1. Forest overview. World United States Northern Forest

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1 Overview of Woody Biomass Resource Base, Supply, Demand and Markets in the Northern Forest Region Northern Forest Biomass Energy Initiative: Working Session Conference November, 006 Charles A. Levesque Innovative Natural Resource Solutions LLC Presentation Outline Goal overview of current and future woody biomass situation in NF region. In the forest: Forest overview Inventory Growth Access/availability. The markets: Location Size. Future look

2 . Forest overview World United States Northern Forest

3 Forests of the World 9.8 billion acres of forests in the world 0% of world land surface is in forests Net loss of 8 million acres of forests per year (most in South America and Africa) Source: 005 Global Forest Resources Assessment, Food and Agriculture Organization United Nations 5 Source: 005 Global Forest Resources Assessment, Food and Agriculture Organization United Nations 6

4 Findings (cont.) 7 Timberland Acreage Timberland = forest land producing or capable of producing crops of industrial wood (more than 0 cubic feet per acre per year) and not withdrawn from timber utilization 8

5 Forests in the US 750 million acres in trees (orig..05 billion ac) 500 million acres timberland (0 cu.ft./ac/yr) Harvests/mortality use only 50% of growth 9% owned by federal, state and local gov. 58% held by individuals % held by timber companies 9 Regional forest trends in the 8 States Million acres Interior West South North Pacific Coast Source: National Report on Forest Resources and other historic data

6 Understanding the Northern Forest region Forests in the Northern Forest States 5 million acres (almost 6 million in Northern Forest area) These four states are 75% forested 0.6 million acres of timberland Forests in the region are gaining inventory as harvests + mortality are less than growth 6

7 Northern Forest landowners types Northern Forest Landownership 9,000,000 8,000,000 7,000,000 6,000,000 Acres 5,000,000,000,000,000, ,000,000,000,000 0 Industrial Large Non-industrial Large NGO State land (statew ide) Landownership Type Federal land (statew ide) Northern Forest is gaining volume 50% 5% 0% 5% 0% 5% 0% 5% 0% 5% 0% 970s 980s 990s Seedlings Saplings Poletimber Sawtimber Acreage Source: A Forest Resource Model of the States of New York, Vermont, New Hampshire, and Maine, NEFA, 00 7

8 5,000 Timber inventory changes by State 0,000 5, s 980s 990s 0,000 5,000 Mm cu. Ft. 0 New York Vermont New Hampshire Source: A Forest Resource Model of the States of New York, Maine 5 Vermont, New Hampshire, and Maine, NEFA, 00 Inventory - The woody biomass Primer Primer on wood volume Overall Overall volumes of wood Higher Higher quality Lower Lower quality 6 8

9 . Cubic foot = x x 000 square foot home includes cubic feet of solid wood 7 Wood volume measurement (cont.): Wood volume measurement: Solid-. Board foot = x x x piece of wood 000+ square foot home includes 5,000 0,000 board feet of solid wood Weight- Ton is the weight measure 5-0 green tons chips = Green tons (~ 5% to 50% moisture) 8 9

10 Wood volume measurement (cont.): Volume- Cord = x x x8 stack (including spaces) Being used less and less 9 Volume of wood in the forest An acre of well-stocked Northern Forest woodland contains (not including tops): - 5+ cords or - 0,000+ board feet -,000+ cubic feet - 6+ tons of biomass Average acre contains: 9 cords or 8 tons 0 0

11 Standing growing stock wood volumes Maine New Hampshire Vermont New York TOTALS Unit = Millions of tons of wood biomass State Hwd Vol. Sft Vol. Total Vol. W/ treetops , ,7., ,70.,6.6 From public and private timberland potentially available for timber uses Source: FIA, NEFA and INRS LLC estimates Hwd = hardwood growing sft = softwood stock = 5 and up

12 Standing wood in truck boxes Hwd Volume Sft Volume Total Volume TOTAL Wood Volume for NF region 5.5 million trucks. million trucks 86.9 million trucks Plus Less Less Forest Growth Growth of growing stock trees In-growth (small trees into 5 +) 5 Mortality Harvesting = Net Growth = about.% of growing stock volume

13 State Maine Forest Growth (cont.) Total Vol Annual Growth 5.5 Vol. w/ tops,77.6 Annual growth w/tops.0 New Hampshire Vermont New York , TOTALS,7. 5.6, Unit = Millions of tons of wood biomass Source: FIA, NEFA and INRS LLC estimates 5 Growth summary Northern Forest states timberland acreage grows between: 6 million and 9 million tons per year of biomass 6

14 Timber harvested each year in NF States.9 million cords or.8 million tons of wood are harvested from Maine, New Hampshire, Vermont and New York forests each year (vs. 6 million and 9 million tons per year of biomass net growth) 7 Growth vs. Harvests NF region Tons of wood 50,000,000 5,000,000 0,000,000 5,000,000 0,000,000 5,000,000 0,000,000 5,000,000 0,000,000 5,000,000 0 Net Forest Growth per year Timber harvesting per year 8

15 Access/availability to timber Just because there is wood in the forest (and it is growing), doesn t t mean it is available for harvesting and use Major categories of unavailability: - reserved (we took care of that) - regulated - landowner attitudes 9 Access/availability to timber (cont.) On any given day, these factors make much of the forestland off limits to harvesting But what is most important is that there is enough land available for harvest over the course of the year Studies show that most landowners (even small family owners) are sensitive to price and will harvest on their land if the price gets high enough 0 5

16 Access/availability to timber (cont.) Conclusion on access/availability of woody biomass: *At INRS, we are becoming more and more convinced that wood availability / price, while important, is not the most important issue for the potential expansion of the biomass/energy wood using industry in the Northern Forest region. History has shown us that you can get wood if you have a market and are willing to pay. If many more large-scale plants get built, the wood may be expensive, but you will be able to get it. *Real issue for proposed large-scale facilities is "can you get it sited? Not many spots left in the Northern Forest region that want lots of trucks and a new industrial site, plus the possibility of emissions from combustion of C&D, which will become a more front-and and-center issue in all the states.. The markets BiomassBiomass Pulp Pulp & paper Solid Solid wood 6

17 Biomass use in the region large State # large biomass facilities Wood usage (tons/yr) Maine New Hampshire Vermont New York TOTALS 0 7,00,000,600, ,000 0,000 7,0,000 Note: These are stand-alone power plants. This table does not include the significant co-gen that occurs at regional forest industries (pulp & paper mills, OSB manufacturers, etc.) Large Biomass Using Facilities, Northern Forest Area 7

18 Biomass Facilities in Vermont A Success Story for Community-Scale Projects The school, industry and public facilities combine to use between 90,000 and 00,000 green tons of biomass each year. This is about the fuel needs for an 8 MW wood-fired electricity facility. McNeil Station is 50 MW, Pinetree Ryegate is 0 MW 5 Vermont Community biomass users (cont.) 50 or so facilities in Vermont Use a collective 9,000 tons of biomass per year (includes sawmill use of own material) New school/hospital use expected in Vermont and all states Each new facility uses tons of biomass per year (0-0 trucks per year) 6 8

19 Pulp and Paper State # pulp/paper Wood usage (tons/yr) Maine New Hampshire Vermont New York TOTALS 0 9,7,000,0,000 0,8,000 7 Large Biomass, Pulp & Oriented Strand Board Facilities, in Northern Forest Area 8 9

20 Maine Solid wood - Sawmills State # sawmills Wood usage (tons/yr) 8,580,000 New Hampshire 5 57,500 Vermont New York TOTALS 8 5,500,87,500,67,500 9 Sawmills in Northern Forest States 0 0

21 arge Biomass, Pulp, Oriented Strand Board and Sawmill Facilities, in Northern Forest Area Wood volume usage NF States Unit = tons of wood biomass State biomass pulp sawmills Total Maine,00,000 9,7,000,580,000 5,95,000 New Hampshire Vermont*,600,000 90,000 57,500,500,7,500,7,500 New York 0,000,0,000,87,500,97,500 TOTALS 7,0,000 0,8,000,67,500,70,500 * Includes community biomass users Source: INRS LLC

22 Wood volume usage Northern Forest States ,000,000 9,000,000 8,000,000 7,000,000 tons 6,000,000 5,000,000,000,000 Biomass pulp & paper sawmills,000,000,000,000,000,000 0 Maine New Hampshire Vermont New York Northern Forest Wood Usage vs. growth and inventory Maine Wood Volume 78.8 Annual Growth 5.5 () Wood usage 5.9 New Hampshire Vermont (.9) 5. (0.8).. New York (6.5).9 TOTALS, (9.). () = growth with tops Unit = Millions of tons of wood biomass

23 Biomass Growth vs. Wood Usage Northern Forest states million tons of wood growth usage (all industries) 0 Maine New Hampshire Vermont New York 5 Wood Flows Source: NEFA 00 6

24 Procurement Drive-Times to Biomass, Pulp & Oriented Strand Board Facilities, in Northern Forest Area Orange area indicates drive time: - minutes per MW biomass - 0 minutes pulp mill - 60 minutes OSB 7. Future Look Wood and fossil fuel prices Potential new biomass plants What we would like to know 8

25 Wood and Oil Prices, W ood (Northern NH) Oil Wood ($/ton) Oil ($/barrel) Q 95 Q 96 Q 96 Q 97 Q 97 Q 98 Q 98 Q 99 Q 99 Q 00 Q 00 Q 0 Q 0 Q 0 Q 0 Q 0 Q 0 Q 0 Q 0 Q 05 Q 05 Q 06 Q 06 Data Sources: NHTOA Timber Crier, US DOE Energy Information Agency 9 Potential Future Biomass Plants INRS believes that in the next 5 years, another 5 large-scale biomass plants will be built and operating in the region, using.5+ million tons of biomass annually It is likely that or pulp mills will also close during that time It is also likely that a dozen or more new community-scale facilities will be built using an additional 5,000 tons+ annually 5 0 5

26 Future of the Forest Resource NEFA 50-year Forest Model of Northern Forests steady-state run Inventory increases over 50 years net growth decreases Source: Turner and Caldwell, A Forest Resource Model of the States of New York, Vermont, New Hampshire, and Maine, 00 5 Future of the Forest Resource (cont.) NEFA 50-year Forest Model of Northern Forests increased-demand run (%/yr) Inventory increases initially and then decreases Harvest levels outpace net growth in 0 years Source: Turner and Caldwell, A Forest Resource Model of the States of New York, Vermont, New Hampshire, and Maine,

27 What it would be nice to know Future logging capacity (easier to get rid of it than get it back) Future wood biomass prices Availability of wood Certification systems can they work for biomass? 5 Conclusion Biomass will become a much bigger player in the Northern Forest region Forests can handle addition harvesting given excess growth Wood markets will continue to be complicated and hard to predict. 5 7

28 Charles A. Levesque, President Innovative Natural Resource Solutions LLC 7 Old Pound Road Antrim, NH levesque@inrsllc.com