GRANTS PASS, Ore. (AP) — Gov. John Kitzhaber wants to put Oregonians back to work in the woods.
Instead of trying to revive the glory days of the timber industry before the spotted owl, he envisions a new kind of woods work that provides green energy, healthier forests and jobs from thinning projects.
He has cleared one major obstacle. The U.S. Environmental Protection Agency is waiting three more years before regulating greenhouse gas emissions from biomass energy plants, which burn wood waste and the leftovers from thinning forests.
But two others remain.
One is getting support from the Legislature for renewing the business energy tax credits that give the marginal biomass industry the boost it needs to grow. They have come under close scrutiny since revelations last year of overspending and abuse in the wind power industry.
"I totally am on board with this idea if the numbers work in terms of the job potential — and that's the big if," said state Rep. Vicki Berger, R-Salem, co-chairwoman of the Tax Credits Committee. "I don't want to buy jobs. That's what got us into trouble with some of the BETC initiatives."
The other is getting significantly more material out of the woods, particularly the federal lands that account for more than half of Oregon. Though the U.S. Forest Service has been talking about producing more biomass energy from thinning forests since the huge wildfires of 2002, it has yet to produce much volume. It takes years to plan projects. And if big logs are part of the mix to pay for the biomass, restoration projects can get challenged by conservation groups. The biomass from thinning projects is frequently burned, rather than trucked to biomass facilities, because transportation costs are too high.
Forest Service spokesman Tom Knappenberger points to three new forest restoration projects coming online that will provide biomass for plants in Warm Springs, Lakeview and John Day as evidence the agency is starting to do what is needed, but the timber industry remains wary.
John Shelk, managing director of Ochoco Lumber, said they purposely kept a new pellet mill small in case the Forest Service can't deliver for lack of funding.
The company's operations in the little Eastern Oregon town of John Day are a microcosm of what biomass will look like. Ochoco recently built a mill to make fuel pellets from biomass in conjunction with its lumber mill there. The pellet mill accounts for a dozen new jobs, and helped retain 80 jobs at the lumber mill, which once employed 400. The local hospital is converting its boilers to burn pellets to take advantage of local fuel, rather than trucking in fuel oil.
Kitzhaber acknowledged that job growth will be slow for at least three or four years, but said the potential is big once it gets rolling.
"It's one of our largest sources of renewable energy in this country, is biomass," Kitzhaber said. "The question is making the economics work."
There are no good hard numbers for just how much biomass is out there, or how many jobs would be generated.
A statewide biomass inventory is high on Kitzhaber's to-do list, and the Ecosystem Workforce Program at the University of Oregon is working on a study taking a closer look at the jobs issue.
Director Cassandra Moseley said it is clear, however, that restoration logging and biomass energy will never provide the kinds of timber jobs Oregon enjoyed in the 1970s and 1980s, before the spotted owl, automation and downturns in lumber markets combined to eliminate thousands of jobs.
Kitzhaber's current plan is based on getting more out of existing materials from private lands, without looking to the federal lands that cover 60 percent of the state.
The Oregon Business Development Department figures there are 36 wood products mills around the state doing some kind of biomass already. The department hopes to see 5 percent to 10 percent more energy production from the existing biomass available from private lands, said Bruce Laird, clean technology recruitment officer for the department.
The Oregon Department of Energy is offering $200,000 in grants so four to six companies can study the feasibility of expanding their biomass use.
Rough & Ready Lumber Co. in the southwestern Oregon town of O'Brien was an early adopter in 2007. The last lumber mill standing in Josephine County built a steam and electricity generator in conjunction with the sawmill. But nearby national forest has not produced as much biomass as mill owners Link and Jennifer Phillippi had hoped for. And their contract for putting electricity into the grid has not kept up with the rising power prices they have to pay. What fuel they get comes largely from their own timberlands.
Mrs. Phillippi, a member of the Oregon Board of Forestry, said investing millions of dollars in biomass is tough when mill owners don't know how much fuel will be available within the 50 mile radius that it pays to transport it. And mills can't survive on biomass alone.
"We need logs to make lumber to be able to use that biomass," she said.
Like many in the timber industry, the Phillippis are hoping the Obama administration will come through on a new direction for federal forests. Interior Secretary Ken Salazar has embraced two pilot projects planned near Medford and Roseburg that would produce some timber while thinning the forest to make it healthier and less vulnerable to wildfire.
"If it works like everybody hopes, it could be a real tipping point," she said.
Jonathan Cooper contributed to this report from Salem, Ore.
Copyright 2011 The Associated Press.