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Forestland and Energy

The following article was printed in New Roots Vol. 1 No. 3 (Sept-Oct 1978), p. 38-39.

A great deal of interest and new information about the possibilities of energy production from wood are developing in the Northeast with its vast supply of under-utilized forestland. One report estimates that Vermont could get all of its energy from wood. If that is true for Vermont then, most certainly, it is also true for New Hampshire and Maine. Burlington, Vermont has already initiated a wood fueled electric generating plant which is expected to save 30 percent of Burlington’s electric generating costs. According to Business Week (March 15, 1978), wood could replace 21 percent of the fossil fuels used in the country as a whole. One official of the State of Vermont remarked as he surveyed the endless expanse of forests in that State: “I like to think that we’re creating a mini-Kuwait.”

But the questions which must be asked are: With such potential, particularly for the Northeast, why hasn’t this energy option been more in the forefront already, and what are the obstacles to the utilization of this resource for the future? The answers are not easy.

For one thing, the use of wood for energy is popularly associated with the burning of firewood (in the fireplace and stove) for heat, a relatively primitive technology not to be compared with such “modern” technologies as nuclear power. Secondly, the public remains ignorant of even such relatively simple advances as wood gasification, a process that has been available for generations. The public simply doesn’t understand that wood gasification is a very efficient method of producing energy, so much so that it is substantially cheaper than every energy source other than passive solar power. This does, however, include nuclear power, even with its governmental subsidy. But, while the technology is old, it has only recently been revived, and more development of various prototype furnaces for all types of use —from small burners for detached single-family residences to large industrial installations—is needed before gasification can be widely and effectively used. However, this development is on the way, without the benefit of government subsidy (virtually nowhere in the DOE reports is mention made of wood gasification).

One important new approach presently being developed in the Northeast is hybridization, the utilization of wood gas to produce a gas (primarily methane) which is suitable for mixing with natural gas and, therefore, making possible the transport of such gas through existing pipelines. Such a process would coincide with Barry Commoner’s recent Statements that gas from the biomass could replace natural gas in present pipeline transmission Systems with only minor alteration of present home and industrial equipment. Commoner proposes, therefore, that natural gas (rather than coal) be used as the transitional energy source until we can shift to total dependence on solar energy.

But what will happen when the people of the Northeast discover that there is such a tremendous amount of energy stored in the trees that are standing all around them? If the energy crunch is bad enough, will there be a demand simply to clear-cut the forests—the most expedient way to retrieve this stored solar energy? If that were to happen, it could be a tremendous waste of an extremely valuable natural resource and a tragedy for the Northeast. Clearly, a far better way would be to take only the waste wood (dead trees, weed trees, branches and tops, culls, and other wood not used for lumber which amounts, in some cases, to up to 50 percent of the total bulk) and leave the good trees for timber. In this way we would get the best of both worlds—waste wood for energy, and high quality lumber for construction, furniture, and other more familiar uses. Moreover, the income from selling the waste wood on the energy market could pay for the cost of managing and thinning the forests for lumber production.

Is this likely to happen? The answer, unfortunately, is no. First, the majority of forestland is held in small woodlots owned by individuals who either cannot afford to pay for forest management, or who cannot justify making the necessary in-vestment in forest management because they think they may sell the land before they are able to realize a return on their management cost Investment (typically, Northeastern woodland is resold every Five to ten years). Moreover, for optimum efficiency, a forest management plan for several thousand acres of forestland is preferable.

Is government action needed, or is there an alternative? I would suggest that the history of government involvement in forestry does not hold much promise for the future. Tax incentives of various kinds have been used to try to stimulate private individuals to manage their own woodlots. These have been notoriously unsuccessful. The federal forestry programs are linked to outdated and understaffed administrative agencies, with little hope of receiving much help from a Congress which is becoming increasingly tight-fisted regarding the expenditure of funds for such agencies. Very little help seems to be forthcoming here, although we might reasonably ask for (demand) more technical resources from the government.

Nothing short of breaking through the patterns of private individual land-holding seems likely to hold out much hope for the future. The only remaining question, as the pressure for energy mounts over the next ten to twenty years, may be whether the State governments or the federal government will be called upon to use mandatory powers, or whether a voluntary program with sufficient incentives can be created to bring about forestland pooling in order to make forest management a feasible and practical method of supplying both the energy and the timber markets. A beginning towards a voluntary program has already been established in New England by the New England Forestry Foundation and by the Society for the Protection of New Hampshire Forests, organizations which manage many thousands of acres of forestland in the Northeast today. Acquisition of this forestland has been accomplished almost exclusively by gifts which have been prompted by philanthropic motives and encouraged by tax write-off incentives.


An Alternative

Now, with the new market incentives created by the increasing demand for energy and the rapidly increasing value of all types of New England wood for lumber, a program has been devised which can offer owners reasonable returns on their forestland when it is pooled or aggregated. This program is called the American Natural Resources Trust (ANRT) and is organized by the Institute for Community Economics, Inc. The ANRT has been organized by the Institute as an Instrument to provide landowners with the incentives that the Institute considers necessary for placing their forestland in trust so that it can be managed on a sustained yield basis with substantial direct benefits accruing to the landowner, and numerous direct benefits accruing to society as a whole.

Under this program, parcels of forested land in any given micro-region (an area having a radius of approximately 25 miles) could be aggregated so that several thousand acres would be held by the Trust, which would then assume responsibility for forest management. The management would be contracted out to private foresters on a long-term basis with the objective of achieving a sustained yield. Tracts as small as twenty to forty acres could be included in the aggregate. It would not be necessary (or even desirable) for the forested land within the mini-region to be contiguous. Non-contiguous land provides greater protection against the two major hazards of forestland ownership: fire and windstorm.

To become involved in this program, a landowner would sell or give (or partially sell and partially give) his land to the ANRT. In return, he would receive non-recourse notes for the value of his holdings (if open land or buildings were included, these might either be excluded from the sale or included and leased back to the owner for life). The Trust and the landowner would agree on the value of the forestland and the Trust would give the landowner notes representing this value. These notes would be so structured as to protect the holder of the notes against the corrosive effects of inflation. (It is interesting to note the difference between the value of the productive capacity of the forest and the so-called “market value.” In those cases where the market exceeds the value of the productive capacity of the forest, land could be considered a gift by the owner of the forestland and could be used by him or her to offset income from other sources.)

Income to the Trust, out of which the demand for the redemption of its notes will be met, will be derived from several sources. First, from the sale of firewood and pulpwood; second, from the sale of wood waste for the production of energy; and, finally, when the forests reach maturity, from the sale of timber on a sustained yield basis.

The American Natural Resources Trust, which was organized in 1977 as a non-profit foundation, has already received a gift of land in Vermont and has acquired, by purchase, several hundred acres in Central New York State. It is anticipated that this latter acquisition will be the beginning of a micro-regional aggregation of forestland to be placed under a comprehensive forest management program. Details of the ANRT will soon be available from the Institute for Community Economics and it is anticipated that many owners of forestland in the Northeast will be exploring the advantages of the program once information about it becomes more widely available.


Publication By

Robert Swann

Robert (Bob) Swann was the founder of the E. F. Schumacher Society, now the Schumacher Center for a New Economics. In 1974 E. F. Schumacher asked Robert Swann to start a sister organization to his own Intermediate Technology Development Group, but it was not until 1980, when prompted by Resurgence editor Satish Kumar, that Swann organized the E. F. … Continued

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