The federal economic stimulus could help move a plan by F.H. Stoltze Land and Lumber Company to build a cogeneration plant, which is a green heat and electricity generator.
“It definitely would be considered a green project – we are making electricity from a renewable resource – and there is a possibility that there would be some funding available through the recently passed stimulus program,” Joe O’Rourke, Stoltze’s plant manager, said.
As an integral part of its production process, the sawmill uses a boiler system to heat logs in order to remove moisture and make them suitable for lumber. The company’s current boiler, however, uses equipment that is as much as 100 years old, O’Rourke said, and needs to be replaced.
As Stoltze officials started to examine their options for new boilers several years ago, they began to consider a cogeneration system.
Cogeneration uses a heat engine, or a power station, to simultaneously generate both electricity and useful heat. With the right equipment, the steam created during Stoltze’s heating process can be used to produce electricity.
In addition to burning the byproducts created at the sawmill, O’Rourke said the company could also bring in woody biomass – a renewable energy source made up of materials like stumps, needles and twigs that are left behind when an area is logged. The process would be “carbon neutral,” O’Rourke added, noting that there would be less carbon discharge at the plant than if the materials rotted in the woods.
O’Rourke said the proposed cogeneration plant would likely be built for a 20 megawatt capacity, but, depending on demand, could operate around 12 megawatts. In comparison, he said Flathead Electric Cooperative’s system demands about 170 megawatts to supply electricity to its customers in the valley.
“It’s a good percentage of power,” O’Rourke said.
In late January, Stoltze announced that it was temporarily shutting down its Columbia Falls sawmill, laying off 45 to 50 employees. It was just the latest local wood products company to shed jobs. As housing prices have dropped nationally, construction has slowed dramatically and demand for commodities, especially wood, has waned.
As relying solely on lumber for income becomes increasingly hard, other lumber companies like Plum Creek Timber have ventured into other markets like real estate. For Stoltze, the cogeneration plant could provide an alternative revenue stream.
“In effect, it’s a complementary business to what we’re doing now, but it’s also a different business – one that won’t move in tandem with the lumber market,” O’Rourke said.
A cogeneration plant would create about eight new jobs at the sawmill, O’Rourke said, and create more work through contractors who would provide the plant with biomass. The plant’s building process would probably add about $9 to $10 million in wages for local and outside contractors.
The total cost of the cogeneration plant is estimated at about $50 million.
The national economic stimulus plan includes billions for energy efficiency and renewable energy, ranging from weatherization programs to grants for projects. It’s still too early to tell if Stoltze cogeneration plan would qualify for federal funding.
Chuck Roady, Stoltze’s general manager, has been meeting with state and federal representatives, including Sens. Max Baucus and Jon Tester, to determine if Stoltze is eligible for stimulus monies. At a recent Kalispell Chamber of Commerce meeting with Tester, Roady told the senator that to make the project happen, “the thing that would help us most are tax credits.”
The federal government offers production tax credits for biomass fuels, though they’re less than what’s offered for wind and solar power. “That works best when a company is making money, and right now, with the industry the way it is, let’s just say we’re not worried about paying taxes right now,” O’Rourke said.
However, investment tax credits to help cover the upfront cost of building and starting the plant would be very helpful, he added.
Once funding and projects are secured the plan could be operational in 18 to 24 months. “This could help us and this valley through tough times,” O’Rourke said.