DEVELOPING BIOMASS PLANT A SLOW PROCESS
By Ray Linker
Observer Staff Writer
Producing electricity from wood waste is an idea that may some day become a reality at a yet-to-be-built $100 million plant outside La Grande.
Two questions remain: "When?" and "Where's the money coming from?"
The answer to the first question, according to the mastermind behind the proposed Baum Industrial Park facility, Mark D. Rappaport of Oregon City, is "2 to 2 1/2 years away."
The financing, while beginning to fall into place, apparently is the bigger question of the two and certainly the determining factor. Rappaport is pursuing several sources but has not said how much money he has raised to date.
"The financing is progressing," he said late last week.
"In this controlled, volatile market, financing is a little slower than I have anticipated. But it's not a question of if I will get it but of when the funding arrives. The due diligence process is taking longer than I had expected."
He has talked with representatives of U.S. Sen. Ron Wyden, D-Ore., about taking advantage of a provision in the recently enacted federal farm bill, which could provide up to a 30 percent grant for such projects.
"There is language in the farm bill providing money. It's been approved by Congress, but the money has not yet been appropriated," Rappaport said.
While those monies are competitively sought, the law nationally calls for $320 million total through 2007 for such projects. Several criteria under the farm bill appear to fit the Rappaport project.
There are state tax incentives available, too, he said.
Still unanswered is the question of the gap between the price the plant could pay for raw materials and what suppliers must charge to make it feasible for them.
Rappaport said on an earlier visit to
La Grande he wants to pay forest managers $10 to $20 a ton for wood waste delivered to his plant. The managers and suppliers are saying it would take $30 a ton to be profitable to them.
The state Office of Energy is now doing a biomass resource assessment focusing on Union, Baker and Wallowa counties, said John G. White of that office. It should reveal the cost estimate for supplying forest biomass to such a plant, but the assessment won't be ready until next summer, White said.
A long-term source of raw materials must be close enough to the plant to be economically feasible to the supplier, and backers need to be assured that the energy can be produced over a long enough period to get a meaningful payback on their investment.
Today, neither of these two situations exists, according to a report prepared for the Office of Energy.
It will take time to bring the whole project to fruition, Rappaport said.
Of immediacy is the need to build out the infrastructure at the site.
"We're trying to get water and sewer systems in, roads into the site to provide access to the site for the forest materials that will be brought in," Rappaport said.
He said he was attending to such details as making sure fire hydrants were in the correct places.
Rappaport founded Sustainable Energy Development Inc., in 1997 as the foundation of the La Grande operation after he served for eight years as managing general partner of a bioenergy company in the southern Oregon town of White City.
He said he understands there are materials in the forest that need harvesting and that those capable of providing him with the wood wastes are anxious to do so.
A state study said "thousands of acres on the national forests of Eastern Oregon urgently need forest health treatment."
The same study points out the lengthy consultation process and the likelihood of various appeals on any proposals for forest health plans which could delay removal of materials.
"I know the sooner we start, the happier (the suppliers) will be," Rappaport said. "I've met with a lot of individuals and companies who are interested in contracting for that work."
He said he did not have any specific "finalized" contracts with people who would gather materials from the forest. Nor does he have a contract to sell the electricity to Bonneville Power Administration.
Developing a timeline for construction of the plant would have little meaning now, he said.
"We can't implement anything until we know more about the financing."
He has completed a surface water management plan and is getting some answers the fire department needs, he said. The water issue goes back to Union County for approval, he said.
"When we actually break ground depends a lot on the weather, when we can bid the job, construction costs."
He said it would take 18 months to build the plant once everything falls into place.
"It will be at least 2 to 2 1/2 years before we are operational. We should be able to do the (electric generating) power plant inside two years but it could be three years before the full plant is operational."
He was referring to the ability to produce ethanol as a byproduct of the electricity generation.
"We will have to do some verification in the ethanol process. We have to verify our engineering and scientific calculations. We hope to utilize a lot of new technologies that were not available when we started working on this. I plan to set up a pilot plant in Portland for those tests. That will happen in the next six to 12 months," Rappaport said.
He said last week he is still negotiating for a building for the pilot plant.
He said there has been no change in the number of people expected to be involved in making the local plant work.
Counting those both in the woods gathering the raw materials, doing trucking and cleaning of materials, and those working in the plant, there will be 200 people involved, he said.
While getting a plant going is a slow process, Rappaport said he is not disappointed in the pace of the development.
"Although I've spent a long time on this project, I'm satisfied with the way things are going. I think the dominoes are falling in my direction; the stars are aligned right for me."