Wood companies face higher costs from EPA rules

New rules covering industrial boilers could cost Oregon manufacturers — mostly wood products companies — as much as $209 million in the near future.

The new Environmental Protection Agency regulations were supposed to be implemented May 20, but were delayed so the agency could continue collecting data through July 15.

However, a bipartisan group in Congress thinks the EPA needs more time to research the impact of additional rules before they go into effect.

The House Energy and Commerce Committee recently passed a pair of bills that will extend the time frame by 15 months. The legislation is scheduled to reach the House floor next week.

"We don't think they got it right," Rep. Greg Walden, R-Ore., said Wednesday after meeting with staff members at Boise Cascade's Medford plywood plant. "We want to make sure they understand how systems work in reality, not just in theory."

Walden, who represents Oregon's 2nd District, said during a press conference that the goal was for EPA to produce achievable results that weren't burdensome, as requested by President Obama in an executive order.

Boilers at plants across the country burn natural gas, fuel oil, coal, wood waste, refinery gas and other gases to produce steam, generating electricity or heat for factories and plants.

Walden said the EPA's new rule would affect 30 boilers in Oregon, 28 of which are in the forest products industry. The rules govern mercury, dioxin, particulate matter, hydrogen chloride and carbon monoxide emissions. Nationwide, the cost to rework the 1,602 boilers has been pegged at $14.3 billion, the congressman said.

Boise Cascade has three industrial biomass boilers that burn "hog fuel" or wood waste at its plant off North Pacific Highway. Walden said wood products companies were out front in using all their raw materials, rather than creating fodder for landfills.

He estimated the cost for reworking the boilers would be between $1 million and $1.5 million per unit.

Bruce Cartmel, the company's regional manager for Western Oregon, said actual costs will depend on what the final rules are and their interpretation.

Originally, companies were given until April 2014 to comply with the rules. But that could change depending on the outcome of the bill.

"We need to know the impacts of the modifications before we decide what we're going to do," Cartmel said. "In the worst case we might decide it's too much to spend and not do business anymore. I'm optimistic that won't be the case, but I can't say until we see the final rule that tells us what we need to do."

Boise Cascade spent $20 million on dryer improvements during the past two years, he said, demonstrating its long-term commitment to operating in Southern Oregon.

"I think there is a chance we can live through this," Cartmel said, "if Congress is more specific to the EPA about making regulations that don't overreach."

During the press conference, Walden also suggested that the federal government should follow Washington state's example in which 2.9 million acres of public land is managed as a trust for the state's schools. In 2005, the systems produced nearly $300 million in revenue.

He said the federal government owns 60 percent of the timberland in Oregon, but accounts for just 12 percent of the trees logged in the state.

Walden toured the CDS Publications center on South Pacific Highway earlier in the day and Erickson Air-Crane's production facility in Central Point in the afternoon.

Reach reporter Greg Stiles at 541-776-4463 or email business@mailtribune.com.

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