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HomeMy WebLinkAboutWood-Peat Municipal Solid Waste Agricultural Byproducts Alaska Bioenergy Program Semi-annual Report Jan-Jun 1998wood - peat municipal solid waste agricultural byproducts Alaska Bioenergy Program Semi-annual Report January - June 1998 State of Alaska Department of Community and Regional Affairs Division of Energy TABLE OF CONTENTS |. REGIONAL ADVISORY GROUP ACTIVITIES.......cccccsscsscssssesseeseseeseeeseeseeneneees 1 ll. TECHNOLOGY TRANSFER AND TECHNICAL ASSISTANCE ...........:eeeeee 1 Ill. INTERAGENCY / INDUSTRY CONTACTS & PROJECT DEVELOPMENT ...2 IV. ALASKA BIOENERGY PROGRAM PROJECTS ........cccsssseseeseeeeeseseeneeeeeeees 2 V. INDUSTRY ACTIVITIES IN ALASKA 1.00... cescecesseseeceseseneessensesseeseeeeaseasesetenee 3 Appendix A Partial List of Alaska Bioenergy Program Contacts Appendix B__ Local Wood Resource Availability And Potential For Fuel And Structural Material Substitution In Rural Alaska, Project Description Appendix C Alaska Energy Update, Volume 2 Appendix D- Current Industry-Related News Articles REGIONAL ADVISORY GROUP ACTIVITIES In February the Division participated in a meeting of the PNA Regional Biomass Energy Program in Tacoma, Washington. Also during this period the Division organized logistics associated with a PNA RBEP meeting and project visits which took place in June near Fairbanks, Alaska. During the reporting period the Alaska program provided written bi-weekly reports of state activities to the RBEP consultant and was in contact with the USDoE program manager and other group members regarding specific projects. In March the Division prepared a proposed operating plan for the period March 1 to September 30, 1999. In June we submitted a revised plan for this period. In May the Alaska Bioenergy Program prepared summaries of five Alaskan biomass projects and provided them to the regional program consultant for compilation. In June the Division provided text and graphics for the PNA RBEP exhibit. TECHNOLOGY TRANSFER AND TECHNICAL ASSISTANCE Between January and June the Division of Energy received and responded to 20 requests for technical assistance and information regarding availability of biomass fuels, feasibility of thermal and/or electrical energy production from biomass, project status, rural energy development, densified fuels, contacts in various fields, and general program information. A partial list of contacts is given in Appendix A. In February the Division of Energy published Volume 2 of the Alaska Energy Update. In the area of biomass energy development, the issue contained 1) a description of the assessment of wood residue being conducted in southeast Alaska, 2) a listing of events and publications / software in the area of biomass energy and other renewable energy areas, 3) a removable description of Division programs. The Division distributed over 1000 copies of the update to individuals and organizations, including forest products and solid waste management companies; Native corporations; universities; federal, state and local agencies; the Alaska state legislature and media throughout Alaska. lll. INTERAGENCY AND INDUSTRY CONTACTS & PROJECT DEVELOPMENT Interagency Coordination From January to June the Division continued to maintain regular contact with professionals in the areas of economic and energy development, environmental management, natural resources/forestry and other areas regarding ongoing and potential projects. (See Appendix A for a partial list of contacts.) During the period the Division assisted with proposals to develop technologies appropriate to regional needs--small multi-fuel fluid bed combustors (University of North Dakota EERC) and biomass-Stirling systems (Stirling Technology Company). We continued participation on the Alaska Forest Product Development Committee, contributed text for and reviewed the Governor's Timber Task Force Report findings in the area of wood residue utilization, explored joint funding possibilities with the U.S. Department of Agriculture rural development section. In October-December the Division worked with the University of Alaska, Alaska Science and Technology Foundation, and U.S. Department of Energy EERE to explore renewable energy projects for the newly-funded Remote Power Initiative. Project Development. Emphasis continued in furthering projects in the area of direct combustion of waste and wood and in lignocellulosic ethanol production. Using a newly-available coal/wood-fired cogeneration assessment model developed in conjunction with University of North Dakota EERC the Division helped to assess feasibility of wood-fired cogeneration for Koncor Forest Products in February and MSW/coal co- firing by the City of Unalaska in June. In June the Division began work with a Delta Junction group to explore possibilities for using wood, MSW, and coal to provide energy to Ft. Greeley, which is targeted for “reuse”. As in the past, the Division continued to be in contact with firms and local governments regarding potential for small biomass thermal systems, - ethanol production, and other areas. (See Appendix A.) IV. ALASKA BIOENERGY PROGRAM PROJECTS Dot Lake Wood-fired District Heating System (DHS). Work was completed on the retrofit of a wood-fired boiler to Dot Lake Native council's district heating system. In June the system was started up and shortly afterwards visited by PNA RBEP Advisory Group members and others during the Alaska meeting. Construction work was done by a contractor hired by the Village of Dot Lake, Dot Lake residents, and Division staff. McGrath Biomass/Waste Heat Project. During this period the McGrath- area Native corporation MTNT Ltd. Division conducted a concept-level design and feasibility assessment on the project, which would expand the utility's district heating system, increase utilization of waste heat from diesel gen-sets, and add a chip-fired boiler system. Division staff continued to assist MTNT and its consultant in fuel and technology-related issues, reviewed reports and other work products, and participated in meetings with utility board members and the public. In June the utility board voted to proceed with 35% design at a cost of $26,000, to be cost- shared $10,000 MTNT and $16,000 Division. Also during this period and related to this project, the Division prepared a work plan for Local Wood Resource Availability and Potential for Fuel and Structural Material Substitution in Rural Alaska project. (See appendix). The project assesses sustained supply and procurement cost of wood for fuel and structural material in three interior Alaska villages. Work will be conducted by the Alaska program manager during a year of unpaid leave. South Tongass Wood Waste Resource Assessment Update. The Alaska program continued to work with southeast Alaska regional Native corporation Sealaska and its consultant to revise the Alaska Bioenergy Program's 1993 wood waste assessment for the region with a particular emphasis on analyzing feedstock for a potential lignocellulosic ethanol plant in the Ketchikan area. In February Sealaska’s consultant Nash and the Alaska program manager co-authored a paper in this area for the Renewable Energy for Cold Climates Conference in Montreal. In April, Nash and the program manager visited mills, sortyards, and other potential residue supply or use sites in Southeast and conferred with mill owners. In June Nash prepared a second report on operational aspects of obtaining residue, while the Division reviewed the report and submitted comments to Sealaska. Also in June the Division director met with Sealaska and National Renewable Energy Lab and USDoE staff regarding progress on feasibility assessment of the development of an ethanol production facility. Statewide Wood Residue Assessment. This project estimates sawmill residue availability for the entire state. In April-May the Division worked with the Alaska Department of Commerce and Economic Development (DCED) to finalize a questionnaire for the Alaska Sawmill Survey in order to obtain data on sawmill wastes and utilization. In June the Division, with DCED and INC Corporation, entered into an agreement with the University of Alaska to conduct the survey. Program funding totals $3,500, while initial results are expected in late summer. V. INDUSTRY ACTIVITIES IN ALASKA A. Forest Products 1. Southeast Alaska The timber economy during this period was mixed, with pulp prices gradually rebounding from a slump last year to around $70-80/bdu FOB barge, but with lumber prices dipping because of the recession in Asia. Despite predictable court challenges of individual timber sales on Forest Service land, the existence of a land use plan for the Tongass National Forest has encouraged some companies to invest in processing facilities in Southeast. In late February, Seley Log and Lumber opened a mill near Ketchikan. The operation expects to include a dry kiln, planer, remanufacturing facility, and a wood waste incinerator. Currently no energy recovery is planned for the incinerator. In April, Silver Bay Logging reopened the Wrangell sawmill which had been closed by Alaska Pulp Corporation four years ago. Lumber is being sold to Pacific Northwest markets. Sealaska Corporation continued to work toward a joint venture with Ketchikan Pulp Company (KPC) to produce veneer for Northwest markets and potentially for a laminated veneer plant in Ketchikan. Sealaska also is considering developing a facility to produce ethanol for Anchorage and Outside markets (see above). In May Sealaska and a number of smaller forest products organizations submitted comments to the Forest Service opposing continued export of low end unprocessed spruce and yellow cedar logs, citing the need for this material to remain in state for development of local mills. Others suggest that Sealaska’s motives are to benefit prices received for logs exported from Sealaska lands by lessening federal competition. Poor lumber prices have called into question how long KPC’s Annette Hemlock Mill will continue operation. The mill, located on Metlakatla Island south of Ketchikan, announced that it would be closing temporarily in mid-summer. 2. Southcentral and Interior Alaska In the Interior and Southcentral relatively small timber sales continued to be opposed by environmentalists, including a long-term sale on forest use designated lands in the Matanuska-Susitna Borough and Tanana Valley State forest land west of Fairbanks. State forestry officials are offering timber sales on 4500 acres near Tok. Designed to benefit moose habitat and supply local mills, the sales are the first to be offered under a 1996 legislative initiative aimed at providing a sustained supply of material to promote value added production in local mills. The program, which allows long-term sales with a negotiated stumpage, has stimulated proposals from at least five firms with interests ranging from kiln-dried lumber milling to ethanol production. In June the Governor announced that an Anchorage timber firm and its Ninilchik partner won a bid to provide10,000 railroad ties to the Alaska Railroad (ARR). The ARR has imported 200,000 ties over the last two years and expects to require another 100,000 over the next year. B. Air Quality In late March the U.S. EPA revised the Fairbanks CO non-attainment status from “moderate” to “serious”. The revision followed a spate of thermal inversions which caused two Clean Air Act violations last winter. The state Department of Environmental Conservation is working with the Fairbanks Borough to prepare an implementation plan acceptable to EPA. After the public complained of MTBE odors in 1994 Sen. Ted Stevens obtained a temporary ban stay on the CAA implementation which expired in 1996. APPENDIX A Partial List of Alaska Bioenergy Program Contacts Alaska Bioenergy Program July 21 July 23 Partial List of Contacts January to June 1998 Contact Craig Chase Cody, WY Carl Propes MTNT Ltd. McGrath Bil Miller Village of Dot Lake Andrew Balisky Clean Washington Center Seattle, WA John Purcell City of Egegik Serge Adamian Ecotrade Glendale, CA Wood Residue Composting Group Alaska Science and Technology Foundation Anchorage Steve Stassel Alaska Energy Engineering Anchorage Bill Miller Village of Dot Lake Harold Choate McGrath Light and Power McGrath Description Crimp on leave. Request for one-line drawing of McGrath biomnas/ waste heat project. Sent letters to City and school district asking for written support for biomass/ waste heat project. Has procured fuel for coming winter. Info request, performance of waste oil burners used by Division in remote locations. Starved air batch MSW combustors are working well. Control panel needs improvement. Installed cost $185 k. Info request, copy of McGrath biomass/waste heat report. Composting interest group teleconference. Current projects in southeast and southcentral Alaska. Review of Dot Lake Boiler O&M Manual. Mayor of McGrath concerns about biomass/waste heat project. July 27 July 28 July 29 July 30 July 31 August Aug 3, 10 Aug 3 MacGregor Mill Services Belfast, ME John Pohl Auke Bay Forest Product Development Committee Alaska Science and Tech. Foundation Anchorage Paul Mcintosh USDA Forest Service Ketchikan Craig Chase Cody, WY Charles Nash Consultant Forester Big Lake Jim Wiedeman Delta Reuse Coalition Delta Junction Mark Fryer RDC Engineering Anchorage Jim Strandberg Strandberg Engineering Anchorage Doug Hanson Tanana Chiefs Conference Fairbanks Bruce Kling Gana -A’Yoo Ltd. Galena Jeff Graham Alaska Div. Forestry Soldotna Charles Nash Consultant Forester Big Lake Doug Hanson Tanana Chiefs Conference Fairbanks Moisture meter for wood fuel. Info request, alternative energy program, costs of diesel energy production. Meeting. Lumber grading, sawmill survey, other activities. Ethanol development in southeast Alaska. Regional biomass program activities. Status of South Tongass wood residue assessment revision. Price of chips. Draft reuse plan for Ft. Greeley to be released on Monday. Interest in meeting with local utility and Division to discuss alternatives. 800,000 gallon oil per year heating load projected for Ft. Greeley reuse. Probable interest by Golden Valley Electric Association in Ft. Greeley cogen and power sales. Timber inventories for Galena, McGrath, and Tanana for Wood Substitution assessment. Update on Wood Substitution assessment. Request for forest stewardship plans for Tnana, Galena, McGrath. Revisions on South Tongass wood residue assessment. Automated map coverages for Interior villages. Will send on CD. Aug 4 Aug 5 Aug 6 Aug 7 Aug 10 Marvin Ridell Golden Valley Electric Jim Strandberg Strandberg Engineering Carl Propes, MTNT Jim Strandberg Harold Choate, ML&P Anchorage Bill Beebe AK Division of Forestry McGrath City of McGrath Rick Harris Sealaska Corp. Juneau Jeff James USDoE Seattle, WA Dave Shelbourne Iditarod Area School District McGrath Kim Langton Iditarod School District Brent Erstle City of McGrath Interest in energy generation at Ft. Greeley. Will coordinate with Division of Energy. Preparation for City Council workshop regarding McGrath biomass waste heat project. Fuelwood supply for McGrath project. No solid timber inventory available for state land in McGrath area. Workshop on biomass waste heat project. Status of ethanol feasibility study. Letter to confirm residue assessement revisions and invite invoice for remaining funding. South Tongass ethanol facility development. Okay to perform energy conservation assessment associated with McGrath project. Support for biomass waste heat project. Interest in energy conservation measures and assessment. Availability of funding for energy conservation assessment associated with biomass waseete heat project in McGrath. 10 APPENDIX B Local Wood Resource Availability and Potential for Fuel and Structural Material Substitution in Rural Alaska Project Description Summary This project assesses the sustained availability, cost, and potential benefit of delivering wood to three rural villages in interior Alaska for structural material and fuel. Higher quality timber would be valued for use as houselogs and sawtimber, while lower quality material would be valued as fuel for local residences and major buildings. An overall model would be developed which can be applied to other communities in rural Alaska. Background For many rural communities in interior and southeast Alaska, forests represent the major local natural resource. In addition to subsistence hunting, fishing, and other uses, forestlands are a source of heating fuel for local residences. Although some communities have small sawmills capable of producing lumber and timbers, much of the structural material is imported. Substantial quantities of diesel fuel are also imported into communities for the purpose of power generation and space heating of larger buildings, such as schools. Unemployment is high in most communities in rural Alaska, and census figures show a poverty level ranging from 25 to 50%. A major factor in rural Alaska is the export of scarce cash from the community for fuel, building materials, and other commodities. Recent statistics for three relatively large communities in interior Alaska are as follows: Community | Population | Diesel for Diesel Fuel Oil | Fuel Oil Lumber Lumber | Current Power Cost Usage’ | Cost2 Used3 Cost4 Fuelwood Production | FY96 (gal/yr) | (S/yr) (mbflyr) | (S/yr) Usage FY96 (cord/yr) ' Based on usage in McGrath (600 gal/person) 2 Assumed to be $1.60/gal. 3 Assumes nationwide average of 123 bf/person-year. 4 Estimated as cost of rough-cut lumber in Fairbanks ($640/mbf). 11 Galena 821 601,576 | $666,807 | 493,000 | $788,800 101 $64,600 | 970 McGrath 533 245,216 $337,077 | 318,000 | $508,000 | 66 $42,200 | 450 Tanana 374 124,794 $179,979 | 224,000 | $358,000 | 46 $29,400 | 440 Many communities in rural Alaska have an existing district heating system (DHS) which supplies waste heat from the diesel power system to the school and other major buildings. The Division of Energy is working with the McGrath electrical utility in assessing feasibility of expanding the DHS and supplementing the waste heat with hot water produced by burning locally harvested wood. The McGrath area Native corporation is also interested in increased harvest for a small-scale wood processing industry. A major question regarding the increased use of local timber resources is the extent of use that can sustained without depleting timber and other forest values. Planned Activities The project would include the following activities: Forest Inventory. Draw together forest inventories of ownerships within an economic radius of the communities of Galena, McGrath, and Tanana. LANDSAT imagery and existing forest vegetation and land ownership maps would be used as the geographic basis for this work. Timber volume and site productivity data would be obtained from field inventories of state and Native corporation lands. Land Suitability for Timber Harvest. Existing land use plans (e.g. “forest stewardship” plans and regional state and federal land use plans), as available, would be used to identify lands, which have been allocated to potential timber harvest. Lands that support other important values, such as fish and wildlife habitat, scenery, or incompatible subsistence uses would be removed from the wood production base as appropriate. Sustainable Harvest Levels of Fuelwood and Structural Material. Using simple timber regulation models (e.g. area control, Hanzlik, area-volume control) and yield projection models, sustained harvest levels of fuelwood and sawtimber would be projected for each community. Fuelwood and sawtimber products would be defined based on dimension and species. Valuation of Fuelwood and Structural Material. Delivered cost of wood would be estimated based on projected harvest, transportation, and stumpage costs. Value of the wood would be conservatively estimated based on the cost of and current demand for imported fuel oil, lumber, and other material, which would be displaced. Conclusions. Based on the results of the tasks described above, the report would draw conclusions on 1) viability of substituting local wood resources for imported fuel and structural material and 2) usefulness and portability of the model for analyzing supply and benefits of wood substitution in other communities. 5 Based on local forester’s estimate for McGrath (1.18 cord/person). 12 APPENDIX C Alaska Energy Update Volume 2 (excerpts) Wood Residue Resources Assessed in Southeast A major assessment of sawmill waste, logging residue, and other low value woody material is being conducted by Sealaska Corporation with the assistance of the Division of Energy. Sealaska is working with the National Renewable Energy Laboratory to study feasibility of establishing a facility which would convert much of the region’s bark, sawdust, chips, and other material into ethanol. Disposal of wood waste remains a major issue for wood processing developers and local communities in Southeast Alaska. Landfill space is limited and options for disposal are expensive. Early results indicate availability of over 630,000 green tons per year of wood residue. NREL estimates that a 16 million gallon per year facility would require around 402,000 green tons of wood residue per year. In addition to wood residue, another 782,000 green tons per year of clean wood chips are also potentially available; however chips also supply a volatile fiber market outside the state. An important market for the ethanol is Anchorage, where a 10% ethanol blend is used as an oxygenate for gasoline during the winter months as part of a plan to meet air quality standards for carbon monoxide. Last spring the Alaska Legislature voted to retain a tax exemption of eight cents per gallon of blended “ gasohol” year- round if the ethanol was derived from wood in the first five years of a facility’s production. Gasohol not meeting these criteria receives a six cent per gallon tax exemption only during the months that it is required. Work will result in updated information on the quantity, quality, cost, and long-term availability of wood waste and fiber in the area of Ketchikan, Metlakatla, Wrangell, Craig-Klawock, and Thorne Bay. Information generated by the assessment will be available to developers of potential projects in southeast Alaska which would use the material for energy production, ethanol feedstock, densified wood fuels, composted soil amendment, and other products. The project is consistent with the State’s overall goals of promoting value-added timber processing to maximize statewide and local economic benefits. Calendar Forest Expo May 9-11, Prince George, BC. Largest forestry trade show in North America. Contact Forest Expo, ph: 604-563-8833 or Web www.forestnet.com/log&saw /feb/expo.htm. Hearth Products Expo ’98 March 18-23, St. Louis, MO. Sponsored by Hearth Products Association, phone 703-522-0086. Renewable Energy Technologies in Cold Climates ’98 May 4-6, Montreal, Quebec. Sponsored by the Solar Energy Society of Canada. Phone 613-234-7004, Fax 613-234-2988, Email retccc.98@sympatico.ca, Web www.newenergy.org/newene rgy/scsci.html. Sixth Clean Coal Technology Conference, Clean Coal for the 21" Century: What Will It Take? April 28-May 1, Reno, NV. Sponsored by the U.S. Department of Energy and others. Contact Faith Cline, phone 202-586-7920, fax 202-586-8488. Wind Power ’98. April 27- May 1, Bakersfield, CA. Registration Donna Ancypa 202-383-2500, email aweamem@mcimail.com. Publications and Software Domestic Coal Handling Study. Evaluates the delivered cost of coal from five sources to seven rural communities in Alaska. Prepared by Northern Economics and Ogden Beeman and Associates for Arctic Slope Consulting Group. Contact, Rebecca Garrett, 907-269-4631 at the Division of Energy, 333 West 4" Ave., Anchorage, AK 99501. Rural Alaska Electric Utility Interties. Presents information on 171 potential interties which would serve utilities participating in the Power Cost Equalization Program. Prepared by Neubauer Engineering and Foster Wheeler Environmental Corporation for the Division of Energy. Contact, Rebecca Garrett, 907-269-4631 at the Division of Energy, 333 West 4" Ave., Anchorage, AK 99501. Rural Hydroelectric Assessment and Development Study, Phase 1 Report. Identifies 131 potential hydroelectric sites in Alaska likely to be cost- effective and technically/environmentally feasible. Includes MS Access™ database containing information on 1,144 potential sites. Prepared by Locher Interests Ltd. for Division of Energy. Contact, Rebecca Garrett, 907-269- 4631 at the Division of Energy, 333 West 4" Ave., Anchorage, AK 99501 APPENDIX D Current Industry-Related News Articles a |e eneeeeeess once Wrangell sawmill restarts after “j=” 4/2 four-year closure JUNEAU (AP) — Wrangell’s sawmill, once the mainstay of the Southeast Alaska town's economy, is turning logs into lumber again after about a four-year shutdown. The mill was bought recently by Silver Bay Logging Inc. from Alaska Pulp Corp. for an undisclosed sum. The mill is currently employing 33 workers, but Silver Bay hopes to eventually boost employment up to 45 workers, Dick Buhler, Silver Bay's president, told the Juneau Empire. The miff fired-back up last week. . <*> “This is a real blessing to Wrangell,’ said Erin Phillips, the company’s secre- tary. The mill was employing about 200 people when it shut down in 1994. At the time, Alaska Pulp said it did not have enough timber to keep operating. Silver Bay has enough logs to stay in ‘Our -geai is to get the maximum amount out of every log and every tree and turn it into a useful product.’ ° . oduction for about fi , Buhl aa orekibubtes Silver ||saiiiiiiiiiiiiiiin Bay’s president “Our goal is to get the maximum amount out of every log and every tree and turnitinto a useful product," Buhler said. = — SST se : Silver Bay is seeking financial assistance from the Alaska Industrial Develop- ment and Export Authority and from the city of Wrangell for the purchase of the mill. [tee i The export authority is still evaluating Silver Bay's proposal for a $6 million loan, said Bob Poe of AIDEA. The mill and its lands are estimated to be worth $7.75 million. “We're still talking and we're very much interested in working with them," Poe said. ‘It's still very much up in the air and where it will land, I couldn't say." Wrangell has offered to pay off part of the interest on the loan, said Carol Rushmore, city economic development planner. If the deal is approved, the state agency would lease the mill back to Silver Bay. Silver Bay is marketing its lumber in the Pacific Northwest. The company has offices in Juneau and Cube Cove. 19 | > Lewis Reef mill opens Monday The new Seley Log and Lumber mill opens Monday at its Lewis Reef site on Gravina Island, said owner Steve Seley. Operations will include a break- down mill, a remanufacturing facil- ity and the log yard. A dry kiln and planer, a wood waste incinerator and a package plant will be added by summer, he said. The breakdown mill will cut rail ties and flitches (a log with all four sides cut). In the remanufacturing phase, flitches will be cut into boards (dimension lumber). The mill has an inventory of about 3 million board feet in hemlock, spruce and cedar, said Seley. As the mill's workload increases, Seley will add more employees, he said. About 100 people work in all his enterprises, including the crew that built and will work in the new mill operations. When fully operational the mill could employ 60 workers for 11 months a year, he said. Seley has a commitment to local See ‘Seley,’ page A-4 hire, he said. He already has four former Ketchikan Pulp Co. and 15 former Seaborne Lumber (former Seley mill) employees working for him. He also used a local contractor and welder for the new mill and will work with Puget Sound Log Scaling Bureau that has a local office, he said. Seley said he expects logging for the mill to be done by his own company and by contract with an- other logging outfit. New products part of L-P’s changes __ By NIKKI MURRAY JONES Daily News Staff Writer Kn Ohne Louisiana-Pacific Corp., faces 1998 with a new “put the customer first” focus, .ccording to the company’s 1997 annual report. To accomplish that the company has recruited a new management team, settled ‘egal issues, centralized controls and developed new products for the manufactured lustry. It also closed 30 “unprofitable, outdated mill operations’ including tomes ind: etchikan Pulp Co., the report said. The low price of pulp, the cost of legal settlements and the new focus contributed ‘o the company’s decision to close Ketchikan Pulp Co., according to L-P. The recent Asian economic crisis and resulting lack of orders contributed to the« yulp market decline, said Mark Sw wyn, L-P chairman and chief executive officer. ~ Despite the drop in pulp prices, KPC tecorded a ret gain of $121.9 million in thd “rst quarter of 1997. That came from a $135 million settlement from the U.S; avernment for company claims related to the long-term timber supply contrast in : ie Tongass Natio! Closing KPC was part of a Forest, according to the report. a package of shut-downs or sales of L-P holdings non- ¢trategic to the company’s core business. Those include several sawmills, structural anel products and other o erations, according to the report. The facilities included in that group caused operating losses of $64 million in 1996, about $40 .million of it in the pulp segment and $24 million in building | »roducts related assets, the report said. The company has had losses due to lawsuits. In 1997 and 1996, respectively, L ? paid out $205 million and $263 million related to litigation settlements, according to the report. The goal for this year is to settle the remaining major legal disputes, said Suwyn. Environmental costs also have been associated with L-P in recent years. For :xample, KPC will have to pay costs related to remedial and pollution control, with an estimated cost of $20 million. Up to $6 million of the $20 million could be spent oncleanup of the Ward Cove mill site. Capping the landfill at Thorne Bay could cost Riis Tok timber harvest to rise FAIRBANKS — Timber har- vesting on state land near Tok will increase sharply under a five-year plan by the Division of Forestry. The plan includes an 880- acre Tok River Moose Habitat sale as well as three others totaling 4,500 acres. The four sales would be the first in the Interior covered under a bill passed by the Leg- islature in 1996 which cuts prices to promote value-added use of Alaska timber. The law requires purchasers to use the timber for local produc- tion of high value-added wood products “to the maximum extent commercially practicable.” '._ See 'L-P changes,’ page 5 Sales out of the Tok office have amounted to 500,000 to 1 million board feet a year, said Tok area forester Richard Mal- chow. The Tok River Moose Habitat sale — one of 11 poten- tial sales in the current plan — would provide 5.9 million board feet over seven years. Harvesting thick stands of white spruce through the Tok River Moose Habitat timber sale would rejuvenate forest health by decreasing the threat of insects, according to Mal- chow, and also would boost moose numbers by improving their habitat. Three other sales for the area through 2002 would yield 34.6 million total board feet over 10-year harvest periods, according to the agency’s fig- ures. Those sales are tentative. ~ap-to-$8 million,-the report said. +> Closing KPC and selling other opera- tions represents a change in direction for the company, cee to Suwyn. Traditionally, the company has made products and then offered them, hoping customers will like what they see, he said in his Chairman's Letter in the report. Calling the new direction “cus- tomer-driven,” Sw said L-P will change its focus to work “from the cus- tomer back to the mill.” ate The company is targeting the grow- . ing market of large volume building products retailers, such as Home Depot _and Lowes, manufactured home com- »panies and major national residential ae builders, said Suwyn. a _The sale of assets, about $1 billion will allow the company to focus its energies, said Warren Easley, L-P's vice president of quality and technology in a December 1997 trade media presenta- tion. L-P also has hired anew aggressive management team, has upgraded its quality control, has cut about $30 mil- lion in annual costs by improved organi- zation and accounting, has improved its market share with its targeted custom- ers, and developed new siding, struc- tural panel, flooring and insulation prod- ucts, said Suwyn. - as could be even lower this year. Knowles said the delegation will be prepared to talk about pos- sible state and federal assistance. i Members of the group, including Fish and Game Com- missioner Frank Rue and Health and Social Services Commissioner Karen Purdue, have been asked to prepare their findings and recommen- dations to the governor before the start of the special legisla- tive session on subsistence, which begins on July 20. Page 22° May 18, 1998 * Alaska Journal of Commerce Sealaska, others urge Forest Service to keep raw timber here By Nancy Pounds Journal Reporter Sealaska Corp. of Juneau, one of several organizations trying to develop Alaska wood product pro- cessing facilities, is seeking to stop U.S. Forest Service export of unprocessed timber from the Ton- gass National Forest. The Native corporation filed its opposition in April as part of public comments on Forest Ser- vice draft procedures to deter- mine criteria for exporting round or unprocessed logs. Deadline for comments was May 4, said Bill Wilson, group leader in forest management at the Forest Service Alaska Regional office in Juneau. Now the regional forester would use the criteria to decide if red cedar, Alaska yellow cedar and low-grade spruce and hem- lock could be harvested and sold to Lower 48 or foreign markets for processing, he said. About six organizations filed comments, including Sealaska, Silver Bay Logging, the Inde- pendent Forest Product Associa- tion of Beaverton, Ore., and Pacific Rim Cedar, a small wood-product manufacturing facility in Wrangell, he said. A final draft is to be released by late May, possibly including some revisions, he said. Sealaska would like to see Ton- gass timber destined for process- ing in Alaska, said Sealaska presi- dent and chief executive Bob Loescher. The Native corporation hopes to develop a joint venture with Louisiana Pacific Corp. to build a veneer plant, sawmill and wood chipping facility at the for- mer Ketchikan pulp plant. Other companies in Southeast are work- ing on wood processing projects, including Silver Bay Logging, an operation in Ketchikan and Viking Lumber in Klawock, Loescher said. “All these companies need a reliable timber supply,” he said. Last year, the Forest Service granted export waivers for 89 million board feet, he said. Since January, the federal agency approved 35 million board feet for export, he said. The Forest Service began exporting unprocessed logs in 1995 after two Southeast pulp mills closed, Wilson said. “It’s for community stability,” he said, adding that the agency also seeks to benefit the local work force year-round. Timber is often more valu- able as exports to the Pacific Rim, he said. Wilson says the Forest Ser- vice’s purchasers of the Tongass exports believe the export process is necessary because there are not enough wood chip- ping or processing facilities in Southeast. Wilson says the Forest Service and Sealaska have similar objec- tives to support the area econo- my, but wood-processing projects are not yet developed enough. “Once that market is estab- lished, then these logs will no longer be available for export,” he said. “Sealaska says there are enough manufacturing facili- ties in Alaska to take care of all the timber from Forest Service lands.” “As soon as we're assured there are local manufacturing facilities in Southeast to process the tim- ber, the regional forester will stop granting export authorization,” Wilson said. Sealaska also believes the Forest Service exports from the Tongass harms foreign markets for Alaska products. “By issuing export waivers and flooding the market with low-grade timber, the Forest Service is reducing returns for existing participants in the market, limiting their ability to invest in primary pro- cessing capacity and thwarting the purpose of the export restric- tions,” according to comments filed by Loescher. Sealaska is the largest pri- vate company harvesting timber in Southeast, selling timber products to Asia, according to Wilson at the Forest Service. “One of the reasons they might object to exports is it is competi- tion to their material,” he said. Loescher said Sealaska filed several Freedom of Information Act requests to acquire informa- tion about the export waivers and other questions from the corporation. These export timber sales are often not produced in the same year of a sale and can take three to five years to close, Loescher said. “We feel strongly the timber should be for domestic markets,” he said. “We would like to see the Forest Service agree to a cer- tain date when they would stop granting waiver of timber sales to exports,” he said. Sealaska suggests May 30 as a date to discontinue exports in comments filed with the Forest Service. However, Wilson said the agency is not ready to set a final date for the export process. Inversion gives area first air quality alert of this winter By ROD BOYCE Staff Writer Zo A temperature inversion over Fairbanks brought the area its first air quality alert of the winter Friday and its fourth violation of a federal clean air law this year. “This is about normal for this time of year,” said Kent Monroe, the borough’s air quality specialist. “In December 1996 we had one (violation), on the 30th, and that was the latest into the season that we had one.” The borough warned the air had become un- healthy, tainted by excessive levels of carbon mo- noxide. The eight-hour average recorded at 3 p.m. Friday showed the air at 10 parts per million of carbon mo- noxide, over the 9.5 ppm allowed by the U.S. Envi- ronmental Protection Agency, leading to the violation. Thursday, the air had 5 ppm of carbon monoxide. With an alert in place, borough officials remind residents with respiratory or circulatory problems to avoid strenuous exercise outside. In doses high enough and over a long enough period, carbon mo- noxide can inhibit the body’s ability to properly use oxygen, officials say. Monroe also asks that residents plug in their cars, since so-called ‘“‘cold starts’ are a major con- tributor to carbon monoxide pollution. Air quality is the poorest when temperature in- versions—surface cold air trapped by a layer of warm air above—are present. Absence of wind com- pounds the problem, Monroe said. br NM “The wind speed is real calm downtown,” Monroe said. ‘‘We have had some wind in hills. But the wind is coming out of the northeast and it tends to come off the top of ridges and not get down to the surface of town.” At 5 p.m. Friday, weather conditions were im- proving downtown. Monroe did not expect addi- tional violations this weekend. Fairbanks exceeded the national standard three times in 1995 and once in 1996. To meet the standard, the EPA several years ago required Fairbanks drivers to use oxygenated fuels, a mandate met with uproar by residents who claimed the sweet-smelling fuel made them ill. The EPA then backed off on oxyfuel. Currently, carbon monoxide emissions are kept in check through a vehicle inspection and mainte- nance, or I/M, program. The program requires ve- hicles to submit to biennial tailpipe emissions tests. Any necessary repairs must be made prior to the is- suance of I/M certificates. The area could see more inversions next week, however, when a surge of warm air arrives from the Gulf of Alaska, according to the National Weather Service. Ted Fathauer, head meteorologist at the weathe service office in Fairbanks, suggested anothe reason for the air quality violation. “I don’t mea to sound like a scrooge, but... Christmas shopping- supposedly traffic emits carbon monoxide.” EPA now calis Fairbanks area ‘serious’ polluter By KATE RIPLEY 5/4 NM Staff Writer It’s official: The air in Fair- banks is as dirty as it is in Los Angeles. That’s according to the U.S. Environmental Protection Agency anyway. Glenn Miller, head of the bor- ough’s vehicle inspection and maintenance, or I/M, program, said most people in town know the reason Fairbanks exceeds federal standards for tailpipe emissions is because of extreme temperature inversions in the winter. “We made it. Yippie!”’ a sar- castic Miller said of the EPA’s re- cent reclassification of Fairbanks from a “moderate” to “serious” carbon monoxide polluter. ‘The “serious’’ moniker be- came effective March 30. “We all knew this was coming,” Miller said Tuesday. “On March 30th, there was no celebration, there was no an- nouncement. It just kind of blew over.” Unfortunately that’s not what the air does in Fairbanks each winter. Instead, the borough is home to strong temperature in- versions—in which a layer of cold air close to the ground becomes trapped by a layer of warmer air above. The layer of warm air cre- ates a ceiling, and the lower the ceiling, the worse the carbon monoxide concentrations become. Carbon monoxide is the odor- less, colorless gas emitted from vehicle tailpipes. ‘the tederal government oniy allows one “‘free’’ violation of the carbon monoxide standard each year, or a reading above the 9 parts per million limit. Fairbanks violated three times in 1995, once in 1996, three times in 1997 and twice so far in 1998. _ Officials first knew about ‘the EPA’s plan for the reclassifica- tion back in 1995, when the bor- ough failed to come into compliance under a_ previous deadline set. by the Clean Air Act. Sen. Ted Stevens helped estab- lish a temporary stay on the 1995 deadline, but that stay expired over a year ago. _ What the new label means is a big unknown. The state and bor- ough must work together to come up with some kind of compliance plan acceptable to the EPA, but what the details of such a plan will look like isn’t clear.