EXCITING NEWS ABOUT OUR AREA

Plant set to spread wealth (courtesy News Herald)

Renewable energy industry provides multiple opportunities for local businesses

    Of all the ways to gauge Green Circle Bio Energy’s effect on Northwest Florida and surrounding states, 1 million tons provides a good measurement.

    That is the amount of wood Green Circle Bio Energy estimates it will need annually to supply its Jackson County pellet facility. And with that level of pellet production comes, potentially, more work for timber harvesters, increased job creation for truckers and higher revenues for Port Panama City.

    “This project will have such a huge economic impact, not only on the Panhandle, but the whole state,” said Rep. Marti Coley, R-Marianna, as she talked about the plant affecting the region’s forestry industry, timber trucking and Port Panama City.
    The Jackson County Development Council has estimated the new business will generate $30 million in revenue for the region’s timber industry, with the finished pellet product resulting in annual export sales of more than $65 million.
    That’s in addition to the $104 million in private investment poured into the Green Circle plant, the $700,000 annually in ad valorem tax revenue going to Jackson County and about 50 jobs created at the facility.
    “I think that any time you can add a new market in an area, it makes everybody more profitable,” said company wood procurement manager Bill Waller, as he described the pellet plant’s wood needs.

Hungry for wood
    To supply its plant daily with a wood diet that includes 30 truckloads of groundwood and 10 loads of sawdust and shavings, Green Circle is employing 15 different area wood suppliers, Waller said.
    The supplier list includes sawmills, timber harvesting companies and individual landowners, and Waller said he expects the number of Green Circle suppliers to rise as high as 25. All of Green Circle’s wood is being secured within a 50-mile radius of the plant, Waller said.
    With the price of diesel fuel climbing toward $4.80 per gallon in Florida and surrounding states, “They like having a close haul,” Waller said of the suppliers.

    Any long-term regional renewable energy production based on wood is also dependent on sustainability and regeneration of the resource.
    Florida Department of Agriculture and Consumer Services spokesman Terry McElroy said renewable energy-related timber harvesting within the state would involve selective cutting. He said the state was most concerned with preserving forestlands as it promotes use of wood and other homegrown resources in renewable energy endeavors.
    “I don’t think there’s any idea of depleting resources, because I think a lot of the resources are wood products,” McElroy said.

    An alternative energy feasibility study commissioned by Florida’s Great Northwest, an economic development organization, estimated the region’s amount of biomass timber product available annually for future bioenergy production at between 2 and 9 million tons. The estimate, reached through data from the Florida Division of Forestry, the U.S. Forest Service, the USDA, and interviews with industry officials, excluded from its final tonnage total Green Circle’s projected timber use and mill residues used by three local pulp and paper mills.
    The organization emphasized in the study that the exact availability of timber biomass for alternative energy production in its 16-county region was unknown because of an uncertainty of the volume, availability and transportation infrastructure of the area’s “timber understory.” Timber understory refers to tree limbs, branches, snapped trees not usable for a higher commercial product, according to the study.
    Jarek Nowak, a forest utilization specialist with the Florida Division of Forestry, said his office relied heavily on U.S. Forest Service timber resources data.
    Nowak, using the Forest Service’s Forest Inventory Mapmaker tool, said he found 2.4 billion cubic feet of available timber resources in a 50-mile radius from the intersection of Interstate 10 and U.S. 231, or about a mile north of Green Circle’s pellet plant site.
    The forestry official said it is difficult to know how much wood is being used in the region at any given time.
    An official with the Florida Forestry Association said he thought it was little premature to assess Green Circle’s impact on the local market, both in terms of their wood use, competition for wood resources with existing paper and sawmills, and what it might mean for regional timber pricing.

FFA Director of Responsible Forestry Phil Gornicki said he had taken a tour of Green Circle’s pellet mill in May and knew of at least a couple organization members that were suppliers to the company.
    With the company still at less-than-maximum production capacity, Gornicki said he thought it was too soon to speculate on Green Circle’s broader impact.

Supply and demand
    In 1999 and 2004, then-Gov. Jeb Bush designated Jackson County and its surrounding counties as a rural area of critical economic concern to give the area more access to the state’s economic and tourism development incentives.

    A declining timber industry was one factor that contributed to Jackson County’s economic decline, according to the Jackson County Development Council. But Green Circle’s presence could be a boon for companies like Morris Timber Products, a Lynn Haven timber harvesting and brokerage company with 45 employees that’s been in business 21 years.
    Business owner Hayes Morris said his company would be one of Green Circle’s suppliers, citing a longtime business relationship with Waller. Morris said he thought the company would significantly impact demand for the region’s pulpwood products and eventually could lead to increased revenues for individual landowners.

    The roughly 150 logging contractors that supply mills in Northwest Florida, Southeast Alabama and South Georgia will be able to produce on a consistent level, Morris said, regardless of whether any of those contractors are actually supplying the Green Circle facility with wood.
    “With Green Circle coming in, we as a community won’t have to worry about limited capacity,” Morris said, “because their demand will be absorbed by the excess capacity.”
    Morris said his industry had been fairly stable since 2003, but had seen relatively flat revenue growth.
    The Green Circle plant is not the only one producing pellets in the region, and Morris said he was aware of several other plants being built across the Southeast, including one in Selma, Ala. “It’s certainly a growth industry,” he said.

    New Gas Concepts, a Pelham, Ala.-based project development company, opened the Dixie Pellets wood pellet plant in Selma, Ala. earlier this year. Sam Duvall, a spokesman for the Alabama Forestry Association, said the plant delivered its first pellet shipment by barge to Mobile’s port in January or February. The Selma plant is capable of annually producing 500,000 pellet tons, he said.
    Wood pellet plants locating near areas with plentiful timber sources is similar to Midwestern ethanol plants opening in states with abundant corn feedstocks, Duvall said.

    Alabama’s forestland covers 22 million acres of the state, and Duvall said about 78 percent of that area is privately owned.
    “We call the counties down in Southeast Alabama the ‘wood basket’ because there’s so much standing wood in those counties,” Duvall said.
    Duvall said New Gas Concepts is building a second wood pellet plant in Jackson, Ala., which is located in Clark County, north of Mobile.
    That plant’s output could reach 650,000 tons annually, which would eclipse Green Circle’s maximum production level and make the facility the world’s largest wood pellet plant.
    With the competition for wood heightened by these new pellet plants, Duvall said there might be some industry concern of pulpwood prices rising with the new utilization of the wood.