The revised Haines Borough biomass project was characterized as a pilot project for small towns throughout Southeast at a Monday meeting where a federal official announced a $92,136 grant to the municipality to pay for a project log splitter and wood chipper.

The project, funded by $1.4 million in grants, recently shifted focus from wood pellets to chips.

“Making (wood) chips is not rocket science. The goal here is to make them very cost-effectively using cheap, low-tech equipment,” said Bob Deering, renewable energy coordinator for the U.S. Forest Service.

He expressed hope that what’s learned in Haines might be applied to other timber-rich towns like Hoonah and Kake. “We see this as being a model for lots of other smaller communities than Haines. We want to come up with a system that allows these communities to create their own local fuel. We’re coming up with that recipe right now.”

Even at their most expensive – $150 per ton – chips still compare favorably to diesel at its current low price, and are stable, he said.

“Chips are generally not going to increase in price. There will be just the standard cost of inflation. If anybody thinks oil is going to be staying down at whatever it is today… more power to you, but I think most people in this room have a realistic look at this. We’re going to see the price of oil go up,” Deering said.

Robert Venables, a former Haines Borough manager who works on energy issues for Southeast Conference, attended the meeting and endorsed the switch to chips from an earlier plan to fuel public buildings with wood pellets: “Even if (oil prices didn’t rise), chips will provide local jobs at almost half the cost.”

Borough officials also said Monday that they had chosen a private lot behind the former Elks Club building as their preferred site for two wood-fired boilers aimed at heating Haines School buildings. They’re hoping to acquire the needed area in a swap with landowner Chris Thorgesen for the borough’s Human Resources Building.

Construction of a building to house two chip and pellet-burning boilers at the site could happen as early as next spring, said Brad Ryan, the borough’s facilities director.

“We’ll start looking for a design for placing two of the boilers at the school. We’ll install them as pellet boilers. At the same time we’ll be pursuing the chip market, but we’ll sort out the bugs with the pellets. Then hopefully the chips will come on board, and then we will move forward with the chips,” Ryan said.

The same progression might occur at the sewage treatment plant and old city shop, Ryan said.

A key to getting chip production “down to a small community scale” is drying the fuel, Deering said. Local trees are about 50 percent water by weight, but the boilers will need chips at 25-30 percent water, he said. Because chip driers are expensive to run, the project will attempt to air dry 10-foot lengths of split logs.

Air-drying those sections for one year would reduce moisture content to 20 percent moisture, Deering said. “We’re looking at systems here that will passively dry wood, much more quickly here, and with really no expense. You’re basically absorbing energy from the surrounding environment to drive off this water. That’s probably the key (factor) is the drying.”

The site for an air-drying facility has not been chosen, and Deering characterized the building as an open-air shed. “How much staging space do we need? We don’t think it’s a huge amount. We don’t think it’s going to be especially expensive,” Deering said.

As general manager of Chilkoot Lumber, resident Larry Beck oversaw operation of a wood boiler at the Lutak sawmill that powered the Haines townsite in the late 1980s. He also created woodchips at mills for 20 years.

Beck this week said the borough’s plan looks all right. “It all depends on what your boiler is designed for. Our boiler was designed to burn at 55 percent moisture.” A log split lengthwise won’t hold its moisture, but there is a potential problem with chipping dry logs, he said. “It dulls your (chipper blades) in a hurry.” Water can be added to keep during the chipping process to prevent dulling, he said.

To heat the main school building and swimming pool for a year would require 400 to 600 tons of chips per year, or between 1.5 and 10 acres of forest, according to Deering and Greg Palmieri, Haines area forester for the Department of Natural Resources.

Ryan was asked at Monday’s meeting whether he could see any way that the biomass project would cost the borough more than it gained in savings. “I certainly hope not. The question will be maintenance. If the chips come on and we’re looking at the savings that we’re hearing, we should be fine. But the question is the maintenance.”

Grants will pay for purchase and installation of boilers, with the borough paying for fuel and maintenance.

The wood boilers would be redundant to oil systems, so that if burning wood or pellets became more expensive, the borough could easily switch back to oil, project supporters said this week.

Residents’ questions Monday included what parts of the forest would be cut to provide chip logs. “I don’t see any sense why we’d be cutting old-growth forest solely for fuel,” Deering said. “If there’s old-growth harvest going on, we should be utilizing every bit of the tree and using the residue for fuel or other products.”

Deering said “it’s not financially viable” to barge chips from Haines for a larger chip market. “That doesn’t pencil out and it’s not our goal. Our goal is to create micro-industries in each community.”

Deering also shed light on a previous dream of establishing a pellet mill in Haines, saying borough consultant Darsie Culbeck pushed that plan. “I kept pushing back, saying, ‘The demand here is not big enough to build a pellet mill.’ Pellet mills (need to produce) at least 30,000 tons a year. Haines couldn’t use 30,000 tons a year if you displaced all your fuel with pellets.”

The borough installed a pellet boiler in the borough-owned Haines Senior Center, but how much money that saved the borough is not clear.

Culbeck said Monday that the center’s pellet system was “working out pretty well. There have been bumps in the road, but we’ve learned a lot from it.” He said converting borough buildings to wood pellets could reduce the borough’s current $300,000 fuel bill and keep money spent on fuel bills in town.

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