Confluence Energy of Kremmling is among the two companies the U.S. Forest Service awarded 10-year stewardship contracts, totaling $13.4 million.
The contracts are intended to address fuel reduction and overall forest health needs for a minimum of 20,000 acres in the Medicine Bow-Routt and White River national forests. The forests, which have been hit hard by the mountain pine beetle epidemic, are located in Northern Colorado and the southern part of Wyoming.
Confluence Energy and West Range Reclamation of Hotchkiss placed the winning bids for the two contracts and plan to use the gathered wood to create clean and renewable energy.
"These stewardship contracts will create jobs in rural communities and bolster Colorado's economy while also reducing the risk of catastrophic wildfire and helping restore the ecological health of our forests," said U.S. Senator Mark Udall in a prepared statement on Monday, Nov. 26. "As we saw this summer, wildfires are unfortunately growing bigger and more intense each year. These contracts are excellent examples of the private sector turning the problem of the bark beetle epidemic into profit while also improving public safety, protecting our water supplies, and reducing the risk these fires pose to Colorado communities and those living in the wildland-urban interface zones."
Confluence Energy's bid of $4.75 million was awarded based on price and the company's technical ability to complete the forest health project. The company will remove beetle-killed trees in the Medicine Bow-Routt National Forest and will pile or scatter the residual debris that has no commercial value.
"We are pleased to add Confluence Energy to the diverse mix of forest product partners who will continue to help in our forest restoration efforts," said Medicine Bow-Routt Forest Supervisor Phil Cruz in a statement.
The company will pay for the usable lumber that is recovered to offset the cost to the government of the other forest health treatments in the contract area.
Confluence Energy is the largest producer of wood pellets in the region and is also the largest producer of the pellets west of the Mississippi River. The pellets that Confluence creates from beetle-killed trees are used mainly as a clean and renewable form of domestic heating fuel. However, the pellets are also used as landscaping material, animal bedding, and absorbents.
"The intent is to put [the lumber] to the highest value use," said Mark Mathis, president and CEO of Confluence Energy, in a telephone conversation.
Mathis plans to sell the high-grade wood that is recovered to lumber mills in the area that will use the wood to make products like dimensional lumber. He then plans to use the slightly lower grade wood to make wood pellets at his plant.
Mathis plans to expand his plant's capabilities in the coming year and also plans to increase the number of people he employs by three-fold. Confluence Energy currently employs 34 individuals.
"The Confluence Energy team is excited and looks forward to working with the Forest Service to manage the Medicine Bow-Routt project," Betty Straub of Confluence Energy is quoted as saying in the statement. "We are confident in our ability to utilize the unwanted material for clean energy and high value purposes."
West Range Reclamation
West Range Reclamation's bid of $8.66 million won the White River Long Term Stewardship Contract and was awarded based on the company's ability to meet technical requirements and per-acre price. The contract focuses on removal of tree species that have already been killed due to pine beetle or that are susceptible to insect and disease infestations, including: lodgepole pine, subalpine fir, Douglas-fir, Englemann spruce, aspen, and ponderosa pine.
The removal of dead trees will give trees that remain a fighting chance to survive and thrive, said Pam Motley, a public relations specialist for West Range Reclamation, in a telephone interview.
"We are very excited about this contract, which will improve forest health and contribute to the sustainability of the local communities as well as increase employment opportunities," Motley said.
The company already holds the Front Range Long Term Stewardship Contract, which includes the Arapaho-Roosevelt, Pike, and San Usable national forests, and has been continuing to clear dead trees and improve the eco-system of those areas while reducing the risk of catastrophic wildfire.
"Other projects focus on safety and hazardous tree removal to reduce the risk of fires," Motley said.
The company is involved in removing trees from the sides of Forest Service roads in Grand County as well.
West Range Reclamation, like Confluence Energy, will be using the recovered wood for its highest value as well as for renewable energy. The company plans to use the larger and higher quality lumber for dimensional lumber and other high value uses while sending the lower grade material to a wood pellet plant in Silver Plume and a new woody biomass-fueled power plant that is being built in Gypsum.
Eagle Valley Clean Energy is the name of the power plant that has partnered with West Range Reclamation. Smaller diameter trees and dead trees can be used to power the planned 11.5 megawatt plant that is planning to supply energy for 8,000 to 10,000 homes in Colorado from Parachute to Vail and Glenwood Springs to Aspen. Heat from the plant will also support an adjacent wallboard manufacturing facility.
In October, USDA's Rural Utilities Service announced a $40 million loan guarantee to help finance the plant. Eagle Valley Clean Energy estimates that the woody biomass electricity plant will further support 41 permanent jobs and 107 construction jobs for the region.
"This contract realizes an opportunity for us to achieve critical landscape restoration on the White River National Forest," Scott Fitzwilliams, White River Forest supervisor, is quoted as saying in the statement. "It also continues our legacy of sustainable use of wood products from saw logs to biomass for renewable energy."