Alternative energy Push Back
by Guest Blogger Peter R.
Great comments from Pete B and Rocky on alternative energy/biomass future for Berlin and beyond.
Lest I be confused with the ash-holes who predict Berlin will revert to the ice-age from many feet of ash precipitate from a biomass plant, let the record show wood to energy plants must meet exacting air emissions standards to qualify for Renewable Energy Credits.
In fact those standards are tougher than NH Air Resources permits allow, which themselves are pretty tough. That is not my concern, nor should it be any one else’s. Let’s stay on topic and remain focused on the critical issues facing developers of these plants.
My larger concern is the potential cyclic economic nature of these plants and the uncertain economic future they evoke for Berlin and Coos County if the wood supply is not constant and sustainable well into the future.
Berlin and the county have a unique opportunity to largely remake the economy. Not an easy task and a daunting one but there literally is no place to go but up. What that future looks like is, as others have said, up to us. It’s not the exclusive purview of the Berlin City Council or the Coos County Commissioners. It’s all of us participating in a larger dialogue to determine that future course.
As I’ve said before and I’ll repeat here as it bears heavily on these discussions; we need facts and data to inform those discussions, not emotion and nostalgia and a yearning for “the way things used to be”. Our primary goal should be a stable and sustainable economic base to build off for future decades, not one in which here today, gone tomorrow is the watchword.
Pete B does some simplified math to suggest that Laidlaw’s plan will only draw on 40% of the previous fiber demand for the Burgess plant. That completely ignores the wood fiber appetite of the North Country Renewable Energy plant planned for Groveton, a plant that is further along in the planning stages than Laidlaw’s.
Groveton’s plant (bio-energy and bio refinery) has its eyes on 1.2 million tons of low-grade wood as its energy source. Oops! There goes Pete’s mathematical cushion. He mentions that PSNH’s Northern Wood project in Newington is buying wood at $30 per ton. While that’s a nice number it is based on a business climate in which there is a limited and fairly static demand. Add in another 1.7 million tons of low-grade wood demand (from the combined Berlin and Groveton plants) and the price rapidly escalates to the $40 per ton and beyond range. Probably not an acceptable figure for any new plant’s business plan.
But back to the wood basket for a minute. Presently a large portion of PSNH’s wood is coming from development cuts on Cape Cod. The problem with this source is it is not sustainable. Once it’s cut and transformed into shopping malls or housing developments that’s it for that low-grade fiber source. Not exactly a sustainable source. Is that the future you see for the Great North Woods of NH, Pete?
The issue is sustainability.
Let’s try another pricing scenario not easily dismissed. Presume for a moment that turning wood chips into ethanol, butanol and other cellulosic-based (read wood-based) chemicals are commercialized in the next 5-10 years. From my conversation with forest products researchers, these are the highest value-added uses for wood fiber, the goal of any business is to add value and thereby profit. The same researchers rank electricity generation as the least value-added uses (and Pete has admitted power generation is a 30% efficient affair).
So now we have investors jumping on the wood to synthetic fuels industry for a handsome return on profits at several magnitudes beyond those from generating kilowatts (even with REC’s available). What happens to Laidlaw’s investment in the biomass plant in downtown Berlin or the NCRE plant in Groveton?
Specifically, what happens when a ton of low-grade wood starts fetching $45 to $60 per ton? Do the biomass-energy investors walk away from their tens of millions in investment because their business plan, based on their presumed cost per ton of wood, is blown up in smoke ?(steam?)
Is that the stable economy we’re chasing so heartily that we lambaste anyone with a divergent viewpoint? I surely don’t have the answers, only cautionary tales to consider as we move forward. I don’t see the Mayor convening any open forum on Berlin’s or the millyard’s future.
For sure Berlin needs taxable investment. Neither the Federal prison nor the Jericho ATV park bring much of that though they’re touted as great leaps forward). It’s a shame we don’t see the forest for the trees (sorry for the mixed metaphor). As long as we rely exclusively on the property tax to fund our schools, towns and county we’re stuck in this competitive grind with our neighboring communities for the next great economic development project, the next great property tax generator.
This really is a regional issue and a conversation convening in the other 34 Northern Forest communities who are experiencing the same economic downturn borne of timber industry reliance on the paper manufacturing economy.
In short, we’re all in this together and rather than carving the shrinking pie into ever smaller pieces we should be looking for ways to grow the pie. As we carve the pie could we use the sharp edge of facts and data to slice through the malarkey and try to keep focused on that which provides the best return, the most efficient operation, the wisest use of our resources to the benefit of us all for decades to come?
Looking forward to the continuing dialogue.
Special thanks to Peter R.
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