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Harvesting System Advancements Dale Greene University of Georgia Southeastern Regional Landowner & Manager Meeting Valdosta, GA October 29, 2014

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Page 1: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Harvesting System Advancements

Dale Greene

University of Georgia

Southeastern Regional

Landowner & Manager Meeting

Valdosta, GA

October 29, 2014

Page 2: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Recent Challenges

Equipment

Fuel

Timber

People

Capacity

Costs

Page 3: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Equipment

Tier IV engines

Ultra Low Sulfur Diesel (15 ppm)

NOx and PM 2.5 reductions targeted

Higher costs

Larger engines

Primary equipment company R&D focus

Page 4: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Median Machine Age

0

2

4

6

8

10

FellerBuncher

Skidder Loader Trucks

Ag

e (

yrs.)

2007

2012

Source: UGA Georgia Logger Survey, 2012

Page 5: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Tons per $1000 Capital – GA

0

20

40

60

80

100

120

140

160

1992 1997 2002 2007 2012

Tons/$1000

Clearcut Thinning

Page 6: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Fuel – Diesel

Page 7: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Fuel – Natural Gas

About ½ the cost of diesel on energy basis.

Electric utilities, trucking firms, railroads, etc. are switching to gas.

Log trucks fit this concept.

Prices can spike in winter due to heating demands.

Enormous new domestic supplies of this fuel.

Page 8: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Fuel Options Compared

Source: DOE Alternative Fuels Data Center

Page 9: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Fuel – Natural Gas

US natural gas supplies are at record levels due to fracking in tight shale formations.

Many shale gas plays are just being developed.

Over-supply & low price of gas is slowing development.

Killing biomass energy opportunities.

Page 10: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Fuel Consumption

Fuel is ~20% of cut and load cost

Diesel range $1.50-$4.75 over past decade

2012 GA/SC logger survey:

21% track fuel use by machine

21% track fuel use by crew

19% do no tracking at all

Benchmarks lacking for comparison

Page 11: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Fuel Consumption Study

Page 12: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Objectives

long-term operational fuel consumption data

per operating hour

per ton produced

mechanized feller-buncher/grapple skidder

pine plantations (clearcut and thinning)

Southeastern coastal plain

Page 13: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Receiving Mill

Buys ~2 million tons annually of pine pulpwood in southeastern Georgia coastal plain

Provided funding for the project

Provided a list of wood suppliers

Suggested 12-15 suppliers as candidates

Received periodic reports showing fuel consumption statistics with no identities of crews or statistics by crew

Page 14: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

University of Georgia

Solicited the participation of each supplier

Provided forms, fuel meters, on-site training

Handled all data input and summary

Follow-up calls, email, site visits with suppliers

Periodic reports back to cooperators and funding company

Page 15: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Logging Contractor

Agreed to record & share:

Fuel consumption by machine

Hour meter reading at fill-up

Weekly production for the crew

Installed and maintained fuel meters

Mailed data to us on their schedule – monthly was most common

Received reports from UGA showing their fuel usage compared to others in the study

Fuel meters are theirs to keep

Page 16: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Sample Size by Machine Type

Fellers Skidders Loaders

Tons 136,017 160,873 164,972

Hours 5,880 6,599 6,640

Gallons 38,877 41,156 26,923

We often received gallons and hours without production reports.

Data received from 1Q2013 through 1Q2014. Study ends 6/30/14.

Page 17: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Fuel Use per Hour

6.46

5.05

3.65

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

Feller-Buncher Skidder Loader

Gallo

ns/

Ho

ur

CV = 20%

CV = 20%

CV = 24%

Page 18: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Fuel Use per Ton

0.15

0.14

0.09

0.00

0.05

0.10

0.15

0.20

0.25

Feller-Buncher Skidder Loader

Gallo

ns/

To

n

CV = 37%

CV = 27%

CV = 31%

Page 19: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Fuel Usage Conclusions

Fuel consumption to cut/skid/load wood averaged 0.38 gallons per ton.

These crews work flat (but often wet) ground harvesting pine plantations with a limited number of sorts.

These consumption rates likely set a floor rather than an average baseline.

Page 20: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Timber – Recession Impacts

Lumber demand off by 40-50% at one point

Sawtimber prices down 35%

Landowners sitting on thinned sawtimberstands waiting for higher prices…?

Pulpwood demand holding due to pulp and wood pellet markets and shortage of lumber chips

Age class distribution impacts and reduced planting – where will future pulpwood be?

Less final harvest = less replanting

Page 21: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

US South Total Annual Harvest

0

50

100

150

200

250

300

2006 2007 2008 2009 2010 2011 2012

To

tal

Harvest

(M

illion

To

ns)

Pine Sawtimber Pine CNS Pine Pulp Hdwd Sawtimber Hdwd Pulp

Source: UGA Wood Demand Report, 2013

Page 22: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Timber – Biomass Potential?

Liquid Fuels 30% of US energy use Still an infant technology

Wood Pellets Technology here today

Driven by EU subsidies

Pulpwood not forest residues Production up sharply

Electricity Generation 40% of US energy use Technology here today Natural gas has advantage

Chart source: Forisk Consulting 2011, RISI 2013

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

350,000,000

400,000,000

Demand: Bioenergy total Demand: Industry

Non-traditional materials Growth

Page 23: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Biomass

Piled residues through grinders –ash content too high for pellets (>5%)

Chipped tops/slash without piling or WTC <2% ash

Residues rely on demand for other primary products

Roundwood (pulpwood) preferred due to control, cost, low ash, etc.

Page 24: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

0

200

400

600

800

1000

1200

1400

1600

1800

2000

100 - 249

50 - 99

20 - 49

10 - 19

5 - 9

1 - 4

AL/FL/GA Logging Businesses

Source: Bureau of Labor Statistics, 2012

No. of Employees

Page 25: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

AL/FL/GA Logging Workforce

Total employment in logging declined 31% since 2000

18% decline since start of recession

Greater decline in businesses than employees

0

2000

4000

6000

8000

10000

12000

14000

16000

2000Q

1

2001Q

1

2002Q

1

2003Q

1

2004Q

1

2005Q

1

2006Q

1

2007Q

1

2008Q

1

2009Q

1

2010Q

1

2011Q

1

2012Q

1

2013Q

1

Logging Employmentin AL, FL, and GA

Page 26: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Firms Shift to Higher Production

0%

20%

40%

60%

80%

100%

1987 1992 1997 2002 2007 2012

> 2500 T/wk

1000-2500 T/wk

< 1000 T/wk

Source: UGA Georgia Logger Survey, 2012

Page 27: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Total Volume Produced

51%

39%

10%

2011 Total Tons

> 2500 Tons 1000 - 2500 Tons

< 1000 Tons

50% of production by 20% of firms

Doubling of larger firms in last 10 years

Source: UGA Georgia Logger Survey, 2012

Page 28: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Production per Man-Hour

3.5

4

4.5

5

5.5

6

1992 1997 2002 2007 2012

To

ns p

er M

an

-ho

ur

Consistent improvement in production per employee

No significant changes in technology

Source: UGA Georgia Logger Survey, 2012

Page 29: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Owner Age – Georgia

0

5

10

15

20

25

25 30 35 40 45 50 55 60 65 70

Pe

rce

nt

Age

1992

1997

2002

2007

2012

Source: UGA Georgia Logger Survey, 2012

Page 30: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

AL/FL/GA Logging Capacity

0

20

40

60

80

100

120

140

2006 2007 2008 2009 2010 2011 2012 2013

Million

To

ns

Logging Capacity Actual Harvest

Page 31: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Southern Capacity Declines

Page 32: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

UGA Logging Cost Index

Page 33: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Southern Cut & Load Cost Components

35%

18%14%

22%

1%5%

5%

Labor

Depreciation

Repair and

MaintenanceFuel

Interest Expense

Administrative

Insurance

Range: $9 - $15 per ton

Page 34: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

UGA Logging Cost Index

Cut & load cost/ton

No hauling cost

Reported quarterly in Timber Mart-South

Replaces the index reported by Stuart on an annual basis

Re-validation underway in 2014

50

75

100

125

150

175

200

Stuart

UGA CostIndex

Page 35: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

The Future?

It is hard to make predictions, especially about the future – Yogi Berra

We have problems, but very few that stronger markets and higher prices would not solve.

Our logging contractors are becoming even more efficient to survive.

Given access to capital, harvesting capacity can rebound rather quickly.

Trucking can be made more efficient with scales, scheduling, and de-linking from logging.

Page 36: “Advances in harvesting systems that reduce harvesting cost, carbon footprint, and conserve site resources for the next rotation” Dale Greene, Warnell School of Forestry and Natural

Questions?

Thanks to Shawn Baker, Samantha Marchman, Cory Dukes, Jason Cutshall for their work shown here.