Panel maker seeks relief on subsidy Government subsidy for use of woody biomass for energy conversion has raised concern from wood-using manufacturers who don't qualify for the subsidy. One of the loudest objections has come from Flakeboard, a Lincoln Parish, Louisiana plant which makes engineered wood panels from wood chips. According to an article published recently by The Ruston Daily Leader, Flakeboard mill manager Jay Fowler said, "It's not that we're asking for anything. We just don't want these incentives to end up driving us out of business. We're just looking for a level playing field." Flakeboard, a former Weyerhaeuser-owned facility located at Simsboro, in Lincoln Parish near Ruston, does not qualify for the $45 per ton subsidy, offered under the U.S. Department of Agriculture Biomass Crop Assistance Program (BCAP). As currently administered by USDA's Farm Service Agency, the Biomass Crop Assistance Program has what Flakeboard officials admit is the commendable goal of fostering diversification of America's fuel supply by subsidizing "renewable biomass" alternatives to traditional fossil fuel. Unfortunately for wood processing plants, BCAP's list of eligible materials for the subsidies includes residual wood already being utilized by companies like Flakeboard to create particleboard for higher value purposes in homes, furniture, cabinets, doors, flooring and other consumer and construction products. And worse, wood-product producing companies like Flakeboard are not defined by BCAP regulations as qualified biomass conversion facilities (BCFs), which will receive the subsidies under the plan. The goal of the BCAP plan is to reduce carbon in the atmosphere. The concept is reducing the amount of fossil fuels industries use by switching to biofuels, which would be derived from the same sources companies like Flakeboard use to create their particleboards--things like green wood chips, shavings and sawdust. The BCAP plan would subsidize those products so they could be diverted for use as bio-fuel, meaning it would be more profitable for logging companies and the like to sell that wood to a company making what BCAP regulations define as a bio-based product. That means a non-eligible company like Flakeboard could have to pay an additional $45 out of pocket for each ton of raw material, resulting in millions of dollars of increased annual cost for the Lincoln Parish plant alone. "There are a number of tax credits from being here (in Lincoln Parish) we've taken advantage of. We like being here. But the problem is that Federal legislation could hurt us--it could end up forcing us to close up shop in the long run if changes aren't made to that legislation." "We pump more than $60 million dollars into our local economy and our industry pumps $68 billion into the nation's economy every year," Perry said. "We employ 125 people at our plant and nationally our industry employs over 30,000 employees with another 350,000 jobs dependent on our product. There are about another 75 indirect jobs locally that would be affected, but it goes deeper than that. "What about the convenience store owner right outside our plant that our workers frequent and truckers stop and buy fuel from? What would happen to him and people like him if we close up shop? It would be a domino effect causing even more damage than it might look like at first glance." "If we end up having to pay the extra money for raw materials, our product could become so expensive to the manufacturers and end users of our product that the business could go to another country. "There is a big demand for the (particleboard) panels we make, so the path would take our customers to seek cheaper alternatives. That would mean overseas or across our borders, in which it would become only a matter of time before the industry left the United States." Perry, Fowler and other Flakeboard employees met recently with state Sen. Neil Riser, Murphy Chestnut of U.S. Sen. Rodney Alexander's staff and Louisiana Forestry Association President Buck Vandersteen to discuss the situation. "The way to fix the problem BCAP is simple," Perry said. "There are really two ways to do it: either change the list of raw materials eligible for a federal subsidy or change the regulations to make plants like ours eligible BCFs. |