FORT DRUM The Armys plan to award a 20-year contract to buy power from the ReEnergy Holdings biomass power plant on post is being greeted as a sign of stability for the regions forestry industry.
Eric W. Carlson, president of the Empire State Forest Products Association, said predictable demand for forestry residues to burn at the plant gives business owners and investors confidence.
It gives them the assurance that they need to invest in upgrading their equipment, Mr. Carlson said. We need large infusions of capital and training to get young entrepreneurs into the business. We need markets like this.
The Army plan calls for the purchase of up to 28 megawatts of electricity enough to supply all of the posts energy needs. When finalized, it will be the Armys largest renewable-power project.
The Army contract is in addition to the power that the 60-megawatt-capacity plant already supplies to the grid. The company sells renewable-energy credits through the states Renewable Portfolio Standard, an initiative to obtain 30 percent of the states electricity from renewable sources by 2015.
Patrick J. Curran, co-owner of Curran Renewable Energy LLC and Seaway Timber Harvesting, both of Massena, said his company provides about 70,000 tons a year of scrap-quality wood products to the ReEnergy plant.
With news of the 20-year deal, Mr. Curran said, he and other contractors to the plant as well as land owners will be able to plan for years of business ahead. That kind of security is important, he explained, as other industries like paper mills have come in and out of the area with little warning.
It will pretty much ensure the labor force thats here can look forward to having a job, too, he said.
Mr. Curran said the low-quality wood products purchased by the plant provide revenue that open up more areas for logging that would otherwise be ignored.
Also, the demand has allowed the company to upgrade its equipment, improving the quality of the wood pellets that it sells to other consumers.
One benefit of the deal could be keeping money spent on heating costs local, rather than importing natural gas.
Were now consuming a local natural resource, said John K. Bartow Jr., Tug Hill Commission executive director.
The supply chains created by the plant could also aid schools and other entities looking to convert their power source, said Timothy A. Volk, a senior research associate at the SUNY College of Environmental Science and Forestry.
Another potential winner from the contract is shrub willow producers.
With a 25-year lifespan, a crop planted within the past few years could be harvested multiple times over the course of the contract.
Robert J. McDonagh, whose Cape Vincent-based company Celtic Energy Farm oversees about 1,200 acres, said he had his first harvest of about 120 acres this past fall.
He said he thought others could be spurred to get into the business following news of the deal.
If you dont have a market, you dont have a business, Mr. McDonagh said. With a market now, its that much easier for them to grow willow.
He also pointed out there was funding in the recently passed Farm Bill that could also help people get into the industry.
However, Mr. Bartow pointed out increasing the number of willow producers may be difficult, based on the profitability of crops like soybeans and corn.