The forests and forest industry of the Northern Forest region - Maine, New Hampshire, Vermont and New York. Presented to a meeting of the Northern Forest Border Commission, March 2018.

1. Investing in the Future Forest Economy
Northern Border Regional Commission
Economic Trends in the Regional Forest Industry
March 2018
Eric Kingsley
Innovative Natural Resource Solutions LLC
kingsley@inrsllc.com
Phone 207‐233‐9910
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2. Innovative Natural Resource Solutions LLC
• Founded in 1994
• Offices in New Hampshire and Maine
• Focus at the intersection of forest industry, energy and
economic development
• Services include:
‐ consulting in renewable energy
‐ advocacy
‐ forest management and protection
‐ forest certification and sustainability
• Clients from the private, non‐profit and government sectors
• Conducted work in all regions of North America
• www.inrsllc.com
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3. 3
Source: Harvard Forest and USDA
NE ‐32+ million acres
NY ‐<19 million acres

4. 4
Northern New England and New York

5. 5

6. 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Sawlogs Pulpwood Biomass
Volume (Tons)
Value ($)
Volume and Value to Landowner of Products from a Timber Harvest
North East State Foresters 2013

7. 7

8. Housing Starts (past 20 years)
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9. Housing Starts (past 10 years)
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10. Lumber Market Trending Upward
http://markets.businessinsider.com/commodities/lumber‐price10

11. A growing issue for (softwood) mills…
• As markets build and production
climbs…
• More residue (chips, sawdust,
bark) is produced
• Markets for this residue have
shrunk, and this is a danger sign
for a healthy industry
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12. Cross Laminated Timber
12

13. 13

14. 14

15. Biomass
Electricity
(MWh)
“Green” Attributes
(Renewable Energy Certificate)
Electricity (MWh)
(Wholesale)

16. What does it take to operate biomass in 2018?
$0
$10
$20
$30
$40
$50
$60
$70
$80
Revenue Expenses
Electricty RECs (CT) Fuel O&M
• Assumes:
• Electricity at average price for the
past year ($34)
• RECs at recent broker quote ($24,
which may be higher than current
market)
• Biomass fuel at $25, 1.6 green tons
per MWH
• O&M at $30 per MWh
• With these assumptions, this is not
an attractive business

17. 17

18. Community‐Scale Biomass
Thermal Has Real Potential
18

19. 19

20. ‐
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
10,000,000
2008 2009 2010 2011 2012 2013 2014 2015 2016e
Estimated Pulpwood Consumption by Maine Pulp Mills
Estimates Based Upon INRS Data

21. 0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
Madison
East Millinocket
Lincoln
Bucksport
Millinocket
Old Town
Jay
Woodland
Rumford
Somerset
Maine Pulpwood Consumption by Mill
Green Tons

22. Emails you never expected…

23. New Investment at Woodland Pulp
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FIRST SALEABLE JUMBO ROLL
MARCH 16
• 2 new tissue machines
• ~$150 million in new
investment
• Used New Markets Tax
Credits
• 70 new employees
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24. SAPPI Announced Investment
• $165 million rebuild of PM1
at Somerset Mill
• $25 million in new wood
yard (completed)
• Clearly investing in the
future of the mill, New
England’s largest market for
low‐grade wood
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25. The Wood
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26. The Markets
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27. The glass is half full…
• We have markets, and are incredibly well positioned compared to
other parts of the country
• We have the forest resource and supply infrastructure (landowners,
loggers, entire forest industry ecosystem) that would make other
regions jealous
• We live in close proximity to (and are part of) the greatest collection
of consumers in the history of the world
• It is cold in New England, we heat buildings, we need process heat
• There may never be a better time to be develop a project or
technology that uses low‐grade, particularly softwood
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28. I would like to add you to my email list
Send an email to kingsley@inrsllc.com to be placed on our monthly email list, which provides information
on markets and developments of interest to the region’s forestry community.
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29. Eric Kingsley
Innovative Natural Resource Solutions LLC
Phone 207‐233‐9910
Email kingsley@inrsllc.com
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