Looking at this picture, you probably wouldn’t guess that a lack of supply is what ultimately led to the failure of the Watershed Research and Training Center's recent firewood business endeavor. Find out what we learned from this wood-products venture and where we're headed next. Credit: Marcus Kauffman, Oregon Department of Forestry

Fantastic Failure: Biomass Utilization and Surviving the Pursuit of a Bright Idea

By: Nick Goulette, Watershed Research and Training Center

Topic: Fuels treatment economics Local workforce capacity

Type: Fantastic Failure

Creating market demand and useful products from the woody material that we remove as a byproduct of community wildfire protection work seems like an obvious and elegant solution. Biomass utilization, they call it! I’ve certainly been compelled by this concept since moving to rural Trinity County, California, over 14 years ago. My organization, the Watershed Research and Training Center (the Watershed Center) has biomass utilization in our DNA. Our founding mission, in the simplest sense, was to generate jobs and community well-being via forest stewardship. Making jobs out of wood-products manufacturing is a time-honored tradition in timber country. Equally clear during our emergence was that we could make our communities and forests more resilient to wildfire in the process of creating said jobs.

History also shows us that biomass utilization is a tenuous and risky endeavor at any scale (PDF, 101KB). Uncertainties and volatility abound, ranging from unpredictable landowner behaviors and constantly shifting market forces, to the price of diesel fuel, to stochastic large wildfire events, to shifting federal budgets. Despite these uncertainties, the Watershed Center has taken many swipes at starting wood product businesses in support of our goals of forest and community resilience over the years. Today, I’ll share our most recent fantastic failure with you, and some of what we’ve tried to take away from it.

Jim Jungwirth holding a wooden baseball bat

The Watershed Center has a long history of supporting local economic development. From helping local gatherers take wild-crafted medicinal herbs to the marketplace, to a partnership with the county to start a business incubator, to a tan oak baseball bat company (product shown above), linking forest-product entrepreneurs with the market has been a big part of how we have invested in our mission. Credit: Marcus Kauffman, Oregon Department of Forestry

For years, we dabbled in roundwood manufacturing (posts and poles), running a small-diameter sawmill (lumber), mulch and compost production, as well as the exploration of just about every other high and low-tech value-added product that can be made from wood. Finally, we thought we had identified a sweet spot of feasibility that aligned with an available wood supply, a workforce, and finance, as well as market, opportunities: bundled commercial firewood. Sure, humanity’s oldest wood product wasn’t an overly sexy or whiz-bang solution. No biomass power plant or biochemical production. No biochar or mass timber. Just firewood. But our business planning and due diligence research, coupled with a savvy business partner who was already operating in the sector, led us to take the leap toward financing and starting Tule Creek Forest Products. To top it off, we’d be using an old mill site for our business location, bringing so many pieces to Trinity County’s triple bottom line (environment-equity-economy) issues full circle.

With our high-functioning Trinity County Fire Safe Council, a well-established forest collaborative group, an abundance of productive public and private forestlands surrounding us, and only needing about 200 truckloads of feedstock per year, we moved ahead with confidence. In the first year, we strung together a strong management team, drew technical advice and support from partners, and cultivated targeted financing for equipment and cash to operate. We were up and running.

After our first six months in operation, we hadn’t reached our production targets, but we remained bullish. We faced both a wood-supply deficit and kinks in our production system. We worked tirelessly over the next 18 months to refine our production system, eventually gaining confidence that we could meet our targets for both productivity and costs. However, by the end of our second year in operation, we began to realize that our wood supply projections, including the formal and informal agreements we made with landowners and operators, were not as strong as we first believed. A large wildfire season in 2015 substantially affected our local landscape and was driving both federal and private landowner behavior. We expected that more firewood feedstock would become available from the removal of the burned timber (i.e., “hazard trees” and salvage operations), but instead, the demand on logging contractors and log trucks to produce sawtimber for the existing industry left no capacity for us to hire for our needs.

More red flags were beginning to peek through the ashes, as 2017 kicked off with a new trade spat with Canada over the import of softwood lumber. This decrease in wood supply, paired with an increasing demand for wood from other sectors (e.g., new home and commercial construction) resulted in even less contracting capacity available for hire. Given these pressures, private landowners stopped removing the low-value material we needed for firewood altogether, favoring the harvest of saw timber to capitalize on strong log prices. Simply put, when log prices go up, the demand for loggers and truckers exceeds availability and landowners become less focused on removing smaller, lower value wood. Left with only the USDA Forest Service to turn to, we found ourselves half-way through the summer season with almost no logs in the yard. Our pleas to our local federal land managers to redirect energy and make small timber sales available to match our needs went unmet. We found ourselves to be just another competing priority, a burden rather than an asset to landowners and managers. In the late summer of 2017, we made the decision to pull the plug on Tule Creek Forest Products. In just our third year in operation, we were laying off eight dedicated employees, liquidating hundreds of thousands of dollars in equipment assets, and facing down debt renegotiation and restructuring in order to stabilize our organizational finances.

When I’m down, I like to say, “at least they can’t eat us.” That trivializes all of the heartaches, the struggle for workers who lost their jobs, and it doesn’t make the debt go away, but it does help to keep me pushing forward when the going gets tough. Failure at this scale is hard to stomach. And it’s hard to let go of something that seems so right in concept and that so many folks worked so diligently to realize. But at the end of the day, with the old mill site once again abandoned, we take stock. What have we learned and how do we stay committed to our mission of cultivating healthy, resilient forests and thriving fire adapted communities?

Share What We’ve Learned

Community leaders around California and the West are aspiring to build new wood product businesses for all of the reasons we were, and in similar circumstances. We learned a lot about business planning, financing, wood procurement, contract provisions, supply chain management, and many other facets that cut across wood products manufacturing and markets. We have a responsibility to share that through regional and state networks, direct technical assistance and storytelling. We’re doing this through venues like the Sierra Institute’s Regional Community Development Initiative, the California Statewide Wood Energy Team, and the Rural Voices for Conservation Coalition.

Wood Products Isn’t the Only Way

Wood utilization is just one way to reduce fuels. We are advocates of all of the tools in the toolbox. Thinning, piling, mastication, prescribed fire. If biomass harvest and utilization are not feasible in our local context, then we must focus on the next most desirable combination that balances social, ecological and economic factors. Over the next several years, we’ll focus our fuels work more heavily on wielding prescribed fire, hand-thinning and mastication.

A forest technician cutting brush

At the heart of our work is local stewardship jobs. For three decades, we’ve put local people to work in the woods. Our crews reduce hazardous fuels, maintain trails, conduct wildlife surveys and use controlled fire to take care of the mountains that surround our community. This is, and will continue to be, integral to our approach. In this photo, a forest technician with the Watershed Center cuts brush on private land in preparation for a prescribed burn. Credit: Marcus Kauffman, Oregon Department of Forestry

 

Celebrate Our Strengths

The Watershed Center was founded to retrain displaced loggers and forest workers to implement the emerging practices of forest stewardship. Today, that work is focused on reducing our communities’ wildfire risk and making landscapes more resilient to wildfire. Over the last 15 years, we employed 10–20 workers (each year) who accomplished those landscape and community goals, yet rarely through log or biomass harvest. With chainsaws, chippers and fire as our primary tools, we can accomplish our landscape and community resilience goals. And, our strengths are positioning us to play a pivotal role in state and national wildfire management forums. For example, in addition to the networks and coalitions listed above, the Watershed Center co-staffs the Fire Adapted Communities Learning Network.

Take Heart in Trying

If there were easy solutions to our “fire problem,” or to rural development in forest-reliant communities, the private sector would be capitalizing on them. National headlines would be focusing on how wildfires are benefiting ecosystems, rather than devastating them and the communities that live in and near them. We’re facing wicked problems, generations in the making, all in the face of massive global economic and climate change. Our work toward community and ecological resilience is righteous. We must be innovative and creative, take risks, do the right thing, and if we fail, repeat (with adjustments, of course) until we get it right. This is how progress is made.

Editor’s note: This post is part of FAC Net’s Fantastic Failures blog series. Learn more about the series and how to participate.

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6 thoughts on “Fantastic Failure: Biomass Utilization and Surviving the Pursuit of a Bright Idea”

  1. Powerful story Nick. I appreciate your willingness to admit project shortcomings. Good lessons for all of us.

  2. eytan says:

    Thanks for sharing Nick. I’m sure it wasn’t easy to get all this out there for the world to see, but I know it is important for many to hear.

  3. Yana Valachovic says:

    Well said Nick! I still have the faith that we can crack the nut at the right time and place. Thanks for your leadership on these issues.

  4. Rebecca Samulski says:

    Thanks Nick! I understand a little better how and why you had to become such an expert in the industry now. Wood industry seems to be growing somewhat organically and with a lot of hard work in SW Colorado. As this begins, I hear a lot of discussion about small, local companies being able to fill the niche markets and benefit from one or two larger mills, or silver bullet products. Your story is another example to me of how critical flexibility is in any wood product business, because the systems and markets are so complex. Unfortunately, those flexible production lines will be even more expensive to capitalize. I look forward to hearing a success story on ultra-subsidized biomass energy generation in NOR CAL!

  5. Kim LaDuke says:

    My 40 years of trying sustainable forestry netted a very similar result. Perhaps like California, New York’s government overreach seems destined to destroy any good and just goals. I became more financially successful, but more subject to state taxes and regulations to the point I was soon to be financially destroyed by them. Sorry to wimp out, but I have relocated to East Tennessee to start again, with much less pressure from the big brother. My most serious problem here seems to be than I am now 40 years older.

  6. Krista Bonfantine says:

    Nick,
    Thanks for sharing your story. After about 15 years of trying to support the forest industry in NM, I’ve come to the conclusion that we should be connecting communities with wood in addition to businesses. Two years ago we organized a community wood day in the Sandias. About 50 cords of wood were removed during the six hour event and 100 people got cheap heating. The heavy load of large diameter, beetle-killed white fir was unmerchantable and a liability for burning. The attendees were thrilled with every stick and log they took home. When the forest was later burned, it was a better, safer burn.

    I’m sorry to hear about your failure but I appreciate learning about all the forces at play. We need to consider as many opportunities as possible.

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