Looming ReEnergy closure will have a ripple effect — if it happens

May 25, 2023

Lewis County Reporter

LOWVILLE — Frustration. Outrage. Disbelief. Reluctant acceptance. Moving on.

Logger Gary Beller's emotions were transparent and evolving over a series of interviews since ReEnergy's January announcement that its Black River bioenergy plant serving Fort Drum would close this month, made shortly after the state Public Service Commission ended its session before discussing or answering the company's petition to continue state subsidies as compensation for the "environmental attributes" of the plant.

Mr. Beller has been working in forests for 44 years and providing wood chips for biomass, first to ReEnergy Lyonsdale from 2011 to its closure in 2017 due to a loss of a contract to sell renewable energy certificates to the New York State Energy and Research Development Authority (NYSERDA) and to the Black River plant since.

Gary T. Beller, owner and operator of Beller Logging, stands in front of the small staging area for the "cut-to-length" logging he did in the town of Rutland. With the closure of ReEnergy's bio mass plant on Fort Drum, he will be using this method of logging more frequently, leaving the tree tops in the forest where the trees are felled and the salable log lengths removed. Julie Abbass/Watertown Daily Times

He knew the plant closure would mean he would have to lay off a couple of his workers. He knew he would not be the only one to have to do that.

He knew his fuel supplier would take a financial hit because he would be buying thousands of gallons less diesel.

He knew that landowners would be doubly impacted by getting less money for their wood lots and having to pay to have the leftover tree tops and debris hauled away instead of getting paid for it if they want their forested areas "clean."

He knew it was another blow to the legacy industry that built the north country and that the ripple effects on other industries would be significant.

He was not, however, surprised that it happened.

On Jan. 3, Mr. Beller harnessed his frustration and traveled with a Franklin County logger, Lewis County Board Chairman Lawrence L. Dolhof and County Manager Ryan M. Piche to Albany to meet with "high ranking staffers" at the state Department of Public Service and make their case in support of ReEnergy's petition.

Lewis County logger Gary T. Beller leads the way through the forest he logged last year leaving the maple trees to thrive as requested by the landowner. Because the logging was done by dragging out the entire trees being culled so the tops could be chipped and supplied to ReEnergy's bio mass plant serving Fort Drum, the forest floor was left "clean" from debris, making tree tapping easier and gaving the landowner a better rate because of the money gained from chipping the tops. Julie Abbass/Watertown Daily Times

"That went nowhere," Mr. Beller said, but he was wrong.

On Friday afternoon, a NYSERDA spokesperson said via email that "the ReEnergy petition is currently under review by the Public Service Commission, including review of the public comments received."

"Included within the (Commission's) review of the petition will be whether or not providing any additional financial assistance to this facility is beneficial to ratepayers and in compliance with the Climate Leadership and Community Protection Act," the statement said, noting the definition of renewable energy in the Climate Leadership Act "excludes facilities like ReEnergy" and does not allow biofuels as an alternative option to meet electricity sector emission reduction demands.

According to Mr. Piche. the group emphasized three main reasons the company's request should be considered and accepted: The bioenergy plant makes Fort Drum the only energy-independent military installment in the country; forestry is important to north country economic development and has a continued role in meeting state Climate Leadership goals into the future like with carbon sequestration forestry; and even without the ReEnergy plant, the tree scraps and brush left behind by forest management will be burned in piles leaving the energy it produces on the forest floor.

For logger Joseph T. Lyndaker, owner and operator of Croghan-based JTL Forestry, that is almost the worst part.

JTL Forestry owner and operator Joseph T. Lyndaker waits for the truck hauling wood chips to ReEnergy Black River to return for its next load at a logging job site in Colton earlier this month. The chips are used for biofuel to supply electricity to Fort Drum. Julie Abbass/Watertown Daily Times

"To me, I’m so used to being able to utilize everything that we cut. When we go in — say we’re going after a tree that's 100 feet down in the woods but there's 10 little trees in the way. We cut them off, they get chipped, they go to the mill and they get turned into electricity. They get utilized," he said. "We go through now (after the closure,) we’re going to let it go to the ground and rot. I don't like the fact of wasting energy. There's energy in that wood."

Mr. Beller and Mr. Lyndaker agree that the biggest financial impact will not be on most established loggers, it will be on landowners.

"Usually the chips will give us enough money at the end of the week to fuel our operation. Once we take that out, we gotta take that cost off the logs or the pulp wood or whatever, so then that will affect the landowner at the end of the day more than anything. There's no way we can get around that cost. We’ve got to pull our cost out of the wood without the chips," said Mr. Lyndaker.

A tractor trailer full of wood chips bound for the ReEnergy biomass plant in Black River, which provides electricity to Fort Drum, leaves the logging staging site on private property in Colton. The trees were harvested by JTL Forestry earlier this month. Julie Abbass/Watertown Daily Times

Entrepreneurs who built their businesses around ReEnergy are also in danger of losing their livelihoods from loggers to truckers and even to tree farmers.

Marty T. Mason of Cape Vincent and his partner are growing willow trees on about 1,400 acres of property — some of it owned, some of it leased — in plots from Cape Vincent to Rome under a 14-year contract with Black River ReEnergy.

"So (the possibility of) this closure really hurts me and I’ve been following this closely," he said, which has meant reading through the legislation proposed in the state Senate and the Assembly that would make the "state's existing biomass facility... located within a military installation... by deeming such a facility a renewable energy system."

Although he is looking into other uses for willow trees, he has not given up hope.

"I personally feel that they’re not going to close. I’m very optimistic," he said, but he's also crossing his fingers for luck because he has a mountain of frozen chips that waiting to be taken to the plant later in the spring which will otherwise be allowed to break down into soil.

FINANCIAL LOSSES AND RIPPLE EFFECTS

While creating new soil from those wood chips may sound like a good idea, Mr. Mason and his partner will be losing money if cut off from the biomass market and they are not alone.

Mr. Beller grossed about $800,000 from the ReEnergy plant last year and Mr. Lyndaker, about $550,000 "on the low side."

The staging area where loggers load lengths of trees on a flat bed tractor trailer for transportation to a buyer is small with "cut-to-length" logging as can be seen with this patch of chips left behind after a job by Lewis County logger Gary T. Beller in the town of Rutland, but the specialized equipment is very expensive for this type of logging. With the closure of ReEnergy's bio mass plant for Fort Drum. Julie Abbass/Watertown Daily Times

Sean Sullivan, procurement manager for Black River ReEnergy, said the company spent $19.6 million with 298 vendors including loggers, drivers, fuel suppliers, parts, and contractors for cleaning and other plant upkeep, but that is just the beginning of the impact because for each of the 50 loggers supplying the 60-megawatt facility biomass wood chips, there are anywhere from two to 10 employees hired strictly for the chipping business, expensive equipment and a slew of service and goods suppliers of their own.

"You’re not going to see it right off but the ripple down effect of this plant closing is going to be quite large," Mr. Sullivan predicted.

Mr. Sullivan and the plant's 33 employees will feel those ripples, losing their jobs if the plant closes down.

Other ripples will be felt in more obscure places like a flooded chipper market that will prevent loggers from getting back some of their equipment investment and loggers and haulers having to go further away to find "good" lots without a lot of the trees only suitable for biomass and be competitive with each other more often to win the bids.

Even some municipalities around the north country, like Cape Vincent, will feel the effect.

Mr. Mason, who is also the village's Department of Public Works superintendent, said a Tupper Lake man who has made a business out of collecting the large amount of brush and limbs collected from residents, chipping it and selling it to ReEnergy has been saving the village about $20,000 in equipment and labor costs they would have had if their own staff had been tasked with chipping the whole lot and maple sugar bushes which loggers like Mr. Beller have been able to clear out of all "junk" tree species and shrubs to make running the sap tubing a more efficient process for farmers.

ANOTHER MARKET LOST

Since the widespread demise of the paper product industry in the late 1980s and early ‘90s, there are very few pulp markets in the north country and even fewer alternative uses for that quality of wood other than biomass.

Mr. Lyndaker emphasized that wood is a renewable resource that, if managed correctly, will always be there. Markets for wood products, however, are more endangered.

On March 7, Logger Joseph T. Lyndaker stands at a job site in Colton in front of a pile of logs slated for the chipper to create bio mass material to be trucked and sold to ReEnergy Black River which serves Fort Drum. Julie Abbass/Watertown Daily Times

"We’ll run out of mills before we’ll run out of wood. That's why it's important to keep every mill that we’ve got open," he said. "What I’m concerned about is if the firewood market and the pulp wood market fill up then we aren't going to be able to move our products and some of us aren't going to be able to stay in business. I don't think there's room for everyone."

ROOTS OF PLANT CLOSURE

Unlike in 2018, when the plant was at risk of closure because the Army considered ending the contract because it could buy energy at a better price from National Grid, ReEnergy has not lost its contract with the federal government to supply power for Fort Drum.

The company lost its designation as a renewable energy source in the updated 2019 list of those sources included in the Climate Leadership and Community Protection Act. That will cause the company to lose its subsidy opportunities from the state when its current contract expires.

Talk about the facility's closure that began last year culminated in the petition for a work-around for losing its designation.

The company has previously closed plants in Lyonsdale and two in Maine for similar reasons.

ReEnergy's Vice President of External Affairs Sarah Boggess confirmed that securing state subsidies in one form or another are part of the company's business model and crucial for the viability of the businesses.

ReEnergy sent an email to all of its chip suppliers last week confirming that March 31 would be the last day they will accept chips.

"Our team will then be working to lay up the plant so it is properly mothballed before it is turned over to the bondholders," Ms. Boggess said of the company's next steps, deflecting questions about ongoing negotiations and the possibility the closure plan will be abandoned.

Even with the financial harm the ReEnergy closure will cause some individual businesses, the age-old practice of logging will carry on no matter what happens.

The smallest remnants of culled trees at a privately owned forested property in Colton remain after the limb stripping machine owned by JTL Forestry, right, does its job. The remnants will be returned to the forest floor, according to business owner and operator Joseph T. Lyndaker. Julie Abbass/Watertown Daily Times

"The only thing the biomass plant is going to affect on our end is getting rid of the tops and wood that's no good for nothing else other than bio(fuel). It's just that simple. It will just be different, that's all," said Mr. Lyndaker, "Like somebody told me, ‘Some things come and after awhile, they go.’"

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