02.PNW.C.1 -- Financial Analysis and Processing Options for Hazardous Fuel Reduction Integrated with
Silviculture, Harvesting, and Evaluation of Business Opportunities

Team Leaders: Jamie Barbour & Roger Fight
Phone: 503-808-2074, 2004
E-mail: jbarbour01@fs.fed.us, rfight@fs.fed.us

Research or Development Rationale:

Finding financially feasible uses for wood removed from forest fuel reduction treatments is often problematic. Success depends on a number of factors including: design of silvicultural treatments, implementation of forest operations, proximity of the forest to processing facilities, available infrastructure (harvesting, transportation, and processing), and physical characteristics of the resource. This proposal addresses the integration of the physical characteristics of the resource with existing, or potentially available, manufacturing infrastructure and the increase in financial value that accrues to stand treatments when higher valued products increase the treatment options. It links with proposals from FPL, RMRS, and SRS that address the other factors. The PNW team proposes to develop better methods to allocate the resource to three wood product-product categories: 1) energy/chemical, 2) fiber/particle, and 3) solid products. Each of these end-product categories requires raw materials with different characteristics, but today land managers focus mainly on tree or log size when allocating raw materials to the different end-product categories. This constrains managers who design fuels treatments where wood utilization is an important political or financial concern because throughout much of the interior West there are no markets for either the energy/chemicals or the fiber/particles. Our work will help to define the additional wood characteristics that are important in determining the economic success of various fuels mitigation treatments.

Research and Development Approach

User Needs/Science Gaps Addressed:

Clients for this work are National Forest Systems, State Foresters in several western states, wood processors, and forestry contractors. The work addresses science gaps associated with processing presently economically marginal material by providing new information about the wood characteristics that cause raw material to be allocated to a particular end-product category. The PNW team together with other teams in the linked proposal will assess the volume and location of biomass and provide ways to evaluate the feasibility of different processing options and how wood characteristics, volume, and location influence the financial feasibility of different processing options. The PNW work provides new methods for, and information on, characterizing the resource made available through different silvicultural options for use in both existing and new wood products.

Scientific Approach:

Our previous research (Barbour, 1999; Christensen and Barbour, 1999; Lowell and Green, 2001; Fight et al., 2001) has shown that there are situations where piece size is not the only important factor to consider when allocating raw materials to a particular end-product category. Understanding the characteristics of the resource, particularly stem straightness, soundness, branchyness, and age can stretch the boundaries that divide these groups and increase financial feasibility of stand treatments. The PNW team proposes to link this knowledge to silvicultural and harvesting in a two-stage process. The first stage will employ existing inventory data and provide broad scale analyses of wood product potential and treatment feasibility by end-product category within the working circle for hypothetical wood products facilities. The second stage will use empirical data to test hypotheses developed in stage one and further refine the definitions of raw material requirements for each end-product category.

First the PNW team will work with other linked teams to use methods developed under an ongoing JFSP project (Barbour et al., 1998) to broadly characterize the mixed conifer and ponderosa pine resources in Colorado (linked proposal element 1). Later these analyses might be extended to other states or forest types. These methods process Forest Inventory and Analysis (FIA) data and other stand level inventory or stand exam data through the Forest Vegetation Simulator (FVS), the FEEMA model (Financial Evaluation of Ecosystem Management Activities) (Fight and Chmelik 1998), and a Microsoft Access database to provide broad scale information on the characteristics, financial feasibility, and possible wood product potential of trees removed during various cutting treatments both now and in the future. A more sophisticated financial evaluation model will be developed to incorporate new products and relate product recoveries to tree and log characteristics like straightness, soundness, branchyness and age (linked proposal elements 5 and 6). This stage will provide information on the amount, types, price, and costs, of raw material that might become available from fire hazard reduction treatments if trees were straight and sound with average crowns. The results will be grouped into "cells" that represent aggregations of interest within the working circle of a hypothetical wood products facility, e.g. fire hazard class, land allocation, land ownership, or other features that are of interest to the client group. The PNW team together with other linked teams will use the results from stage one to conduct sensitivity analyses to evaluate the importance of different wood characteristics and formulate hypotheses about the suitability of the resource generated by fuels treatments for different end-product categories and their effect on the financial feasibility of stand treatments (linked proposal element 7).

In the second stage the PNW team and other linked teams will collect empirical data to test the hypotheses developed in stage one (linked proposal element 3). We will coordinate our data collection with operational fire hazard reduction treatments in the western US. Our sampling scheme will be designed to allow inferences about resource characteristics over as broad a range as possible anywhere in the western US, except moist coastal forests. The PNW team will collect information on individual trees and develop predictive models that allow us to project yields of various wood products, which might include logs, lumber, veneer, chips, hogfuel, particles for panel manufacture, chemicals, or other products as appropriate to the needs and interests of our clients (linked proposal element 5). This information will then be used to design simple timber cruising methods that incorporate the important tree characteristics identified during the project.

Development and Technology Transfer Approach:

Teams from all the Stations in the linked proposal will work closely with federal, state, and local planners to develop an information delivery system that can provide information needed to make project level decisions. This group has a track record of making these connections, e.g., 1997 Chief's Ecosystem Management Award for work on the Colville National Forest through the WUEM (Wood Utilization for Ecosystem Management Project). We will form an advisory committee that includes members from each of the Forest Service Regional staffs in the west (Regions 1-6) and a representative of the Council of Western State Foresters. Forest Service members will be recruited from the Natural Resources, Fire, or Fuels staffs. We will also publish our scientific results.

Description of Products and how they will be used:
1. Methods to evaluate if different silvicultural systems can support different types of wood products installations in specific locations.
2. Methods and software to evaluate the financial feasibility of stand treatments under different scenarios of products and processing capacity.
3. Evaluations of the mix of manufacturing capacity needed within a working circle to support a given fuels management option.
4. Illustrations of how capacity might need to change over time as forest conditions within a working circle begin to approach a sustainable condition.

Local and regional planners will use this information to evaluate community development proposals and to devise fuels treatments. Private, state, and federal forest managers will use this information in devising fuel management project plans that support existing infrastructure and encourage establishment of new facilities.

Location (regions, states) of proposed work:
Work will be located in USFS Regions 1, 2, 3, 4, 5, and 6. Initial analysis will be conducted for Region 2 and Colorado. Empirical studies will be located anywhere in the western US where appropriate fuels management activities occur. These studies will be spread over five years so it is impossible to say exactly where data collection will occur but the Ecologically Sustainable Production of Forest Resources team's long history of successfully implementing studies that integrate wood products data collection with operational scale Forest Service treatments (more than 125 in the past 40 years and more than 15 in the past 10 years), is evidence that the ESP team is capable of identifying and participating in appropriate projects.

Research partners and their roles and commitments: Colorado State University College of Forestry will provide office space for the requested wood scientist. This scientist will interact with the to faculty and the Colorado Wood Utilization Center being established at CSU. We expect a high level of collaboration between these groups. The Colorado State Forestry Department will participate as a partner in research projects.

User partners and their roles and commitments: Regional office staffs from the Forest Service's 6 western Regions regularly participate in our studies. They play an advisory role and also actively participate in project design and implementation. This participation will broaden as empirical studies are implemented in Regions other than Region 2. Representatives from each Forest Service Region and the Western Council of State Foresters will participate in an advisory committee for the project.

References

Barbour, R.J., Fight, R.D.; Fiedler, C.; Keegan C. III. 1998. Assessing the need, costs, and potential benefits of prescribed fire and mechanical treatments to reduce fire hazard. Joint Fire Sciences Program Funded Study
Barbour, R.J. 1999. Diameter and gross product value for small trees. Proceedings of the 27th Annual Wood Technology Clinic and Show. Sponsored by MillerFreeman, March 24-26, 1999. Oregon Conventions Center, Portland, Oregon. p.40-46.
Christensen G. and R. James Barbour. 1999. Veneer recovery from small diameter logs. In: Proceedings, the 1999 Society of American Foresters national meeting, Portland, OR. Sept. 11-15. Soc. Am. Foresters. Bethesda, MD: 299-304.
Fight, Roger D.; Chmelik, John T. 1998. Analysts guide to FEEMA for financial evaluation of ecosystem management activities. Gen. Tech. Rep. FPL-GTR-111. Madison, WI: U.S. Department of Agriculture, Forest Service, Forest Products Laboratory. 5 p.
Fight, R.D.; Barbour, R.J. 2001. The financial challenge of ecosystem management. In Proceedings of the management of fire maintained ecosystems workshop. May 23 - 24, 2000, Whistler, BC: 74-77.
Lowell, Eini C. and Green, David W. 2001. Lumber recovery from small-diameter ponderosa pine from Flagstaff, Arizona. In: Vance, Regina K.; Covington, W. Wallace; Edminster, Carleton B., tech. coords. 2001. Ponderosa pine ecosystems restoration: steps toward stewardship; 2000 April 25-27; Flagstaff, AZ. Proceedings RMRS-P-22. Ogden, UT: U.S. Department of Agriculture, Forest Service, Rocky Mountain Research Station. p. 161-165.

Links: Linked with FPL, RMS, and SRS

Research Unit/Team: PNW-4865, Portland, OR