Peter J. Ince, Kenneth E. Skog (FPL) Do-il Yoo, Andrew Kramp (UW-Madison) V. Alaric Sample (The Pinchot Institute)

North South West

Timber Harvests: Softwood Sawtimber Hardwood Sawtimber Softwood Non-Sawtimber Hardwood Non-Sawtimber Softwood Ag. SRWC Hardwood Ag. SRWC Timber Product Outputs: Sawlogs/Veneer logs Other Indust. Rndwd Harvest Residue Fuel Feedstock Pulpwood Mill Residues Other Fiber Pulp Recovered Paper Forest Products: Softwood Lumber Hardwood Lumber Softwood Plywood/Veneer Hardwood Plywood/Veneer Oriented Strand Board (OSB) Industrial Particleboard Fiberboard (MDF, HB, IB) Wood Pulp (Chem. & Mech.) Newsprint Printing & Writing Paper Other Paper & Board Other Industrial Roundwood Wood Energy Demand

Generic Scenario Assumptions: Farm Bill-like like US biomass definition (no restrictions on wood use for energy) No carbon credits for wood or wood energy US Forest growth starts at 1996-2006 growth rate US GDP and housing starts outlook based on 2010 Annual Energy Outlook (EIA 1 ) Global GDP outlook based on IMF 2 (to 2014) and IPCC 3 B2 Message scenario (2015-2030) 2030) In other countries wood s s share of total energy increases by 1% (2010-2030) 2030) 1 EIA Energy Information Administration (US Dept. of Energy) 2 IMF International Monetary Fund (World Economic Outlook Database) 3 IPCC Intergovernmental Panel on Climate Change (Special Report on Emissions Scenarios)

An important generic assumption in our analysis is a recovery in housing (our projections are based on housing projections of the 2010 Annual Energy Outlook)

Our wood energy scenarios range from a negligible increase in US wood energy use by 2030, to a 5-fold increase in our highest scenario... 5x 0x

High wood energy demands compete for pulpwood and wood fiber (assuming no restriction on biomass supply). Pulpwood and harvest residues supply the bulk of increased wood energy use, along with increased fuelwood harvest and some diversion of mill fiber residues to energy...

Without restrictions on timber use for energy (assuming Farm Bill-like biomass definition), increasing wood energy use competes directly for pulpwood, resulting in higher real pulpwood prices across the USFPM scenarios... Toward the high end (price index > 1.4 or so) agricultural SRWC also begins to become economical.

Generally, increasing wood energy use causes higher projected fuel feedstock and pulpwood prices (competition effect), but lower prices for sawlog/veneer logs (a complementary effect of higher value for logging residue co-products).

Increasing wood energy complements US output of solid-sawn and veneer products (lumber, plywood, LVL, etc.) due to higher values for mill residue co-products and logging residues (co-products of logging); Note: analysis assumes recovery from the housing downturn.

US net exports have increased in recent years for solid-sawn and veneer products, and increasing wood energy use is a complement to that trend, again because those products are yet more economical with higher wood residue values.

On the other hand, increasing wood energy use reduces projected US output of composite wood panel products (OSB, particleboard and fiberboards), because of higher wood fiber prices due to competing usage of pulpwood and mill residues for energy...

Increasing wood energy use also displaces recent gains in US net exports of composite wood panel products, again because of higher prices and competing use of wood fiber (pulpwood and mill residues)...

US wood pulp output has declined since the mid-1990s. Increasing wood energy use is projected to further displace US wood pulp production because of higher pulpwood and fiber residue prices.

Among the primary forest products, paper & paperboard have generally the highest value. US output declined since 1999 in the context of intense global competition, but net exports have improved. Increasing wood energy use is projected to further displace US paper and board output (and exports) due to higher domestic prices for pulpwood and wood pulp.

Rationalized currency exchange rates and productivity gains via mill closures and mill upgrades finally led to a positive trend in US net exports of paper & board (pulp & paper net trade balance was +$3.3 billion in 2009). However, increasing wood energy use is projected to dampen that trend going forward.

US primary forest product revenues (not counting secondary products) Gross Revenue Impacts: Increasing wood energy use reduces primary forest product revenues, but increases projected timber stumpage revenues... US timber stumpage revenues

Summary & Conclusions: Detailed analysis within global model reveals trade and sector-wide impacts... Increasing US wood energy... increases fuelwood & pulpwood prices decreases output of wood-fiber products increases output of lumber & veneer products reduces primary forest product revenues increases timber stumpage revenues