Look to Biomass Power and Thermal to Create U.S. Jobs

Although President Obama didn’t specifically mention biomass power and thermal in his speech Thursday evening, these industries have a lot to contribute toward job creation and retention.
By Rona Johnson | September 09, 2011

Although President Obama didn’t specifically mention biomass power and thermal in his speech Thursday evening, the industries can benefit from some of the proposals in his American Jobs Act, especially for businesses that that are just starting or expanding. But it is too bad he didn’t say anything specific about biomass and the potential it has for job creation.

For example, under the heading of new tax cuts to businesses to support hiring and investment, Obama has proposed to cut the payroll tax in half to 3.1 percent on the first $5 million in wages and temporarily eliminating employer payroll taxes on wages for new workers or raises for existing workers. The president also has proposed to extend 100 percent expensing into 2012, which would allow businesses to deduct investments in new plants and equipment. 

The president also mentioned trade agreements and making it easier for U.S. companies to sell their product overseas. This could benefit the growing U.S. pellet industry as most of the demand for this product is currently in Europe and Asia. As you may have noticed, this week’s newsletter is populated with several stories on export opportunities for wood pellets. That’s because Biomass Power & Thermal Associated Editor Lisa Gibson is attending the North American Biomass Pellet Export Conference in New Orleans. The conference wraps up today.

While the president has his work cut out for him trying to get his American Jobs Act passed, there are other pressing issues holding back the biomass industry on the state level that need attention.

Just this morning, I was reading a press release from N.Y State Sen. Patty Ritchie, who recently attended a hearing of the state legislature’s Commission on Rural Resources where they were talking about renewable energy and the fact that bureaucratic red tape is holding back the biomass industry.
“The commission was told we could create 140,000 new jobs by harnessing this emerging local energy resource,” Sen. Ritchie said. “But state laws that favor renewable energy sources like wind and solar are written to specifically exclude wood, grasses and other biomass sources.”

The biomass power and thermal industry not only provides opportunities to build new businesses, but it could also help restore employment in areas where the economic downturn, wholesale shifts in business practices and overseas competition are threatening to put people out of work.

I’m sure all of you saw the news that the largest maker of magazine paper in North America, NewPage Corp., filed for bankruptcy this week, and as of press time did not have a solid plan for how they are going to emerge from bankruptcy.

“The company, with $3.4 billion in assets, is the biggest Chapter 11 filing of the year and the largest filing of a nonfinancial company since 2009,” according to Bankruptcydata.com.

As those in the biomass and forestry industries know, this not only impacts employees of NewPage, which is owned by Cerberus Capital Management LP, but it also hurts their raw material suppliers. Although NewPage has said it will continue to operate and work with its creditors, news of the bankruptcy filing is troubling.

The company has mills in Wisconsin, Michigan, Minnesota, Kentucky, Maine, Maryland and Nova Scotia, Canada.

If NewPage can’t come back from this setback, these are areas where the biomass power and thermal industries could come in and restore these jobs without impacting forest resources.

Now we just have to make sure that lawmakers stay focused on job creation and that they notice the job generating benefits of biomass power and thermal.