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Efforts to Promote the Utilization of Woody Biomass, but Significant 
Obstacles to Its Use Remain' which was released on May 24, 2005. 

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Report to the Chairman, Committee on Resources, House of 
Representatives: 

May 2005: 

Natural Resources: 

Federal Agencies Are Engaged in Various Efforts to Promote the 
Utilization of Woody Biomass, but Significant Obstacles to Its Use 
Remain: 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-373]: 

GAO Highlights: 

Highlights of GAO-05-373, a report to the Chairman, Committee on 
Resources, House of Representatives: 

Why GAO Did This Study: 

In an effort to reduce the risk of wildland fires, many federal land 
managers—including the Forest Service and the Bureau of Land Management 
(BLM)—are placing greater emphasis on thinning forests and rangelands 
to help reduce the buildup of potentially hazardous fuels. These 
thinning efforts generate considerable quantities of woody material, 
including many smaller trees, limbs, and brush—referred to as woody 
biomass—that currently have little or no commercial value. 

GAO was asked to determine (1) which federal agencies are involved in 
efforts to promote the use of woody biomass, and actions they are 
undertaking; (2) how these agencies are coordinating their activities; 
and (3) what agencies see as obstacles to increasing the use of woody 
biomass, and the extent to which they are addressing these obstacles. 

What GAO Found: 

Most woody biomass utilization activities are implemented by the 
Departments of Agriculture (USDA), Energy (DOE), and the Interior, and 
include awarding grants to businesses, schools, Indian tribes, and 
others; conducting research; and providing education. Most of USDA’s 
woody biomass utilization activities are undertaken by the Forest 
Service and include grants for woody biomass utilization, research into 
the use of woody biomass in wood products, and education on potential 
uses for woody biomass. DOE’s woody biomass activities focus on 
research into using the material for renewable energy, while Interior’s 
efforts consist primarily of education and outreach. Other agencies 
also provide technical assistance or fund research activities. 

Federal agencies coordinate their woody biomass activities through 
formal and informal mechanisms. Although the agencies have established 
two interagency groups to coordinate their activities, most officials 
we spoke with emphasized informal communication—through e-mails, 
participation in conferences, and other means—as the primary vehicle 
for interagency coordination. To coordinate activities within their 
agencies, DOE and Interior have formal mechanisms—DOE coordinates its 
activities through its Office of Energy Efficiency and Renewable 
Energy, while Interior and BLM have appointed officials to oversee, and 
have issued guidance on, their woody biomass activities. In contrast, 
while the Forest Service recently issued a woody biomass policy, it has 
not assigned responsibility for overseeing and coordinating its various 
woody biomass activities, potentially leading to fragmented efforts and 
diluting the impact of these activities. 

The obstacles to using woody biomass cited most often by agency 
officials were the difficulty of using woody biomass cost-effectively 
and the lack of a reliable supply of the material; agency activities 
generally are targeted toward addressing these obstacles. Some 
officials told us their agencies are limited in their ability to 
address these obstacles and that incentives—such as subsidies and tax 
credits—beyond the agencies’ authority are needed. However, others 
disagreed with this approach for a variety of reasons. 

Examples of Uses for Woody Biomass: 

[See PDF for image]

[End of figure]

What GAO Recommends: 

To improve the Forest Service’s effectiveness in promoting woody 
biomass utilization, GAO recommends that the Secretary of Agriculture 
direct the Chief of the Forest Service to appoint an official or 
organization responsible for overseeing and coordinating the agency’s 
woody biomass activities. 

In responding to a draft of this report, USDA concurred with its 
findings and recommendation, while DOE had no comments. Interior 
provided no response. 

www.gao.gov/cgi-bin/getrpt?GAO-05-373. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Robin M. Nazzaro at (202) 
512-3841 or nazzaror@gao.gov. 

[End of section]

Contents: 

Letter: 

Results in Brief: 

Background: 

Most Woody Biomass Utilization Activities Are Implemented by the 
Departments of Agriculture, Energy, and the Interior, and Include 
Grants, Research, and Education: 

Woody Biomass Coordination Efforts among and within Federal Agencies 
Include Both Formal and Informal Mechanisms, but Unlike DOE and 
Interior, the Forest Service Has Not Assigned Responsibility for 
Overseeing Woody Biomass Activities: 

Most Officials Cited Economic Obstacles to Woody Biomass Utilization, 
and While Agencies Generally Targeted These Obstacles, Some Officials 
Believe Additional Steps beyond the Agencies' Authority Are Needed: 

Conclusions: 

Recommendation for Executive Action: 

Agency Comments and Our Evaluation: 

Appendixes: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Comments from the Department of Agriculture: 

Appendix III: GAO Contacts and Staff Acknowledgments 51: 

Figures: 

Figure 1: Before and After Photos of Thinning Project, Lassen National 
Forest, California: 

Figure 2: Chip Truck Being Emptied, California Power Plant: 

Figure 3: Wood Chips Being Conveyed to a Boiler, California Power 
Plant: 

Figure 4: The BioMax 15 Power Generator: 

Figure 5: Automated Wood Chip Conveyor, Darby School District Project, 
Darby, Montana: 

Figure 6: Signs Produced from Woody Biomass Mixed with Plastic: 

Figure 7: Kiosk Built from Roundwood and Small-Diameter Wood: 

Figure 8: Interior of Darby Community Library Built from Roundwood, 
Darby, Montana: 

Figure 9: Slash Bundler Processing Small-Diameter Trees: 

Abbreviations: 

BIA: Bureau of Indian Affairs: 

BLM: Bureau of Land Management: 

CSREES: Cooperative State Research, Education,: 

and Extension Service: 

DOE: Department of Energy: 

EAP: Economic Action Programs: 

EERE: Office of Energy Efficiency and Renewable Energy: 

EPA: Environmental Protection Agency: 

FEMP: Federal Energy Management Program: 

FWS: Fish and Wildlife Service: 

NPS: National Park Service: 

NREL: National Renewable Energy Laboratory: 

TMU: Technology Marketing Unit: 

USDA: U.S. Department of Agriculture: 

Letter May 13, 2005: 

The Honorable Richard Pombo: 
Chairman: 
Committee on Resources: 
House of Representatives: 

Dear Mr. Chairman: 

Much attention has been paid in recent years to the state of our 
nation's forests. Dense, dry forest conditions have fueled extensive 
wildland fires and have raised the specter of severe fires in the 
future. In an effort to reduce the risk of fire, federal land 
management agencies--including the Forest Service in the Department of 
Agriculture (USDA) and the Bureau of Land Management (BLM) in the 
Department of the Interior--are placing greater emphasis on thinning 
forests and rangelands to help reduce the buildup of potentially 
hazardous fuels. 

These thinning efforts will generate considerable quantities of woody 
material, including some larger trees that are commercially valuable 
timber and many smaller trees, limbs, and brush that generally have 
little or no commercial value today. This low commercial value material 
is often referred to as woody biomass.[Footnote 1] Unlike commercial 
timber, this material typically has been piled and burned, left in the 
forest, or deposited in landfills because there is often little or no 
demand for it. 

Some industries make use of this woody biomass, however--for example, 
by burning it to generate electricity or turning it into products such 
as road signs or animal bedding. Using woody biomass in these or other 
ways can have several beneficial side effects, including stimulating 
local economies and potentially facilitating fuel reduction efforts by 
creating a demand for thinned material. However, the cost of harvesting 
and transporting the material, combined with the relatively low value 
of the products produced, has meant that woody biomass has not been 
widely utilized. 

In this context, you asked us to determine (1) which federal agencies 
are involved in efforts to promote the use of woody biomass, and the 
actions they are undertaking; (2) how these federal agencies are 
coordinating their activities related to woody biomass; and (3) what 
these agencies see as the primary obstacles to increasing the use of 
woody biomass, and the extent to which they are addressing these 
obstacles. 

In conducting our review, we used a structured interview guide to 
collect information from headquarters and field officials from the 
Departments of Agriculture, Energy, and the Interior, and the 
Environmental Protection Agency. In total, we interviewed 44 officials 
using this guide. We also met with officials from nonfederal 
organizations, including state governments, Indian tribes, academia, 
environmental organizations, and others. We reviewed agency policies, 
regulations, strategic plans, and other documents; federal and 
nonfederal studies regarding technological, economic, and other issues 
related to woody biomass utilization; and pertinent laws and other 
documents. We also toured the Forest Service's Forest Products 
Laboratory in Madison, Wisconsin; a woody biomass-heated community 
center in Nederland, Colorado; and a wood-fired power plant in Burney, 
California. Appendix I provides further details on the scope and 
methodology of our review. We conducted our work between June 2004 and 
March 2005 in accordance with generally accepted government auditing 
standards. 

Results in Brief: 

Most woody biomass utilization activities within the federal government 
are being undertaken by USDA, the Department of Energy (DOE), and the 
Department of the Interior, and include awarding grants to businesses, 
schools, Indian tribes, and others; conducting research; and providing 
education and outreach. Some of these activities involve multiagency 
efforts--for example, the three departments signed an agreement in 2003 
to support the utilization of woody biomass, and USDA and DOE jointly 
award grants for biomass research and development. Each department also 
carries out its own activities. Most of USDA's woody biomass 
utilization activities are undertaken by the Forest Service and include 
grants for woody biomass utilization, research into wood products by 
the Forest Products Laboratory, and outreach and technical assistance 
conducted by agency field staff. Most of DOE's woody biomass 
utilization activities focus on research into the use of woody biomass 
for renewable energy. DOE also is engaged in programs that assist 
federal agencies and tribal governments in switching to renewable 
energy, including woody biomass. Interior's woody biomass efforts 
generally consist of education and outreach, as well as some grant 
programs; within Interior, BLM is expanding its efforts to conduct 
education and outreach and recently established a woody biomass 
utilization strategy that will provide a framework for future 
activities related to woody biomass. Other federal agencies, including 
the Environmental Protection Agency and the National Science 
Foundation, implement some activities indirectly related to woody 
biomass utilization. 

Federal agency efforts to coordinate their woody biomass utilization 
activities, both among and within agencies, occur through both formal 
and informal mechanisms. Although the departments have established the 
interagency Woody Biomass Utilization Group to coordinate their 
activities, most agency officials we spoke with emphasized informal 
communication--such as telephone discussions, e-mails, participation in 
conferences, and other means--rather than this group as the primary 
vehicle for interagency coordination. To coordinate activities within 
their agencies, both DOE and Interior have formal mechanisms--DOE 
coordinates its activities through its Office of Energy Efficiency and 
Renewable Energy, while both Interior and BLM have appointed officials 
to oversee, and have issued guidance on, their woody biomass 
activities. In contrast, while the Forest Service issued a woody 
biomass policy in January 2005, the agency has not assigned a specific 
individual or office with responsibility for implementing this policy. 
As a result, the agency risks diluting the impact of its activities 
because different units within the Forest Service may be emphasizing 
different priorities--and indeed, some officials we interviewed told us 
that the Forest Service's lack of a coordinated approach has resulted 
in poor coordination between headquarters and field units. Without 
assigning responsibility for overseeing the implementation of its new 
policy, the Forest Service cannot ensure that its multiple activities 
each contribute to its overall objectives. Therefore, to capitalize 
more fully on the Forest Service's potential to promote greater woody 
biomass utilization, we are recommending that the Secretary of 
Agriculture direct the Chief of the Forest Service to assign 
responsibility for overseeing and coordinating the agency's woody 
biomass utilization activities to a specific official or office within 
the agency. 

Agency officials cited two principal obstacles to increasing the use of 
woody biomass: the inherent difficulty in using woody biomass cost- 
effectively and the lack of a reliable supply of the material. Although 
agency activities are generally targeted toward these obstacles and 
others identified by agency officials, some officials told us that 
additional steps beyond the agencies' authority to implement are 
needed. Most importantly, officials with whom we spoke cited the 
relatively high costs of converting woody biomass into marketable 
products as a primary challenge to increasing the utilization of woody 
biomass--in other words, using woody biomass is often not cost- 
effective given the price that can be obtained for the products 
produced. For example, a Forest Service researcher estimated the cost 
of producing electricity from woody biomass at about 7.5 cents per 
kilowatt hour but noted that this electricity could be sold for only 
about 5.3 cents per kilowatt hour in the wholesale market. The costs 
cited most frequently were those for harvesting and transporting the 
material. Additional costs can be involved as well, such as exit fees 
charged by electrical utilities to customers seeking to disconnect from 
the electrical grid and rely on their own woody biomass-generated 
electricity. The other major obstacle agencies cited was the lack of a 
reliable long-term supply of woody biomass from federal lands, which 
inhibits potential investment in woody biomass utilization projects 
because investors are reluctant to commit to projects without 
assurances of a steady supply of raw material. The agency activities we 
identified are generally targeted at overcoming the obstacles 
identified--for example, working to reduce woody biomass processing 
costs by conducting research into less expensive ways to convert woody 
biomass into wood products or energy. 

Some agency officials believe that their agencies are limited in their 
ability to fully address these obstacles, and that additional steps 
beyond the agencies' authorities will be required to increase woody 
biomass utilization. Such steps include subsidies or tax credits to 
offset the costs involved in using woody biomass and federal or state 
policies requiring the use of renewable energy sources, including woody 
biomass, in generating electricity. Other officials disagreed with this 
view, stating that neither subsidies nor tax credits were appropriate 
mechanisms for promoting the use of woody biomass and that such 
incentives could have adverse, unintended consequences on the 
ecological health of the national forests. In responding to a draft of 
this report, USDA concurred with our findings and recommendation, while 
DOE officials stated that they had no comments. We requested, but did 
not receive, comments from Interior. USDA's comments appear in appendix 
II. 

Background: 

The Forest Service and Interior manage about 700 million acres of 
federal land between them, much of which is considered to be at high 
risk of fire. Federal researchers estimate that from 90 million to 200 
million acres of federal lands in the contiguous United States are at 
an elevated risk of fire because of abnormally dense accumulations of 
vegetation, and that these conditions also exist on many nonfederal 
lands.[Footnote 2] Addressing this fire risk has become a priority for 
the federal government, which in recent years has significantly 
increased funding for fuels reduction. Fuels reduction is generally 
done through prescribed burning, in which fires are deliberately lit in 
order to burn excess vegetation, and mechanical treatments, in which 
mechanical equipment is used to cut vegetation. Figure 1 shows before 
and after photos of a site that was thinned to reduce the risk of fire. 

Figure 1: Before and After Photos of Thinning Project, Lassen National 
Forest, California: 

[See PDF for image] 

[End of figure] 

Although prescribed burning is generally less expensive than mechanical 
treatment, prescribed fire may not always be the most appropriate 
method for accomplishing land management objectives--and in many 
locations it is not an option, either because of concerns about smoke 
pollution or because vegetation is so dense that agency officials fear 
that a prescribed fire could escape and burn out of control. In such 
situations, mechanical treatments are required, generating large 
amounts of wood--particularly small-diameter trees, limbs, brush, and 
other material that serve as fuel for wildland fires.[Footnote 3]

Woody biomass can be put to many uses. Small logs can be peeled and 
used as fence posts, or can be joined together with specialized 
hardware to construct pole-frame buildings. Trees also can be milled 
into structural lumber. Using computer-operated equipment, some mills 
can manufacture lumber from logs as small as 4 inches in diameter. 
Other wood products such as furniture, flooring, and paneling can be 
produced. Woody biomass also can be chipped for use in paper pulp 
production and other uses--for example, a New Mexico company combines 
juniper chips with plastic to create a composite material used to make 
road signs. 

Woody biomass also can be converted into other products, including 
liquid fuels such as ethanol and other products such as adhesives. 
Finally, woody biomass can be chipped or ground for energy production-
-for example, to fire power plants, or produce steam or hot water heat 
for manufacturing processes or buildings. Figure 2 shows a trailer full 
of wood chips being emptied into a container at a California power 
plant fueled by woody biomass; figure 3 shows chips ready to be fed 
into a boiler. 

Figure 2: Chip Truck Being Emptied, California Power Plant: 

[See PDF for image] 

[End of figure] 

Figure 3: Wood Chips Being Conveyed to a Boiler, California Power 
Plant: 

[See PDF for image] 

[End of figure] 

Citing biomass's potential to serve as a source of electricity, fuel, 
chemicals, and other materials, the President and the Congress have 
encouraged federal activities regarding biomass utilization--but until 
recently, woody biomass received relatively little emphasis. A list of 
major congressional direction follows: 

The Biomass Research and Development Act of 2000[Footnote 4]

* directed the Secretaries of Agriculture and Energy to coordinate 
their research and development efforts, leading to the production of 
biobased industrial products;[Footnote 5]

* created the interagency Biomass Research and Development Board, 
supported by a Biomass Research and Development Technical Advisory 
Committee;[Footnote 6]

* directed the Secretaries of Agriculture and Energy to implement a 
"Biomass Research and Development Initiative" under which the agencies 
would provide grants, contracts, and financial assistance for research 
on biobased industrial products; and: 

* authorized an appropriation of $49 million for each of fiscal years 
2000 through 2005 to carry out the act's provisions. 

The Farm Security and Rural Investment Act of 2002[Footnote 7]

* established a federal procurement preference for biobased products 
requiring federal agencies purchasing items costing more than $10,000 
to give preference to biobased products;[Footnote 8]

* directed the Secretary of Agriculture to award grants for developing 
and constructing biorefineries (equipment and processes that convert 
biomass into fuels and chemicals and that may produce electricity);

* directed the Secretary of Agriculture to provide grants, loans, and 
loan guarantees to farmers, ranchers, and rural small businesses to 
purchase renewable energy systems and make energy efficiency 
improvements, and to make available from the Commodity Credit 
Corporation $23 million for these activities for each of fiscal years 
2003 through 2007;[Footnote 9] and: 

* directed the Secretary of Agriculture to make available from the 
Commodity Credit Corporation $5 million in fiscal year 2002 and $14 
million for each of fiscal years 2003 through 2007 to carry out the 
provisions of the Biomass Research and Development Act of 2000, and 
extended through fiscal year 2007 the Biomass Research and Development 
Act's authorization of $49 million each fiscal year. 

The Healthy Forests Restoration Act of 2003[Footnote 10]

* authorized appropriations of $5 million for each of fiscal years 2004 
through 2008 for each of two grant programs--a Forest Service program 
focusing on community-based enterprises and small businesses using 
biomass, and a USDA program providing grants to offset the costs of 
purchasing biomass by facilities that use it for wood-based products or 
other commercial purposes; and: 

* increased the authorization contained in the Biomass Research and 
Development Act of 2000 from $49 million to $54 million for each of 
fiscal years 2002 through 2007. 

The American Jobs Creation Act of 2004 contained tax incentives 
promoting the use of woody biomass to generate electricity.[Footnote 11]

Utilization of woody biomass also is emphasized in the federal 
government's National Fire Plan, a strategy for planning and 
implementing agency activities related to wildland fire management. For 
example, a National Fire Plan strategy document cites biomass 
utilization as one of its guiding principles, recommending that the 
agencies "employ all appropriate means to stimulate industries that 
will utilize small-diameter, woody material resulting from hazardous 
fuel reduction activities."[Footnote 12] Federal agencies also are 
carrying out research concerning the utilization of small diameter wood 
products as part of the Healthy Forests Initiative, the 
administration's initiative for wildland fire prevention. 

Most Woody Biomass Utilization Activities Are Implemented by the 
Departments of Agriculture, Energy, and the Interior, and Include 
Grants, Research, and Education: 

Most of the federal government's woody biomass utilization efforts are 
being undertaken by USDA, DOE, and Interior. Some activities are 
performed jointly. For example, USDA, DOE, and Interior signed a 
Memorandum of Understanding to promote the utilization of woody 
biomass, and USDA and DOE conduct a joint biomass grant program. Each 
department also conducts its own woody biomass activities, which 
generally involve grants for small-scale woody biomass projects, 
research on woody biomass uses, and education, outreach, and technical 
assistance aimed at woody biomass users. 

Some Woody Biomass Activities Are Performed Jointly by Multiple 
Agencies: 

USDA, DOE and Interior have undertaken a number of joint efforts 
related to woody biomass. In June 2003, the three departments signed a 
Memorandum of Understanding on Policy Principles for Woody Biomass 
Utilization for Restoration and Fuel Treatments on Forests, Woodlands, 
and Rangelands. The purpose of the memorandum is "to demonstrate a 
commitment to develop and apply consistent and complementary policies 
and procedures across three federal departments to encourage 
utilization of woody biomass." The departments also sponsored a 3-day 
conference on woody biomass in January 2004. To discuss woody biomass 
developments and to coordinate their efforts, the departments 
established an interagency Woody Biomass Utilization Group, which meets 
quarterly. 

Another interdepartmental collaboration effort is the Joint Biomass 
Research and Development Initiative, a joint USDA and DOE grant program 
authorized under the Biomass Research and Development Act of 2000. The 
program provides funds for research on biobased products. In fiscal 
year 2004, the two departments awarded $25 million to 22 projects, and 
cost sharing by private sector partners raised the value of the 
projects to nearly $38 million. While the program generally promotes 
all forms of biomass rather than targeting woody biomass, in 2004 the 
grant solicitation included woody biomass as an area of emphasis and, 
according to a USDA official, 10 projects emphasizing or incorporating 
woody biomass were funded that year, for a total of about $7.7 million. 
For example, the Hayfork Biomass Utilization and Value Added Model for 
Rural Development project in California received about $503,000 to 
support the design and early implementation phases of a biomass 
utilization facility, including a log sort yard, small log processor, 
and wood-fired electrical generation plant. Another California project, 
the Small-Scale, Biomass-Fired Gas Turbine Plants Suitable for 
Distributed and Mobile Power Generation, received about $242,000 to 
evaluate the economic benefits of using forestry residues for 
generating power in small-scale power plants. USDA and DOE also have 
collaborated on an assessment of biomass availability, including woody 
biomass, and have prepared a report summarizing their 
findings.[Footnote 13]

In another interagency effort, BLM worked with DOE's National Renewable 
Energy Laboratory (NREL) to identify and evaluate renewable energy 
resources--including biomass--on public lands, resulting in a February 
2003 report titled "Assessing the Potential for Renewable Energy on 
Public Lands." More recently, USDA and Interior entered into a 
cooperative agreement with the National Association of Conservation 
Districts in 2004 to promote woody biomass utilization.[Footnote 14] 
Activities to be performed by the association under the agreement 
include organizing national and regional workshops on woody biomass 
utilization and developing outreach materials to stimulate investment 
in small wood industries and bioenergy. 

USDA, DOE, and Interior also participate in joint activities at the 
field level. NREL and the Forest Service have collaborated in 
developing and demonstrating small power generators that use woody 
biomass for fuel. These generators, known as BioMax units, are being 
demonstrated at several sites, including a high school in Walden, 
Colorado, and a furniture-making business at the Zuni Pueblo in New 
Mexico. Figure 4 shows the BioMax 15 power generator. 

Figure 4: The BioMax 15 Power Generator: 

[See PDF for image] 

[End of figure] 

The Forest Service also collaborates with Interior in awarding and 
funding grants under the Fuels Utilization and Marketing program, a 
jointly funded grant program targeting woody biomass utilization 
efforts in the Pacific Northwest. Another collaborative effort at the 
field level involves a Forest Service rural community assistance 
coordinator specialist in the Southwest Region and includes officials 
from BLM and the state of New Mexico, as well as environmental group 
and utility company representatives. In addition to studying woody 
biomass availability and conducting market assessments, this biomass 
working group is proposing policy changes favorable to woody biomass. 
It also has studied barriers to biomass use and provided input on 
project designs so that projects are less likely to be challenged. 

The agencies also are collaborating with state and local governments to 
promote the use of woody biomass. The Forest Service, NREL, and BLM 
entered into a Memorandum of Understanding with Jefferson County, 
Colorado, in 2004 to study the feasibility of developing an electricity 
generating facility using woody biomass from forest thinning projects 
intended to reduce the risk of wildland fire. In addition to the 
agencies and Jefferson County, the agreement included the Colorado 
State Forest Service and a local energy utility. In its January 2005 
feasibility study, the partnership reported that about 166,000 tons of 
biomass would be available each year from forest thinnings and new 
construction waste. With this development, the local energy utility 
announced that it would consider converting a boiler at one of its 
plants to burn biomass to generate steam heat for downtown Denver 
buildings. 

Another example of federal agencies working with local governments 
involves a power plant in Canon City, Colorado, that uses coal and wood 
chips to fire its boilers. The power plant announced in January 2005 
that it plans to sell renewable energy certificates to help recover 
costs associated with introducing the renewable fuel source.[Footnote 
15] The wood chips used in the power plant are produced by forest- 
thinning operations conducted by BLM, the Forest Service, and state and 
local governments, while the environmental and market analysis for the 
project was co-funded by DOE. 

Yet another example of local cooperation involves a January 2005 
"declaration of cooperation" signed in central Oregon by officials from 
the Forest Service, BLM, state and tribal government, the timber 
industry, and environmental groups. The groups have agreed to work 
together to stabilize the supply of woody biomass as a way of helping 
create a market for the material. 

USDA's Efforts Related to Woody Biomass Utilization Are Concentrated in 
the Forest Service, with Some Efforts Under Way in Other USDA Agencies: 

Most of USDA's woody biomass utilization activities are undertaken by 
the Forest Service, with other USDA services playing a smaller role. 
USDA's activities involve grants, research and development, and 
education, outreach, and technical assistance. 

Grants: 

USDA implements several grant programs related to woody biomass. The 
Forest Service provides grants through its Economic Action Programs 
(EAP), created to help rural communities and businesses dependent on 
natural resources become sustainable and self-sufficient. In 2003, 
according to Forest Service officials, the Forest Service funded 73 
projects related to woody biomass utilization; grants ranged from 
$5,000 to $225,000, for a total of about $3.5 million.[Footnote 16] A 
Forest Service official told us that similar levels of effort existed 
in 2001 and 2002, but that the level of effort in 2004 declined because 
of reduced funding levels. The Forest Service currently is preparing a 
report summarizing the activities carried out under EAP grants 
nationwide. 

Forest Service officials told us that EAP grant funds are distributed 
among Forest Service regional and national units, which in turn 
allocate the funds according to regional or national priorities, 
respectively. For example, the Northern and Intermountain Regions 
decided to use their regional EAP allocations not only to fund Economic 
Recovery--a Forest Service program providing financial and technical 
assistance to improve the economic, environmental, and social 
conditions of rural communities--but also to fund two regional woody 
biomass grant programs, one focusing on using small-diameter wood to 
create specialty products such as flooring, paneling, and wood-plastic 
composites and the other focusing on biomass utilization for energy 
production.[Footnote 17] This second program, known as the Fuels for 
Schools program, provides grant funds to help public schools retrofit 
their fuel and gas heating systems to woody biomass heating systems 
that reduce heating costs. The Darby School District in Montana, for 
example, provides heat to three schools with wood burning boilers; this 
conversion reduced its fuel bill by about 43 percent during the first 
year of operation. The project requires about 500 tons of woody biomass 
per year, the byproduct of about 50 acres' worth of fuel reduction 
treatments, according to project officials. As of December 2004, 
according to Forest Service officials, three Fuels for Schools projects 
(including the Darby School District) had been completed, and about 20 
schools had completed engineering analyses and were preparing to apply 
for grant funds. Figure 5 shows the automated wood chip conveyor 
installed to provide fuel to the boiler as part of the Darby School 
District project. 

Figure 5: Automated Wood Chip Conveyor, Darby School District Project, 
Darby, Montana: 

[See PDF for image] 

[End of figure] 

The Forest Service has created an additional grant program in response 
to a provision in the Consolidated Appropriations Act for Fiscal Year 
2005,[Footnote 18] authorizing up to $5 million for grants to create 
incentives for increased use of biomass from national forest lands. A 
congressional committee report accompanying the act directed the Forest 
Service "to develop this program with the clear intent to make grants 
that will result in increased commercial use of biomass products, and 
which will thereby result in reduced overall hazardous fuels program 
costs." Specific Forest Service goals for the grant program are to (1) 
help reduce management costs by increasing the value of biomass and 
other forest products generated by hazardous fuel treatments, (2) 
create incentives and reduce the business risk for increased use of 
biomass from national forest lands, and (3) institute projects that 
target and help remove economic and market barriers to using small- 
diameter trees and woody biomass. Grants will be awarded for up to 3 
years in amounts from $50,000 to $250,000, and will require a 20 
percent match on the part of grantees; applications are due May 16, 
2005, with awards to be announced by June 1, 2005. 

Two other USDA agencies---the Cooperative State Research, Education, 
and Extension Service (CSREES) and USDA Rural Development--maintain 
grant programs that potentially include woody biomass utilization 
activities.[Footnote 19] CSREES oversees the Biobased Products and 
Bioenergy Production Research grant program, under which a total of 
$5.4 million is available to support research into the use of 
agricultural materials--including woody biomass--for fuels or products. 
CSREES also provides grants to states for research under the McIntyre-
Stennis Act of 1962, which was enacted to promote forestry research by 
state colleges and universities. Projects can fall into one of eight 
areas listed in the act, one of which is the utilization of wood and 
other forest products. However, this grant program does not emphasize 
wood products over the other areas, and a CSREES official told us that 
most funded projects address issues other than woody biomass. 

USDA Rural Development oversees grant and loan programs targeting 
renewable energy, potentially providing support to woody biomass 
utilization activities. Within Rural Development, the Rural Business- 
Cooperative Service oversees the renewable energy grant program 
authorized by the Farm Security and Rural Investment Act of 2002, 
emphasizing renewable energy systems and energy efficiency among rural 
small businesses, farmers, and ranchers. In September 2004, $22.8 
million was awarded to a total of 167 recipients; however, most grants 
were directed toward projects using wind power or agricultural biomass 
rather than woody biomass. Also within Rural Development, the Rural 
Utilities Service maintains a loan program for renewable energy 
projects. A Rural Utilities Service official told us that none of the 
$119 million loaned under this program since fiscal year 2000 has gone 
toward woody biomass, although the program would welcome such projects. 

Research and Development: 

Forest Service researchers are conducting research into a variety of 
woody biomass issues. Researchers have conducted assessments of the 
woody biomass potentially available through land management projects-- 
for example, in 2003, Forest Service researchers prepared an assessment 
of the land suitable for mechanical treatment in the western states and 
the woody biomass that could potentially be produced.[Footnote 20] 
Researchers also have developed models of the costs and revenues 
associated with thinning projects, such as the Fuel Treatment 
Evaluator. In using this model, users can input the specific area to be 
treated (by state or county), the desired end condition of the area to 
be treated, and so forth. Users also can enter prices for forest 
products--sawtimber, small-diameter biomass, and the like. The tool 
then estimates the amount of material in each of various size classes 
that would have to be removed to achieve the desired end condition, the 
project cost, and the likely revenues from the project. Researchers 
also are studying the economics of woody biomass use in other ways; one 
researcher, for example, is beginning an assessment of the economic, 
environmental, and energy-related impacts of using woody biomass for 
power generation. 

The Forest Service also conducts extensive research into uses for woody 
biomass, primarily at its Forest Products Laboratory. The laboratory's 
strategic plan includes the goal of developing new and improved 
technologies to use low-value, underutilized forest resources, 
including thinnings and small-diameter timber, and the laboratory 
Director told us the laboratory has changed its research approach over 
the past several years to focus more on the issue of small-diameter 
trees. Woody biomass-related research at the laboratory includes 
research into a variety of potential uses for the material, including 
wood-plastic composites; structures made from small-diameter roundwood; 
improved paper pulping processes that can accommodate small- diameter 
trees; water filtration systems using woody biomass fibers; flooring, 
paneling, and laminated wood beams made from small-diameter trees; and 
others. For example, one scientist we met with told us that the 
laboratory is using woody biomass to make water filters that can remove 
heavy metals, oils, phosphates, and pesticides from water. The 
laboratory is currently testing the use of these filters to remove 
heavy metal contaminants from mining site runoff. Another scientist we 
met with described his efforts to develop techniques for using sound 
waves to test the strength of small-diameter timber in order to assess 
its suitability for particular applications. Still other officials are 
working on less expensive ways of converting woody biomass to liquid 
fuels; researchers at the laboratory told us they are working on new 
ways of separating wood into its constituent components--lignin, 
hemicellulose, and cellulose--in order to improve the conversion 
process. 

Education, Outreach, and Technical Assistance: 

The Forest Service conducts extensive education, outreach, and 
technical assistance activities through a variety of staff--small- 
diameter utilization specialists, rural development program managers, 
regional EAP coordinators, and others. Much of this activity is 
conducted by the Technology Marketing Unit (TMU) at the Forest Products 
Laboratory,[Footnote 21] which provides technical assistance and 
expertise in wood products utilization and marketing. TMU has produced 
an extensive array of publications conveying information about specific 
aspects of small-diameter wood utilization and marketing--for example, 
publications on biomass for small-scale heat and power, structural 
grading of logs from small-diameter trees, and the economic feasibility 
of making wood products from small-diameter trees--and issues a 
bimonthly newsletter titled Forest Products Conservation & Recycling 
Review. 

TMU staff also provide direct technical assistance to individuals or 
companies seeking information or assistance. One such user in New 
Mexico was interested in finding a use for local woody biomass. TMU 
staff worked with the individual to develop a wood-plastic composite 
using juniper fibers that could be made into road signs; the composite 
signs, unlike wooden signs, are not chewed on by animals--and are thus 
favored by the Forest Service because they do not have to be replaced 
as frequently. The individual now operates a 15-employee sign-making 
business utilizing low-value woody biomass. Figure 6 shows signs made 
from woody biomass mixed with plastic. 

Figure 6: Signs Produced from Woody Biomass Mixed with Plastic: 

[See PDF for image] 

[End of figure] 

Similarly, TMU has worked with businesses in Montana to find uses for 
roundwood, including roundwood buildings and bridges. Roundwood 
structures developed with TMU assistance include wood kiosks displayed 
at the 2002 Winter Olympics in Utah; a roundwood community pavilion in 
Westcliffe, Colorado; and the Darby Community Library in Darby, 
Montana. In addition, a 165-foot suspension bridge designed with TMU 
assistance and being built primarily with 6-inch diameter lodgepole 
pine is currently under construction in Lolo, Montana. Figure 7 shows a 
roundwood kiosk made from small-diameter wood; figure 8 shows the 
interior of the library in Darby, Montana, which was constructed from 
roundwood. 

Figure 7: Kiosk Built from Roundwood and Small-Diameter Wood: 

[See PDF for image] 

[End of figure] 

Figure 8: Interior of Darby Community Library Built from Roundwood, 
Darby, Montana: 

[See PDF for image] 

[End of figure] 

The Forest Service also has partnerships with state and regional 
entities that provide a link between scientific and institutional 
knowledge and local users. One such group, the Colorado Wood 
Utilization and Marketing Assistance Center, housed at Colorado State 
University, provides small grants in Colorado and assists communities 
in identifying technologies that will utilize forest thinnings to heat 
buildings and generate electricity. Another such partnership is through 
the Forest Service's Wood Education and Resource Center in West 
Virginia, which assists constituents in addressing economic, 
environmental, technological, and social challenges through training, 
technology transfer, and applied research. Yet another partnership with 
state and regional entities involves the Forest Service and the Greater 
Flagstaff Partnership in Arizona, an alliance of 27 environmental and 
governmental organizations that researches and demonstrates approaches 
to forest ecosystem restoration in the ponderosa pine forests 
surrounding Flagstaff, Arizona. 

Staff in Forest Service field offices also provide education, outreach, 
and technical assistance. Each region has an EAP coordinator, and 
coordinators we spoke with provided numerous examples of their 
involvement in woody biomass. For example, one EAP coordinator 
organized a "Sawmill Improvement Short Course" designed to provide 
information to small sawmill owners regarding how to better handle and 
use small-diameter material, how to find small-diameter markets, and so 
forth. EAP coordinators also have conducted demonstrations of equipment 
for handling woody biomass cost-effectively, including several 
demonstrations of a "slash bundler" that can bundle and compress woody 
biomass for more efficient transportation.[Footnote 22] Figure 9 shows 
the slash bundler in operation. 

Figure 9: Slash Bundler Processing Small-Diameter Trees: 

[See PDF for image] 

[End of figure] 

Other field staff also provide technical assistance; for example, the 
Fremont-Winema National Forest in Oregon employs a Forest Products and 
Economic Development Specialist, who told us he provides general 
information about new technologies and economic issues to entities 
looking to engage in woody biomass-related activities; provides 
assistance in assessing the woody biomass harvesting, processing, and 
utilization infrastructure; and works with potential grant applicants 
to help them develop appropriate projects with defined goals and 
outcomes, which are more likely to be funded. An EAP official told us 
that the assistance provided to small groups or businesses is critical 
to getting them established and making them competitive for other 
assistance, such as USDA Rural Development grants; the official stated 
that many small businesses lack the expertise to prepare a competitive 
business plan or to adequately estimate future costs and revenues. 

Until November 2004, the Forest Service employed a small-diameter 
utilization specialist who served as a national resource to provide 
education and technical assistance. This specialist told us he 
conducted frequent presentations to both agency and nonagency audiences 
on using woody biomass and worked as a liaison between parties 
interested in using woody biomass and agency officials or private 
companies that can assist them. He also maintained a small-diameter 
utilization Web site. However, in November 2004 he transferred out of 
the position, and the position has not yet been refilled. 

DOE Is Primarily Engaged in Biomass Research and Development 
Activities: 

Although DOE maintains some grant programs and provides technical 
assistance to assist federal, state, and tribal agencies in switching 
to renewable energy, most of its activities focus on research and 
development. Following a recent reorganization, most of DOE's woody 
biomass activities are overseen by its Office of the Biomass Program, 
although some activities also are conducted within the Federal Energy 
Management Program and the Tribal Energy Program. 

Grants: 

DOE maintains several grant programs that emphasize renewable energy, 
potentially including woody biomass. DOE's Golden Field Office in 
Colorado administers the National Biomass State and Regional 
Partnership, which provides grants for biomass-related activities 
through five regional partners: the Coalition of Northeastern Governors 
Policy Research Center, the Council of Great Lakes Governors, the 
Southern States Energy Board, the Western Governors' Association, and 
DOE's Western Regional Office. DOE provides funds to each regional 
partner; the partners, in turn, provide grants to states. Although the 
overall DOE partnership does not emphasize woody biomass over other 
types of biomass, the Western Governors' Association is directing its 
DOE funds toward projects involving woody biomass, according to an 
official with the association. 

Another DOE grant program that potentially involves woody biomass is 
the State Energy Program, which provides grants to states to design and 
carry out their own renewable energy and energy efficiency programs. 
States manage the funds and are required to match 20 percent of the DOE 
grants. In 2004, about $44 million was directed in grants to the 
states, and another $16 million was directed to special state projects. 
While the grant program does not emphasize woody biomass over other 
energy sources, woody biomass projects may be included among those 
funded, depending on state priorities. 

The Tribal Energy Program promotes tribal energy sufficiency, economic 
development, and employment on tribal lands through renewable energy 
and energy efficiency technologies. Over the past 2 years, DOE has 
funded a total of 45 tribal energy projects, for a total of $8.4 
million; the projects are primarily for energy and electricity, with 
some specifically targeting the utilization of woody biomass. A DOE- 
funded study involving the Yavapai-Apache Reservation in Arizona, for 
example, will examine the feasibility of a proposed power generation 
facility using woody biomass, while another study involving the Red 
Lake Band of the Chippewa Indians in Minnesota will examine the use of 
woody biomass for producing power, fuels, and products. 

Research and Development: 

DOE's woody biomass research and development activities are managed by 
its Office of the Biomass Program, which has overall responsibility for 
managing DOE's research activities relating to the use of biomass for 
fuels, chemicals, and power. Many woody biomass research and 
development activities within DOE are carried out by the National 
Bioenergy Center, a "virtual center" intended to unify DOE's efforts to 
advance technology for producing fuels, chemicals, materials, and power 
from biomass. These activities generally encompass research into the 
conversion of biomass, including woody biomass, to liquid fuels, power, 
chemicals, or heat. In addition, a new biomass laboratory--the Biomass 
Surface Characterization Laboratory--was dedicated at NREL in January 
2005. An NREL official told us that DOE does not have an effort 
specific to woody biomass, though its activities can be applied to the 
material. DOE also supports research into woody biomass through 
partnerships with industry and academia. Program management activities 
for these partnerships are conducted by DOE headquarters, and project 
management through DOE field offices. 

Education, Outreach, and Technical Assistance: 

In addition to its research activities, the National Bioenergy Center 
provides information and guidance to industry, stakeholder groups, and 
users through presentations and lectures, according to DOE officials. 
Information also is made available through the DOE Web site. DOE also 
provides outreach and technical assistance through its State and 
Regional Partnership, Federal Energy Management Program (FEMP), and 
Tribal Energy Program. FEMP provides assistance to federal agencies 
seeking to implement renewable energy and energy efficiency projects, 
including assistance in designing renewable energy systems and 
obtaining private-sector financing. Among these efforts is a program 
focused on using biomass and alternative methane fuels in energy 
projects at federal facilities, and although the program does not focus 
specifically on woody biomass, a FEMP official told us that military 
and civilian agencies (including the Forest Service) across the country 
are increasingly contemplating projects in which woody biomass would be 
used to heat and power federal installations. In addition to grants, 
the Tribal Energy Program also provides technical assistance to tribes, 
including strategic planning and energy options analysis. 

Interior's Woody Biomass Activities Include Education, Outreach, and 
Grant Programs: 

Interior's activities include limited grant programs and education and 
outreach; department agencies do not conduct research and development 
into woody biomass utilization issues. Interior also works with its 
land management agencies to develop policy and direction regarding 
woody biomass activities. Interior now requires that the agencies' land 
management service contracts include an option allowing contractors to 
remove woody biomass generated through the contracts where ecologically 
appropriate, and has directed the agencies to develop contract 
mechanisms to include biomass removal in timber sale contracts. 

Many of Interior's woody biomass activities are implemented by BLM, 
which recently established a woody biomass utilization strategy that 
will provide a framework for future agency activities and allow it to 
expand its biomass utilization efforts. The strategy, made final in 
July 2004, includes overall goals related to increasing the utilization 
of biomass from treatments on BLM lands, and individual action items 
within three substrategies: developing tools, building expertise within 
BLM and building networks with other agencies and organizations, and 
increasing the percentage of acres treated from which harvested biomass 
is subsequently used. Individual action items include developing 
contract specifications for appraising biomass and guidelines for 
estimating biomass volume; training BLM staff in the use of biomass 
guidance and tools; facilitating technology transfer with key partners 
such as governments, tribes, and contractors; and increasing funding 
available for biomass projects. BLM also is contemplating a small-scale 
preferred procurement initiative for woody biomass products, similar to 
the preferred procurement program for biobased products established in 
the Farm Security and Rural Investment Act of 2002. 

In addition to BLM, three other Interior agencies--the Bureau of Indian 
Affairs (BIA), the Fish and Wildlife Service (FWS), and National Park 
Service (NPS)--conduct activities related to woody biomass. An official 
from the U.S. Geological Survey told us that her agency does not 
conduct activities to promote woody biomass utilization. 

Grants: 

Interior generally does not have grant programs specifically targeted 
toward woody biomass. However, BIA has provided a limited number of 
grants to Indian tribes, including a 2004 grant to the Confederated 
Tribes of the Warm Springs Reservation in Oregon to conduct a 
feasibility study for updating and expanding a woody biomass-fueled 
power plant. 

Education, Outreach, and Technical Assistance: 

Interior agencies conduct education, outreach, and technical 
assistance, but not to the same degree as the Forest Service. The 
primary BLM official responsible for woody biomass activities told us 
that BLM does not have staff at field locations assigned to identify 
community resources and to build community capacity, as does the Forest 
Service. According to this official, BLM's community outreach is 
conducted primarily through its land use and management planning 
activities, which include interaction with environmentalists, community 
leaders, and others. This official said that BLM is making a concerted 
effort to promote woody biomass utilization, has hired new forest 
management staff, and is studying the possibility of engaging in 
outreach activities through proposed demonstration projects called 
"incubators," which would serve as examples of successful woody biomass 
utilization. Funding has not yet been appropriated for these projects, 
according to this official. Interior also will use the National 
Association of Conservation Districts, with whom it signed a 
cooperative agreement, to conduct outreach activities related to woody 
biomass. 

BIA provides technical assistance to tribes seeking to implement 
renewable energy projects; specifically, the agency works with tribes 
to determine appropriate management activities and offers technical 
assistance in marketing forest products. Tribal projects include a 
proposal by the Northern Cheyenne Tribe in Montana to use woody biomass 
to provide steam and electricity for a manufacturing plant and a study 
by the Confederated Tribes of the Warm Springs Reservation of the 
feasibility of producing energy from forest thinning projects. BIA also 
sponsored a renewable energy conference, including an emphasis on woody 
biomass, in September 2004. Interior's primary woody biomass official 
told us that tribal officials are very interested in biomass. 

Although FWS and NPS conduct relatively few woody biomass utilization 
activities, according to agency officials, in some cases the agencies 
will work to find a woody biomass user nearby if a market exists for 
the material. After a 2004 thinning project in Denali National Park, 
for example, NPS used some cut trees in cabin restoration projects and 
for firewood for backcountry cabins; however, the bulk of the biomass 
generated was provided to a nearby coal mine, which wanted material for 
use in a reclamation project at the mine site. NPS officials told us 
that their agency did not charge the mine for the material, but that 
the arrangement saved NPS several hundred thousand dollars in 
transportation and disposal fees because the material would otherwise 
have been sent to a landfill. The officials stated that finding a 
market for this material "represented a lot of time and effort on the 
part of local Park Service planners." Both FWS and NPS officials told 
us that the agencies' woody biomass activities are limited because the 
agencies produce only modest amounts of the material; most FWS and NPS 
fuel reduction activities use fire rather than mechanical thinning. 
Further, according to agency officials, in those instances where woody 
biomass is generated, the agencies often use the material for their own 
purposes--for example, using chipped biomass to stabilize soils during 
restoration projects. 

Several Other Federal Agencies Implement or Participate in Woody 
Biomass Activities: 

Aside from USDA, DOE, and Interior, several other federal agencies also 
are engaged in woody biomass activities through their advisory or 
research activities. The Environmental Protection Agency (EPA) provides 
technical assistance through its Combined Heat and Power Partnership to 
power plants that generate combined heat and power from various 
sources, including woody biomass and other sources of renewable energy. 
An EPA official told us that the partnership is fuel neutral, meaning 
that it does not promote the use of one fuel over another when 
producing combined heat and power. EPA also has a Green Power 
Partnership Program to assist federal agencies and companies in 
procuring power for their facilities from renewable sources. 

Three other agencies also have limited involvement in biomass 
activities through their membership on the Biomass Research and 
Development Board, created by the Biomass Research and Development Act 
of 2000. The board, which is intended to focus on all biomass issues, 
not solely woody biomass, is responsible for coordinating federal 
activities for the purpose of promoting the use of biobased industrial 
products. The board consists of membership from USDA, DOE, Interior, 
and EPA, as well as the National Science Foundation, the Office of the 
Federal Environmental Executive, and the Office of Science and 
Technology Policy (both within the Executive Office of the President). 
Officials we spoke with from the National Science Foundation, Office of 
Science and Technology Policy, and the Office of the Federal 
Environmental Executive told us that their involvement in issues 
specifically related to woody biomass is minimal. 

We also contacted officials from the Departments of Commerce and 
Transportation. Officials from both told us their departments do not 
conduct woody biomass utilization activities. 

Woody Biomass Coordination Efforts among and within Federal Agencies 
Include Both Formal and Informal Mechanisms, but Unlike DOE and 
Interior, the Forest Service Has Not Assigned Responsibility for 
Overseeing Woody Biomass Activities: 

Federal agency efforts to coordinate their woody biomass utilization 
activities, both among and within agencies, occurred through both 
formal and informal mechanisms. Formal coordination between agencies 
occurs through both the Woody Biomass Utilization Group and the Biomass 
Research and Development Board, although most agency officials we spoke 
with emphasized informal communication--through telephone discussions, 
e-mails, participation in conferences, and other means--rather than 
these groups as the primary vehicle for interagency coordination. To 
coordinate internal activities, both DOE and Interior have formal 
mechanisms--DOE coordinates its activities through the Office of Energy 
Efficiency and Renewable Energy (EERE), while both Interior and BLM 
have appointed officials to lead their woody biomass efforts; further, 
Interior's woody biomass policy and BLM's woody biomass strategy guide 
these organizations' efforts. In contrast, the Forest Service--the USDA 
agency with the most woody biomass activities--has not assigned 
responsibility for coordinating its woody biomass activities, 
potentially leading to fragmentation of effort and diluting the impact 
of these activities. 

Coordination among Agencies Includes Formal Groups, but Officials Often 
Cited Informal Coordination Efforts as More Common: 

Two groups serve as formal vehicles for coordinating federal agency 
activities related to woody biomass utilization. The Woody Biomass 
Utilization Group, open to all national, regional, and field-level 
staff across numerous agencies, is a multiagency group that meets 
quarterly on woody biomass utilization issues. According to the group's 
draft charter (which has not been made final), the group's objectives 
are to (1) implement the policy principles of the June 2003 Memorandum 
of Understanding between USDA, DOE, and Interior; (2) coordinate, plan, 
and encourage woody biomass utilization; (3) serve as technical and 
policy advisers on woody biomass utilization; and (4) function as an 
information clearing house to help identify relevant woody biomass 
utilization technologies, foster joint demonstrations and pilot 
projects, identify research and development needs, and highlight 
successful woody biomass projects. The draft charter calls for a chair 
position to be rotated on an annual basis, generally between USDA, DOE, 
and Interior. 

The other formal group is the Biomass Research and Development Board, 
which is responsible for coordinating federal activities to promote the 
use of biobased industrial products. The board consists of membership 
from USDA, DOE, and Interior, as well as EPA, the National Science 
Foundation, the Office of the Federal Environmental Executive, and 
Office of Science and Technology Policy, and is co-chaired by USDA' s 
Under Secretary for Natural Resources and Environment and DOE's 
Assistant Secretary for Energy Efficiency and Renewable Energy. The 
board is supported by the Biomass Research and Development Technical 
Advisory Committee, which includes representatives of nonfederal groups 
such as industry, academia, trade associations, and the like. 

When discussing coordination among agencies, however, agency officials 
more frequently cited using informal mechanisms for coordination than 
the formal groups described above. For example, two officials we spoke 
with in the Forest Service's Northwest Region told us that although 
they were aware of the interagency Woody Biomass Utilization Group, 
they were not aware of any of the group's activities--or even whether 
the group has a charter. Several officials told us that informal 
communication among networks of individuals was essential to 
coordination among agencies; one Forest Service field official told us 
that, in contrast to formal groups, the more common method for 
coordinating among agencies is frequent, informal communication through 
e-mail, telephone calls, and discussions at regional or local 
conferences or workshops. Another Forest Service field official 
emphasized that his informal network of officials--both within and 
outside the agency and with whom he converses by telephone and e-mail 
regularly--helps him keep abreast of woody biomass developments by 
providing reports, documents, and other information. Similarly, a 
headquarters official in another agency described a network of 
individuals--both within and outside of the agency--with whom he 
remains in frequent e-mail and telephone contact. These individuals 
exchange information regarding projects, policies, potential impacts of 
legislation, success stories, and the like. In each case, the officials 
stated that they relied much more upon informal means of coordination 
than on formal interagency groups. 

Officials also described other forms of coordination. Two officials 
described a regional grant application review team that included Forest 
Service, BLM, BIA, and FWS staff that jointly reviewed applications for 
fuels treatment grants. Although the main emphasis of the grants was 
not woody biomass, there was discussion within the review team about 
biomass issues that ensue from fuels treatment projects. Another 
program that involves interagency coordination is the joint review of 
applications by USDA and DOE for renewable energy projects authorized 
by the Biomass Research and Development Act of 2000. In addition, two 
officials told us that the Forest Service was trying to organize a 
multiagency team to collaborate on woody biomass efforts within the 
agency's Northwest Region. Other officials mentioned state-level 
interagency working groups focusing on fire and fuels reduction issues 
and consisting of representatives from the Forest Service, Interior 
agencies, and nonfederal entities. These groups are primarily concerned 
with fire suppression capacity, fuel reduction treatments, and 
community wildland fire planning efforts, not with woody biomass. 
However, according to these officials, the woody biomass issue is 
interwoven with these other issues and is often discussed. Further, the 
networks established by these interagency groups facilitate 
communication on a variety of issues, including woody biomass, among 
the states and agencies involved. 

While DOE and Interior Have Formal Mechanisms for Coordinating Internal 
Activities, the Forest Service Does Not: 

DOE's woody biomass utilization activities are coordinated through 
EERE. Within this office, the Office of the Biomass Program directs 
biomass research at DOE national laboratories and contract research 
organizations, while a small number of woody biomass activities are 
undertaken within two other programs, the Federal Energy Management 
Program and the Tribal Energy Program. 

Interior has appointed a single official to oversee its woody biomass 
activities and is operating under a woody biomass policy in the form of 
an April 2004 memorandum from the Assistant Secretary for Policy, 
Management and Budget. This memorandum directs all Interior bureaus and 
offices to implement the policy principles of the June 2003 Memorandum 
of Understanding between USDA, DOE, and Interior. According to the 
official responsible for overseeing Interior's woody biomass efforts, 
this memo serves as departmental policy until a departmental manual can 
be updated. Interior also has appointed a Renewable Energy Ombudsman to 
coordinate all of the department's renewable energy activities, 
including woody biomass. Similarly, BLM has appointed a single official 
to oversee woody biomass efforts, and, as noted, has developed a woody 
biomass utilization strategy to guide its activities, including overall 
goals related to increasing the utilization of biomass from treatments 
on BLM lands. 

In contrast, although the Forest Service developed a woody biomass 
policy in January 2005, unlike DOE and Interior, it has not assigned a 
specific individual or office with responsibility for overseeing its 
woody biomass activities. The agency does have an internal group--the 
Woody Biomass Utilization Team--that meets to discuss woody biomass 
issues, but this group does not have responsibility for implementing 
the policy. And according to some Forest Service officials we spoke 
with, agency woody biomass activities have been opportunistic, arising 
from local awareness of and interest in the issue rather than from a 
national strategy for approaching the issue. One Forest Service 
headquarters official told us that the agency's woody biomass 
activities have been "a grassroots effort on the part of those who have 
a real burning passion for improving utilization." However, according 
to this official, individuals who do not share that passion have not 
been involved in woody biomass because there has been no central 
requirement or strategy for addressing the woody biomass issue. Another 
headquarters official told us that the extent to which woody biomass 
has been addressed has depended on the knowledge, interest, and 
availability of the local forest staff and the presence of local 
markets for woody biomass. Several field officials we spoke with share 
this view; one field official told us that there is a great deal of 
interest in woody biomass technology on the part of field staff, but 
not much coordination and no formal strategy, while another noted that 
woody biomass activities are "largely dependent on local risk taking." 
Yet another field official told us that there is no coordinated 
approach within the Forest Service to woody biomass; instead, 
determining what activities to undertake is left up to the forests and 
ranger districts, and depends on local leadership. 

The Forest Service does have an individual, located within the agency's 
State and Private Forestry branch, who generally serves as the agency's 
primary point of contact for woody biomass utilization. However, two 
officials noted that this individual serves primarily as a consultant, 
with no influence over budgets or activities. They also stated that, 
because this official works within the State and Private Forestry 
branch, he has no influence over agency activities regarding public 
lands and no influence over the Forest Service's National Forest System 
or Research and Development branches, with their associated land bases 
or budgets. One headquarters official within the agency stated that 
without stronger central authority or a stronger woody biomass policy, 
the Forest Service will find it difficult to effect change because 
while the agency's primary woody biomass official can discuss 
technology, innovation, supply, and other issues, he lacks the 
authority to influence land management practices. 

Two officials attributed the Forest Service's lack of a coordinated 
woody biomass effort to the agency's decentralized culture, with 
autonomy at the ranger district, national forest, and regional level. 
One official told us that this culture serves the agency well for some 
purposes but works against the agency when it tries to promote an idea 
or issue--such as woody biomass utilization--that has not been widely 
emphasized. Another official noted that each region in the Forest 
Service has considerable autonomy in developing its own policies, 
setting its own priorities, and establishing its own procedures, and 
that, while there is often value in having ideas originate from the 
field, a more formalized structure is often more effective at 
accomplishing overall agency objectives. According to this official, 
the woody biomass issue has reached the stage where a formalized, 
coordinated national strategy is appropriate. 

One official told us that the Forest Service's emphasis on fuel 
reduction planning and implementation efforts under the National Fire 
Plan had focused the agency's attention away from woody biomass. The 10-
year comprehensive strategy for implementing the National Fire Plan 
contains four overall goals: (1) improving fire prevention and 
suppression, (2) reducing hazardous fuels, (3) restoring fire-adapted 
ecosystems, and (4) promoting community assistance, which includes 
woody biomass utilization. This official told us that the Forest 
Service's emphasis on goals 1 and 2 has reduced its ability to focus on 
the other goals, and "now that the biomass is starting to pile up," it 
is time for the Forest Service to begin focusing on woody biomass. The 
Western Governors' Association issued a report in November 2004 
concurring with this view, stating "Goal 4 must be given the same 
emphasis Goals 1 and 2 have received in order for its action items--and 
the 10-Year Strategy as a whole--to be accomplished."[Footnote 23]

Without an individual or office with responsibility for overseeing 
woody biomass activities within the agency, the Forest Service risks 
diluting the effects of its activities because individual units within 
the agency may undertake woody biomass activities that are not 
consistent with the activities of other units--or they may choose to 
undertake no woody biomass activities at all. Further, given the 
magnitude of the woody biomass issue and the finite funds available to 
the agency, it is important that the Forest Service ensure that 
activities on which it places a high priority are undertaken so that it 
can maximize its accomplishments within its budget. 

Most Officials Cited Economic Obstacles to Woody Biomass Utilization, 
and While Agencies Generally Targeted These Obstacles, Some Officials 
Believe Additional Steps beyond the Agencies' Authority Are Needed: 

Agency officials cited two principal obstacles to increasing the use of 
woody biomass: the difficulty in using woody biomass cost-effectively-
-particularly the obstacles posed by the high cost of harvesting and 
transporting woody biomass--and the lack of a reliable supply of the 
material. Agency activities--grants, education and outreach, and 
research and development--are generally targeted toward the obstacles 
identified by agency officials. Many officials, however, told us that 
their agencies are limited in their ability to fully address these 
obstacles and that additional steps--such as subsidies and tax credits-
-beyond the agencies' authority to implement are needed. But agency 
officials generally did not specify the level of subsidies or tax 
credits they believe would be necessary, and not all agree that such 
additional steps are appropriate. 

Most Officials Noted the Difficulty in Using Woody Biomass Cost- 
Effectively, and Many Also Cited the Lack of a Reliable Woody Biomass 
Supply: 

Most officials we spoke with cited the difficulty in using woody 
biomass cost-effectively--that is, in using the material to create 
products that generate more revenue than is required for their 
creation. Other obstacles cited include the lack of a reliable supply 
of woody biomass; internal agency barriers to effectively promoting 
woody biomass, including the lack of agency commitment to the issue; 
and the lack of a local infrastructure to harvest, transport, and 
process woody biomass. 

Most Officials Cited Economic Factors, Particularly the High Cost of 
Harvesting and Transporting Woody Biomass Relative to Its Value, as 
Primary Obstacles to Increasing Woody Biomass Utilization: 

The obstacle most commonly cited by officials we spoke with (30 of 44 
officials) is the difficulty of using woody biomass cost-effectively. 
Officials told us that the products that can be created from woody 
biomass--whether wood products, liquid fuels, or energy--often do not 
generate sufficient income to overcome the costs of acquiring and 
processing the raw material. For example, a Forest Service researcher 
in California estimated that the cost of generating electricity from 
woody biomass was about 7.5 cents per kilowatt hour, including costs to 
harvest, transport, and process the material, as well as operations, 
maintenance, and capital amortization costs. However, the same 
researcher noted that at the time of his study, the wholesale price 
paid for power in California was 5.3 cents per kilowatt hour--meaning 
that, without receiving additional income for their electricity, 
producers of woody biomass-generated electricity would lose about 2.2 
cents for each kilowatt hour generated if they sold their electricity 
on the wholesale power market.[Footnote 24]

One factor contributing to the difficulty in using woody biomass cost- 
effectively, according to 23 officials, is the cost incurred in 
harvesting and transporting woody biomass. For example, one Forest 
Service official pointed out that while a single 18-inch-diameter tree 
of a given height contains the same volume as 20 4-inch-diameter trees 
of the same height, it is much more expensive to harvest 20 trees than 
1. Two officials told us that when the end use for woody biomass calls 
for chipped or ground material--for example, for use in power plants-- 
it is often more efficient to chip the material in the forest and haul 
the chips to the plant rather than hauling the unprocessed woody 
biomass. However, these officials noted that the vehicles typically 
used to haul chips--known as chip vans--cannot navigate many forest 
roads, which were designed for logging trucks. Because hauling material 
in smaller vehicles is more costly, this adds to the difficulty in 
using the material cost-effectively. Officials pointed out that small 
installations located close to woody biomass sources will have lower 
transportation costs, enhancing their ability to use the material cost- 
effectively. Schools and other buildings located in communities near 
forests are thus particularly well-positioned for woody biomass use, 
according to officials--especially if these buildings are heated with 
natural gas or fuel oil, because once buildings convert their heating 
infrastructure to accept woody biomass, they can be heated at a lower 
cost by using woody biomass than by using natural gas or fuel oil. 
However, officials also noted that such installations consume 
relatively small amounts of woody biomass. 

Five officials primarily involved in research and development noted the 
costs involved in converting woody biomass to liquid fuels such as 
ethanol. For example, the chemical makeup of wood makes it more 
difficult and expensive to convert into ethanol than other substances 
such as corn, according to officials.[Footnote 25] Thus, although 
ethanol represents a potentially large opportunity for utilizing woody 
biomass (because of the demand for transportation fuels), the 
availability of cheaper raw materials such as corn presents an obstacle 
to its use. 

Other Obstacles Cited Include the Lack of a Reliable Supply of Woody 
Biomass from Federal Lands and Internal Barriers to Effective Promotion 
of Woody Biomass: 

Of the 44 officials we spoke with, 22 told us that even if cost- 
effective means of using woody biomass were found, the lack of a 
reliable supply of woody biomass from federal lands presents an 
obstacle because business owners or investors will not establish 
businesses without assurances of a dependable supply of material. 
Officials identified several factors contributing to the lack of a 
reliable supply, including the lack of widely available long-term 
contracts for forest products, environmental opposition to federal 
projects, and the shortage of agency staff to conduct activities. 
Regarding long-term contracts, projects that use stewardship 
contracting authority may include contracts of up to 10 years-- 
potentially stabilizing the long-term supply of woody biomass--whereas 
projects conducted outside of this authority must use contracts of a 
shorter duration.[Footnote 26] Agency officials cited one stewardship 
project--the White Mountain project in Arizona, which has a 10-year 
duration and is expected to treat 50,000 to 250,000 acres--as an 
example of the benefits of stewardship contracting in stabilizing 
supply. An official told us that two manufacturers are negotiating with 
the contractor to establish manufacturing plants using woody biomass 
removed as part of the project. According to this official, without the 
assurance of supply offered by a long-term contract, these 
manufacturers would not have shown interest. However, another official 
pointed out that Forest Service stewardship contracts must be approved 
at the regional level, making their use more cumbersome than other 
contract types. 

Adding further to the uncertainty of supply, 10 officials told us that 
environmental opposition poses an obstacle--for example, in the form of 
appeals and litigation that delay planned projects. Finally, according 
to five officials, staffing constraints make accomplishing projects in 
a timely manner difficult even without external opposition; two Forest 
Service officials told us that even if long-term contracts were 
available and environmental opposition were not a factor, the lack of 
staff still hampers the agency's ability to implement projects. 

Six officials cited internal agency barriers that hamper agency 
effectiveness in promoting woody biomass utilization. Prior to the 
Forest Service's January policy statement on woody biomass, one Forest 
Service official told us that the lack of a strong policy stating that 
using woody biomass is preferable to piling and burning it hampered the 
agency because no incentive existed for "field staff to think 
creatively about how to move [woody biomass] to potential users." This 
official told us that even if the Forest Service received no payment 
for the material, putting it to use was better than piling and burning 
it--which also brings no revenue--and this preference should be 
embedded in policy. Two Forest Service officials also noted that the 
agency's mechanisms for designing and implementing projects were still 
geared toward larger, merchantable timber to the detriment of woody 
biomass. One official stated that "the Forest Service needs to improve 
its capabilities to design treatments, contracts, and agreements that 
will encourage utilization of smaller diameter material," while another 
official echoed this view by stating that "timber operations [in 
contrast to woody biomass] account for the bulk of institutional 
knowledge about material removal." Finally, several officials stated 
that federal agencies have not been effective in communicating the 
potential benefits of fuel reduction. According to the officials, fuel 
reduction would reduce fire suppression and rehabilitation costs, avoid 
damage to watersheds, avoid smoke pollution, and the like. Officials 
told us that communicating these benefits could reduce opposition to 
fuel reduction projects, which was cited as a factor in the uncertainty 
of woody biomass supply. 

Other officials cited the lack of agency commitment to the issue. For 
example, a BIA official told us that BIA has not provided the resources 
and structure required for promoting and developing woody biomass 
utilization projects. Six officials told us that more funds should be 
devoted to researching new or less expensive ways to use woody biomass 
in order to overcome economic obstacles to its use. And two Forest 
Service officials cited that agency's lack of a woody biomass policy as 
an obstacle to effective agency promotion of woody biomass utilization. 

A variety of other obstacles were noted as well. One official told us 
that some large facilities such as prisons could use woody biomass to 
generate their own electricity for less than the cost of electricity 
sold by electrical utilities. However, such facilities generally would 
need to have electricity available from the grid in the event that 
their own generators were unavailable--and, according to this official, 
utilities can charge rates for this electricity (known as standby 
power) that are equal to the rates charged for electricity that is 
actually delivered. In other words, for every hour the utility is 
prepared to deliver electricity to the facility, the utility charges a 
fixed portion of the rate that would have been charged had the 
electricity actually been delivered--100 percent of the rate in some 
cases, according to this official. As a result, installations would pay 
not only the costs of generating their own electricity but also the 
standby power rates charged by the utility--costs that, when combined, 
may exceed the cost of simply purchasing electricity from the utility. 
Withdrawing from the electricity grid entirely can be problematic as 
well; this official stated that utilities can charge fees--known as 
exit fees--for doing so. 

Another obstacle cited by officials is the lack of a local 
infrastructure for harvesting, transporting, and processing woody 
biomass, including loggers, mills, and appropriate equipment for 
treating small-diameter material. Three Forest Service officials we 
spoke with told us that in some cases the decline in federal logging 
has left areas without any infrastructure at all, while in other cases 
the infrastructure that is left is equipped to handle large trees 
rather than woody biomass. According to officials, contractors need 
equipment designed for handling woody biomass rather than larger trees 
in order to cost-effectively harvest and transport the material. 
However, contractors may not have the capital to purchase this new 
equipment, and may be unable to obtain loans without assurances of a 
long-term supply of woody biomass. 

Agency Efforts Are Generally Targeted toward the Obstacles Identified, 
but Officials Cited the Need for Additional Actions Such As Subsidies 
and Tax Credits: 

The agency activities we identified were generally targeted toward the 
obstacles agency officials cited. Agencies provided grants, engaged in 
outreach, and conducted research aimed at overcoming economic obstacles 
to woody biomass use, and conducted activities to address other 
obstacles as well. However, several officials believe that additional 
steps beyond the agencies' authorities are needed to fully address the 
woody biomass issue. 

Agency Activities Are Generally Targeted at Overcoming the Challenges 
Identified: 

Agency activities related to woody biomass were generally aimed at 
overcoming the obstacles agency officials identified, including many 
aimed at overcoming economic obstacles. For example, staff at the 
Forest Service's TMU have worked with potential users of woody biomass 
to develop products whose value is sufficient to overcome the costs 
involved in harvesting and transporting the material; EAP coordinators 
have worked with potential woody biomass users to overcome economic 
obstacles; and Forest Products Laboratory researchers are working with 
NREL to increase the yield of ethanol from woody biomass, making wood- 
to-ethanol conversion more cost-effective. 

Some agency activities also are targeted at providing more certainty of 
supply. A Forest Service official in New Mexico has been meeting with 
environmental groups to try to obtain consensus on the need for forest- 
thinning activities. Obtaining consensus can reduce the likelihood of 
environmental opposition, making Forest Service projects easier to 
accomplish and allowing a steadier supply of biomass. Although not all 
groups will support the projects, according to this official, obtaining 
agreement from major groups can blunt opposition from other groups. 
Other officials are working on models to predict the amount of woody 
biomass potentially available, giving users a better sense of the 
supply of raw materials. 

Some Officials Stated That Additional Actions beyond the Agencies' 
Authorities, Such As Subsidies and Tax Credits, Are Needed to Stimulate 
the Market for Woody Biomass: 

Despite ongoing agency activities, 14 officials told us that additional 
steps--such as subsidies or tax credits--that are beyond the agencies' 
authorities are necessary to develop a market for woody biomass. 
According to several officials, the obstacles to using woody biomass 
cost-effectively are simply too great to overcome by using the tools-- 
grants, outreach and education, and so forth--at the agencies' 
disposal. One official stated that "in many areas the economic return 
from smaller-diameter trees is less than production costs. Without some 
form of market intervention, such as tax incentives or other forms of 
subsidy, there is little short-term opportunity to increase utilization 
of such material." Three officials stated that subsidies have the 
potential to reduce the per-acre cost of thinning, because if there is 
a market for woody biomass, contractors will be willing to harvest the 
material for a lower fee, knowing that they can recoup some of their 
costs by selling the material. According to these officials, subsidies 
thereby create an important benefit--reduced fire risk through 
hazardous fuels reduction--if they promote additional thinning 
activities by stimulating the woody biomass market. 

Officials told us that tax incentives, subsidies, and low-interest 
loans may serve to stimulate infrastructure for harvesting, processing, 
and transporting woody biomass, and that such assistance should target 
not only larger plants and facilities but smaller operators as well. 
Harvesters and loggers, for example, could use the assistance to 
purchase the expensive equipment and machinery required to treat woody 
biomass and thus help to build the required infrastructure. 

It is not only federal officials who hold this view. In testimony 
before the Congress, the owner of a sawmill that uses woody biomass to 
generate electricity for the mill stated that woody biomass-to-energy 
does not work as a stand-alone enterprise. According to this 
individual, "The cost structure associated with removing woody biomass 
from the forest, hauling the material to a facility and converting the 
fiber into a product suitable for electricity production is prohibitive 
without massive subsidization."

Others see a need for state requirements that utilities procure or 
generate a portion of their electricity by using renewable resources, 
known as renewable portfolio standards.[Footnote 27] Forest Service 
officials in the Southwest Region are encouraging states in the region 
to enact renewable portfolio standards that include a woody biomass 
component. These officials are urging states to go beyond simply 
requiring electricity from renewable resources and require, or provide 
favorable treatment of, electricity generated from woody biomass 
produced as part of forest restoration projects. The official primarily 
responsible for this effort stated that "using this biomass source will 
help lower costs and allow restoration activities to occur on many more 
thousands of acres than present budgets allow."

Agency officials generally did not specify the level of subsidies or 
tax credits they thought necessary, and not all officials believe that 
these additional steps are efficient or appropriate. One official told 
us that, although he supports these activities, the creation of tax 
incentives and subsidies would create enormous administrative and 
monitoring requirements. Another official stated that although federal 
policy changes such as increased subsidies could address obstacles to 
woody biomass utilization, he does not believe they should be made. 
Rather, he believes that research and development efforts, combined 
with market forces, will eventually result in "equilibrium"--in other 
words, in woody biomass utilization finding its appropriate level. If 
cost-effective uses of woody biomass can be found, its utilization will 
increase. Yet another official stated that while production tax credits 
or subsidies may be successful in getting businesses or industries 
started, he does not believe they are sustainable over the long term. 
In addition, he is reluctant to create credit-or subsidy-dependent 
businesses that would be at the mercy of the annual appropriations 
cycle. Instead, market-driven solutions are more appropriate--for 
example, providing information to exploit the existing market, or 
developing requirements or incentives (such as renewable portfolio 
standards) that create a market on their own. 

Further, not all agree with the assumption that the market for woody 
biomass should be expanded. One agency official told us he is concerned 
that developing a market for woody biomass may result in overuse of 
mechanical treatment (rather than prescribed burning) as the market 
begins to drive the preferred treatment. In other words, given a choice 
between mechanical thinning and prescribed burning, a forest manager 
might choose mechanical thinning not because it was the most 
appropriate tool for the project at hand but to satisfy the demand for 
woody biomass. This official stated that "if we do that, we are not 
being good stewards of the land."

Environmental group representatives also have urged caution in taking 
any steps that expand the market for woody biomass. Representatives of 
one national environmental group told us that relying on woody biomass 
as a renewable energy source will lead to overthinning, as demand for 
woody biomass exceeds the supply that is generated through responsible 
thinning. They also questioned the incentive to create or reconstruct 
roads in the forests to facilitate inexpensive transportation of woody 
biomass because they believe doing so introduces unwanted side effects-
-increased erosion and sedimentation, increased access to areas of the 
forest that previously had no roads, and increased maintenance and 
enforcement costs for the federal agencies. Finally, the 
representatives questioned the true energy gain of using woody biomass-
-that is, whether the energy involved in harvesting, transporting, and 
processing woody biomass exceeds the energy contained in the biomass-- 
stating that "it doesn't make economic sense to burn expensive gasoline 
to get cheap biomass." However, they stated that the benefits gained by 
using the biomass rather than piling it in landfills or leaving it in 
the forest where in some locations it would continue to pose a 
significant fire risk may justify any net energy loss. 

Conclusions: 

The amount of woody biomass resulting from increased thinning 
activities could be substantial, adding urgency to the search for ways 
to use the material cost-effectively rather than simply disposing of 
it. The use of woody biomass, however, will become commonplace only 
when users--whether small forest businesses or large utilities--can 
gain an economic advantage by putting it to use. Federal agencies are 
targeting their activities toward overcoming this and other obstacles-
-for example, by providing technical assistance and grant funds to 
businesses facing economic challenges in using woody biomass. But some 
agency officials believe that these efforts alone will not be 
sufficient to stimulate a market that can accommodate the vast 
quantities of material expected. 

While additional key steps may be necessary at the federal and state 
levels, we believe the agencies will continue to play an important role 
in stimulating woody biomass use. However, while both DOE and Interior 
have designated individuals or offices for coordinating woody biomass 
activities, no individual or office within the Forest Service has been 
similarly designated. Without an individual or office with 
responsibility for overseeing and coordinating woody biomass activities 
within the agency, the Forest Service can neither ensure its multiple 
activities contribute to the agency's overall objectives nor assess the 
effectiveness of individual activities. Further, by taking a piecemeal 
approach to the issue, the agency risks diluting the impact of its 
activities because different agency units may be emphasizing different 
priorities. Some local variation may be appropriate--to account for 
regional differences in infrastructure, for example, or in forest type. 
Nevertheless, a coordinated approach is essential if the Forest Service 
is to capitalize fully on its potential to increase woody biomass 
utilization. 

Recommendation for Executive Action: 

To improve the Forest Service's effectiveness in promoting woody 
biomass utilization, we recommend that the Secretary of Agriculture 
direct the Chief of the Forest Service to assign responsibility for 
overseeing and coordinating the agency's woody biomass utilization 
activities to a specific official or office within the agency. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to the Secretaries of Agriculture, 
Energy, and the Interior for review and comment. USDA concurred with 
our findings and recommendation, and the department's comment letter is 
presented in appendix II. DOE officials stated they had no comments on 
the report, while Interior did not provide comments. 

As agreed with your office, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies to the 
Secretary of Agriculture, Secretary of Energy, Secretary of the 
Interior, Chief of the Forest Service, Director of BLM, and other 
interested parties. We also will make copies available to others upon 
request. In addition, this report will be available at no charge on 
GAO's Web site at [Hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-3841. Key contributors to this report are 
listed in appendix III. 

Sincerely yours,

Signed by: 

Robin M. Nazzaro: 
Director, Natural Resources and Environment: 

[End of section]

Appendixes: 

Appendix I: Objectives, Scope, and Methodology: 

The objectives of our review were to determine (1) which federal 
agencies are involved in efforts to promote the use of woody biomass, 
and the actions they are undertaking; (2) how these federal agencies 
coordinate their activities related to woody biomass; and (3) what 
these agencies see as the primary obstacles to increasing the use of 
woody biomass and the extent to which they are addressing these 
obstacles. To get a better understanding of woody biomass issues, we 
initially met with officials at the Forest Service and Office of the 
Chief Economist within the Department of Agriculture (USDA), the 
Department of Energy's (DOE) Office of Energy Efficiency and Renewable 
Energy, the Department of the Interior, the Bureau of Indian Affairs, 
the Bureau of Land Management (BLM), the Fish and Wildlife Service, and 
the National Park Service. We also met with representatives from 
nonfederal organizations, including the Western Governors' Association, 
Colorado State University, the state of New Mexico, the state of 
California, the Santa Ana Pueblo, the Wilderness Society, the Nature 
Conservancy, Public Service Company of New Mexico, and others. We also 
visited the Forest Service's Forest Products Laboratory in Madison, 
Wisconsin; a woody biomass-heated community center in Nederland, 
Colorado; and a wood-fired power plant in Burney, California. 

We subsequently developed a structured interview guide to collect 
information on woody biomass utilization activities, coordination 
efforts, and challenges to utilizing woody biomass. Because the 
practical difficulties of developing and administering a structured 
interview guide may introduce errors--resulting from how a particular 
question is interpreted, for example, or from differences in the 
sources of information available to respondents in answering a 
question--we included steps in the development and administration of 
the structured interview guide for the purpose of minimizing such 
errors. We pretested the instrument at two locations by telephone and 
modified it to reflect questions and comments received during the 
pretests. 

To determine whom to interview, we began with agency headquarters 
officials who had been identified by the agencies as points of contact 
for woody biomass activities. As part of these interviews, we asked for 
the names of additional officials--regardless of location or agency 
affiliation--who could provide additional information on, or insights 
into, woody biomass issues. We continued this expert referral technique 
until the references we received became repetitive. In all, we used our 
structured interview guide to interview a nonprobability sample of 44 
officials in various agencies and geographic locations.[Footnote 28] 
Our sample included officials at various levels within the agencies, 
including agency headquarters; Forest Service regional, national 
forest, and ranger district offices; Forest Service research 
facilities, including regional research stations and the Forest 
Products Laboratory; a BLM district office; DOE national laboratories; 
and others. Our structured interviews were conducted with officials 
from the following departments and agencies: 

USDA: 

* Cooperative State Research, Education, and Extension Service. 

* Forest Service (including the National Forest System, Research and 
Development, and State and Private Forestry branches). 

* Natural Resources Conservation Service. 

DOE: 

* Golden Field Office. 

* National Energy Technology Laboratory. 

* National Renewable Energy Laboratory. 

* Office of Energy Efficiency and Renewable Energy (including the 
Federal Energy Management Program, the Office of the Biomass Program, 
the FreedomCAR and Vehicle Technologies Program, and the Tribal Energy 
Program). 

Interior: 

* Department of the Interior. 

* Bureau of Indian Affairs. 

* Bureau of Land Management. 

* Fish and Wildlife Service. 

* National Park Service. 

* U.S. Geological Survey. 

Other agencies: 

* Environmental Protection Agency. 

* National Science Foundation. 

* Office of Federal Environmental Executive, Executive Office of the 
President. 

* Office of Science and Technology Policy, Executive Office of the 
President. 

We also contacted officials from the Departments of Commerce and 
Transportation, who told us their departments have no activities 
related to woody biomass utilization. 

Federal Agency Woody Biomass Utilization Activities: 

To collect information on federal agency woody biomass utilization 
activities, we used our structured interview guide to ask officials to 
identify individuals or organizations responsible for biomass 
utilization activities within their agencies and to identify other 
federal agencies involved in such activities. We also asked them to 
provide information about the activities their agencies had under way 
as well as policies, strategic plans, and goals related to woody 
biomass. We also reviewed agency policies, strategic plans, and other 
documents; federal and nonfederal studies regarding technological, 
economic, and other issues related to woody biomass utilization; and 
pertinent laws and other documents. To corroborate the information we 
gathered through interviews, we compared interviewees' responses with 
other information we reviewed. Because the documentary evidence we 
reviewed generally agreed with the information provided by key agency 
officials involved in woody biomass efforts, we believe the data are 
sufficiently reliable to be used in providing descriptive information 
on federal agency woody biomass utilization activities. 

Federal Agency Coordination of Woody Biomass Activities: 

To determine how agencies coordinate their woody biomass activities, we 
asked officials to provide information on individuals or organizations 
responsible for coordinating activities within their agencies and those 
responsible for coordinating activities involving other agencies, as 
well as on the types of formal and informal activities they undertook. 
We also reviewed agency documentation regarding coordination issues, 
including draft and final coordinating team charters and notes from 
coordinating team meetings. We then compared the information provided 
by agency officials with this documentation. Because the documentary 
evidence we reviewed generally agreed with the information provided by 
key agency officials involved in woody biomass efforts, we believe the 
data are sufficiently reliable to be used in providing descriptive 
information on agency woody biomass coordination efforts. 

Obstacles to Increasing the Use of Woody Biomass: 

To obtain information on obstacles that federal agencies face in their 
efforts to increase the use of woody biomass, we asked agency officials 
to identify and provide their opinions on the major obstacles to 
increasing the use of woody biomass, describe agency efforts that 
target the obstacles they identified, and discuss additional steps they 
believe are necessary to address these obstacles. Because we asked only 
for opinions about obstacles to woody biomass utilization and 
additional steps needed to overcome them, we made no attempt to 
corroborate these responses. To corroborate responses regarding agency 
efforts to target the obstacles identified, we compared interviewees' 
responses with the documentary evidence we gathered regarding the 
agencies' woody biomass utilization activities. Because the documentary 
evidence we reviewed generally supported the information provided by 
interviewees, we believe the data are sufficiently reliable to be used 
in providing information about the extent to which the agencies are 
addressing these obstacles. 

We performed our work from June 2004 through March 2005 in accordance 
with generally accepted government auditing standards. 

[End of section]

Appendix II: Comments from the Department of Agriculture: 

DEPARTMENT OF AGRICULTURE: 
OFFICE OF THE SECRETARY: 
WASHINGTON, D.C. 20250: 

APR 12 2005: 

File Code: 1430: 

Ms. Robin M. Nazzaro:
Director, Natural Resources and Environment: 
U.S. Government Accountability Office:
441 G Street, N. W.: 
Washington, DC 20548: 

Dear Ms. Nazzaro: 

The Department of Agriculture has reviewed the GAO Report, GAO-05-373, 
"Natural Resources: Federal Agencies Are Engaged in Various Efforts to 
Promote the Utilization of Woody Biomass, but Significant Obstacles to 
its Use Remain." The report recognizes the Forest Service's progress 
toward addressing the woody biomass utilization issue and working with 
the departments of Interior and Energy from 2004 through 2005. The 
report also identifies the Agency's need to develop a stronger 
leadership role and strategic plan that defines management goals, 
obstacles, corrective actions, responsible parties, and target dates 
and resources. It also prioritizes improvement initiatives and provides 
additional woody biomass utilization details. The Forest Service 
concurs with the audit findings and recommendations. 

The Forest Service has created the Staff Directors Biomass Utilization 
Steering Committee in its Washington Office. The committee leads are 
Chuck Myers, Director, Forest Management, and Ed Gee, Forest 
Management. The woody biomass strategic/business plan is being 
prepared. 

If you have any technical questions regarding this audit, please 
contact Ed Gee, Forest Management, at (202) 205-1787. For general 
questions regarding the audit, please contact Sandy T. Coleman, Agency 
Audit Liaison, at (703) 605-4940. 

Sincerely,

Signed by: 

Mark Rey: 
Under Secretary: 
Natural Resources and Environment: 

[End of section]

Appendix III: GAO Contacts and Staff Acknowledgments: 

GAO Contacts: 

Robin M. Nazzaro, (202) 512-3841; 
David P. Bixler, (202) 512-7201: 

Staff Acknowledgments: 

In addition to those named above, James Espinoza, Steve Gaty, Richard 
Johnson, and Judy Pagano made key contributions to this report. 

(360489): 

FOOTNOTES

[1] Although biomass can be considered any sort of organic material-- 
including trees, grasses, agricultural crops, and animal wastes--the 
term woody biomass in this report refers to small-diameter trees and 
other traditionally noncommercial material cut as part of thinning, 
harvesting, or other activities on forests or rangelands. The term 
"woody" is used to distinguish this material from agricultural biomass 
such as corn stalks or sugar cane residue. 

[2] For more information about the risks and effects of wildland fire, 
see GAO, Wildland Fires: Forest Service and BLM Need Better Information 
and a Systematic Approach for Assessing the Risks of Environmental 
Effects, GAO-04-705 (Washington, D.C.: June 24, 2004). 

[3] Fuel reduction efforts are not the only source of this material. 
Woody biomass can result from a variety of activities related to 
improving or maintaining forest and rangeland health, as well as forest 
management activities such as timber harvests. Further, according to 
Forest Service officials and others, millions of acres of pine trees in 
the southeastern United States face a depressed market because of the 
closure of pulp mills. These trees thus constitute another potential 
source of woody biomass. 

[4] Pub. L. No. 106-224, Title III, 114 Stat. 428, as amended (2000). 

[5] The act defined biobased industrial products to include fuels, 
chemicals, building materials, electric power, or heat produced from 
biomass, but did not specify the type of biomass--agricultural, woody, 
or other--to be used. 

[6] These groups replaced interagency groups created by Executive Order 
13134, "Developing and Promoting Biobased Products and Bioenergy." See 
64 Fed. Reg. 44639 (Aug. 16, 1999). Executive Order 13134 directed the 
establishment of the Interagency Council on Biobased Products and 
Bioenergy, as well as an Advisory Committee on Biobased Products and 
Bioenergy, to provide information and advice for consideration by the 
council. 

[7] Pub. L. No. 107-171, Title IX, 116 Stat. 475 (2002). 

[8] Specifically, the statute requires the Secretary of Agriculture to 
develop a list of items that are or can be produced with biobased 
products and whose procurement by federal agencies will carry out the 
statute's objectives. Federal agencies then must generally give 
preference to such items composed of the highest percentage of biobased 
products practicable, consistent with maintaining a satisfactory level 
of competition. Procurement preference is to be given to biobased 
products for items costing more than $10,000 or "where the quantity of 
such items or of functionally equivalent items purchased or acquired in 
the course of the preceding fiscal year was $10,000 or more."

[9] The Commodity Credit Corporation is a government-owned corporation 
within USDA. 

[10] Pub. L. No. 108-148, Title II, 117 Stat. 1901 (2003). 

[11] Pub. L. No. 108-357, § 710, 118 Stat. 1552 (2004). 

[12] Departments of Agriculture and the Interior and the Western 
Governors' Association, A Collaborative Approach for Reducing Wildland 
Fire Risks to Communities and the Environment: A 10-Year Comprehensive 
Strategy (Washington, D.C.; August 2001). Note that the National Fire 
Plan is not a single document. Rather, it is composed of several 
strategic documents that set forth a priority to reduce wildland fire 
risks to communities. The various documents that make up the National 
Fire Plan include (1) a September 2000 report from the Secretaries of 
Agriculture and the Interior to the President in response to the 
wildland fires of 2000, (2) congressional direction accompanying 
substantial new appropriations in fiscal year 2001, and (3) several 
approved and draft strategies to implement all or parts of the plan. 

[13] Oak Ridge National Laboratory, Biomass as Feedstock for a 
Bioenergy and Bioproducts Industry: The Technical Feasibility of a 
Billion-Ton Annual Supply (Oak Ridge, Tennessee; April 2005). 

[14] The National Association of Conservation Districts is a nonprofit 
organization that represents the nation's 3,000 conservation districts-
-local units of government established under state law to carry out 
natural resource management programs at the local level. 

[15] Renewable energy certificates represent the environmental 
attributes of renewable energy generation and can be sold separately 
from the underlying commodity electricity. Because the certificates are 
sold separately from electricity, they can be purchased from locations 
anywhere, enabling organizations to purchase renewable energy even if 
their local utility or power marketer does not offer a renewable energy 
product. Customers do not need to switch from their current electricity 
supplier to purchase certificates, and they can buy certificates based 
on any fixed amount of electricity. 

[16] Forest Service officials noted that the data do not include grants 
made by the Forest Service's Southern Region or Northeast Area Office 
because these units did not provide information on their EAP grant 
programs. 

[17] The Northern and Intermountain Regions administer national forests 
and grasslands in all of Idaho, Montana, Nevada, North Dakota, and 
Utah, and in parts of South Dakota, Washington, and Wyoming. 

[18] Pub. L. No. 108-447. 

[19] CSREES's mission is to advance knowledge for agriculture, the 
environment, human health and well-being, and communities by supporting 
research, education, and extension programs. CSREES does not perform 
actual research, education, and extension, but rather helps fund it at 
the state and local level and provides program leadership in these 
areas. USDA Rural Development assists rural individuals, communities, 
and businesses in obtaining financial and technical assistance to 
address their needs. 

[20] USDA Forest Service, A Strategic Assessment of Forest Biomass and 
Fuel Reduction Treatments in Western States (April 2003). 

[21] Although TMU is located at the Forest Products Laboratory, it is 
funded by the Forest Service's State and Private Forestry branch--in 
contrast to other activities at the laboratory, which are funded by the 
Forest Service's Research and Development branch. 

[22] A Forest Service official told us that the slash bundler was the 
result of a research effort led by the Forest Service's Research and 
Development branch. 

[23] Western Governors' Association Forest Health Advisory Committee, 
Report to the Western Governors on the Implementation of the 10-Year 
Comprehensive Strategy (Denver, November 2004). 

[24] Officials pointed out that some power plants, particularly in 
California, are able to burn woody biomass cost-effectively. However, 
these officials stated that this is in part due to economic incentives 
offered by the state. 

[25] Officials told us that corn is higher in starches, which can be 
converted into sugar and then fermented into ethanol. In contrast, wood 
contains lower amounts of starch and also contains lignin, which cannot 
be converted into ethanol. 

[26] Stewardship contracting involves the use of any of several 
contracting authorities first authorized in 1998, including the ability 
to enter into contracts of up to 10 years in length. For a description 
of the agencies' use of stewardship contracting authority, see GAO, 
Federal Land Management: Additional Guidance on Community Involvement 
Could Enhance Effectiveness of Stewardship Contracting, GAO-04-652 
(Washington, D.C.: June 14, 2004). 

[27] According to the Database of State Incentives for Renewable 
Energy, a DOE-funded project, 19 states and the District of Columbia 
had renewable portfolio standards as of February 2005. 

[28] Results from nonprobability samples cannot be used to make 
inferences about a population, because in a nonprobability sample, some 
elements of the population being studied have no chance or an unknown 
chance of being selected as part of the sample. 

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