KRBD - Ketchikan

The Trump administration announced this week it is planning to impose a tariff of up to 24 percent on softwood lumber imported to the U.S. from Canada. It’s uncertain what this will mean for the timber industry in Southeast Alaska.

Ketchikan-based Alcan Forest Products has operations in the United States and Canada. Partner Brian Brown says the tariff will raise the price of lumber. While he says it will likely be a net positive for his business, he does not support the tax.

“I think the net result of this duty is bad. It’s bad for consumers. People are going to pay more for lumber, period. There’s no doubt in my mind on that. That’s a fact.”

In addition, Brown says it will be bad for businesses.

“If you’re a producer, particularly in Canada, how do you run a business? All of the sudden you have to pay a 20 percent tax. It’s tough to run a business. And Canada, the last time I checked, was an ally of ours. I don’t know. I think it’s fraught with risk.”

Owen Graham, executive director of the Alaska Forest Association, disagrees. He says he thinks the tariff will benefit the Southeast timber industry.

“A portion of our lumber, particularly hemlock, goes to the Lower 48. It would help that lumber. It would take some of the Canadian wood off the market, and that would tend to raise the price up a tiny little bit. So it would be a help to Alaska producers.”

Graham says more than a tariff, he would like to see the U.S. government adopt more business-friendly practices, similar to those in Canada.

“They’re more interested in jobs than they are in some of the other things that come off the forest. They tend to have a larger economy of scale that gives them a huge advantage over our sawmills.  And they allow the mills to manage some of the land for them, and so the mills can get additional savings that way.”

According to a U.S. Commerce Department report, Canadian exports of softwood lumber to the United States in 2016 were valued at $5.6 billion.

It’s great to talk about biomass as a renewable energy source, but how does it work in real-world situations? During last week’s Alaska Wood Energy Conference in Ketchikan, participants heard three “case studies” from communities in Alaska that have invested in biomass.

Galena is a small village about 300 miles west of Fairbanks. It gets cold there in the winter – like negative-40 cold – so heat is pretty important.

Their big industry is education. Galena is home to a regional boarding school on the site of a former U.S. Air Force base. Tim Kalke is a teacher at that school, and worked on plans to improve the heating system for the 14-building Galena Interior Learning Academy.

“Heat to these buildings was distributed through steam,” he said. “They had several steam boilers that took the load. Very inefficient, and very old. Annual consumption of fuel for that system was about 230,000 gallons.”

Kalke said getting a new wood-chip boiler was essential for the community to continue operating the school economically, and there were many steps from start to finish.

For example, they needed a forest inventory to make sure they had enough wood fuel. They had to redo their entire water pipe system because, it turned out, one of the reasons the old steam boilers were so inefficient is the heat from that system kept the water pipes from freezing.

Then they had to convert the old steam boilers to hot water boilers – they supplement the wood chip boiler as needed. And they had to figure out a system for harvesting, drying, chipping and storing wood.

The new system has been in place for a season, and there were some kinks to work out when they first cranked it up. But, Kalke said, so far it’s displaced 52,000 gallons of fuel oil.

Ketchikan International Airport was another case study presented for the conference. Airport Manager Mike Carney said he first looked into replacing the airport’s oil-fired boilers with another oil system.

“Interesting enough, I probably got a higher bid to replace my oil-fired boilers with another oil system than I ended up with with biomass,” he said.

Carney somewhat jokingly thanked everyone who made mistakes installing their own biomass systems. He said he learned from those mistakes. One big lesson was to hire biomass engineers with a proven track record of successfully installed systems.

“And when I say successful systems, I don’t go to the bean counters or to the contracting officer to find out if their system is successful. I go to the guy who pushes the buttons,” he said.

Ketchikan airport’s biomass boiler was installed and operational in summer of 2016. It was almost entirely grant funded, and saves the airport an estimated 40 percent on fuel costs. It also uses locally produced wood pellets.

Tanana City Manager Jeff Weltzin talked about the project his community installed to heat the city’s public buildings. He said one of the city’s goals is reducing the need for imported fuel as much as possible.

To that end, they connected their old oil-fired boilers to the new biomass system, cutting their oil use significantly, even during this last, extremely cold winter.

“We estimate this last winter, we displaced 40,000-50,000 gallons of fuel, so even at $3 a gallon, that’s $120,000 to $150,000 of savings,” he said.

Weltzin said the wood supply surrounding Tanana is good for many decades, and they expect they also can use standing-dead trees left after a massive wildfire came through the area a couple years ago.

“We found that standing dead in the Interior has a longevity of 30 years,” he said. “We have tens of thousands of acres of standing dead around the community. Our goal is to do a harvest plan and ultimately try to replant, regenerate, with some high-value trees.”

Along with hiring local residents to harvest trees for the biomass boilers, Weltzin said reforestation is another potential economic-development investment for the community.

They’re also working toward a biomass-heated greenhouse for local students to operate – yet another sustainable investment connected to wood energy.

It’s great to talk about biomass as a renewable energy source, but how does it work in real-world situations?

During last week’s Alaska Wood Energy Conference in Ketchikan, participants heard three “case studies” from communities in Alaska that have invested in biomass.

Galena is a small village about 300 miles west of Fairbanks. It gets cold there in the winter – like 40 below zero cold – so heat is pretty important.Their big industry is education.

Galena is home to a regional boarding school on the site of a former U.S. Air Force base. Tim Kalke is a teacher at that school, and worked on plans to improve the heating system for the 14-building Galena Interior Learning Academy.

“Heat to these buildings was distributed through steam,” he said. “They had several steam boilers that took the load. Very inefficient, and very old. Annual consumption of fuel for that system was about 230,000 gallons.”

Kalke said getting a new wood-chip boiler was essential for the community to continue operating the school economically, and there were many steps from start to finish.

For example, they needed a forest inventory to make sure they had enough wood fuel.

They had to redo their entire water pipe system because, it turned out, one of the reasons the old steam boilers were so inefficient is the heat from that system kept the water pipes from freezing.

Then they had to convert the old steam boilers to hot water boilers – they supplement the wood chip boiler as needed.

And, they had to figure out a system for harvesting, drying, chipping and storing wood.

The new system has been in place for a season, and there were some kinks to work out when they first cranked it up. But, Kalke said, so far it’s displaced 52,000 gallons of fuel oil.

“Interesting enough, I probably got a higher bid to replace my oil-fired boilers with another oil system than I ended up with with biomass,” he said.

Ketchikan International Airport was another case study presented for the conference.

Airport Manager Mike Carney first looked into replacing the airport’s oil-fired boilers with another oil system.

Carney somewhat jokingly thanked everyone who made mistakes installing their own biomass systems. He learned from those mistakes.

One big lesson was to hire biomass engineers with a proven track record of successfully installed systems.

“When I say successful systems, I don’t go to the bean counters or to the contracting officer to find out if their system is successful,” he said. “I go to the guy who pushes the buttons.”

Ketchikan airport’s biomass boiler was installed and operational in summer of 2016.

It was almost entirely grant funded, and saves the airport an estimated 40 percent on fuel costs. It also uses locally produced wood pellets.

Tanana City Manager Jeff Weltzin talked about the project his community installed to heat the city’s public buildings. He said one of the city’s goals is reducing the need for imported fuel as much as possible.

To that end, they connected their old oil-fired boilers to the new biomass system, cutting their oil use significantly, even
during this last, extremely cold winter.

“We estimate this last winter, we displaced 40,000-50,000 gallons of fuel, so even at $3 a gallon, that’s $120,000 to $150,000 of savings,” he said.

Weltzin said the wood supply surrounding Tanana is good for many decades, and they expect they also can use standing-dead trees left after a massive wildfire came through the area a couple years ago.

“We found that standing dead in the Interior has a longevity of 30 years,” he said. “We have tens of thousands of acres of standing dead around the community. Our goal is to do a harvest plan and ultimately try to replant, regenerate, with some high-value trees.”

Along with hiring local residents to harvest trees for the biomass boilers, Weltzin said reforestation is another potential economic-development investment for the community.

They’re also working toward a biomass-heated greenhouse for local students to operate – yet another sustainable investment connected to wood energy.

Ketchikan hosted the annual Alaska Wood Energy Conference last week, where participants heard about how biomass works in different places, and how to make the technology more known, and eventually less expensive to install and operate.

Biomass is ancient.

Humans have been burning wood to produce heat and light for thousands of years; but new technology has turned that ancient energy source into low-emission fuel that fits nicely on the menu of renewable energy options.

Unlike wind and solar, for example, biomass doesn’t get a lot of policy perks, which has slowed its growth.

That was a recurring theme of the 2017 wood energy conference – building policy.

In his presentation, Chris Rose of the Renewable Energy Alaska Project spent some time making the case for biomass: energy demand is on the rise, fossil fuels will run out, and renewable energy is a fast-growing industry that the United States – and Alaska — shouldn’t miss out on.

One big reason is the potential cost savings.

“Alaskans are estimated to be using about $5 billion worth of energy every year,” he said. “So, if you collectively put together all the money that you and I put into transportation, heat and electricity: 730,000 people, we’re spending $5 billion. Let’s just say we can save 20 percent of that $5 billion. That’s a billion dollars we’re literally burning up every year.”

In Alaska, though, Rose said state funding for biomass has dried up.

Traditional banks don’t like to invest in biomass, because they consider the technology too new, and therefore risky.

Rose suggests that the state establish a “Green Bank,” an independent state agency, kind of like the Alaska Industrial Development and Export Authority, that attracts private investors for biomass projects by providing some guarantees for the loans.

“It’s all about not spending state money,” he said. “It’s all about leveraging state money and getting as much private money out of the markets as possible.”

The model already exists, and Rose pointed to the Connecticut Green Bank as a success story.

Canada already has taken a lead on encouraging biomass through policy. Several presenters from Canada talked about how that works for Alaska’s closest neighbor.

Fernando Preto, a biomass researcher based out of British Columbia, said the Canadian federal government has specific policies in its proposed budget to support renewable and sustainable energy projects, including biomass, for the northern territories.

The total for those projects is about $300 million Canadian.

That huge swath of land is sparsely populated, even by Alaska standards, with small, isolated communities. And a large portion of the territories is treeless, too.

So, like Alaska, there’s no one solution that will fit all the needs. They have to get creative, Preto said, and policies have to be flexible. It’s worth the investment, though, because of the potential long-term economic benefits.

“If you have wood resources, you have local employment, you have local development, but much more important than that is the capacity,” he said. “In some communities, especially in northern Ontario, they are at the capacity (or) near the capacity of their diesel generators. When they reach 75 percent of capacity, they go into a load restriction status. Any local industry is told you have to cut back on your power consumption.”

That’s not an attractive situation for industries exploring new locations.

Blair Hogan of the Teslin Tlingit Council in the Yukon also spoke. While they have hydro for their electric needs, they were on diesel for heat. He said their new biomass heat system uses chipped waste wood harvested locally.

How did policy help them? Hogan said government grants were a major contributor. And with the new system, the community now has a source of local jobs and a way to reduce the area’s wildfire risk.

Ryan Hennessy, senior energy planner with the provincial government of Yukon, said the government has a “basket of policies” to increase the viability of biomass.

One example is a policy to use biomass in public facilities and government buildings, which provides a large, steady customer for wood chips or pellets, thus supporting the industry.

“What went along with the biomass energy strategy was public consultation,” he said. “This proved very important to us. We heard a lot of things both for and against biomass. People were broadly in favor of biomass energy.”

But, he said, people also had concerns about the potential for overharvesting, and environmental problems related to emissions.

So, Hennessey said, they worked to calm concerns about timber supply and emissions – the newest technology provides a pretty clean burn — and they helped fund training within communities such as Teslin, teaching locals the various aspects of supplying and running a chip boiler.

Washington and Oregon also have some established policies to encourage biomass.

Dylan Kruse of Portland-based Sustainable Northwest said one of the challenges for biomass is, right now, it’s more expensive than natural gas. But, he said, policies can narrow that price gap through tax credits, like those that drive solar and wind-energy projects.

That would require people in the biomass industry to toot their own horns.

“We don’t do it as well; we’re not as proud of it. But we should be. It’s renewable; it’s base-load power, that’s very valuable to utilities,” he said. “It’s got diverse outputs and distribution, whether it’s electricity or heat or even transportation fuels. We can save money and reduce our dependence on fossil fuels, and it has a lot of other great ancillary benefits, like supporting forest stewardship and controlled waste disposal.”

There are some federal programs in place that help, such as the U.S. Forest Service’s wood energy grants.

But, Kruse predicts there will be less help on the federal side in coming years, so the focus should be on increasing and improving policies within individual states.

Kruse said the best way to encourage state policy is to talk with lawmakers and their staff, and to work with individual communities that are interested in biomass, so they, too, can lobby for state incentive policies.

The Alaska Senate unanimously approved a measure Thursday allowing a land exchange between the state and federal governments.

Senate Bill 88, sponsored by Sitka Republican Sen. Bert Stedman, allows a land trade between Alaska Mental Health Trust and the U.S. Forest Service, in which the trust would receive nearly 20,000 acres for timber harvest in exchange for approximately 18,000 acres near several Southeast communities.

In a Thursday announcement, Stedman said that through the exchange, the trust would be able to raise revenue for its services, the region’s logging industry would have access to a timber supply, and communities would not have logging occur in sensitive areas.

The sites that would become Forest Service land include Ketchikan’s Deer Mountain and land above homes along Petersburg’s Mitkof Highway.

Completing the transfer requires approved bills from both the state Legislature and U.S. Congress. There are federal measures moving through the process, sponsored by U.S. Sen. Lisa Murkowski and U.S. Rep. Don Young.

A similar state House bill also was introduced by Ketchikan Rep. Dan Ortiz. That bill, HB 155, is still in committee.

Alaska State Troopers are warning state residents of a telephone scam that has affected people in the Fairbanks area, but could happen elsewhere in the state.

Troopers report that numerous people have contacted them about phone calls they received, during which the callers identify themselves as troopers representatives, and state that the person called has missed a court appearance, and/or has a warrant.

The callers then talk victims through purchasing prepaid debit cards and providing the access numbers. The suspects also provide a phone number that victims can call that has an elaborate voicemail system identifying itself as Alaska State Troopers.

In a Tuesday announcement, Alaska State Troopers stressed that the agency will not take payments except for records requests, background checks and similar services, and even then only in person.

Anyone who receives one of these suspicious calls should not agree to any payment, and should contact a local troopers post immediately to report the phone call.