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At this stage of the analysis, we remain focused on biomass supplies from acres that are already under harvest for sawtimber and other industrial roundwood products. We restrict the potential for forest biomass to this footprint because of our assumption that biomass stumpage prices remain near recent levels. As shown in Exhibit 3-5, stumpage prices for forest biomass chips averaged only $1−$2 per green ton in southern New Hampshire in 2008 and 2009. Prices were lower than this in western Massachusetts, but higher in Maine. At these price levels, there will be little incentive for landowners to bring additional acres into produc- tion. Historically (at least for the past several decades), timber harvests in Massachusetts have been driven by the demand for sawtimber23 and in this scenario, this continues to be the case. Exhibit 3-5: Average Cost of Fuel Grade Chips in Southern New Hampshire 3.2.3.1 Costs of Whole-Tree Harvesting In whole-tree harvesting systems, trees are felled by either mechan- ical or manual means and moved to a landing with most or all of their tops and branches. For our analysis, the costs of whole-tree harvesting in Massachusetts are important because low-value trees that are cut only for biomass chips have to bear the full variable costs of the harvest. If a logging operation is arranged to include biomass chip production, some portion of the cost of getting equipment to the site and setting up operations should also be covered by biomass. These fixed costs are one reason that produc- tion volume is an important economic variable in determining the profitability of biomass harvests. In order to estimate the costs of whole-tree harvesting in Massachusetts, we have conducted a large number of simula- tions with the Fuel Reduction Cost Simulator.24 Our main interest in this analysis is to understand the relationship between tree size and the chip production costs because it commonly stated that pre-commercial thinnings and small trees can make a significant contribution to forest biomass supply. This model can also be used to analyze the relationship between chip production costs and a host of other factors such as block size and skidding distance. 25 We designed this analysis to determine the cost of producing 25 green tons of wood chips on one acre (this volume is based on our analysis of availability in the next section) using different combinations of the size and number of trees.26, 27 The results are presented in Exhibit 3-6. Although these parameters will 24 The Fuel Reduction Cost Simulator (FRCS) was developed by the U.S. Forest Service (Fight et al., 2006) to estimate the costs associated with fuel reduction treatments in harvests of whole trees, logs, and chips with a variety of harvesting systems. Although originally developed for forests in the Northwest, the model has been subsequently expanded to other regions (including the Northeast) by Dennis Dykstra and is available on the U.S. Forest Service website at: www.fs.fed.us/pnw/ data/frcs/frcs.shtml 25 Our analysis in Task 5 has also utilized this model as a key source in developing estimates of diesel consumption as a component of the life-cycle analysis. 26 Assumptions made so that conditions would be representative of average conditions of Massachusetts include: a) harvest block size of 50 acres, and thus an average skidding distance of 600 feet; b) terrain sloped 5%; c) species mix evenly distributed between softwood and hardwood. 27 We also assumed no move-in costs simply to avoid the issue of how these costs should be shared with sawtimber operations. Move- in costs depend directly on the total tons produced from a given logging operation. In our simulations, producing 25 green tons on 50 acres (1250 tons total) results in move-in costs of $1-$2 per green ton (assuming a 15-mile move) if there is no complementary sawtimber/pulpwood harvest to share the expense. If 25 green tons are produced on 25 acres, then move-in costs per green ton remain about the same because the doubling in fixed costs is approximately offset by the reduction in skidding costs due to shorter hauls. BIOMASS SUSTAINABILITY AND CARBON POLICY STUDY Dollars per Green Ton Delivered Stumpage Difference 2005 $18 $0.8 $17 2006 $23 $0.8 $22 2007 $22 $0.9 $21 2008 $32 $1.2 $31 2009 $30 $1.6 $28 Source: Compiled from average quarterly prices as reported by the New Hampshire Timberland Owners Association’s Market Pulse and reported in the Timber Crier magazine. If the demand for biomass fuel increases in response to an expansion in bioenergy plants, how much “new” biomass could be harvested economically from areas already under harvest for sawtimber in Massachusetts? There are three analytical tasks involved in this projection. First, we address the issue of harvesting costs in Massa- chusetts: if new biomass demand originates from electric power plants, it would almost certainly be accompanied by an increase in whole-tree harvesting; thus, we start with an analysis of these costs. As shown in Exhibit 3-5, delivered prices for fuel grade chips were about $30 per green ton in 2008−2009 and we are assuming that biomass producers must be close to that target for electric power plants. If new biomass demand originates from thermal and CHP plants, they can pay higher prices for wood chips and thus have the option of using alternative logging methods; in addition, they will be competing for bolewood because of their need for higher- quality chips. Second, we consider the issue of how much low-value timber (that is, timber with low stumpage prices) is available on typical stands that are being harvested for sawtimber? Once we have established how much low-value wood is available and the cost of harvesting it, we then consider whether landowners would be amenable to these higher harvest levels. Using this information, we conclude this section with a projection of how much forest biomass supply would be available at current energy prices. 23 According to Forest Cutting Plan reports for 1984−2003, 95% of harvests included sawtimber. MANOMET CENTER FOR CONSERVATION SCIENCES 40 NATURAL CAPITAL INITIATIVEPDF Image | NATURAL CAPITAL INITIATIVE AT MANOMET
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