r *\ GEORGIA FOREST RESEARCH PAPER 67 January, 1987 V. \. Received MAY 30 1988 DOCUMENTS A SURVEY OF GEORGIA UGA L,BRARIES USERS OF WOOD FOR ENERGY By: Paul M. Butts, Robert L. Chaffin and Albert A. Montgomery V. *\ RESEARCH DIVISION GEORGIA FORESTRY COMMISSION About The Authors Paul M. Butts Utilization Forester Management Department Georgia Forestry Commission Robert L. Chaffin Professor College of Business Administration Georgia State University ' m^ Albert A. Montgomery, Ph. D. Associate Professor Department of Decision Sciences College of Business Administration Georgia State University *i ACKNOWLEDGMENTS The authors gratefully acknowledge the assistance of Mr. Tommy J. Loggins, Associate Chief of Forest Research, Georgia Forestry Commission and that of the many Commission staff members who did the field work and interviewing for this study. A SURVEY OF GEORGIA USERS OF WOOD FOR ENERGY By: Paul M. Butts, Robert L. Chaffin and Albert A. Montgomery ABSTRACT Georgia's forest products industries are energy intensive. Among 84 firms re- sponding to the 1984 survey, energy expenditures totaled $316,949,800. Average annual energy costs were $395,800 for lumber and wood products firms, $23,699,000. for pulp and paper mills, $2,198,600 for nonwood manufacturers, and $109,200 for government institutions with wood burning installations. The use of wood residues and chips for energy has been highly cost efficient. Firms, institutions, and households in Georgia spent an estimated $194.7 million on 10,116,385 tons of residues, chips, and roundwood for wood energy in 1984. The cost to generate equivalent energy using fuel oil in 1984 would have been $462.3 million. The resulting saving to Georgia users of wood energy was $267.6 million. Additionally, it is estimated that there was an economic benefit of more than $61 million to Georgia's economy due to the fact that virtually all wood for energy pup- poses is produced in the state as contrasted with alternative fuels, which are imported. The import of 13.8 million barrels of fuel oil would have been required to generate as much energy for Georgia as from burning wood in 1984. The survey of wood energy users disclosed that 64 lumber and wood products firms used wood to supply up to 100 percent of their total energy requirements. Pulp and paper mills used wood to supply from 5 to 30 percent of their energy needs. In addition wood has become an increasingly important source of energy among nonwood manufacturers and government institutions in Georgia. Planned expansion in wood energy systems by Georgia firms will increase wood energy demands by more than 227,000 tons annually. The 14 whole tree chipping operations interviewed by the survey produced 972,800 tons of whole tree fuel chips and 350,800 tons of pulp chips in 1984, allocated 55 percent to hardwood and 45 percent to softwood chips. Chipping operations occurred on 32,400 acres in 32 Georgia counties. Whole tree chipping is a forest management tool that significantly reduces site preparation costs, maximizes forest outputs, and upgrades low-value natural stands. Georgia's forest is a renewable resource that can fuel industrial energy requirements into the distant future. Introduction By far the largest user of wood for energy in Georgia is the forest products industry itself. In 1984 this industry utilized 5.4 million tons of wood fuel as well as an undetermined but large quantity of black pulping liquor. The annual fuel cost savings attributable to the substitution of wood residues and chips for conventional fuels by industry, government, and households exceeded $267 million, Table 1. In addition to the fuel savings, the substitution of wood energy by Georgia industry, government, and households resulted in an estimated $61.8 million of additional economic activity in Georgia. Wood fuel is a renewable, locally produced energy source as contrasted with conventional fuels which must be imported into the state. To produce as much energy as Georgia's wood energy, 13.8 million barrels of fuel oil would have had to have been imported in 1984. For every 2,000 tons of wood chips locally produced in supply of this energy substitution it is estimated that one job is directly or indirectly created in Georgia. Georgia's potential supply of wood for energy is abundant in relation to current and anticipated demand. The demand for wood energy constitutes no serious competition for the timber requirements of lumber mills, pulp and paper mills, and other forest products manufacturers. As the principal consumer of wood for fuel, the forest products industry obtains most of its wood energy from manufacturing residues, as contrasted with in-the-woods produced fuel chips. Moreover, present methods of harvesting timber and the prevalence of cull trees having no value except as fuel leaves ample wood waste for fuel chipping. Indeed, in-the-woods fuel chipping contributes to the long run productivity of the forest in that the reforestation of chipped-over land costs only one-fourth to one-third as much as conventionally harvested timberland. TABLE 1 Wood Energy Used by Georgia Industry, Government, and Households 1984 Wood Fuel Tons Cost Equivalent Fuel Oil Cost Savings Lumber and Wood Products Pulp, Paper, and Board Nonwood Industry Government Institutions Households 1,228,164 4,148,598 721,439 55,239 3,962,945 $15,966,132 45,634,578 7,214,390 662,868 125,229,062 $56,122,182 189,574,334 32,966,877 2,524,201 181,090,735 $40,156,050 143,939,756 25,752,487 1,861,333 55,861,673 Total 10,116,385 $194,707,030 $462,278,329 $267,571,299 Procedures To determine the characteristics of Georgia's users of wood for energy and of the in-the-woods chipping opera- tions the study attempted a survey of all firms and institu- tions known to be involved with wood energy, numbering more than one hundred in 1984. Sixty-four lumber and wood product firms, 13 pulp and paper mills, seven nonwood indus- try firms, 12 governmental institutions, and 14 chipping operators participated in the survey. With respect to the estimates of overall use of wood residues and chips for energy, estimates were made for firms not participating in the survey. Otherwise, data presented in this report are not necessarily additive since some questions did not apply to all firms. Energy Sources Findings The industries and institutions surveyed by the study relied upon a variety of energy sources other than wood, Table 2. Among firms utilizing wood energy in the lumber and wood products industry, electricity was the most frequently mentioned source other than wood, accounting for as much as 95 percent and as little as five percent of the total energy requirements of 71 firms. Natural gas and fuel oil were the next most frequently mentioned energy sources for lumber and wood products firms. Thirteen firms in the state's pulp and paper industry relied upon wood energy for as much as 30 percent of their total energy requirements. The black liquor produced in the pulp-making process was the most important energy source. Twelve firms produced energy from black liquor, which accounted for at least 26 percent and as much as 64 percent of their total energy requirements. For seven of the surveyed pulp mills, coal and coke was an important energy source. Among these firms, the use of coal and coke ranged from 18 percent to 40 percent of their total energy requirements. Natural gas was mentioned by 10 mills, with a range of from six percent to 29 percent of their total energy requirements. Fuel oil and purchased electricity are common energy sources, but they account for a relatively small share of the pulp and paper industry's total energy requirements. Among the nonwood manufacturing firms using wood for energy, wood accounted for at least 35 percent and for as much as 94 percent of their total energy requirements. Nat- ural gas and electricity were the most important alternative energy sources for these few nonwood industry firms. Several governmental institutions, e.g. prisons, schools, and hospitals, have recently added wood-burning equipment to supplement their more conventional energy sources. For these institutions, wood accounts for at least 18 percent and for as much as 90 percent of their total energy requirements. Six of these wood-using institutions reported the use of natural gas, with this source accounting for as little as 10 percent and for as much as 82 percent of their energy requirements. Six institutions mentioned electricity, with a range of from 15 to 71 percent of their total energy requirements, and four mentioned fuel oil, with a range of from eight to 32 percent of total energy requirements. Energy Expenditures Firms utilizing wood for energy are energy intensive. Energy expenditures by 57 lumber and wood products firms totaled $22.6 million in 1984 and averaged $395,775 per firm. Table 3. The 12 pulp and paper firms spent $284.4 million on energy and averaged $23.7 million per firm in 1984. The four nonwood firms in the survey utilizing wood energy spent a total of $8.8 million on energy from all sources, averaging $2.2 million per firm. Eleven governmental institutions using wood for energy in 1984 spent a total of $1.2 million for energy and had average energy costs of $109,182 per institution. The firm with the highest energy costs in 1984 was a pulp and paper mill which spent more for energy from all sources than the combined total of all lumber and wood products firms, nonwood industry firms, and governmental institutions in the survey. Tat>le 2 Energy Sources Used by F rms Utiliz ing Wood E nergy 1984 Percent of Total E nergy Requirements Firm Type and Sources Nu mber High Low Lumber and Wood Products: Electricity 71 95% 5% Coal and Coke 1 1 Fuel Oil 13 50 1 Natural Gas Liquid Propane Gas --25 74 1 Wood 64 100 1 Pulp and Paper Mills: Electricity Coal and Coke Fuel Oil Natural Gas Liquid Propane Gas Black Liquor Wood 13 8 1 7 40 18 12 13 1 10 29 6 2 1 i 12 64 26 13 30 5 NonWood Industry: Electricity Coal and Coke Fuel Oil ----4 56 5 Natural Gas 4 52 9 Liquid Propane Gas Wood 1 1 5 94 35 Governmental Institutions: Electricity Coal and Coke --6 71 15 Fuel Oil 4 32 8 Natural Gas Liquid Propane Gas --6 82 10 Wood 12 90 18 The demand for wood energy constitutes no serious competition for the timber requirements of lumber mills, pulp and paper mills, and other forest products manufacturers. Expenditures Total Energy Cost Average Cost Per Firm Range: High Low Number of Firms Table 3 Energy Expenditures by Firms Utilizing Wood Energy 1984 Lumber and Wood Products Pulp and Paper Mills Nonwood Industry $22,559,200 $284,395,100 $8,794,500 395,775 2,205,400 10,600 57 23,699,592 (withheld) 5,828,400 12 2,198,625 6,364,500 220,000 4 Government $1,201,000 109,182 785,800 10,700 11 Uses Of Wood Energy Georgia's wood-using firms and institutions use wood energy to generate steam, heat, and electricity, Table 4. In 1984, 71 lumber and wood products firms burned wood to generate these three energy applications, of which 26 generated steam only, 18 heat only, 26 steam and heat, and one steam and electricity. Of these firms using wood to fire their boilers, 31 reported having boilers capable of using alternative fuels. Natural gas as well as wood could fire the boilers of 16 firms. Coal could be used as a substitute for wood by seven lumber and wood products firms, fuel oil by four firms and fuel oil or natural gas by four firms. Of the 13 pulp and paper firms in the survey, one reported using wood to fire boilers to generate steam, one for heat, seven for steam and electricity, and four for steam, electricity, and heat. All 13 pulp and paper firms have boilers capable of using alternative fuels. Five firms reported a boiler capability of using either fuel oil, natural gas, or coal as a substitute for wood. The five nonwood industry firms in the survey all reported a boiler capability for alternative fuels to wood. However, only two of the 12 governmental institutions using wood to fire their boilers, mainly for the generation of heat, reported a capacity of using coal as a substitute for wood. Because of their substantial energy requirements forest products firms self-generate a significant proportion of their total energy requirements. Although virtually all firms in the survey purchase energy, most also rely upon wood residues or chips to generate their own energy, Table 5. Table 4 Firms Using Wood Energy to Generate Steam, Electricity, and Heat 1984 Lumber and Wood Products Pulp and Paper Mills Nonwood Industry Government Firms Using Wood To Generate- Steam 26 1 Heat 18 Steam and Heat 26 --1 11 1 Steam and Electric ity 1 7 Steam, Electricity, and Heat -- 4 Total 71 13 12 Boilers Capable of Using Alternative Fuels: Fuel Oil 4 Natural Gas 16 Coal 7 Fuel Oil and Natural Gas 4 2 Fuel Oil and Coal 3 Fuel Oil, Natural Gas, and Coal 5 Total 31 13 Table 5 Purchased and Self-Generated Energy by Georgici Firms Lumber and Wood Products Piilp and Paper Nonwood Industry Purchased: No of Firms Range: High Low 72 100% 14 70% 1 4 100% 6 Self-Generated from Wood: No. of Firms Range: High Low Self-Generated from Other fuels No. of Firms Range: High Low 67 100% 1 2 100% 1 14 68% 4 11 70% 26 4 94% 39 1 35% 35 Government 12 100% 11 10 89% 15 Delivered Prices The delivered price per ton for wood residues and chips reported by firms in the survey varied widely. Table 7. The delivered prices of residues used to produce energy by 55 lumber and wood products firms ranged from a low of $6.50 per ton to a high of $25.00 per ton. The range of reported prices for residues was much less for the pulp and paper industry, nonwood industry firms, and governmental insti- tutions, from a low of $8.04 per ton reported by one of the 12 pulp and paper mills to a high of $15.00 as reported by a pulp mill and one of the nonwood industry firms in the sur- vey. The average delivered prices per ton of residues reported for each class of wood energy user ranged from $9.63 per ton for the five nonwood industry firms to $12.87 per ton for the lumber and wood products firms. Wood chips were much less commonly used for energy than wood residues. Only five firms reported using wood chips for energy and only three of them reported a delivered price, the average of which was $13.33 per ton. In contrast, eight government respondents, a majority of the institutions using wood for energy, used wood chips rather than wood residues. The delivered prices reported by these institutions ranged from $10 to $20 a ton and averaged $15.62. Table 6 Residues and Chips Used for Wood Energy By Georgia Firms in 1984* Residues: No. of Firms Total Tons Average Lumber a nd Wood ProdiJCtS 87 1,249,164 14,358 Pulp and Paper Mills Nonwood Industry Government 12 3,811,269 317,606 7 721,439 103,063 4 46,563 11,641 Chips: No. of Firms Total Tons Average 1 4,000 4,000 4 337,329 84,332 1 1,500 1,500 8 8,676 1,085 includes estimated wood energy use of firms not reporting to survey. Price per Ton for Residues and Chips Used for Wood Energy by Georgia Firms and Institutions Lumber and Wood Pulp and Paper Nonwood Products Mills Industry Government Delivered Price per Ton: No. of Firms Range: High Low Wgtd. Average 55 $25.00 6.50 12.87 12 $15.00 8.04 11.16 5 $15.00 9.00 9.63 4 $12.53 10.00 12.14 Chips: No. of Firms 1 Range: High D Low D Wgtd. Average D 3 $15.00 12.75 13.33 1 8 D $20.00 D 10.00 D 15.62 (D) Data not reported. _ Residues Used The kind and form of wood used for energy production in the forest products industries was directly dependent upon the kind of wood being processed and the nature of the wood processing. By the same token, the kind and form of wood available to nonwood industry firms and governmental users is largely a by-product of wood processing, in their areas. Even so, except for governmental institutions, there does not appear to be a material difference between the kind and form of wood being used to produce energy and that which users would prefer, Table 8. Wood energy is considered to be a viable substitute for five conventional fuels: electricity, coal and coke, fuel oil, natural gas, and liquid propane gas (LPG). Among all four types of wood energy users, wood energy was considered to be most readily substituted for fuel oil and natural gas, Table 9. Among firms in the lumber and wood products indus- try, 58.1 percent and 73.0 percent, respectively, indicated that wood substitutes for fuel oil and natural gas. Similarly, high proportions of the respondents in the pulp and paper industry, nonwood industries, and government indicated wood is a feasible substitute for fuel oil and natural gas. Wood energy users were queried further as to the percent of energy requirements now provided by conventional fuels that could be supplied by wood. With appropriate systems investment, wood energy was considered to be a feasible alternative for as much as 100 percent of the energy present- ly being supplied by specific conventional sources , Table 10. This opinion was not unanimous, however, as indicated by the responses at the lower end of the range of energy requirements that could be supplied by wood. "able 8 jnd of Wood Used and Preferred for Wood Energy (Number of F irms) 1984 Lumber and Wood Products Pulp and Paper Mills Nonwood Industry Government Used: Pine 25 Hardwood 17 Bark 10 Pine and Hardwood 9 Pine and Bark 8 Hardwood and Bark 4 Pine, Hdwd, and Bark 2 Total 75 Preferred: Pine 28 Hardwood 21 Bark 10 Pine and Hardwood 3 Pine and Bark 5 Hardwood and Bark Pine, Hdwd, and Bark --4 No Preference 4 Total 75 ---- --6 --1 2 --1 ----1 ------ --9 7 1 3 14 5 12 1 3 -- 1 --5 2 2 --------2 --7 4 3 --1 - 14 5 17* Table 9 Wood Energy as a Substitute for Conventional Fuels (Number and Percent of Responclents) 1984 Conventional Sources Lumber and Wood Products No. % Electricity 27 Coal and Coke 33 Fuel Oil 43 Natural Gas 54 LPG 32 None 7 36.5 44.6 58.1 73.0 43.2 9.5 Pulp and Paper Mills No. % Nonwood Industry No. % Government No. % 4 28.6 3 60.0 ,, __ 7 50.0 - -- 7 58.3 10 71.4 3 60.0 12 100.0 8 57.1 4 80.0 11 91.7 4 28.6 2 40.0 7 58.3 1 7.1 Fourteen total tree chipping operations produced over 970,000 tons of fuel chips. Table 10 Percent of Total Energy Requirements Pre sently Supplied by Conventional Fuels That Could be Suppliec by Wood 1984 Conventional Sources Number of Respondents Range of En ergy Requirements That Could Be Supplied by Wood High Low Lumber and Wood Products: Electricity Coal and Coke Fuel Oil Natural Gas LPG 23 100% 2% 12 100 100 18 100 5 27 100 20 13 100 40 Pulp and Paper Mills: Electricity Coal and Coke Fuel Oil Natural Gas LPG 3 100 2 3 100 5 7 100 10 5 90 5 -- -- -- Nonwood Industry: Electricity Coal and Coke Fuel Oil Natural Gas LPG 2 100 30 -- ... -- 3 100 95 4 95 60 1 100 -- Government: Electricity Coal and Coke Fuel Oil Natural Gas LPG 7 100 25 2 100 80 9 100 80 10 100 80 2 85 80 1 Table 1 Opinions Major Reasons for Converting Energy Requirements from Conventional Fuels to Wood Percent of Responses Ranking No. 1 and No. 2 Reason Lumber and Wood Products %1's %2's 1984 Pulp and Paper Mills %1's %2's Nonwood Industry Government %1's %2's %1's %2's Conventional fuels too expensive. 40.0 16.9 75.0 16.7 60.0 40.0 100.0 Wood supply was readily available at competitive cost 25.7 32.3 8.3 41.6 40.0 20.0 - 100.0 Cheaper to burn wood for fuel than to dispose of it 27.1 Investment in wood burning equipment pays for itself in a few years 4.3 32.3 12.3 - 16.7 25.0 40.0 Wanted to become energy independent 2.9 6.9 16.7 Total Responses : Percent 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Number 12 65 12 12 5 5 12 12 Table 12 Characteristics of F irms That Plan an Addit ional Investment in Wood Energy Systems or Equi pment 1984 Lumber and Wood Products Pulp and Paper Mills No nwood Industry Number of Firms 6 3 Tons of Wood Used per year Currently 53,750 1,123,697 -- After Expansion 75,250 1 ,328,697 ... Percent of Total Energy from Wood Currently: High 75% 29% ... Low 30 14 ... After Expansion: High 100% 41% ... Low 25 14 ... Expected Annual Rate of Return on Investment: High 100% 40% ... Low 10 22 Government 1 ... 540 ... ... 100% ... 25% Table 13 1984 Conditions Affecting Industry's Future Demand for Wood Energy Conditions Number of Times Mentioned by: Lumber and Wood Products Pulp and Paper Mills Nonwood Industry Government Fuel and power prices 40 Boiler efficiency 3 Wood supply reliability 3 Awareness of saving 3 Improved harvesting and transportation 1 Environmental restrictions on use of coal 3 8 1 1 Table 14 Sources of Siupply for Wood Used as Energy 1984 Source-- Lumber and Wood Products No. Pet. Pulp and Paper Mills No. Pet. Nonwood Industry No. Pet. 4 1 2 3 1,2 1,3 2,4 3,4 4,5 1,2,3,4 Total 49 77.8 3 4.8 2 3.2 ... ... 3 4.8 5 7.9 1 1.5 ... ... 63 100.0 1 7.7 ... ... 1 7.7 ... -- 7 53.8 ... 1 7.7 3 23.1 13 100.0 ... ... 3 60.0 ... 1 20.0 ... 1 20.0 ... ... ... 5 100.0 1/ Source 1. Independent contractors from private lands 2. Residues from other forest products manufacturers 3. Company lands 4. Wood residues from company mill operations 5. Company sawmill residues Government No. Pet. ... 3 27.2 4 36.4 ... 4 36.4 ... ... ... ... ... 11 100.0 Major Reasons for Converting to Wood Energy Each respondent was asked to rank in order of importance the major reasons that influenced their decision to convert a portion of their energy requirements from conventional sources to wood. The reason that conventional sources of fuel were becoming too expensive was ranked first by 40 percent of lumber and wood products firms, by 75 percent of firms in the pulp and paper industry, by 60 percent of nonwood industry firms, and by all of the government insti- tutions in the survey, Table 1 1 . The ready availability of wood for energy at a competitive cost was the second most significant reason for converting from conventional fuels to wood. Interestingly, a desire to be energy independent was not ranked as an important reason for converting to a wood burning system. Among lumber and wood products firms, the imperative of disposing of wood waste was a significant reason being ranked first by 27.1 percent of the firms and second in importance by 32.3 percent of the firms. Planned Investments in Wood Energy Systems Based upon a favorable experience from using wood energy, six lumber and wood products firms, three pulp and paper mills and one government institution indicated plans to make additional investments in wood energy systems or equipment, Table 12. These planned expansions would increase the demand for wood for energy by 227,040 tons annually. When completed, the percent of total energy requirements supplied by wood will rise from a present high of 75 percent to a high of 100 percent for a lumber and wood products firm and from a present high of 29 percent to a high of 41 percent fro a pulp and paper mill. The range of expected annual rates of return on the additional investment in wood energy systems and equipment extended from a low of 10 percent to a high of 100 percent. Future Demand for Wood Energy Based upon open-ended responses, a number of conditions were cited by respondents that will influence the future demand for wood as an energy source, Table 13. The price of alternative fuels and of electricity was the most frequently cited condition, exceeding by an overwhelming margin such concerns as boiler efficiency, reliability of wood supply, and improvements in the harvesting and transporting of wood. The marked decline in energy prices since the survey was taken should, therefore, inhibit industry's plans for future growth in the use of wood for energy. Supply of Chips and Residues Wood for energy is procured by industry from five sources: 1. Independent contractors from private land 2. Residues from other forest products manufacturers 3. Company lands 4. Residues from company mill operations 5. Company sawmill residues Wood residues from company mill operations was the only source of wood energy at 49 or 77.8 percent of 63 lumber and wood products firms in the survey, Table 14. Wood residues from their own mill operations and those from other forest product manufacturers are the principal sources for pulp and paper mills. Outside residues are typically obtained from manufacturing concerns that are operating units of the parent corporation of the pulp and paper mill. Wood chips originating from private lands and furnished by private contractors was a supplemental source used by only three lumber and wood products firms and no pulp and paper firms. One pulp and paper mill maintained whole tree chipping operations on its company land. Three of eleven governmental institutions 10 Visitors view a chip storage silo and other facilities of a wood energy system installed at a prison complex. reported they were solely dependent upon the supply of chips from independent contractors operating on private lands. Four other institutions used chips supplied by contractors in conjunctions with wood residues from forest products firms and four were solely dependent upon the latter source. Chip Production Fourteen whole tree chipping operations in Georgia were interviewed to determine the characteristics and experience of fuel chip producers. These firms produced a mix of wood outputs including pulp chips, pulpwood and sawlogs as well as fuel chips. In 1984 the 14 operations produced 972,807 tons of whole tree fuel chips and 350,750 tons of pulp chips, equivalent to 529,423 cords of wood. In addition to chips, these firms produced 9,595,000 board feet of sawlogs and 2,400 cords of pulpwood. The chip production of the 14 whole tree chipping operations interviewed can be allocated as 727,780 tons of hardwood chips and 595,777 tons of softwood chips. Timberlands owned by nonindustrial landowners were the origin of 822,633 tons of chips, while 500,924 tons originated from timberlands owned by forest industries. In producing these chip tonnages the chipping operations clearcut 25,276 acres and selectively cut 7,162 acres of timberland. Whole tree chipping operations reportedly paid as little as $0.40 and as much as $10.40 a ton for whole tree chipping stumpage. Whole tree chipping is a forest management tool that can upgrade low-value natural stands, maximize forest outputs, and significantly reduce site preparation costs. Since most whole tree chipping uses the clear cutting harvesting method, land can be planted readily at a much lower cost to the landowner than for land harvested by conventional methods, where it is necessary to site prepare the land. In-the-Woods Whole Tree Chip Production In 1984 chip using firms and institutions bought 832,717 tons of chips from the 14 in-the-woods chip producers in the survey, equal to 63 percent of chip sales. Chips produced under contract from forest industry and delivered to the company accounted for 490,840 tons or 37 percent of chip sales. The delivered prices for in-the-woods whole tree chips received by producers ranged between $16.80 and $24.00 per ton for pulp chips and between $10.00 and $23.00 per ton for wood energy chips. The price per ton for chips produced and delivered under contract from company lands ranged from a low of $10.00 to a high of $14.00 per ton. Counties in Which In-the-Woods Chips Were Produced and Sold Based upon data from responding operations, 779,596 tons of chips were produced in 32 Georgia counties. Table 15. Five counties producing more than 50,000 tons each accounted for almost half the chip production in 1984. These were Crawford, 100,000 tons; Bibb, 75,000 tons; Talbot, 65,000 tons; Richmond, 62,500 tons; Harris, 60,000 tons. Only two counties were reported as having in-the-woods chipping locations by more than one chipping operation. Sales of 489,476 tons of whole tree chips were concentrated in nine Georgia counties, Table 16. Recording sales of more than 50,000 tons each, Bibb, Chatham, Early, and Wayne counties represented more than 83 percent of sales by the whole tree chipping operations interviewed. The concentration of chip sales in a relatively few counties is explained by the location in these counties of major chip consuming industries and institutions. In 1984 three Georgia whole tree chipping operations produced 109,057 tons of chips in Alabama, Florida, and South Carolina for delivery to Georgia firms and institutions. Virtually all of the chips produced out-of-state for consumption in Georgia were used for wood energy. Converse- ly, of 135,475 tons of chips produced in Georgia for sale in Alabama and Florida only 4 percent were used in generating wood energy. Equipment Requirements for Chip Production The production capacities of individual chipping operations ranged from a low of 50 tons per day to a high of 750 tons per day. The combined chipping capacity of the 14 firms interviewed was 4,454 tons per eight hour day. The chipping operations interviewed employed 150 workers. Chip output per worker varied between 10.0 and 50.0 tons per day. Operations with smaller daily chipping capacities tended to have a higher output per worker day. To produce 1,323,557 tons of chips in 1984, the 14 Georgia operations utilized the equipment listed in Table 17. The typical chipper used by a whole tree chipping operation had a 22 inch maximum log diameter size and produced 50,906 tons of chips in 1984. On average, each chipper was fed by one or two skidders and feller bunchers and required the transportation of 7 chip trailers. The investment in the chipper and supporting equipment ranges from about $500,000 to well over $1,000,000. An investment of this magnitude requires operation at near capacity levels and high quality management. Among the 14 firms interviewed, eight chipping operations shipped all production by their own chip trucks, while six operations shipped from 5 to 60 percent of their chip output by leased trucks. The maximum hauling distance for whole tree chips destined for fuel use ranged from a low of 20 miles to a high of 125 miles. The maximum distance reported for pulp chips was 90 miles. Expansion Plans The in-the-woods whole tree chipping operations interviewed expanded production from 1,265,159 tons in 1981 to 1,323,557 tons in 1984, a gain of 4.6 percent. Among eleven firms expanding production the increase in chipping capacity ranged from 5 percent to 100.0 percent. Three firms reported a decrease in production over the three year period. Number of Georgia Counties in Which Whole Tree Chips Were Produced 1984 Production (tons) Number of Counties Total Tons of Chips 50,000 and more 5 25,000 - 49,999 7 15,000-24,999 4 10,000- 14,999 6 5,000 - 9,999 4 Under 5,000 6 362,500 231 ,890 72,000 67,546 30,515 15,145 Total 32 779,596 Table 16 Number of Georgia Counties in Which Whole Tree Chips Were Sold Sales (tons) Number of Counties Total Tons of Chips 50,000 and more 4 25,000 - 49,999 1 15,000-24,999 1 10,000- 14,999 1 5,000- 9,999 Under 5,000 2 408,674 44,520 20,000 10,882 5,400 Total 9 489,476 Table 17 Number and Types of Equipment Used by Surveyed Ch ipping Operators Type Number Tons of Chips per Unit of Equipment Chipper 26 Feller Bunchers 34 Skidders 41 Truck Tractors 101 Chip Trailers 181 Maintenance Trucks 25 Pickup Trucks 37 Other Vehicles 10 50,906 38,928 32,282 13,105 7,154 52,942 35,772 132,356 11 Literature Cited Butts, Paul M., and Druid N. Preston, Whole Tree Chipping--A Forest Management Tool. Georgia Forestry Com- mission Research Paper 4, 1979. Chaff in, Robert L., and Albert A. Montgomery, The Energy Use of Wood in Georgia. Georgia Forestry Commis- sion Research Paper 45., 1983. Elrod, Robert H., Kamal M. El-Sheshai, and William M. Shaffer, Interindustry Study of Forestry Sectors for the Georgia Economy. Georgia Forest Research Council Report No. 31, 1972. Georgia Department of Industry and Trade, Georgia Manufacturing Directory, 1984-85. Georgia Forestry Commission, Wood Energy in Georgia: A Five Year Progress Report. Georgia Forestry Commission, Wood-Using Industries in Georgia, 1984. Morrow, James E. Wood-A Growing Home Energy Source in Georgia. Georgia Forestry Commission Research Paper 29, 1982. U. S. Bureau of the Census, Annual Survey of Manufacturers, Fuels, and Energy Consumed, 1979. (I 3 ElDfl 0M55M 222S GEORGIA FORESTRY, John W. Mixon, Director J. Fred Allen, Chief of Research ""3"h