Economists at Oregon State University (USA) explored whether the utilization of residual forest biomass may be a source of jobs in the near future. The results were quite surprising.
Many studies found that the development of a market for currently non-merchantable forest material, such as harvest residues or small diameter trees, has been suggested as a possible win-win solution.
Use of woody biomass could provide a material that can be processed in rural communities reeling from changes in the forest products industry and policy environment. Also, woody biomass utilization could capture more value from timber management activities. Finally yet importantly, it could provide a financial incentive for treatments to reduce wildfire risk or restore forest stands. However, the question is whether the utilization of residual forest biomass may support rural development?
Researchers from the College of Forestry modeled the supply of residual forest biomass with spatially-explicit potential demand locations, which allowed for a realistic analysis of the feasibility of such a market to stimulate rural development in western Oregon. They explored the feasibility of market-driven investment in intermediate shipping or processing facilities (“depots”) for woody biomass in rural communities in 19 western Oregon counties. In particular, they extended and applied an existing spatially-explicit regional forest products market model to identify locations where these depots might emerge under a range of price-cost structures and alternative levels of harvest on federal land. Probably it was the first attempt to model the use of an emerging forest products technology as a specific rural development strategy within a spatially-explicit, market-driven context. In the analysis, researchers from Oregon State have used a Regional Model of Timber Supply with Emerging Technologies, or RMTSET1.
They selected western Oregon because it characterizes with high levels of forest productivity and profitable harvest. Western Oregon can potentially supply large amounts of biomass as harvest residue and it contains many forest-located communities that have experienced declining operating mill numbers and employment losses in recent decades.
Researchers identified 65 likely locations in western Oregon for such facilities, which they call “depots.” Potential depot locations used in the model, along with locations of current processing facilities are shown in the figure below. Note that federal lands are indicated in green.
Nevertheless, according to an analysis by economists at Oregon State University, the utilization of residual forest biomass for rural development faces significant economic hurdles that make it unlikely to be a source of jobs in the near future.
Mindy Crandall, who led the research as a doctoral student at Oregon State and who is currently an assistant professor at the University of Maine said:
“There’s a lot of interest in focusing on the use of biomass to meet multiple objectives, one of which is support for rural communities. We thought this might provide some support for that idea. But from a strictly market feasibility perspective, it isn’t all that likely that these facilities will be located in remote, struggling rural communities without targeted subsidies or support.”
Crandall and her colleagues estimated that a depot operating three shifts per day and producing 75,000 dry tons per year would create about 19 jobs.
Results of their study suggested also that with relatively high biomass prices, there is some potential for investment in depots to aid rural communities in western Oregon, but there is little change in either the overall feasibility or the location of depot establishment under scenarios of increased federal harvest.
Regarding the second conclusion, researchers considered the possibility that an increase in material from federal forests would make a difference. Nevertheless, such scenario showed that the transportation costs would rise because such lands tend to be remote from likely depots.
Darius Adams, co-author on the paper said:
“Just like with real estate, it’s ‘location, location, location’ that matters here, and national forest lands are not uniformly distributed across the landscape. They are frequently in less accessible areas, and it would cost more to transport material.”
Support for the research came from the Northwest Advanced Renewables Alliance led by Washington State funded through the National Institute of Food and Agriculture in the U.S. Department of Agriculture.
1RMTSET combines these features with a model of the biomass market to examine the feasibility of employing new technologies and underutilized material, processed at dispersed locations (depots), to capture some of the benefits of biomass utilization in rural areas. It uses GIS data to identify potential depot locations and to generate realistic transportation cost estimates of biomass fromwoods to depots and a mixed-integer model that allows spatial tracking of individual biomass facility locations.
Source: Crandall, M. S., Adams, D. M., Montgomery, C. A., & Smith, D. (2017). The potential rural development impacts of utilizing non-merchantable forest biomass. Forest Policy and Economics, 74, 20–29.
Main photo credit: Rafal Chudy