Shouldering Risk For Forest Restoration

Backed by the U.S. Endowment for Forestry & Communities, construction of Restoration Fuels, a commercial-scale torrefaction facility in John Day, Oregon, is well underway.
By Anna Simet | January 01, 2020

In a rural county that’s four times the size of Rhode Island but home to only one stop light, it isn’t often that something incredibly exciting happens. In fact, the last significant commercial investment in the city of John Day, Oregon—considered the main economic center of Grant County with the largest population at about 1,700—was likely back in the early 1980s, when Malheur Lumber Co. was built. Ironically, that same operation has a significant role in an $18.5 million project underway—the first commercial-scale torrefaction plant in the U.S., construction of which is on track to be complete by spring.

Though development of this project has been ongoing for nearly a decade—the result of significant contributions by not only the U.S. Endowment for Forestry & Communities, but also involvement of many private companies, research organizations, utilities, landowners and project developers—those at the forefront have believed in working quietly toward the end goal, rather than making noise and sensationalizing the first-of-its-kind project.

That’s not to say Restoration Fuels hasn’t been forthcoming about everything they are doing, and hope to accomplish. “We just haven’t wanted to get too far ahead of ourselves,” says CEO Matt Krumenauer. “Things change, projects don’t move forward. And we’ve had some delays—permitting and other things that have happened during construction. We’ve been reluctant to actively seek too much attention, set expectations too high, or get the community overly excited. At the same time, we’ve tried to be as transparent as possible.”

Krumenauer has been involved in the project from its inception, which he said began as part of the U.S. Endowment for Forestry & Communities’ mission of using markets as effective tools for maintaining sustainable, working forests.

Working Forests, New Markets
The U.S. Endowment for Forestry & Communities is a nonprofit corporation established in 2006 at the request of the U.S. and Canadian governments. The organization works collaboratively with partners in the public and private sectors to advance systemic, transformative and sustainable change for the health and vitality of the nation’s working forests and forest-reliant communities. “We believe that markets are one of the more effective tools for maintaining sustainable, working forests,” says Krumenauer, who, besides CEO of Restoration Fuels, serves as the endowment’s vice president of special projects. “Over the past decade, the endowment has made investments in a whole range of areas and technologies—it did some Fuels for Schools projects and some smaller district heating systems in rural communities, as well as work in gasification and biochar, traditional power generation—a whole range of things. Almost like a funnel, investing small amounts of money in many different things to see what’s viable and what we could learn. About four or five years ago, we really began to focus on torrefaction.”

That was for two main reasons, according to Krumenauer.  “First, the technology was at a place where it was pretty much ready for commercialization, meaning there weren’t a lot of outstanding technological challenges that couldn’t be overcome—compared to liquid biofuels, which is just too big of a technical and financial challenge for an organization like the endowment to handle. So from a technical and financial perspective, it was an area appropriate for the endowment to dive into.”

At the time, Krumenauer says, it seemed like there would be a potential growing market for it.

“Especially domestically, with various types of regulations like the Clean Power Plan and states moving away from coal, and potential opportunities for utilities to maintain some of those existing coal assets and convert them to biomass. So, what we did is put together a two-part strategy, the first part of which was to bring together the nascent industry and various research institutions and companies interested in this, and attempt to get everyone to collaborate, share information and work together on a precommercial level to see if we could accelerate commercialization and, ultimately, market adoption.”

What resulted was formation of the Consortium for Advanced Wood-to-Energy Solutions, done so jointly with the USDA Forest Service. That effort was funded 50-50 by the endowment and the Forest Service. “We engaged seven different research institutions, a couple dozen different private companies including landowners and technology and project developers to identify what was needed to bring torrefaction into commercial-scale production and acceptance,” Krumenauer says. “We developed a work plan that identified a series of tasks—things like life cycle assessments, safety analyses, techno-economic analyses, a utility testing program, and looking at integrating existing torrefaction technology into existing manufacturing platforms like pellet mills. That work plan was implemented over about a three-year period, and rather than research work, we really tried to focus on how to accelerate commercialization—practical activities that may be able to take it to commercial scale.”

The second part of the strategy was investment in commercial-scale facilities, taking what was learned from the consortium and applying it to prove production through quality, cost and, ultimately, enable utilities to pursue conversion to torrefied material.

At that point, the plan changed and the original vision of supporting two facilities didn’t move forward. “The endowment ended up partnering with Portland General Electric, to support its biomass testing—we saw that as a very critical piece, if we wanted to see the market grow,” Krumenauer says.

PGE’s 550-MW Boardman facility was built in the late 1970s, but despite its young age, Oregon’s decision to phase out coal left the utility with the decision to switch fuels or close by 2020. Other fuels and emissions control upgrades were ruled out as uneconomic, but PGE explored biomass for several years. “After many years of trying to make it happen, if PGE wasn’t able to complete a full-scale torrefied biomass test burn, that would set the industry back,” Krumenauer says. “So, we put effort into forming Oregon Torrefaction, and fairly quickly got a few different facilities producing and delivering material to the Boardman facility so a series of tests could be done, including the 100-percent effort completed in early 2017.”

In the wake of the test burn, it became known PGE wouldn’t decide about the long-term conversion of Boardman in the near future. “We regrouped after that and again looked at the mission to determine how we could continue development of markets to support forest health restoration if the Boardman plant wasn’t going to be a market,” Krumenauer says. “We did a lot of business planning and analysis, and in 2018, the board of the endowment approved to move forward with Restoration Fuels, which is a full-scale torrefaction facility integrated with the Malheur Lumber Co.”

Malheur Lumber—the only remaining mill in a county that was once home to several several—nearly closed in 2012, but ironically, was able to stay on its feet and grow from a major boost in regional forest restoration efforts.

Moving into Malheur
Malheur Lumber planned to close due to shortage of timber supply from neighboring public lands, said parent company Ochoco Lumber, in August 2012. Shortly thereafter, the Malheur National Forest announced the awarding of a 10-year stewardship contract worth up to $69 million to Iron Triangle LLC of John Day, which would secure the fiber stream the mill so desperately needed.At the time, and up until construction of Restoration Fuels, a 20,000-ton-per-year pellet mill operated on-site, sending product to many local bulk customers.

Ochoco Lumber and Malheur have been involved with Restoration Fuels from the very beginning. “They have worked very closely with us to host the facility and take a risk,” Krumenauer says. “I think they have a similar vision—that if we can create a market for some of the small-diameter material, it can make the overall economics, viability, and stability of timber sales, restoration work, and the industry all work a little bit better. We’ve been pretty lucky to have them. We essentially tried to integrate into their existing facilities, setting the torrefaction facility around and within the existing pellet mill infrastructure. They did cease wood pellet operations when construction began earlier this year, but the design is to still maintain that capability once the new system gets up and running.”

Building into an existing operation has benefits, but does not come without challenges. “There have been some cost savings—there is a lot of infrastructure at existing mill sites that you don’t have to replicate, like a log yards, chipping facilities, scales and utility connections,” Krumenauer says. “But there are also some challenges in that you have to size and locate things appropriately, and when integrating a new operation or product line within an existing one, there are some operational and procedural changes, adjustments and flexibilities you need to have on both ends.”

Overseeing the operations at Restoration Fuels will be Plant Manager Joe Koerner, who ended up in the role after being in the right place, at just the right time. Previously, Koerner had been employed at a Boardman, Oregon, facility that recovered carbon black out of tires. “Our product was tied to the energy sector, and when the energy sector took a dive price-wise, it undermined our economic model,” he says. “We mothballed the operation and were getting ready to sell it when Matt [Krumenauer] approached us and asked, ‘We know you can cook tires, but do you think you could cook wood?’”

Koerner’s company participated in the Boardman torrefaction test trials in 2016, producing about 20 percent of the material used. “Because the facility I was at was on its way out and was sold after the trials, I was left doing some independent contracting,” Koerner tells Biomass Magazine. “The thought of working in a timber-related industry was pretty attractive to me, so when Matt informed me that they were building a plant in John Day and asked me to run it, I said yes. I was very lucky that’s how it happened, and that Matt had faith in me.”

Koerner explains there are three main unit operations at the facility—a dryer, a boiler and the torrefier.

The Process
The wood chip dryer, which uses energy derived from a Hurst wood-fired boiler via hot water sent through a conventional tube and shell heat exchanger and stored in an insulated hot water tank, blows warm air through the chips as they move on the belted conveyor. After the drying process, moisture content will be reduced from about 50% to 10%, and energy density of the dry chips is in the range of 8,500 Btu per pound. “We’re using a state-of-the-art, low-temperature belt dryer, designed by IMI Industrial, for a couple of reasons,” Koerner says. “The emissions from the belt dryer will be significantly cleaner than traditional wood-drying equipment, but we also don’t want to drive off any volatile organic compounds (VOCs) other than water—we only want to dry it. We want to keep the VOCs there because they end up as fuel in the second stage of the process, which is torrefaction.”

The torrefaction process uses a triple-pass rotary drum design. The wood chips enter the rotating drum, with steam first injected to warm the drum to torrefaction temperature (about 570 degrees F), and then the wood chips are fed continuously for torrefaction. The steam is initially heated with propane in a local furnace. “As the torrefaction process proceeds, all the gases generated are burned, and used to reheat the system, as well as heat the medium for our dryer as well,” Koerner explains.
The torrefied chips—water-resistant with grindability similar to coal—are now at a higher energy density of about 9,500 Btu per pound, with a moisture content of about 5%. Depending on what a customer desires, the torrefaction process can be tuned to yield higher or lower energy densities. “Once we’ve finished cooking the wood, we cool it and densify it—densification will either be through pelletizing or briquetting,” Koerner says.

The overall process ensures oxygen is minimized not only to allow torrefaction to occur, but to make best use of the energy content of the generated “torr gas,” with very little wasted energy. “We’re trying to take advantage of all the fuel that’s in the wood,” Koerner reiterates. He explains that a Hurst wood-fired boiler was chosen not only to provide the steam the torrefaction operation needs, but the lumber mill as well. And because it’s a newer, state-of-the-art boiler, he adds, it also helps clean up the air emissions from the site.

Once product is ready for shipment, it will be sent to customers in bulk via truck, train or ocean-going ship vessels, depending on the customer.

Looking at Logistics
There is no rail access at the mill site, so Restoration Fuels will use a storage depot and transfer shipment to the port or the end customer. “That’s a bit down the road, though,” Krumenauer says. “Since we self-funded the project, we were able to start construction—and go into operations—without an offtake contract. We built the facility at risk to be able to prove the overall market.”

Through 2020, Krumenauer estimates the plant will run at about a quarter of its estimated 100,000-ton-per-year capacity. “Initial customers might order large-scale sample volumes that could be in the thousands or 10,000-ton range,” he says. “We’ve talked with a number of Japanese and European utilities and we continue to maintain contact with folks in the U.S., but we haven’t committed a volume to any one customer. We have to get up and running first, and ensure we’re producing quality material before we commit to a contract. We hope to be able to get there by the end of 2020, so Joe and his operations team have a lot of work to do.”

About halfway through construction, Krumenauer and Koerner say there have been challenges so far, but nothing insurmountable or completely unexpected. “Going through the environmental process takes time and we knew that, so we set optimistic goals to get them in place,” Koerner says. “The agency was more than willing to work with us and help us get what we needed, it just took a little longer.”

New processes are difficult because of exactly what they are, Krumenauer adds. “We can’t look to another torrefaction facility to find out what the emission factors are,” he points out. “We did choose off-the-shelf technology and brand new pollution control equipment, but we had to work closely with regulators for them to get comfortable with it.”

Integrating into an existing facility has its benefits, but Koerner also points out the difficulties. “Their infrastructure and staff have been very helpful to us, but it’s also challenging because we can’t interrupt the existing operations,” he says. “When you’re doing electrical tie-ins and things like that, you have to take things offline, so we have had to do a lot of coordinating with the mill.”

Staffing has been another challenge—the plant is in an extremely rural area, making it difficult to obtain needed skill sets such as card-carrying electricians and millwrights. “We’re doing much better now than we were six months ago,” Krumenauer says. “There have been some some fairly significant construction projects happening in the region—when the technology companies build a couple billion dollars’ worth of data centers, it takes a lot of the skilled labor, and we have trouble competing with those types of construction projects.”

As for the abundant West Coast wood resource that—in theory—could be utilized for bioenergy purposes, but has complicated logistics and is very different from the Southeast where greater economies of scale make sense, Krumenauer says Restoration Fuels is a good example of how an entity like the endowment can take a risk to demonstrate. “We want to show that this can be done on a smaller scale, in order to address feedstock availability first,” he adds. “If we can do this—demonstrate this model of matching facilities with restoration plans and forest plans in areas where there’s a market need—it will be a pretty significant win for the endowment’s mission, and the forest service and the broader industry. I can’t think of anything better to do—a lot of us think we were put here to accomplish this.”

Author: Anna Simet
Editor, Biomass Magazine

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Boiler Extras

The boiler installed at Restoration Fuels is a 1,200-horsepower hybrid boiler with a reciprocating grate Hurst Boiler Chief Engineer Bruce Coffee tells Biomass Magazine. “It will burn wood materials or other biomass fuels up to 50 percent moisture content, and at full bore, will produce about 40,000 pounds of steam per hour,” he says.

At a previous location, the boiler was used to produce biodiesel from soybeans. “It was originally built in 2006, so it is still young in boiler age,” Coffee says. “It’s being updated with new controls and refractory and should be able to keep pace with a brand new one.”

With state-of-the-art air emissions controls, it will be one of the cleanest boilers in the state, working alongside a couple of smaller wood-fired boilers, Coffee says.

The mill and new project, located in a picturesque Rocky Mountain setting, are among the largest employers for many miles, Coffee adds. “The town seems to be more about fishing and hiking than manufacturing, so it will be of utmost importance to be clean and quiet in operation.”