(Source: Mascoma.com)

(Source: Mascoma.com)

In an era of high energy prices and economic hardship, Michigan Gov. Jennifer Granholm’s administration is touting the promise of extracting biofuel from Michigan’s forests while reducing carbon emissions. “Long before the current run-up in petroleum prices, we declared Michigan’s intentions to lead the nation in alternative-energy production and help reduce our dependence on foreign oil,” Granholm said last June when she inked a deal with Mascoma, a Boston-based company that is trying to build the nation’s first commercially viable cellulosic ethanol operation in the Upper Peninsula.

“Mascoma’s next generation biomass-to-ethanol technologies are integral to wide-scale ethanol production, and this plant will put Michigan on the leading edge of technology that will create good-paying jobs for Michigan citizens,” the governor said at the time.

The state estimates that the Mascoma’s Frontier Renewable Resources project, which has attracted hundreds of millions of dollars in private investment and public funding, will create 50 to 75 new jobs in 2012. That works out to as much as 1 million in federal and state aid for each permanent job that may be created. But about 50 miles down the road from Kinross, where the planned Mascoma bio-fuel project would take shape, a neighbor watches nervously.

Building-materials manufacturer Louisiana Pacific, which opened an oriented strand board (OSB) plant in Newberry in 1985, is worried that the Mascoma project in Chippewa County might prove its undoing.

Kurt Chamberlain, general manager of the Louisiana Pacific plant, said the facility he oversees is the smallest OSB plant in the country. But the plant, which uses aspen just as Mascoma would, is already having a hard time getting supplies.

“It’s costly, and we already have to go farther away to get supply,” he explained. The company uses about one-third the amount of wood that Mascoma would use, but employs two to three times more people.

“I’d question the value added of a project like this,” Chamberlain said. “It’s great for guys who have equipment in the woods, but the availability of wood is already strained.”

Chamberlain believes that the Mascoma project will depend heavily on Canadian wood resources because it sits 18 miles from international border crossing at Sault Ste. Marie. Mascoma’s local partner, JM Longyear, has significant land holdings in northern Ontario.

Tough economic times have threatened to close the Louisiana Pacific plant before, but each time, it has survived. With the current recession and the prospect of Mascoma undermining his business, Chamberlain said he doesn’t want Luce County to lose 125 jobs when the December jobless rate was 14.2 percent.

Chamberlain said what he knows about the Mascoma project he learned press releases. Neither the Michigan Economic Development Corporation nor his own state legislators have talked to him about the project’s impact on the Newberry plant.

“We’re not the only users around either. This affects a lot of users,” he said.

When asked about Chamberlain’s concerns about Mascoma threatening the viability of the Louisiana Pacific plant, JM Longyear’s CEO, Steve Hicks, said he had no specific comment. “I’ll contact Mr. Chamberlain directly and get his concerns and we’ll talk at some point face-to-face,” he said.

Hicks noted that several forestry companies have closed recently, opening up 2 million acres of forestland that had been in demand five years ago. Therefore, Hicks said, the Mascoma project would be able to strike a healthy balance between biofuel production and forest sustainability. He said he’s putting the company’s name on the line: “We have been here for 120 years and don’t want to tarnish our reputation.”

Still, as Mascoma’s cellulosic ethanol project moves closer to reality, questions linger.

“We may be just de-valuing our forests,” said Anne Woiwode, executive director of the Michigan Sierra Club. “The problem is that nobody knows. No one is measuring the effects of all these projects on our forests, and certainly no one has ever, ever measured the best possible use of the state’s investment in forests.”

The state contends that it’s starting to look at the potential impact on Michigan’s forests.

Bridget Beckman, public relations officer for the Michigan Economic Development Corporation (MEDC), said Mascoma conducted an analysis of the area surrounding the Kinross facility. She said via e-mail, “There’s an adequate unutilized feedstock supply to serve the facility when it reaches capacity. It’s understood that not all unused growth will be available. The MEDC is working with the private sector, Michigan Tech and [Michigan State University] to improve and increase a long-term, sustainable supply of feedstock.”

Additionally, MEDC is working with Mascoma, Michigan Tech, MSU and the Michigan Forest Products Council on a Statewide Forest-Based Biomass Assessment, which will include, according to Beckman, the development of a “forest-based information system” which tracks forest-based biomass inventory and current biomass availability, as well as identifies constraints limiting biomass availability.

“The state recognizes the importance of ensuring a sustainable flow of feedstock that will support both existing feedstock users and emerging renewable energy users,” according to Beckman.

(Patrick Egan is a former publisher and owner of two small dailies in Michigan’s Upper Peninsula. He is a recipient of a William Allen White award for editorial writing.)