Loading...
HomeMy WebLinkAboutCIA wood availability study INRS LLC 7 11 10 FINALWood Fuel Supply Opportunities Haines, Alaska Prepared for: Chilkoot Indian Association July 11, 2010 Prepared By: Innovative Natural Resource Solutions LLC 107 Elm Street, Suite 100-G Portland, ME 04101 207-772-5440 37 Old Pound Road Antrim, NH 03440 603-588-3272 www.inrsllc.com Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 2 of 36 Introduction This document serves as an independent assessment of wood availability, and factors influencing availability and pricing, for a proposed wood pellet plant and possible wood-fired combined heat/power facility, the size of both as yet determined, to be located in or near the town of Haines, Alaska. Although the size and wood supply needs have not been determined as of this time, it is assumed that the facility (ies) may use up to 50,000 green tons of woody material to start. This analysis is based on that assumption. Information contained in this document was developed by Innovative Natural Resource Solutions LLC. Innovative Natural Resource Solutions LLC (INRS) was hired by the Chilkoot Indian Association to conduct these investigations and analyses and to compile this report. INRS has decades of extensive experience with the forest products industry and loggers in North America. INRS believes the information contained in this report to be correct, based upon information sources we deem reliable. Given the dynamic nature of wood markets and biomass, INRS does not warrantee information in this report against all errors. This report contains some predictions, forecasts and forward-looking statements that are based upon the professional knowledge, experience and opinion of INRS. These predictions and forecasts are not guarantees of future events. Innovative Natural Resource Solutions LLC Founded in 1994, Innovative Natural Resource Solutions LLC (INRS) is a full-service consulting firm specializing in the forest industry, natural resource conservation/sustainability, and renewable energy. INRS has worked with many parties, public and private, on the development of new biomass energy facilities around the United States. The firm is currently working with developers of biomass or biofuel projects in Maine, New Hampshire, New York, New Jersey, Vermont, Massachusetts, Indiana, Virginia, Georgia and California in addition to this Alaska effort. A complete description of INRS activities in biomass energy development, including a partial client listing, can be found at www.inrsllc.com Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 3 of 36 Table of Contents Executive Summary 4 1. Market Structure for Forest-Derived Wood 5 2. Biomass and Roundwood Availability – Haines, Alaska 9 3. Species of Timber Available 21 4. Wood Products Manufacturing and Competition in the Region 22 5. Factors Influencing the Price of Biomass Fuel 26 6. Diesel as a Component of Biomass Production Costs 26 7. Cost Estimates for Biomass Supply 28 8. Supplier Base 31 9. Biomass Supply Infrastructure Development 33 Appendix A – Investing in Supply Infrastructure – A Case Study 34 Table of Figures & Tables Figure 1. Schematic of Products Derived from a Single Tree .................................................................................... 6 Figure 2. Log landing with slasher (left), chipper (right), and wood sorted by product. ....................................... 7 Figure 3. Wood sorted for chipping. .............................................................................................................................. 7 Figure 4. Close-up of chipper on log landing. ............................................................................................................... 8 Figure 5. Trailer for whole-tree chips, with opening for chipper to blow chips into. ............................................ 8 Figure 6. Fifty Mile Radius of Haines, AK .................................................................................................................... 9 Figure 7. Timberland Ownership within 50 Miles of Haines, AK .......................................................................... 10 Figure 8. Species Mix, Timberland, 50 Mile Radius of Haines, AK ........................................................................ 11 Figure 9. Portable sawmill, Haines, AK ....................................................................................................................... 13 Figure 10. Cottonwood, Klehini River valley .............................................................................................................. 14 Figure 11. Haines State Forest map .............................................................................................................................. 15 Figure 12. Yukon Territory map ................................................................................................................................... 17 Figure 13. Beetle kill areas, Yukon ................................................................................................................................ 18 Figure 14. Beetle kill, Yukon .......................................................................................................................................... 19 Figure 15. Beetle kill spruce logs ................................................................................................................................... 20  Figure 16. Wood Using Markets, southeast Alaska area ........................................................................................... 22  Figure 17. Icy Straits Lumber Company ...................................................................................................................... 23  Figure 18. Dimok Lumber Company ........................................................................................................................... 24  Table 1. Standing Inventory and Growth- Removals - 50 Miles of Haines, AK .................................................. 10 Table 2. Haines State Forest Biomass Availability ..................................................................................................... 16 Table 3. Users of Wood in Southeast Alaska area ...................................................................................................... 25 Table 4. Diesel costs in biomass production ............................................................................................................... 27 Table 5. Estimated Biomass Fuel Prices, Haines, Alaska .......................................................................................... 29 Table 6. Estimated Biomass Fuel Prices, Distant Sources ........................................................................................ 30 Table 7. Loggers in Haines area .................................................................................................................................... 28     Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 4 of 36 Executive Summary The Chilkoot Indian Association hired Innovative Natural Resource Solutions LLC (INRS) to conduct a wood availability study for a proposed wood pellet mill and possible wood-fired combined heat/power facility to be sited near or in Haines, Alaska. The proposed facilities may need up to 50,000 tons of woody biomass annually as feedstock for these plants. INRS developed information about biomass sourcing for the proposed facility using three different and complementary approaches.  First, the timber availability in the 50-mile radius area around Haines was determined from the USDA Forest Inventory and Assessment data set that over 45 million tons of standing timber exists on the over 156,000 acres of land that is considered “timberland” – land that is biologically capable of growing timber crops. This data also shows that annually on public and private land in the area, net growth, the amount of growth of the forest over and above mortality and harvesting, is over 487,000 tons of timber.  Secondly, using data and information provided by the State of Alaska, Haines State Forest, between 35,000 and 65,000 tons of biomass is available for harvest annually on the state ownership from its harvestable 42,000 acres of forestland.  Lastly, more distant sources of biomass are available that can be used to supplement the more local sources of biomass available in the Haines area. Over 10,000 tons of sawmill residue biomass is available annually from two somewhat distant sawmills in the Yukon Territory and in Hoonah, Alaska. Additionally, substantial amounts of beetle kill white spruce roundwood are available from the Yukon. Although price may be an issue, easily the entire biomass need identified for the proposed Haines facilities could be fulfilled with the beetle kill wood. The two major species available for biomass production in the Haines area are sitka spruce and western hemlock. Additionally, black cottonwood, not currently utilized, is also available in lesser quantities. Biomass from these species in the immediate Haines area can likely be sourced in roundwood form for approximately $ 43 to $ 46 per delivered green ton. Beetle kill spruce from the Yukon can likely be sourced for approximately $ 70 per delivered green ton. Sawmill residue from the Yukon can likely be sourced for approximately $ 120 per delivered ton in wood chip form while residue from Hoonah can be purchased for approximately $ 60 delivered, per green ton in chip form. The preferred source of biomass to supply the proposed wood using facilities is the material that is available on the Haines State Forest property and other private lands in the greater Haines valley from town to the Canadian border along the Haines highway corridor. A challenge in getting this biomass to market is the small and underutilized logging infrastructure that exists in the Haines area. Five logging companies, all single person operations, currently operate in the area. Collectively, these companies are operating at less than 40% of capacity considering labor and equipment. A new market for low quality material created as a result of a wood pellet and combined heat/power facility(ies) along with sufficient incentives, should increase the logging infrastructure in the first few years in the Haines area to be able to fully utilize the available biomass. Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 5 of 36 1. Market Structure for Forest-Derived Wood for Energy Production Wood for use as biomass fuel, or for the production of wood pellets, is the by-product of timber harvesting for house logs, sawlogs and other lower-grade roundwood (where those markets exist). The economics and availability of biomass fuel rests upon the harvesting of higher-value products, with the tops, branches, off-spec wood and economically undesirable species potentially available as biomass fuel. On timber harvesting operations, the landowners and loggers are generally looking to harvest house logs, sawlogs (for lumber) and low-grade roundwood (for firewood or pulp and paper mills where this is a geographically accessible market), both generally higher value products than biomass. However, much wood does not meet the rigid specifications for these higher value markets. For example, a length of tree may be crooked, have rot, or have a split in it. For this wood, as well as all tops and branches, loggers have (three) choices: they can return the wood to the forest and allow it to decay, or they can chip the wood that does not meet sawlog and pulpwood specifications or move this lower grade material to markets as roundwood. Most loggers practice a combination of these approaches in other places in Canada and the lower 48 US states. In the Haines Borough area, the lack of forest product markets has resulted in a very limited logging work force. The companies that are operating are small and use more traditional equipment (chainsaws as the only tree felling tool). This logging infrastructure, which will be discussed in more detail later in this report, creates some challenges when contemplating the development of wood energy production or wood pellet manufacturing in the Haines area. Loggers and landowners make their money from growing, harvesting and selling veneer, house logs, sawlogs and (to a much lesser extent) low-grade roundwood, where all of those markets exist. The health of these markets, particularly the higher value markets, is what allows for the economic opportunity to conduct a timber harvesting operation. If these markets are not strong, as in the Haines, Alaska area, or suffer a significant downturn, less biomass may be available in the marketplace because fewer individuals will be conducting timber harvesting operations. Discussed later, the value of low grade wood products used for facilities such as the proposed Haines wood pellet or wood energy plants that are the subject of this report, are unlikely to be sufficient for loggers to operate as the sole, or significant component, of a timber harvesting business. In general, when a single tree is harvested (and when a full suite of wood markets exist in the area), a number of products can be derivedi.  The bottom length (generally eight to sixteen feet or even up to twenty-four feet on occasion) is often straight with relatively few defects such as knots or branches. This section is generally a veneer log, sent to a market that slices or peels the log for plywood, or more commonly a house log or sawlog, the latter of which is sent to a sawmill for lumber production.  The next lengths (again, often eight to twenty-four feet) may become a variety of products. If it is straight and has few defects, it is a veneer log, house log or sawlog. If it is smaller than the size sawmills require, or has a large number of defects (rot, knots, split, etc.), it will be sent to a pellet mill or to a pulp mill for paper manufacturing. If it is not straight (and thus cannot be cleanly debarked) it may be chipped for use in biomass production or mulch, or left in the woods if those markets are not economically available. Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 6 of 36  The tops and branches from all of the tree grades harvested can be chipped for biomass energy markets, chipped for mulch markets, or left in the woods. Figure 1 shows the sections of a single tree and the products derivedii; figures 2 through 5 show parts of a lower-48 logging operation that will produce whole-tree chips for a biomass power plant. Figure 1. Schematic of Products Derived from a Single Tree Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 7 of 36 Figure 2. Log landing with slasher (left), chipper (right), and wood sorted by product. Figure 3. Wood sorted for chipping. Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 8 of 36 Figure 4. Close-up of the business end of a chipper on log landing. Figure 5. Trailer for whole-tree chips, with opening for chipper to blow chips into. Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 9 of 36 2. Biomass and Roundwood Availability – Haines, Alaska INRS has used several methods to estimate wood availability in the area around Haines, Alaska.  First, a review of the data available from the USDA Forest Inventory and Analysis databases was conducted in order to understand the standing wood volume in the forests within a 50- mile radius from Haines (see Figure 6).  A second analysis was conducted from data on the Haines State Forest area to understand what is standing and available there.  A final approach assesses the potential for acquiring wood energy resources from more distant locations, namely, from the north in British Columbia and the Yukon Territory of Canada and from the areas south of Haines within southeast Alaska. 2A. USDA Forest Inventory and Analysis - Using the USDA Forest Inventory & Analysis databaseiii, INRS determined the growth and drain (mortality and harvest) for a region within a 50- mile radius of Haines, Alaska. INRS used the most recent complete FIA information, which uses data collected between 2004 and 2009 for southeast Alaskaiv. This data covers only the U.S. area and includes 2,237,091 acres of land area (within the U.S.). Figure 6. Fifty Mile Radius of Haines, AK Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 10 of 36 INRS restricted its assessment to timberland – those acres physically and legally capable of producing commercial timber cropsv. Of the over 156,680 acres of timberland within fifty miles of Haines: 7% is held privately; 18% is owned by the federal Bureau of Land Management; 21% is in the Tongass National Forest; and 55% is in State Forest ownership. By policy, virtually none of the federal land is available for timber harvesting. An estimated half of the private land may be available for harvest due to landowner attitudes and accessibility. Also by policy, approximately 50%, or 42,000 acres, of state land is available for timber harvest out of the 85,658 acres of timberland in the area. Figure 7. Timberland Ownership within 50 Miles of Haines, AK (acres) With the existing minimal timber markets in place in the Haines area, for the 50 miles surrounding Haines, annual growth of roundwood on the timberland acres exceeds harvest by over 487,901 green tons per year. Table 1. Standing Inventory and Growth- Removals - 50 Miles of Haines, AK Green Tons Standing Volume 45,185,084 Annual Growth 576,119 Annual Removals 88,218 Growth less Removals 487,901 32353 27932 85658 10737 National Forest Bureau of Land  Management State Forest Private Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 11 of 36 The FIA only measures the roundwood portion of the tree, not tops, branches, or other parts suitable for biomass fuel. When these are included, INRS estimates that growth levels exceed harvest levels by 633,000 green tons per year. The species mix on the timberland in the region is roughly one-third softwood, two-thirds hardwood. The figure below shows the breakout by species. Figure 8. Species Mix Standing Timber (%), on Timberland, 50 Mile Radius of Haines, AK subalpine fir 1% Alaska yellow‐ cedar 0% Sitka spruce 50% lodgepole pine 0% western  hemlock 32% mountain  hemlock 9% red alder 0% paper birch 1% black  cottonwood 7% Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 12 of 36 2B. Haines State Forest Wood Availability Review The major forestland base available, and most importantly, for timber harvests and potential as a supply for the proposed wood pellet and combined heat/power facility in the 50-mile radius from Haines, is land within the Haines State Forest. Any federal land within the Tongass National Forest in this area is largely off-limits to logging as part of the policy of the Tongass. Though some timber sales on the Tongass are expected to move ahead in the next 5 years based on recent court rulings, these sales are all in the southern area of the Tongass, far distant from the Haines area. While the FIA data reviewed above indicates 10,737 acres of private timberland in the 50-mile radius area, for the purposes of this study, only a minor amount of timber is expected to become available from these lands. The result is that the Haines State Forest, with a management plan and goal of providing timber to the local economy (though in limited amounts given the actual forest base that could produce timber), is the only nearby forest area that will produce significant wood for the proposed facilities. From the Haines State Forest Management Plan, adopted in 2002: On July 1, 1982, Alaska took the first step in the development of a system of State-owned lands legislatively dedicated to the multiple use management of forest resources. Alaska Statutes (AS) 41.15.300—41.15.330 established the Haines State Forest Resource Management Area (State Forest). At the same time, AS 41.21.610—41.21.630, established the Alaska Chilkat Bald Eagle Preserve (Preserve), which is surrounded by the Haines State Forest Resource Management Area. This legislation was the result of cooperation among a host of diverse interest groups. The legislative intent in establishing the State Forest states: "The primary purposes for the establishment of the Haines State Forest Resource Management Area are the utilization, perpetuation, conservation, and protection of the land and water, including, but not limited to, the use of renewable and nonrenewable resources through multiple-use management, and the continuation of other beneficial uses, including traditional uses and other recreational activities." Haines State Forest includes 286,208 acres of mostly forest land (green outlined area, Figure 11). Of that, 42,000 acres are available for timber harvest under the management of the State of Alaska, Division of Forestryvi. An additional accessible and operable 6,500 (approximate) acres is under the jurisdiction of the University of Alaska and seen in Figure 11 as orange hatched area. The State’s Mental Health Trust has approximately 2,120 additional acres that are available for harvestvii. A formal forest inventory was last conducted in 1985 on the Haines State Forest. This inventory indicated 164 tons/acre of standing timber. The species breakdown is 52% sitka spruce, 45% western hemlock and 3% cottonwood. This timber volume data, with adjustments for growth and mortality and harvest over time, was the data used for calculating the allowable harvest levels, or allowable cut, for the forest. The Haines State Forest Management Plan provides for an annual allowable cut of 5.88 million board feet of timber from the 42,000 acres of forest designated for timber harvest. In the 8 years since the adoption of the plan, an average of 750,000 board feet has been cut in any given year. The allowable cut calculations provide for harvesting on up to 294 acres per year of the State Forest. Currently, only approximately 30 acres are harvested annually. The allowable cut level has not been reached because there is the lack of forest products markets in the area within reasonable transport distance from the Forest. The nearest full-time substantial timber Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 13 of 36 markets for forest products are at the Icy Straits Lumber Company in Hoonah, Alaska, over 90 miles distant via water, and Dimok Lumber Company in Canyon Creek, east of Haines Junction in the Yukon Territory, Canada, some 164 road miles from Haines. Several portable sawmills exist and are being operated in Haines (see Figure 9) but these are insignificant users of wood and are not considered true year-round forest products markets of substance. See market competitors section later in this report for a review of other forest products markets in the region. Figure 9. One of several operating portable sawmills in the Haines, AK area With the forest inventory data available and adjustments made by State Forest personnel, it is estimated that a minimum of 21,000 tons of biomass could be made available annually. A reminder that annual harvests have been less than 13% of allowable cut since the plan was adopted in 2002. Haines State Forest staff advise that the 21,000 tons annually is very conservative and could be off by 50% or moreviii. There has been no experience harvesting biomass material and so estimating the amount available from a typical harvest is very difficult. Several harvesting operations viewed indicate a substantial amount of lower quality and small woody materials is left in the forest during a typical harvesting job from the traditional harvested species of sitka spruce and western hemlock. This material could add substantially to what is available and estimated by state forestry staff. Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 14 of 36 The Haines State Forest inventory includes data on most of the timber resources on the State Forest property. It does not, however, include data on several species that could find a place if a low-grade market for biomass were developed for pellets or power generation in Haines. Cottonwood (see Figure 10) is a species that is found throughout the valley bottom areas of the Forest near rivers and creeks and also along timber roads and other bottomland roads. Although no timber inventory data is available, officials at the Haines State Forestix estimate that substantial volumes of cottonwood are standing on operable areas of the Haines State Forest and that these trees could add substantially to the volumes of sitka spruce and western hemlock that are traditionally harvested. Data derived from the USDA Forest Service Forest Inventory and Analysis for the state forest show that 646,000 green tons of cottonwood are standing on the 85,658 acres of timberland in the State Forest. Assuming that approximately half of this acreage on the Forest is available for harvesting, then we can assume that approximately 323,000 green tons of standing cottonwood is available on the State Forest. These volumes could double the amount of material available from the State Forest – an additional 20,000 tons per year is possible for a substantial number of years. An important note here is that the staff at the Haines State Forest believes that, while there is still a substantial amount of timber available to harvest from the easily accessible areas off the main existing logging roads on the Forest, there will be a need for investment in additional new logging roads to access other areas that need to be harvested. There is question as to how this work can be financed given the small size of the existing logging companies in the Haines area. Figure 10. Cottonwood in Klehini River valley, Haines Borough, AK Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 15 of 36 Figure 11. Haines State Forest Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 16 of 36 The Haines State Forest sourcing of biomass for a pellet and/or combined heat/power facility in Haines holds significant promise, though the lack of logging capacity in the area could put constraints, at least initially, on supply (see Section 8 for a more thorough review of logging capacity in the Haines area). Table 2 summarizes the likely annual availability of biomass from the State Forest property. As stated above, the existing logging capacity may have difficulty harvesting this volume of additional woody biomass. Table 2 Summary of annually available biomass from the Haines State Forest (green tons) Species Low estimate High estimate Sitka spruce & Western hemlock 20,500 40,000 Cottonwood 15,000 25,000 TOTALS 35,500 65,000 2C. Remote Sources of Biomass for Haines pellet and/or CHP plant As described in the previous section, the most logical source of biomass for a Haines-sited pellet and/or combined heat/power facility is the Haines State Forest because of the readily available timber, proximity and an existing and eager (though constrained) logging infrastructure (see previous and next sections). However, other readily available sources of biomass exist – from distance locations north and south and should be explored as well. 2C1. Yukon Beetle Kill Wood Over 1.6 million acres of Yukon forest has been killed or partially killed by the bark beetle infestation since the 1990sx. An estimated 5 to 14 billion board feet of timberxi, primarily white spruce, has been killed and is standing dead in the southwestern Yukon Territory area to the north and east of the Kluane National Park and Preserve and north of Haines, Alaska in Canada (see Figures 12 and 13)xii. This represents some 25-70 million tons of standing dead material. Although the beetle outbreak is considered waning, additional thousands of acres are identified as new kill areas each year by government officials. Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 17 of 36 Figure 12. Yukon Territory Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 18 of 36 Figure 13. Beetle Kill Areas in the western Yukon Territory Source: GIS Section, Forest Management Branch, Energy, Mines and Resources, Government of Yukon, 2008 Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 19 of 36 In recent years, the Territorial government has been making more and more of this timber available for harvest. With a dry climate, compared to the Haines area, beetle kill spruce will not rot or decay for a decade or more. The timber in these trees generally can be sawed into timbers for years after death, but the extreme cracking due to the shrinkage in drying generally prevents the trees from being sawed into boards or small diameter structural pieces. Figure 14. Beetle Kill White Spruce in the Yukon Territory Dimok Lumber Company in Canyon Creek, Yukon, is in a position to supply large volumes of beetle kill white spruce to an operation in Haines. This material is already being shipped to a few selected firewood companies in the Haines area on 28 cord truckloads as roundwood. The delivered price to Haines for this material is $155/cord or approximately $70/ton. The owners of Dimok Lumber are very eager to provide large volumes of this material to the Haines area. Figure 15 shows the intact several year old beetle kill white spruce. Only limited by trucking capacity, tens of thousands of tons of beetle kill spruce would be available via this source. Backhaul logs cut in the Haines area could reduce the trucking costs considerably. Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 20 of 36 Figure 15. Beetle killed white spruce in at Dimok Lumber in Canyon Creek, Yukon 2C2. Biomass from Yukon Territory sawmill Dimok Lumber Company also has mill waste wood available. As the sawmill cuts lumber, cants and logs for houses and cabins, it generates waste wood material in the form of slabs and sawdust. Although a chipper is on-site (originally acquired for other purposes), the waste material from the mill is simply piled near the mill and open air burned when the storage space runs short. Dimok Lumber Company produces approximately 2.3 million board feet of lumber and house/cabin logs per year. The mill generates an estimated 5,000 tons of mill residue per year. This material, with currently no market, could be purchased in chipped and sawdust form, delivered to Haines, for approximately $100-150 per ton. Price is not clear because there is no current market for the material and negotiations need to occur between the pellet and combined heat/power facilities owner to determine market price. See summary of pricing issues in later section. Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 21 of 36 2C3. Biomass from Southern Sources in Southeast Alaska The likeliest other source of biomass that is currently available would come from Icy Straits Lumber Company in Hoonah, Alaska. This sawmill, also producing house and cabin logs, lumber and more recently, finished lumber materials, saws approximately 2 million board feet per yearxiii. The mill currently generates over 7,000 green tons of waste wood in the form of slabs and sawdust. This material currently has no market and is burned in piles when the supply takes up too much storage space. Delivered at the dock in Haines, this material would cost between $35 and $45/green ton based on barge loads of approximately 3,000 tons. Barge shipping costs from Hoonah to Haines (90 miles) are approximately $5-6/green ton. A final source of sawmill residues, from Viking Lumber Company in Craig, Alaska (some 290 water miles south) may be too distant to make economical sense with barge transport costs estimated at $20-30/green ton from that location. Residue cost estimates from this location are estimated at $30- 50/green ton loaded onto a barge. 3. Species of Timber Available Figure 8 on page 12 shows the relative abundance of tree species growing in the 50-mile radius area within the US from Haines. The major species, and moisture characteristics, for trees to be sourced in the Haines area are as follows: a. Sitka spruce (Picea sitchensis) – This high quality species is used for a variety of structural and finish solid wood purposes. Lower quality trees of this species abound and, along with unused tops and branches, could be a significant source of biomass for both a wood pellet plant and combined heat/power facility. The lower quality sitka spruce is also currently used in the firewood market. Published studies indicate green moisture content commonly over 60%. In a Haines High School study conducted in late 2009, green moisture content for this species at standing live tree and decked for 1 month, respectively, was determined to be between 36% (standing) and 43% (decked).xiv b. Western Hemlock (Tsuga heterophylla) – This is the second most abundant tree species in the Haines area and is also used for a variety of purposes though it is not as prized a species as sitka spruce. Western hemlock is the dominant species used in the firewood market in the Haines area. Moisture content determination of green western hemlock in published studies suggest average moisture content of over 70%. In the Haines High School study conducted in late 2009, green moisture content for this species at standing live tree and decked for 1 month, respectively, was estimated at between 44% (standing) and 49% (decked). c. Black Cottonwood (Populus trichocarpa) – Black Cottonwood is fairly abundant in the river valleys in and around the Haines area. Trees can grow to substantial size (over 100 feet) but a lot of the standing volume of this species is in small to medium sized trees (under 70 feet). Cottonwood can be used for a number of solid wood products but is not utilized much for these purposes in the Haines area. Green moisture content of standing trees are often over 100%xv and in virtually all cases will be substantially higher than the moisture content of spruce and hemlock. Cottonwood can be air-dried relatively quickly compared to other species. Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 22 of 36 The other species that might be available in significant quantities include white spruce (picea glauca) from the Yukon, as previously discussed. This species is typically drier than species found in southeast Alaska due to the drier climate found in the interior landscape of the Yukon Territory of Canada. Green tree moisture content may be over 40% but will quickly dry during warm weather months once harvested. The beetle kill spruce that is available in large quantities is often as dry as 15% moisture content after a season or more of drying once the beetle has killed the tree. 4. Wood Products Manufacturing and Competition in the Region There is very little competition for the wood that is available in the greater Haines area of Alaska. There is only one local competitor market for lower quality/value timber that would be used in a wood pellet and/or combined heat/power facility – firewood. There is no data available on firewood use in Haines, however, a survey of the loggers in the Haines valley (to the Canadian border) suggest that commercial production of firewood is approximately 1200 cords per year. This does not include firewood that is cut by the homeowner, which could be a substantial addition to the commercial total. Figure 16. Wood Using Markets in the southeast Alaska area Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 23 of 36 Loggers in the Haines area produce firewood from the lower grade, lower value wood harvested on the Haines State Forest, University of Alaska, Mental Health Trust and certain private forests in the area. Figure 17. Icy Straights Lumber Company, Hoonah, Alaska Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 24 of 36 Figure 18. Dimok Lumber Company, Canyon Creek, Yukon Territory The table below shows operating substantialxvi wood markets in the region. Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 25 of 36 Table 3. Users of Timber in southeast Alaska area Facility A Dimok Lumber Company Location Canyon Creek, Yukon Territory Product Lumber and house/cabin logs Owner Privately held: John Clunie-Ross Annual Wood Use 2.3 million board feet Road miles 164 Travel Time 4 hours 30 minutes Status Operating Facility B Haines firewood market Location Haines, Alaska Product firewood Owner Various (6+ ) Annual Wood Use (estimate) 1200 cords Road miles 0 Travel Time 0 minutes Status Operating Facility C Icy Straits Lumber Company Location Hoonah, Alaska Product Lumber, house/cabin logs Owner Wes Tyler Annual Wood Use 2 million board feet Distance 90+ miles via barge Travel Time 4 hours and 40 minutes Status Operating Facility D Viking Lumber Company Location Craig, Alaska Product Lumber, House/cabin logs Owner Privately held Annual Wood Use (estimate) Several million board feet Distance 290 miles via barge Travel Time 14.5 hours Status Operating Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 26 of 36 5. Factors Influencing the Price of Biomass Feedstock The following factors influence the pricing and availability of biomass fuel, and changes in any of these factors can have an impact on biomass fuel prices.  Diesel costs are one of the largest single inputs to forest-derived wood. Every step of the process – felling, skidding, chipping and transport – uses diesel to power machinery. As diesel costs rise, biomass prices will rise as well. As a general rule, it takes slightly over 2 gallons of diesel to make and transport 1 green ton of wood chips normal transport distances of 50 miles or less.  The number of housing starts in the region, and thus the volume of land clearing wood and sawmill production, is impacted by overall economic conditions. The current economic downturn has affected building throughout the lower 48 states and Alaska. This is cyclical, and will change as overall regional economic conditions change.  The region’s wood using and logging infrastructure is facing serious challenges, and is not in growth mode. Loggers will not expand production without expanded markets for the products they harvest. A new substantial wood using facility(ies) in Haines would likely spur logging capacity increases.  Specific and localized weather events can have a meaningful short-term impact on the price of biomass fuel. 6. Diesel as a Component of Biomass Production Costs As noted above, diesel fuel is a significant cost input variable to the price of biomass. Diesel is used in both in-wood operations (felling and skidding), operations at the log landing (handling and chipping), and transport to the facility, whether by road or water. INRS has developed a formula for estimating the fuel used and diesel cost component of biomass fuel, based upon distance to market, payload size, and fuel cost. As a rule of thumb, two gallons of diesel fuel are used in the production of a single green ton of biomass. However, this varies considerably by the type and age of equipment, operator decisions and behavior, harvest prescription, skidding distance, distance to market, and other variables. The table below shows the estimated diesel cost component of production of biomass - both for wood operations (felling, skidding, handling and chipping) and transportation – at a number of diesel fuel costs. In this table, the left column (blue) represents a range of possible diesel fuel prices, per gallon. The second column (yellow) shows the modeled in-woods diesel cost, and the green columns show the diesel cost for round-trip transportation (loaded in one direction, empty on the return) for a 27 ton load at a variety of distances. For example, if diesel is $4.40 per gallon, the in- woods diesel cost is estimated to be $5.59 and the transportation cost at 50 miles is estimated to be $3.62. The total cost for diesel per green ton of chips would thus be $9.21. Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 27 of 36 Table 4. Diesel costs in biomass production Distance to Market (One-Way Miles) 10 20 30 40 50 60 70 80 90 100 Diesel Fuel ($/gallon) In-Woods Cost ($/g. ton) Round Trip Transportation Cost (dollars per green ton) 2.00 2.54 0.33 0.66 0.99 1.32 1.65 1.98 2.30 2.63 2.96 3.29 2.20 2.79 0.36 0.72 1.09 1.45 1.81 2.17 2.53 2.90 3.26 3.62 2.40 3.05 0.40 0.79 1.19 1.58 1.98 2.37 2.77 3.16 3.56 3.95 2.60 3.30 0.43 0.86 1.28 1.71 2.14 2.57 3.00 3.42 3.85 4.28 2.80 3.56 0.46 0.92 1.38 1.84 2.30 2.77 3.23 3.69 4.15 4.61 3.00 3.81 0.49 0.99 1.48 1.98 2.47 2.96 3.46 3.95 4.44 4.94 3.20 4.06 0.53 1.05 1.58 2.11 2.63 3.16 3.69 4.21 4.74 5.27 3.40 4.32 0.56 1.12 1.68 2.24 2.80 3.36 3.92 4.48 5.04 5.60 3.60 4.57 0.59 1.19 1.78 2.37 2.96 3.56 4.15 4.74 5.33 5.93 3.80 4.83 0.63 1.25 1.88 2.50 3.13 3.75 4.38 5.00 5.63 6.26 4.00 5.08 0.66 1.32 1.98 2.63 3.29 3.95 4.61 5.27 5.93 6.58 4.20 5.33 0.69 1.38 2.07 2.77 3.46 4.15 4.84 5.53 6.22 6.91 4.40 5.59 0.72 1.45 2.17 2.90 3.62 4.35 5.07 5.79 6.52 7.24 4.60 5.84 0.76 1.51 2.27 3.03 3.79 4.54 5.30 6.06 6.81 7.57 4.80 6.10 0.79 1.58 2.37 3.16 3.95 4.74 5.53 6.32 7.11 7.90 5.00 6.35 0.82 1.65 2.47 3.29 4.12 4.94 5.76 6.58 7.41 8.23 5.20 6.60 0.86 1.71 2.57 3.42 4.28 5.14 5.99 6.85 7.70 8.56 5.40 6.86 0.89 1.78 2.67 3.56 4.44 5.33 6.22 7.11 8.00 8.89 5.60 7.11 0.92 1.84 2.77 3.69 4.61 5.53 6.45 7.37 8.30 9.22 5.80 7.37 0.95 1.91 2.86 3.82 4.77 5.73 6.68 7.64 8.59 9.55 6.00 7.62 0.99 1.98 2.96 3.95 4.94 5.93 6.91 7.90 8.89 9.88 7. Cost estimates for Biomass Supply 7.A Haines area biomass - Using historic prices of firewood in the Haines area as a baseline, INRS has estimated the price of biomass fuel per green ton for local sources of biomass – primarily from the Haines State Forest but also including wood from other ownerships in the Haines Valley area north to the Canadian border. Currently, firewood is produced from western hemlock and a lesser extent from sitka spruce and delivered as log length roundwood in the Haines area for $42-47/green ton equivalent (firewood is sold in cords). Table 5 estimates take recent historic prices, and inflates the wood componentxvii by 3% annually. This assumes a biomass supply mix of 100% roundwood (including bark) delivered on conventional log trucks to a yard somewhere in the Haines area. While more supply is available as standing timber in the Haines valley area, given the constraints on logging infrastructure (see next section), we are estimating initial production by local loggers at between 10,000 – 15,000 tons annually for the first several years of plant operation. The prices in the table should be viewed as estimated average annual prices; actual pricing will change regularly based upon weather, season, diesel prices, changes in the marketplace and other factors. These prices do not anticipate the entrance of a major new market for low-grade wood in close proximity to Haines (none are announced or expected), and assumes that the wood buyer is steady, interacts with contractors regularly and maintains positive relationships with the supplier base. Table 5. Estimated Biomass Prices ($US), Haines area wood (roundwood per green ton delivered) Year Wood Diesel Per Gallon Component $3.50 $3.75 $4.00 $4.25 $4.50 $4.75 $5.00 2012 $37.00 $43.75 $44.23 $44.71 $45.20 $45.68 $46.16 $46.64 2013 $38.11 $44.86 $45.34 $45.82 $46.31 $46.79 $47.27 $47.75 2014 $39.25 $46.00 $46.48 $46.96 $47.45 $47.93 $48.41 $48.89 2015 $40.43 $47.18 $47.66 $48.14 $48.63 $49.11 $49.59 $50.07 July 11, 2010 Pg 28 of 37 Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska   Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 29 of 36 7.B Price of biomass from likeliest other sources – Initially, in order to secure up to 50,000 green tons of biomass per year for the project’s wood pellet and possible combined heat/power plant, additional sources over and above the local sources described above will be needed. We estimate the following sources and costs to secure the additional up to 35,000 tons in the start-up years: Table 6. Estimated Biomass Prices ($US), Distant sources (per green ton delivered) Source Wood Diesel Per Gallon Year 2012 Component $3.50 $3.75 $4.00 $4.25 $4.50 $4.75 $5.00    Dimok Lumber sawmill residue* $50.00 $112.50 $120.00 $127.50 $135.00 $142.50 $150.00 $157.50 Dimok Lumber beetle kill roundwood** $40.00 $64.00 $70.00 $76.00 $82.00 $88.00 $94.00 $100.00 Icy Straits Lumber sawmil residue*** $35.00 $56.70 $60.20 $63.35 $66.85 $70.35 $74.20 $77.70 * chip form - moisture content 15-20%, 5000 tons per year available ** roundwood form - moisture content 15- 20%, large quantities available *** chip form, 7,000 tons per year available 8. Supplier Base INRS believes that the most logical and cost-effective source of biomass supply for a wood pellet mill and possible combined heat/power facility in Haines is the Haines State Forest and private forestlands in the Haines valley from town through to the Canadian border. As discussed briefly throughout this report, the supply of biomass is adequate in the valley for the size of facility(ies) being contemplated. The challenge, however, is the logging capacity to cut and haul the needed biomass material to the plant site. Not since the early 1990s, when the last full-time sawmill operated in Haines, has the logging infrastructure been adequate given the timber availability in the area. The current logging infrastructure is small (see Table 7), with five companies operating logging equipment in the Haines valley area along with a third that manufactures cut, split and delivered firewood for the Haines market. These companies are largely single person operations with hired help on occasion to supplement the owners’ work. These operators cut mostly on Haines State Forest lands but will cut on private lands and lands owned by the Mental Health Trust or University of Alaska lands (the latter of two likely managed by the Haines State Forest staff). As mentioned previously, the Haines State Forest annual allowable harvest is 5.88 million board feet but the logging infrastructure has harvested only an average of 750,000 board feet annually. Based on personal interviews with the loggers, INRS believes that the loggers in the list, given the equipment they own and the current production of the companies, is collectively operating at below 40% capacity. The largest and most productive company, the Stump Company and its proprietor Scott Rossman, operates at less than 50% capacity. In other words, given the same labor force and equipment owned by these firms, a doubling of production could occur simply by adding markets for the wood harvested. A wood pellet plant and combined heat/power facility would be such a market for the lower value material currently under utilized on the Haines State Forest and surrounding lands. The challenge associated with the need for increased production by the existing labor and logging company infrastructure is to also provide for some additional markets for the higher quality logs that would be harvested along with the lower quality material destined for the wood pellet and biomass plant market. Loggers will derive more income for the same amount of labor out of sale of higher quality logs that they harvest. Currently, most logs go to small sawmill (portable sawmill) producers of lumber and house/cabin logs. Some of the loggers on the list have invested in portable sawmilling equipment (or in partnership with others) essentially, to create their own log market. The likeliest other market that would allow for more log production as part of increased production of biomass in the valley, is to backhaul logs to the Dimok Lumber Company when Dimok ships biomass grade material to initially supplement the locally produced biomass. The company is interested in such an arrangement, particularly for the high quality sitka spruce logs, that could be sent north on the back haul. July 11, 2010 Pg 30 of 37   Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska   Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 31 of 36 INRS believes that given a new biomass market that has steady demand for biomass and keeps prices relatively stable, the existing logging infrastructure in the Haines area will increase production and will likely grow its capacity with additional equipment and employees. Table 7 Loggers Operating in the Haines area Name Company Address Phone Rocky Seward Eager Beaver Wood Products P.O. Box 1548 Haines AK 99827 907-767-5624 Carl Wallers Green Diamond Logging P.O. Box 651 Haines AK 99827 907-767-5645 Scott Rossman Stump Company P.O. Box 1411 Haines AK 99827 907-766-3321 Sage Thomas Klehini Log Works HC 60 Box 3161 Haines AK 99827 907-767-5449 Bob Jenson Top Hat Logging P.O. Box 477 Haines AK 99827 907-766-2514 Nick Degtoff* Fabulous Firewood HC 60 Box 2710 Haines AK 99827 907-767-5476 *Fabulous Firewood does not operate logging equipment at this time but might act to broker biomass material. Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 32 of 36 9. Biomass Supply Infrastructure Development The small, underutilized logging infrastructure in the Haines are may need additional assistance to grow, initially, should a wood pellet plant and combined heat/power biomass plant be built. There are a number of ways that the plant(s) can assist in this growth, including:  Long-term contracts that provide the supplier certainty that they can pay off the significant capital cost of new equipment: o Contracts can provide a fixed price, fixed quantity, or price indexed to input costs (e.g., diesel fuel), and give the buyer some level of assurance that wood can be purchased at a known price formula; o Long-term contracts between large, credit-worthy parties (e.g. the biomass plant) and small parties (e.g. loggers) tend to be one-sided, with the smaller parties having greater ability to exit the contract with minimal penalty; o Long-term contracts have not, however, been the norm in the industry in the lower 48.  Financing packages offered to suppliers that are paid off as fuel is provided to the facility: o Helps quickly build the infrastructure needed to supply a facility; o Encourages loggers to deliver to the facility, building supplier loyalty; o Puts the facility in the position of acting as a lender, not a core business and not an action many entities are interested in taking. o See Appendix A for a case study of this approach.  Contracting with (or owning) mobile chipping unit(s) that can service a number of small suppliers: o Allows these smaller logging contractors to act as suppliers without scaling up and adding equipment and staff. o Chips from these “aggregators” tend to be higher cost, as there is cost and downtime involved in constantly moving a chipper (or grinder) from one location to the next. Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 33 of 36 Appendix A – Investing in Supply Infrastructure – A Case Study The following is adapted from a case study INRS prepared highlighting the way one biomass firm uses equipment financing to strengthen their supply chainxviii. This case study, prepared for the Massachusetts Technology Collaborative, examines the practices of Boralex, a firm with wood-fired power plants in Maine and New York. Boralex is considered a leader in this supply chain strategy. The financing program is a “lease to buy” agreement, where payment is based on wood deliveries (i.e., $/ton). The program is available to any reputable contractor who is interested in establishing an in-woods biomass processing operation. Each agreement is tailored to meet the mutual needs of the contractor and the facility. The agreements are governed by a contract that states the annual volume to be delivered to the biomass facility and respective prices. The typical contract length is five years with an annual volume of approximately 50,000 to 60,000 tonsxix. The annual volume is expected to be delivered in a 40 week time periodxx. Volume obligations and delivered prices are renegotiated annually to provide flexibility for the contractor and the power plant. The contractor is responsible for negotiating the purchase price with the equipment dealer, and the power plant pays the invoice for the machine plus the cost of the manufacturer’s recommended parts inventory. Under the terms of the agreement, the contractor pays back the principal, and interest at 7.0%, through wood deliveries. The contractor is not required to make an equipment payment if they do not deliver wood. When a load of chips or hog fuel is delivered, a dollar per ton amount (e.g., $2.50/ton) is withheld from payment to the contractor and credited towards money owed on the machine (see table below). With prior approval from the power plant, the contractor can use the equipment for deliveries to competing facilities, however, the contractor is required to make the same dollar per ton equipment payment to the power plant on the volume. The ownership title transfers to the contractor and payment withholding ceases when the money owed equals zero. Once the contractor owns the machine, they are still required to fulfill their annual volume obligation for the remaining term of the contract, but they do not need the power plant’s prior approval to make deliveries to other wood-fired power plants. The contractor has the option to forfeit the agreement prematurely, however, doing so eliminates all accrued ownership in the financed equipment. If the wood-energy industry becomes uncompetitive and all of the power plant’s wood-energy facilities close, a force majeure clause would be triggered, thus elevating the obligation for the contractor to continue to make equipment payments. In the occurrence of such an event, the contractor has the option to pay the remaining balance on the equipment liability, however, they are not required to. Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 34 of 36 Cash flows with facility financing of biomass equipment (example) Load # Price per Delivered Ton Equipment Payment per Ton Volume (Tons) Total Revenue Payment to Contractor Money Owed on Equipment $ 300,000 1 $ 24.00 $ 2.50 30 $ 720 $ 75 $ 299,925 2 $ 24.00 $ 2.50 27 $ 648 $ 68 $ 299,858 3 $ 24.00 $ 2.50 28 $ 672 $ 70 $ 299,788 4 $ 24.00 $ 2.50 29 $ 696 $ 73 $ 299,715 5 $ 24.00 $ 2.50 30 $ 720 $ 75 $ 299,640 6 $ 24.00 $ 2.50 32 $ 768 $ 80 $ 299,560 7 $ 24.00 $ 2.50 26 $ 624 $ 65 $ 299,495 8 $ 24.00 $ 2.50 28 $ 672 $ 70 $ 299,425 9 $ 24.00 $ 2.50 30 $ 720 $ 75 $ 299,350 10 $ 24.00 $ 2.50 31 $ 744 $ 78 $ 299,273 The contractor is required to pay for inland marine insurance, and all operating costs (e.g., labor, maintenance and repair, fuel, etc.) associated with the financed machine. The contractor is also directly or indirectly (i.e., via subcontractors) responsible for the ownership and operating costs related to loading (e.g., excavator, loader on crane carrier, etc.), transport (e.g., tractor trucks, chip vans, etc.), and any support equipment/assets (e.g., pick-up truck, garage, etc.). The wood-fired power plant pays a diesel fuel surcharge based on the prior month’s fuel price movement. The Energy Information Administration’s “weekly retail on- highway diesel price” dataxxi is used to determine the surcharge. Boralex indicated that while the program requires more oversight, communication, and financial risk than traditional means of procuring wood material, it sends a message to their contactors/suppliers that they think the wood-energy industry has a strong future and that they want a long-term relationship with them. Four contractors have already reused the program, thus indicating they are pleased with the arrangement. Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 35 of 36 Endnotes                                                              i While this is a general description of the variety of products that can be derived from a single tree, it is important to note that the characteristics of an individual tree, combined with local markets, may make all or most of it unsuitable for lumber manufacturing, and then all of the tree would be used for pulp and chip markets, or left in the woods. ii Note: This tree is used for illustration purposes only. Forest-grown trees look significantly different than this diagram, generally with longer trunks and less “crown”, or leafy top. iii USDA Forest Service EVALIDator 4.01, http://fiatools.fs.fed.us/Evalidator401/tmattribute.jsp iv USDA Forest Service data is presented in cubic feet. INRS calculated green tons assuming 85 cubic feet of solid wood per cord, and that a green cord of wood weighs 2.6 tons for hardwood and 2.3 tons for softwood. v FIA definition of “timberland” is “Forest land that is producing or capable of producing in excess of 20 cubic feet per acre (1.4 cubic meters per ha) per year of wood at culmination of mean annual increment (MAI). Timberland excludes reserved forest lands.” http://socrates.lv- hrc.nevada.edu/fia/ab/issues/pending/glossary/Glossary_5_30_06.pdf vi Personal communication, Greg Palimiera, Haines State Forest, 6/15/10 & 6/16/10 vii The University of Alaska and Mental Health Trust lands are not designated for timber harvest per se by the two state entities in any formal management plan but are generally considered available by the agencies and the Division of Forestry though this designation could change. viii Personal communication, Greg Palimiera, Haines State Forest, 6/15 &16/10 ix Personal communication, Greg Palimiera, Haines State Forest, 6/16/10 x Yukon, Energy Mines and Resources - http://www.emr.gov.yk.ca/forestry/sprucebeetle.html xi Canadian Energy, Mines and Resources and local resident estimates(font size?) xii Yukon Forest Health Report 2008, Energy, Mines and Resources, Government of Canada xiii Personal communication, Wes Tyler, Icy Straits Lumber Company, June 28, 2010 xiv Moisture content information was taken from published studies (see below) and studies done in the Haines High School Physical Science classes under the supervision of physics teachers and documented in an unpublished research paper entitled “Moisture Content of Locally-Sourced Fuelwoods”, November, 2009. Tests conducted for these investigations used the standard ASTM protocol E 1358-97: Standard Test Method for Determination of Moisture Content of Particulate Wood Fuels Using a Microwave Oven. xv Hardwoods of the Pacific Northwest, S.S. Niemiec, G.R. Ahrens, S. Willits, and D.E. Hibbs. 1995. Research Contribution 8. Oregon State University, Forest Research Laboratory xvi The use of the term substantial refers to the full-time wood users of significant capacity. INRS estimates that in the Haines area there are approximately six regularly operating portable sawmills that each likely produce 10,000 to 40,000 board feet per year. In the southeast Alaska area there are likely dozens, if not hundreds of such operations. Most are very part-time.  Innovative Natural Resource Solutions LLC Wood Availability Analyses, Chilkoot Indian Association, Haines, Alaska July 11, 2010 Pg 36 of 36                                                                                                                                                                                                  xvii The wood component includes the cost of stumpage and labor costs but not diesel.  xviii Excerpted from: RE Consulting and Innovative Natural Resource Solutions LLC. Renewable Biomass from the Forests of Massachusetts: Forest Harvesting Systems for Biomass Production. Prepared for the Massachusetts Technology Collaborative. June 2007. xix This volume applies to large chippers or grinders. The typical annual volume obligation for a smaller chipper is 10,000 to 15,000 tons. xx This equates to an average daily delivery of approximately eight to nine loads. xxi http://tonto.eia.doe.gov/oog/info/wohdp/diesel_detail_report_combined.asp Other Sources Construction materials: their nature and behavior, J. M. Illston, P. L. J. Domone, Taylor & Francis, 2001 - 554 pages F O R E S T E N E R G Y P R O G R A M M E, Storage and seasoning of conifer and broadleaf firewood, Pieter D. Kofman and Tom Kent, 2008 Haines State Forest Management Plan, 2002 Haines Borough Wood Source Report, CE2 Engineers, Inc., 2009   Hardwoods of the Pacific Northwest, S.S. Niemiec, G.R. Ahrens, S. Willits, and D.E. Hibbs. 1995. Research Contribution 8. Oregon State University, Forest Research Laboratory Logger interviews, various Moisture Distributions in Western Hemlock Lumber From Trees Harvested Near Sitka, Alaska David L. Nicholls, Allen M. Brackley, and Travis Allen, USDA Forest Service, Research Note PNW-RN-530, May 2003 Norum, Rodney A.; Miller, Melanie. Measuring fuel moisture content in Alaska: standard methods and procedures. Gen. Tech. Rep. PNW-171. U.S. Department of Agriculture, Forest Service, Pacific Northwest Forest and Range Experiment Station; 1984. 34 p. State of Alaska, Office of Economic Development, Species of Trees in Alaska, http://www.dced.state.ak.us/oed/forest_products/forest_products5f.htm State of Alaska, Department of Natural Resources, Division of Forestry, memo “Haines State Forest Timber Resource and Biomass Estimate Summary” June 25, 2010 Wes Tyler, Icy Straits Lumber Company, Hoonah, Alaska, Personal communication 6/29/10