Eager - Promote Community Assistance

Improve Fire Prevention and Suppression • Reduce Hazardous Fuels • Restore Fire Adapted Ecosystems Promote Community Assistance • Summary

WGA Goal - Promote Community Assistance

Actions to meet goal

Reduce losses to communities from wildland fire
Promote markets for traditionally underutilized wood
Promote opportunities to continue and enhance sustainable livestock grazing as part of restoration strategies
Increase incentives for private landowners to address defensible space and fuels management needs on private property
Promote local government incentives through fire-sensitive land use planning

Map of SDT locations

The real story in Eagar and the surrounding communities is the development of a critical mass of small diameter timber (SDT) providers and utilizers. Eagar is positioning itself to be a major beneficiary when small-diameter timber starts being processed with greater regularity. SDT providers include WB Contractors (Eagar), G. Reidhead Contracts (Alpine), Ft. Apache Sawmill (BIA Land), T. Reidhead Sawmill (Nutrioso) and White Mountain Forestry (Show Low). SDT Utilizers include Forest Energy Corporation (Show Low), Mountain Top Wood Products (Show Low), Western Renewable Energy (Eagar), Cheyenne Logs (Eagar) and Imperial Laminators (Eagar).

Arizona Power Service

Utilizers creating power from biomass have benefited from Arizona Power Service (APS) desire to find renewable energy sources. In February 2001, the Arizona Corporation Commission (ACC) adopted the Environmental Portfolio Standard (EPS) which established goals that all utility companies that sell retail electricity in Arizona generate a percentage of their electricity from renewable resources. The EPS requires 1.1% of retail energy to be derived from renewables by 2007. The EPS added a surcharge to customer's bills which allows APS to pay premium price for renewable energy. The Portfolio Standard is in effect until 2012 . APS has a budget to pay premium price for renewable energy. 60% must come from solar and the other 40% can come from other renewable resources.

Arizona Sustainable Forestry Partnership

The Arizona Sustainable Forestry Partnership (ASFP) was organized by the Little Colorado River Plateau Resource Conservation and Development in 1996. The mission of the ASFP is to "Establish an environmentally and economically sustainable forestry industry in Arizona utilizing small-diameter Ponderosa Pine and other under-utilized wood species requiring thinning and restoration". The organization's purpose is to "Unite the public in addressing issues facing southwestern forest and communities for a common purpose - promoting ecological-based forest initiatives enhancing sustainable forests and employment opportunities". Eagar has been actively involved in forming and promoting the Arizona State Forest Partnership to advance a SDT products industry in the region. The group meets monthly and brings together operators and manufacturers to investigate SDT opportunities. According to Eagar City Manager Bill Greenwood, "Our focus is the networking and just trying to keep everybody up to speed". Some of the accomplishments of ASFP include documenting the magnitude of thinning and restoration needs on the ponderosa pine forests in Arizona, conducting workshops oriented toward industry transition and new product commercialization, sponsoring grant writing workshops designed for small business owners and submitting testimony to the Arizona House of Natural Resource Committee. ASFP brought in people to conduct seminars, explain the contracting process, how to create business plans, use working capital and in general create a small business. They also passed on information about various grant cycles and conferences to take advantage of additional opportunities. Herb Hopper is the Project Director of Little Colorado River Plateau Resource Conservation & Development, the organization that sponsors ASFP. The Action Team Leader is Bill Greenwood. Greenwood and Hopper coordinate and organize the meetings and Greenwood leads the group through the agenda each month. Meetings rotate and have taken place in various field settings to investigate the Blue Ridge Demonstration Project and the Mineral Springs Project. In this way the various participants can see the different prescriptions and how the SDT will be made available.

Little Colorado River Plateau Resource Conservation & Development

The Little Colorado River Plateau Resource Conservation & Development (RC&D) has been assisting SDT utilizers to build successful businesses for three years. They have 120 active members. The RC&D hired Herb Hopper to coordinate activities. Hopper also works as the Arizona State Coordinator for the Four Corners Partnership, which funds his salary. The Four-Corners funding ends in December 2004, but Little Colorado River Plateau RC&D efforts will continue. The USFS Region 3 Forester provided a grant for the Southwest Sustainable Forest Partnership (SWSFP) in Arizona and New Mexico. SWSFP is a transition program from Four Corners Sustainable Forest Partnership and comes on line in June 2004. The grant is in the amount of $690,000 and runs until the end of 2006. Since Hopper's organization, Little Colorado River Plateau RC&D, was supported by Four Corners dollars, this new organization will also support them and the grant will keep their efforts in support of utilizers going. SWSFP intends to hire a SDT Utilization Specialist to help the small utilizers in Arizona and New Mexico in product development and marketing. The money will also provide $400,000 towards a new grant program. Hopper's office will be the fiscal agent for the SWSFP grant program.

WB Contracting

Dwayne Walker is a local thinner or selective land thinner that helps supply SDT to the many utilizers in and around Eagar. He owns and operates WB Contracting with his two brothers. They are fourth generation loggers and have been in business for 16 years. They currently employ two, six people crews. Working with the town of Eagar and the USFS, the Walkers used Four Corners grant money ($130,000) and Economic Action grants ($100,000) to purchase a chain flail debarker and a chipper to get their contracting business up and running. In 2003 Walker received a Four Corners grant for $30,000 to rebuild and upgrade the hydraulics system of the chain flail chipper. Recently they were awarded a Forest Products grant from the USFS Forest Products Lab out of Madison, Wisconsin. The Forest Products Lab has USFS dollars inspire people to develop and create new wood products. Walker is developing a countertop made with SDT. The grant paid for equipment to help produce a countertop designed by WB Contracting constructed from SDT in larger numbers.

The Walkers work mostly on White Mountain Apache Reservation land because they complete more thinning projects than the USFS. They prefer to be paid by the ton of material removed. Walker is charging $20 per ton for thinning and removal of debris on 900 acres on his current Bureau of Indian Affairs project. Forest Energy pays him $6 per ton to transport chips to their plant. In 2003, Walker was let a USFS contract to thin 480 acres around Pinetop Country Club. He charged $22.86 per ton for that project. Walker also thinned the Blue Ridge demo area for the USFS in 2001. It was 400 acres and he was paid $365 an acre. The USFS burned the piles left. WB Contracting intends to bid on the White Mountain Stewardship contract. Walker can thin 2,000 to 3,000 acres a year. Walker's biggest challenge is negotiating government bureaucracy and changing market conditions.

WB Contracting pictures

Western Renewable Energy

Western Renewable Energy sign Within and near Eagar, in particular, are several efforts to provide and utilize SDT. Steve Hall grew up in Show Low, AZ where seven generations of his family have resided. At one time, Hall's family owned five sawmills in the area. Hall purchased Stone Forest sawmill property in September 2000 and began retrofitting it in 2001 to become a bio-generation plant. The property is 128 acres and he intends to create an entire industrial complex around forest by-product industries. He will offer free rent to companies that have waste wood as a byproduct so that he can use it as fuel. A micro mill was to be added in December 2003 but this has not happened yet because of the low availability of wood. He hopes that the USFS White Mountain Project will bring in enough SDT to make it worth the money required to start up the micromill.

xxxxx Bio-generation plant

Hall's company, Western Renewable Energy, began plant operations in February 2004. Hall intends to fuel his co-generation plant with woody biomass from thinning projects. The CO-generation plant is three megawatts and will supply enough electricity for the Eagar-Springerville area. Arizona Power Service (APS) provided the financial loans for the plant, $4,600,000. The plant must produce 210 million KW to repay the loan. If the plant runs 80% of the time, it will produce 1,700,00 kW per month. Hall estimates it will take 10 years to repay the loan. The plant will utilize 100 tons of woody material a day. Material will be obtained from a 40-50 mile radius around Eagar. He currently employs 14 people in the plant and 15 people to gather woody material for fuel. Hall's original plan was to use White Mt. Forestry, a contracting company in which he is part owner (15%), to obtain a majority of his woody material. However, White Mt. Forestry has not had the access to the woody material he had hoped for. He has had to find other sources. There are three main sources: 1) Grow Fast, a company Hall started 20 years ago, collects unwanted woody material from surrounding communities (Eagar, Pinetop-Lakeside, Show Low). He was using the material for composting, but now it is used at the biomass plant. About 50% of the material he uses in the biomass plant comes from Grow Fast. 2) Ft Apache Timber charges $1.50 per ton for scrap wood from the sawmill. This is mostly wood chips, sawdust, sticks, bark, etc. Hall must pay $7.50 a ton for transportation for the 65 mile one way trip from Ft Apache to the plant. His original plan was to obtain woody material from a 40-50 mile radius of the plant and the transportation cost pushes him to his limit for cost. $9.00 a ton is the break even point for woody material, without giving up something, such as wages or benefits for his employees. 3) Material from private landowner's thinning or creating defensible space has also supplied some woody material. Hall has received no wood from the USFS since he started.

The USFS assisted Hall in writing $407,000 in grants from the Economic Action Program to get his plant up and running. $286,000 was used for turbine electrical equipment. $105,000 paid for an engineer consultant, who rated the boiler and completed a turbine search across the US to find a turbine that would work with the existing boiler. $106,000 was used for the processing center. It costs 7-8 cents per kW from Hall's plant and the same kW will sell for 2-6 cents, depending on the market. The difference is paid by Arizona Power Service (APS) as a green premium. The green premium is paid for by the surcharge added to APS customer bills for the Environmental Portfolio Standard.

Forest Energy

Forest Energy sign Rob Davis is President of Forest Energy Corporation. Forest Energy has been in operation for 12 years and produces densified logs, pellets and animal bedding. The pellets are an alternative fuel source for propane. Davis takes 10-12 semi tractor loads of wood chips per day (~80,000 pounds of wet biomass) and uses 70,000 wet tons of woody material a year. 50% of his material comes from forest restoration projects. Forest Energy employs 30 people and their main supplier is Walker Brothers, a logging contractor out of Eagar. Forest Energy prefers the material supplied by Walker Brothers because the quality is consistently reliable as is the supply. Quality is vital because "clean chips" are needed. Forest Energy has developed a "commercial wood chip" made from dirty material that utilizes the entire tree, including the bark and needles, but these pellets must be used in specific commercial grade finances. Davis's biggest challenge is finding a steady supply of woody material .

The amount Forest Energy pays depends on the moisture content of the wood material. Less than 10% moisture content is needed for their product. The pellets average 7% moisture content after they are produced. They produce about 35,000-40,000 dry tons per year of products and take in about twice that amount of material. Forest Energy will take in 53,000 bone dry tons of woody material in 2004 (this is different from wet tons above). About 25,000 bone dry tons will be forest material. They will produce about 45,000 dry tons of product. Forest Energy has the capacity to produce 80,000 dry tons of product but there is not enough of a market. About 8-9,000 bone dry tons is used a year for fuel to run the factory. Forest Energy supplies wood pellets to Home Depot, Ace Hardware, Lowes and other stores. These pellets are used in stoves and are sold in 40 pound bags for about $3.

Forest Energy is trying to develop a market for boilers/furnaces that are fueled by wood pellets. These furnaces are used in Europe, but have not caught on in the US. The town of Eagar would like to buy one of these commercial furnaces and is remodeling Town Hall to accommodate one. They will apply to the Department of Energy for a grant to finance it.

Imperial Laminators

Imperial Laminators sign Imperial Laminators, managed by Stephen Nicoll, employs 28 people and manufactures laminated logs for log homes. Nicoll started the company 1979. Traditionally they have used southern yellow pine. If there were more ponderosa pine available, Nicoll would change his current product to use it. He can use the SDT ponderosa pine, but has no reliable source of the milled product. 20 more jobs could be added to his payroll, if he could find a supply for the pine. Imperial Laminators uses most of the scrap wood from their products. They heat their factory with a large wood furnace and sell scraps to Forest Energy for pellets.

xxx Lamination process

Cheyenne Log Homes

Cheyenne Log Homes sign Randy Nicoll is the owner of Cheyenne Log Homes, which is a family business that has been building log homes since 1990. In January 2003 the company started using ponderosa pine SDT and hired 5 people to produce the products. The SDT is used not for the outside logs but for products to accompany the homes such as railings, vigas, and decorative posts. Walker Brothers and Gerald Reidhead are his main suppliers. The biggest challenge for Nicoll is getting material at a reasonable price.

Mountain Top Wood Products

Neil Brewer is the owner of Mountain Top Wood Products in Show Low, AZ and he is a third generation logger. His company makes posts, poles, peeled poles and specialty requests. The company was started in 2001 when he received a Four Corners and Economic Action grant of $49,000 and $85,000, respectively. He used that money to purchase a debarker and shaver machine to develop a product using SDT for a new fence panel design. The town of Pinetop-Lakeside provided the match by supplying the workforce to make the panels. Brewer supplied the material for the panels. In 2003 he received a Rural Community Development grant for $40,000 for new product demonstration, log sort yard and a market development study to for a new utility shed in the form of log cabin kits that are readily assembled. Brewer also received a $253,000 grant from Southern Navaho County .

Brewer currently employs three people. In 2003 the post and pole market went down hill due mostly to the influx of cheap lumber from Canada. Prior to this he employed seven people and processed 1,400 logs per week. Now orders are down and he produces posts, poles and peeled poles as they come in as special orders.

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