New life for lumber mills brings jobs, environmental concerns

Steven Hill hopes to cash in on an emerging green economy.

Hill and his family-owned wood products company are the new owners of the former Ainsworth lumber mill in Cook. He thinks the push for renewable fuels has created new business opportunities in the timber industry.

"It's going to help our general economy and help the forest and help the loggers and, it's just going to be a good thing for the area in general," Hill said.

Operations like Hill's utilize more of the scrap wood material that's typically left to rot on the forest floor. That can mean anything from tree tops, bark and limbs left behind by traditional logging operations, to old logs and trees that die naturally in the forest.

Using those materials -- commonly called woody biomass -- is nothing new. For 22 years, Hill's company has sold dried biomass to utility companies and the mining industry for fuel to make electricity.

Hill has high hopes for the Cook facility and is betting the demand for biofuels will grow. He's also investigating other possibilities. For example, he hopes to manufacture wood pellets to heat homes and businesses.

But he admits investing in wood pellets might be risky, because it depends a lot on how high home heating costs go.

"I equate this idea of pellets for the retail industry to almost a dot com boom back in the 90s, in that everybody gets excited, invests a bunch of money, and they fail because of energy prices and/or the cost of the raw material just went too high for them to survive," Hill said. "You've got to do it right and pay attention. You just can't throw money at it or you'll be one of the ones to go."

There are wood pellet plans for shuttered lumber mills in Bemidji and Grand Rapids, too. And it's not just happening in northern Minnesota. Wood waste has become a sought-after commodity in forest communities in Wisconsin and Michigan.

That has some environmentalists worried.

"I think we're jumping the gun," said Lois Norrgard, a forest policy expert with Minnesota's North Star Chapter of the Sierra Club.

Norrgard worries about what biofuel operations could do to healthy forests, which she said need waste material to replenish nutrients in the soil and provide animal habitat. She said researchers haven't done long-term studies to see how burning biomass might hurt forest ecosystems.

She's also concerned the emerging industry will take too much from the forest.

"Once these plants are there, they're going to have to continue to be fed," Norrgard said. "It's a real concern that they're going up so quickly and so many of them."

A variety of federal programs are pushing speedy development of renewable fuels that can reduce dependence on foreign oil. The Department of Agriculture planned to spend $57 million on 30 projects supporting development of biofuels from trees.

The flurry of new, green ventures is expected to create jobs. In Cook, the biofuel project will initially mean 20 to 30 new jobs by this summer. That's a far cry from the work force needed when the mill was producing lumber for home building. At its peak, Ainsworth in Cook employed 180 people.

Cook Area Chamber of Commerce President Lisa Ojanen said that with the timber industry in such bad shape from the recession, any new jobs are welcome.

"People are very excited that there could be an increase in jobs," Ojanen said. "This will be just huge. A lot of friends of ours had to leave town. ... Maybe if there's something around here they'll come back."

Competition for biomass material may intensify as new companies emerge in Minnesota. But it's likely not every project on the drawing board will survive.

State officials predict supply and demand will balance over time. The marketplace will determine which companies make it and which don't.

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