Grand Marais looks to harvest heat from an overcrowded forest

After the Ham Lake Fire torched more than 100 buildings along the Gunflint Trail in 2007, Cook County residents looked differently at the lush pine forest surrounding their homes. All those beautiful trees posed a very real wildfire hazard.

So homeowners began thinning thousands of trees, adopting a strategy known as "Firewise." They hauled the trees and brush to gravel pits on the Superior National Forest and burned them.

"It's just a lot of material going up in smoke," said Lutsen resident Paul Nelson as he gestured to a slash pile near Devil Track Lake outside town, easily 25 feet tall and over 100 feet across.

So Nelson and other members of the Cook County Local Energy Project hatched an idea. Why not harness that wasted energy, and use it to heat buildings in Grand Marais?

That question led to nearly four years of community discussion and detailed analysis of a plan to build a district biomass heating plant, which would burn locally harvested timber to heat water and pipe it underground to the city's 21 largest customers, including the hospital, schools, county courthouse and the city's largest private businesses.

It put the town of 1,400 at the leading edge of a growing interest in small-scale community power generation. Elsewhere, communities trying to take advantage of their resources are building solar operations, using methane from garbage and burning agricultural waste.

But, as Grand Marais is learning, making energy locally brings both benefits and costs.

Cook County commissioners set aside $355,000 from a 1 percent sales tax to fund feasibility studies for the Grand Marais idea. A $250,000 USDA grant is helping pay for a final engineering study and business plan due this fall.

"When you localize things, you end up localizing the good and the bad."

Backers see three big advantages.

Wood to fuel the new system would be harvested from an old, crowded forest, reducing fire risk and rejuvenating the forest. Because most of the county's heat is now generated from fuel oil and propane, fossil fuels would be displaced. And Grand Marais would increase its energy self-reliance by harvesting a local, sustainable resource and keeping energy dollars in the community.

"We have the opportunity to do something different," argued Grand Marais City Council member Tim Kennedy. Rather than sticking its head in the sand and doing the same thing year after year, Kennedy believes the county is on the cusp of making "some long-term, visionary decisions."

LACK OF NATURAL GAS SPURS INNOVATION

Biomass projects have lost steam elsewhere because of dirt-cheap natural gas prices, driven largely by hydraulic fracturing and other technologies that have drastically increased the domestic supply.

But there aren't any gas pipelines to Grand Marais and other far northern Minnesota towns like Ely. The rocky terrain and sparse customer base make the cost prohibitive.

"It's just a lot of material going up in smoke."

As a result, homes and businesses in Grand Marais heat largely with propane or fuel oil.

It can cost $1,000 in fuel oil to heat the Cook County Regional Hospital for a single cold winter day, said maintenance supervisor Rory Smith. One of the hospital's three boilers was installed 45 years ago and needs replacing.

Smith said the price of fuel oil is also extremely volatile and has risen 253 percent in the past 10 years, according to FVB Energy, which is conducting the engineering and economic analysis of the Grand Marais project.

With a central biomass plant, the hospital would need the boilers only for backup. And the costs would likely be much more predictable. But Administrator Kimber Wraalstad is waiting for more information.

"They haven't given me real pricing yet," she said. "I remain skeptical until I get on the bottom line here and they get me the real numbers."

Still, the hospital and the 20 other primary target customers have signed letters of intent to work with the new biomass project.

AIR EMISSION CONCERNS

Another concern community members have raised is potential air pollution. But Kennedy said that fear is based on history and old technology. In the 1970s the high school in Grand Marais installed a a wood chip burning plant that "spewed smoke all over the community," Kennedy said. "That was nothing more than a glorified barrel stove."

New technology burns much more of the biomass, leaving less to escape up the smokestack. Still, wood fuels do produce higher emissions of some pollutants, including particulates and carbon monoxide, than do more refined fuels like propane and fuel oil.

"Emissions associated with (fuel oil and propane) are largely left behind at the refinery," explained Kathryn Fernholz, executive director of Dovetail Partners, a Minneapolis based nonprofit that conducted the first major analysis of the proposed Grand Marais biomass project. "So by the time that fuel gets to Grand Marais, it's very clean."

The community is considering outfitting the biomass plant with pollution control equipment called an electrostatic precipitator to remove most of particulate matter. According to the Dovetail Partners analysis, that would reduce particulate emissions to 13 percent of uncontrolled emissions.

But even without those controls, the Grand Marais plant would not even need Minnesota air quality permits...it's simply too small.

OLD TREES FOR NEW ENERGY

Grand Marais is a town of vivid, sparkling blue and lush green, with the waters of Lake Superior on one side and a seemingly endless sea of spruce, aspen and birch on the other, stretching inland to the Boundary Waters and beyond.

Off a dirt road in the Superior National Forest, Nelson skidded his F-150 pickup to a stop to inspect a small logging site. This was where he envisions the wood to fuel a biomass plant will come from. Feasibility studies have demonstrated that the trees and brush cleared for fire protection would not be enough to fuel a central plant.

Logs were stacked neatly to the side. The outsides of the logs were green and healthy, but the centers were clearly rotten. "The mill wants the stuff that's solid all the way through," he said. "This other aspen that's all rotted out in the center they don't want, because it's not productive wood."

It turns out the forest surrounding Grand Marais is filled with thousands of acres of over-age aspen trees that Nelson argues could easily fuel a biomass plant. The U.S. Forest Service estimates there are 56,000 dry tons of sustainable biomass supply within 60 miles. The proposed district heating plant would use 2,700 dry tons a year.

"There's so much biomass out there in the forest," said Patty Johnson, fire management officer for the Superior National Forest. She hopes this project will lead the way for additional community-scaled projects across northern Minnesota. Those dense stands of old aspen are some of the most fire-prone parts of the forest, "but there's just not enough volume (of younger trees) for the loggers to be interested in those areas." A biomass plant, she said, "would give us another tool in our toolbox for treating those areas."

But it won't come cheap. The Grand Marais system is expected to cost about $9 million to build.

Kennedy, also a member of the Grand Marais Public Utilities Commission, said the city council passed a resolution in August to request bonding money from the state to build it. "If that would happen," he said, "it would put us in a pretty good position to secure the rest of the financing necessary to build and capitalize the facility."

A COMMUNITY CHOICE

In today's world where so much of what we buy--from food to clothing to iPads--is actually made thousands of miles away, Grand Marais is poised to move in the opposite direction, to generate the majority of the community's thermal energy needs just a few blocks from where it would be used.

What Grand Marais has had to wrestle with, said Fernholz, is that "when you localize things, you end up localizing the good and the bad." So with biomass, for example, there will be increased truck traffic to bring the timber to the plant. Some air pollution will be created where the wood is burned, rather than where the propane or fuel oil is refined.

But the benefits are also localized. "We can do it in a way that's good for the forest, for the local economy, in a way the air quality is preserved," argued George Wilkes, co-founder of the Cook County Local Energy Project. "It's going to happen sometime, we just have to keep working on finding the right way to do it."

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