Challenges and Opportunities in
Using Wood to Pay for
Fuels Treatments
Guy Robertson
USDA Forest Service
Main Points:
• Public-private interface
• Multiple objectives of utilization may be mutually
reinforcing or conflicting
• Utilization will seldom pay the full cost of
treatment
• No one-size-fits-all solution
Wildland fuels represent a huge
challenge for land managers
• 190 million acres of federal lands at risk (HFRA)
• Forest Service Cohesive Strategy to treat 3 million acres
per year in West
• Assuming $700/acre treatment cost, yearly FS bill in
west would = $2.1 billion (as compared to fuels
treatment budget of about $250 million service wide)
More Resources are needed!
Public-private interface
• We can count on the private sector to work
to maximize profits through innovation and
increased efficiency
• Challenges for public managers are more
complex:
– Public benefits are ill-defined
– Lack of single objective
Objectives for utilization
• Reduced costs of fuels treatments
– Sales of material into existing markets using existing
technology (static)
– Increased efficiency, innovation and new
products/markets (dynamic)
• Community economic development
• Other pubic goods (e.g., pollution abatement, reduction of
carbon emissions)
Potential conflicts
• Temptation to maximize utilization rather than
minimize cost
• Favoring local economic activity can involve
higher costs and higher risks
• Utilization may dictate a different set of priority
acres for treatment
• Ditto for bioenergy benefits
Nonetheless, significant “joint production”
opportunities undoubtedly exist, but they will
entail a balancing act
Utilization is often marginal from a
straight profit-loss standpoint
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Low value material
Lack of infrastructure and human capital
Extensive resource (not concentrated)
Commodity products in competition with
other producers in a global setting
But cost minimization, not economic
Feasibility is decision criteria
Economic feasibility:
Net $ Revenue > 0
vs. Cost minimization:
Treatment cost w/util < cost w/out util
Need to define non-utilization
backstop technology for comparison
e.g.
Prescribed fire
Mastication
Chip & spread
Stack & burn
Haul & burn
etc.
No single utilization scheme works
everywhere
Land ownership patterns
Physical Characteristics
– Species mix, stem size, and stand density
– Slope and operability constraints
– Distance to landing, mill, and market
Local/regional Infrastructure
Local/regional supply of skilled and unskilled labor
But one general rule of thumb
Larger trees = better economic potential
– Larger piece size means efficiencies in
handling and transport
– Larger diameters mean better price:
• Sawtimber perhaps $200/mbf @ mill
• Pulp chips perhaps $70/bdt @ mill
• Biomass for energy max $20/bdt @ facility
Where available, sawtimber will
Be a crucial component of any
Utilization strategy
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Highest end value
Often a substantial proportion of volume
Crown bulk density adjustment
Public acceptability
Options for supporting utilization
1. Seed money or other support to specific processing
facilities
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2.
Direct focus on utilization
Control location of activity
Risk of enterprise failure
Price offsets for material (up to cost of backstop)
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More transparent in regard to cost minimization
Greater market flexibility
No guarantee of utilization
Can’t control location of activity
Stability of supply at given price
Bioenergy
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Currently used extensively in wood products
industry processing stream
Currently marginal for production of energy for
general power grid
State renewable energy requirements will
increase demand
Carbon credit trading can alter production
costs
Technological innovations in materials
handling, energy generation and new products
(e.g. methanol for hydrogen fuel cells)
Conclusions
1. Utilization needs to be assessed in terms of specific
projects and in relation to specific backstop
technologies
2. We need to explicitly identify the public goods we are
supplying and be aware of the ways they may conflict
with each other
3. We can count on the private sector to develop and
seize evolving opportunities in the area of utilization
4. Public managers need to take advantage of this
process while keeping in mind the ultimate objective of
“maximizing” public benefits