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MEMORANDUM

By Wendy Cooper,2014-04-18 08:58
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12 Nov 2009 Recommendation: The definition of renewable energy resource in Senate Renewable energy resource' does not include peat, a fossil fuel,

     MEMORANDUM

To: EMC Renewable Energy Committee

From: Bob Slocum, Executive Vice President

     NC Forestry Association

Subject: RECOMMENDATIONS REGARDING RENEWABLE WOODY

     BIOMASS

Date: November 12, 2009

    A technical advisory group (TAG) established by the EMC’s Renewable Energy Committee has been meeting to discuss policy options and recommendations regarding

    woody biomass. While the group has not reached any final conclusions or made any

    policy recommendations, members of the TAG were asked to provide comments to

    members of the Renewable Energy Committee prior to the November 18

    th meeting.

    The following comments and recommendations are offered on behalf of the NC Forestry

    Association, a private non-profit conservation organization representing some 4,000

    forest landowners, managers, wood suppliers and manufacturers of wood and paper

    products in North Carolina.

    Definitions

    Recommendation: The definition of renewable energy resource in Senate bill 3

    must be clarified with regards to what a “biomass resource” means and includes.

    The NCFA recommends that it be made clear that a biomass resource includes all

    forms of wood and does not restrict the potential supply.

    Discussion

    In Senate bill 3, the bill that created NC’s renewable power standard, the following

    definition was made of a “renewable energy resource:

     (8) 'Renewable energy resource' means a solar electric, solar thermal, wind,

    hydropower, geothermal, or ocean current or wave energy resource; a biomass resource, including agricultural waste, animal waste, wood waste, spent pulping liquors,

    combustible residues, combustible liquids, combustible gases, energy crops, or landfill

    methane; waste heat derived from a renewable energy resource and used to produce

    electricity or useful, measurable thermal energy at a retail electric customer's facility; or

    hydrogen derived from a renewable energy resource. 'Renewable energy resource' does

    not include peat, a fossil fuel, or nuclear energy resource.

Significant questions have surfaced over what “a biomass resource” means and/or

    includes. Some read the language [including agricultural waste, animal waste, wood

    waste, spent pulping liquors, combustible residues, combustible liquids, combustible

gases, energy crops, or landfill methane] to mean that only those items stated would be

    considered as a biomass resource. Under this interpretation, only wood waste (which is

    not defined) would be considered a “biomass resource” for the purpose of meeting the

    state’s renewable power standard.

    Others, including the NC Forestry Association, read this list as examples of a “biomass resource” and not an exclusive list of eligible materials. Under this view, all wood would

    be considered a biomass resource.

The NC Utilities Commission has stated that it will review this issue (what constitutes a

    biomass resource) on a “case by case” basis. This means that one facility might be

    allowed to use a broad range of wood resources while another could be restricted to using

    only “waste.” We believe this alone is and will be a major deterrent to potential investors in biomass power. Thus, this definition must be clarified.

There is general agreement that if North Carolina is to meet the goals and mandates

    defined in Senate bill 3, wood will have to play a significant role in producing renewable

    power. Arbitrarily restricting the potential supply of woody biomass will make

    achievement of these goals and mandates almost impossible.

    Other Policy Options

    Recommendations: The NC Forestry Association recommends that no additional policy actions, beyond clarifying the above definition, be taken at this time and that

    the EMC revisit this issue at 5-year intervals.

Discussion

Despite much attention, fanfare and media coverage, the fact is that there has been no

    significant expansion of the use of wood for power generation in North Carolina. And

    most experts agree that it will take 3-5 years for any new facilities to come on line.

    While the major power utilities are exploring both co-firing at existing coal plants and

    building new biomass power capacity, no major expansions are expected in the near term.

Some have expressed concern over potential impacts to the existing forest products

    industry. We do not believe there will any significant adverse impact to this industry.

    The forest products industry in North Carolina is already the largest producer of

    renewable power in the state. This industry, like most manufacturing industries, is in a

    severe recession and a number of facilities have closed or are taking significant down

    time. For example, it was recently announced that the International Paper mill in

    Franklin, VA will be shut down. This was a major market for pulpwood in the

    northeastern part of North Carolina. The Domtar mill in Plymouth, NC is shutting down

    is last paper machine and converting to the production of fluff pulp. This means the mill

    will no longer use hardwood species in its production. Georgia Pacific has closed its mill

    in Ahoskie, NC and suspended operations at its Whiteville, NC mill for at least 6 months.

    st. This mill was the largest

    employer in Haywood County. Almost all other manufacturers are running at reduced

    levels. T&S Hardwoods in Sylva, NC closed its doors October 1

    The fact is that additional markets for wood are needed and we believe that biomass

    power, and eventually the production of liquid fuels, can provide new and much needed markets.

    Some have expressed concern of potential impacts to our forests and suggested that new mandates, rules, or restrictions are needed. We disagree. “Biomass” is simply one of

    several forest products. And it is not new. We have been producing and using woody

    biomass for power generation for decades. We also believe that basic economics,

    certainly as they exist as this time, will mandate that biomass will be produced as part of an integrated harvesting operation, i.e. there will be very little harvesting solely for the production of biomass. We already have mandatory requirements for water quality

    protection that pertain to any land-disturbing activity for forestry. Almost all of our logging contractors are trained in best management practices and compliance rates for the mandatory performance standards for water quality exceed 90%.

Preliminary data from the new forest inventory and analysis work in North Carolina

    shows the following:

    ? Total forestland in North Carolina increased slightly;

    ? Forest growth per acre continues to increase;

    ? Our growth/drain ratio is positive for both hardwoods and softwoods (we are

    growing more than we are removing).

    ? Over half of NC’s 18 million acres of forest land is in hardwood types and two-

    thirds of our timber volume is hardwood.

So the data does not indicate any problems in meeting demands for wood. What we do

    know is that the continued decline in markets will likely have an adverse impact on forest investments by private landowners that could lead to increased conversion of forestland to non-forest uses.

    We do not believe that any additional mandates, requirements or restrictions are needed or are appropriate with regards to the production of woody biomass. We continue to

    support expanded landowner education and outreach regarding forestry and forest

    management options as well as the continued training of logging professionals in best management practices.

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