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Renewable energy project

From Jennifer Krauss Phillippi & Link Phillippi

Rough & Ready Lumber Co.

Cave Junction

All of us at Rough & Ready appreciate our community for the incredible support we received in the building of our cogeneration plant. After a long, complicated process that began some three years ago, 1,500 homes (the equivalent of ) are being brightened with home-made, locally grown, renewable electricity.

We hesitate to burden readers with too much information about our reasons
for constructing the plant, but so much interest has been shown and so many questions asked that we thought a quick rundown of how it all happened might be in order.

One day as we sat in our office across the street from the 2002 still-smoking Biscuit Fire, wondering whether we had a future as a sawmill in Illinois Valley, the once only dreamed of idea for a co-generation plant began to grow. We considered that, while the loss of our historical access to local federal timber had created a seemingly insurmountable problem, that same proximity to the federal lands might somehow provide an opportunity for us.

As the importance of forest thinning and restoration began to be widely talked about, we imagined how satisfying it would be to help restore those forests that we, like many in our community and elsewhere, have spent our lives in.   

As the next couple of years passed, the idea of a co-generation plant developed further. Drying enough lumber for our customers has always been a challenge, and in recent years more and more products are being sold dry. Our small company had not been able to upgrade our boiler and dry kilns until
we considered co-generation. 

With it, a revenue stream from selling electricity would be added to the extra value we would get from selling more dry lumber.  Not only do customers pay more for dry lumber, but it is considerably less expensive to ship because more dry lumber can be loaded on a truck. Essentially you’re not paying to ship all that water.

So now, co-generation was sounding promising, but the staggering expense of
such a plant was still a stretch for us. Then, it seemed that all our stars lined up. As support for renewable energy and forest restoration grew, so
did state, federal and private grants and incentives.

We worked hard to
access these, and were successful on many fronts. This assistance took us “over the top” and made the project feasible.

Although the lumber market is terrible right now, traditionally all our large
projects have been built in market downturns. That is a time when construction is less expensive and production disruptions have less effect
because markets are poor. 

Producing power and adding value to our lumber will give us the best chance to get through this market downturn, and poises us
to take great advantage of the market when it turns around.

Our family philosophy of reinvesting profits into the business has been critical to our long existence. Upgrading our processes and refocusing in a changing world have kept us afloat in a highly competitive industry.

So, a few years after our early imaginings, it is exciting to see them realized today. Our boiler is producing steam for our 12 dry kilns and, at the same time, spinning the turbine and making clean electricity. The U.S. Forest Service and BLM are offering local stewardship and thinning projects that will revitalize forests and bring biomass to our plant. Lumber customers are calling about purchasing dry lumber, and several lumber manufacturers are inquiring about custom drying.

Our main business continues to be producing high-quality lumber which is now
enhanced by our drying capacity, but obviously this all hinges on our ability to produce that lumber in the first place. Access to a local,
affordable log supply is crucial to our continued operation and our ability to contribute to the “three-legged stool” of forest health, economic vitality, and renewable energy. 

And most satisfying to us, it provides the chance to sustain the 85 jobs of the talented, honest, hard-working Rough & Ready employees, without whom we wouldn’t exist at all.

‘Green’ bad meat
From Glenn Sander
Selma

It seems that the government has recalled 143 million pounds of beef -- enough for 570 million quarter-pounders.

This meat recall business is chillingly profiled in Men’s Health magazine. Writer Tom Groenberg reports that last year, 30 million pounds of ground beef were recalled for possible E. coli contamination. This comes after the Dept. of Agriculture in 2005 issued a report stating that the number of E. coli infections had actually decreased 42 percent from 1996 to 2004.

Last year, the USDA’s undersecretary for food safety said that the problem is growing.  “The amount of product we test that’s positive has gone up about 33 percent from that past three years.”

What's the reason for the increase? Groenberg says it may be the green movement.

As corn prices have skyrocketed, partly because of a growing demand for ethanol, Bossie is increasingly being fed a diet of distiller’s grains,  a byproduct of the ethanol process.

A Kansas State prof says that such cattle carry a twofold increase in the incidence of an E. coli strain. “When you change their feed, their intestinal flora change,” said the USDA safety expert.

Another factor: changes in weather patterns have frequently flooded feedlots, leaving the cattle to walk through a fetid brine of their own waste that becomes a residue on their hides when shipped for slaughter.

Co-generation negative view
From Don Smith
Cave Junction

According to an article about the newly constructed co-generation plant at Rough & Ready Lumber Co., it will “generate heat to dry lumber and create electricity” used to operate the mill by burning slash after logging.

The article says that the new building cost $5 million, with slightly less than half the cost paid for by public and private grants. The article continues that “the mill is surrounded by 2 million acres of forest, mostly public, that are in need of fuels reduction and thinning.”

Presumably, revenues from logging these public lands are expected to cover the remaining cost of building the plant. But there’s a problem here. According to mill owner Link Phillippi, the new plant “has been a little scary for us,” since this “is one of the worst lumber markets we’ve ever seen.”

So there it is, the weak link in the chain. Let’s take a look at it. With another $2,550,000 needed to cover expenses, the mill is confronted with paying off a huge amount of the construction cost while revenues are going down with lumber prices falling through the floor and demand drying up.

And if that weren’t bad enough, the cost for corporations to borrow is climbing fast. The dilemma is quite obvious, isn’t it? Expenses pile up at a time when lumber markets are about as bad as Phillippi has ever seen.

One should expect processing logs at the mill to slow significantly as the demand for lumber plummets further, which is a given, as the housing market crash is just now taking hold. It would be ironic, to say the least, if it turns out that a plant built to generate electricity to dry lumber sits idle because there is no lumber to dry.

Any lessons here? For one, don’t load up on debt at just the time the economy is nose-diving, going head-first into a deep nationwide recession. We might see some layoffs at Rough & Ready, as the burden of carrying the debt for the new building gets heavier and heavier. Who knows, as economic conditions get much worse, the mill may even be forced to close.

In either case, one can expect Rough & Ready’s owners to say that the problem is they didn’t have access to public lands due to those pesky environmentalists.

The real problem is that a business decision was made at a time when that decision was about as ill conceived as could be. The mill owners will look far and wide to find scapegoats, but in the end they’ll play the same old blame game, rather than facing up to their own mistakes.

(Editor’s Note: The letter-writer is not the Don Smith of Don Smith Construction, but a former Siskiyou Project executive director.)