporting of the status and results of this program are detailed in the text of the quarterly report. Prepared: Peter Crimp, Development Specialist Amended: March 30, 1993 Page 21 Project Summary Report Title Small Commercial Wood-Fired Boiler Demonstration Brief description This is a demonstration of a wood-fired boiler system for institutional heating. The project includes the design, installation, performance monitoring and reporting for a small commercial wood-fired boiler project. The project is located at the Alaska Correctional Industry's agricultural complex, within the Alaska Department of Correction's minimum security facility, Palmer Correctional Facility, Sutton, Alaska. Identification Number DE-FG79-84-BP14984, A011 Grantee Alaska Energy Authority PO Box 190869 Anchorage, AK 99519-0869 Project Manager Peter Crimp, 907/561-7877 Department of Commerce and Economic Development, Alaska Energy Authority, Anchorage, AK 99519-0869 Regional Bioenergy Program Funds $25,000 Cost Sharin Match AEA cash (boilers and equipment) $20,000.00 Alaska Correctional Industries cash (parts and $17,339.89 materials) Alaska Correctional Industries (inmate labor) $4,457.84 Alaska Correctional Industries (in kind, staff labor) $44,543.54 Total Match $86,341.27 Expanded Description The project was established to demonstrate the effective use of wood as an institutional heating fuel. In summer and fall of 1990, AEA contacted numerous local governments, school districts and public facilities managers to locate a site for the project. Based on the availability of wood fuels, willingness to participate and provide matching support and overall project economics, the Alaska Correctional Industries agricultural complex in Sutton, Alaska, was chosen for the project. Page 22 AEA and Alaska Correctional Industries have jointly managed this project, using contractual expertise for boiler sizing and mechanical room layout. Two 350 Mbtu cordwood fired boilers and a 3,000 gallon accumulator tank were installed in a newly constructed boiler house in spring and summer of 1991. Annual fuel oil offsets from 8,000 to 10,000 gallons per year are anticipated. The project will include monitoring of fuel consumption and boiler performance over a twelve month period and reporting on findings. The project will also include a pro-active effort to publicize the project in the media and provide tours of the facility to parties interested in establishing similar systems in other facilities. Need Addressed In many areas of Alaska, markets for lower quality timber are nonexistent. Timber harvesting and land clearing residues have become an environmental liability, contributing to burgeoning landfills or air quality problems through open burning. Fuel oil is shipped to rural Alaska at great expense, exporting cash that might otherwise stay in the local economy. The use of locally based woody fuels for energy projects can contribute to the environmental and economic well being of rural Alaska. The wood-boiler demonstration is intended to promote the use of locally harvested wood fuels as a replacement for fossil fuels from outside the local economy. Project Objectives Specific objectives are as follows: 1) to reduce the volume of wood harvesting residue left on federal/state lands 2) to identify institutional or commercial users interested in alternatives to using fuel oil for space heating 3) to develop a transportation plan for moving fuel wood to end-user markets 4) to purchase and install wood boilers at one or more project sites Approach This project will begin with an investigation of wood residue availability, characterization of fuel quality, and an examination of transportation, environmental and economic issues that would affect the outcome of the project. This part of the project will include contacts with regulatory agencies to get input on permit requirements, performance criteria of wood-fired boilers and other information that would influence equipment selection decisions. The next phase of the project will be identification of specific sites for small-commercial wood- fired boiler applications. This will be followed by a survey of potential sites, presentation of project plans to potential users; gathering cost, weather and heat load data, evaluating equipment, and doing project cost estimates. Data will be submitted to the Regional Task Force for approval and recommendation. Upon approval, actual design work and equipment selection will be initiated and bids for materials and installation will be solicited. While ordering and design are underway, program staff will decide on monitoring and performance evaluation criteria for the systems. Page 23 Installation will be followed by assistance with start up, assistance in developing an operation and maintenance plan, and a 12 month performance monitoring period. Results Project construction is complete and the wood-fired boilers are operating as the primary heat source for the facility. Facility management and operating personnel are extremely satisfied with the system. A monitoring system has been developed and AEA purchased a surplus 2,000 pound floor scale, a moisture meter and 3 hour-meters. With these tools, operation and fuel consumption will be recorded to obtain information useful for other potential project developers. The monitoring period will extend for one (1) year into November of 1992. In the fall of 1992, the Energy Authority prepared Autocad drawings and text describing the project to be included in the agency's 1992 annual report. In January AEA prepared media materials to publicize the project. A press release was sent to Alaska news outlets, and the Governor's media office used a state satellite system and a recording phone line to transmit video pictures and audio interviews provided by the Energy Authority to interested broadcast stations. The Associated Press sent out a short story on its wire. Stories were run in at least the two major Anchorage newspapers, and video aired on the Rural Alaska Television Network reaching viewers in approximately 200 small communities. Staff also heard reports that stories had aired on some radio stations. The project was also highlighted in the Energy Authority's Annual Report. The project has generated increased interest in institutional wood heating throughout the state. It is displacing over 8,000 gallons of fuel oil annually at the correctional facility. Major Milestones Milestone Status Investigation of resource availability and delivery infrastructure Complete Site identification Complete Heat load analysis and system design Complete Materials list, bids and orders Complete Shipment Complete Boiler house plan preparation and submittal to fire Marshall Complete Earthwork and foundation Complete Boiler house construction Complete Plumbing, heat distribution and electrical Complete Boiler installation Complete Monitoring Ongoing Final report June 1993 Prepared: Peter Crimp, Development Specialist Amended: March 30, 1993 Page 24 Project Summary Report Title Seward Spring Creek Prefeasibility Analysis Brief description This project is an initial assessment of the feasibility of various options for using wood waste from the newly-reopened Seward mill to produce heat or heat and electricity for the mill, the nearby Spring Creek Correctional Center, and other buildings in the vicinity. Identification Number Not applicable. Grantee Not applicable. Project Manager Peter Crimp, 907/561-7877 Department of Commerce and Economic Development, Alaska Energy Authority, Anchorage, AK 99519-0869 Regional Bioenergy Program Funds Unspecified. Research costs for this project are paid for as part of technical assistance core program costs. Cost Sharing Not applicable. Expanded Description The Seward Forest Products sawmill in Seward has recently reopened after having closed in Fall, 1991 when its owner Chugach Alaska Corporation filed for Chapter 11 bankruptcy. The mill produces dimension lumber from timber from Native corporation land in Prince William Sound and, to a lesser extent, mixed ownerships on the Kenai Peninsula. Slabs and edgings are chipped and exported, while the 150 tons of bark, sawdust, and shavings produced each day are being stockpiled in the millyard. At the same time, the Seward landfill has been closed by the Department of Environmental Conservation because of possible leaching into a high water table, so the Kenai Borough has been trucking MSW 100 miles to Soldotna, the nearest landfill. Around 105 tons of waste paper is separated out the 5,500 ton yearly MSW stream in Seward. The sawmill is located in an industrial park near the Spring Creek Correctional Center and Seward Ship Chandlery across the bay from downtown Seward. The mill supplements the electrical service provided by the local utility with diesel generators to run their saws and chipper; however current air quality permits for the generators limit their use to the extent that the mill is limited to one shift. Moreover, due to energy costs, kiln drying costs are about twice the cost that the local mill manager feels are reasonable. At the same time, the local prison is using around Page 25 250,000 gallons of fuel each year for space and water heating, while the chandlery is planning an expansion which may require 300,000 gallons per year to heat it. This project is an initial assessment of the feasibility of various options for using wood waste from the newly-reopened Seward mill to produce heat or heat and electricity for the mill, the nearby Spring Creek Correctional Center, and other buildings in the vicinity. Need Addressed Currently the facilities in the Seward industrial park are using diesel oil as their primary energy source, despite the availability of a potentially inexpensive source of biomass fuel. The local landfill is closed, so the mill must determine a cost-effective way to dispose of the considerable amount of residue that is accumulating. The project addresses the needs for environmentally sound and efficient energy sources by evaluating the potential for producing energy from material that might otherwise require disposal. Project Objectives The objective of this project is to assess the key technical factors influencing the success ofa wood waste-fired plant and distribution system and make recommendations on if and how the project should proceed. The scope of the project is intentionally limited so that prospects for success might be determined before a substantial investment of time and money is made. Approach The approach of the prefeasibility analysis is to estimate current heating and electrical requirements and costs for the mill, prison, and chandlery; assess quantities and costs of available mill residue, waste paper and waste wood produced locally, coal, and other potential fuels; estimate capital costs that would be associated with various options for energy conversion and distribution; and perform a simple financial analysis of the costs and benefits of various alternatives, including the status quo. In addition; potential political and legislative obstacles to the project will be assessed. Results and recommendations will be presented in a report. Results Work is in progress. Major Milestones Milestone Status Work plan Completed February 19 Report and Recommendations April Prepared: Peter Crimp, Development Specialist Amended: March 30, 1993 Page 26 SEWARD CREEK PREFEASBLITY ANALYSIS [Snergy Conversion Energy Markets Boller at oot taal VG VAIVH eset IN aceon FOREST: Continued from Page C1 basically logging the en- trance to a national park.” At the same time, though, the project and the several dozen jobs it is expected to create are being welcomed by other residents of the region. The area has few non-government, year-round jobs, and unemployment, es- pecially among Natives, is high. Ahtna estimates the project is worth between $5 million and $20 million, and could also mean construction of a wood-chipping plant in the region, which could mean even more jobs. Al- though the logging will be contracted, the companies want their shareholders to have preference for some of the jobs. Spruce bark beetles kill trees by burrowing under the bark to choke off nutri- ents. State officials estimate beetles have infested 325,000 acres on the Kenai Peninsu- ja, and the bugs have set off a political debate there over what should be done. Critics argue that the Hickel administration has used the. beetle infestation as an excuse to push for more intensive logging, and they argue the forests are better left alone to regener- ate naturally. State officials argue that logging is neces- sary to restore the forests’ health, d that logging could improve wildlife habi- tat by replacing aging, spin- Native corporation _- dly white spruce with new willow and birch browse. The Chitina-area logging is proposed on land selected by. the companies in the 1971 Alaska Native Claims Set- tlement Act. The 13-million- acre national park was cre- ated in the 1980 Alaska Na- tional Interest Lands Con- servation Act. A year ago, Ahtna an- nounced plans to log about 5,000 acres just off McCarthy Road east of Chitina and drew a smattering of pro- tests. Since then, company officials say they’ve become alarmed at the rate at which beetle infestation has spread in the area, and their log- ging plans mushroomed this spring to now include be- tween 40,000 and 50,000 acres — nearly 80 square miles. The companies want to start logging this summer and expect the operation to continue for five to 10 years. The two companies earlier this year sent out a joint request for proposals from logging companies, and have since been talking seriously with several of them, Deven- port said. The companies want to. sell about 200 million board feet of timber, with about a third exported as logs, prob- ably to Asian markets from Valdez, and the rest ground into wood chips. The logging would occur in.two areas. The largest block is an arc that follows the east bank of the Copper ee River starting just north of Chitina. Much of this land is visible from the Edgerton Highway as motorists drive toward Chitina and McCar- thy. With the Wrangell Mountains towering in the background, the area is what park planners like to call premier ““viewshed.”” It’s this land that park service officials and environ- mentalists are most con- cerned about, but it’s also the most valuable because trees there are not yet wide- ly infested with beetles. “Clear-cutting is a concept that some park visitors have trouble understanding,” said Russ Lesko, a Park Service official. “Especially at the entrance to the park.” Park Service officials, as well as state land managers, have suggested that the log- gers leave some stands of trees in the area as a “visual puffer,” although state law doesn’t require the company to do so. Devenport said the companies are considering that, but aren’t so sure that’s a good idea if beetles end up infesting the remain- ing trees there anyway. Devenport questioned ifa clear-cut would be any ugli- er than infested, dead spruce trees, which would become more vulnerable to forest fires. “You're going to be able to see it from the road, no question about it,’’ he said. “Bet to me, it’s questionable about what’s prettier: a big s plan to clear-cut Spruce stand of dead timber, a fire scar or a revegetated harvest area. We've been counseled by all the experts we talk to — the regeneration is fastest when you clear-cut. We don’t want to leave a seedbed for the bugs.” Access would be by road from near the Copper River bridge at Chitina, as well as by using winter ice bridges, Devenport said. He said no permanent roads wauld be built. Under Alaska forestry laws, the company must leave a 66-foot buffer of un- cut trees along the Copper River and several other streams in the area used by migrating salmon. The com- pany also would be required to reforest all clear-cuts. The second block of forest the companies want to log lies about five miles south of Chitina, along the dirt track known as the Copper River Highway. As much as 80 percent of the trees there are already infested with bee- tles, although the wood is still in relatively good shape, he said. But getting the trees out could be more difficult. Log- ging trucks would have to navigate the narrow, rough road, including several switchbacks. Ahtna is offer- ing the land in the sale, but isn’t yet sure whether get- ting the wood out makes economit’ sense, Devenport said. proposed |: for logging et Scale In Miles RON ENGSTROM / Anchorage Daily News Anta DV. 3/ Bec 2 Timber near Chitina - targeted for logging Clear-cut planned near Wrangell-St. Elias By DAVID HULEN Daily News reporter A pair of Native corporations are moving ahead with plans to clear-cut more than 40,000 acres of spruce forest along the Copper River, most of it on land that forms the scenic gateway to Wrangell-St. Elias National Park and Preserve. Leaders of Ahtna Inc. and Chitina Native Corp. say they need to begin harvesting large tracts of forest soon north of the village of Chitina before trees there become badly infested with spruce bark beetles and the market value is lost. Forests in the southern part of the sale area, south of Chitina, already are badly infested, and the bugs appear to be spread- ing fairly rapidly to the north, according to a company official and state foresters. “We're in the position now where we’ve got to do something or we’re going to lose the timber,” said John Devenport, Ahtna’s lands and resource manager. The company plans to reforest the area, he said. “We're trying to be responsible managers. We're not trying to destroy. We’re trying to maintain the value,”’ he said. Yet the prospect of large clear-cuts greet- ing thousands of visitors who travel the road into America’s largest national park has alarmed environmentalists and some local residents, who say they're also worried about logging trucks rumbling along the area’s narrow roads. Officials with the National Park Service say they, too, are dismayed at the logging, two-thirds of which would occur on private land inside park boundaries. But they say there’s little they can do to stop it because they have no control over the property. “Of all the lands they could log, this is probably the least desirable from a park visitor’s point of view,”’ said Jack Hession of the Sierra Club’s Alaska office. ‘'They're Please see Page C-3, FOREST ANCHORAGE DAILY NEWS Log shortage shuts pulp mill The Associated Press KETCHIKAN — The Ketchi- kan pulp mill is shutting down for about 30 days starting early next month — idling about 300 employees, company officials say. n internal memo signed by Katchikan Pulp Co. General Mdnager Martin Pihl blamed a log shortage for the shutdown. “Due to the shortage, we will concentrate on providing logs to our sawmills while we attempt to build our pulp log inventory to a level where we can sustain | 0) WALL STREET: Weekly wrap-up / C-4 ee SATURDAY, March 27, 1993 SECTION C operations,’”’ the memo said. Annual maintenance will be done at the plant for the first six to eight days of the shut- down, Pihl ‘said Thursday. Half of the mill’s 400 employees will be working on maintenance with the other half temporarily are laid off, he said. After the maintenance period ends, 75 percent to 80 percent of the pulp mill’s employees will be idled, Pihl said. And even when the mill starts operations again, it will be at a reduced production rate of about 450 tons of pulp a day, he said. That means 10 to 15 percent of the mill’s employees will contin- ue to be without jobs. Pihl said the mill plans to return to its normal output of about 600 tons of pulp a day as soon as enough timber has been rounded up. For three years, the U.S. For- est Service has been 30 million to 40 million board feet short of the amount of timber it was to make available, Pihl said. The pulp mill and the sawmill require 275 million board feet per year to stay at regular ca- pacity, he said. Forest Service officials de- clined comment Thursday, say- ing they hadn't had an opportu- nity to analyze the shutdown. “We have been bringing this growing timber supply problem to the attention of the U.S. Forest Service and working with them for the last three years," Pihl said. ‘‘We regrgt that many parties are affectefi, the company, its employees, sociated businesses and the co munities in which we operate.”’ Pihl said the decision to shut down the plant was local, not corporate. r = The Honorable Donald E. Young March 11, 1993 Page -2 maintain support of the regional bioenergy program, | would like to recom following language be incorporated into the FY 1994 Congressional that the Conference Report: The Regional Biomass Energy Program should be continued at the $9,000,000 level with each regional program receiving no less than 18 percent of the total program funding and the opportunity to subcontract these funds to continue: ongoing activities designed to match local resources to local energy opportunities; technology development, demonstration and transfer, technical assistance, industry and public institution support; and resource assessment. These regional biomass energy programs should continue to emphasize activities in: biomass direct combustion, biogas recovery and utilization, biomass derived liquid fuels development and demonstration, and waste-to-energy applications. The regional bioenergy program has contributed over a million dollars in federal funds to Alaskan projects and to the state's technical assistance program during its 13 year association. Your continuing support for the regional program at the 18 % level will ensure that we can maintain our technical assistance program and continue to provide new opportunities for biomass project development in Alaska. Sincerely, Ronald A. Garzirii Executive Director cc: John Katz Hon. Frank H. Murkowski Hon. Ted Stevens State of Alaska DS Walter J. Hickel, Governor Alaska Energy Authority A Public Corporation March 12, 1993 The Honorable Donald E. Young House of Representatives 2331 Raybum House Office Bldg. Washington, DC 20515-0201 Dear Representative Young: | am writing to ask for your continuing support of the Pacific Northwest and Alaska Regional Biomass Energy Program. Alaska has been a 13-year member of the program, which also includes the states of Idaho, Montana, Oregon, and Washington. The regional program aims to promote biomass (wood, garbage, and agricultural waste) as cost- effective sources of energy in the region and, in so doing, contribute to the region's economic and environmental well-being. In Alaska, the biomass program is administered by the Energy Authority and is assisting industry and local governments in developing alternatives to costly power generation, heating fuels, and current waste disposal methods. Current activities include: e Analyzing the feasibility of a power plant in the South Tongass area fueled by waste wood from saw mill, pulp mill, and logging operations. e Assisting the City of Sitka to upgrade its garbage incinerator so that it generates electricity and improves air quality. e Assessing the potential for heating correctional facilities using residues from the new sawmill in Seward and waste heat from Channel Sanitation's modular garbage incinerators in Juneau. e Analyzing the savings in fuel costs gained by heating a new school in Tok using residues from the local sawmill instead of oil. We also provide technical and business development assistance to companies and organizations planning to initiate biomass energy projects. | would appreciate your support of funding for the regional bioenergy program at the Energy and Water Committee and the Appropriations Committee. Additionally, in order to PO. Box 190869 704 East Tudor Road ~=Anchorage, Alaska 99519-0869 (907) 561-7877 Fax: (907) 561-8584 ponorable Ted Stevens 11, 1993 yon poe? maintain support of the regional bioenergy program, | would like to recommend that the / — following language be incorporated into the FY 1994 Congressional Conference Report: The Regional Biomass Energy Program should be continued at the $9,000,000 level with each regional program receiving no less than 18 percent of the total program funding and the opportunity to subcontract these funds to continue: ongoing activities designed to match local resources to local energy opportunities; technology development, demonstration and transfer, technical assistance, industry and public institution support; and resource assessment. These regional biomass energy programs should continue to emphasize activities in: biomass direct combustion, biogas recovery and utilization, biomass derived liquid fuels development and demonstration, and waste-to-energy applications. The regional bioenergy program has contributed over a million dollars in federal funds to Alaskan projects and to the state's technical assistance program during its 13 year association. Your continuing support for the regional program at the 18 % level will ensure that we can maintain our technical assistance program and continue to provide new opportunities for biomass project development in Alaska. Sincerely, ial City = Ronald A. Garzini Executive Director ce: John Katz Hon. Frank H. Murkowski Hon. Donald E. Young State of Alaska DN Walter J. Hickel. Governor Alaska Energy Authority A Public Corporation March 12, 1993 The Honorable Ted Stevens United States Senate 522 Hart Building Washington, DC 20510-0201 Dear Senator Stevens: | am writing to ask for your continuing support of the Pacific Northwest and Alaska Regional Biomass Energy Program. Alaska has been a 13-year member of the program, which also includes the states of Idaho, Montana, Oregon, and Washington. The regional program aims to promote biomass (wood, garbage, and agricultural waste) as cost- effective sources of energy in the region and, in so doing, contribute to the region's economic and environmental well-being. In Alaska, the biomass program is administered by the Energy Authority and is assisting industry and local governments in developing altematives to costly power generation, heating fuels, and current waste disposal methods. Current activities include: e Analyzing the feasibility of a power plant in the South Tongass area fueled by waste wood from saw mill, pulp mill, and logging operations. e Assisting the City of Sitka to upgrade its garbage incinerator so that it generates electricity and improves air quality. ¢ Assessing the potential for heating correctional facilities using residues from the new sawmill in Seward and waste heat from Channel Sanitation's modular garbage incinerators in Juneau. e Analyzing the savings in fuel costs gained by heating a new school in Tok using residues from the local sawmill instead of oil. We also provide technical and business development assistance to companies and organizations planning to initiate biomass energy projects. | would appreciate your support of funding for the regional bioenergy program at the Energy and Water Committee and the Appropriations Committee. Additionally, in order to PO. Box 190869 701 East Tudor Road Anchorage, Alaska 99519-0869 (907) 561-7877 Fax: (907) 561-8584 Hon. Frank Murkowski March 10, 1993 Page - 2 maintain support of the regional bioenergy program, | would like to recommend that the following language be incorporated into the FY 1994 Congressional Conference Report: The Regional Biomass Energy Program should be continued at the $9,000,000 level with each regional program receiving no less than 18 percent of the total program funding and the opportunity to subcontract these funds to continue: ongoing activities designed to match local resources to local energy opportunities; technology development, demonstration and transfer; technical assistance, industry and public institution support; and resource assessment. These regional biomass energy programs should continue to emphasize activities in: biomass direct combustion, biogas recovery and utilization, biomass derived liquid fuels development and demonstration, and waste-to-energy applications. The regional bioenergy program has contributed over a million dollars in federal funds to Alaskan projects and to the state's technical assistance program during its 13 year association. Your continuing support for the regional program at the 18 % level will ensure that we can maintain our technical assistance program and continue to provide new opportunities for biomass project development in Alaska. Sincerely, Ronald A. Garzini Executive Director ce: John Katz Hon. Ted Stevens Hon. Donald E. Young State of Alaska ) Walter J. Hickel, Governor Alaska Energy Authority A Public Corporation March 12, 1993 The Honorable Frank H. Murkowski United States Senate 706 Hart Building Washington, DC 20510-0202 Dear Senator Murkowski: | am writing to ask for your continuing support of the Pacific Northwest and Alaska Regional Biomass Energy Program. Alaska has been a 13-year member of the program, which also includes the states of Idaho, Montana, Oregon, and Washington. The regional program aims to promote biomass (wood, garbage, and agricultural waste) as cost- effective sources of energy in the region and, in so doing, contribute to the region's economic and environmental well-being. In Alaska, the biomass program is administered by the Energy Authority and is assisting industry and local governments in developing alternatives to costly power generation, heating fuels, and current waste disposal methods. Current activities include: e Analyzing the feasibility of a power plant in the South Tongass area fueled by waste wood from saw mill, pulp mill, and logging operations. e Assisting the City of Sitka to upgrade its garbage incinerator so that it generates electricity and improves air quality. e Assessing the potential for heating correctional facilities using residues from the new sawmill in Seward and waste heat from Channel Sanitation's modular garbage incinerators in Juneau. e Analyzing the savings in fuel costs gained by heating a new school in Tok using residues from the local sawmill instead of oil. We also provide technical and business development assistance to companies and organizations planning to initiate biomass energy projects. | would appreciate your support of funding for the regional bioenergy program at the Energy and Water Committee and the Appropriations Committee. Additionally, in order to PO. Box 190869 704 East Tudor Road Anchorage, Alaska 99519-0869 (907) 561-7877 Fax: (907) 561-8584 APPENDIX B Alaska Energy Authority Letters to Senators Ted Stevens and Frank Murkowski and Representative Don Young Page 40 Major Milestones Milestone Secure matching funding Draft RFP and review, Phase | Wood/Transportation Assessment Advertise for Professional Services Proposal deadline Select Consultant, Finalize Agreement First interim report Second interim report Third interim report Draft final report Final report Prepared: Peter Crimp, Development Specialist Amended: March 30, 1993 Page 39 Status Completed Completed December, 1992 Completed January 1993 Completed February 1993 March 31,1993 April 30 May 14 May 28 June 15, 1993 June 30, 1993 competitive markets for wood waste and possible changes in the flow and production of logs and wood waste over the next 20 years. 2. Siting The study will recommend a proposed site for the facility with considerations for: fuel delivery cost and storage; site development costs; make up water; cost to access power grid; power sales and proximity to market for steam and transmission line; environmental impacts including air quality, water quality and noise; proximity to fuel supply from uplands and tidewater; land ownership and land use designations; utility participation and cooperation; and public acceptance. 3. Concept Design Electrical A concept design that maximizes power sales from the facility, while recognizing the superiority of diesel generators in load following will be prepared. Remote diesels with automated dispatch may be necessary to serve peak loads. Plant design, cost estimates and performance criteria, suitable for use in preparing of an RFP for independent power producers will be prepared. Mechanical A mechanical concept design including fuel handling, preparation and storage, boiler feed water system, boiler design, flue gas control and ash handling will be prepared. The concept design will also consider the viability of co-firing portions of the municipal waste stream. The concept design will include cost estimates and performance criteria suitable for use in preparing an RFP for independent power producers. 4. Environmental Analysis This portion of the project will address environmental issues including: stack emissions and Clean Air Act compliance; ash-fill siting and design criteria (or alternative means of ash disposal); air emissions from fuel dryer, if applicable; and water quality impacts. The study will also discuss the avoided impacts of reduced land filling, open burning, fuel oil transport and storage, and generation of power via diesel internal combustion units. If determined to be necessary for permitting and if adequate funds are available, the study will include the collection of baseline air quality data. 5. Economic and Financial Analysis The study will include an economic and financial analysis of the project which includes estimates of capital cost, operations and maintenance costs, and fuel costs for the life of the project. This analysis will address the level of State and Federal funding needed to arrive at a target kWh power rate. The target power rate will be a rate determined to be competitive with alternative costs of wholesale power. The economic analysis can be used for comparative studies with hydro and diesel power generation, as well as serve as a decision document for obtaining public and private project financing. Results AEA has recently secured matching funds for this project and is in the process of developing an RFP for professional services to implement the study. The RFP for the fuel volume and transportation assessment will be issued in January 1993. Page 38 projections indicate that additional diesel-fueled capacity will be needed to meet demand within the next few years. Metlakatla uses a mix of hydroelectric and diesel power. This project will evaluate the prospects for developing a power plant that uses these surplus wood residues to produce power for local utility use. A detailed description of the evaluation is described under the heading of approach below. Need Addressed The project addresses the need for power production alternatives to costly diesel fuel in Southeast Alaska communities, the need for improved wood waste disposal practices, and the need to use local fuel resources for local needs as an economic development strategy. Project Objectives Specific objectives are as follows: 1) to encourage the development of a facility to fully utilize wood waste being produced by wood processors in Southern Southeast Alaska at a regional generation facility. 2) to provide adequate information concerning project development to encourage independent power producers, local ,electric utilities, wood processors and public agencies to participate in developing a wood-waste fired generation facility. 3) to reduce dependency on non-renewable fuel resources imported into the Southern Southeast Region of Alaska. 4) to determine the long term wood residue supply anticipated for the Southern Southeast Alaska Region that could be available for energy production. 5) To encourage local economic development through the use of "import substitution" of fuels for power production. Approach The scope of work proposed for this project is to complete a feasibility study for a wood-waste- fired electrical generation facility located in a South Tongass community. The study will take place in two parts: (1) A wood resource and transportation cost assessment that will examine the quality and quantity of mill, sort yard and landing residue available for fuel and (2) a design concept and cost estimate for a wood-fired power plant at a location identified by the first phase of the feasibility study. The study will be tailored to seek alternate energy markets for the wood- waste on a regional basis, providing a regional wood-waste disposal facility and utility power in the location offering the highest feasibility and public benefit. The second phase of this project will be initiated only if the results of the first phase demonstrate that it is economically viable. 1. Analysis of Fuel Supply The fuel supply analysis will investigate both short and long term (20 year) wood fuel availability to the project from a multitude of sources including sort yard waste, landing slash, and off-island residue deliverable by barge. Estimates of the quantity, characteristics, and cost of prepared fuels from all sources will be included. The long term fuel supply analysis will include factors such as the level of harvest activity on the Tongass National Forest, potential for future Page 37 Project Summary Report Title South Tongass Wood-Waste Brief description This is a feasibility study to evaluate the potential for developing a power plant fired with surplus wood residues from several industrial sources in Southeast Alaska. Identification Number DE-FG79-84-BP14984, A014 Grantee Alaska Energy Authority PO Box 190869 Anchorage, AK 99519-0869 Project Manager Peter Crimp, 907/561-7877 Department of Commerce and Economic Development, Alaska Energy Authority, Anchorage, AK 99519-0869 Regional Bioenergy Program Funds $40,000 Cost Sharin Match AEA cash, contractual services $33,839 AEA personal services, electrical and mechanical engineers $2,370 AEA overhead $3,791 Total Match $40,000 Expanded Description Several sawmills and log sorting facilities in Southern Southeast Alaska are producing wood residues in excess of their ability to properly dispose of this material. The practices of open burning, land filling and the use of silo burners without adequate emissions control devices are all being discouraged by regulatory agencies. Preliminary estimates indicate that mills in Ketchikan, Metlakatla, Annette, and Kaasan are collectively producing sufficient residue to provide fuel for about 3 mW of baseload power. Electrical power for the communities of Thorne Bay, Craig and Klawock is produced by diesel fired generators. The community of Ketchikan uses primarily hydroelectric power, although load Page 36 Approach AEA will grant funds to the City-Borough of Sitka in support of capital improvements to the community's existing waste-to-energy facility. These capital improvements will include the installation of a back pressure turbine to recover electrical energy from steam currently produced for district heating. The City-Borough will also allow access to parties interested in touring the facility, and facilitate technology transfer by documenting the selection, installation, start-up and performance of the steam turbine-generator system. Results AEA entered into a grant agreement with the City-Borough of Sitka on August 10, 1992. The City-Borough is in the planning phase of the project. Since the last quarterly report, Dick Smith, Director of the City's Public Works Department and project manager for this project, has reported that plans are temporarily on hold due to City funding problems. Problems started when $175,000 in planned state funds for City of Sitka was cut from the Governor's FY93 budget. A key element of the City's budget problem as a result of this action, was the cost of the new electrostatic precipitator. Because of this budget problem, the generator will not come on line until December 1993, when sufficient city funding will be available for the project whether or not state funding is available. Major Milestones Milestone Status AEA and City-Borough of Sitka enter into Completed 8/10/92 grant agreement Project Plan Developed by Sitka October 1 - 31 Procurement and turn key contract to be determined in project plan Equipment procurement and shipping to be determined in project plan Installation to be determined in project plan Startup and shakedown to be determined in project plan Final inspection by AEA to be determined in project plan Begin performance monitoring to be determined in project plan End performance monitoring 12 months from date of monitoring start Final report open Prepared: Peter Crimp, Development Specialist Amended: March 30, 1993 Page 35 Community College and recovers steam for heating campus facilities via a district heating system. Boilers are currently rated to 150 psig and are operating at 30 psig, producing an average of 4,000 pounds of saturated steam per hour. The incinerator produces steam for 166 hours per week. Preliminary estimates indicate a 100 kW in-house demand for power. Increasing steam pressures to 150 psig and installing a back pressure turbine would result in power savings of about $23,160 annually, reducing power purchases and demand charges for 289,500 kWh annually. 30 psig exhaust steam would be available to meet the existing campus heating requirements. The City-Borough has identified several other capital improvements for the facility, including adding a larger capacity electrostatic precipitator to provide redundancy in the flue gas handling system, and other state-of-the-art pollution control systems. In addition to the energy production benefits, the turbine-generator project will reduce the costs of operating the facility, improving the ability of the City-Borough to finance the implementation of these other air quality related improvements. Specific recommendations for facility improvements are contained in the attached draft report entitled Incinerator Operating Measures Study, prepared for the City-Borough by RW Beck and Associates. Page 18 of the draft summarizes cost payback estimates for the turbine-generator portion of the project proposed for regional funding. Needs Addressed Where appropriate from an economic and environmental perspective, waste-to-energy is an attractive solid waste disposal alternative which recovers useful energy from an otherwise wasted resource. To remain competitive with other solid waste disposal alternatives, and to provide the level of environmental controls demanded by regulatory agencies and the public, waste-to-energy facilities must operate efficiently and use state-of-the-art emissions control technologies. Older plants require capital upgrades to remain competitive. This project addresses both the need for upgraded environmental controls and improved operating efficiency through better energy recovery. Recovery of electrical energy from low pressure steam using a back pressure turbine-generator is an energy production strategy with potential applications throughout the Pacific Northwest and Alaska. Small sawmills, waste-to-energy facilities, hospitals and industrial facilities that require low pressure steam, are all potential sites for this energy recovery technology. This project meets the need of demonstrating this small scale technology in a region of the country in which steam turbines have typically been on a much larger scale. As power rates in the Pacific Northwest and Alaska escalate, the number of cost effective applications for these small scale systems is likely to increase. Project Objectives Specific objectives are as follows: 1) to promote the upgrade of existing waste-to-energy facilities to improve energy efficiency and reduce environmental impacts 2) to promote the recovery of energy from MSW in those instances where it is environmentally and economically beneficial to do so 3) to promote the recovery of electrical energy from low pressure steam by using small scale back-pressure steam turbines at other facilities throughout the Pacific Northwest and Alaska Page 34 Project Summary Report Title Sitka Co-Generation Brief description This is a demonstration of a small back-pressure steam-turbine installation at the waste-to- energy facility in Sitka, Alaska. Identification Number AEA contract 2800559 Grantee Alaska Energy Authority Funds passed through to: City-Borough of Sitka PO Box 190869 304 Lake Street Anchorage, AK 99519-0869 Sitka, AK 99835 Project Managers Peter Crimp, 907/561-7877 Dick Smith, 907/747-3294 Department of Commerce and Economic City-Borough of Sitka Development, Alaska Energy Authority, Anchorage, AK 99519-0869 Regional Bioenergy Program Funds $25,000 Cost Sharing Match City-Borough of Sitka $580,000 Total Match $580,000 Note: Total match includes improvements to the facility in addition to the steam turbine- generator including emissions controls and design improvements. Expanded Description This project is aimed at promoting the environmentally sound and efficient use of MSW for energy through increased energy recovery efficiency and cost effective operation of an existing waste-to-energy facility. The project will also serve to demonstrate the use of a small-scale back pressure turbine, that has direct application at facilities generating steam from other biomass fuels such as wood waste and hospital waste. The City-Borough of Sitka owns a mass burn municipal solid waste incinerator which disposes of 25 tons of MSW and sewage sludge per day. The facility is operated by Sheldon Jackson Page 33 Prepared: Peter Crimp, Development Specialist Amended: March 30, 1993 Page 32 A thorough evaluation of mass burn, RDF with dedicated combustor and RDF for co-firing in existing power boilers as solid waste to energy alternatives A description of the public involvement in the planning and evaluation process from early stages on An evaluation of the markets for power and steam sales (and fuel sales in the case of RDF production for use at existing facilities), and an estimation of sales and revenue streams from these sources Recommended environmental mitigation strategies including front end material separation and processing, hazardous and problem waste removal, combustion optimization, flue gas control technologies and ash disposal A discussion of environmental constraints, permitting requirements and public acceptance issues A description of how Borough recycling programs would affect waste-to-energy economics and availability of fuel supply An economic analysis of waste-to-energy options including tipping fees required and anticipated power and/or steam sales A cost and benefit comparison with other solid waste disposal alternatives such as land filling Results Rick Rogers met with the FNSB RFP evaluation team in Fairbanks, May 21, 1992, to educate team members of waste-to-energy technologies and issues, and to outline what AEA expected as a condition of awarding a grant to assist with the solid waste plan. AEA entered into a grant agreement with the FNSB on August 10, 1992. FNSB has selected a consulting contractor in response to an RFP issues early summer. Dames and Moore was initially selected to complete the study. A procurement appeal has resulted in cancellation of the Dames and Moore award and the award of the project to CH2M. Since the last quarterly report, the procurement appeal has been concluded and the Borough has executed a contract with Dames and Moore. A Notice To Proceed was issued on November 23, 1992, and the Borough has obtained a detailed schedule for the project. A copy of the schedule is attached for reference. Major Milestones Milestone Status AEA and FNSB enter into grant agreement Completed 8/10/92 Professional Services Contract signed Completed November 1992 Solid waste plan under preparation January 1993 - April 1993 Public meetings on MSW management Completed February 1993 options Mid project formal consultant review date to be selected Draft report submitted April 1993 AEA and peer review of draft April to May 1993 Final report submitted June 1993 Final report July 1993 Page 31 The Borough assembly has been approached by several experienced, private firms interested in developing a waste-to-energy facility in Fairbanks. Proposals have varied from modular mass burn units, to retrofits of coal spreader stokers for dedicated dRDF combustion and fluidized bed combustion with a front end material recycling facility. Power production estimates for the waste-burning facilities have ranged as high as 7.5 mW. Conceptual siting indicates a location adjacent to the city's waste water treatment plant may be logical, as sludge solids could be processed and this facility's 1 mW load could be directly served. Ballpark figures for tipping fees of around $70/ton have been aired by potential developers. Landfilling in compliance with new federal regulations is likely to be costly, and a WTE facility may have favorable economics. Fairbanks is certainly the most promising prospect for the development of a sizable WTE facility in Alaska. The Alaska Bioenergy program's support of the Borough's efforts to evaluate WTE on equal footing with land filling is in keeping with current DoE emphasis on development and commercialization of biomass energy facilities. While it is uncertain whether WTE will be the preferred alternative, support for the study will ensure this option is given a fair consideration and could lead to the development of a multi-million dollar WTE facility with up to 7.5 mW of capacity. Need Addressed Where appropriate from an economic and environmental perspective, waste-to-energy is an attractive solid waste disposal alternative which recovers useful energy from an otherwise wasted resource. Because land filling has been the solid waste disposal alternative of choice in Alaska, WTE often is overlooked as a serious alternative. For example, the FNSB has initiated landfill siting without concluding that land filling is the most cost effective alternative. Providing support to evaluate WTE along with other solid waste disposal options, promotes the development of this resource where appropriate. Project Objectives Specific objectives are as follows: 1) to ensure WTE is evaluated as a solid waste disposal option for the FNSB 2) to promote the recovery of energy from MSW in those instances where it is environmentally and economically beneficial to do so 3) to promote least cost planning of solid waste disposal alternatives that considers the environmental and economic benefits of recovering energy from waste 4) to encourage other communities in the Pacific Northwest and Alaska to evaluate WTE as a Solid waste disposal altemative Approach AEA will grant funds to FNSB in support of the comprehensive solid waste plan. FNSB will be required to include an in depth evaluation of WTE as a solid waste disposal alternative. The analysis will include : e An evaluation of the Borough's current and projected waste stream quantities and heat content Page 30 Project Summary Report Title Fairbanks Waste-to-Energy Brief description This project is to prepare a comprehensive solid waste management plan for the Fairbanks North Star Borough, including a thorough evaluation of waste-to-energy as a solid waste disposal option. Identification Number AEA contract 2800559 Grantee Alaska Energy Authority Funds passed through to: Fairbanks North-Star Borough PO Box 190869 410 Cushman Street Anchorage, AK 99519-0869 Fairbanks, AK 99701 Project Manager Peter Crimp, 907/561-7877 Department of Commerce and Economic Development, Alaska Energy Authority, Anchorage, AK 99519-0869 Regional Bioenergy Program Funds $25,000 Cost Sharing Match Fairbanks North-Star Borough, Minimum per AEA contract $150,000 Total Match $150,000 Note: Total match likely to be higher. This is the minimum required in agreement between AEA and FNSB. Expanded Description The Fairbanks North Star Borough (FNSB), with solid waste management responsibilities for Fairbanks and outlying areas, has been struggling to find a solution to a very difficult solid waste management problem. The Borough currently operates a bale and landfill facility that will be completely full in four to five years. While efforts have been made to select a site for a new landfill, wetlands regulations, shallow water tables, discontinuous permafrost and other siting difficulties have delayed any final determination of a suitable site. Page 29 Need Addressed Currently the Channel Corporation operation is not recovering heat from the incineration of the local MSW stream. Meanwhile the Lemon Creek Correctional Facility and other facilities in the area are using oil as an energy source. This project addresses the need for a potentially inexpensive, efficient, and environmentally sound source of energy for local industry and government by recovering heat energy that would otherwise be lost. Project Objectives The objective of this project is to assess the key technical factors influencing the success of a heat recovery and distribution system and make recommendations on if and how the project should proceed. The scope of the project is intentionally limited so that prospects for success might be determined before a substantial investment of time and money is made. Approach The approach of the prefeasibility analysis is to estimate available energy from the Channel Corporation incinerators; estimate current heating requirements and costs for the prison and other facilities in the area; estimate capital costs that would be associated with heat recovery and distribution; and perform a simple financial analysis of the costs and benefits of various alternatives, including the status quo. In addition; potential political and legislative obstacles to the project will be assessed. Results and recommendations will be presented in a report. Results Work is in progress. Major Milestones Milestone Status Work plan Completed February 19 Report and Recommendations April Prepared: Peter Crimp, Development Specialist Amended: March 30, 1993 Page 28 Project Summary Report Title Juneau Lemon Creek Prefeasibility Analysis Brief description This project is an initial assessment of the feasibility of recovering heat from the MSW incinerators at Channel Corporation's Juneau landfill and constructing a district heat system to distribute the heat to the nearby Lemon Creek Correctional Center and other facilities in the vicinity. Identification Number Not applicable. Grantee Not applicable. Project Manager Peter Crimp, 907/561-7877 Department of Commerce and Economic Development, Alaska Energy Authority, Anchorage, AK 99519-0869 Regional Bioenergy Program Funds Unspecified. Research costs for this project are paid for as part of technical assistance core program costs. Cost Sharing Not applicable. Expanded Description Currently the Channel Corporation is incinerating around 20,000 tons and landfilling 2,400 tons of MSW per year at their facility, located between downtown Juneau and the airport. Although the two Consummat CS1600 incinerators are set up for heat recovery, Channel Corporation has not attempted to recover heat in the past. The Lemon Creek Correctional Facility is located around 4,000 feet from the incinerators and uses around 110,000 gallons of oil per year for space heating and hot water. Costco has purchased land between the incinerators and the prison, and is planning to build an 80,000 square foot store on the site. In addition, there are numerous other existing or planned facilities in the area (not necessarily near the prison or incinerators) including a proposed KMart, the Juneau Pioneers Home, and a public school under construction. This project is an initial assessment of the feasibility of recovering heat from the MSW incinerators at Channel Corporation's Juneau landfill and constructing a district heat system to distribute the heat to the nearby Lemon Creek Correctional Center and other facilities in the vicinity Page 27 Bled fron Dory News State in race with loggers to get Seal Bay land rights The Associated Press KODIAK — Negotiators working to re- purchase land on Afognak Island — land now owned by Native corporations — are hurrying to complete the deals before spring timber harvests remove any reason for preserving the old-growth forests there. Timber company officials say that they are readying plans to begin harvesting the timber, while negotiators for the state gov- ernment and the Native land owners charac- terize their sales talks as preliminary. That has conservationists and other local groups nervous that efforts to protect the forests around Seal Bay will be wasted. A state and federal commission overseeing $900 million in settlement money from the Exxon Valdez oil spill put the Seal Bay land high on a list of real estate worth spending the settlement funds on. Logging around Seal Bay could begin at any time, said Allan Foutch, vice president of operations for Koncor Forest Products. Company Officials plan to talk with board members of Seal Bay Joint Venture, the land owner, this week, he said. “They are going to have to give us direction on where they want to go,’’ Foutch said. ‘‘There would be nothing from stop- ping us from being there immediately.” Harvesting would change the state’s in- terest in the property, one official said. “Tf something is going to happen that would make (Seal Bay) no longer attractive for restoration purposes, that would be the (negotiating) deadline,” said Craig Tillery, an assistant attorney general who is negoti- ating for the state. Ralph Eluska, president of Akhiok-Ka- guyak Corp., said his corporation has ad- vised the state of its harvesting schedule for Seal. Bay. “They know what pressure we're under,” Eluska said. “If they wanted to do some- thing they certainly could.” The state wants to purchase about 15,000 acres of Seal Bay land from Akhiok-Kaguy- ak Inc. and Old Harbor Native Corp. Many local, state and even national orga- nizations, from the Area K Seiners Associa- tion to the Alaska Wilderness and Tourism Association, have lobbied for preserving old-growth forest around Seal Bay on the northeast corner of Afognak. “In three or four weeks Seal Bay is going to disappear,”’ said Greg Petrich, conserva- tion chairman for the Kodiak Audubon Society. Tongass waits for ax to fall By DAVID WHITNEY Daily News reporter WASHINGTON — Forest Service has pee hold its Proposed new 10- year management plan for the Tongass National Forest as environmentalists gear up a campaign to slash federal funding of logging ee there. e plan — whic - Poses harvesting an ae of 418 million board feet of timber annually — has been awaiting action since Decem- ber. Forest Service spokes- man Gary Lidholm said Monday that it will be de- layed another “six months or longer” while the agency reviews the biology and eco- nomics of Tongass logging. Dave Mathews of the Alaska Forest Association a logging-industry group, said that while he understands the Forest Service's need to study these issues, the delay will slow logging. Pla>se see Back Pai e, TONGASS 3/z4 [wh D.N, awIiw~wmAadvwsa: Fidali Ulli 1hUIlim Continued from Page A-1 “Any time timber supply gets held up, it creates a problem down the road,” Mathews said. ‘‘This puts a bottleneck on timber operations.” The forest supplies two major Southeast timber firms, Alaska Pulp Corp. and Ketchikan Pulp Corp. “We don’t know what to make of this yet,”’ said John Sisk, executive director of the Southeast Alaska Con- servation Council. ‘‘But we figure it could only be good for southeast Alaska. We'd like to see the new adminis- tration put less money into timber production and more into diversifying the econo- my into tourism, fishing and other areas.” A group of Forest Service biologists, in a report they said was not incorporated into the 10-year plan, warn- ed that the proposed logging level of 418 million board feet could jeopardize wolf, bear and deer populations in parts of the forest. The proposed logging lev- el is 30 percent higher than the average Tongass harvest for the past 10 years. Complaints that the biolo- gists’ findings had been sup- pressed angered environ- mentalists and prompted Rep. George Miller, D-Calif., chairman of the House Natu- ral Resources Committee, to ask the Clinton administra- tion to begin an immediate investigation of the forest’s management. On Tuesday, a group of 22 conservation biologists and research scientists joined that call. In a letter to Vice Presi- dent Al Gore, released by the Association of Forest Service Employees for Envi- ronmental Ethics, the group included the silencing of the Tongass biologists in a list of resource-management is- sues that should be investi- gated. “Such attempts by Forest Service administrators to pervert science-based ap- proaches to resource man- agement create an air of intimidation, discouraging the conscientious perfor- mance of duty,’’ said the scientists, most of whom are academicians. “This air of intimidation permeates much of the agency.” Lidholm said that part of the delay in the management plan is because the Forest Service has asked other sci- entists to review the biolo- gists’ report. Also, Lidholm said, Ton- gass managers are awaiting further word from the Clin- ton administration about how it intends to define and treat unprofitable logging operations on federal lands. The administration an- nounced last month that it intends to phase out money- losing logging in an effort to save $275 million over five years, a proposal that sur- vived a challenge on the Senate floor Tuesday. According to the Forest Service’s accounting, the Tongass lost about $23 mil- lion last year. But environ- mentalists said in a new report this week that they believe the loss was more like $64 million when all 1992 federal spending for timber operations is bal- anced against income from timber sales. Their accounting method differs from that of the For- est Service, which amortizes logging costs over many years and counts as income the value of trees traded to timber contractors for the cost of building logging roads. The report, prepared by forest economist Randall O'Toole of Cascade Holistic Economic Consultants in Portland, Ore., said no na- tional forest has ever lost as much money as the Tongass did last year. The report was released by the Alaska Coastal Rain- forest Campaign, a group of state and national environ- mental organizations being assembled by the Southeast Alaska Conservation Coun- cil to fight taxpayer-subsi- dized logging in the Tongass. The looming fight over money-losing logging operations has the Alaska timber industry worried. “We have to plead for some broader understanding of the benefits of timber harvesting on our communi- ties,’” Mathews said. He said that Tongass operations . have pumped more than $450 ‘million in cumulative bene- fits into southeast Alaska communities. Slougn crossing nalts Susitna Valley logging _/,. By BRIAN O'DONOGHUE Daily News reporter PALMER — Sawmill owner Greg Bell didn’t have any trouble buying trees from the state. But when he tried to get to the trees he bought, the state socked him with a $2,000 ticket, he shut down his logging operation and one worker got laid oF sell's troubles started last month when his D5 Caterpillar tractor broke through the ice crossing a foot-deep slough off the Big Susitna River near Willow, one mile south of ks Highway. ; eal who tom Valley Sawmill, had a permit from the state Fish and Game Department allowing him to cross the slough ice at a fording used the Susitna River.” ter of Willow-area musher, angry about the logging plans, complained to Fish and Game the next day about the disruption to the salmon stream. The habitat biologist who wrote Bell’s permit, Steven Albert, and an enforcement officer paid a visit to the logging operation. They confirmed the violation and Bell got icket. ow Bell is headed for court and his logging plans are on hold until he figures out a legal way to cross stream. ne eil's timber purchase was a small sale as those go in Alaska. But state forestry officials fear Bell’s trouble crossing the stream could signal larger resource battles ahead. by loggers and recreationalists since ‘i id he 1970s. But the permit also said, ‘there shall be no vehicles or equip- ment operated within the open wa- SAWN Continued from Page C-1 bear the additional cost of access, even if no risk to the fish exists,” state resource manager Dave Wallingford wrote his boss, state forester Dean Brown. ‘‘From my per- spective, a very. nar- row-minded, unprofessional, point of view.” The sawmill owner can’t see why the state is blocking his plans. ‘Our intentions were honorable; we didn’t want to break through,” said Bell, in a phone inter- view from his sawmill in Anchorage. “But there’s a history of people using that fording point. What damage did we do? Let’s get the guys in and get it done.” Albert, the biologist, said the law leaves no room for leeway. Crossing open water in the known salmon spawn- ing grounds is prohibited, no matter how many others blazed the trail. He compared Bell’s situa- tion to an unlucky driver who gets ticketed for speed- ing while traveling with a group of cars breaking the 55 mph limit. “Just because somebody breaks the law and gets away with it, that doesn't mean the next guy can do it,’ the habitat biologist said. At stake is an estimated: 640,000 board feet of cotton- wood, spread across 240 acres of slough-locked is- lands. Bell’s contract, signed three years ago, called for him to pay the state $10 per 1,000 board feet, or about $6,400 for the whole harvest. By the time his crew gets done cutting up the wood at his small sawmill, Bell esti- mates, the finished products will sell for about $150,000, keeping his crew of six on the payroll for several months. teases Albert said the whole sit- uation is regrettable. “There’s no intention of shutting down the timber sale,” Albert said. ‘‘We’ve offered a few times to talk with him (Bell) about find- ing some alternative way of getting to the site. Some t “Any other resource developmen’ associated with fords would have to Please see Page C-6, SAWMILL other way of getting him across.” Bell said those talks cen- ter on the possibility of put- ting in a bridge, something too costly to consider. “If they choose not to put in a bridge because of the economics, that’s not our business,”’ Albert said. Ted Smith, a Matanuska- Susitna assemblyman and former state lands chief, has asked the legislature to con- sider changing state law to balance the priority given fish habitat against other resource uses. “It’s questionable wheth- er he (Bell) did any real damage,” said Smith. “If he did, what is the value of those eggs compared to the $150,000 that timber could produce?” Wwe vi I Aud. Dal, News 3/ic/#3 Costco buys land for Juneau store The Associated Press JUNEAU) ~— Costco Wholesale Corp. Has agreed to buy 10 acres of land in Lemon Creek, north of Ju- neau, for a store it expects to open in the fall. _ Pending necessary build- ing permits, construction is expected to begin’-in the spring, said Costco vice pres- ident John Osterhaus. Costco officials have told Juneau Borough the store will be about 80,000 square dries, appliances, electronic equipment and&clothing. With $5.3 billig in 1991 sales, it is the second largest warehouse-style discount chain in the nation. Osterhaus said Friday fi- nal details and design infor- mation would be made pub- lic when Costco files a land use permit application with the borough in a few weeks. Osterhaus and Juneau Community Development Director Murray Walsh are feet. optimistic that construction The Kirkland, Wash.- could begin as soon as this based wholesaler sells bulk spring, despite a heavy Broceries and foods, sun- workload on city planners. Oxyfuel ey Ye This time it’s true: More study needed The oxyfuel experiment ended Monday, leaving some Alaskans smarting from its fumes and others » Smarting from its pump price. What are we to make of the conflicting claims for and against oxyfuel? Is it a menace to our health or a panacea for our winter air pollution? Or is it, perversely enough, both menace and Panacea? / If there ever was a situation where the hoary cliche “more study needed” had validity, this is it. So far, research into the effects of oxyfué] on Anchorage residents has proved inconclusive, although there’s enough evidence to be concerned. Anecdotal reports by people who've suffered inexplicable winter illnesses are particularly troubling, but doctors as well as non-professionals are worried about oxyfuel’s potential health impact. — At the same time, oxyfuel does seem to reduce the amount of carbon monoxide that automobiles spew into our air. Indeed, this is the first winter in the 20 years since Anchorage began keeping records that the community has not exceeded the federal- carbon monoxide safety level at least once. While this finding requires more study too, research suggests that when the use of oxyfuel goes up, the dangers from automobile excrement go down. And oxyfuel definitely has been used in other cities without threatening public health. During the months ahead, the Fink administration and the state will be working together to provide Anchorage with a thorough evaluation of oxyfuel. While it’s certain that their work will not satisfy everyone, it is likely that ‘‘more study”’ will tell us if we should proceed with the oxyfuel experiment - — KACHEMAK: Groups to sell land rights Continued from Page C-1 The bill also would have spent the rest of the state’s $50 million in Exxon settle- ment money on other land purchases, research and proj- - ects to help restore the re- gions damaged in the na- tion’s largest oil spill. Hickel supports saving most of that money. He de- clined to comment Thursday on whether he would again veto a bill to spend it all. ‘We'll take a look at that when we get there,’’ Hickel said. Hickel stressed that the agreement would not set a precedent for the state’s buying private land to pre- vent logging. Already set aside for the Kachemak purchase is $15 million in other settlement money connected with the oil spill. The legislature needs to allocate only $7 million, and some lawmak- ers said they were optimistic it would be approved. “The difference this year is that all of the parties have come together early,”’ said Rep. Mike Navarre, D-Ke- nai. ‘‘We have bipartisan support, we have the gover- nor’s support, and the land- owners’ support.” Rep. Gail Phillips, R-Ho- mer, and Sen. Suzanne Lit- tle, D-Soldotna, have intro- duced Senate Bill 63 and House Bill 76, which would allocate the $7 million for Kachemak. But Sen. Georgianna Lin- coln, D-Rampart, said she would not support an appro- priation that ignored the re- uests of areas in Prince illiam Sound directly af- fected by the spill. “I don’t want to see a Christmas-tree bill, with lots of money spent on areas that were not directly affected,” Lincoln said. . Lincoln has introduced SB98, which would spend all of the $50 million settle- ment. She and Rep. Cliff Davidson, D-Kodiak, who introduced companion bill HB10, plan to hold a state- wide teleconference Monday to consider specific propos- als. The park was created in 1972. The Native association carved out a coastal chunk in 1974 as a land selection under the Alaska Native Claims Settlement Act. Timber rights were sold to Timber Trading in 1986 for an undisclosed amount. CIRI, the regional Native corporation with jurisdiction over Seldovia, owns the land’s mineral rights. Under the agreement, the Native association would get $15.5 million, the timber company would get $4.5 mil- lion, and CIRI would get $2 million. John Sturgeon, president of Timber Trading, said the company's timber rights probably are worth loser to $10 million.’ Sturgeon said logging ould begin if the agree- ent is not approved. Several hundred acres near Peterson Bay within the park would remain in Native association hands, said Fred Elvsaas, associa- tion president. . “The state will probably be interested in buying some of that land in the future,” he said. One provision stipulates that the Native association would not allow logging on any Peterson Bay land until 1999. That part of the agree- ment must still be approved by the association's board, Elvsaas said. Wood chips arriving by truck to the Homer Spit are making a mountain that eventually will be shipped to Japan. Jack Jump, above, superintendent of the Circle DE Pacific operation, said about 1,000 truckloads are required to fill a ship. A conveyor belt will carry the chips across the Homer dock to cargo ships. At right, a bulldozer begins the task of spreading a new arrival of chips. BILL ROTH / Daily News photos Homer woodpile bound for Japan By TOM KIZZIA Daily News reporter HOMER — A fragrant mountain of wood chips is rising on the Homer Spit as loggers await the late-April arrival of a ship to carry the nai Peninsula’s newest export product to Japan. The poker-chip-sized spruce flakes are the re- mains of trees pulverized in a logging operation north of Ninilchik. The chips are trucked in tractor-trailer rigs to Homer, where they are being stored in a private $3 million yard built this winter with state financing. The April ship is the first of many expected by Circle DE Pacific, the logging joint venture that has been piling up wood chips since Novem- ber. Circle DE officials plan to continue grinding up Ke- nai Peninsula trees and ship- ping them through Homer for the next 15 years. The Japanese conglomer- ate Matsui has a long-term contract for the chips, which H . will be made into paper and newsprint, Circle DE vice president Terry Nininger said. Please see Page D-6, CHIPS a CHIPS: Continued from Page D-1 , “White spruce is desirable for pulp because it requires very little bleaching,” Ni- ninger said. After being felled, the trees are flailed with heavy chains to remove their bark. The finished chips are sifted with screens to create a uni- form product for shipping. Two-thirds of the first shipload is now on hand in Homer, Circle DE superin- tendent Jack Jump said. About 1,000 truckloads are required to fill a ship, and the company plans to load eight ships a year in Homer. The Homer Spit storage facility includes a four-acre concrete pad surrounded by an 18-foot retaining wall. A conveyer belt will carry the chips across the Homer dock. Though the mountain of chips has grown higher than 40 feet, they do not blow away in high winds, city of Homer officials say. The city will make more than $100,000 a year in lease payments and wharfage fees, City Manager Rick Le- land said. The storage facility was built with $2.4 million in loans provided by the Alas- ka Industrial Development and Export Authority, Ni- ninger said. He said the log- ging and shipping operation provides about 60 jobs. The operation is a joint Operation employs 60 venture between Kenai Pa- cific Lumber of Anchorage and Circle DE Lumber of Klamath Falls, Ore. Logs are being cut on 17,000 acres owned by Cook Inlet Region Inc., a regional Native corpo- ration, in the drainage of the upper Ninilchik River. Many of the trees being logged have been killed by spruce- bark beetles. Circle DE has an option n other CIRI lands in the rea, which Nininger said ould provide ‘“‘the lion’s Share” of the trees needed to sustain the 15-year opera- tion. The company also plans to bid on other private timber on the Kenai Penin- - sula, he said. Timber plan blasted Interior logging proposal too ambitious, some fear The Associated Press FAIRBANKS — Environmental- ists studying a state proposal to expand logging in the Tanana Riv- er Valley are worried such efforts could damage the forest. The state’s Division of Forestry, on the other hand, says logging in the valley could be increased by as much as 20 times without risk, as long as timber companies pursue ambitious replanting programs. Environmentalists question whether the slow-growing boreal forest can withstand a rigorous logging schedule. “I’m not sure we need to clear high-volume, old-growth spruce stands to create a tree farm,”’ said Marty Peale, who tracks timber issues for the Northern Alaska Environmental Center. About 1,000 acres now are logged in various timber sales each year, mostly by small companies or commercial firewood cutters. Companies from the Lower 48, however, are eyeing the Interior’s resources as a replacement for Pa- cific Northwest timber now in scarce supply. The Hickel administration has responded with proposals to pro- vide long-term contracts that might boost the annual cut in the Tanana River Valley by anywhere from 50 percent to 20 times the current rate. At least one researcher said ex- panding production significantly will take some work. John Alden, of the U.S. Forest ‘Service’s Insti- tute of Northern Forestry in Fair- banks, said the boreal forest could sustain itself at a 20,000-acre annu- al cut rate, assuming companies are willing to spend money on replanting. In addition, t state would have to control new wth with proper spacing, lighting and water, he said. If they did so, tree growth could triple, he said. Please see E-3, TIMBER TIMBER: Plan would increase Interior logging than forests in warmer cli- talking about jobs and an Ginny Hill Wood, a long- time Fairbanks environmen- talist, industry that is going to be mates. It takes 60 to 80 years Continued from Page E-1 But ‘such work is expen- sive, Alden said. an Outside company, bring- ing in a lot of Outside peo- ple, using up our resource,” Wood said. objects to major large-scale logging without “I question when they’re regard for other uses. for white spruce to reach saw log size — 80 to 100 feet high with a diameter of 16 to 20 inches, Alden said. It doesn‘t—hetp that the boreal forest grows slower in wiage Daily ews NO. 58 418 PAGES ANCHORAGE, ALASKA, ! NORAGE, ALASKA, SUNDAY, _ FEBRUARY 28, 1993 _ BOB HALLINEN / Anchorage Daily News APanaws Varmal cstande nite vith tha air mack cha warn aarrlinre thie wintar Maur an acthea noanene har hraathing Fhe. oxy-fuel tally: -,azts cleaner winter air, reports of illness By STEVE RINEHART | Daily News reporter 6 Nancy Yarmak says she was all All my symptoms went for oxy-fuel last fall. The spécial away about the time | got blend of gasoline was supposedto {9 urnagain Pass. They help clean up Anchorage’s dirty winter air, and she figured the all came back 12 hours government officials in charge later when | drove through knew what they were doing. the intersection of Lake Then she started coughing She ‘ coughed when she filled her tank. Otis and Tudor. | g She coughed when she walked past cars idling in parking lots. * — Edward P. Mjolsnes She finally took to wearing a this winter. mask outdoors. The special blend of gasoline “It began with a little cold last | was supposed to reduce carbon November and just kept going,” monoxide during cold weather, she said. when stale air gets trapped near Four months later, Yarmak the ground. Anchorage’s said, she has coughed so hard four-month experiment with she’s cr darib and racked up oxy-fuels ends Monday. more than $600 in doctor bills. Yarmak’s problem — in many Her physician was skeptical, variations — has been reported by but finally prescribed asthma other people in Anchorage all medicine. That helped, she said. winter, medical authorities said. “I have lived in Anchorage for Whether or not those problems 25 years and have never had a have been caused by oxy-fuels has problem like this,’’ the not been shown. 38-year-old working mother said. Setting aside possible health --~.-The.oxy-fuel program started problems and other complaints “ here Nov. 1. The federal Clean Air against it, there is some evidence ae required that Anchorage, the oxy-fuel program did what i¢ airbanks and about 40 other was supposed to: reduce carbor U.S. cities with chronically polluted air begin using oxy-fuels Please see Page A-7, OXY-FUEL TARGET 120.5 tons/day 1994. | 1995-1996 jem =Oxygenated 2 Fuels LANCE LEKANDER / Anchorage Daily News | Continued from Page A-1 | monoxide levels. But even that is open to argument. So, as local air quality champions, oxy-fuel foes, government administrators, scientists, physicians and people like Nancy Yarmak — ‘‘a regular person,” in her words — try to figure out how the program worked, there are more questions than answers. Was oxy-fuel a health hazard? Should government have known more about MTBE — methy! tertiary butyl ether — the oxy-fuel additive? Should health studies now under way by state and federal agencies have been done earlier? MTBE added 5 to 15 cents to the price of a gallon of gas, meaning the extra cost to Anchorage motorists could be more than $2 million this winter. Was it worth it? AIR QUALITY IMPROVES Carbon monoxide is a poisonous gas in car exhaust. Oxy-fuel — gasoline with an additive to make it burn cleaner — reduces the amount of carbon monoxide coming out a car’s tailpipe by 15 to 20 percent, according to most authorities. Oxy-fuel seems to have worked as advertised in Anchorage. According to the city air quality office, this is the first winter since tracking began” in 1973 that Anchorage air has not exceeded the federal carbon monoxide safety lirnit at least once. Last winter, Anchorage went over the limit three times; the winter before that, nine times. There is more evidence: Average carbon monoxide readings for the first three months of this winter were all lower than for the same months last winter, according to Steve Morris, city air quality program manager. “T am not saying that proves oxy-fuels are working, but it is consistent” with projections, he said. It could have been the weather. This winter was warm, with few real cold spells to trap pollutants. But, then, last winter was also fairly mild. Morris said he’s drawing up plans for a study that will analyze what role weather has played in winter air-pollution spells. The state Department of Environmental Conservation is also planning a study to bolster its oxy-fuel success claims. It will compare exhaust measurements collected by vehicle I/M test stations this winter with measurements taken in previous years, according to Ron King, a DEC air quality program official. Overall, state and federal environmental officials said they thought oxy-fuels worked as designed in Anchorage.‘‘We continue to be confident of the net benefit under oxy-fuels,’’ said Mike Bussell, chief of the EPA's regional air quality section in Seattle. Then why are so many people unhappy? Cheryl Richardson of the Clean Air Coalition says the city is playinc ahaa be 2S te authorities sought to have the program suspended in Anchorage, mainly because Anchorage weather isn’t as cold as Fairbanks’. —— WHEN IN DOUBT... Gordian, the city’s public health physician, said she reviewed Middaugh’s Anchorage study in December and was not convinced the complaints were tied to the new gasoline. Some of those surveyed, such as taxi drivers, had reason to complain about oxy-fuels simply because the new gas cost more, she said. And asking people if they suffered more symptoms this year than last year was asking too much. “As a physician, I can’t even remember what illnesses I had last year,”” Gordian said. : She decided that the health benefits from predicted drops in carbon monoxide od benzene emissions outweighed »tential risks from the new gas, Gordian aid. There are reliable studies linking carbon monoxide to heart and breathing problems, she said, and benzene is a carcinogen. People should be glad to breathe less of both. Middaugh said carbon monoxide at the levels recorded on Anchorage streets doesn’t amount to much of a health risk . and that no one is known to have gotten sick from it. On that second point, other authorities agreed. His study was never intended to be the end-all scientific investigation, Middaugh said. That would have taken months and all the while people could have been getting sick. It was a judgment call: ‘‘We concluded there was a strong likelihood it was making people ill,” he said. People making decisions about oxy-fuels should keep this in mind, Middaugh said: “A lot of people are saying they are sick, and it is not just the lunatic fringe. Their doctors are telling us that their patients are sick from oxy-fuel.” The CDC reported preliminary conclusions from its follow-up study in Fairbanks this week. Health complaints appear to have fallen off since the oxy-fuels program stopped. Human.-health effects of breathing MTBE should be the focus of more study, said Dr. Ruth Etzel, head of the CDC’s air pollution section in Atlanta. ‘We have been searching the literature since the first day. We have found a few toxicological studies of animals. We have not really found any health studies on humans,” she said. : EPA saw no reason to conduct scientific health tests of the oxy-fuel blend used in Anchorage, said Bob Jacobson, EPA Ms regional spokesman in Seattle. Denver and other cities had used the blend for several the Anchorage Assembly budget office years without any rash of health complaints, he said. “There was no indication the stuff was harmful,” he said. ‘‘There was ample evidence of a benefit.” THE WINTERS TO COME State and city officials said they hope to know more about oxy-fuel health effects before the season starts again next Nov. 1. “We should have known more before we went in. We were playing with chemicals,” said Cheryl Richardson of the Clean Air Coalition, an Anchorage environmental group. She, too, suspects MTBE causes health problems. But oxy-fuels or no, she added, “People need to know that car exhaust is awful stuff.” And car exhaust is the problem, Richardson said. If the city had addressed it years ago — with better public transit, sidewalks, car-pooling for big companies and land-use rules that make cars less necessary — it would not have today’s carbon monoxide pollution and a federal order to use oxy-fuels. All of those strategies were options under the Clean Air Act. The city government discussed them, but most have been rejected as too expensive or politically unacceptable. Doing nothing was not an option under the law, although that would probably also have solved the problem, air quality officials said. That’s because newer cars pollute less. The annual violation count in Anchorage has dropped steadily since 1983, when the city went over the carbon monoxide limit 49 times. With scheduled improvements in car engines, Anchorage air would meet federal standards by 1996 even without oxy-fuels, said Busse!! of the EPA. The city has not tracked the added cost of gasoline this winter. But, information from the state Department of Revenue and suggests around 24 million gallons of gasoline are sold in Anchorage in the four winter months. Oxy-fuels added 15 cents per gallon at the beginning of the program, though pump prices have dropped since then. If the average increase was 10 cents a gallon, consumers paid $2.4 million for the program. Whatever it cost, that money might have gone for added bus routes or some lasting improvement in the transportation system, Richardson said. ‘‘We can still make those decisions,”’ she said. ‘‘It is not too late.” If the city goes one more year without breaking the federal carbon monoxide standard, it can apply to get out of the oxy-fuels pr¢gram, said Bussell of the \¢ EPA. But it would have to offer some other plan to keep the air clean. FRIDAY, March 5, 1993 ANCHORAGE waist 2 .— —_— Location of Kachemak Bay State Park t SECTION C Groups agree to buyback deal Native companies, loggers offer to sell Kachemak Bay rights By IAN MADER The Associated Press JUNEAU — Native groups and a logging company have agreed to sell their rights to nearly 24,000 acres in Kachemak Bay State Park to the state for $22 million. The agreement announced Thursday hinges on the legislature appropriating $7 million in Exxon Valdez oil-spill settlement money before its session ends in May. The rest of the money would come from other settlement cash, much of which is under the control of state-federal trustees. The state has been negotiating for the land near Homer since the 1970s to protect the park’s scenic vistas from logging. “I’m really celebrating with my friends today,” said Anne Wielahd, an Anchorage spokeswoman for the Kachemak Bay Citi- zens Coalition. ; The park, visible from the Homer Spit, is popular among southcentral Alaska resi- dents and tourists for hiking, kayaking and hunting. It also provides a scenic backdrop for boating and fishing in the bay. At a Capitol news conference, Gov. Wally Hickel joined representatives of Seldovia Native Association; Cook Inlet Region Inc. and Timber Trading Co. to praise the agree- ment. “We sort of made Kachemak Bay State Park whole again,”’ Hickel said. Attorney General Charlie Cole, who nego- tiated the agreement for the state, said the owners agreed to the state’s 1990 appraisal of the land, timber and mineral rights, settling for significantly less than their current value. Hickel last year vetoed a bill that would have appropriated money for the purchase. Please see Page C-3, KACHEMAK dian't do enough to educate the public before the program began, said Dr. Mary Ellen Gordian, Anchorage municipal public health doctor. She said she is convinced oxy-fuels made Anchorage’s air safer, but she is at a loss to explain the health complaints. Or, maybe it is because the people making the decisions did not do their own homework, suggested Edward P. Mjolsnes, a licensed professional engineer in Anchorage. Mjolsnes said he dismissed the early oxy-fuel complaints. Then, in mid-November he caught what he thought was a cold — a cough, puffy eyes, shortness of breath — and couldn’t shake it. In mid-December he drove to Homer. “All my symptoms went away about the time I got to Turnagain Pass. They all came back 12 hours later when I drove through the intersection of Lake Otis and Tudor,” he said. - When he got home, he called the Society of Automotive Engineers and ordered a series of technical papers on oxy-fuels, including some that the state was using to support its position: He noticed that the gasoline used in some of the tests was not the same as the cold-weather grade used in Alaska, leading him to wonder how anybody could be sure the fuel would work here. That’s a good point, state and federal officials said in interviews this week. The EPA plans to study Alaska gas, Bussell said. Oxy-fuel opposition was widespread | enough that a small band of dissidents — calling themselves Oxy-Busters — was able to collect signatures on a boxful of petitions calling on Hickel to end the program. They got nearly 18,000 signatures in three weeks, said Michael O’Callaghan, a community activist and one of the group’s leaders. “I have done a lot of petition drives and this one was the easiest,”’ he said. ‘‘People would see the petition and yell, ‘Gimme that!’ ”’ he said. A STUDY QUASHED Of all the doubters, the one who got perhaps the most attention was Dr. John Middaugh, the state epidemiologist, or chief health inspector. Last December, in response to oxy-fuel complaints, Middaugh’s team of public health physicians surveyed people in Anchorage to see if the new gas was making anybody sick. He found enough to make him think the program should be shut down. In a Dec. 23 report to state health officials, Middaugh cautioned that the study was limited, that it was not definitive. He called it preliminary. He called for more study. Just the same, he said a signifi proportion of people were reporti oc consistent complaints: headaches, nausea, ‘ consideration. ... burning sensations in the nose and mouth, dizziness, eye irritation. Although no serious illness was known to have occurred, he said, there could be thousands of similar ailments in Anchorage. “We believe that the balance between expected health benefits from continuation of the current oxy-fuel program compared to the very real possibility that illness is being caused by the program needs careful We recommend that the oxy-fuel program in Anchorage be suspended,” he said in a report to Health Commissioner Ted Mala, to the Anchorage city administration and to other authorities. In short, he said the benefits were not worth the risk. Mala quashed the report. He told Middaugh not to release it publicly and to refer all inquiries to the commissioner's office. The report, and a companion study by | the federal Centers for Disease Control, - | were not released until Feb. 11, almost two months later and only a few weeks before the end of the oxy-fuel season. Mala said he kept the study quiet because it was preliminary — a field survey, not a full scientific investigation — and because it ran counter to conventional wisdom. “EPA had made it clear that other cities (using oxy-fuel) had reported no problems. That was why I had reservations releasipg a study that was not consistent with national studies,” he said. . A similar study in Fairbanks earlier i December, by Middaugh’s office and the Centeys for Disease Control, had found much the same results. Gov. Wally Hickel, with the EP“ concurrence, suspended the oxy-fuels pr m in Fairbanks. But neith« te nor municipal @ We have been searching the literature since the first day. We have found a few toxicological studies of animals. We have not really found any health studies on humans. 9 i3 r — Dr. Ruth Etzel BUSINESS ANCHORAGE DAILY NEWS SECTION D Ill-fated Seward mill to reopen » By HAL BERNTON Deliy News business reporter After being closed for more than a year, the Seward sawmill is scheduled to reopen on Friday with a payroll of about 40 peo- ple. “We'll be sending some lum- ber to the Alaska market and a big amount overseas,” said Jim Morgan, the mill’s new manag- er. Morgan is a co-owner of Young & Morgan, an Oregon- based timber company operating the mill in a joint venture with Citigreen, a Chinese forestry company, and Chugach Alaska Corp., a regional Native corpo- ration. The mill initially opened in the summer of 1990 as the cen- terpiece of an ill-fated push into the timber industry by Chugach Alaska. The mill’s construction was plagued by cost overruns and management problems, and its operations proved unprofit- able. By the time the mill shut down in the fall of 1991, Chu- gach was mired in a Chapter 11 bankruptcy filing due in part to the mill’s losses. Since then, Chugach has emerged from federal Bankrupt- cy Court and, after months of negotiations, reached agreement with the two joint-venture part- ners to reopen the mill. Key to reopening the mill was a settlement that paid $5.25 mil- lion to Traveler’s Insurance, a major creditor that helped fi- nance the mill’s construction and had repeatedly threatened to repossess it. The settlement money was part of a more than $9 million investment put up by Citigreen and Young & Morgan. The new joint venture will be known as Seward Forest Prod- ucts and will tap the large tim- ber holdings that Chugach Alas- ka received under the terms of the federal Alaska Native Claims Settlement Act in 1971. “There are endless possibili- ties up here,’”’ Morgan said. ‘‘The volume of private timber in Alaska is a definite attraction.” Morgan stressed that Chugach will have no managerial author- ity in the new mill or logging scheduled to start again at Fish ‘ Bay in Prince William Sound and Windy Bay on the Kenai Please see Page D-6, SAWMILL SAWMILL: Sewar Continued from Page D-1 Peninsula. The logging will be done by contract, Morgan said. president. But the mill will benefit from much lower debt than in its previous incarnation as a Chugach subsidiary. This time around, #~tne~ Chugach was saddled with a venture should falter, Chu- gach will not be at risk for paying off creditors, said Wlike Brown, Chugach’s @ large debt service to help pay the mill’s more than $20 million construction cost. Now, that debt is gone, re- d mill aims for 2 shifts, 100 jobs placed by the joint venture’s much more modest $9 mil- lion stake. Morgan said a key to the mill’s success will be his own hands-on experience gained from three Oregon mills that employ 400 peo- ple. Timber markets also have strengthened over the past year. The mill plans to operate two shifts and double em- ployment tg 100 people, pos- sibly by summer. The mill should sustain at least 50 logging jobs, Morgan said. “All of our operations, we're used to running hard,” Morgan said. It's time to s Garbage is on the table again in the Mat-Su Borough. The borough's Solid Waste Task Force is asking for public comment on four options to pay the borough's increasing solid waste costs. A primary goal has been to reduce the tax burden to proper- ty owners by developing a user fee system. Other task force goals were to encourage recy- cling and waste reduction, discourage illegal dumping, design an efficient waste management scheme, and encourage Anchorage folks to dump their trash in Anchorage. OF THE GROUP'S four options, only Option 2 rewards waste reduction and recycling and meets the other goals as well. Reduction and re- cycling are essential ingredients of solid waste management for the 21st century. MSB citizens know this — hundreds of people signed a peti- tion last spring asking the borough to promote recycling in our communities. The borough gov- ernment should know it, too; its 1991 Solid Waste Management Plan Update recommends source reduction, recycling and composting. All four options would ue a $2.5 million operating budget. They all place gatekeepers at the central landfill on Moffit Drive and at the four major transfer stations (Sutton, Butte, Big Lake, and Willow) to monitor waste disposal. But only Option 2 ae people to drop off recyclable materials in bins before goin: through the gate, cutting their garbage loa and thus. reducing the fee they pay to the gate- ‘keeper. . HATS OFF to those task force members who suggested this plan — it's so simple and it makes such good sense! Everyone benefits: recyclers save money, the borough's landfill lasts longer, and resources (like paper and aluminum) are conserved for fu-/ ture generations. The groundwater contamination problem at the Big Lake landfill is a clear indication that our old approaches to dealing with garbage were not only unwise but also costly. Issues of hazardous waste and public health demand greater public awareness. Besides being the only option that includes re- cycling, Option 2 proposes a public advisory committee, and earmarks two to three percent of solid waste fees for public education and en- forcement. THE SHORTCOMING of Option 2 is its ap- proach for areas of the borough beyond Willow and Sutton. The proposal does not include recy- cling for remote communities, yet it would have -residents there pay an annual household fee to cover hauling costs. o peak up for recycling ES ee aes a Ellen Wolf This doesn't make sense; if they're hauling con- tainers of garbage down the road, why not con- tainers of recyclables? The borough's own 1991 study recommended placing recycling bins at these locations. People in remote communities deserve the same service as other borough resi- dents — all the more so if they're asked to pay more. With the addition of recycling for remote com- munities, Option 2 is an excellent proposal. Right now is the time to let the Task Force know that you think the Mat-Su Valley deserves a safe and up-to-date solid waste disposal plan which in- cludes waste reduction and recycling. Attend your local public hearing and speak up for borough efforts to reduce, reuse, and recycle. SCHEDULE OF PUBLIC HEARINGS. (All meetings at 7 p.m.) AREA DATE PLACE Talkeetna Feb. 25 SuValleyHigh School Willow March1 = Willow Community Center Big Lake/ Houston March4 Big Lake Elementary Wasilla March10 WasillaCity Hall Sutton March11 Sutton Elementary Palmer March17 Borough building Ellen Wolf is a local coordinator for the Valley office of the Alaska Center for the Environment. C2 Anchorage Daily News As lum By STEVE KERCH Chicago Tribune LAS VEGAS — The skyrocket- ing cost of timber — all the buzz at the National Association of Home Builders’ annual convention, after four months that saw prices climb as much as 85 percent has pushed the group to ask President Clinton to convene a summit on forestry issues. The builders’ board of directors Monday adopted a policy state- ment calling on the president and Congress to ‘‘develop a comprehen- sive strategy that acknowledges the nation’s need for timber and other natural resources, affordable housing and jobs, as well as the nation’s desire to protect the envi- ronment and wildlife.” “The cost of lumber is on just Thursday, February 25, 1993 ber prices soar, builders seek about all our builders’ minds. It could be a drag on housing starts and on housing affordability,” said J. Roger Glunt, a small-volume Pittsburgh-area home builder who Monday took over as president of the organization, of which 159,000 firms are members. Lumber, a basic component in residential construction for centu- ries, has become so expensive in so short a time because of a combina- tion of factors, including a reduc- tion in tree cutting on government lands, a sharp increase in demand caused by rebuilding from Hurri- cane Andrew and what builders say is price gouging by some sup- pliers taking advantage of the situ- ation. Home builders say the price increases translate into an addi- ‘Iaquit} JO salve alow = tional cost of $4,500 for a typical 2,000-square-foot home and if noth- ing is done to bring the price down, that figure will continue to rise. Consumers in most markets probably haven’t felt the pinch. That’s bécause builders with signed contracts for new homes must deliver those to the buyer at the contracted price, even if it means absorbing a huge lumber bill. And builders in competitive markets such as Chicago are reluc- tant to raise prices much when that could lead to sales moving down the road. But eventually housing will get more expensive if the lumber sup- ply can’t be increased, the builders said. ‘‘We have to be quite concerned S2°58S2S9S cero 508 BEES? SOR o@eH5 O +5 Kad Bio 5 dB PVASZERFRS ip pan” peo geeee 8S 88 883 o an Beaseasg oh Fo eB mSBRrs eo Xs. aoe 8 U8 838° 9R ay tmnX®oedo een. 2 om ETS RE ZORLOD S8gran + 50 of DEE TPe sD Ones Sag Baopud ou ° nBGop aR eased C2" OR oF a 3 oq eeu Pe aye 2% Bob Sas BERS fc Sonn sa oer? “26 Beet Rag Fy Seay Sob yh me Se pRE” ES Arob oa Saes SF fas cetpas » Ory oO Po re wad a mom asond ahadu mon = me » PT oe@Frope 8° Dp Rie SBSB258G8R83 a88ae5 yt ‘uMop 08 saojid aas ABU SHIaM jo afdnoo yxeu ay} Yysnoyiy,, about our ability to deliver afford- able housing when the price of lumber is rising as it is,’’ said Ira Norris, a Southern California home builder. “In a $60,000 house, which is the lowest price we build, we're talking about $2,500 more for lum- ber today. That’s (more than) 4 percent, and that’s an important factor for buyers in that price range,” he said. Michael Carliner, an economist for the builders’ group, said prices for framing lumber, the biggest timber component of new homes, have risen to about $460 per 1,000 board feet from about $250 per 1,000 board feet in October. About 15,000 board feet of lumber is used in building a typical 2,000-square- ‘asnoy joo} yiwiwins Ketchikan Daily News Source: ANCHORAGE (AP) — Logging loses from the Tongass National Forest could top $23 million in 1992, renewing con- operation may be scruti- wees the next four ye over a Estimated losses for 1992 would wipe out Tongass profits from the three pre- vious years, some officials say. Details of the White House phase-out coy ake i say money for three years in a row may be jnized Mike Barton, a Forest Service re- gional director for Alaska, said the Tongass wasa '‘moneymaker"’ that may be spared. Barton said the forest would show a $25 million profit over the past four Forest Servic accounting years if federally mandated payments to state or local governments were sub- tracted. Governments get 25 percent of poss revenue from logging on national ; “‘Ithink the Tongassis amoncymaker Sr the American public,’ Barton said. i Sen. Ted Stevens, R-Alaska, vowed to E any cuts that might threaten Ryutbesst’s 3,250 timber-elated jobs ad $150 million annual othe Sen- Stevens, senior mem! oO! ate hen Committee, said he where logging lost money years when the Tongass showed a profit. The Tongass operation, the nation’s second largest, produced an annual av- erage of 426 million board feet in the three years ending 1991. But its net return per thousand board feet in those years was less than $20, worst of the 21 largest timber opera- tions. Barton said Tongass trees were ald and half the wood was so rotten it was good only for pulp, which has seen a Of the nation’s 118 national forests? => is under way, almost half = between 1989 and 1991 — © price collapse on world markets. Logging may be vulnerable because some Clinton administration policy ' makers have been critical of Tongass operations. | At issue is how the Tongass rogram is evaluated. In the 1990 Tongass Timber Reform Act, Congress required the Forest Ser- vice to begin a new accounting process to show all timber-related benefits and costs. The process yielded two cost-benefit reports for fiscal year 1991, the latest year for which data is available. One report, which contrasts revenue with costs, shows a net gain of $3.9 million for the Tongass. The second, which analyzes the long-term benefits, effects and costs expected from logging activities, shows a net loss to the trea- sury of $9.4 million. Itis this second report, placing a price tag on such intangibles as recreational es, wildlife and fisheries, that is cited by critics of Tongass management. “The economics of the Tongass tim- ber program have declined or not im- proved since the reform act passed,’ said Chris Finch of the Southeast Alaska on Council. , “Ttis , the environment and other ‘Alas Sidustries like tourism and fishing that pay these costs.’ But Stevens said the new accounting system forced the St Service to re- port expenses unrelated to preparin; timber sales. 8 These include $9.9 million it on areas in the Tongass that have been designated as wilderness; $14 million in overpayments from previous years on the long-term contracts with the Ketchi- kan and Sitka pulp mills; $3.2 million in Payments to the state; and an unspeci- fied amount of compliance expenditures to fulfill provisions of the reform act. “All 7 — =. deducted from rev- enues and it es the Tongass appear to be one that is a baloveoot operation,” Stevens said. ‘These had noth- ing to do with operations on the Tongass." timber Ju veer Report 2 VB Agreement on air quality Diverse interests negotiate compromise on new regulatory program A working group of diverse Alas- kan interest groups, asked by the Department of Environmental Con- servation (DEC) to help draft a new state clean air law, has picked its way through a minefield of conten- tious issues and reached general agreement. Participants included members of major resource industries, en- vironmental groups, utilities, and municipalities. “For the most part, things turned out fairly well,” said Eric Myers, a former legislative assistant asked to represent public interests. “We de- veloped a constructive approach in working through dif- ficult issues.” The group was charged with drafting a proposed new state statute to change the state’s air permitting program, mandated by 1990 amendments to the federal Clean Air Act. The legisla- ture must act on the bill this spring, or Alaska faces stiff penalties under federal law, includ- ing a cutoff of federal funds. DEC’s objective was to get all Alaskan groups affected by the new regulatory pro- gram involved in help- ing draft a bill that would meet the mini- mum requirements of the new federal Clean Air Act amendments. “It would be hard for this bill to get any cleaner,” said Harry Noah, an envi- ronmental consultant representing mining companies on the council. “It's as close to the federal mini- mums as possible.” Steve Taylor, BP Exploration’s environmental manager, who repre- sented the petroleum industry, was first afraid the effort would crater. “After the first two meetings, I thought we were doomed,” Taylor said. “But when we got around to going through sections of the bill, we all came together.” Members of the group lauded Tom (Continued on Page 4) es Clean air program will cost Alaskans, but less than it could Continued from Page | Chapple. DEC official in charge of the project. for thorough prepara- tion, comprehensive briefings on a complex subject and impartial me- diation of conflicting views. DEC Commissioner John Sandor will ask the committee to stay to- gether to help state legislators work on the bill, and to review regulations before they are submitted to the federal EPA. “There's a lot of knowledge in this committee that can be used as legis- lators consider the bill, and when the regulations are drafted.” said DEC's Chapple. “Last year a similar bill failed mainly because the regulated community didn’t know what it was about. and lobbied to stop it,” he said. “Now the people who are affected are participating in crafting the leg- islation. Everyone didn't get what they wanted. but they worked hard to find common ground.” DEC convened the group in Octo- ber. Included were oil, mining and fish processing industnes. munici- palities, large urban and small rural utilities. the military, environmental groups and one committee member — Eric Myers — designated to rep- resent the general public interest. Several lengthy work sessions were held before a final draft bill was agreed on Dec. 28. Industry groups gave some ground, in giving DEC flexibility to regulate beyond Clear Air Act federal-mini- mums. and in allowing local gov- ernments to regulate beyond the state’s requirements. Environmental groups and others gave some ground on an appeals pro- cess proposed to limit third-party challenges. Where all sides “won” was in hav- ing a bill that meets EPA minimums so that the state can manage the per- mitting program and tailor it to local conditions. There were other “win-wins™ for all sides. These included sections cover- ing criminal penalties, which are re- quired under the federal law. The committee drafted language imposing misdemeanor and felony penalties in such a way that they become strong incentives for training. rather than merely punitive measures. Another major accomplishment was an innovative permit fee struc- ture taxing major industry on the basis of volume of emissions as well as imposing a broad-based fee creat- ing incentives for DEC to run the program efficiently. Also. there was a generic “general permit™ section that allows small operators to tie into a single statewide permit. rather than having to bear the expense of apply- ing individually Probably the most sensitive issue the group worked through was the fee structure. 1990 federal Clean Air Act amendments require states to set up fees that pay for the programs. EPA recommended a tee based on tons of emissions, $26 per ton annu- ally. This yan approach thatin Alaska would have meant singling out a few major industries, particularly petro- leum and large electric utilities. ' operator would prudently get both permits before construction begins) tees 190 uncdeto wo te ea Can At At Sry oe pollution regulatory programs. Ameng other: chemicals regulated are increased from about 10 to Te eel of emissions requiring an air quality permit are also lowered. ° In Alaska, hundreds of businesses and institutions, including smail businesses like dry cleaners, auto body shops, remote lodges, utilities — and schools operating diesel generators, will need air quality permits: Now only a few large industries; plants and utilitiew need permits...” Federal law. now requires: = + States to impose fees that will eompletely nance the Program. * criminal penalties for violations * an assistance program for small businesses facing difficulty in 4 complying with the law. 4 The new federal law is structured to encourage states to assume* management, so they can tailor programs to local needs, with EPA. approval. Alaska must meet a November 1993 deadline for submitting its program and regulations. Changes in state statutes are required before regulations can be written. A bill making those changes, drafted by a Department of Environmental Conservation (DEC) working 4 group of affected interest groups, is now before the legislature. What happens if the legiletureddems't act im 199377; - If Alaska misses the Novembet deadline, thé Eaiviroamental Pré- | tection Agency (EPA) could apply penalty provisions under the federal Clean Air Act that could inclode cutotYs ia iamportant federal funding, EPA’s ae yponoen to eae commer ‘They “will pressure EPA to~} impose sanctions on states missing the deadline. For all practical purposes, Alaska doesn’t have a choice in assuming the program. Ifthe state doesn’t doit, then EPA manages it Alaska aif quality permits will be written by EPA agency staff in Seattle, and Alaska will not be able to take advantage of the flexibility EPA gives states to develop programs that fit local conditions. Key points in the new bill + Fee structure: A two-tiered fee will levy a permit processing charge on all applicants, based on hours actually spent by DEC staff in processing. An annual fee, based on tons of emissions, will then be assessed. This accomplishes rwo goes: I spreads past of ts cows of the program widely, as well as requiring facilities generating large +} emissions to carry major costs. * General permit: This allows small operators — small diesel generators, dry cleaners, auto body shops — to tie into a generic statewide permit, rather than having to apply for individual permits. * Small business assistance program. This will give help to small firms having difficulty meeting requirements of the new program. + Criminal penalties: Misdemeanor and felony penalties are levied for violations, but requirements for written notification take much of the burden off line employees and place it on management. This jf feature, a requirement of the federal law. becomes in effect a strong incentive for training programs. + DEC flexibility to regulate beyond federal minimums: DEC is allowed more stringent regulations, based on scientific studies and the commissioner's findings. + Municipal authority to regulate beyond state minimums: Local governments have authority to adopt more stringent requirements, but only after DEC has set the technical parameters. + Appeals process: Only parties with an actual interest affected by a permit, or who were involved in initial comments and review, can initiate administrative and judicial appeals. This is aimed at preventing frivolous appeals aimed at blocking development projects. + Construction, operating permits: This provides for an initial permit to cover construction, to be followed by a separate permit for opera- tions. Mainly of help for smaller projects (on a large project, an this allows work to get under way before the more lengthy process of the operating permit is resolved. + Time limits: The bill specifies maximum time limits for DEC consideration of construction and operating permits. If the agency fails to act, the permit is automatically issued. FOCUS ON POLICY That approach was not good tor Alaska. the working group decided. Not only was it too akin to the state's general revenue situation —toomuch dependence on the petroleum indus- try — but with only a handful of major industries paying, DEC wouldn't have any check on its ad- ministrative costs. The committee developed a novel, two-tiered system. Applicants would pay a permit fee based on the actual number of hours it took DEC staff to. inspect and process applications Once the permit is issued. an annual fee is paid. based on tons of emissions That allayed fears of major indus- tries, not only oil but also mining and wood products companies. who were concerned DEC would load up staff overhead. since the program is paid by a few corporate “deep pockets.” “It seemed like a reasonable ap- proach, because it provides for ac- countability by DEC of how much they're spending on a permit.” said Harry Noah, representing mining companies in the group. Uncertainties over how fees were to be paid created an impasse that helped kill the legislation last year. Industry, mainly mining and timber companies. said they would oppose the bill in the legislature unless they better understood how DEC would structure its fees. and how much it would cost. It was a Catch 22 situa- tion: DEC couldn 'testimate its costs, it said, until it had a bill and could write regulations. The two-tiered fee structure. an experiment which no other state has tried, will be in effect for two years and then reviewed. Noah said. Another sensitive area the working group successfully addressed was the criminal penalties for violations that are required to be in a state program by the 1990 amendments. “This was a difficult issue that we worked through. and it came out fairly well.” said Eric Myers. The area of disagreement was how to fairly allocate liability between the line worker who fails to operate pollution-control equipment and management who fails to train staff and inform workers. The compromise involved written notice by manaze- ment to field staff of environmental requirements. and the penalties. be- fore felony or misdemeanor charges could apply “The notice requirement places responsibility on corporate manaye- ment. not the guy in the field.” said John McDonagh. a BP attorney who followed the proceedings. “It also ensures that line employee are’ informed as to what ty legally not acceptable. It will go a le way toward insuring there are good train- ing programs.” The concemof most working group members, said BP's Taylor. that on controversial development issues. municipalities Would use lo eal authority to set sMundards on ir quality permits as a say of stopping projects.” Mining development in Ju eau Was cited as a current example (Continued neat page Group says 16,000 signed petitions An Anchorage group opposing the use of oxygenated fuels in automotive gasoline claims to have gathered at least 16,000 signatures of residents who want use of the fuel stopped in the city, organizers said. Oxy-Busters member Mike O’Callaghan said the group would turn the petitions in to the Anchorage governor’s office at 2 p.m. today. The group opposes the fuel because of health concerns and cost to consumers. City, state and federal officials met in Juneau on Monday and agreed to allow the oxygenated fuel to be sold until its scheduled March 1 end. They suggested that more tests on the health effects of the fuel additive methyl tertiary butyl ether be made in cold climates before the program resumes in the fall. Similar concerns ended use of the fuel in Fairbanks in December. Daily News staff report MiaeeH /, CE2 Does oxy-fuel make us sick? The recent outbreak of some unknown “virus” or ‘‘flu’’ that has attacked the school-aged children in Anchorage should be reviewed and studied in depth to determine if there is any correlation between the disease and our required use of the oxygen- ated fuel additives. It would seem to be intuitively obvious to even the most causal observer that there is some connection associated with this un- wanted additive and the illness increases. The first winter that we used this Gestapo- maintained additive, so many kids are sick with respiratory problems that it is epidem- ic in proportion. Maybe it is time for the state or the citizens of Anchorage to file a class action suit against the EPA for subjecting us to this untested gas additive program. — Bob Klein Oxy Busters No oxy Fuel Petitions 344-5469 Oxy-Fuel Generates Formaldehyde (aldehydes), Cardinogenic (cancer) Everyone in Anchorage will die from this fuel. In my opinion. Robert Gigler State Senate ‘94 ee Mey eet tye bates Spruce beetles chomping their way south on Peninsula - The Associated Press KENAI — The spruce bark beetles that have devastated thousands of acres around Cooper Landing are marching south to other Kenai Penin- sula communities, according to the state Division of Forestry. . Division officials estimate thatnear- ly 2,000 property owners in Kenai, Soldotna, Kasilof and Clam Gulch are, or will be, affected by the bark beetles. “There’s a pretty good pocket right around Skyview High School,” said Wade Wahrenbrock, a state forester. Kasilof and Clam Gulch are particu- Q2aseORs RELL RBuresQe 2g OQ aoe Roges = $3 >> ° “Uf o DO My a ox Toa FTRS OHS RS y VDoargat ms ans g SSSSS sweep es & of.d'. Pog uw ® 24D igo a Beye “EO » 32588 Rouge @ RET OC ay TORTS yx 4R OB e635 OD CngntD pooe® = gq » Cm ese¥%arog Ra 6 ¢2d4,028 F558 Oy x ¢0 Bude. ean BS Uv Or Ons er Fae g GP "RCE, ed SFB Oo Sete eSBs oh” i PAM HOGMD AY 4 a? a tg m aS 8 ZB o°ggre yee So De gseaa ses an masbtanrsloe Fee Desa Ssara asm BAWH SERESATLE YSss Pe SS we TE RS peg Pads oo corstuasy }° =o Bre ae aes S aren? Rae = Bem GR et eRe Bes aeovount# o.t8oge0 2 ~@o5 SRESS SSC EM CRS oe on l ° : - geGkE Qh, ReeOe Bys meP?g RH GRERBEE “Oy Bolme amg p™ coe ms &° Ae gRokwaees 7s Orn & o 3a Owe an Bu eS CSF oy de 8 RSS Saeed wi Sei oan Fee Oe 8 Bre SoG Bah BSGuo 28° omeg ek BES BA®TO™ Es im GVel BR P4280 S$? Smutd 79 ADDY B°252 [SgBSHBR. SS Epeee OC ume re “ie = 3 ° ote 2 Saoee sores saaa For larly hard hit,’ said forester Ric Plate. More than 80 percent of the spruce are dead in an area south of Tustumena Lake, he said. The beetles only attack spruce trees, so homeowners don’t have to worry about other varieties. Reddish-brown sap is a sign that beetles already are chewing on the inside of a tree, Plate said. ‘‘When it’s reddish-brown, it’s sawdust from the beetles. They’re in there ghomping away, and the sap is carrying»sawdust with it.” Other clues include reddish-brown oyuy Suyuuns st ensuueg reuey ay} uo ButZZ0] peaidsaprm a30wo1d 0} Pose s,aze}s eUL — UANOH dust on the bark or the roots; wood- peckers hanging around the tree; ar bark chips around the base. Woodpeck- ers and squirrels feed on the beetlés, ‘and will chip away the bark to get to them, Plate said. ae To find out for sure if a-trecis under attack, the Forest Service recommends peeling a patch of bark just above the beetles’ entrance hole. If the tree ‘is infested, the beetles or their eggs should be present just under the bark. If the tree is infested, foresteff say cutting it down is the only way to save neighboring trees. TWh 4 vIZzIy WOL Ag 14H OUI suni uejd seuode, SMaN AlreQ { \ _. Bulbbo e932 soy Aya we Continued from Page A-1 it-or-lose-it mentality.” Environmental groups charged last week that a fast-track timber sale proposed by the state violates state regulations. ‘‘Even worse, the plan appears to exploit the Kenai spruce bark beetle situation in: an opportunistic attempt to advance the current DNR commissioner's timber development agenda,”’ said Trustees for Alaska and other groups in formal comments on the sale. Dan Golden, who is leading the timber effort for the state Division of Forestry, said the constitution requires Department of Natural Re- sources Commissioner Glenn Olds to manage the forests as a renewable resource. “He does have an attitude. of positive development orientation, but the spruce beetle issue is also an emergency in the eyes of the univer- sity and the U.S. Forest Service,” Golden said. The state is preparing to sell 5,300 acres of white spruce inside a 14,000- acre area along the Ninilchik River. The offering, known as the Falls Creek sale, is being pushed under emergency regulations allowing the state to move quickly to salvage trees. The state sale, combined with other logging operations on Native corporation or University of Alaska land, will clear trees from much of the country east of Ninilchik. Sched- uled for logging are the drainages of the Ninilchik River and Deep Creek, both popular’ salmon-fishing streams. Golden said the fish streams and views would be in greater jeopardy if the mature spruce die and fall down. ‘We're putting up forest lands for sale for the purpose of bringing the forest back to health,’’ said Golden, a former rural development special- ist for the state Department of Com- merce. ‘‘Roads and economics are secondary. We have a resource and we need to protect it.’’ But critics say the proposed cure is worse than the disease. “They're trying to save the forest by cutting it down,’’ said Cliff Eames of the Alaska Center for the Environment. He said the Hickel effort is reminiscent of the wide- spread logging proposed for the Sus- itna Valley by then-Gov. Steve Cow- per in 1987. That proposal was dropped after an uproar from local residents and tourist businesses. ee oe TIMBER: Logging plan runs into opposition GQ coat [D | Ninitchik viltage coi Sources: State Division of Forestry. Cook Inlet Region Inc KEVIN POWELL and RON ENGSTROM / Anchorage Daily News Jt 20S Y.-S oc Timber: Miller goes after Tongass again Congressman George Miller, who chairs the House Natural Resources Committee, wants the Clinton administration to launch_an investigation of U.S. Forest Service mangement oO gass National For- est. Miller contends that the Forest Service has not properly implemented the 1990 Tongass Timber Reform Act that was supposed to place less emphasis on timber production and bring other environmental reforms. Miller has written to the Agriculture De- partment asking the agency to investigate recent charges by a Forest Service planner that the logging pace was higher than the Tongass can sustain. ee Tanana Valle A Y State Forest and ote pope state land classified Ee forestry. The ones oF oy by Ran developed following a request toinduse asked for a f issioner Glenn Olds who , ol i scale Interior timber developmen needed for large- wee Eames said environmentalists in the Mat-Su area and Fairbanks are watching the Kenai Peninsula close- ly. “We think the Falls Creek sale is the first salvo in a war on south- central and interior Alaska’s for- ests,”” he said. Commercial fishermen and some sport fishermen have objected to the proposed sale and the state’s emer- gency timber regulations, citing log- ging’s damage-te-ttsheries in Wash- ington and Oregon. State law will prohibit logging within 100 feet of any salmon stream in the state sale. But the area pro- posed for cutting has not been com- pletely surveyed for fish streams, according to the Department of Fish and Game. Area forester Jim Peterson said the stream surveys can probably be completed in a day next summer, before any logging takes place. . _ Fish and Game habitat biologist Steve Albert said the department is also concerned about the cumulative effects of many separate logging operations and the prospect of new backcountry hunting and fishing pressure because of new logging roads. A borough consultant has recommended building 384 miles of new roads to provide access to state and borough timber. Tall grass slows the regrowth of forests in southcentral Alaska. At a meeting early this winter in Homer, both sides cited the example of the western Cook Inlet area around Ty- onek, which was logged in the 1970s. Though slow to regenerate, spruce ‘are. finally poking through the grass, along with deciduous moose browse. But the improved habitat hasn't helped the moose; which TOW Bet blasted by hunters using the former logging roads, state habitat biologist Mike Wiedmer said. Concern for the Kenai Peninsula’s forests grew in the late 1980s, as beetles wiped out thousands of acres around Cooper Landing and raised fears of ‘a major forest fire. But a 1991 fire near Cooper Landing raced more quickly through live spruce with resinous green needles than the dead trees. Foresters have largely disowned fire danger as a reason for logging, except near settled areas. A borough task force made up mostly of loggers generated much of the early enthusiasm for large-scale logging on the Peninsula. At one point, there was even talk of the state turning its own timber sales over to borough managers. But log- ging has received a cooler reception from the borough assembly. “I’m not prepared to be the tim- ber guru of the Kenai Peninsula,” borough Mayor Don Gilman said. “Two things ought to drive the borough’s decision-making. We should be careful not to harvest trees at the expense of other re- sources like fish and game and recre- ation. And we shouldn’t subsidize it.” Golden maintains that opposition to logging is still small. He said ‘opinion surveys show support for public efforts to remove dead trees. “The small minority is speaking very loudly,” he said. Finding markets for the relatively low-value trees has not been easy. Trees cut on Cook Inlet Region Inc. land north of Ninilchik are being diced into chips for export to the Far East from Homer. Logging on Ninil- chik village corporation land has been shut down by lack of a market for two years. Golden said the state may try to combine several offerings into a sale big enough to attract a ‘‘major play- er” like a paper company from the Lower 48. He said the state hasn’t decided if it would subsidize road construction. State officials have said they're considering state loans or use of Exxon Valdez spill settle- ment funds to make logging econom- ical. Kodiak Daily Mirror Recycling | good news. To the editor:.* . . Good news for a cleaner Ko- diak. The opening of the new recy- cling facility is the best local’ news for the New Year. It is lo- cated next to the Daily Mirror office, across from Sears, on Selig Street. . This convenient and central lo- cation will make recycling easy. Just bring. your newspapers, | - glossy catalogues and magazines as well as all your collapsed card board boxes there."“"".5"" = Local businesses ! happy to have a place to Tecycle their piles of cardboard and keep it out of the overburdened trash‘ dump: Isn't it nic to ave the option to Wayne Stevens, Duane Picea and others working on the ' waste te reduction: “Projects@for’ ig” z stories” on‘ the “tremendous ‘local. pollution from ‘old military instal-. lations (well’ ‘reséarched and ex: plained by John Pfeifer anid | Kail Puckett in the Kodiak Daily Mir: : ror, January 6 and: 8; news on recycling “give sew" hopé, fora ‘leet ‘and healthier | oR a a an Kodiak Daily Mirror - Duane. Freemar sotitt ‘| director Wayne ‘Ste 2 sland sspaneuriscycing Center Wednesday... Newspaper, in be d Kapped oft ‘atthe pets a Sentand va eemed ! ANCHORAGE, ALASKA, TUESDAY, DECEMBER 29, 1992 PRICE 25 CENTS Timber plan draws criticism State biologists fear Tongass logging would cause decline in wildlife By HAL BERNTON Daily News business reporter State biologists want the U.$. Forest Service to back off pla for a major new round of south- east Alaska logging they predict will cause dramatic declines in deer, bald eagle, black bear and other wildlife on central Prince of Wales Island. The draft timber plan calls for cutting more than 20,000 acres of old-growth spruce and hemlock during the next decade to meet the terms of a 50-year federal Tongass National: Forest con- tract with Ketchikan Pulp Co. State biologists say that by the time that logging ends in 2004, there will be a ‘major reduction of biological diversi- ty’ in a rich forest area covering roughly 20 percent of South- east’s largest island. The biologists detailed their concerns in a state Department of Fish and Game memorandum that Gov. Wally Hickel’s office forwarded to the Forest Service last week. Pt. XLVI, NO. 363 60 PAGES - ate) if Wales Island In their memo, the state biolo- gists recommend reducing the pace of logging and leaving patches of old-growth forest to help shelter wildlife. The memorandum reflects -some of the same concerns for wildlife outlined in a report by Forest Service biologists for use in revising the overall logging plans for the Tongass. The feder- al report was rejected by Forest Service officials, who said it was inexact and unworkable. The state memorandum also cites concerns for a decadelong boom cycle in the Prince of Wales Tongass logging that will end abruptly when the pulp mill’s 50-year contract runs out in 2004. Under the current plan, Forest Service officials say, the central island timber harvest will then fall by as much as 80 percent. “Such planning seems to be contrary to the objects of multi- ple use and sustained yield,”’ Please see Back Page, TONGASS B08 HALLINEN / Daily News file photo s along the edge ofa Prince of Wales Island. A Sitka blacktailed deer dashe Ketchikan Pulp sort yard on | ai TONGASS: Continued from Page A-1 wrote Richard Reed, a state Department of Fish and Game biologist who drafted the memorandum sent to the Forest Service. The central Prince of Wales plan is one of a series of area plans being drafted by the Forest Service to map timber targeted during the next decade of logging. It lists six options for the har- vest, four of which call for major logging shaped by the need to supply the Ketchi- kan mill. “We have an obligation to provide about another 2.5 billion board feet to the pulp company by the year 2004,” «said Bill Shoaf, a Forest ' Service planner. ‘“‘We are pretty much behind the eight ball in getting wood to them.” “‘We manage for many dif- ferent resources, including the wildlife, which we view as just as important as the timber resources,"’ said Hank Newhouse, another Forest Service planner. But balancing the differ- ent resources “‘is a fine line, and I can understand some of the biologists’ concerns,” Newhouse said. Ketchikan Pulp Co. offi- cials could not be reached for comment Friday. But in past interviews, they have said the logging is a key to the survival of their mill, which is a mainstay of the Southeast economy. Prince of Wales Island al- ready is one of the state’s most intensively logged ar- eas, with both the Forest Service and Native corpora- tions opening lands to major clear-cutting. State biologists argue in their memorandum that the cumulative effect of private and public logging must be considered by Forest Service Officials as they manage the area. Much of the biologists’ data comes from the Forest Service’s own study of the environmental effects of log- ging on central Prince of Wales. That study predicted log- ging at proposed levels Logging opposed would reduce central island deer habitat by 75 percent compared to 1954 when log- ging first started. Bald eagle habitat would drop by 68 percent. Black bear habitat would drop by 66 percent The hairy woodpecker would lose 94 percent of its central island habitat. State biologists are also alarmed by the plan’s pro- posal to allow the cutting of special tracts of old growth once set aside for wildlife protection in a joint state and—feacral program. In their memorandum, state bi- ologists say they had reached,an agreement with the Forest Service that those areas would be permanently protected. “They weren't huge blocks, but they were the areas we thought were most important for wildlife habi- tat,” said Reed, the state Fish and Game biologist. Newhouse, the Forest Ser- vice planner, said there was never any agreement for per- manently protecting the old- growth tracts. APPENDIX D South Tongass Wood-Waste Project RFP Statement of Scope Page 42 PART SCOPE OF WORK I. | Background: Project Description and Goa The primary focus of this Request for Proposals is to obtain information on wood waste resources in the area of Ketchikan, Metlakatla and Prince of Wales Island. The purpose of the resource assessment is to obtain information on the quantity, quality, cost and long-term availability of wood waste fuels to supply a proposed wood-fired power generation facility in this geographic area. The facility will use surplus sawmill and sort yard residues to provide industrial and/or utility power and/or steam. In support of this project, AEA is seeking proposals from qualified firms for the assessment of wood waste fuel resources available to supply a power plant on a long-term basis. ; The assessment is intended to be a "bankable" document that can be used by power plant project developers to describe fuel resources in documents that will be used to obtain private and public financing. In addition, the assessment will be used to determine whether further concept design and siting for a wood-fired power plant is warranted, and if so, provide the project design team with sufficient information on fuel quantity, characteristics and delivered costs necessary to complete a concept design and power plant siting. Surplus wood residues are currently being produced at several locations in Southern Southeast Alaska including: e Ketchikan Pulp Company's (KPC) Annette Hemlock sawmill in Metlakatia e KPC's sawmill facility north of Ketchikan (Ward Cove) e Seley Corporation's Ketchikan based chip mill e Metlakatla Indian Timber Enterprise sawmill, Annette Island e Kavilco sawmill, currently leased by Jim Ensley e Log sorting facilities in Thorne Bay, Klawock and other log transfer facilities « Small portable sawmills on Prince of Wales Island and near Ketchikan Residue sources from other wood processing operations are likely to exist and should be evaluated as part of this feasibility study. While KPC fires hog fuel in industrial boilers at their Ward Cove facility for steam and power generation, there are surplus residues being produced in the region. The bulk of these residues are incinerated without energy recovery or they are landfilled. Current disposal practices have often resulted in difficuities for the forest products industry and regulatory agencies. The Alaska Energy Authority, the U.S. Forest Service and the Alaska Department of Environmental Conservation have three goals in developing a regional wood waste fired power plant: ° to produce baseload power to displace diesel-fired power generation, e to strengthen the competitiveness of the forest products industry, and d e to reduce the environmental impact of wood waste disposal. Possible consumers of energy produced from the wood-fired plant include the forest products processing industry and local electric utilities in Metiakatia, Thorne Bay, Craig, Klawock and Ketchikan. The success of developing this project is contingent on several factors including: e The ability to provide sufficient wood fuel at minimal cost to a regional facility over an estimated twenty-year project life. The project concept is to draw wood residues from multiple sources to reduce project risks that may result from fuel disruption from any single residue source e The willingness of local utilities to participate in facility development or purchase power from the facility e The ability of a wood-waste-fired facility to meet the needs of small isolated utility systems e Potential for steam sales from the facility e The financial and economic feasibility of the project Part F - Scope of Work - Page 2 of 10 e The ability of the facility to meet air quality and ash disposal requirements and handle the particularly difficult (high moisture and salt laden) wood fuels « Power plant siting i. Work to be Performed A. = Introduction The purpose of this introduction is to provide a brief overview of the work to be performed under this Request for Proposais. Specific deliverables are described in Sub-Section B, Description of Tasks below. In general, the main purpose of this study is to perform a fuel supply analysis that will investigate both short and long term (10-20 year) wood fuel availability and estimate net fuel cost to the project from a multitude of sources including mill residue, sort yard waste, and off-island residue deliverable by barge. The estimated cost and availability of higher cost fuels such as chipped landing slash will also be evaluated to provide fuel cost projections in the event of fuel supply disruptions from lower cost sources. Estimates of the quantity, physical characteristics (moisture content, salt content) and cost of prepared fuels from all sources will be included in the analysis. Estimates of delivered fuel costs will be completed for the following project locations: 1. Adjacent to Annette 4emlock Mill, Metlakatia 2. Ward Cove, North of Ketchikan 3. Klawock sawmill 4. Adjacent to tidewater in Thorne Bay Fuel cost estimates for all potential project sites will be developed based on weighted average cost to deliver fuel from the residue sources to each site. Transportation, handling and primary processing required to use these fuels for power and/or steam production will be included in arriving at net fuel cost. The long term fuel supply and cost analysis will include factors such as the level of harvest activity on the Tongass National Forest, potential for future competitive markets for wood waste, anticipated future disposal costs (or tipping fees) of residues based on the regulatory climate, and possible changes in the flow and production of logs and wood waste over the next 20 years. The fuel supply analysis will also provide the basis for optimal power plant sizing, and will include recommendations for securing wood fuels from multiple sources. Part F - Scope of Work - Page 3 of 10 B. Description of Tasks Specifically, the Scope of Work for the contract awarded under this RFP will consist of the following tasks: 1. Identify Primary Wood Residue Sources Define the primary existing and expected residue supplies to be considered in this wood residue evaluation. Primary residue sources will include mills and major sorting facilities within an economic radius of the project area. Deliverable: Conduct a verbal briefing of Energy Authority staff on results of investigation of primary residue supply sources. 2. fro h Pri R This will involve visiting the residue production sites, evaluating mill records, and estimating residue production for the facilities ‘per Mbf processed based on the production process. Discussions with plant managers will be conducted to evaluate their willingness to provide residues to a regional energy plant and current or planned wood residue disposal alternatives and costs. Historical residue yield will be estimated based on previous mill or sort yard production for the past 10 years, Technical factors concerning the handling, storage and transportation of residues will be discussed with plant operators and evaluated as to how they affect the logistics and economics of fuel delivery to a power plant site. Information conceming species mix, moisture content, salt content will be obtained from producers. Residue producers will be asked to supply information on current and future timber supply outlooks for their respective facilities. Deliverables: Submit a preliminary summary report describing the site visits to and phone discussions with residue producers. The preliminary report findings will be included in the final report summarized later in this RFP. The summary will include: e Description of quality and characteristics of mill residue being produced, including species mix, salt content, moisture content and other parameters that would affect the quality of residue as a combustion fuel Part F - Scope of Work - Page 4 of 10 ° Methods used for estimating residue yield based on production e Current disposal practices and markets for the residue, including, where obtainable, values of current sales or costs associated with current disposal practices ° Historical residue production volumes from each source ° Assessment of future available quantities and cost for residue from each source over the following three periods: next 5 years, 5-10 years and 10-20 years e Physical factors that may limit or enhance opportunities for storing and transporting residues e Regulatory, environmental or other considerations that would affect fuel cost e The degree of mill and sort yard management's interest in and willingness to participate and/or cooperate in development of the project 3. Evaluate Fuel Supply from Secondary Sources In the event of mill closures or fuel supply disruptions, higher cost secondary fuel sources could provide a usable, albeit more costly, fuel supply to the project. Such fuel sources may include chippable landing residues, chippable sort yard waste from satellite operations, residue barged from mills outside the study area, densified waste paper and cardboard, urban wood waste, and coal. Some of these fuels couid fill short-term voids in fuel supply with no plant modification, while other fuels such as waste paper or coal could require significant plant retrofit and permit modifications and would only be used in the event of long term supply disruptions. Preliminary information on the availability and delivered cost per MMBtu (million Btu) of such fuels will provide a worst case scenario to potential project financiers. Deliverables; Submit a preliminary summary report of findings on secondary solid fuel availability. The preliminary report findings will be included in the final report summarized later in this RFP. The preliminary report will include: Part F - Scope of Work - Page 5 of 10 e A description of each secondary fuel source, including physical characteristics and delivered cost per ton and per MMBtu as delivered e Methods used to estimate delivered cost e Quantities available and discussion of factors affecting supply and handling of residue from each secondary source e Contact information for fuel suppliers 4. stimate Delivered F ts to Four Potential Project Site: For each of the four potential project sites, develop an estimate of delivered fuel costs from the primary residue sources, based on estimated fuel supplies and transportation costs including loading and unloading. Deliverables Submit a preliminary summary report describing estimated, delivered fuel costs to the four project sites. The preliminary report findings will be included in the final report summarized later in this RFP. The summary will include: e For each potential project site provide a summary of available annual fuel quantity in bone dry tons (BDT) and delivered cost for fuels from all primary sources, beginning with the lowest cost source. For example, for project site 1 Fuel Source Procurement | Processing | Delivery Total Annual CosvBOT CosvBOT | Costv/BOT | Delivered Available CosvBOT__| BOT Local wm nesive [$500 [so iso ss.00 | 20,000 _| [ Mill residue fromste3_ [$0 [$0 S10 $10.00 15,000__—d [ Local sort yard residue [$0 $10 $2 $12.00 5,000_ [ Mill residue from site2_| $10.00 ss $o_ $5 $15.00 10,000 [ Mill residue from site 4* | ($5.00) [$0 $25 $20.00 35,000 [ Landing residue, 20 miles| $0 $30 $10. $40.00 5.000 * in this case mill 4 has high disposal cost and is willing to pay tipping fee. e Graphically represent the data for each project site as shown on the example graph below with cost per BDT on the Y axis and annual available BDT on the X axis, with the lowest cost fuel source shown Part F - Scope of Work - Page 6 of 10 shown first. This graphical representation will assist in developing optimal plant sizing based on fuel costs and availability. Available Quantity and Cost of Fuel for Site 1 - a a & 3 3° oO e Identify technical constraints and capital improvements necessary to transport hog fuel to and from these project sites. Capital costs incurred by residue producers for loading and transport should be reflected in delivered residue price. Capital costs for fuel transport away from the energy facility and incurred by the power project developer should be identified and estimated. 5. Evaluate factors affecting long-term residue supply For private banks and investors to finance a wood waste generation project, they must be assured the fuel supply will be available at a cost effective price for the duration of the project pay back period, typically 7 years. Public sector financing of such projects is often longer term, extending 10-15 years and longer. The economic life of plants of this nature is typically 20 years. The long term stability of both available fuel quantities and price is critical to project feasibility. Factors affecting the residue supply at any of the project sites include the availability of standing timber for harvest, the ability of local mills to remain competitive and remain in operation, competing markets for wood that may presently have little value other than for fuel (such as cedar utility logs), and changes in the flow of raw Part F - Scope of Work - Page 7 of 10 materials (such as logs from federal timber sales being scaled at remote log dumps rather than passing through the Thorne Bay sort yard). Deliverables: A preliminary summary report will not be required for this task. The deliverables described below will be included in the draft final report: e Following discussions with forest products industry representatives and forest service officials, and based on an evaluation of the Tongass Land Management Plan (TLMP) revisions and other pertinent plans, identify timber supply risk factors and likely residue production scenarios. e Identify any site-specific factors that could disrupt fuel availability. For example, identify whether any specific potential residue suppliers are having financial difficulties, have filed for reorganization of debt under Chapter 11 or have few prospects for securing additional log volume for processing. e To the extent information is available for public disclosure, Yor each residue source, identify management's long term plans for business development and log procurement. e Identify any plans or trends that would disrupt current patterns of log flow and processing, which could adversely or favorably affect long- term fuel supply and would tend to make one project site advantageous over another. This should include transportation, regulatory, production or other issues. e From the above information, develop best case, expected case and worst case estimates of residue supply and cost for each of the potential project sites. 6. Final Report Prepare a draft report summarizing the findings of the wood fuel analysis. The report is to be appropriate for presentation to public and private _ financing institutions and to potential project developers. The report will be reviewed by AEA, edited to address AEA’s comments and prepared in final bound form in triplicate, with a reproducable master. The final report will include: ° an executive summary Part F - Scope of Work - Page 8 of 10 ° a discussion of methods used and assumptions made to arrive at conclusions and residue supply scenarios ° residue supply summaries for each of the potential project sites, using a graphical representation as described previously under task 3 of this request for proposals. e a project siting recommendation based on fuel supply costs e a recommended course of action for securing sufficient residue quantities for project financing and development (e.g. long-term contracts, recommended contract terms, fuel cooperative of residue producers, etc.) e a listing of contacts relevant to securing fuel supplies for a potential power plant and verifying assumptions used in preparing this feasibility study ° other relevant information and observations concerning the fuel supply and viability of a constructing a wood-fired plant to! be used for generation of electricity , e a discussion of considerations about project risks associated with fuel supply that financial institutions can use to make investment decisions Part F - Scope of Work - Page 9 of 10 Anticipated Schedule: Activity Date 1993 RFP Issued January 25 Deadline for Substantive Questions * February 12 Proposals Due February 26 Notice of Intent to Negotiate March 5 Alaska Business License Submission Deadline March 12 ) Contract Offer March 19° AEA _staff_briefing: Identification of primary March 31 wood residue sources First Interim Report: Evaluation of fuel supply April 16 from each residue source (Task B2) Second Interim Report: Evaluate fuel supply April 30 from secondary sources (Task B3) Third Interim Report: Estimate of delivered May 14 cost to project sites (Task B4) Draft Final Report May 28 Final Report June 15 * Substantive questions conceming this RFP that may have a significant impact on how proposers interpret work to be performed, or questions that may affect proposal cost estimates will be shared with all parties who have requested the RFP. Written responses to these questions will be provided by the Energy Authority. See Part B, Submittal Checklist, Paragraph 1 for reference. Part F - Scope of Work - Page 10 of 10