The housing bust has been tough on Minnesota's logging industry.
So, with no big boom in construction on the horizon, one group has another idea for the beleaguered industry to add jobs and improve its fortunes: biofuel.
The BioBusiness Alliance of Minnesota says in a report that the logging industry should capitalize on opportunities to sell wood for energy production. That could add jobs, while also helping the state get more energy-efficient.
"There are quite a few loggers out of work," said Tim Welle, program manager at the BioBusiness Alliance of Minnesota. "We need to keep them working somehow so we can grow the industry in the future."
The alliance's report completes a one-year study involving more than 100 forestry industry experts on how to expand the sector. The report recommends the state provide tax incentives to invest in new equipment that efficiently uses wood for heat and power, while also doing more to recruit and support biofuel and biochemical facilities that could work with the logging industry.
The state's logging industry, which produces products from paper to lumber, generated $3.2 billion in economic activity and supported 44,000 jobs last year, according to the BioBusiness Alliance. The alliance estimates that the recommendations would directly produce 736 additional jobs.
But there are some challenges. The BioBusiness Alliance is encouraging the state to offer incentives to generate more demand, but some industry officials say it might take a while for wood-energy production to catch on.
Currently, about 10 percent of the 480 logging businesses of the Minnesota Logger Education Program participate in providing wood chips, pellets or other scraps for efficient energy production. To participate in this market, businesses often need to factor in whether it's worth paying hundreds of thousands of dollars for a chipper or grinder and how often they would use such equipment.
In some cases, Minnesota loggers use a chipper or grinder from another job to make it economically viable, said Wayne Brandt, executive vice president of trade associations Minnesota Forest Industries and Minnesota Timber Producers.
In addition, Brandt said there will need to be more biofuel and biochemistry facilities in the state. Brandt said the biofuel plants he is aware of in Minnesota are emerging and very small-scale.
"It does hold significant promise, but we're still a ways away from that," Brandt said.
Still, Arvin Vanderplas, owner of Preston Lumber Inc. in Preston, Minn., said he is generally supportive of exploring the biofuel and biochemistry markets. Vanderplas said sales have dropped significantly because of a slowdown in construction.
"We're working on a fourth of what we had before [in sales]," Vanderplas said.
Officials said the logging industry has gone through tough times. Since 2007, the state's consumption of wood for industrial processing has dropped 20 percent, and three of the state's five mills that produced one type of widely used boards have closed, the report said.
"We've seen logging businesses that have either had to reduce the number of crews or employees. A few logging businesses even had to make the decision to get out of the business altogether," said Dave Chura, executive director of the Minnesota Logger Education Program. "New markets that don't endanger existing markets ... would be welcomed."