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Cashing in the (wood) chips


A whole tree chipper helps bring down the cost of producing wood chips for a biomass plant in Pagosa Springs. The plant will require 40,000-50,000 tons of wood chips annually to operate.

By Emery Cowan Herald staff writer

PAGOSA SPRINGS – Dark green ponderosa pines and the steam from Pagosa Springs’ geothermal pools provided the backdrop for a gathering of about 70 people from across the state to talk about renewable-energy development in the state’s rural mountain towns.

It was a fitting scene for the symposium, as the two most local projects, spearheaded by Pagosa Springs residents, depend on the same resources that define the outdoor scenery.

Using those local resources in a way that sustains and protects them is just one goal of the men, J.R. Ford and Jerome Smith.

Both men are blazing the trail locally in creating unique models for renewable energy generation that are sustainable, revenue generating and helping stimulate economic growth, all key components in the face of skepticism about government subsidies to renewable energy ventures and declining federal stimulus dollars.

“What we need in Colorado is a base load economy (that provides) year-round jobs,” said Smith, who is working to bring a geothermal power generation project to Pagosa Springs.

Smith’s company, Pagosa Verde, hosted the Thursday symposium that featured speakers involved in renewable-energy ventures across the state. The emphasis was on how participants’ ideas and experiences could help benefit Colorado mountain and resort communities on a practical basis.

The symposium’s goal was to offer ideas about “creating vibrant growth in harmony with common environmental and cultural concerns,” its brochure said.

Community power, community benefit

Ford’s operation plans to harvest biomass within a 30-mile radius of Pagosa Springs, chip the wood locally and funnel the chips into a gassifier, which would power an internal combustion engine on the same site. The five megawatts of energy it is expected to produce is about enough to supply one-third of Pagosa Springs’ energy needs at peak usage, Ford said. He expects the plant to be operational at the end of 2013.

“I made a business plan that is also a community plan,” Ford said. “(Forest) thinning, jobs and power all come from and go to the same community.”

The biomass plant will provide the type of well-paying, professional jobs the county wants to attract to the community, Archuleta County Manager Greg Schulte said.

When the biomass plant is up and running, Ford estimated the entire operation would create about 30 jobs.

The project is a new model that state officials are studying closely, said Joani Matranga, the market development manager with the Colorado Energy Office.

Local geothermal power generation would also benefit the local economy through jobs creation and would add a different source of power to the mix, which creates a more secure and outage-resistant system, Smith said.

He expects geothermal projects to attract outside investment as well.

“Money is on the sidelines watching and waiting,” Smith said.

Geothermal is a way for communities that rely on their environment to develop power generation while preserving the beauty and the recreational appeal of their surroundings, he said.

“How do you develop energy when you have tourism? You can’t build a big coal plant or drill a lot of wells,” he said.

Plus, clean power generation provides a “branding opportunity and a way to increase marketing attractiveness of a community,” Smith said.

Local power generation in general has a distinct economic development bent, said Ed Morlan, executive director of Region 9 Economic Development District.

“There’s a concept of economic multiplier. The more you produce, more value is added at the local level,” he said. “It’s a matter of value added investment in local communities.”

Building a successful business model

Every component of Ford’s business model was developed to create a profitable, sustainable venture. He will use a whole tree chipper that eliminates the need to strip the trees of pine needles and branches. He will chip the wood on site and harvest biomass within a nearby radius of Pagosa Springs. Any farther and the hauling costs would outweigh the revenue from milling and chipping the wood. He also plans to buy a small-scale mill to process bigger trees into blocks to be used for things like beams, wooden posts and molding.

Another key ingredient in the venture was a 10-year $4.5 million stewardship contract with the U.S. Forest Service to remove biomass and forest products in the wildland-urban interface around Pagosa Springs. The contract helps with fire mitigation and maintains forest health, but it also provides the 40,000 to 50,000 tons of wood chips annually to fuel the plant.

“People are getting hung up on renewable energy, but we’re a forest health company and the only way to make it economic is to gas fire (the biomass),” Ford said.

Ford’s goal is to prove the technology and package it in a size that will work in other mountain communities.

Smith’s work also focuses on creating a self-supporting business model. Part of his challenge is reforming the current regulatory process. A more understandable and predictable permitting processes is key to attracting development, Smith said.

“Whether you want to do solar farm or biomass or generation, if it keeps taking this long all investment will continue to go to California, Idaho and New Mexico,” he said.

Smith is working with a task force attended by state officials, local entrepreneurs and led by Morlan that aims to clarify and simplify the permitting process to drill geothermal wells.

Smith also is working with local governments in other counties with geothermal potential to create uniform regulations so investors can easily develop projects.

Interest in geothermal has grown statewide over the last three or four years, said Matt Sares, hydrological services manager with the Colorado Division of Water Resources. But actual development has been slower to follow and there are no geothermal power plants in the state right now.

Ford and Smith still have several steps to complete, including working out a power purchase agreement with La Plata Electric Association. Ford’s biomass plant is awaiting approval by the Archuleta County Planning Commission and Board of County Commissioners. Smith is still working to test for geothermal potential, build partnerships with other counties interested in geothermal development, streamline regulations and court investment groups.

“It’s hard to say,” Smith said about when work may begin on a local geothermal power plant. “It could be next week, it could be next year.”


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