Biofuels shaving sawdust supplies.

Byline: Diane Dietz The Register-Guard

A sawdust and wood chip shortage? In Oregon? Who'd have thought?

But shortages of those lumber-making waste products is exactly what the owners of plants that produce fiberboard are beginning to worry about, according to Random Lengths, a forest products trade publication in Eugene.

The plants, including seven in Oregon, have long produced fiberboard that other manufacturers then fashion into kitchen countertops, cupboards and ready-to-assemble furniture.

But now the drive for renewable energy spurred by incentives from the Oregon Energy Trust, a nonprofit organization funded by power companies, is creating competition for the sawdust.

Plants are burning the material to produce heat used in industrial processes and to make steam-generated electricity.

And just over the horizon is the prospect of a "biorefinery" that can turn plant fiber, including sawdust, into ethanol - or fuel for cars and trucks.

Fiberboard mills already are feeling the supply pinch, said Pete Malliris, associate editor at Random Lengths.

`Earlier in the year, when the market was screaming (for fiberboard), you had some (fiberboard) mills who could not increase production. They wanted to add new shifts and hire more workers, but they were unable to do it because they couldn't get enough raw material," he said.

A limited sawdust supply eventually could hurt fiberboard manufacturers in Springfield, Eugene, Medford, Albany, Roseburg and Klamath Falls, Malliris said.

The Lane County plants are Flakeboard Ltd. in Eugene and SierraPine Ltd. in Springfield.

"It makes it tougher. It drives our costs up," said Rick Hogue, fiber manager for SierraPine's plant in Medford, who said he's been in bidding wars for sawdust with biomass buyers.

`I haven't been outbid. (But) I've had to raise values to maintain the fiber,' he said. "It's having an effect. There is no question about it."

Oregon's fiberboard and particle board mills that rely on sawdust and wood chips employ about 700 people, Hogue said. They're good, $20-an-hour jobs, he said, and the plants contribute significantly to the property tax rolls.

If biomass or biorefineries suck up all the wood and knock out the fiberboard makers, it would be a loss to the state, Hogue said.

A large fiberboard mill needs a lot of sawdust: It may gobble from 800 to 1,500 tons of raw wood fiber every day, Malliris said.

Already, 10 industrial sites in Oregon use wood fiber biomass combustion boilers to power steam-driven generators that produce electricity, according to the state Energy Department. The pace of construction picked up over the past two years as state incentives came online.

Nationally, 200 companies - many of them sawmills - are generating power from biomass, including wood fiber, according to the U.S. Department of Energy.

From the fiberboard producer's point of view, that's a lot of competition for raw material.

Researchers anticipate that a biorefinery will be built in the next several years that could process 10,000 tons of biomass - including wood fiber - a day. "They're serious competitors for the resource," Malliris said. It is not clear where such a refinery would be built.

But a sawdust shortage could mean a price bonanza for Oregon sawmills as the mountains of waste in their hoppers turn into yellow gold.