To: EMC Renewable Energy Committee
From: Bob Slocum, Executive Vice President
NC Forestry Association
Subject: RECOMMENDATIONS REGARDING RENEWABLE WOODY
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
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.
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.
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.
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.