Enclosure (7) Wood Fiber Supply Assessment: US Marine Corps, MCIEAST New Bern, Jacksonville, and Kenansville NC. FiberAnalytics

Transcription

1 Enclosure (7) Wood Fiber Supply Assessment: US Marine Corps, MCIEAST New Bern, Jacksonville, and Kenansville NC FiberAnalytics

2 Wood Fiber Supply Assessment: US Marine Corps, MCIEAST New Bern, Jacksonville, and Kenansville NC Prepared for CIV Paul M. Friday MCIEAST 656 W. Corbett Avenue PO Box 814 Swansboro, NC April 27, 2012 Prepared by James Jeuck Extension Forestry, North Carolina State University Raleigh, NC Helene Cser Extension Forestry, North Carolina State University Raleigh, NC Jessica Knight Extension Forestry, North Carolina State University Raleigh, NC Dennis Hazel, PhD. Extension Forestry, North Carolina State University Raleigh, NC Robert Bardon, PhD. Extension Forestry, North Carolina State University Raleigh, NC

3 Glossary of Terms This glossary is provided to define key abbreviations and terms. CHP - Combined heat and power system. Generates electricity and production steam or steam for HVAC. Drain - The woody biomass already used by competing facilities (a.k.a., current demand for the resource) for energy or wood products within a given supply area. DT - dry tons biomass lower than 20% moisture content GT - green tons (woody biomass estimate based on high moisture content, typically from wood that that has not yet air dried down to 20%) MGT - million green tons OSB - Oriented Strand Board manufactured wood building materials from pulpwood sized stems. Clean chips - Chips from stems that are typically sold as pulpwood in the pulp and paper market, and represent (mostly ) stems that in the 5 9 diameter class, but can include larger stems that have poor form and/or little other value. Pulpwood chips are often debarked prior to chipping as the paper industry requires clean chips with little dirt, bark, twigs, and leaves. Other competitors for this product class are OSB plants and, export chips (Wilmington and Morehead City Ports), high- quality pellet manufacturers, and to a lesser extent, medium- density fiber board and particle board facilities. REIT - Real Estate Investment Trust similar to TIMOs, but may be accessed by average investor through stock trading, example firms: Plum Creek Timber Company, Rayonier Inc., Potlatch Corporation. TIMO - Timber Investment Management Organization a private forestry management corporations that broker and manage forestland investments for institutional clients. These are not forestry industry, i.e., do not have capital in manufacturing wood products. TIMO examples include: Hancock Timber Resource Group, Timbervest, Resource Management Service, Inc. Whole- tree chips Chips that have been created primarily from logging residues, land clearing operations, urban wood wastes, and otherwise un- merchantable woody products and stems. In operations where pulpwood sized trees (5-9 diameter class) have no other valuable markets, pulpwood stems may be included with logging residues as part of the whole- tree chipping operation. Most common competitors for this product class include electrical energy plants, industrial- quality pellet manufacturers, gasification facilities, and torrefaction plants 1 1 There are no gasification or torrefaction plants currently in operation in or around NC NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page ii

4 Wood Fiber Supply Assessment: US Marine Corps, MCIEAST Executive Summary This document is the result of three wood fiber supply assessments for US Marine Corps, MCIEAST by Extension Forestry at NC State University. This assessment was conducted to explore the supply regions for Region 1 (New Bern, NC), Region 2 (Jacksonville, NC), and Region 3 (Kenansville, NC). Key findings for Supply Region 1 are: There are approximately 2.2 million acres of forestland in the proposed supply regions with 1.1million acres classified as hardwoods and 1.1 million classified as softwoods. TIMOS, REITS, forest industry or other private timber management firms own close to 500,000 acres of forestland in the proposed supply region. On an average annual basis there is a potential of 2 MGT/yr of whole- tree chips in the proposed 70- mile supply region with an estimated consumption of 1.6 MGT/yr of whole- tree chips resulting in a net supply of approximately 0.43 MGT/yr. The analysis indicates the feedstock requirement of 360,000 GT/yr is met within the 50- mile supply area of Region 1 for whole- tree chips. This increases to 1.2 times the required feedstock in the 70- miles supply area. There are approximately 13.0 MGT of hardwood pulpwood (5 9 in. diameter) standing inventory and 15.2 MGT of softwood pulpwood standing inventory within the 70- mile supply region. The approximate annual drain for hardwood pulpwood is 0.8 MGT/yr and softwood pulpwood is 2.3 MGT/yr. There are approximately 35.5 MGT of roundwood in the standing inventory of hardwood and softwood trees (5" or greater and would include both pulpwood and sawtimber) in the proposed 70- mile supply region. Currently, over MGT of timber exists within the proposed 70- mile supply region. The sustainability criteria of current roundwood harvest is met in the 30- mile supply area and continues to increase with distance as the supply region expands to a 70- mile distance. There are 5 operating facilities and one announced facility within the supply region that utilizes wood fiber. The types of facilities include biomass power and small CHP, procurement/export (Morehead City), OSB, and pulp and paper mills. The estimated annual poultry litter production is 50,000 tons/yr. Key findings for Supply Region 2 are: There are approximately 1.90 million acres of forestland in the proposed supply regions with 0.92 million acres classified as hardwoods and 0.98 million classified as softwoods. TIMOS, REITS, forest industry or other private timber management firms own close to 480,000 acres of forestland in the proposed supply region. There are a potential 1.5 MGT/yr of whole- tree chips in the proposed 70- mile supply region with an estimated consumption of 1.65 MGT/yr of whole- tree chips resulting in a negative net supply of approximately 0.13 MGT/yr. The analysis indicates the feedstock requirement of 360,000 GT/yr is not met within the 70- mile supply area of Region 2 for whole- tree chips. This is based on the 14- year history of activities that generate this type of feedstock and the amount of competition currently in the region. There are approximately 10.4 MGT of hardwood pulpwood (5 9 in. diameter) standing inventory and 13.3 MGT of softwood pulpwood standing inventory within the 70- mile supply region. The approximate drain for hardwood pulpwood is 0.8 MGT/yr and softwood pulpwood is 2.1 MGT/yr. There are approximately 28.1 MGT of roundwood potential in the standing inventory of hardwood and softwood trees (5" or greater) in the proposed supply region. Currently, over 149 MGT of timber exists within the proposed supply region. The sustainability criteria of current roundwood harvest are met throughout the entire proposed supply region. NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page iii

5 There are 6 operating facilities and 2 announced facilities within the supply region that utilizes wood fiber. The types of facilities include biomass power and small CHP, procurement/export (Morehead City and Wilmington), OSB, and pulp and paper mills. The estimated annual poultry litter production is 50,000 tons/yr. Key findings for Supply Region 3 are: There are approximately 2.87 million acres of forestland in the proposed supply regions with 1.48 million acres classified as hardwoods and 1.39 million classified as softwoods. TIMOS, REITS, forest industry or other private timber management firms own close to 480,000 acres of forestland in the proposed supply region. There are a potential 2.27 MGT/yr of whole- tree chips in the proposed 70- mile supply region with an estimated consumption of 1.65 MGT/yr of whole- tree chips resulting in a net supply of approximately 0.62 MGT. The analysis indicates the feedstock requirement of 360,000 GT/yr is met within the 60- mile supply area of Region 3 for whole- tree chips. This increases to 1.7 times the required feedstock in the 70- miles supply area. There are approximately 16.9 MGT of hardwood pulpwood (5 9 in. diameter) standing inventory and 18.7 MGT of softwood pulpwood standing inventory within the 70- mile supply region. The approximate drain for hardwood pulpwood is 0.8 MGT/yr and softwood pulpwood is 2.1 MGT/yr. There are approximately 46.6 MGT of roundwood in the standing inventory of hardwood and softwood trees (5" or greater) in the proposed supply region. Currently, over 229 MGT of timber exists within the proposed supply region. The sustainability criteria of current roundwood harvest is met throughout the entire proposed supply region. There are 6 operating facilities and 2 announced facilities within the supply region that utilizes wood fiber. The types of facilities include biomass power and small CHP, procurement/export (Morehead City and Wilmington), OSB, and pulp and paper mills. The estimated annual poultry litter production is 185,000 tons/ yr. Key Findings for all supply regions Opportunities on the Hofmann for Fuel Chip Production o 2,000 acres of final harvests annually yielding 10,000 to 20,000 green tons of fuel o 3,500 acres of pine plantation thinnings yielding 15,000 to 20,000 green tons of fuel from recovered residues o Chipped thinnings on 3,500 ac/yr depending on pulpwood markets o 20,000 acres needing fuel reduction. Opportunity will be captured when self- propelled chip recovery technology improves Opportunities on the Croatan National Forest (CNF) for Fuel Chip Production: o 20 acres of final harvests annually yielding 100 to 200 green tons of fuel o 600 acres of pine plantation thinnings yielding 2,500 to 3,500 green tons of fuel from residues recovered. o Chipped thinnings on 600 ac/yr depending on pulpwood markets o Fuel reduction opportunities will be captured when self- propelled chip recovery technology improves and as Federal policies fund cost- sharing operations on national forests for fuel reductions Prices for clean chips in North Carolina have been consistently lower than the U.S. Southeastern clean chips prices. Eastern North Carolina pine and hardwood pulpwood prices are consistently lower then the south- wide average pulpwood prices. Over the period from 2006 to 2010 in the southeastern United States, cut and load rates for the Coastal Plain region were consistently lower than the Piedmont region. NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page iv

6 In summary, results indicate that Supply Regions 1 & 3 are best able to meet the demand for a 360,000 GT/yr assumed expansion at the biomass power plants located in New Bern and Kenansville, NC. Both scenarios require at least a 50- mile travel distance in order to meet feedstock requirements. It should be noted that these analyses are based on current inventory and drain. Increases in drain may occur when and if new biomass- using facilities are built within the supply areas resulting in reduced net availability. Statement of Accuracy No guarantee is made to the accuracy of the estimates in this document, but it provides the best of NCSU Extension Forestry s knowledge of green ton supply and demand estimates for wood fiber in the assessment region by using the most current data and information available. NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page v

7 Table of Contents Introduction... 1 Overview of Supply Regions Region 1: New Bern Scenario... 4 Supply Area Estimates... 4 Whole- tree Chips Supply Potential... 4 Pulpwood Supply Potential... 5 Comparison of Inventory Volumes... 6 Sustainability of Resource... 7 Region 2: Jacksonville Scenario... 9 Supply Area Estimates... 9 Whole- tree Chips Supply Potential... 9 Pulpwood Supply Potential... 9 Comparison of Inventory Volumes Sustainability of Resource Region 3: Kenansville Scenario Supply Area Estimates Whole- tree Chips Supply Potential Pulpwood Supply Potential Comparison of Inventory Volumes Sustainability of Resource Description and Location of Existing and Potential Fiber Competitors within Supply Areas Regional Opportunities Other Biomass Feedstocks: Poultry Litter Opportunities for the Croatan National Forest and Hofmann Forest Hofmann Forest Croatan National Forest Historic Prices Trends in Biomass- Based Industries Recent Decreases in Pulp and Paper Capacity Appendix: Methodology Data sets used Data resources and estimation techniques References NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page vi

8 List of Figures Figure 1. The outer 70- mile boundaries of each of three supply regions and the TIMO, REITS, and other forested industry lands with in those three supply regions Figure 2. Supply areas (gray boundaries) defined by 10- mile to 70- mile travel distances for Region 1 site (green point). Inside the supply areas, red indicates hardwood forests and green indicates softwood forests Figure 3. Whole- tree chips supply curves for the 70- mile supply area around Region 1 based on averages of TPO data on green tons of whole- tree chips made available through timber harvesting, drain on whole- tree chips, and net available whole- tree chip... 6 Figure 4. Supply areas (gray boundaries) defined by 10- mile to 70- mile travel distances from the Region 2 site (green point). Inside the supply areas, red indicates hardwood forests and green indicates softwood forests Figure 5. Whole- tree chips supply curves for the 70- mile supply area around Region 2 based on averages of TPO data on green tons of whole- tree chips made available through timber harvesting, drain on whole- tree chips, and net available whole- tree chips Figure 6. Supply areas (gray boundaries) defined by 10- mile to 70- mile travel distances from the Region 3 site (green point). Inside the supply areas, red indicates hardwood forests and green indicates softwood forests Figure 7. Whole- tree chips supply curves for the 70- mile supply area around Kenansville, NC based on averages of TPO data on green tons of whole- tree chips made available through timber harvesting, drain on whole- tree chips, and net available whole- tree chips Figure 8. Locations of facilities that directly compete within and outside the three supply regions for woody biomass Figure 9. Poultry (broilers & turkeys) farm facilities within the 50- mile supply regions Figure 10. Historical Clean chips pricing for eastern North Carolina and the southeastern United States, Figure 11. Historical pine and hardwood pulpwood standing timber prices for eastern North Carolina and the southeastern United States, Figure 12. Pellet use in Europe in recent years NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page vii

9 List of Tables Table 1. Forestland within the proposed supply region, by species type, defined by 10- mile travel distances from a point located near each site... 3 Table 2. TIMO, REITS, and other industry acreage estimates within the three 70- mile supply regions Table 3. The potential amount of whole- tree chips supply, drain, net supply, and chips from standing trees over 5 inches in diameter at breast height for a proposed facility capacity increase of 360,000 GT/yr in Region Table 4. Pulpwood (5 9 inch diameter class) standing inventory and pulpwood drain for Region Table 5. Pulpwood (5 9 inch diameter), sawtimber, and merchantable roundwood in trees larger than 5 inches) standing inventory in Region Table 6. Mean annual volume of net growing stock growth and removals for tree in the 5-9 in diameter class and net growth to net removal ratios in the supply area around Region Table 7. Mean annual volume of net growing stock growth and removals for merchantable growing stock and net growth to net removal ratios in the supply area around Region Table 8. The potential amount of whole- tree chips supply, drain, net supply, and chips from standing trees over 5 inches in diameter at breast height for a proposed facility with a capacity of 360,000 GT/yr in Region Table 9. Pulpwood (5 9 inch diameter class) standing inventory and pulpwood drain for Region Table 10. Pulpwood (5 9 inch diameter), sawtimber, and merchantable roundwood in trees larger than 5 inches) standing inventory in Region Table 11. Mean annual volume of net growing stock growth and removals for tree in the 5-9 in diameter class and net growth to net removal ratios in supply area around Region Table 12. Mean annual volume of net growing stock growth and removals for merchantable growing stock and net growth to net removal ratios in the supply area around Region Table 13. The potential amount of whole- tree chips supply, drain, net supply, and chips from standing trees over 5 inches in diameter at breast height for a proposed facility capacity increase of 360,000 GT/yr in Region Table 14. Pulpwood (5 9 inch diameter) standing inventory in Region Table 15. Pulpwood (5 9 inch diameter), sawtimber, and merchantable roundwood in trees larger than 5 inches) standing inventory in Region Table 16. Mean annual volume of net growing stock growth and removals for tree in the 5-9 in diameter class and net growth to net removal ratios in supply area around Region Table 17. Mean annual volume of net growing stock growth and removals for merchantable growing stock and net growth to net removal ratios in the supply area around Region Table 18. Current and potential competitors for woody fiber within the 70- mile supply regions Table 19. Current and potential competitors located outside the supply regions of the three scenarios, but that may extract timber periodically from with in the 70- mile supply regions for each scenario Table 20. Region 1 Supply Area poultry litter (broilers & turkeys) totals for a 50- mile travel distance Table 21. Region 2 Supply Area poultry litter (broilers & turkeys) totals for a 50- mile travel distance Table 22. Region 3 Supply Area poultry litter (broilers & turkeys) totals for a 50- mile travel distance Table 23. Hauling rates for southeastern United States, Table 24. Cut and load1 contract rates for the Piedmont and Coastal Plain regions of the southeastern United States, Table 25. Original and reclassified land use data used in the assessment NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page viii

10 Introduction This document is the result of a resource user assessment for US Marine Corps, MCIEAST by Extension Forestry at NC State University. The intention of the resource analysis project is to determine the feasibility of three scenarios each allowing MCIEAST to contribute to renewable energy production in Eastern NC. Specifically, each scenario assesses the availability of 360,000 GT/yr of whole- tree and/or clean chips as feedstock for in 10- mile to 70- mile supply regions for the following situations. Scenario 1, Supply Region 1 o New Bern, Craven County, NC; Lat N, Long W o Increase capacity by 25MW at existing Craven Wood Energy, a wood- burning electrical production facility o Facility capacity is currently 50MW and requires approximately 7,000,000 GT/yr. Scenario 2, Supply Region 2 o Jacksonville, Onslow County, NC; Lat N, Long W o Development of a new 25MW wood- burning facility for electrical energy production in Jacksonville, NC. o New construction, no facility currently at this location Scenario 3, Supply Region 3 o Kenansville, Duplin County, NC; ; Lat N, Long W o Increase capacity by 25MW at existing Coastal Carolina Clean Power, a wood- burning electrical production facility o Facility capacity is currently 32MW and requires approximately 448,000 GT/yr. Based on the request from MCIEAST the following information is addressed by the assessment and the results provided in this report. 1. Conduct a woody biomass supply assessment to include the spatial distribution of wood product supply sources, including pulpwood inventory and logging residue and other removal potential description and location of existing fiber competitors within each analysis region where such buyers may, from time to time, seek fiber in the region s wood basket supply/drain curves and interpretations of these curves. 2. Report price information for the most recent quarter which data are available within each of the regions price point history 3. Assess the current state of the wood basket based on travel distance up to 70 miles from each site current acreage and volumes for softwoods and hardwoods current acreage of forest industry lands in southeastern NC availability of the required feedstock to meet the demand assumption of 360,000 GT/yr estimate of sustainable harvest levels by feedstock type to meet the demand assumption of 360,000 GT per year anticipated percentage of such sustainable harvest to be represented by the assumed demand (360,000 GT/yr) 4. Evaluate regional opportunities for long- term biomass supply contracts including litter from commercial poultry operations woody biomass from resulting fuel reduction projects and wildlife habitat improvement in public forests such as the Croatan National Forest. woody biomass from resulting harvest operations on Hofmann Forest NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page 1

11 5. Identification of existing forest product industries in the surrounding areas that may impact future feedstock supply, including traditional forest industries pellet mills other biomass- consuming industries NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page 2

12 Overview of Supply Regions 1-3 (Hardwood and Softwood, TIMO/REIT, other Industry Forested Land Acreage) Table 1 below provides hardwood and softwood forest acreage estimates for the three regions. Hardwood forests predominate as woody wetlands in the drainages east of I- 95 and both woody wetlands and upland hardwoods west of I While wetland protection is of vital importance in North Carolina, ecologically safe harvesting in wetlands has and will continue to be a major source of hardwoods. Softwood pine plantations are typically in the east and north portion of the proposed supply region while in the western side of the proposed supply region, much of the softwoods are mixed pine/hardwoods, classic of the Piedmont region of North Carolina. Region 3 is the most forested supply region, with 28% more forestland than Region 1 and 51% more forestland than Region 2. This is because Region 3 is further inland than the other two sites (Figure 1). These differences in the size of the supply regions will have obvious implications on the relative amount of woody biomass supply available in each region. Table 1. Forestland within the proposed supply region, by species type, defined by 10- mile travel distances from a point located near each site Region 1 Hardwoods Area (acres) Softwoods Area (acres) Totals 70- mile 1,135,969 1,096,294 2,232, mile 857, ,224 1,770, mile 627, ,717 1,344, mile 431, , , mile 285, , , mile 106, , , mile 15,289 22,948 38,237 Region 2 Hardwoods Area (acres) Softwoods Area (acres) Totals 70- mile 918, ,321 1,901, mile 709, ,689 1,465, mile 516, ,369 1,046, mile 342, , , mile 163, , , mile 47,738 73, , mile 11,982 20,542 32,524 Region 3 Hardwoods Area (acres) Softwoods Area (acres) Totals 70- mile 1,480,871 1,386,004 2,866, mile 1,168,027 1,052,852 2,220, mile 769, ,753 1,537, mile 431, , , mile 213, , , mile 92, , , mile 23,755 20,308 44,063 Table 2, provides the amount of acreage under corporate ownership to include Timber Investment Management Organizations (TIMOs), Real Estate Investment Trusts (REITs), forest industry or other private timber management firms (Figure 1). Much of these corporate ownership lands fall within the overlapping areas of the three regions (Figure 1). These corporate acres consist primarily of loblolly pine plantations and, to a lesser extent, natural hardwood forests. Other prominent forest lands within the three regions include the Hofmann Forest, a 50,000- acre intensively managed forest managed by the College of Natural Resources Natural Resources Foundation and 130,000 acres of the Croatan National Forest that is actively engaged in large fuel- reduction and species conversion programs. All of these ownerships have a strong interest in selling woody biomass. 2 This is found in the northwest portion of Region 3 seen in Figure 1. NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page 3

13 Table 2. TIMO, REITS, and other industry acreage estimates within the three 70- mile supply regions. Supply Region TIMO/REIT Acreage Other Industry Acreage* Total 1 391, , , , , , , , ,300 *Forest industry or other private timber management firms. Private landowners enrolled in the Present Use Value (PUV) program and tracts under 80 acres are excluded. Figure 1. The outer 70- mile boundaries of each of three supply regions and the TIMO, REITS, and other forested industry lands with in those three supply regions. Region 1: New Bern Scenario Supply Area Estimates This scenario assumes increasing the capacity of an existing 50 MW energy facility located in New Bern, NC currently consuming approximately 500,000 GT/yr. The increase will require an additional 360,000 GT/yr. Figure 2 shows the 10- mile to 70- mile supply areas in the region based on road networks in Region 1. The region is somewhat limited to the east and south due to proximity to the coastline. Whole- tree Chips Supply Potential Whole- tree chips supply consists of logging residues and other removals 3. The assumptions for estimating whole- tree chip supply potential are: 3 Other removals are defined by the US Forest Service Timber Product Output as management operations that typically do not have a product market, such as land clearing operations, hogged fuels, and pre- commercial thinning operations. This designation is also given to forest land put into reserve status (not a very common occurrence). NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page 4

14 Figure 2. Supply areas (gray boundaries) defined by 10- mile to 70- mile travel distances for Region 1 site (green point). Inside the supply areas, red indicates hardwood forests and green indicates softwood forests. There is an assumed 85% efficiency in recovery of logging debris for whole- tree chips. Based on preliminary studies in the region indicating actual recovery rate near the assumed rate. Drain from competing demand for whole- tree chips is assumed at 90% of the facility rated capacity. Net average annual whole- tree chips supply potential is the difference between the whole- tree chips supply potential and competition drain. The current 500,000 GT/yr usage from the existing plant at the site location is included in the drain estimates. The desired feedstock capacity of 360,000 GT/yr can be accomplished with in the 50- mile supply area of Region 1 (Figure 3). The data indicates 405,335 green tons (1.2 times the required feedstock) of net potential for whole- tree chip supply (Table 3). These data reflect the impact the economic down turn has had on logging and the amount of woody biomass available. The potential of whole- tree chips in standing timber is enormous (Table 3). If traditional sustainable harvesting (sawlogs and pulpwood) increases in the future, the 360,000 GT/yr requirement may be met in smaller supply regions. Pulpwood Supply Potential Often, when other pulpwood markets are not available, loggers may chip pulpwood roundwood and sell to a biomass using facility, so estimates of pulpwood in the supply area are an important part of overall supply analysis. In the 70- mile supply area, the current inventory of roundwood from pulpwood- sized trees (5"- 9" diameter class) is NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page 5

15 estimated at approximately 28.2 million green tons, in which 54% is softwood and 46% is hardwoods (Table 4). It should be noted that these data represent total inventory, and are not growth on an annual basis. The potential average annual drain from the same supply region of pulpwood is approximately 3.1 MGT/yr (Table 4). At first it may appear that pulpwood harvests are 11% of the inventory, but this is not the case. Pulpmills in the region reach out further than the 70- mile area to meet their supply needs, greatly increasing the supply area. There is an additional 26% of pulpwood in the upper portions of sawtimber trees that make it to the pulpmills (Table 5). Figure 3. Whole- tree chips supply curves for the 70- mile supply area around Region 1 based on averages of TPO data on green tons of whole- tree chips made available through timber harvesting, drain on whole- tree chips, and net available whole- tree chip Table 3. The potential amount of whole- tree chips supply, drain, net supply, and chips from standing trees over 5 inches in diameter at breast height for a proposed facility capacity increase of 360,000 GT/yr in Region 1. Potential Whole- tree Chips Supply 1 (GT/yr) Potential Whole- tree Chips Drain 2 (GT/yr) Net Potential Whole- tree Chips Supply 3(GT/yr) Potential Whole- tree Chips from Standing Timber Over 5 inches 4 (MGT) Supply Area 70- mile 2,076,448 1,646, , mile 1,726,104 1,293, , mile 1,336, , , mile 884, , , mile 577, , , mile 239, , , mile 47,699 28,761 18, Supply estimates from average of USFS Timber Products Output for hardwood and softwood logging residues and other removals. This estimate represents 85% residue harvest efficiency. 2 Drain data derived from individual facility whole- tree chip usage and the proportion of facilities drain area overlap in each supply area. This estimate represents 90% of the facilities total capacity for whole- tree chips usage. 3Net is the difference of the previous two columns. The 360,000 GT/yr requirement is met at the 50- mile supply area. 4 Derived from USFS FIA Data and represents the non- merchantable portions of live trees greater than 5- inches in diameter. Comparison of Inventory Volumes Currently, over 186 MGT of timber exists within the 70- mile supply region (Table 5). The data shows that hardwood sawtimber growing stock (65 MGT) dominates softwood sawtimber growing stock (58 MGT). As stated prior, much of the upper portions of hardwoods contain pulpwood- sized logs and adding this to the 5"- 9" hardwood pulpwood shows the enormous inventory of hardwood in smaller diameter classes that could be utilized (33.2 MGT) within the 70- mile supply area. Pine plantations provide a high proportion of softwood pulpwood to the pulpwood industry compared to softwood sawtimber. Hardwood forests (1.1 million acres) for the 70- mile supply area average 11 GT/ acre for pulpwood growing stock and 89 GT/ acre for all hardwood stems (including sawtimber). Softwood forests (1.1 million acres) average 14 GT/ acre for pulpwood and 80 GT/ acre for all softwood stems (including sawtimber). Most softwood stands are considerably younger than hardwood stands and achieve similar volumes due to intensive management of softwoods in this region. Roundwood from sawtimber trees (excluding the saw log NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page 6

16 Table 4. Pulpwood (5 9 inch diameter class) standing inventory and pulpwood drain for Region 1. Gross pulpwood 1 (MGT) Pulpwood Drain 2 (MGT/yr) Supply Area Hardwood Softwood All Hardwood Softwood All 70- mile mile mile mile mile mile mile Gross pulpwood (5-9 inch diameter class) estimates from USFS FIA Annual Data found at: 2 Drain data is derived from individual facility pulpwood usage and the proportion of each facility s procurement area that overlaps in each 7 supply areas for Region 1. Table 5. Pulpwood (5 9 inch diameter), sawtimber, and merchantable roundwood in trees larger than 5 inches) standing inventory in Region 1. Supply Area Pulpwood 1 Inventory (MGT) Sawtimber 2 Inventory (MGT ) Other Hard- Soft- Hard- wood Total Oak wood wood Roundwood 3 from Trees 5+ Inch Diameter (minus sawlog) (MGT ) 70- mile mile mile mile mile mile mile Pulpwood estimates from USFS FIA Annual Data found at: 2 Sawtimber estimates from USFS FIA Annual Data found at: 3 Roundwood from trees larger 5+ inch diameter is derived from total merchantable wood from trees 5+ inches minus any saw logs. Estimates from USFS FIA Annual Data found at: Total portion) average 18 GT/ acre for hardwoods and 14 GT/ acre for softwoods, indicating the large resource for roundwood residing in tops and limbs, particularly in mature hardwoods. Sustainability of Resource The sustainability of resources, in the context of this assessment, is concerned about maintaining a sustainable harvest level in the supply region. In this assessment, the approach that best defines sustainability is determining whether current growth of growing stock exceeds current growing stock removals for the supply region. Growth and removal data are both from permanent plot estimates provided by the USFS Forest Inventory and Analysis (FIA) program. Using the FIA removal data verses our drain data is preferable as it directly can be compared relatively against the sample plot estimates of growth. Table 6 compares growing stock with removals for pulpwood- sized (5"- 9" diameter class) timber and Table 7 compares growth to removal of all growing stock larger than 5 inches in diameter at breast height for the supply region. In both tables, where the ratio of growth to removal is less than 1.0, removals exceed growth. FIA data is based on relatively few plots so it is best to consider this data on a basis of the entire 70- mile supply area to stay with in acceptable confidence levels. At the 70- mile supply area level, it appears growth exceeds removals in the smaller diameter classes by almost 2 times (Table 6). Inclusion of all diameters reflects the slower growth older stems experience, but still exceeds removals by 30% (Table 7). NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page 7

17 With large hardwood availability and poor market incentives, silviculture designed to increase hardwood productivity is not given much attention from most landowners. However, there are many ways to increase the relatively slow growth of our unattended hardwood forests. When markets develop for hardwoods, more interest is developed in growing them at faster rates. Hardwood thinning in smaller diameter classes can take advantage of this untapped resource while providing the added benefit of increased growth rates for the residuals and growing stock. Thinning promote healthy forests for landowners. A market for harvesting poorly developed hardwood stands would greatly benefit landowners. Table 6. Mean annual volume of net growing stock growth and removals for tree in the 5-9 in diameter class and net growth to net removal ratios in the supply area around Region 1. Mean Annual Net Growing Stock Growth in the 5-9 inch diameter class, GT/yr Mean Annual Net Growing Stock Removals in the 5-9 inch diameter class, GT/yr Net Growth to Net Removal Ratios 1 in the 5-9 inch diameter class, GT/yr Supply Area All All All 70- mile 385,184 1,170,053 1,555, , , , mile 308, ,429 1,248, , , , mile 227, , , , , , mile 157, , , , , , mile 103, , ,660 95, , , mile 41,583 39,632 81,215 48,307 56, , mile 7,707 11,043 18,749 8,438 6,658 15, A ratio less than 1.0 indicate net removals exceed growth and indicates supply requirements are not sustainably met with in the proposed supply region given the current and proposed demand. Table 7. Mean annual volume of net growing stock growth and removals for merchantable growing stock and net growth to net removal ratios in the supply area around Region 1. Mean Annual Net Growing Stock Growth, 5+ inch diameter class, GT/yr FIA 2010 Ave Annual Net Growing Stock Removals, 5+ inch diameter class, GT/yr net growth to net removal ratios 1 for 5+ inch diameter class Supply Area All All All 70- mile 1,640,822 4,501,481 6,142,303 1,246,770 3,468,302 4,715, mile 1,263,087 3,578,448 4,841,536 1,001,302 2,700,826 3,702, mile 899,344 2,664,001 3,563, ,212 2,158,347 2,928, mile 610,890 1,870,831 2,481, ,127 1,676,160 2,209, mile 387,303 1,201,989 1,589, ,919 1,156,132 1,500, mile 145, , , , , , mile 24,435 44,563 68,997 35,550 80, , A ratio less than 1.0 indicate net removals exceed growth and indicates supply requirements are not sustainably met with in the proposed supply region given the current and proposed demand. Whole- tree chip supply was not included in the sustainability analysis because of two reasons. First, logging residues are byproduct of harvesting, but not included in growing stock estimates. If it is determined that the rate of merchantable harvests is sustainable then this may serve as a surrogate for the sustainability of logging residues, since they are a byproduct of harvesting. Second, and more difficult to determine is the sustainability of other removals", the other source of whole- tree chips potential resulting from thinning or land clearing. While thinning is an acceptable and sustainable forestry practice, land clearing is not. Since the amount of land clearing debris cannot be separated from other removals, the estimate of sustainability of this feedstock cannot be determined. The fact remains that other removals supply a considerable amount of whole- tree chip potential from sources that may be non- sustainable, but these are considered to continue as long as development continues. NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page 8

18 Region 2: Jacksonville Scenario Supply Area Estimates This scenario assumes new construction of a 25MW energy facility located in Jacksonville, NC requiring a feedstock of 360,000 GT/yr. Figure 4 shows the 10- mile to 70- mile supply areas in the region based on road networks in Region 2. Compared to the other two regions, this one is considerably limited to the southeast due to proximity to the coastline. It is estimated that there are approximately 1.9 million acres of forestland in the proposed supply region with 0.9 million acres classified as hardwoods and 1.0 million classified as softwoods 4. This region lies entirely east of I- 95 and hardwood forests predominate as woody wetlands while softwoods are dominated by pine plantations (Figure 4). Whole- tree Chips Supply Potential Whole- tree chips supply consists of logging residues and other removals 5. The assumptions for estimating whole- tree chip supply potential are: There is an assumed 85% efficiency in recovery of logging debris for whole- tree chips. Based on preliminary studies in the region indicating actual recovery rate near the assumed rate. Drain from competing demand for whole- tree chips is assumed at 90% of the facility rated capacity. Net average annual whole- tree chips supply potential is the difference between the whole- tree chips supply potential and competition drain. In Region 2 the amount of whole- tree chips that are potentially being utilized exceed the supply potential creating a potential short fall in chips that could meet the need of 360,000 GT of feedstock based on whole- tree chips (Table 8 and Figure 5). This potential short fall is more of a consequence of the harvest level over the past 11 years, which includes the impact of the down turn in the economy on harvest levels, which ultimately impacts the amount of residue available for feedstock. This region also faces significant levels of competition from other forest industries, which is discussed later in the report. Based on these facts the potential of meeting the 360,000 GT of feedstock with whole- tree chips may require a higher premium for a reliable supply and / or attempts for long- term contracts with entities such as TIMOs/REITs, College of Natural Resources Natural Resources Foundation, or US Forest Service Croatan National Forest. Pulpwood Supply Potential In the 70- mile supply area, the current inventory estimate of roundwood from pulpwood- sized trees (5"- 9" diameter) is approximately 23.7 million green tons, and consist of approximately 44% hardwood and 56% softwoods (Table 9). It should be noted that these data represent total inventory, not annual availability potential annual supply. The potential average annual drain from the same supply region of pulpwood is approximately 2.9 MGT/yr with the majority (~72%) being softwoods. (Table 9). At first it may appear that pulpwood harvests are 12% of the inventory, but this is not the case. Pulpmills in the region reach out further than the 70- mile area to meet their supply needs, greatly increasing the supply area. There is an additional 18% of pulpwood in the upper portions of sawtimber trees that make it to the pulpmills (Table 10). 4 Acreage estimated from the 2006 NLCD 5 Other removals are defined by the US Forest Service Timber Product Output as management operations that typically do not have a product market, such as land clearing operations, hogged fuels, and pre- commercial thinning operations. This designation is also given to forest land put into reserve status (not a very common occurrence). NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page 9

19 Figure 4. Supply areas (gray boundaries) defined by 10- mile to 70- mile travel distances from the Region 2 site (green point). Inside the supply areas, red indicates hardwood forests and green indicates softwood forests. Table 8. The potential amount of whole- tree chips supply, drain, net supply, and chips from standing trees over 5 inches in diameter at breast height for a proposed facility with a capacity of 360,000 GT/yr in Region 2. Potential Whole- tree Chips Supply 1 (GT/yr) Potential Whole- tree Chips Drain 2 (GT/yr) Net Potential Whole- tree Chips Supply 3(GT/yr) Potential Whole- tree Chips from Standing Timber Over 5 inches 4 (MGT) Supply Area 70- mile 1,516,568 1,646, , mile 1,082,445 1,293, , mile 709, , , mile 430, , , mile 207, , , mile 63, ,403-71, mile 17,203 28,761-11, Supply estimates from average of USFS Timber Products Output for hardwood and softwood logging residues and other removals. This estimate represents 85% residue harvest efficiency. 2 Drain data derived from individual facility whole- tree chip usage and the proportion of facilities drain area overlap in each supply area. This estimate represents 90% of the facilities total capacity for whole- tree chips usage. 3Net is the difference of the previous two columns. The 360,000 GT/yr requirement is not met in any supply area. 4 Derived from USFS FIA Data and represents the non- merchantable portions of live trees greater than 5- inches in diameter. NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page 10

20 Figure 5. Whole- tree chips supply curves for the 70- mile supply area around Region 2 based on averages of TPO data on green tons of whole- tree chips made available through timber harvesting, drain on whole- tree chips, and net available whole- tree chips. Table 9. Pulpwood (5 9 inch diameter class) standing inventory and pulpwood drain for Region 2. Gross pulpwood 1 (MGT) Pulpwood Drain 2 (MGT/yr) Supply Area Hardwood Softwood All Hardwood Softwood All 70- mile mile mile mile mile mile mile Gross pulpwood (5-9 inch diameter class) estimates from USFS FIA Annual Data found at: 2 Drain data is derived from individual facility pulpwood usage and the proportion of each facility s procurement area that overlaps in each 7 supply areas for Region 2. Table 10. Pulpwood (5 9 inch diameter), sawtimber, and merchantable roundwood in trees larger than 5 inches) standing inventory in Region 2. Pulpwood 1 Inventory (MGT) Sawtimber 2 Inventory (MGT) Roundwood 3 from Trees 5+ Inch Diameter (minus sawlog) (MGT) Other Supply Area Total Oak Total 70- mile mile mile mile mile mile mile Pulpwood estimates from USFS FIA Annual Data found at: 2 Sawtimber estimates from USFS FIA Annual Data found at: 3 Roundwood from trees larger 5+ inch diameter is derived from total merchantable wood from trees 5+ inches minus any saw logs. Estimates from USFS FIA Annual Data found at: Comparison of Inventory Volumes Approximately 149 MGT of timber exists within the 70- mile supply region. The data shows that hardwood sawtimber growing stock (49 MGT) is approximately equal to softwood sawtimber growing stock (48 MGT). There is approximately 26 MGT of hardwood from pulpwood and roundwood inventory in the Region 2 (Table 10). This is an enormous inventory of hardwood in smaller diameter classes that could be utilized as feedstock within the 70- NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page 11

21 mile supply area. Pine plantations provide a high proportion of softwood pulpwood to the pulpwood industry compared to softwood saw timber. Hardwood forests (0.92 million acres) for the 70- mile supply area average 11 GT/ acre for pulpwood growing stock and 81 GT/ acre for all hardwood stems (including sawtimber). Softwood forests (0.98 million acres) average 14 GT/ acre for pulpwood and 75 GT/ acre for all stems (including sawtimber). Most softwood stands are considerably younger than hardwoods and achieve similar volumes due to intensive management of softwoods in this region. Roundwood from sawtimber trees (excluding the saw log portion) average 17 GT/ acre for hardwoods and 13 GT/ acre for softwoods, indicating the large resource for roundwood residing in tops and limbs, particularly in mature hardwoods. Sustainability of Resource All supply areas with in Region 2 indicate growth exceeds removal for both pulpwood and all merchantable stems (Table 11 and 12). In both tables, the ratio of net growth to net removal is greater than 1.0, indicating growth exceeds removal. The FIA data used in this portion of the analysis is based on relatively few plots so it is best to consider this data on a basis of the entire 70- mile supply area to stay with in acceptable confidence levels. For the complete supply area of Region 2 it appears growth exceeds removals in the smaller diameter classes by over 2 times (Table 11). Inclusion of all diameters reflects the slower growth older stems experience but still exceeds removals by 37% (Table 12). This indicate that although current logging rates and other removals may not be sufficient to supply the 360,000 GT/yr in Region 2, it is not a result of over harvesting (Table 8 and 11). Timber harvesting appears to continue to be sustainable in this region. Table 11. Mean annual volume of net growing stock growth and removals for tree in the 5-9 in diameter class and net growth to net removal ratios in supply area around Region 2. Mean Annual Net Growing Stock Growth, 5-9 inch diameter class, GT Mean Annual Net Growing Stock Removals, 5-9 inch diameter class, GT net growth to net removal ratios 5-9 inch diameter class Supply Area Soft- wood All All All 70- mile 277, ,986 1,216, , , , mile 196, , , , , , mile 125, , ,504 85, , , mile 73, , ,607 49, , , mile 33, , ,018 19,250 75,914 95, mile 12,840 79,081 91,921 4,205 16,713 20, mile 3,291 22,253 25,544 1,031 4,092 5, Table 12. Mean annual volume of net growing stock growth and removals for merchantable growing stock and net growth to net removal ratios in the supply area around Region 2. Mean Annual Net Growing Stock Growth, 5+ inch diameter class, GT FIA 2010 Ave Annual Net Growing Stock Removals, 5+ inch diameter class, GT net growth to net removal ratios for 5+ inch diameter class Supply Area All All All 70- mile 1,016,501 3,403,737 4,420, ,179 2,547,510 3,233, mile 680,203 2,514,763 3,194, ,267 1,999,595 2,461, mile 418,367 1,913,982 2,332, ,000 1,410,708 1,676, mile 245,431 1,354,205 1,599, , ,835 1,010, mile 115, , ,409 32, , , mile 38, , ,353 5,747 53,304 59, mile 9,653 50,080 59,733 1,397 12,695 14, With large hardwood availability and poor market incentives, silviculture designed to increase hardwood productivity is not given much attention from most landowners. However, there are many ways to increase the relatively slow growth of our unattended hardwood forests. When markets develop for hardwoods, more interest is developed in growing them at faster rates. Hardwood thinnings in smaller diameter classes can take advantage of this untapped resource while providing the added benefit of increased growth rates for the residuals and growing NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page 12

22 stock. Thinnings promote healthy forests for landowners. A market for harvesting poorly developed hardwood stands would greatly benefit landowners. Whole- tree chip supply was not included in the sustainability analysis because of two reasons. First, logging residues are byproduct of harvesting, but not included in growing stock estimates. If it is determined that the rate of merchantable harvests is sustainable then this may serve as a surrogate for the sustainability of logging residues, since they are a byproduct of harvesting. Second, and more difficult to determine is the sustainability of other removals", the other source of whole- tree chips potential resulting from thinning or land clearing. While thinning is an acceptable and sustainable forestry practice, land clearing is not. Since the amount of land clearing debris cannot be separated from other removals, the estimate of sustainability of this feedstock cannot be determined. The fact remains that other removals supply a considerable amount of whole- tree chip potential from sources that may be non- sustainable, but these are considered to continue as long as development continues. NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page 13

23 Region 3: Kenansville Scenario Supply Area Estimates This scenario assumes increasing the capacity of an existing 32 MW energy facility located in Kenansville, NC that currently consumes ~500,000 GT of woody biomass per year. The increase will require an additional 360,000 GT/yr. Figure 6 shows the 10- mile to 70- mile supply areas in the region based on road networks in Region 3. Compared with the other two regions, Region 3 is the furthest west and therefore has a much larger available supply area in every direction. Although less corporate landholdings are found, there is still a large amount of working forestland in the region. In the south and east portions of Region 3, intensively grown pines can be seen in continuous areas shaded green and swamp areas consisting of mainly hardwoods are shown in continuous red patches. Supply amounts of whole- tree chips and pulpwood are determined for each subsequent supply area in the region. Figure 6. Supply areas (gray boundaries) defined by 10- mile to 70- mile travel distances from the Region 3 site (green point). Inside the supply areas, red indicates hardwood forests and green indicates softwood forests. Whole- tree Chips Supply Potential Whole- tree chips supply consists of logging residues and other removals6. The assumptions for estimating whole- tree chip supply potential are: 6 Other removals are defined by the US Forest Service Timber Product Output as management operations that typically do not have a product market, such as land clearing operations, hogged fuels, and pre- commercial thinning operations. This designation is also given to forest land put into reserve status (not a very common occurrence). NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page 14

24 There is an assumed 85% efficiency in recovery of logging debris for whole- tree chips. Based on preliminary studies in the region indicating actual recovery rate near the assumed rate. Drain from competing demand for whole- tree chips is assumed at 90% of the facility rated capacity. Net average annual whole- tree chips supply potential is the difference between the whole- tree chips supply potential and competition drain. The current 500,000 GT/yr usage from the existing plant at the site location is included in the drain estimates. Table 13 indicates that the plant may meet an increased feedstock capacity of 360,000 GT/yr within a 60- mile supply region. Figure 7 indicates that the feedstock demand distance may be less then 60 miles. Increasing capacity of the facility in Region 3 is feasible under the current logging rates. The potential of whole- tree chips in standing timber is enormous. If only tradition sustainable harvesting (sawlogs and pulpwood) increases in the future, the 360,000 GT/yr requirement would be met in shorter travel distances. This region does have several competitors drawing on the resources, which is discussed later in the report. Table 13. The potential amount of whole- tree chips supply, drain, net supply, and chips from standing trees over 5 inches in diameter at breast height for a proposed facility capacity increase of 360,000 GT/yr in Region 3. Potential Whole- tree Chips Supply 1 (GT/yr) Potential Whole- tree Chips Drain 2 (GT/yr) Net Potential Whole- tree Chips Supply 3(GT/yr) Potential Whole- tree Chips from Standing Timber Over 5 inches 4 (MGT) Supply Area 70- mile 2,269,530 1,646, , mile 1,691,575 1,293, , mile 1,191, , , mile 697, , , mile 346, ,170 16, mile 151, ,403 16, mile 33,781 28,761 5, Supply estimates from average of USFS Timber Products Output for hardwood and softwood logging residues and other removals. This estimate represents 85% residue harvest efficiency. 2 Drain data derived from individual facility whole- tree chip usage and the proportion of each facility s drain area overlap in each supply area. This estimate represents 90% of the facilities total capacity for whole- tree chips usage. 3Net is the difference of the previous two columns. The 360,000 GT/yr requirement is met at the 50- mile supply area. 4 Derived from USFS FIA Data and represents the non- merchantable portions of live trees greater than 5- inches in diameter. Pulpwood Supply Potential In the 70- mile supply area, the current inventory estimate of roundwood from pulpwood- sized trees (5"- 9" diameter) is approximately 35.6 million green tons (Table 14). It should be noted that these data represent total inventory, not annual availability potential annual supply. The potential average annual drain from the same supply region of pulpwood is estimated at approximately 2.9 MGT/yr (Table 14). At first it may appear that pulpwood harvests are 8% of the inventory, but this is not the case. Pulpmills in the region reach out further than the 70- mile area to meet their supply needs, greatly increasing the supply area. There is an additional 8% of pulpwood in the upper portions of sawtimber trees that make it to the pulpmills (Table 15). Comparison of Inventory Volumes Currently, over 229 MGT of timber exists within the 70- mile supply region (Table 15). The data shows that hardwood sawtimber growing stock (84 MGT) exceeds softwood sawtimber growing stock (63 MGT). As stated prior, much of the upper portions of mature hardwoods contain pulpwood- sized logs and adding this to the 5"- 9" hardwood pulpwood shows the enormous inventory of hardwood in smaller diameter classes that could be utilized (42.9 MGT) within the 70- mile supply area. Pine plantations provide a high proportion of softwood pulpwood to the pulpwood industry compared to softwood saw timber. Hardwood forests (1.5 million acres) for the 70- mile supply area average 11 GT/ acre for pulpwood growing stock and 85 GT/ acre for all hardwood stems (including sawtimber). Softwood forests (1.4 million acres) average 13 GT/ acre for pulpwood and 73 GT/ acre for all stems (including sawtimber). Most pine stands are considerably younger than hardwoods and achieve similar volumes NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page 15

25 due to intensive management of softwoods in this region. Roundwood from sawtimber trees (excluding the saw log portion) average 18 GT/ acre for hardwoods and 14 GT/ acre for softwoods, indicating the large resource for roundwood residing in tops and limbs, particularly in mature hardwoods. Figure 7. Whole- tree chips supply curves for the 70- mile supply area around Kenansville, NC based on averages of TPO data on green tons of whole- tree chips made available through timber harvesting, drain on whole- tree chips, and net available whole- tree chips. Table 14. Pulpwood (5 9 inch diameter) standing inventory in Region 3. Gross pulpwood 1 (MGT) Pulpwood Drain 2 (MGT/yr) Supply Area Hardwood Softwood All Hardwood Softwood All 70- mile mile mile mile mile mile mile Gross pulpwood estimates from USFS FIA Annual Data found at: 2 Drain data derived from individual facility pulpwood usage and the proportion of each facility s drain area overlap in each supply area. Table 15. Pulpwood (5 9 inch diameter), sawtimber, and merchantable roundwood in trees larger than 5 inches) standing inventory in Region 3. Pulpwood 1 Inventory (MGT) Sawtimber 2 Inventory (MGT) Roundwood 3 from Trees 5+ Inch Diameter (minus sawlog) (MGT) Other Supply Area Total Oak Total 70- mile mile mile mile mile mile mile Pulpwood estimates from USFS FIA Annual Data found at: 2 Sawtimber estimates from USFS FIA Annual Data found at: 3 Roundwood from trees larger 5+ inch diameter is derived from total merchantable wood from trees 5+ inches minus any saw logs. Estimates from USFS FIA Annual Data found at: NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page 16

26 Sustainability of Resource All supply areas indicate growth exceeds removal for both pulpwood and all merchantable stems (Table 16 and 17). The FIA data used in this portion of the analysis is based on relatively few plots so it is best to consider this data on a basis of the entire 70- mile supply area to stay wit in acceptable confidence levels. For the complete supply area of Region 3 it appears growth exceeds removals in the smaller diameter classes by over 2 times (Table 16). Inclusion of all diameters reflects the slower growth older stems experience, but still exceeds removals by 70% indicating harvests are by no means depleting the resource in this region (Table 17). Table 16. Mean annual volume of net growing stock growth and removals for tree in the 5-9 in diameter class and net growth to net removal ratios in supply area around Region 3. Mean Annual Net Growing Stock Growth, 5-9 inch diameter class, GT Mean Annual Net Growing Stock Removals, 5-9 inch diameter class, GT net growth to net removal ratios 5-9 inch diameter class Supply Area Soft- wood All All All 70- mile 430,745 1,286,659 1,717, , ,052 1,012, mile 325, ,306 1,306, , , , mile 213, , , , , , mile 112, , ,437 79, , , mile 56, , ,325 40,195 82, , mile 30, , ,485 15,518 31,432 46, mile 10,675 29,756 40,431 1,883 5,281 7, Table 17. Mean annual volume of net growing stock growth and removals for merchantable growing stock and net growth to net removal ratios in the supply area around Region 3. Mean Annual Net Growing Stock Growth, 5+ inch diameter class, GT FIA 2010 Ave Annual Net Growing Stock Removals, 5+ inch diameter class, GT net growth to net removal ratios for 5+ inch diameter class Supply Area All All All 70- mile 2,101,973 5,663,011 7,764,984 1,404,200 3,993,798 5,397, mile 1,513,438 4,412,358 5,925,797 1,046,771 3,130,658 4,177, mile 1,007,458 2,849,845 3,857, ,737 1,874,002 2,539, mile 589,644 1,587,854 2,177, ,840 1,041,403 1,391, mile 314, ,089 1,107, , , , mile 138, , ,354 54, , , mile 34,502 88, ,620 5,612 24,641 30, With large hardwood availability and poor market incentives, silviculture designed to increase hardwood productivity is not given much attention from most landowners. However, there are many ways to increase the relatively slow growth of our unattended hardwood forests. When markets develop for hardwoods, more interest is developed in growing them at faster rates. Hardwood thinning in smaller diameter classes can take advantage of this untapped resource while providing the added benefit of increased growth rates for the residuals and growing stock. Thinning promote healthy forests for landowners. A market for harvesting poorly developed hardwood stands would greatly benefit landowners. Whole- tree chip supply was not included in the sustainability analysis for two reasons. First, logging residues are byproduct of harvesting, but not included in growing stock estimates. If it is determined that the rate of merchantable harvests is sustainable then this may serve as a surrogate for the sustainability of logging residues, since they are a byproduct of harvesting. Second, and more difficult to determine is the sustainability of other removals", the other source of whole- tree chips potential resulting from thinning or land clearing. While thinning is an acceptable and sustainable forestry practice, land clearing is not. Since the amount of land clearing debris cannot be separated from other removals, the estimate of sustainability of this feedstock cannot be determined. The fact remains that other removals supply a considerable amount of whole- tree chip potential from sources that may be non- sustainable, but these are considered to continue as long as development continues. NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page 17

27 Description and Location of Existing and Potential Fiber Competitors within Supply Areas Known sources of major competition for clean and whole- tree chips 7 found within the 70- mile supply are of Regions 1-3 are depicted in Table 18. As seen in Figure 8, considerable overlap of the facilities supply regions occurs for all three regions as shown in Table 18. Table 19 shows the competitors outside the three supply regions that have procurement supply regions that may from time to time extract timber sources from all three scenarios. These facilities have estimated annual throughputs ranging from 50,000 green tons per year to 4.3million green tons per year. The table below lists the competitors that are located inside the supply regions. The annual throughput for the facilities is a conservative estimate that reflects the maximum capacity of the facility. Biomass power plants (30-50 MW), oriented strand board (OSB) mills, and pulp and paper mills dominate all three supply regions. Procurement and export operations at both ports also compete for resources within all three supply regions. Table 18. Current and potential competitors for woody fiber within the 70- mile supply regions. Map ID Status Facility Name 1 Operating Coastal Carolina Clean Power Type Biomass Power Facility Address or Coordinates N. NC HWY 11 & 903 City Kenansville, NC Green Supply Tons 2 Region 325,000 1,2 & 3 2 Operating Cogent fibre Procurement- Export 3 Operating Craven Wood Energy 4 Operating Georgia- Pacific, LLC 5 Announced House of Raeford 6 Operating International Paper 7 Announced Prestage Farms Biomass Power Facility OSB Biomass CHP Pulp & Paper Mill Biomass Power Facility Biomass Cogen , Executive Pkwy 2457 Bold Mount Olive Hwy 3333 US Hwy 117 S. 865 John L. Riegel Rd Taylors Bridge Hwy Morehead Port, NC New Bern, NC 260,000 1 & 2 700, Dudley, NC 550, Rose Hill, NC 50, Riegelwood, NC 4.3 million 3 Clinton, NC 35,000 2 & 3 8 Announced Sterling Planet John L. Riegel Rd. Riegelwood, NC 630, Operating Weyerhaeuser Pulp & Paper 1785 Vanceboro, 1.9 million 1-3 Mill Weyerhaeuser NC Rd. 10 Operating Yildiz Procurement Wilmington 260, Export Port, NC 1 Facility locations unless specified. 2 Estimated annual green tons for roundwood or clean chips. Annual green tons reflect the facility operating at full capacity or nameplate capacity. Average annual throughput estimation derived from: Johnson, Tony G.; Steppleton, Carolyn D Southern pulpwood production, Resour. Bull. SRS 168. Asheville, NC: U.S. Department of Agriculture Forest Service, Southern Research Station. 38 p. 3 Will be located at the International Paper Riegelwood Site, expected to be operational in For a list of timber buyers within the supply regions NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page 18

28 Table 19. Current and potential competitors located outside the supply regions of the three scenarios, but that may extract timber periodically from with in the 70- mile supply regions for each scenario. Map ID Status Facility Name Type 11 Operating Atlantic Power Biomass Corporation Power Facility Address or Coordinates Power House Dr. City Southport, NC Green Supply Tons 2 Region 500, Operating Domtar Corp. Pulp & Paper Mill Highway 912 Bennettsville, NC 2.0 million Operating Domtar Corp. Pulp & Paper Mill Highway 149 N. Plymouth, NC 2.3 million Operating Enviva LP Pellet Mill NC Hwy 561 East Ahoskie, NC 750, Operating International Paper Pulp & Paper Mill 700 S. Kaminski St. Georgetown, SC 3.7 million 2 & 3 16 Operating Kapstone Paper & Packaging Corp. Pulp & Paper Mill 100 Gaston Rd. Roanoke Rapids, NC 2.3 million Operating Perdue Agribusiness Biomass CHP 242 Perdue Rd. Cofield, NC 50, Operating Perdue AgriRecycle Biomass CHP 3539 Governors Rd. Lewiston Woodville, NC 75, Operating Rock- Tenn Pulp & Paper Mill 7320 Mill Rd. Florence, SC 2.4 million 2 &3 1 Facility locations unless specified. 2 Estimated annual green tons for roundwood or clean chips. Annual green tons reflect the facility operating at full capacity or nameplate capacity. Average annual throughput estimation derived from: Johnson, Tony G.; Steppleton, Carolyn D Southern pulpwood production, Resour. Bull. SRS 168. Asheville, NC: U.S. Department of Agriculture Forest Service, Southern Research Station. 38 p. NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page 19

29 Figure 8. Locations of facilities that directly compete within and outside the three supply regions for woody biomass. NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page 20

30 Regional Opportunities Other Biomass Feedstocks: Poultry Litter Electricity can be generated from poultry litter using the following combustion technology sources: utility scale boilers (co- firing coal plants and wood fired boilers), steam turbines, engine generator sets, and gasifiers. The conversion technologies that utilize dry biomass to produce heat or electricity are: combustion, co- firing, gasification, and CHP 8. These technologies produce heat or electricity. The North Carolina Renewable Energy and Energy Efficiency Portfolio Standard 9 (REPS) has specific set- aside requirements 10 for poultry litter energy production. A recent amendment allows for renewable energy credits from poultry waste to be used as a feedstock in combined heat and power facilities (CHP) to qualify towards the REPS poultry waste 11 set- aside. At this time there are no operating poultry litter facilities for the production of energy within North Carolina primarily due to current market demands and environmental and social issues. Bioenergy markets for poultry litter at this time do not exist and the primary disposal method of animal waste in NC includes land application or cofiring applications in a biomass power facility such as Craven Wood Energy 12. Poultry farms that produce dry litter and have populations greater than 30,000 or more birds are required by NCDENR to have a animal waste management plan, 13 however all poultry farms are required to prevent waste discharges to surface waters and groundwater. If stricter clean water regulations are imposed on the traditional land application for dry poultry litter the emergence of a bioenergy market may help to alleviate the narrowing disposal options that could occur. The social issues that have been identified in a report prepared for the South Carolina Energy Office include a general Not in my backyard (NIMBY) 14 opposition from constituents who believe that a poultry litter bioenergy facility will impact health from air emissions and deflate property values (Perera, 11). Fibrowatt, LLC 15 recently proposed three facilities within North Carolina in which all of have been defeated. Without stricter land application regulations pertaining to poultry litter disposal, these social trends are likely to continue. The three sites (Regions 1-3) have been analyzed using a 50 mile 16 distance based transportation network to obtain estimates for the procurement area (Figure 9). Poultry litter facilities with animal populations less than 1,000 were eliminated from the analysis. Due to the variation of litter generated from type of bird, market weight, number of flocks, etc., estimating the amount of litter can prove to be difficult. Based on extensive literature research the types of poultry birds that are analyzed for bioenergy include: chicken (broilers) 17 and turkeys 18. Tables show the 8 CHP, Combined Heat and Power 9 NC General Assembly: 10 Poultry Waste requirements for 2012 are 170,000 megawatt hours, 700,000 megawatt hours in 2013, and 900,000 megawatt hours in The NC REPS clarifies that the generation of electricity from poultry waste will be combined with wood shavings, straw, rice hulls, or other bedding material, N.C. Gen. Stat (f). Peanut hulls are primarily used as bedding material in northeastern NC while wood shavings are primarily used in the piedmont and southeastern coastal plain of NC. 12 Coastal Carolina Clean Power does not purchase poultry litter as a feedstock due to the high ash content and ash fusion. 13 NCDENR, AWMP (Animal Waste Management Plan); documents.html 14 NIMBY ( Not in my back yard ) 15 Biomass Power & Thermal, Fibrowatt fields emissions questions : fields- emissions- questions/ 16 The majority of poultry farmers are under contract with several processing facilities and deliver poultry livestock within a 50 mile travel distance. The processing plants are located at: St. Pauls, Raeford, Mt. Olive, Kinston, Goldsboro, and Lewiston. 17 Broiler chickens have 5 to 6 batches per year and the poultry house is cleaned once a year. 18 Turkeys are produced every 20 weeks for male and 15 weeks for female. The poultry house is cleaned twice a year. NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page 21

31 annual amount of litter produced per 1000 birds 19, and the total litter production for the supply areas based on the assumptions above (Flora and Riahi- Nezhad, 2006). Estimated poultry litter production by county are available from the 2007 USDA Agriculture Census publication 20. Figure 9. Poultry (broilers & turkeys) farm facilities within the 50- mile supply regions. 19 Conservative estimates used that do not include litter accumulation from animal losses. 20USDA, The Census of Agriculture, NCSU FiberAnalytics: Camp Lejeune Woody Biomass Analysis, 4/27/2012 Page 22