March 9, 2012






Timber Biofuel snags chip deal despite eleventh-hour appeal
 by Edward French


       The ongoing saga of what company may ship wood chips through the Port of Eastport took more twists and turns at the 11th hour, as the port authority board seemed at first willing to dance with Great Northern Timber, based in Halifax, then dropped that partner in favor of a new suitor, Timber Biofuel Venture. At the expected blessing of the union by the port authority board, though, a representative of the jilted suitor made his own plea for a reconsideration of whom the partner should be.
     At the March 20 meeting of the board, Stephean Chute, who previously had represented Great Northern Timber and has now formed his own company, Ishofn Ltd., based in South Casco, outlined his concerns about a tentative agreement that the port director, Chris Gardner, had reached with Timber Biofuel Venture. Following an executive session, though, the board authorized Gardner to proceed with signing an agreement with Timber Biofuel, with some minor changes in the contract concerning insurance parameters and the addition of language to have the company consider working with other ventures if it does not have product of its own to ship through the port.
     Before the board entered executive session to discuss the contract, Chute told the board members that for Timber Biofuel to begin piling wood chips at the port by April 1 and start shipping within 60 days, as outlined in a previous report, would be "impossible." He related that, in order to ship biomass fuel chips to Europe, a phytosanitary certificate must be obtained from the U.S. Department of Agriculture 14 days prior to loading the chips. The only way to obtain that certificate is to have a certified heat-treating plant that eradicates the roundworms found in conifers. The plant would have to be able to treat the wood at a rate of 70 tons per hour for 60 days to prepare a cargo for certification. Such a plant would take 12 months to design and install and would cost over $10 million.
     "It is a regulatory impossibility to ship wood fiber to Europe without first developing a certified heat-treating plant," he stated in a letter to the board. He felt that signing a lease agreement with Timber Biofuel, which would take the port authority's chip yard out of the market, would tie up the new bulk conveyor system without any wood fiber being shipped and would result "in an unreasonable restraint on trade" and likely violate the port authority's charter and the regulatory basis upon which the funding for the new bulk conveyor system was provided.
     Chute offered a proposal to the board under which Ishofn would begin shipping wood chips to Turkey, which is not under European Union requirements, during the third or fourth quarter of this year. Then the company would ship wood fiber to industrial pellet mills in Scandinavian countries. Ishofn Ltd. would invest in a heat-treating plant at the port, and he noted that the costs would be recovered fairly quickly. He said Ishofn has capital partners ready to make that investment.
     Gardner says the board considered Chute's concerns, but he notes that any other company can also bridge the one-year period needed to build a heat plant by shipping to countries outside of Europe. He says the port authority was aware of the need for a heat-treating plant for longterm shipment to Europe, but he thinks the company will not have the plant at the port site. "Timber Biofuel doesn't want to let it [the wood chip yard] sit dormant while they're making lease payments" to the port authority, he points out. The bulk conveyor system is expected to be ready for use by April 1, and Gardner says that it only makes sense for the company to begin shipping product as soon as possible.
     The initial contract with Timber Biofuel will be for one year, with performance measures that would have to be met before the port authority would extend the contract term. The lease will be based more on monthly lease payments for the bulk storage yard than on the company meeting tonnage requirements. The agreement does not include a commitment for Timber Biofuel to ship a certain annual tonnage.
Gardner points out that the new bulk conveyor system "is a sought-after facility," with another proposal for its use, from Construction Management Institute of Belfast, also having been considered by the board at its March 20 meeting. He observes that there is currently no other location in Maine for shipping out wood chips, although Searsport is looking at installing a similar system.
     During the meeting, Stephen DeWitt, president of the North East Longshoremen's Association, raised concerns that the wood chip company would be bringing in its own labor force to work at the chip yard. Gardner noted that the port authority had tried to work out an arrangement with Federal Marine Terminals, which operates the port terminal, to also operate the chip yard, but an agreement could not be reached. He said, though, that the port authority would be encouraging the wood chip company to use local labor.

Other business
     In other business, Gardner noted that cow shipments will begin again in the coming weeks. He believes the shipments are shaping up to be as strong as last year, even though Sexing Technologies has been shipping recently out of Pennsylvania.
     The board voted to name its new tugboat the Mackintire, after a longtime tugboat captain for the port, the late Robert Mackintire of Pembroke. The port authority recently purchased the 80-foot tug, presently named the Marjorie J. Winslow, from David Winslow of Sheepscot Pilots Inc.
     Gardner noted that Ocean Renewable Power Company had received 200 yards of aggregate from the port authority's stockpile at the port in order to form a pad for its crane at Deep Cove.
     An issue with water leakage into the vault under the transformers at the new bulk conveyor project was discussed. The question of who should pay the possible $15,000 to $20,000 cost to repair the problem has not been resolved, but Gardner said it should not be the port authority.

March 23, 2011     (Home)     


www The Quoddy Tides article search