Ochoco Lumber’s new biomass plant, built adjacent to its existing sawmill on its Malheur Lumber site in John Day, began churning out pellets this month.

The plant will bring jobs to a region with unemployment of more than 14%. Rick Minster, a business development officer for Business Oregon, the state’s economic development arm, stressed the impact of jobs created by the new plant. “The huge benefit is the retention aspect of having the facility there. It enhances the viability of the 80-plus jobs at the sawmill.” Beyond retaining those existing jobs, the biomass plant will directly create between 11-15 full-time jobs.

The factory was built despite an oversupply of pellet production that last year shut down three other wood pellet plants in Oregon. The project was financed with $50 million in new market tax credits allocated by Ecotrust, Midwest Renewable Capital and CEI Capital Management. It also received a $4.9 million federal stimulus grant.

The plant will turn material unsuitable for timber use — small-diameter trees and debris — into pellets and bricks for fuel.
Ococho has stewardship contracts through the U.S Forest Service to maintain forest health throughout the state, although the new plant will source only materials from Grant, Crook and Harney counties because of transportation costs.  The facility will now allow the company to turn material collected through these contracts into fuel to be sold around the state.

“We think our product should stay as local as it possibly can, ” said Ochoco president Bruce Daucsavage, who plans on supplying pellets and bricks to the biomass heating systems at Harney County Hospital, Burns High School and the John Day Airport.

Daucsavage sees the new plant as a valuable addition to the sawmill. “It fits in beautifully to what we do because now we have a facility that can take this type of material,” he says. “It’s going to help us increase forest health, reduce fire risk and get some timber off these contracts.”

Gov. John Kitzhaber has formed a biomass transition team to promote the industry, led by John Shelk, the managing director of Ochoco. Sen. Ron Wyden is also a fervent supporter of the biomass industry and has been critical of the EPA’s attempts to regulate the industry under the Clean Air Act. The EPA in January deferred action for three years while it studies the long-term environmental impact of the industry.

Whether or not the industry will take off depends on financing, regulation and consumer demand. For the new plant in John Day, the numbers appear to have made sense. At least for now.

ILIE MITARU