Natural Resources
Federal Agencies Are Engaged in Numerous Woody Biomass Utilization Activities, but Significant Obstacles May Impede Their Efforts Gao ID: GAO-05-741T May 24, 2005In an effort to reduce the risk of wildland fires, many federal land managers--including the Forest Service and the Bureau of Land Management--are placing greater emphasis on thinning forests and rangelands to help reduce the buildup of potentially hazardous fuels. These thinning efforts generate considerable quantities of woody material, including many smaller trees, limbs, and brush--referred to as woody biomass--that currently have little or no commercial value. GAO was asked to determine (1) which federal agencies are involved in efforts to promote the use of woody biomass, and the actions they are undertaking; (2) how these agencies coordinate their activities; and (3) what the agencies see as obstacles to increasing the use of woody biomass, and the extent to which they are addressing the obstacles. This testimony is based on GAO's report Natural Resources: Federal Agencies Are Engaged in Various Efforts to Promote the Utilization of Woody Biomass, but Significant Obstacles to Its Use Remain (GAO- 05-373), being released today.
Most woody biomass utilization activities are implemented by the Departments of Agriculture (USDA), Energy (DOE), and the Interior and include awarding grants to businesses, schools, Indian tribes, and others; conducting research; and providing education. Most of USDA's woody biomass utilization activities are undertaken by the Forest Service and include grants for woody biomass utilization, research into the use of woody biomass in wood products, and education on potential uses for woody biomass. DOE's woody biomass activities focus on research into using the material for renewable energy, while Interior's efforts consist primarily of education and outreach. Other agencies also provide technical assistance or fund research activities. Federal agencies coordinate their woody biomass activities through formal and informal mechanisms. Although the agencies have established two interagency groups to coordinate their activities, most officials we spoke with emphasized informal communication--through e-mails, participation in conferences, and other means--as the primary vehicle for interagency coordination. Internally, DOE coordinates its woody biomass activities through its Office of Energy Efficiency and Renewable Energy, while Interior and the Forest Service--the USDA agency with the most woody biomass activities--have appointed officials to oversee, and have issued guidance on, their woody biomass activities. The obstacles to using woody biomass cited most often by agency officials were the difficulty of using woody biomass cost-effectively and the lack of a reliable supply of the material; agency activities generally are targeted toward addressing these obstacles. Some officials told us their agencies are limited in their ability to address these obstacles and that incentives--such as subsidies and tax credits--beyond the agencies' authority are needed. However, others disagreed with this approach for a variety of reasons, including the concern that expanding the market for woody biomass could lead to adverse ecological consequences if the demand for woody biomass leads to excessive thinning.
GAO-05-741T, Natural Resources: Federal Agencies Are Engaged in Numerous Woody Biomass Utilization Activities, but Significant Obstacles May Impede Their Efforts
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Testimony:
Before the Subcommittee on Forests and Forest Health, Committee on
Resources, House of Representatives:
United States Government Accountability Office:
GAO:
For Release on Delivery Expected at 2:00 p.m. EDT:
Tuesday, May 24, 2005:
Natural Resources:
Federal Agencies Are Engaged in Numerous Woody Biomass Utilization
Activities, but Significant Obstacles May Impede Their Efforts:
Statement of Robin M. Nazzaro, Director, Natural Resources and
Environment:
GAO-05-741T:
GAO Highlights:
Highlights of GAO-05-741T, a testimony before the Subcommittee on
Forests and Forest Health, Committee on Resources, House of
Representatives:
Why GAO Did This Study:
In an effort to reduce the risk of wildland fires, many federal land
managers--including the Forest Service and the Bureau of Land
Management--are placing greater emphasis on thinning forests and
rangelands to help reduce the buildup of potentially hazardous fuels.
These thinning efforts generate considerable quantities of woody
material, including many smaller trees, limbs, and brush--referred to
as woody biomass--that currently have little or no commercial value.
GAO was asked to determine: (1) which federal agencies are involved in
efforts to promote the use of woody biomass, and the actions they are
undertaking; (2) how these agencies coordinate their activities; and
(3) what the agencies see as obstacles to increasing the use of woody
biomass, and the extent to which they are addressing the obstacles.
This testimony is based on GAO's report Natural Resources: Federal
Agencies Are Engaged in Various Efforts to Promote the Utilization of
Woody Biomass, but Significant Obstacles to Its Use Remain (GAO-05-
373), being released today.
What GAO Found:
Most woody biomass utilization activities are implemented by the
Departments of Agriculture (USDA), Energy (DOE), and the Interior, and
include awarding grants to businesses, schools, Indian tribes, and
others; conducting research; and providing education. Most of USDA's
woody biomass utilization activities are undertaken by the Forest
Service and include grants for woody biomass utilization, research into
the use of woody biomass in wood products, and education on potential
uses for woody biomass. DOE's woody biomass activities focus on
research into using the material for renewable energy, while Interior's
efforts consist primarily of education and outreach. Other agencies
also provide technical assistance or fund research activities.
Federal agencies coordinate their woody biomass activities through
formal and informal mechanisms. Although the agencies have established
two interagency groups to coordinate their activities, most officials
we spoke with emphasized informal communication--through e-mails,
participation in conferences, and other means--as the primary vehicle
for interagency coordination. Internally, DOE coordinates its woody
biomass activities through its Office of Energy Efficiency and
Renewable Energy, while Interior and the Forest Service--the USDA
agency with the most woody biomass activities--have appointed officials
to oversee, and have issued guidance on, their woody biomass
activities.
The obstacles to using woody biomass cited most often by agency
officials were the difficulty of using woody biomass cost-effectively
and the lack of a reliable supply of the material; agency activities
generally are targeted toward addressing these obstacles. Some
officials told us their agencies are limited in their ability to
address these obstacles and that incentives--such as subsidies and tax
credits--beyond the agencies' authority are needed. However, others
disagreed with this approach for a variety of reasons, including the
concern that expanding the market for woody biomass could lead to
adverse ecological consequences if the demand for woody biomass leads
to excessive thinning.
Kiosk Constructed from Small-Diameter Wood:
[See PDF for image]
[End of figure]
What GAO Recommends:
In its report, GAO recommended that the Secretary of Agriculture direct
the Chief of the Forest Service to appoint an official or organization
responsible for overseeing and coordinating the agency's woody biomass
activities. The Forest Service has done so.
www.gao.gov/cgi-bin/getrpt?GAO-05-741T.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Robin M. Nazzaro at (202)
512-3841 or nazzaror@gao.gov.
[End of section]
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss federal agency efforts to
increase the utilization of woody biomass. As you know, federal land
management agencies--including the Forest Service in the Department of
Agriculture (USDA) and the Bureau of Land Management (BLM) in the
Department of the Interior--continue to focus on the threat that
wildland fire poses to our nation's communities and ecosystems. In
addressing this threat, agencies are placing greater emphasis on
thinning forests and rangelands to help reduce the buildup of
potentially hazardous fuels. These thinning efforts will generate
considerable quantities of woody material, including some larger trees
that are commercially valuable timber and many smaller trees, limbs,
and brush that generally have little or no commercial value today. This
low commercial value material is often referred to as woody
biomass.[Footnote 1]
Unlike commercial timber, this material typically has been piled and
burned, left in the forest, or deposited in landfills because there is
often little or no demand for it. Some industries make use of this
woody biomass, however--for example, by burning it to generate
electricity or turning it into products such as road signs or animal
bedding. Using woody biomass in these and other ways can have several
beneficial side effects, including stimulating local economies and
potentially facilitating fuel reduction efforts by creating a demand
for thinned material. However, the cost of harvesting and transporting
the material, combined with the relatively low value of the products
produced, has meant that woody biomass has not been widely utilized.
My testimony today summarizes the findings of our report being released
today that discusses federal agency activities to promote woody biomass
utilization, agency efforts to coordinate their activities, and the
primary obstacles that agencies believe are standing in the way of
increased woody biomass utilization.[Footnote 2] This report is based
on our interviews of officials from a wide range of federal and
nonfederal organizations, including the Departments of Agriculture,
Commerce, Energy, the Interior, and Transportation, as well as various
agencies within these departments; state governments; Indian tribes;
environmental organizations; academia; and others. We also reviewed
agency documents, federal and nonfederal studies of woody biomass
utilization issues, and pertinent laws and other documents.
Summary:
Most woody biomass utilization activities within the federal government
are being undertaken by USDA, the Department of Energy (DOE), and the
Department of the Interior and include awarding grants to businesses,
schools, Indian tribes, and others; conducting research; and providing
education and outreach. Some of these activities involve multiagency
efforts--for example, the three departments signed an agreement in 2003
to support the utilization of woody biomass, and USDA and DOE jointly
award grants for biomass research and development. Each department also
carries out its own activities.
Federal agency efforts to coordinate their woody biomass utilization
activities, both among and within agencies, occur through both formal
and informal mechanisms. Although the departments have established an
interagency group to coordinate their activities, most agency officials
we spoke with emphasized informal communication--such as telephone
discussions, e-mails, participation in conferences, and other means--
rather than this group as the primary vehicle for interagency
coordination. Regarding internal woody biomass activities, DOE
coordinates its activities through its Office of Energy Efficiency and
Renewable Energy, while both Interior and the Forest Service--the USDA
agency with the most woody biomass activities--have appointed officials
to oversee their woody biomass activities and have issued guidance on
these activities.
Agency officials cited two principal obstacles to increasing the use of
woody biomass: the inherent difficulty in using woody biomass cost-
effectively, in large part because of the relatively high costs of
harvesting and transporting it, and the lack of a reliable supply of
the material. And although agency activities are generally targeted
toward these obstacles and others identified by agency officials, some
officials told us that additional steps that are beyond the agencies'
authority to implement--such as subsidies or tax credits to offset the
costs involved in using woody biomass--are needed. Other officials
disagreed with this view, however, stating that neither subsidies nor
tax credits were appropriate mechanisms for promoting the use of woody
biomass and that such incentives could have adverse, unintended
consequences on the ecological health of the national forests.
Background:
The Forest Service and Interior collectively manage about 700 million
acres of federal land, much of which is considered to be at high risk
of fire. Federal researchers estimate that from 90 million to 200
million acres of federal lands in the contiguous United States are at
an elevated risk of fire because of abnormally dense accumulations of
vegetation, and that these conditions also exist on many nonfederal
lands. Addressing this fire risk has become a priority for the federal
government, which in recent years has significantly increased funding
for fuels reduction. Fuels reduction is generally done through
prescribed burning, in which fires are deliberately lit in order to
burn excess vegetation, and mechanical treatments, in which mechanical
equipment is used to cut vegetation.
Although prescribed burning is generally less expensive on a per-acre
basis than mechanical treatment, prescribed fire may not always be the
most appropriate method for accomplishing land management objectives--
and in many locations it is not an option, because of concerns about
smoke pollution, for example, or because vegetation is so dense that
agency officials fear a prescribed fire could escape and burn out of
control. In such situations, mechanical treatments are required,
generating large amounts of wood--particularly small-diameter trees,
limbs, brush, and other material that serve as fuel for wildland
fires.[Footnote 3]
Woody biomass can be used in many ways. Small logs can be peeled and
used as fence posts, or can be joined together with specialized
hardware to construct pole-frame buildings. Trees also can be milled
into structural lumber or made into other wood products, such as
furniture, flooring, and paneling. Woody biomass also can be chipped
for use in paper pulp production and for other uses--for example, a New
Mexico company combines juniper chips with plastic to create a
composite material used to make road signs--and can be converted into
other products such as ethanol and adhesives. Finally, woody biomass
can be chipped or ground for energy production in power plants and
other applications.
Citing biomass's potential to serve as a source of electricity, fuel,
chemicals, and other materials, the President and the Congress have
encouraged federal activities regarding biomass utilization--but until
recently, woody biomass received relatively little emphasis. Major
congressional direction includes the Biomass Research and Development
Act of 2000, the Farm Security and Rural Investment Act of 2002, the
Healthy Forests Restoration Act of 2003, and the American Jobs Creation
Act of 2004. Utilization of woody biomass also is emphasized in the
federal government's National Fire Plan, a strategy for planning and
implementing agency activities related to wildland fire management. For
example, a National Fire Plan strategy document cites biomass
utilization as one of its guiding principles, recommending that the
agencies "employ all appropriate means to stimulate industries that
will utilize small-diameter woody material resulting from hazardous
fuel reduction activities."[Footnote 4] Federal agencies also are
carrying out research concerning the utilization of small-diameter wood
products as part of the Healthy Forests Initiative, the
administration's initiative for wildland fire prevention.
Most Woody Biomass Utilization Activities Are Implemented by the
Departments of Agriculture, Energy, and the Interior and Include
Grants, Research, and Education:
Most of the federal government's woody biomass utilization efforts are
being undertaken by USDA, DOE, and Interior. While some activities are
performed jointly, each department also conducts its own activities,
which generally involve grants for small-scale woody biomass projects;
research on woody biomass uses; and education, outreach, and technical
assistance aimed at woody biomass users.
Some Woody Biomass Activities Are Performed Jointly by Multiple
Agencies:
USDA, DOE, and Interior have undertaken a number of joint efforts
related to woody biomass. In June 2003, the three departments signed a
memorandum of understanding on woody biomass utilization, and the
departments sponsored a 3-day conference on woody biomass in January
2004. The departments also have established an interagency Woody
Biomass Utilization Group, which meets quarterly to discuss relevant
developments and to coordinate departmental efforts.
Another interdepartmental collaboration effort is the Joint Biomass
Research and Development Initiative, a grant program conducted by USDA
and DOE and authorized under the Biomass Research and Development Act
of 2000. The program provides funds for research on biobased products.
DOE also has collaborated with both USDA and BLM on assessment of
biomass availability, while USDA and Interior have entered into a
cooperative agreement with the National Association of Conservation
Districts to promote woody biomass utilization.[Footnote 5]
USDA, DOE, and Interior also participate in joint activities at the
field level. For example, DOE's National Renewable Energy Laboratory
(NREL) and the Forest Service have collaborated in developing and
demonstrating small power generators that use woody biomass for fuel.
The Forest Service also collaborates with Interior in funding and
awarding grants under the Fuels Utilization and Marketing program,
which targets woody biomass utilization efforts in the Pacific
Northwest. The agencies also collaborate with state and local
governments to promote the use of woody biomass--for example, the
Forest Service, NREL, and BLM entered into a memorandum of
understanding with Jefferson County, Colorado, to study the feasibility
of developing an electricity-generating facility that would use woody
biomass.
USDA's Efforts Related to Woody Biomass Utilization Are Concentrated in
the Forest Service, with Some Efforts Under Way in Other USDA Agencies:
Most of USDA's woody biomass utilization activities are undertaken by
the Forest Service and involve grants, research and development, and
education, outreach, and technical assistance. The Forest Service
provides grants through its Economic Action Programs, created to help
rural communities and businesses dependent on natural resources become
sustainable and self-sufficient. The Forest Service also has created a
grant program in response to a provision in the Consolidated
Appropriations Act for Fiscal Year 2005, which authorized up to $5
million for grants to create incentives for increased use of biomass
from national forest lands. Two other USDA agencies--the Cooperative
State Research, Education and Extension Service (CSREES) and USDA Rural
Development--maintain programs that could include woody biomass
utilization activities. CSREES oversees the Biobased Products and
Bioenergy Production Research grant program and the McIntyre-Stennis
grant program, which provides grants to states for research into
forestry issues under the McIntyre-Stennis Act of 1962. Within USDA
Rural Development, the Rural Business-Cooperative Service oversees a
grant program emphasizing renewable energy systems and energy
efficiency among rural small businesses, farmers, and ranchers, and the
Rural Utilities Service maintains a loan program for renewable energy
projects.
Forest Service researchers are conducting research into a variety of
woody biomass issues. Researchers have conducted assessments of the
woody biomass potentially available through land management projects
and have developed models of the costs and revenues associated with
thinning projects. Researchers also are studying the economics of woody
biomass use in other ways; one researcher, for example, is beginning an
assessment of the economic, environmental, and energy-related impacts
of using woody biomass for power generation. The Forest Service also
conducts extensive research, primarily at its Forest Products
Laboratory, into uses for woody biomass, including wood-plastic
composites and water filtration systems that use woody biomass fibers,
as well as less expensive ways of converting woody biomass to liquid
fuels.
In addition, the Forest Service conducts extensive education, outreach,
and technical assistance activities. Much of this activity is conducted
by the Technology Marketing Unit (TMU) at the Forest Products
Laboratory, which provides woody biomass users with technical
assistance and expertise in wood products utilization and marketing.
Forest Service field office staff also provide education, outreach, and
technical assistance, and each Forest Service region has an Economic
Action Program coordinator who has involvement in woody biomass issues.
For example, one such coordinator organized a "Sawmill Improvement
Short Course" designed to provide information to small-sawmill owners
regarding how to better handle and use small-diameter material. The
Forest Service also has partnerships with state and regional entities
that provide a link between scientific and institutional knowledge and
local users.
DOE Is Engaged Primarily in Biomass Research and Development Activities:
Most of DOE's woody biomass activities are overseen by its Office of
the Biomass Program and focus primarily on research and development,
although the department does have some grant and technical assistance
activities. DOE's research and development activities generally address
the conversion of biomass, including woody biomass, to liquid fuels,
power, chemicals, or heat. Much of this work is carried out by NREL,
where DOE recently opened the Biomass Surface Characterization
Laboratory. DOE also supports research into woody biomass through
partnerships with industry and academia. Program management activities
for these partnerships are conducted by DOE headquarters, with project
management provided by DOE field offices.
In addition to its research activities, DOE provides information and
guidance to industry, stakeholder groups, and users through
presentations, lectures, and DOE's Web site, according to DOE
officials. DOE also provides outreach and technical assistance through
its State and Regional Partnership, Federal Energy Management Program
(FEMP), and Tribal Energy Program. FEMP provides assistance to federal
agencies seeking to implement renewable energy and energy efficiency
projects, while the Tribal Energy Program provides technical assistance
to tribes, including strategic planning and energy options analysis.
DOE's grant programs include (1) the National Biomass State and
Regional Partnership, which provides grants to states for biomass-
related activities through five regional partners; and (2) the State
Energy Program, which provides grants to states to design and carry out
their own renewable energy and energy efficiency programs. In addition,
DOE's Tribal Energy Program provides funds to promote energy
sufficiency, economic development, and employment on tribal lands
through renewable energy and energy efficiency technologies.
Interior's Woody Biomass Activities Include Education, Outreach, and
Some Grant Programs:
Interior's activities include providing education and outreach and
conducting grant programs, but they do not include research into woody
biomass utilization issues. Four Interior agencies--BLM, the Bureau of
Indian Affairs (BIA), Fish and Wildlife Service (FWS), and National
Park Service (NPS)--conduct activities related to woody biomass. These
agencies conduct education, outreach, and technical assistance, but not
to the same degree as the Forest Service. For example, BIA provides
technical assistance to tribes seeking to implement renewable energy
projects, and while FWS and NPS conduct relatively few woody biomass
utilization activities, in some cases the agencies will work to find a
woody biomass user nearby if a market exists for the material. Interior
plans to expand its outreach efforts by using the National Association
of Conservation Districts, with which it signed a cooperative
agreement, to conduct outreach activities related to woody biomass. And
while Interior's grant programs generally do not target woody biomass,
BIA has provided some grants to Indian tribes, including a 2004 grant
to the Confederated Tribes of the Warm Springs Reservation in Oregon to
conduct a feasibility study for updating and expanding a woody biomass-
fueled power plant.
Several Other Federal Agencies Participate in Woody Biomass Activities:
Several other federal agencies are engaged in limited woody biomass
activities through their advisory or research activities. The
Environmental Protection Agency provides technical assistance, through
its Combined Heat and Power Partnership, to power plants that generate
combined heat and power from various sources, including woody biomass.
Three other agencies--the National Science Foundation, Office of
Science and Technology Development, and Office of the Federal
Environmental Executive--also are involved in woody biomass activities
through their membership on the Biomass Research and Development Board,
which is responsible for coordinating federal activities for the
purpose of promoting the use of biobased industrial products.
Woody Biomass Coordination Efforts among and within Federal Agencies
Include Both Formal and Informal Mechanisms, and the Forest Service,
DOE, and Interior Have Assigned Responsibility for Overseeing Woody
Biomass Activities:
Two groups serve as formal vehicles for coordinating federal agency
activities related to woody biomass utilization. One, the Woody Biomass
Utilization Group, is a multiagency group that meets quarterly on woody
biomass utilization issues and is open to all national, regional, and
field-level staff across numerous agencies. The other, the Biomass
Research and Development Board, is responsible for coordinating federal
activities to promote the use of biobased industrial products. The
board consists of representatives from USDA, DOE, and Interior, as well
as EPA, the National Science Foundation, Office of the Federal
Environmental Executive, and Office of Science and Technology Policy.
When discussing coordination among agencies, however, agency officials
more frequently cited using informal mechanisms for coordination--
through telephone discussions, e-mails, participation in conferences,
and other means--rather than the formal groups described above. Several
officials told us that informal communication among networks of
individuals was essential to coordination among agencies. Officials
also described other forms of coordination, including joint review
teams for interagency grant programs and multiagency working groups
examining woody biomass at the regional or state level.
The Forest Service--the USDA agency with the most woody biomass
activities--developed a woody biomass policy in January 2005, and, in
March 2005, in response to a recommendation in our draft report, the
agency assigned responsibility for overseeing and coordinating its
woody biomass activities to an official within the Forest Service's
Forest Management branch. In addition, the agency has created the
Biomass Utilization Steering Committee, consisting of the staff
directors of various Forest Service branches, to provide direction and
support for agency biomass utilization.
DOE coordinates its woody biomass utilization activities through its
Office of Energy Efficiency and Renewable Energy. Within this office,
the Office of the Biomass Program directs biomass research at DOE
national laboratories and contract research organizations, while the
Federal Energy Management Program and the Tribal Energy Program conduct
a small number of other woody biomass activities.
Interior has appointed a single official to oversee its woody biomass
activities and is operating under a woody biomass policy adopting the
principles of the June 2003 memorandum of understanding among USDA,
DOE, and Interior. Interior also has appointed a Renewable Energy
Ombudsman to coordinate all of the department's renewable energy
activities, including those related to woody biomass, and has worked
with its land management agencies to develop woody biomass policies
allowing service and timber contractors to remove woody biomass where
ecologically appropriate. Similarly, BLM has appointed a single
official to oversee woody biomass efforts and has developed a woody
biomass utilization strategy to guide its activities that contains
overall goals related to increasing the utilization of biomass from
treatments on BLM lands.
Most Officials Cited Economic Obstacles to Woody Biomass Utilization,
and While Agencies Generally Targeted These Obstacles, Some Officials
Believe Additional Steps beyond the Agencies' Authority Are Needed:
Agency officials cited two principal obstacles to increasing the use of
woody biomass: the difficulty in using woody biomass cost-effectively
and the lack of a reliable supply of the material. Agency activities
are generally targeted toward the obstacles identified by agency
officials, but some officials told us that their agencies are limited
in their ability to fully address these obstacles and that additional
steps beyond the agencies' authority to implement are needed. However,
not all agree that such steps are appropriate.
Most Officials Noted the Difficulty Involved in Using Woody Biomass
Cost-Effectively, and Many Also Cited the Lack of a Reliable Woody
Biomass Supply:
The obstacle most commonly cited by officials we spoke with is the
difficulty of using woody biomass cost-effectively. Officials told us
the products that can be created from woody biomass--whether wood
products, liquid fuels, or energy--often do not generate sufficient
income to overcome the costs of acquiring and processing the raw
material. One factor contributing to the difficulty in using woody
biomass cost-effectively is the cost incurred in harvesting and
transporting woody biomass.
Numerous officials told us that even if cost-effective means of using
woody biomass were found, the lack of a reliable supply of woody
biomass from federal lands presents an obstacle because business owners
or investors will not establish businesses without assurances of a
dependable supply of material. Officials identified several factors
contributing to the lack of a reliable supply, including the lack of
widely available long-term contracts for forest products, environmental
groups' opposition to federal projects, and the shortage of agency
staff to conduct activities. A few officials cited internal barriers
that hamper agency effectiveness in promoting woody biomass
utilization, including limited agency expertise related to woody
biomass and limited agency commitment to the issue. A variety of other
obstacles were noted as well, including the lack of a local
infrastructure for handling woody biomass, consisting of loggers,
mills, and equipment capable of treating small-diameter material.
Agency Efforts Are Generally Targeted toward the Obstacles Identified,
but Officials Cited the Need for Additional Actions Such as Subsidies
and Tax Credits:
Agency activities related to woody biomass were generally aimed at
overcoming the obstacles agency officials identified, including many
aimed at overcoming economic obstacles. For example, Forest Service
staff have worked with potential users of woody biomass to develop
products whose value is sufficient to overcome the costs of harvesting
and transporting the material; Economic Action Program coordinators
have worked with potential woody biomass users to overcome economic
obstacles; and Forest Products Laboratory researchers are working with
NREL to make wood-to-ethanol conversion more cost-effective.
Despite ongoing agency activities, however, numerous officials believe
that additional steps beyond the agencies' authority are need to fully
address obstacles to woody biomass utilization. Among these steps are
subsidies and tax credits, which officials told us are necessary to
develop a market for woody biomass but which are beyond the agencies'
authority. According to several officials, the obstacles to using woody
biomass cost-effectively are simply too great to overcome by using the
tools--grants, outreach and education, and so forth--currently at the
agencies' disposal. One official stated that "in many areas, the
economic return from smaller-diameter trees is less than production
costs. Without some form of market intervention, such as tax incentives
or other forms of subsidy, there is little short-term opportunity to
increase utilization of such material." Some officials stated that
subsidies have the potential to create an important benefit--reduced
fire risk through hazardous fuels reduction--if they promote additional
thinning activities by stimulating the woody biomass market. Rather
than incentives or subsidies, some officials noted the potential for
increased use of woody biomass through state requirements--known as
renewable portfolio standards--that utilities procure or generate a
portion of their electricity by using renewable resources, which could
include woody biomass.[Footnote 6]
But not all officials believe these additional steps are efficient or
appropriate. One official told us that, although he supports these
activities, tax incentives and subsidies would create enormous
administrative and monitoring requirements. Another official stated
that although increased subsidies could address obstacles to woody
biomass utilization, he does not believe they should be implemented,
preferring instead to allow research and development efforts and market
forces to establish the extent of woody biomass utilization. Further,
not all agree that the market for woody biomass should be expanded. One
agency official told us he is concerned that developing a market for
woody biomass could result in overuse of mechanical treatment (rather
than prescribed burning) as the market begins to drive the preferred
treatment, and representatives of one national environmental group told
us that relying on woody biomass as a renewable energy source will lead
to overthinning, as demand exceeds the supply that is generated through
responsible thinning.
Conclusions:
The amount of woody biomass resulting from increased thinning
activities could be substantial, adding importance to the search for
ways to use the material cost-effectively rather than simply disposing
of it. However, the use of woody biomass will become commonplace only
when doing so becomes economically advantageous for users--whether
small forest businesses or large utilities. Federal agencies are
targeting their activities toward overcoming economic and other
obstacles, but some agency officials believe that these efforts alone
will not be sufficient to stimulate a market that can accommodate the
vast quantities of material expected--and that additional action may be
necessary at the federal and state levels. Nevertheless, we believe the
agencies will continue to play an important role in stimulating woody
biomass use. The Forest Service took a significant step recently by
designating an agency lead for woody biomass activities, responding to
a need we had identified in our draft report and enhancing the agency's
ability to ensure that its multiple activities contribute to its
overall objectives. Given the magnitude of the woody biomass issue and
the finite nature of agency budgets, it is essential that federal
agencies appropriately coordinate their woody biomass activities--both
within and across agencies--to maximize their potential for addressing
the issue.
Mr. Chairman, this concludes my prepared statement. I would be pleased
to answer any questions that you or other Members of the Subcommittee
may have at this time.
GAO Contacts and Staff Acknowledgments:
For further information about this testimony, please contact me at
(202) 512-3841 or at nazzaror@gao.gov. David P. Bixler, James Espinoza,
Steve Gaty, Richard Johnson, and Judy Pagano made key contributions to
this statement.
FOOTNOTES
[1] Although biomass can be considered any sort of organic material--
including trees, grasses, agricultural crops, and animal wastes--the
term "woody biomass" in this testimony refers to small-diameter trees
and other traditionally noncommercial material cut as part of thinning,
harvesting, or other activities on forests or rangelands. The term
"woody" is used to distinguish this material from agricultural biomass,
such as corn stalks or sugar cane residue.
[2] GAO, Natural Resources: Federal Agencies Are Engaged in Various
Efforts to Promote the Utilization of Woody Biomass, but Significant
Obstacles to Its Use Remain, GAO-05-373 (Washington, D.C.: May 13,
2005).
[3] Fuel reduction efforts are not the only source of this material.
Woody biomass can result from a variety of activities related to
improving or maintaining forest and rangeland health, as well as forest
management activities such as timber harvests. Further, according to
Forest Service officials and others, millions of acres of pine trees in
the southeastern United States face a depressed market because of the
closure of pulp mills. These trees thus constitute another potential
source of woody biomass.
[4] Departments of Agriculture and the Interior and the Western
Governors' Association, A Collaborative Approach for Reducing Wildland
Fire Risks to Communities and the Environment: A 10-Year Comprehensive
Strategy (Washington, D.C.; August 2001).
[5] The National Association of Conservation Districts is a nonprofit
organization that represents the nation's 3,000 conservation districts-
-local units of government established under state law to carry out
natural resource management programs at the local level.
[6] According to the Database of State Incentives for Renewable Energy,
a DOE-funded project, 19 states and the District of Columbia had
renewable portfolio standards as of February 2005.
