staar volume3 -...

STAAR|Vol3|MunishSikka|2011

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AssessingOpportunitiesforaSustainableWood‐biomassEnergySysteminSoutheastAlaskaMunishSikka Abstract: In Southeast (SE) Alaska, the local communities based ondifferent islands are dependent on oil for heating and are thereforefacingenormouschallengesduetogloballyincreasingoilprices.ThehighcostofenergyinthefarNorthhasconstrainedthelocaleconomyandisamajor roadblock in the development of the region. The present studylooksatthepotentialbenefitsofdevelopingalocalwood‐pelletindustryinSoutheastAlaskabyutilisingresiduesfromlocalsaw‐millsandloggingoperations.The study explores the economic, environmental and socialbenefitsofdevelopinga sustainablewood‐pellet industry thatdisplacesfossil‐fuel forheating energy in the region. Italsobrieflydiscusses theAlaska’s historic land settlement act of 1971 that gave land rights tolocal communities by organising them into corporations. Thesecorporationscanfurtherplayimportantroleinthedevelopmentoflocalwood‐pelletindustry.Introduction

TheregionofSoutheast(SE)Alaskaisaresource‐dependenteconomywithcommunitiesrelying primarily upon hunting, fishing, timber, mining, and tourism for their livelihood. Theregioncomprisesofmorethanadozencommunitieswithpopulationsfromaslowas50andtoover 30,000 (Juneau, the state capital) residents located throughout the archipelago. Thesecommunitiesdrawtheirenergyeitherfromlocalhydro‐powerstationsorfossil‐fuels(oil/diesel‐oil)importedviasea‐routes.Whilsthydroenergyisamajorsourceofelectricityintheregion,forheatingbuildings,mostcommunitiesrelyuponoil(Alexander,Henderson,&Coleman,2010,p.84).

The increase in global oil prices has therefore left these rural communities to face an

energycrisis,threateningtheirverysurvival.Thereforeaconcertedefforttopromotesmall‐scale,self‐sustainingenergyoptions inruralareas isrequiredtomeettheenergyneedsoftheregionandtheentirestateofAlaska.Besidesthehighcostofoil,thereisanenvironmentalriskinvolvedinshipping,handlingandstoringthepetroleumproducts,especiallythepotentialforspillsintheharshAlaskanclimateandoceanconditions(Alexanderetal.,2010,p.8).Whileexploringavenuesfor alternative energy, it is important to note that the region is home to the TongassNationalForestspreadover17millionacresofland.UndertheTongassLandManagementPlandevelopedfortheregion,576,000acresisdesignatedassuitablefortimberharvest.Therefore,anenormouspotential lies in converting locally available forest‐biomass intowood‐pelletsorother formsofcleanandaffordablebiomass‐energy.

One unique feature associatedwith Alaska is the “AlaskaNative Claims Settlement Act”

(ANCSA)of1971thataimedtosettleNativeAmericans’claimstovirtuallyallofAlaska’sroughly400millionacresof land.ThiswasdonebyorganisingAlaska’shuntingandgatheringpeoplesinto13regionaland220villagecorporations.Thecorporationsweredevisedasaninstitutionalmeanstogivethenativetribesthecapital,infrastructureandincentivestodevelopandmanage


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theirownnaturalassets,therebyincreasingtheirself‐sufficiencyandreducingthegovernment’strustresponsibility(Thornton,2007).

The Sealaska Corporation is one of the regional corporations formed under ANCSA and is

involved in the land and natural resourcemanagement in SE Alaska (Sealaska ‐WhoWe Are,2011).Sealaskarecentlyinstalledawood‐pelletbasedheatingsystemintheirofficebuildinginJuneau as a potential step in biomass energy development. The Corporation is further takingstepstodeveloparegionalindustryforwood‐pelletsincludingthrough:

Spreading awareness amongst the native community members and policy makers,

regardingthebenefitsofswitchingfromoiltowood‐pelletstoheatbuildings;and Capacitybuildingofexistingsaw‐millstostartawood‐pelletproductionfacility.

Developing a biomass‐energy industry in the region that produces wood‐pellets to beconsumedasheating fuel isexpected tobenefit theregion inseveralways.Thesewood‐pelletscouldbemadefromcurrentsaw‐millandloggingresiduesinSEAlaskaanddoesnotrequireanynewtreetobeharvestedparticularlyforbiomass‐energy.

Thefactthatresiduesoftenhaveloworevennegativecostsandthereforecouldbeutilisedfor

development of biomass‐energy is also supported by Rosillo‐Calle et al.(2007,pp.6‐7). Theseauthors suggest that residues from forestry and agricultural activities are a large andunderexploited potential energy resource, almost always under‐estimated and representmanyopportunitiesforbetterutilisation.Globallytheenergypotentialavailablefromresiduesisabout70Exa Joules9 (EJ) including 36EJ from forestry residues alone.However, these estimates areregardedasroughindicationsonlywithconsiderablevariationestimated.

Thepresentstudyattemptstoidentifypotentialeconomic,environmentalandsocialbenefits

of establishing a wood‐pellet industry in the region. These three types of benefits togetherconstitutetheTripleBottomLineframeworkofsustainability(Slaper&Hall,2011). Inordertodemonstratetheenvironmentalbenefits,thestudyusestheemissionfactorvaluespublishedbyObernberger & Thek (2010,p.305) to calculate the potential savings in Carbon Dioxide (CO2)emissionsthatcouldbeachievedbydisplacingoilwithwood‐pelletsasheatingfuelinresidentialandcommercialbuildings.Thestudyfurtherexaminesapotentialdemand‐supplyscenariousingthe available literature and conducts the price sensitivity analysis ofwood‐pellet and oil. Thissensitivity analysis is based on a methodology developed by Brackley, Barber, & Pinkel(2010,p.19)wherethepriceperunitofenergyisdeterminedatdifferentpricesofoilandwood‐pellets.Methods

Thecurrentstudy isbasedonan in‐depth literaturereview,participantobservationandsemi‐structuredinterviewswithkeyinformantsontheexistingenergysituationandtrendsintheforestindustryinSoutheastAlaska.Semi‐structuredinterviewsarecomposedofpredeterminedquestions, but the order and content of the questions can be modified based upon the

9 1 EJ = 1018 Joules


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interviewer’s responses. Moreover, the questions’ wording can be changed and particularquestionswhichseeminappropriatewithaparticularintervieweecanbeomitted,oradditionalones included (Robson, 2002,p.270). One benefit of semi‐structured interviews, as opposed toformalsurveysorquestionnaires,isthattheyenablerespondentstoexpressperspectivesintheirown words, with the opportunity to elucidate and clarify their response through follow‐updialoguewiththeinterviewer(Thornton,etal.,2010,p.23).

Figure 1.TopLeft: Forest Residue Site in Sitka, Alaska.TopRight:Mr.Nathan Soboleff, a youngTlingit businessleader,showingwood‐pelletbasedheatingsysteminstalledatSealaska’scorporateofficesite.BottomLeft:TlingitCommunityMembersnarratingstories–Hoonah,Alaska.BottomRight:TongassNationalForest‐Juneau,Alaska.

PhotoCourtesy:MunishSikkaCurrently,thereisnoexistingwood‐pelletmanufacturingfacilityinSEAlaska.Thepresent

studyattemptstoconsolidatetheeffortsofvariousindividualsandentitiesworkingonthisissue.Therefore, the semi‐structured interview approach was especially useful in carrying out thepresent study as the respondents shared their knowledge about local‐context and individualperceptiononwood‐biomassenergy. In‐depthinterviewswereconductedwithresearchersandfield staff associatedwith theUS forest services, Sealaskaexecutives, and representatives fromnon‐governmentalorganisationsworkingontheissuesrelatedtoconservationinSEAlaska.


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Calculations:Whiledoing theeconomicandenvironmentalcalculations, thequantityofwood‐pelletshasbeenrepresentedintons.ItisapopularmeasurementunitinUSAandvariousregionalstudiesconsultedhaveusedthisunitforanalysis.Forenvironmentalbenefitanalysis,theemissionquantitiesofvariousgaseshavebeencalculated in ‘tonnes’10which isadifferentunitfrom‘tons’11representingwood‐pellets.Thequantityofvariousgasesemittedbyburningwood‐pellets and oil for centralised heating systems has been taken from Obernberger & Thek(2010,p.305). These values are based on the Austrian framework conditions concerning fuelsupply,distributionandutilisation.Therefore,minordifferencesareexpectedinthesevaluesinadifferent country due to possible differences in energy consumption during the production offuels.However,thisispresumedtohaveminimalabsoluteinfluenceandhasbeenignoredinthecalculations.GlobalClimateChangeMitigationandTongassNationalForest

Around theworld, forests are seen as an important sourceofmitigating climate changethroughcarbonsequestration.Ontheotherhand,burningwood‐biomassforenergywouldleadtothereleaseofstoredcarbonintotheatmosphere.Therefore,itisimportanttoconsiderclimatechange related impacts of promoting wood‐biomass in SE Alaska. In this regard theIntergovernmental Panel on Climate Change (IPCC) has expressed that, “In the long term, asustainableforestmanagementstrategyaimedatmaintainingorincreasingforestcarbonstocks,while producing an annual sustained yield of timber, fibre, or energy from the forest, willgenerate the largest sustainedmitigation benefit” (IPCC,2007). Another study by Lippke et al(2011)usesthelifecyclecarbonaccountingapproachtocomparetheemissionimpactsofusingfossil‐fuelandbiomassforenergy.Whilstfossil‐fuelemissionsflowonewayfromdeepreservesto theatmosphere, carbonemittedbyburningbiomass couldbeabsorbedby the regeneratingforests,therebymakingthelatterarenewablesourceofenergy.

In SE Alaska, the saw‐mill and sort yard residue produced from timber industry is

currently unutilised. It eventually decays and emits CO2 during that process. Therefore, usingthose residues to displace fossil‐fuels could significantly reduce greenhouse gas emissionsthroughavoidedburningofoilforheating(JEDC,2011,p.173).ResultsandPolicyRecommendations

Thestudyattemptstoexplorethepotentialbenefitsofwood‐biomassindustryinSEAlaska.Itincludes literature on the historic land settlement act‐ ANCSA and the Native Corporationsestablishedfortheoveralldevelopmentoflocalcommunities.Themajorfindingsofthestudyare:

Potential demand for wood‐biomass exists in SE Alaska and could increase with an

increaseininternationaloilprices. Supportive policy instruments such as a carbon‐tax on fossil‐fuels, the investment

subsidies and feed‐in tariffs could facilitate quick adoption of wood‐pellets as hashappened in several European countries such as Netherlands, Belgium and Sweden(Obernberger & Thek, 2010). These policy instruments are likely to address regionalenergysecurityandcommunityvulnerability issuesandprovideenvironmentalbenefits

10 Tonne is known as the metric ton; 1 tonne = 1000 Kilograms 11 Ton is also referred to as short ton; 1 ton = 2,000 pounds (907.18474 kg). (source: internet)


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bydisplacingoil inSEAlaskaandsimilarly inotherpartsof theworldespeciallywherebiomassisalocallyavailableresource.

Aregionalwood‐pelletindustrythatutilisesarangeofrawmaterialssuchassawmillandloggingresiduecouldleadtooptimalresourceuseintheforestindustryofSEAlaska.

Currently,utilisingsaw‐millresidueandothereconomicallyavailablebiomasscouldmeetalmost65%ofestimatedheatingfueldemandintheregion.Promotingsustainablewood‐biomassenergyopensupanopportunitytoachievemultiplebenefitsonallthreepillarsofsustainability–Economic,SocialandEnvironmental;

o Economic: Access to affordable energy for heating, possible revival of forestindustry

o Environmental:HugesavingsinCO2expected Approximately23,000tonnesavoidedbyconsuming15,000tonsofwood‐

pellets and displacing oil for heating [proposed production capacity of anupcomingfacilityinSEAlaska].

Approximately 264,395 tonnes avoided by consuming 174,400 tons ofwood‐pelletsanddisplacingoilforheating[economicallyavailablequantityofresidue‐biomassasestimatedbyMaterandMiles(2009)].

o Social: Reduced energy vulnerability due to risingoil prices aswell as increasedandsustainableemploymentintheregion.

Rosillo‐Calleetal.(2007,pp.10‐11)reportsthatbiomass‐energyisdifficulttoquantifyandthe task of obtaining information related to production and use of biomass‐energy isconsiderablydifficultduetothepaucityofreliablelong‐termdata.Inordertoovercometheseissuesandtoputbiomass‐energyonacomparablebasiswithfossil‐fuelsthereisaneedtodevelopcertainstandardisedmeasures.Inthisregard,thepresentstudyutilisedthe supply and demand information on biomass local to SE Alaska and calculated theenvironmentalbenefitsusingaframeworkdevelopedbyObernberger&Thek(2010).Theformulaegeneratedwithinthescopeofthisstudycouldbeusedtoconservativelycalculate environmental benefits of promoting wood‐biomass over oil in otherregionsofAlaskaandpossiblyinotherpartsoftheworld.

ConclusionThe ANCSA provided opportunities for economic and social development of Alaskan

Natives.Thisisauniquefeatureoftheplacewherenativecorporationsexistsandseektoachieveoverall sustainability by addressing issues related to native population and natural resourcemanagement.Currently,accesstoaffordableandcleanenergyisanissueinSEAlaska,similarlytomanyother remote parts of theworld. One advantage SEAlaskahas is the presence of accessrights intheformofresources(land)andcapitalforNativecommunitiestodevelopalternativeenergy systems to fossil‐fuels, for their overall development. This could be one importantmessageforotherpartsoftheworldwhereproperty‐rightsfornativecommunitiesstillremainadistant reality. Another importantmessage is the need for supportive policies and grants at anational level which promote alternative energy systems like wood‐biomass. Despite havingaccesstobiomass,additionalincentivesarerequiredforitsconversionandadoptionasaheatingfuel.

Thestudyconcludesthatasustainablewood‐biomassenergyindustrycouldbedeveloped

in SEAlaska. It relies on residues fromexisting forestry operations including saw‐mill residue


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andloggingwastegeneratedintheregion.It isalsoobservedthataneconomicincentiveexistsforusers toswitch towood‐pelletbasedsystemsat thecurrentoilpricesofover$4.00/gallon.However,initialinvestmentcostsremainhighinthepresentsituationwhichcoulddiscouragetheswitch. Therefore, some policy support in the form of carbon tax or investment subsidies isrequiredtofacilitateaswitchtowood‐pellets.TheseinitiativeshavebeenimplementedinmanycountriesincludingNetherlands,BelgiumandSwedenandcouldbereplicatedinSEAlaskaandotherplacesaroundtheworld.

ReferencesAlexander, S. J., Henderson, E. B., & Coleman, R. (2010). Economic Analysis of Southeast Alaska: Envisioning aSustainableEconomywithThrivingCommunities.Juneau:ForestService,AlaskaRegionPublicationR10‐MB‐725.

Brackley,A.M.,Barber,V.,&Pinkel,C.(2010).DevelopingEstimatesofPotentialDemandforRenewableWoodEnergyProductsinAlaska.Portland:USDA‐ForestService.

Frank Rosillo‐Calle, Sarah Hemstock, Peter de Groot and JeremyWoods (Eds.). (2007). The Biomass AssessmentHandbook:Bioenergyforasustainableenvironment.London:Earthscan.

IPCC.(2007).ClimateChange2007Mitigation.ContributionofWorkingGroupIIItotheFourthAssessmentReportoftheIPCC.IPCC.

JEDC.(2011).SoutheastAlaskaActionInitiativesForKeyEconomicClusters.Juneau:JuneauEconomicDevelopmentCouncil.

Lippke,B.,Oneil,E.,Harrison,R.,Skog,K.,Gustavsson,L.,&Sathre,R.(2011).Lifecycleimpactsofforestmanagementandwoodutilizationoncarbonmitigation:knownsandunknowns.CarbonManagement,303‐333.

Mater,C.M.,&Miles,T.(2009).FeasibilityAssessmentofProducingaWoodWasteAlternativeFuelProductonPrinceofWalesIsland.MATERLtd.

Obernberger,I.,&Thek,G.(2010).ThePelletHandbook:TheProductionandThermalUtilisationofPellets.London:Earthscan.

Robson, C. (2002). Real World Research: A Resource for Social Scientists and Practitioner‐Researchers. Oxford:BlackwellPublishing.

Sealaska‐WhoWeAre.(n.d.).Retrieved0311,2011,from:www.sealaska.com:http://www.sealaska.com/page/who_we_are.html

Slaper,T.F.,&Hall,T.J.(2011).TheTripleBottomLine:Whatisitandhowdoesitwork?Retrieved0725,2011,from:http://www.ibrc.indiana.edu:http://www.ibrc.indiana.edu/ibr/2011/spring/article2.html

Thornton,T.F.(2007).AlaskaNativeCorporationsandSubsistence:ParadoxicalForcesinthemakingofsustainablecommunities.InC.A.(Ed.),SustainabilityandCommunitiesofPlace(pp.41‐62).NewYork‐Oxford:Berghahnbooks.

Thornton,T.F.,Butler,V., Funk,F.,Moss,M.,Hebert, J.,Elder,T., et al. (2010).HerringSynthesis:DocumentingandModelling Herring Spawning areas within Socio‐ecological Systems over time in the Southeastern Gulf of Alaska.NorthPacificResearchBoardProject#728.

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