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Page 1: Mountain Timber Wood Products EAW · maximum possible wood product from the dryer prior to pelletizing. This high efficiency also minimizes wood product air emissions from the facility
Page 2: Mountain Timber Wood Products EAW · maximum possible wood product from the dryer prior to pelletizing. This high efficiency also minimizes wood product air emissions from the facility

p-ear1-05 TDD (for hearing and speech impaired only): 651-282-5332

Printed on recycled paper containing 30% fibers from paper recycled by consumers

ENVIRONMENTAL ASSESSMENT WORKSHEET

Note to reviewers: The Environmental Assessment Worksheet (EAW) provides information about a project that may have the potential for significant environmental effects. This EAW was prepared by the Minnesota Pollution Control Agency (MPCA), acting as the Responsible Governmental Unit (RGU), to determine whether an Environmental Impact Statement (EIS) should be prepared. The project proposer supplied reasonably accessible data for, but did not complete the final worksheet. Comments on the EAW must be submitted to the MPCA during the 30-day comment period which begins with notice of the availability of the EAW in the Minnesota Environmental Quality Board (EQB) Monitor. Comments on the EAW should address the accuracy and completeness of information, potential impacts that are reasonably expected to occur that warrant further investigation, and the need for an EIS. A copy of the EAW may be obtained from the MPCA by calling 651-297-8510. An electronic version of the completed EAW is available at the MPCA Web site http://www.pca.state.mn.us/news/eaw/index.html#open-eaw. 1. Project Title: Mountain Timber Wood Products Fuel Pellet Facility 2.

Proposer:

Mountain Timber Wood Products, LLC

3.

RGU:

Minnesota Pollution Control Agency

Contact Person Joann Birchem Contact Person Jim Sullivan and Title CEO and President and Title Planner Principal Address P.O. Box 354, 8877 Slate Street Address 520 Lafayette Road North Mountain Iron, Minnesota 55768 St. Paul, Minnesota 55155-4194 Phone 218-735-8600 Phone 651-297-1788 Fax 218-735-8102 Fax 651-297-2343 4. Reason for EAW Preparation:

EIS Scoping

Mandatory EAW

X

Citizen Petition

RGU Discretion

Proposer Volunteered

If EAW or EIS is mandatory give EQB

rule category subpart number and name: Minn. R. 4410.4300, subp. 5A - Fuel Conversion Facilities

5. Project Location: County St. Louis City Mountain Iron E 1/2 Section 10 Township 58N Range 18W

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Mountain Timber Wood Fuel Pellet Facility Environmental Assessment Mountain Iron, Minnesota 2 Worksheet

Attach each of the following to the EAW:

Exhibit A United States Geological Survey (USGS) topographic map indicating project location; Exhibit B Aerial photograph indicating the proposed facility layout; Exhibit C Maps indicating biomass source area (C1) and vegetation cover types (C2); Exhibit D Natural Heritage Database search response from the Minnesota Department of Natural Resources

(DNR); Exhibit E Aerial photograph indicating estimated wetland boundaries; Exhibit F MPCA Voluntary Investigation and Cleanup No Further Action letter; Exhibit G Minnesota Historical Society database search results for known recorded archaeological sites and

historic architectural properties; Exhibit H Letter from city of Mountain Iron regarding noise impacts; Exhibit I Cumulative Potential Effects Analysis map for surface water and land resources; and Exhibit J Woody Biomass Supply Information.

6. Description:

a. Provide a project summary of 50 words or less to be published in the EQB Monitor.

Mountain Timber Wood Products (Mountain Timber) proposes to construct a new wood fuel pelletizing facility in Mountain Iron, Minnesota. A mixture of hardwood and softwood would be cleaned, processed into small pieces, dried into pellets, cooled, and packaged for sale. Proposed annual production is 100,000 dry tons of finished wood pellet products per year. Mountain Timber would need approximately 200,000 green tons of raw materials per year that would be supplied by local loggers and sawmills. Market research for the proposed project indicates that the biomass supply would consist of approximately 120,000 tons softwoods and 80,000 tons hardwoods per year.

b. Give a complete description of the proposed project and related new construction. Attach

additional sheets as necessary. Emphasize construction, operation methods and features that will cause physical manipulation of the environment or will produce wastes. Include modifications to existing equipment or industrial processes and significant demolition, removal or remodeling of existing structures. Indicate the timing and duration of construction activities.

This discussion distinguishes the activities at the production site, located in Mountain Iron, Minnesota, and the woody biomass procurement areas, located within approximately 100 miles of the Project site (See Exhibit C1 & C2). Each of the discussions illustrates the relevant activities, a brief discussion of the potential environmental impacts and the mitigation practices employed to reduce or eliminate environmental impact.

Project Site The proposed project would be constructed on a remediated brownfield property – a former mine waste stockpiling site – within the city of Mountain Iron (see Exhibit A). The facility would include a mill/production building, material storage area, employee parking, and access roads (see Exhibit B). The round wood storage area would be unpaved, but the wood chip and sawdust storage pile areas and the internal site roadways would be paved. Construction would include re-grading the building and storage area sites, and standard construction procedures for buildings and roadways, but would not generate wastes (other than construction waste). Transportation – Raw Materials and Finished Product Current project operational plans include use of trucks to bring materials in and to ship them out. Approximately 40 trucks per day would be bringing materials in, and an additional 30 trucks per day would be used to ship finished product.

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Mountain Timber Wood Fuel Pellet Facility Environmental Assessment Mountain Iron, Minnesota 3 Worksheet

Production Process Un-dried (green) sawdust and wood chips arriving at the facility with a moisture content equal to or greater than 50 percent would be placed into a storage bin for later use. Larger pieces of green wood arriving at the facility would be placed into a wood stockpile, where it would be fed into a de-barker to remove bark from the surface of the wood before being fed into a chipper to reduce its size. Chipped wood would be placed into a separate storage bin for later use. The wood waste/bark would be used as fuel for the dryer or used in the production of lower-heat content (commercial) pellets. Green wood chips and green sawdust from the storage bins would be transported via a front-end loader or conveyor belt to a hammer mill inside the production building. The hammer mill would process the green wood chips and green sawdust into a fine, green wood meal. Processed green wood meal would be sent to a meal storage container before being fed into a triple-pass direct-fired rotary dryer to reduce moisture. The dryer is directly supplied with hot air from a wood-fired burner. Wood ash residue from the dryer furnace would be disposed of through beneficial use by land applying it to agricultural land or, if a license for land application could not be obtained, the ash would be disposed of at a licensed landfill.

The dryer exhaust, containing the dried wood meal, would pass through a series of cyclone collectors to collect and recover the dried product. The process drying cyclone collectors are designed for very high efficiency because their main purpose is to maximize economic return for the facility by collecting the maximum possible wood product from the dryer prior to pelletizing. This high efficiency also minimizes wood product air emissions from the facility. Product lost from the hammer mill, meal storage container, pellet mills, and pellet cooler is captured by a baghouse and deposited in a storage bin for later use in the wood-fired burner for the dryer. After the meal is formed into pellets in the pellet mills, the pellets are then sent to a pellet cooler and a screener before storage. Stored pellets are sent to a packing machine or shipped off-site in bulk.

Premium pellets (for residential use market) would be made using all residues purchased from sawmills, clean chips, and debarked round wood. Dirty chips purchased and the bark created from the debarking process of the round wood would be used as hog fuel (for the dryer) or used to produce commercial-grade pellets. Schedule Construction is proposed to start in April 2008 and be completed in 2009.

Wood Procurement Areas Mountain Timber would utilize approximately 200,000 green tons of woody biomass raw material per year. The overall wood biomass supply plan for Mountain Timber is to utilize wood products and residues from a variety of sources that major forest products industries generally do not utilize for production. Based on available wood biomass supplies in today’s markets, the project proposer has estimated the sources and types of wood biomass material that would likely be available for wood fuel pellet production. The primary sources include wood products removed from forest resources and wood processing byproducts from area processors. Mountain Timber anticipates that it would purchase about 20,000 green tons of wood residue (sawdust, chips, shavings, and end trims) from sawmills within a 120-mile radius of Mountain Iron. Based on current market availability, it is anticipated that approximately 97 percent of the wood residue, or 19,400 green tons, would be hardwoods and 3 percent, or 600 green tons, would be softwoods.

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Mountain Timber Wood Fuel Pellet Facility Environmental Assessment Mountain Iron, Minnesota 4 Worksheet

The remaining approximately 180,000 green tons of wood biomass would be supplied by local loggers within a 100-mile radius of Mountain Iron (see Exhibits C1 and C2).1 Based on current market supplies, it is anticipated that approximately 1/3, or 61,200 green tons, of this material would be from hardwood species and 2/3, or 118,800 green tons, would be from softwood species (i.e., conifers, primarily spruce, fir, tamarack, and pines). The procurement activities within the forest are focused on the following activities:

Small diameter woody biomass, including: • Harvest residue (i.e., tree tops and limbs less than four inches in diameter remaining after round

wood harvesting for ‘marketable’ (e.g., maple, aspen, spruce, pine and balsam fir) wood products industries) – harvested in conformance with Minnesota Forest Resources Council (MFRC) Site-Level Forest Management Guidelines (including the recently-added woody biomass harvesting guidelines);

• Pre-commercial thinning material from managed forests/plantations.

Non-marketable round wood biomass, including: • Insect-infested trees (e.g., pine damaged/killed by pine beetle, tamarack damaged/killed by

eastern larch beetle, and spruce damaged/killed by spruce budworm); • Damaged round wood (i.e., round wood harvested for other uses, but was not acceptable for those

uses due to defects, such as bad form, rot, cracks, etc.); • Underutilized species (e.g., basswood, ash, tamarack) that are currently in low demand for other

uses; • Other available round wood, if feasible, based on wood availability and market price.

The amount of biomass that would come from small-diameter versus non-marketable round wood sources is highly variable. For example, statewide timber harvests have declined from 3.7 million cords per year in 2005 to about 3.3 or 3.4 million cords per year in 2007. This means that less harvest residue would be available now (i.e., roughly 10 percent less), compared to past, higher production periods; however, underutilized and insect-damaged round wood is currently available and could make up for the lower availability of harvest residue. Additional discussion of woody biomass fuel sources is provided in Item 11 below. Woody Biomass Raw Material Procurement Methods and Features As described above, sources of woody biomass material for pellet production include wood products removed from forest harvesting and/or thinning operations and wood processing byproducts obtained from area processors. These materials would be obtained from loggers and from other forest industry processors. Woody biomass from wood processing byproducts (e.g., sawdust, residual chips, etc) would be transported by truck from other wood processing facilities to the Mountain Timber site. Forest thinning and/or harvesting operations (including site preparation and post-harvest site conditions) would be performed using practices that are in conformance with Minnesota Forest Resources Council (MFRC) Site-Level Forest Management Guidelines, including the recently-added woody biomass harvesting guidelines (see discussion in Item 11 below). Round wood may be de-barked and chipped at the harvest site and delivered to the Mountain Timber facility as chips, or may require de-barking and chipping at the Mountain Iron production facility. The majority of harvest residue will likely be chipped at the harvest site and delivered to the Mountain Timber

1 Note: The potential wood biomass raw material supply radius estimates are based on current market conditions. The 120-mile radius for sawmill residue and 100-mile radius for logger-supplied material represent the maximum feasible transportation distances based on current raw material costs, transportation costs, and finished product value in the marketplace. However, it is likely that most biomass material would come from a 50-60 mile radius, and that the large majority would come from within a 75-85 mile radius.

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Mountain Timber Wood Fuel Pellet Facility Environmental Assessment Mountain Iron, Minnesota 5 Worksheet

facility as “dirty” chips. However, some individual suppliers may not have the capability (i.e., equipment) to de-bark and chip harvest residue at the harvest site. As noted above, current project operational plans include use of trucks to bring materials in and to ship them out. Approximately 40 trucks per day would be bringing materials in, when the plant is in full production. Item 21 in this EAW provides additional discussion of truck traffic routing. Mitigation Practices Potential impacts from wood harvest activities will be mitigated by Mountain Timber’s commitment to include language in their contracts with woody biomass raw material vendors that require wood material suppliers certify that the woody material was harvested from land certified to conform to forest sustainability management guidelines and/or that the wood biomass was harvested in conformance with the Minnesota Forest Resources Council (MFRC) Site-Level Forest Management Guidelines (including the recently-added woody biomass harvesting guidelines). The purpose of the MFRC guidelines is to “conduct forest management activities while addressing the continued long-term sustainability of diverse forest resources.” and to “Promote or enhance the functions and values of water and soil resources, riparian areas, wildlife habitats, visual quality and cultural resources.”2 The MFRC site-level forest management guidelines, including the woody biomass harvesting guidelines, were developed by the MFRC, with input from numerous stakeholders, based on current understandings of practices needed to maintain forest productivity for multiple uses, including timber production, wildlife habitat, water quality, and forest soil productivity/fertility. The original MFRC site-level forest management guidelines address potential site-level impacts from forest management activities and incorporate a number of corresponding site-level mitigation measures identified in the GEIS. Woody biomass harvesting guidelines were added to the MFRC Site-Level Guidelines in 2007 in response to growing interest in biomass harvesting for various energy-related efforts.

c. Explain the project purpose; if the project will be carried out by a governmental unit, explain the need for the project and identify its beneficiaries

The project is proposed to meet increasing residential and commercial demands for wood biofuel as a renewable energy source.

d. Are future stages of this development including development on any outlots planned or likely to

happen? Yes No If yes, briefly describe future stages, relationship to present project, timeline and plans for environmental review.

e. Is this project a subsequent stage of an earlier project? Yes No If yes, briefly describe the past development, timeline and any past environmental review.

7. Project Magnitude Data Total Project Area (acres) 56 acres or Length (miles)

Number of Residential Units: Unattached

NA

Attached

NA

maximum units per building

NA

Commercial/Industrial/Institutional Building Area (gross floor space): total square feet 105,550 Indicate area of specific uses (in square feet): 2 See page 7. Minnesota Forest Resources Council. (2005). Sustaining Minnesota Forest Resources: Voluntary Site-Level Forest Management Guidelines for Landowners, Loggers and Resource Managers. Saint Paul, MN: Minnesota Forest Resources Council. The guidance is available at http://www.frc.state.mn.us/FMgdline/BHGC.html

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Mountain Timber Wood Fuel Pellet Facility Environmental Assessment Mountain Iron, Minnesota 6 Worksheet

Office 0 Manufacturing 105,500 Retail 0 Other Industrial Outside storage of

chips/sawdust -- 100,500 Outside storage of round

wood – 544,000 Warehouse Institutional Light Industrial Agricultural Other Commercial (specify)

Building height 2 stories with exhaust stacks 50 to 70 feet tall If over 2 stories, compare to

heights of nearby buildings No other buildings are nearby. Stacks and other structures on the site would not be inconsistent with adjacent industrial land uses.

Unit of government Type of application Status MPCA Air Permit Draft permit will be on public notice

concurrent with this EAW. MPCA NPDES* Stormwater Permit

for Construction To be obtained

MPCA NPDES Industrial Stormwater Permit (for outside storage areas)

To be obtained

MPCA Beneficial Re-Use Determination (for land application of wood ash)

To be obtained, if needed

Minnesota Department of Agriculture (USDA)

Agricultural Land Application License (for land application of wood ash)

To be obtained, if needed

City of Mountain Iron Building Permit To be obtained City of Mountain Iron Utility permits (water, sewer

connection) To be obtained

*NPDES = National Pollutant Discharge Elimination System

The proposed project will receive financial assistance through two state programs. The project is located in a designated JOBZ area3, which makes it eligible for certain tax savings, subject to a qualification process that determines eligibility for tax relief benefits. A grant for $200,000 towards the cost associated with making connection to city sewer and water would also be provided through the state Department of Employment and Economic Development (DEED).4

9. Land use. Describe current and recent past land use and development on the site and on adjacent

lands. Discuss project compatibility with adjacent and nearby land uses. Indicate whether any potential conflicts involve environmental matters. Identify any potential environmental hazards due to past site uses, such as soil contamination or abandoned storage tanks, or proximity to nearby hazardous liquid or gas pipelines.

3 http://www.positivelyminnesota.com (retrieved March 4, 2008) 4 http://www.deed.state.mn.us/news/release/2007/bus28Mar07wip.htm (retrieved March 4, 2008)

8. Permits and approvals required. List all known local, state and federal permits, approvals and financial assistance for the project. Include modifications of any existing permits, governmental review of plans, and all direct and indirect forms of public financial assistance including bond guarantees, Tax Increment Financing and infrastructure.

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Mountain Timber Wood Fuel Pellet Facility Environmental Assessment Mountain Iron, Minnesota 7 Worksheet

The current land use on the proposed project site is vacant land zoned for industrial use – primarily open land, with a few wooded areas, wetlands, and an existing stormwater pond (see Exhibit B). Adjacent land uses include railroad corridor to the west, industrial to the south, municipal drinking water plant and public works building to the north, and county road to the east, with vacant land (former mine waste disposal area) across the county road. The proposed project would be compatible with the adjacent existing land uses.5 The proposed project property was formerly used for mine waste disposal, including a former 1.25-acre dump that operated from an unknown time until the mid-1940s. The dump primarily contained charred municipal waste and ash. The western part of the property was used for taconite mining tailings disposal from the 1940s through the 1960s. Investigation and response actions at the Mountain Iron Dump Site were conducted through the MPCA Voluntary Investigation and Cleanup (VIC) Program. Response actions completed at the Site in 2006 included the excavation of 10,200 cubic yards of waste material, which was then taken to a landfill for disposal. The VIC Program letter documenting their No Further Action Determination for this Site is included in Exhibit F. There is a natural gas pipeline running along the interior site roadway through the north central portion of the site (see Exhibit B). If re-construction of the roadway or other nearby construction is required, the location of the pipeline would be identified in the field and plainly marked, to avoid accidental damage to the pipeline. The northeast corner of the site is a relatively steep-sloped area of former mine waste, now covered with trees – at its highest point it is approx 40-50 feet above the remainder of the site. This area will not be affected by the proposed project – nor will the two wetland areas on the property (see Item 12 below) be affected.

10. Cover Types. Estimate the acreage of the site with each of the following cover types before and after

development: Before After Before After Types 1-8 wetlands 3 3 Lawn/landscaping 0 0 Wooded/forest 11.2 11.2 Impervious Surfaces 1.7 4.6 Brush/grassland 39.8 22.1 Other (Residence) 0 14.8 Cropland 0 0 Stormwater Pond 0.3 0.3 TOTAL 56.0 56.0

11. Fish, Wildlife, and Ecologically Sensitive Resources. a. Identify fish and wildlife resources and habitats on or near the site and describe how they would

be affected by the project. Describe any measures to be taken to minimize or avoid impacts.

Project Site The site areas that would be affected by construction of the proposed project consist of land that was previously-disturbed by mining waste disposal activities (see discussion in Item 9 above) and that is now open land with herbaceous vegetation that would be of low value as wildlife habitat, except for small mammals. The forested and wetland areas on the proposed project parcel (at the northeast and southeast quadrants of the parcel – see Exhibit E) are potentially more diverse wildlife habitat areas. However, these areas would not be affected by the proposed project construction [see Item 10 – Cover Types and Item 12 – Wetlands].

5 See The Mountain Iron Zoning Ordinance found in Chapter 154: ZONING CODE

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Mountain Timber Wood Fuel Pellet Facility Environmental Assessment Mountain Iron, Minnesota 8 Worksheet

Wood Biomass Procurement Sources As described in Item 6b above, Mountain Timber plans to utilize approximately 200,000 green tons of woody biomass raw materials a year. Wood harvesting could adversely affect fish and wildlife resources and habitats if conducted inappropriately. As noted above, potential impacts from wood harvest activities will be mitigated by Mountain Timber’s commitment to include language in their contracts with woody biomass raw material vendors, requiring certification that the woody material supplied by vendors was harvested from land certified to conform to forest sustainability management guidelines and/or that the wood biomass was harvested in conformance with the Minnesota Forest Resources Council (MFRC) Site-Level Forest Management Guidelines (including the recently-added woody biomass harvesting guidelines). Because the specific amounts of each woody biomass source (i.e., the small diameter material vs. non-marketable round wood material) cannot be accurately predicted due to likely future market fluctuations, three different possible supply scenarios were identified, to assess the potential options for supply sources and to define the range of potential impacts among the scenarios. These three scenarios can then be compared to provide a ‘sensitivity analyses of the potential range of demand and potential impacts from woody biomass harvesting for the proposed project. (NOTE: None of these three scenarios should be interpreted as ‘The Proposed Scenario,’ since the project would utilize woody biomass from a variety of sources [listed previously]. There would likely be variations in the amount of biomass provided from each source over time, depending on market conditions, so no one biomass supply source scenario can be assumed.) The three scenarios are summarized in Exhibit J, Table 1. The two columns at the far right of the table compare the Mountain Timber woody biomass demand to available forest resources (based on recent DNR data) and provide a summary assessment of whether the assumed additional demand for each of the scenarios would suggest a potential for significant impacts. In general, the supply assessment in Table 1 (Exhibit J) suggests that there is adequate supply of biomass materials from various sources to supply biomass for the Mountain Timber facility. Biomass from Round Wood Round wood harvests for this project would be from 0 to 85,000 cords, again depending on the mix. The maximum potential additional round wood harvest under the three scenarios (i.e., scenario 2, which assumes all of the biomass comes from round wood) would represent 2.5 percent of current estimated statewide timber harvest levels, which remain well below the 1994 Generic Environmental Impact Statement Study on Timber Harvesting and Forest Management in Minnesota (GEIS) base-level harvest scenario projections (i.e., four million cords per year). This round wood “most-use” scenario is not very likely to occur, with a more realistic scenario being a mix of materials from a variety of sources, as described elsewhere in this section. Most of the round wood used for the Mountain Timber project is expected to come from species currently in low demand (e.g., tamarack, ash, basswood), and insect and disease killed or damaged trees (e.g., spruce budworm, eastern larch beetle, pine bark beetle). As a result, the project is not expected to contribute substantially to the overall round wood demand within the project supply area for species currently used by the primary forest products industries. Mitigation of potential impacts from round wood harvests for this project would occur primarily through the ongoing application of the MFRC Site-Level Forest Management Guidelines and other harvesting guidelines and restrictions applied by the various forest land owners (e.g., USDA Forest Service, DNR, counties). Biomass from Timber Harvest Residue The impacts assessment in Table 1 (Exhibit J) indicates that Mountain Timber would likely use from 0 percent to 20 percent of the available harvest residues within the 100-mile radius (depending on the residue/round wood mix). While the additional demand for biomass materials for the Mountain Timber facility could potentially result in a significant increase in the removal of timber harvest residue within the project supply area (i.e., relative to current levels of removals), the assessment in Table 1 (Exhibit J)

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Mountain Timber Wood Fuel Pellet Facility Environmental Assessment Mountain Iron, Minnesota 9 Worksheet

suggests that there is an adequate available supply of this material available for the Mountain Timber facility. Mitigation of potential impacts from the gathering of additional timber harvest residue would occur primarily through the application of the MFRC Site-Level Forest Management Guidelines, including the recently completed woody biomass harvesting guidelines, and other biomass harvesting guidelines and restrictions provided by various forest land owners (e.g., USDA Forest Service, DNR, counties). To reduce potential impacts, Mountain Timber will require that procurement agreements be signed by suppliers of woody biomass raw materials, thereby contractually obliging suppliers to provide only material that conforms to the MFRC Guidelines. The diversity of potential sources of biomass would minimize the potential for shortages of woody biomass and would decrease potential impacts that could result from over-use of any single biomass source (e.g., use of under-utilized species or harvest residue, etc.). Application of the MFRC Woody Biomass Harvest Guidelines As previously discussed, the Project proposer will require that vendors abide by the MFRC as part of their contractual agreements. The MFRC Guidelines include practices that would lessen potential negative impacts to forest wildlife, such as retention of snags and down logs, retaining slash piles that show evidence of use by wildlife, and leaving a minimum of 1/3 of the fine woody debris and slash on harvested areas. In addition, concerns about woody biomass harvesting from certain sensitive sites (i.e., Minnesota County Biological Survey [MCBS] high and outstanding biodiversity sites, and other high conservation value forests) are addressed in the Guidelines by giving greater consideration to leaving additional biomass (i.e., above what is generally recommended in the MFRC guidelines) or avoiding biomass harvesting on these sites.

b. Are any state (endangered or threatened) species, rare plant communities or other sensitive ecological resources such as native prairie habitat, colonial water bird nesting colonies or regionally rare plant communities on or near the site? Yes No

If yes, describe the resource and how it would be affected by the project. Indicate if a site survey of the resources has been conducted and describe the results. If the DNR Natural Heritage and Nongame Research program has been contacted give the correspondence reference

number. ERDB 20080484-0002 Describe measures to minimize or avoid adverse impacts.

The DNR Natural Heritage and Nongame Research program letter is included in Exhibit D. It states that, based on their review, there are no known occurrences of rare species or native plant communities within approximately one-mile radius of the project site.

12. Physical Impacts on Water Resources. Will the project involve the physical or hydrologic alteration

(dredging, filling, stream diversion, outfall structure, diking, and impoundment) of any surface waters such as a lake, pond, wetland, stream or drainage ditch? Yes No If yes, identify water resource affected. Describe alternatives considered and proposed mitigation measures to minimize impacts. Give the DNR Protected Waters Inventory (PWI) number(s) if the water resources affected are on the PWI.

Project Site An off-site investigation of the Mountain Timber property was conducted to identify areas of potential wetlands in the vicinity of the proposed project area. This investigation included review of USGS topographic contours, National Wetland Inventory (NWI) maps, and aerial photos to identify areas on the property that may potentially contain wetlands. Typically, county soil survey data would be reviewed as well to identify areas that are mapped as containing hydric soils, but soil survey data is not available for this portion of St. Louis County.

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The USGS topographic contour map (see Exhibit A) indicates a depressional area in the southeast corner of the property. The remainder of the property is identified as a mine dump, and contours are not displayed. A site visit confirmed that the majority of the site consists of mine wastes. The topography of the site is generally high and flat over most of the site with slopes down to the west and east boundaries. The NWI mapping indicates one wetland basin on the property, in the location identified as Potential Wetland Area A on Exhibit E. The NWI identifies this basin as an excavated, permanently flooded, palustrine, unconsolidated bottom wetland (Cowardin PUBHx, CIRC 39 Type 5). Based on the review of topographic contours, NWI, and also aerial photos from 2003 and 2006 for signatures of wetland hydrology, two areas were identified as areas of potential wetlands. One basin, identified in Exhibit E as Potential Wetland Area A, is identified by the NWI and appears as an open water basin on aerial photos. The site visit confirmed that an area of open water existed in this area. This basin is in the mine waste area and was likely excavated or otherwise created incidentally by activities on the site. The approximate boundary of the wetland basin within this area is shown in Exhibit E. The area outlined as Potential Wetland Area B in Exhibit E is located in a depressional area in the southeast corner of the site. Wetland signatures, including open water and a change in vegetation cover, are evident on aerial photos, indicating that wetlands likely exist in this area. The approximate wetland boundaries in this area, as shown on Exhibit E, were delineated based on the presence of wetland signatures and the change in vegetation communities as evidenced on aerial photos. Both Potential Wetland Areas A and B appear to be located such that they would not be impacted by the proposed project construction, since they are located outside of the areas planned for construction of the proposed facility. They are, however, located adjacent to the existing internal roadway through the property. If the roadway were to be widened, it is possible to widen it in such a way to avoid wetland impacts, i.e., by widening to the west in the vicinity of Potential Wetland B and to the south in the vicinity of Potential Wetland A. It should be noted that the wetland boundaries determined by the off-site investigation are approximate. If there is work proposed in the vicinity of the potential wetland areas identified in the investigation, complete field delineation should be performed during the growing season in 2008 to confirm the wetland locations, to avoid impacts to the basins. Wood Procurement Sites Although the majority of woody biomass for the Mountain Timber project will likely come from material (e.g., harvest residue, under-utilized species) harvested from forest areas already being harvested for other resources and from forest products industrial residue (e.g., sawdust), some woody biomass supplied to the facility may come from round wood harvesting that would not occur except to supply Mountain Timber (e.g., insect-infested trees that might not otherwise be harvested). Harvesting round wood in these areas could potentially result in physical impacts to water resources (e.g., wetlands). These impacts would need to be permitted and mitigated in accordance with state (Wetland Conservation Act) and federal (Section 404 permitting from the U.S. Army Corps of Engineers) regulatory requirements. In addition the MFRC Site-Level Forest Management Guidelines (Appendix G) include guidance on BMPs to provide wetland protection in forest harvest areas.

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13. Water Use. Will the project involve installation or abandonment of any water wells, connection to or changes in any public water supply or appropriation of any ground or surface water (including dewatering)? Yes No If yes, as applicable, give location and purpose of any new wells; public supply affected, changes to be made, and water quantities to be used; the source, duration, quantity and purpose of any appropriations; and unique well numbers and DNR appropriation permit numbers, if known. Identify any existing and new wells on the site map. If there are no wells known on site, explain methodology used to determine.

The project would be connected to the city of Mountain Iron public water supply (supplied from municipal ground water wells). Water will not be used for industrial processes at the proposed facility. Use will be limited to water required for ‘domestic’ uses (employee drinking water, lunchroom and restroom facilities). The project is anticipated to require 20 employees (working three shifts through the 24-hour work day). Assuming each employee results in 50 gallons per day of usage, the facility would require 1,000 gallons of water per day. There is adequate city water supply – and supply piping to the site – available to meet this usage requirement.6 There are no known wells on the proposed project site. Dewatering will not be required for project construction.

14. Water-related land use management districts. Does any part of the project involve a shoreland

zoning district, a delineated 100-year flood plain, or a state or federally designated wild or scenic river land use district? Yes No If yes, identify the district and discuss project compatibility with district land use restrictions.

15. Water Surface Use. Will the project change the number or type of watercraft on any water body?

Yes No If yes, indicate the current and projected watercraft usage and discuss any potential overcrowding or conflicts with other uses.

16. Erosion and Sedimentation. Give the acreage to be graded or excavated and the cubic yards of soil to be moved and identify them on the site map. Describe any erosion and sedimentation control

measures to be used during and after project construction.

There are no steep slopes within the portions of the property planned for construction of the proposed facility.

17. Water Quality – Surface Water Runoff. a. Compare the quantity and quality of site runoff before and after the project. Describe

permanent controls to manage or treat runoff. Describe any stormwater pollution prevention plans.

Project Site The proposed project will result in an additional approximately 2.9 acres of impervious surfaces in roadway and buildings (bringing the total impervious surface area to 4.6 acres), plus approximately 14.8 acres of outside material storage areas that would initially be unpaved, but are ultimately planned to be paved. Since the site plan is only developed to a concept level, detailed stormwater modeling and stormwater management plans have not been prepared yet. A rough estimate of increased runoff following development of the site can be made by assuming 100 percent runoff from a ½-inch rainfall

6 E-mail dated March 4, 2008, from Craig J. Wainio, City of Mountain Iron, to Jim Sullivan, MPCA regarding the use of service and waste water for the proposed project.

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event. For this assumed condition, the additional 17.7 acres of impervious surface on the Mountain Timber site would generate approximately 0.7 acre-feet of runoff. However, as noted in Item 19 below, the soils on the site appear to be coarse-textured, which would allow for some soil infiltration – decreasing stormwater pond capacity requirements – if ditches are used to convey surface water across the site. There is an existing stormwater pond (see location shown on Exhibit B) that could be used to treat a portion of the surface water runoff from the Mountain Timber facility prior to discharge, as required by the MPCA NPDES/State Disposal System (SDS) Construction Stormwater Permit Program. As part of the MPCA’s NPDES/SDS permitting program, the proposed project would also be required to implement a stormwater management plan/stormwater pollution prevention plan for construction and post-construction stormwater treatment as well as best management practices to minimize erosion and sedimentation during and after construction. Procurement Sites The MFRC Site-Level Forest Management Guidelines include guidance on water quality protection regulations and BMPs to provide water quality protection in forest harvest areas (the ‘Water Quality and Wetlands’ chapter and Appendix G of the Guidelines). The Guidelines also reference the guidelines in Protecting Water Quality and Wetlands in Forest Management: Best Management Practices in Minnesota (published in 1989 and updated in 1995).The guidance includes discussion of the need for erosion control measures to prevent sedimentation of water, location of roads and other grading with respect to water bodies, fill stabilization, and other BMPs to protect water quality.

b. Identify routes and receiving water bodies for runoff from the site; include major downstream

water bodies as well as the immediate receiving waters. Estimate impact runoff on the quality of receiving waters.

The proposed project site is part of the upper West Two Rivers watershed that eventually flows south to the St. Louis River. As noted in item 17.a. above, the coarse soil textures on the site (which could help to promote water infiltration), combined with required construction of runoff treatment facilities as part of NPDES/SDS Permit requirements would likely result in no substantive impacts to the receiving surface waters.

18. Water Quality – Wastewater. a. Describe sources, composition and quantities of all sanitary, municipal and industrial

wastewater produced or treated at the site.

Project Site The project would be connected to the city of Mountain Iron public sanitary sewer. No industrial sanitary sewer discharges would result from the proposed processing facility, since there are no processes that utilize water or generate wastewater. As described in Item 6 above, the process consists of grinding the wood material and then drying it to release the moisture from the green wood. This moisture would be lost in the dryer through evaporation. Additional processing consists of compacting the wood fines into pellets, and this process does not involve water use or wastewater generation. The project is anticipated to require 20 employees (working three shifts through the 24-hour work day). Assuming each employee results in 50 gallons per day of water use and wastewater generation, the facility would generate 1,000 gallons of wastewater per day. There is adequate city wastewater treatment capacity – and sanitary sewer lines to the site – available to meet this discharge requirement.

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Procurement Sites Wastewater will not be generated at procurement sites as timber harvest does not require processes which generate wastewaters.

b. Describe waste treatment methods or pollution prevention efforts and give estimates of

composition after treatment. Identify receiving waters, including major downstream water bodies, and estimate the discharge impact on the quality of receiving waters. If the project involves on-site sewage systems, discuss the suitability of site conditions for such systems.

Wastewater would be similar to typical ‘domestic’ wastewater and would be treated at the city sewage treatment plant, which has sufficient capacity to treat the additional discharges from the proposed project, consistent with the plant’s operating permit. Therefore, minimal or no downstream water body impacts would result from the proposed project discharges.

c. If wastes will be discharged into a publicly owned treatment facility, identify the facility,

describe any pretreatment provisions and discuss the facility’s ability to handle the volume and composition of wastes, identifying any improvements necessary.

Wastewater will be similar to typical ‘domestic’ wastewater, so no pretreatment of the wastewater is required at the Mountain Timber facility prior to discharge to the city sanitary sewer and, ultimately, to the city of Mountain Iron wastewater treatment plant. The treatment plant has sufficient capacity to treat the additional discharges to the sanitary sewer from the proposed project.

d. If the project requires disposal of liquid animal manure, describe disposal technique and

location and discuss capacity to handle the volume and composition of manure. Identify any improvements necessary. Describe any required setbacks for land disposal systems.

Not Applicable. 19. Geologic hazards and soil conditions. a. Approximate depth (in feet) to Ground water: 0 minimum; 10 average. Bedrock: NA minimum; 100 average. Describe any of the following geologic site hazards to ground water and also identify them on

the site map: sinkholes, shallow limestone formations or karst conditions. Describe measures to avoid or minimize environmental problems due to any of these hazards.

Project Site and Procurement Sites

None of the geologic hazards listed occur at the proposed project site. b. Describe the soils on the site, giving SCS classifications, if known. Discuss soil granularity and

potential for ground water contamination from wastes or chemicals spread or spilled onto the soils. Discuss any mitigation measures to prevent such contamination.

Project Site No Natural Resources Conservation District soil mapping is available for the project site; however, the site is known to be a former mine waste disposal site, so soils are not natural. The soils in the vicinity of the existing stormwater ponds at the south end of the site and on the property to the south have been observed to be coarse-textured, since the ponds do not retain stormwater within the ponds over time. However, since materials handled outside at this facility consist of round wood and wood chips, no material releases of potential concern are anticipated to occur.

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See the section on ‘Sustainability of Forest Soil Nutrients’ in Item 29 for a discussion of potential forest soil fertility impacts and mitigation. Item 9 above describes identification of contamination from previous land uses, site remediation, and the MPCA No Further Action Determination for the site. Procurement Sites Item 29 provides a discussion of potential soil fertility impacts from woody biomass harvesting, and mitigation measures included in the MFRC Site-Level Management Guidelines (including the recently-added woody biomass harvest guidelines) that will be required to be followed by suppliers of woody biomass to the Mountain Timber project.

20. Solid Wastes, Hazardous Wastes, Storage Tanks. a. Describe types, amounts and compositions of solid or hazardous wastes, including solid animal

manure, sludge and ash, produced during construction and operation. Identify method and location of disposal. For projects generating municipal solid waste, indicate if there is a source separation plan; describe how the project will be modified for recycling. If hazardous waste is generated, indicate if there is a hazardous waste minimization plan and routine hazardous waste reduction assessments.

No chemicals are used in the wood pellet production process, so no chemical or hazardous wastes would be generated by the facility, with the possible exception of small quantities of hazardous wastes from materials used for machine maintenance, etc. (e.g., motor oils, parts washing, small quantities of cleaning solvents, etc.). These materials would be stored, handled and disposed of in accordance with standard good housekeeping practices. As described in Item 6 above, the de-barking process generates woody material that is not utilized in the pellet production. However, this ‘waste’ material from de-barking, plus any residue from the baghouse dust collection, would be used as fuel for the processing dryers. Therefore, the only process waste produced would be an estimated 4,000 tons per year of wood ash from the dryer furnace. The project proposer plans to obtain an Agricultural Land Application License from the USDA for land application of the wood ash on agricultural production areas. A Beneficial Re-Use Determination would also need to be obtained from the MPCA prior to ‘disposal’ of the wood ash on agricultural fields. If the license/approvals cannot be obtained from these agencies, Mountain Timber Wood Products would dispose of the ash in a permitted landfill. The remainder of the solid waste generated at this facility would be from the offices, employee work areas, etc., and would be similar in composition to municipal solid waste. This waste would be collected at the site and disposed of through a licensed waste hauler, for disposal at a regional sanitary landfill.

b. Identify any toxic or hazardous materials to be used or present at the site and identify measures

to be used to prevent them from contaminating ground water. If the use of toxic or hazardous materials will lead to a regulated waste, discharge or emission, discuss any alternatives considered to minimize or eliminate the waste, discharge or emission.

Not applicable – see Item 20.a above. c. Indicate the number, location, size and use of any above or below ground tanks to store

petroleum products or other materials, except water. Describe any emergency response containment plans.

No above ground or underground storage tanks will be utilized at the facility.

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21. Traffic. Parking spaces added: 22 Existing spaces (if project involves expansion): NA Estimated total average daily traffic generated: 186 vehicles Estimated maximum peak hour traffic generated (if known) and its timing: 22 trips from 3:00 to 4:00 p.m. on weekdays Provide an estimate of the impact on traffic congestion affected roads and describe any traffic

improvements necessary. If the project is within the Twin Cities metropolitan area, discuss its impact on the regional transportation system.

Trip generation Estimate Assumptions – Production Site Only

Trip generation Estimate Assumptions Average Weekday Daily Traffic Estimate: 40 trucks/day bringing wood in (38 round wood and 2 chip/sawdust delivery trucks), 30 trucks/day taking finished product out, and one truck/day hauling ash off site x 2 (i.e., roundtrip) = 142 trips 20 employees total = 40 trips (roundtrip) Assume 2 vendor vehicles visiting the site/day = 4 additional trips each day Total Daily Trips = approximately 186/day Peak Hour Trip Estimate: Assuming a ‘worst case’ of 10 employees entering and 10 employees leaving for a shift change, plus adding an additional 10 percent, the peak hour traffic would be 22 trips. Traffic Impact Assessment: Employees and miscellaneous deliveries (approximately 44 trips/day) would access the site from the city street north of the site (see Exhibit B); trucks (approximately 142 trips/day) would access the site via CR 102. The project proposer has been requested by the city to require trucks to use TH 169 to CR 102 to access the site, instead of going through downtown Mountain Iron. The proposer would make this a requirement of their supply/shipping truckers. The 186 daily trips would be an approximately 8 percent increase from the 2003 CR 102 AADT of 2,450 vehicles/day; and would be a 2 percent increase from the 2006 volume of 9,300 vehicles/day on TH 169 (assuming a worst case, that no one travels north to Mountain Iron – i.e., all vehicles would use TH 169). Assuming that the peak hour traffic on area roadways is 10 percent of the average daily traffic volumes, the 22 additional peak hour trips from Mountain Timber would be a 9 percent increase in peak hour traffic on CR 102; and 2.3 percent of the TH 169 peak hour traffic. Because the volumes on CR 102 and TH 169 are already relatively low, compared to the roadway capacity, no traffic operations impacts would be anticipated to result from the proposed Mountain Timber facility.

22. Vehicle-related Air Emissions. Estimate the effect of the project’s traffic generation on air quality,

including carbon monoxide levels. Discuss the effect of traffic improvements or other mitigation measures on air quality impacts. Note: If the project involves 500 or more parking spaces, consult EAW Guidelines about whether a detailed air quality analysis is needed.

No vehicle-related air quality impacts would result from the proposed project, since no traffic operations impacts are anticipated (see Item 21 above).

23. Stationary Source Air Emissions. Describe the type, sources, quantities and compositions of any emissions from stationary sources of air emissions such as boilers, exhaust stacks or fugitive dust sources. Include any hazardous air pollutants (consult EAW Guidelines for a listing), any greenhouse gases (such as carbon dioxide, methane, and nitrous oxides), and ozone-depleting chemicals (chlorofluorocarbons, hydrofluorocarbons, perfluorocarbons or sulfur hexafluoride).

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Also describe any proposed pollution prevention techniques and proposed air pollution control devices. Describe the impacts on air quality.

Mountain Timber receives hardwood and softwood primarily as unprocessed logs (roundwood), though it may also receive hardwood and softwood as sawdust or wood chips containing a moisture content equal to or greater than 50 percent (green). Roundwood will be stored in the roundwood yard, located on the Mountain Timber facility site; sawdust and woodchips will be stored in the respective piles, also located on the Mountain Timber facility site. Roundwood is processed, on an as-needed basis, by a debarker to remove any bark and by a chipper to reduce the roundwood to smaller, manageable pieces (i.e., chips) which are placed in a storage pile. Green wood chips and green sawdust from the respective storage piles will be transported via a front-end loader or conveyor belt to a hammermill. The hammer mill processes the green wood chips and green sawdust into a fine, green wood meal. Processed green wood meal will be sent to a meal storage container before being fed into a triple-pass direct-fired rotary dryer to reduce moisture. The dryer is directly supplied with hot air from a wood-fired burner. The dryer exhaust, containing the dried wood meal, will pass through a series of cyclone collectors to collect and recover the dried product before being sent to the pellet mills. Material not captured by these cyclone collectors is lost; recovery of the product from the dryer airstream is not possible without the cyclone collectors. After the meal is formed into pellets in the pellet mills, the pellets are then sent to a pellet cooler and a screener before storage. Stored pellets are sent to a packing machine or shipped off-site in bulk. Product lost from the hammer mill, meal storage container, pellet mills, and pellet cooler is captured by a baghouse for later use in the wood-fired burner. Process Drying Emission unit (EU) 001 consists of a triple-pass, direct-fired rotary dryer and an accompanying bank of cyclone collectors, positioned in series, to collect the dried wood pellets from the dryer exhaust. A wood-fired burner, with a maximum potential capacity of 55 million British thermal unit per hour (MMBtu/hr) will supply heat to the dryer. The bank of cyclones collectors are considered to be process equipment, not control equipment; the wood-fired burner, the dryer, and the accompanying cyclone collectors are considered to be a single emission unit. Emissions will vent out stack/vent (SV) 001; there is no proposed control equipment (CE) for this unit. The dryer will remove moisture from 200,000 tons of green wood infeed, resulting in 100,000 tons of processed (oven-dried) wood per year. The dryer emission rate for PM and PM10 is 4.8 pounds per hour and 20.9 tons per year. Baghouse Dust Collector The primary purpose of the Baghouse Dust Collector is to capture wood chips and dust for use as fuel for the Dryer. The moisture content of the wood captured by the Baghouse Dust Collector is expected to be too low for a viable wood pellet, but ideal for use as fuel for the Dryer. The baghouse controls all emissions from the Hammermill, Meal Storage, the Pellet Mills, and the Pellet Cooler Cyclone Collector; 100 percent of the emissions from these processing units are captured by the baghouse. Because the baghouse captures 100 percent of the lost product from the hammer mill, meal storage container, pellet mills, and pellet cooler, no emissions calculations are necessary for these units; emissions from these units are included in the emission calculation for the Baghouse Dust Collector. The baghouse emission rate for PM and PM10 is 1.4 pounds per hour and 6.1 tons per year.

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Particulate Matter The project proposers assed the potential air quality impacts using an air quality dispersion model. The purpose of the modeling was to demonstrate compliance with the applicable Minnesota and National Ambient Air Quality Standards (MAAQS and NAAQS) and Prevention of Significant Deterioration (PSD) Class II Increment Standards for PM10. The project proposers employed a U.S. Environmental Protection Agency approved ambient air quality dispersion model known as AERMOD. Modeling of Mountain Timber’s potential emissions using AERMOD has demonstrated compliance with PSD Class II Increment standards for PM10, along with MAAQS/NAAQS for all pollutants. The facility’s maximum impacts computed by AERMOD were added to the background concentrations to determine a total predicted impact. Background concentrations are used to account for unidentified off-site sources to better simulate the potential cumulative effects to air quality. The background concentrations were provided by MPCA. The total impacts were compared to the applicable air quality standards presented in Table 1.

Table 1. Mountain Timber Wood Products Ambient Air Impacts

PM10 Impact 24-Hour Average

(μg/m3) Annual Average

(μg/m3) Increment Results

AERMOD Results 22.27e 7.76d

PSD Increment Standard 30b 17a

MAAQS/NAAQS Results AERMOD Results 34.62f 12.58d

Background Concentration 26 12 Total Predicted Impact 60.62 24.58 Minnesota/National Ambient Air Quality Standard 150c 50a a Never to be exceeded. b Not to be exceeded more than once per year per receptor location. c Not to be exceeded more than five times during a five-year period. d Concentration represents the highest high - 1st high from the five one-year model runs. e Concentration represents the highest high - 2nd high from the five one-year model runs. f Concentration represents the high - 6th high from the one five-year model run.

Based on the air quality modeling simulation for the proposed facility, the project is expected to comply with the applicable air quality regulations and is not expected to contribute to an adverse cumulative potential air quality effect. Greenhouse Gas Emissions Carbon dioxide and other greenhouse gas emissions from the Mountain Timber Wood project are not subject to any federal, state, or local laws or regulations. Emissions of carbon dioxide (CO2) are estimated here to provide general information related to greenhouse gas issues. Because there is no mandatory or uniform method for calculation of greenhouse gas emissions, CO2 emissions from the project were estimated using a spreadsheets developed by the National Council for Air and Stream Improvements for the American Forest and Paper Association. The spreadsheets use analysis methods and assumptions from the World Resources Institute and World Business Council on Sustainable Development Greenhouse Gas Protocol Standards for Wood Manufacturing facilities.

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The step in the process was to define the operational boundary for the carbon footprint and then identify the carbon emitting activities that occur within that boundary. The operational boundary for the carbon footprint is represented in the schematic diagram below.

Mountain Timber Wood Products

Carbon Footprint Direct and Indirect Emission Activities

Scope 1 – Direct CO2 Emissions • Wood yard loader operation approximately 20 miles per day 350 days per year • Biomass (wood waste) dryer furnace heat input is 481,000 mmBTU/year and is included as additional

information but not included in the direct emissions estimate (see footnote 7 in the ‘CO2 Emission Estimate’ section below)

Scope 2 – Indirect CO2 Emissions from Purchased Electricity • 2.418 MWh/yr of electricity purchased and emission factor of 834.1 kg CO2 / kWh per MAPP region of

NERC Region and eGRID Subregion Average Emission Factor sheet Scope 3 — Indirect CO2 Emissions from Other Activities • Round wood, wood chips and sawdust with a worst case hauling distance of 120 miles • Wood ash transported using 1 trailer load per day to an off-site location with a worst case hauling

distance of 120 miles The maximum direct CO2 emissions from the Mountain Timber Wood Products project from on-site wood handling are estimated at 30 metric tons per year. Combustion-related releases of biomass-derived CO2 are not counted but were calculated and included as additional information.7 The combustion-related emissions

7 Consistent with the standard protocol in the NCASI Spreadsheets for Calculating GHG Emissions from Wood Products Manufacturing Facilities used in the C-footprint analysis, the wood biomass heat input estimate is provided to acknowledge that energy needs at wood processing facilities utilize biomass fuels recovered from the industry’s waste and process streams. However, the current standard protocol does not include the CO2 generated when biomass fuels are burned in GHG emission

Scope 2 Indirect

Scope 1 Direct

Scope 3 Other Indirect

Wood fuel combustion (information only)

Purchased Electricity for Own

Use Company Owned

Vehicles

Round wood, sawdust and chip trucks

Wood ash trucks

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of biomass-derived CO2 are estimated at 671 metric tons per year. Indirect emissions from purchased electricity are estimated to be 2 metric tons per year. Indirect emissions from other activities such as hauling of round wood/chips/sawdust to the facility, pellet product shipments and wood ash hauling are estimated at 3,003 metric tons per year. The direct and indirect CO2 from activities related to the Mountain Timber facility are small enough to be considered insignificant in terms of their effect on ambient CO2 concentrations.

24. Odors, noise and dust. Will the project generate odors, noise or dust during construction or during

operation? Yes No If yes, describe sources, characteristics, duration, quantities or intensity and any proposed measures

to mitigate adverse impacts. Also identify locations of nearby sensitive receptors and estimate impacts on them. Discuss potential impacts on human health or quality of life. (Note: fugitive dust generated by operations may be discussed at item 23 instead of here.)

Dust/Odors The air permit application submitted to the MPCA includes a discussion of potential fugitive dust sources and planned best management practices for reducing dust generation. The dust management plan would require MPCA approval prior to the air permit being approved. Generally, dust generation sources at the facility could include dust from material handling and truck traffic within the unpaved material storage area (round wood). Dust will be minimized by watering down the dust-generation areas during non-freezing weather. Odors generated by the proposed facility would primarily consist of wood fermentation odors from stockpiled wood on site. This should not be an issue under normal facility operating conditions, since turnover of wood supply would occur frequently, and wood storage piles would be designed to allow for ‘first in, first out’ removal of wood. Since decomposition decreases the energy value of wood, the wood storage facility would be designed to facilitate turnover of stock, and minimization of storage time, thereby reducing the likelihood of generation of fermentation odors. The closest residential odor/dust receptors would be the southernmost residences in Mountain Iron, located approximately 1,180 feet from the northernmost (closest) end of the mill building, and approximately 1,730 feet (1/3-mile) from the northernmost (closest) end of the round wood storage area (where dust generation could occur). The wooded, high ground (see site description in Item 9) at the northeast corner of the property may also help to reduce dust and odor transmission to the receptors northeast of the project site. Noise Traffic noise – The closest residential receptors would be the southernmost residences in Mountain Iron, located approximately 550 feet from the northeast corner of the proposed project parcel boundary and city road that provides employee access to the property. Traffic noise generation from the proposed facility is not anticipated to be perceptible, since the traffic trips generated by the project would not contribute substantially to local roadway traffic volumes (see project traffic generation discussion in Item 21 above). Generally, traffic volumes on a roadway would need to double before a perceptible increase in traffic noise (i.e., 3 decibels) would result. To avoid potential noise generation issues from heavy trucks serving the Mountain Timber facility, the project proposer has made a commitment to the city of Mountain Iron to require all supply/material transport trucks to use TH 169 to access the site, and to avoid downtown Mountain Iron.

totals. The GHG Protocol, however, requires that biomass-derived CO2 be reported as additional information. This is the approach generally prescribed for national inventories by the United Nations Framework Convention on Climate Change.

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Facility Noise – Noise sources at the production process vary in location and intensity, New noise sources at the proposed Mountain Timber facility include: • Hammer mill (located inside of the production building) • Chipper • Debarking • Shipping/receiving trucks (no idling will be allowed) • Front end loader • Forklift Of these sources, the hammer mill would be the loudest noise source, but it will be located inside of the production building, so noise levels would be minimized by the surrounding structure. None of the exterior debarking or chipping operations would be performed at night, so no nighttime noise disturbance would result from those operations. The city of Mountain Iron has reviewed the potential noise impacts associated with the proposed Mountain Timber project, and has indicated that the project would not result in adverse noise impacts to the community (see letter in Exhibit H). The closest residential receptors would be the southernmost residences in Mountain Iron, located approximately 1,180 feet (1/4-mile) from the northernmost (closest) end of the mill building, and approximately 1,730 feet (1/3-mile) from the northernmost (closest) end of the round wood storage area (where the closest exterior machinery noise generation could occur). The wooded, high ground (see site description in Item 9) at the northeast corner of the property would also help to reduce noise transmission to the receptors northeast of the project site. Because the closest receptors are located at least 1/3-mile from the nearest outside noise generation activity at the facility, no substantial noise impacts to the closest residential receptors are anticipated.

25. Nearby resources. Are any of the following resources on or in proximity to the site? a. Archaeological, historical, or architectural resources? Yes No b. Prime or unique farmlands or land within an agricultural preserve? Yes No c. Designated parks, recreation areas, or trails? Yes No d. Scenic views and vistas? Yes No e. Other unique resources? Yes No If yes, describe the resource and identify any project-related impacts on the resources. Describe any

measures to minimize or avoid adverse impacts.

Project Site The Minnesota State Historic Preservation Office searched their Minnesota Archaeological Inventory and Historic Structures Inventory databases for the project site vicinity (see Exhibit G). No historic structures were identified within the search area. One archaeological inventory listing was included within the Section 9, T58 N, R18W search area – but no details were given regarding where the site was within Section 9. However, only the western-most portion of the proposed project parcel is located within Section 9; and that portion consists of the railroad corridor and adjacent steel slopes of fill area within the project site (see Exhibit A). These areas have already been disturbed by the railroad and the mine waste placement, so it is reasonable to assume that there are not any intact archaeological sites in this area.

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Procurement Sites Although the majority of woody biomass for the Mountain Timber project will likely come from material (e.g., harvest residue, under-utilized species) harvested from forest areas already being harvested for other resources and from forest products industrial residue (e.g., sawdust), some woody biomass supplied to the facility may come from round wood harvesting in forest areas that would not occur except to supply Mountain Timber (e.g., insect-infested trees that might not otherwise be harvested). Harvesting round wood in these areas could potentially result in physical impacts to cultural resources and/or visual impacts. The MFRC Site-Level Forest Management Guidelines (Appendices B and C) include guidance on regulatory requirements and resources available to identify and avoid cultural resources. Part 2 of the Guidelines includes a discussion of visual quality considerations and impact minimization.

26. Visual impacts. Will the project create adverse visual impacts during construction or operation? Such as glare from intense lights, lights visible in wilderness areas and large visible plumes from cooling towers or exhaust stacks? Yes No If yes, explain.

The proposed project is located in an area designated for industrial land use, so visual impacts are not a substantial concern. However, to minimize visibility from adjacent roads to the project site, the site plan avoids disturbing the wooded areas adjacent to CR 102, so these areas will serve as a visual buffer between the roadway and the facility.

27. Compatibility with plans and land use regulations. Is the project subject to an adopted local comprehensive plan, land use plan or regulation, or other applicable land use, water, or resource management plan of a local, regional, state or federal agency? Yes No

If yes, describe the plan, discuss its compatibility with the project and explain how any conflicts will be resolved. If no, explain.

The proposed project is consistent with the city’s planned industrial land use for this site.8 28. Impact on infrastructure and public services. Will new or expanded utilities, roads, other

infrastructure or public services be required to serve the project? Yes No If yes, describe the new or additional infrastructure or services needed. (Note: any infrastructure that is a connected action with respect to the project must be assessed in the EAW; see EAW Guidelines for details.)

No expanded infrastructure construction would be required to serve the proposed project since there are existing city utility service lines located within the city street right-of-way north of the project site. There is an existing paved city street from CR 102 to the proposed project employee entrance. The truck entrance is located on CR 102. Public service requirements for the proposed project will include fire and police service for the site, once improvements are made. The increased tax income from the increased post-development land value would compensate for these increased public service provisions.

8 This statement is based on the city of Mountain Iron approved zoning map (Number 03-98 Approving Zoning Map), which is expressed under the city of Mountain Iron Ordinance Number 03-98 Section 1. Adoption of Official Zoning Map, which states that “The Zoning Map, as presented on September 8, 1998, is hereby declared to be the official Zoning Map in and for the city of Mountain Iron (map available for review at City Hall, 8878 Main Street, Mountain Iron, Minnesota).”

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29. Cumulative impacts. Minn. R. 4410.1700, subp. 7, item B requires that the RGU consider the

“cumulative potential effects of related or anticipated future projects” when determining the need for an environmental impact statement. Identify any past, present or reasonably foreseeable future projects that may interact with the project described in this EAW in such a way as to cause cumulative impacts. Describe the nature of the cumulative impacts and summarize any other available information relevant to determining whether there is potential for significant environmental effects due to cumulative impacts (or discuss each cumulative impact under appropriate item(s) elsewhere on this form). The MPCA is required to inquire whether a proposed project, which may not individually have the potential to cause significant environmental effects, could have a significant effect when considered along with other projects. This type of impact is known as a cumulative potential effect. In order to assess the proposed project’s “cumulative potential effects of related or anticipated future projects,” the MPCA conducted an analysis that addressed other projects or operations in context to the potential direct or indirect impacts of the proposed project that: (1) are already in existence or planned for the future; (2) are located in the surrounding area; and (3) might reasonably be expected to affect the same natural resources. The following is a review of the analysis conducted to determine if the proposed Project would contribute to an adverse cumulative potential effect. Please refer to Exhibit I. Projects that “are already in existence or planned for the future” and” are located in the surrounding area.” The MPCA reviewed existing public data to identify the number of projects within the same geographic area of the proposed project. The public data reviewed included the most recent MPCA permit database for other operations that may hold an air quality, water quality, hazardous waste or solid waste permit. A total of 72 projects identified from the search of public records. There is no other project pending within the project boundaries of this proposal. Lastly, the MPCA reviewed the proposed and existing projects to determine whether collectively they “might reasonably be expected to affect the same natural resources.” The natural resources of concern included ground water, surface waters, air quality and land use. The following is a brief discussion of each.

Ground water The proposed project will operate entirely on the city of Mountain Iron municipal water supply. Based on the review of the proposed project’s water use in context to the existing city of Mountain Iron municipal water supply, the city of Mountain Iron indicated that the new project will not contribute to an adverse impact on the municipal water supply. Surface water The project will be located in the W Two R minor watershed of the St. Louis River watershed within the Lake Superior Basin. The W Two R minor watershed is not currently listed for any specific impairment. The proposed Project will operate under a NPDES/SDS permit which regulates stormwater during the construction and operation phase. In light of the existing condition of the W Two R minor watershed, along with the stormwater permit, the proposed project is not anticipated to contribute or create to an adverse environmental condition. Air quality The air permitting associated with obtaining approval to install and operate the biomass-fired boilers required for the project was evaluated for potential direct and cumulative air quality effects using an air quality model approved by the U.S. Environmental Protection Agency. The modeling approach addressed PM10 from the proposed project and for all the facilities in the region. The total impacts were then compared to PSD increments and the NAAQS. The predicted impacts are all below the NAAQS standards and PSD increment ceilings. As such, the proposed project is not expected to contribute or create an adverse cumulative effect to air quality.

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Mountain Timber Wood Fuel Pellet Facility Environmental Assessment Mountain Iron, Minnesota 23 Worksheet

Land use The land use in the project area is primarily residential, municipal and industrial. The proposed project is expected to conform to the existing land use for the area and will not displace green space or other designated land uses. Forest Resources Already existing and reasonably-foreseeable planned future wood biomass projects included in the assessment of cumulative potential effects included projects within a 100-mile radius of the proposed Mountain Timber project that are either constructed (existing) or have completed or initiated permitting and/or environmental review processes. Based on these criteria, the following projects and estimates of woody biomass needs were considered:

• Laurentian Energy Authority (LEA), Virginia/Hibbing (Wood Yard in Mountain Iron) – Existing

project; approximate annual biomass need of 240,000 green tons/year by 2009, with approximately 50 percent of the biomass provided by closed loop sources (as defined in Minn. Stat. § 216B.2424 Biomass Power Mandate)9, resulting in a need for approximately 120,000 green tons of open loop (forest harvest) woody biomass/year.

• Bio-Pellets, Deer River – Existing project (2007); biomass need is supplied by residue from Rajala

Timber facility in Deer River. • Valley Forest Wood Products, Marcell – Existing project; approximate biomass need is 100,000 green

tons/year. • Trego Wood Pellet Plant, Wisconsin – Planned Project; no available projection of biomass needs; but

for the purpose of assessing potential needs, 200,000 green tons was assumed to be needed at this facility. However, since Trego is approximately 110 miles from Mountain Iron, this facility would not impact Minnesota forest resources to the same extent as the other foreseeable projects would. For the purpose of assessing supply needs, it was assumed that 20 percent (likely a conservatively high estimate) of the 200,000 green tons (i.e., 40,000 green tons) would come from Minnesota forest sources.

• Laskin Energy 3, Hoyt Lakes – Planned project; estimated biomass need is 250,000 green tons/year, slated to open in 2011.

Based on the rough estimates of woody biomass needs for these five projects, plus the estimated 200,000 green tons per year needed for Mountain Timber, the cumulative woody biomass needs for these six projects would total approximately 710,000 green tons per year.

9 Minn. Stat. § 216B.2424 defines farm-grown closed loop biomass as biomass, as defined in section 216C.051,

subdivision 7, that: (1) is intentionally cultivated, harvested, and prepared for use, in whole or in part, as a fuel for the generation of electricity; (2) when combusted, releases an amount of carbon dioxide that is less than or approximately equal to the carbon dioxide absorbed by the biomass fuel during its growing cycle; and (3) is fired in a new or substantially retrofitted electric generating facility that is: (i) located within 400 miles of the site of the biomass production; and (ii) designed to use biomass to meet at least 75 percent of its fuel requirements.

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Mountain Timber Wood Fuel Pellet Facility Environmental Assessment Mountain Iron, Minnesota 24 Worksheet

The following natural resources that would be affected by the proposed project and other reasonably foreseeable planned future projects were assessed for cumulative potential effects:

• Available wood supply o Round wood supply o Timber harvest residue o Brushlands

• Forest and wildlife habitat impacts • Sustainability of forest soil nutrients • Invasive species

Available Woody Biomass Supply As noted previously, woody biomass from a number of different potential sources can be, and is planned to be, used by the various known proposed biomass facilities. These potential sources include: small diameter woody biomass from harvest residue, pre-commercial thinning from brushland harvesting, as well as non-marketable round wood biomass from insect-infested trees, damaged round wood, underutilized species and other potential surplus round wood sources. The sections that follow discuss the potential sources and availability of each – and together they combine to make up the total potential available woody biomass sources.

Round Wood Supply As a first step in assessing the potential cumulative round wood supply available to meet woody biomass demands and assessing the potential significant effects from any resulting round wood harvest, the current status of timber harvesting in Minnesota vs. the harvests assessed in the 1994 GEIS was reviewed. A comparison of actual timber harvests from 1990 to 2000 vs. the harvest levels assumed in the ‘base scenario’ in the 1994 GEIS was made in the August 2005 ‘report card’ on the GEIS findings: ‘Minnesota Timber Harvesting GEIS: An Assessment of the First 10 Years’ (Staff Paper Series No. 182 from University of Minnesota Department of Forest Resources). This report found that actual harvests fell slightly short of the GEIS base scenario (4 million cords) – varying between 99 percent in 1994 and 89 percent in 2000. Actual harvests have continued to drop in subsequent years – from 3.7 million cords per year in 2005 to about 3.3 or 3.4 million cords per year in 2007. The ‘2005 report card’ provides details of minor variations in trends from what was predicted in the GEIS analysis for various potential significant impacts, but found no trends that were substantially different from the GEIS projections and findings. Overall, current harvest levels are within the levels envisioned in the base scenario of the GEIS, and actual harvests (2005 to 2007) were 300,000 to 700,000 cords (or approximately 645,000 to 1.5 million GT/year) below the 4 million cords or approximately 8.4 GT/year GEIS base scenario. If demands for ‘marketable’ round wood continue to be below the GEIS assumed levels, some of the ‘surplus’ roundwood that would normally go to traditional wood products manufacturing may be available for woody biomass use (even though woody biomass production facilities are not planning to utilize marketable timber in their production, due to current market price). An alternative approach to estimating the likely availability of sufficient woody forest biomass to meet the cumulative needs of foreseeable projects – based on estimated available biomass in under-utilized ash, basswood, and tamarack tree species – is summarized in Exhibit J, Table 2. This estimate is based on data from the DNR – Division of Forestry report ‘Minnesota’s Forest Resources’ dated December 2007 (‘2007 Report’). The report includes the statewide round wood harvest (in cords) for each species, as well as estimates of the ‘long-term annual sustainable harvest’ and ‘estimated net annual growth.’ The data in Exhibit J, Table 2 reflect estimated quantities within the 100-mile supply area for Minnesota Timber, based on the statewide harvest and growth values contained in the 2007 Report, pro-rated to reflect the percentage of total statewide forest land that is located within the 100-mile radius supply area (i.e., 9,240,968 acres of timberland within the 100-mile radius area vs. 15,112,725 acres of timberland statewide = 61 percent is within the Mountain Timber supply area).

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Mountain Timber Wood Fuel Pellet Facility Environmental Assessment Mountain Iron, Minnesota 25 Worksheet

The total surplus green tons/year of ‘surplus’ (i.e., beyond the 2005 harvest levels) round wood for these three species, as shown in Exhibit J, Table 2, is 758,800 million GT/year above the ‘sustainable harvest levels’ and 1.1 million GT/year above the net annual growth. Comparing these values against the estimated 710,000 GT/year estimated need for the foreseeable woody biomass projects indicates that there is substantially more under-utilized round wood mass available than is anticipated to be needed for the woody biomass projects. It should also be noted that Table 2 summarizes only the estimated available quantities of three under-utilized tree species. Woody biomass for the Mountain Timber project - and other projects needing woody biomass – would come from a variety of sources in addition to these underutilized species. Other potential sources could include: forest thinnings, small diameter harvest residue, damaged (un-marketable) round wood, insect-damaged stands, and brushland woody biomass. Based on this analysis, it is unlikely that the proposed Project would contribute or create an adverse cumulative effect to the available round wood supply.

Timber Harvest Residue The existing and foreseeable biomass projects all indicate that they would primarily utilize wood from harvest or sawmill residue (e.g., sawdust, chips, and/or forest harvest residue) or under-utilized wood or, in the case of the LEA project, would ultimately include ‘closed loop’ biomass sources (as defined in Minnesota Statutes 216B.2424 Biomass Power Mandate10), Because the LEA project proposed to use harvest residues as a portion of their raw material needs, an analysis of forest harvest residue availability was performed for the LEA project in 2005. The LEA analysis can be used to assess if the proposed project use of timber harvest residue will adversely impact the aggregate supply of timber harvest residue within the biomass supply area for the proposed Mountain Timber Project, since the LEA supply area is approximately the same as the supply area for the proposed Mountain Timber project. This analysis looked at the availability of forest residues for energy production within a 100-mile radius of the LEA project Hibbing wood yard (less than 20 miles from Mountain Iron, where the Mountain Timber project is proposed).11 The analysis assumptions considered only the unutilized woody biomass that would result from projected merchantable pulpwood harvesting (i.e., not including diseased trees, under-utilized species, or potential brushland biomass harvesting). The analysis also reduced the overall percentage of tree biomass assumed available to account for stem breakage in winter operations and reduced merchantable top diameters, plus a 25 percent additional reduction to address concerns related to soil nutrient depletion and wildlife impacts. The end result was an estimated 732,000 green tons of biomass that would potentially be available each year within 100 miles of the LEA wood yard. While the LEA analysis estimate of available timber harvest residue is greater than the 710,000 green tons estimated as potentially being needed annually for the six biomass projects considered in this cumulative potential effects analysis, there are some factors that suggest the LEA estimate of available timber harvest residue may be higher than what may actually be available, since:

• The LEA analysis was done prior to the development and completion of the MFRC woody biomass harvest guidelines. The LEA analysis assumed a 25 percent reduction in available woody biomass to address potential soil and wildlife impacts, while the MFRC guidelines ultimately recommended retaining 1/3 of the fine woody debris (i.e., branches and tops) on sites where woody biomass is harvested to address potential impacts. This is countered somewhat by the fact that the LEA analysis assumed a fairly conservative (conservatively low) amount of biomass volume in the tops and

10 Minnesota Statute 216B.2424 defines farm-grown closed loop biomass as biomass that: (1) is intentionally cultivated, harvested, and prepared for use, in whole or in part, as a fuel for the generation of electricity; (2) when combusted, releases an amount of carbon dioxide that is less than or approximately equal to the carbon dioxide absorbed by the biomass fuel during its growing cycle; and (3) is fired in a new or substantially retrofitted electric generating facility that is: (i) located within 400 miles of the site of the biomass production; and (ii) designed to use biomass to meet at least 75 percent of its fuel requirements.

11 Berguson, Bill, et al.; University of Minnesota, Natural Resources Research Institute, ‘Analysis of Forest Harvest Residue for the Laurentian Energy Authority Project,’ 2005.

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Mountain Timber Wood Fuel Pellet Facility Environmental Assessment Mountain Iron, Minnesota 26 Worksheet

branches of hardwood species. • In addition to the recommendation to retain 1/3 of fine woody debris on biomass harvest sites, the

MFRC guidelines also recommended avoiding additional biomass harvest in riparian areas, certain organic soils and within leave tree clumps.

• The LEA analysis did not make any adjustments for timberland areas that may not be available or totally available for woody biomass harvest. Examples include MCBS sites of high or outstanding biodiversity significance and lands within state wildlife management areas.

Mountain Timber and the other foreseeable woody biomass projects will be using biomass from a variety of sources, not just from forest harvest residue. This practice greatly reduces the potential for a significant cumulative potential effect. As noted above, the original LEA woody biomass availability estimates of 732,000 green tons of biomass per year. It did not include other potential woody biomass sources. In a separate assessment of the availability of small diameter woody biomass was performed for the Mountain Timber project, as described in Item 11 and in the scenarios in Table 1 (which includes a 33 percent reduction factor for leaving harvest residue in the forest). Scenario 3 in Table 1 (that assumes the likely supply scenario, where biomass is supplied by both harvest residue and round wood sources) estimated that Mountain Timber would utilize approximately 2 percent of the hardwood harvest residue and approximately 14 percent of the softwood residue harvested within the 100-mile supply radius of the facility. Based on the percentages in this assessment, it is not likely that the Mountain Timber project will adversely impact the aggregate supply of timber harvest residue within the project’s biomass supply area. Brushlands Although Mountain Timber does not currently plan to use woody biomass from brushland, this source was identified for potential use by other biomass facilities. For example, the 2005 LEA analysis estimated the total woody biomass currently existing on Minnesota brushland within 100 miles of the LEA project as an additional 4.4 million green tons.2 (Note: while brushland harvest may prove to be economically viable in the future, the equipment for harvesting and processing it efficiently are still in the development stages, so this woody biomass source is not currently being utilized.)

Summary of Woody Biomass Source Opportunities

If all of the known projects relied completely on timber harvest residues for biomass materials, there would be concerns that total demand will exceed the amount of timber harvest residue available within the Mountain Timber project supply area (100-mile radius). However, the estimated total cumulative demand for these known projects (710,000 green tons per year) will not likely be met solely with timber harvest residues. Woody biomass would be available from a number of sources (e.g., sawmill residue, underutilized tree species, damaged round wood, round wood from insect-infested forests [see Exhibit J], and brushlands) that were not included in the LEA analysis and which will be utilized by Mountain Timber and other projects to meet biomass material needs. Based on these combined sources, there appears to be adequate amounts of potentially-available woody biomass in the general project area to supply the existing and reasonably-foreseeable biomass projects. A wood supply plan has been developed for the proposed Mountain Timber facility, based on a market assessment of availability of wood material. This plan resulted in the proposed wood supply strategy described in Item 6 above. It is anticipated that each biomass project proposer would perform their own market analysis and supply plan – including assessment of sources/quantities that are economically and practically feasible – as part of their feasibility studies for each of the proposed projects. Based on the above comparisons of available biomass supplies (i.e., round wood, timber harvest residue and brushlands) vs. the estimated 710,000 GT of woody biomass/year needed to supply biomass for foreseeable woody biomass projects, as well as consideration of the fact that wood biomass facilities will be using biomass materials from a variety of sources, no potential adverse cumulative effects to forest resources are anticipated to result from the proposed project in combination with the other foreseeable projects.

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Mountain Timber Wood Fuel Pellet Facility Environmental Assessment Mountain Iron, Minnesota 27 Worksheet

Forest and Wildlife Habitat Impacts As noted in the previous section, based on the estimated biomass needs for the six planned woody biomass projects, adequate forest resources are available from mixed sources for biomass. Potential additional round wood harvest levels for biomass are within the 1994 GEIS base-level scenario projections and are not likely to generate additional significant potential impacts or suggested mitigations beyond what was developed by and as a result of the GEIS. The potential impact to wildlife and wildlife habitat due to the removal of additional woody biomass (after timber harvest) has been documented by a variety of researchers. While there has not been extensive work on this topic in Minnesota, the range of potential impacts is foreseeable.12 The Project proposers recognize the potential for adverse impact to wildlife and wildlife habitat and have taken measures to minimize or eliminate loss of wildlife and wildlife habitat. As discussed in Item 11, the MFRC Site-Level Forest Management Guidelines, including the recently completed woody biomass harvesting guidelines, contain practices that would lessen potential negative impacts to forest wildlife, such as retention of snags and down logs, retaining slash piles that show evidence of use by wildlife, and leaving a minimum of 1/3 of the fine woody debris and slash on harvested areas. In addition, concerns about woody biomass harvesting from certain sensitive sites (i.e., Minnesota County Biological Survey [MCBS] high and outstanding biodiversity sites, and other high conservation value forests) are addressed in the Guidelines by giving greater consideration to leaving additional biomass (i.e., above what is generally recommended in the MFRC guidelines) or avoiding biomass harvesting on these sites. Mountain Timber will require that their woody biomass suppliers conform to the Guidelines, therefore the Mountain Timber project would not adversely impact the aggregate supply of wildlife habitat within the project’s biomass supply area. If all woody biomass project proposers agree to conform to the Guidelines, potential cumulative effects from biomass harvest residue would be further minimized. Concerns about woody biomass harvesting from certain sensitive sites (i.e., MCBS high and outstanding biodiversity sites) could be addressed by encouraging project proposers to work with biomass suppliers to give greater consideration to leaving additional biomass (i.e., above what is generally recommended in the MFRC guidelines) or avoiding biomass harvesting on these sites. In addition, the MFRC and MnDNR plan to monitor woody biomass guideline implementation and effectiveness over time, to determine if there is a need to adapt the guidelines as new knowledge and experience is gained. Sustainability of Forest Soil Nutrients Another concern related to timber harvesting activities is the loss of soil nutrients within harvest areas. An Updated Forest Soil Fertility Analysis report was produced in 2004 to re-assess the original GEIS analysis based on updated scientific understanding of forest soil fertility, and incorporation of factors to assess the potential impacts from utilization of harvest residue (i.e., the ‘waste’ wood now being considered for biomass use) for energy production. The results of this update are included in the recently-updated woody biomass harvesting guidelines in the MFRC Site-Level Forest Management Guidelines. The 2004 study assumed that the material that remains after biomass harvesting would primarily be high-nutrient small branches and leaves, which are not utilized in biomass production for energy. The study estimated that in this scenario, an average of 25 percent of above-ground nutrients in the pre-harvest stand would be retained following residue removal, compared to about 40 percent retained following conventional harvest. The results of this updated, analysis indicated that natural inputs of nitrogen (N), phosphorus (P) and magnesium (Mg) in mineral soils are sufficient to balance outputs; and that although losses of both potassium (K) and calcium (Ca) would be greater than the rates of input (the same results as the GEIS found), less than 2 percent of the K in the soil system and substantially less than 0.5 percent of the Ca in the soil system would be removed during each 50-year rotation.13 These losses were considered by the researchers to be

12 IEA Bioenergy (2002). Sustainable production of woody biomass for energy: A position paper prepared by IEA Bioenergy.

International Energy Agency. 13 Grigal, David; ‘An Update of Forest Soils. A Technical Paper for a Generic Environmental Impact Statement on Timber

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Mountain Timber Wood Fuel Pellet Facility Environmental Assessment Mountain Iron, Minnesota 28 Worksheet

inconsequential, and would not affect soil productivity, even in sandy soils. Further, the study noted that, in addition to the theoretical soil nutrient analyses described above, long-term nutrient studies based on actual field data from Minnesota and other similar forest-type areas have not found any evidence of substantial changes in soil nutrients from forest harvesting re-growth cycles. The study found that deep organic soils (ombrotrophic sites) were somewhat different with respect to K and P – approximately 30 percent of K and 20 percent of P would be lost in each 50-year rotation. Although lowland conifer harvests from organic soil sites are often at a 100+-year rotation, not 50-year rotation, harvesting of biomass on organic soil sites was addressed as a specific issue in the MFRC Site-Level Forest Management Guidelines (including the recently-added woody biomass harvesting guidelines). The Guidelines specify avoidance of biomass harvesting (tops and limbs) on organic soils deeper than 24 inches that are ombrotrophic. This research indicates that no cumulative potential effects on forest soil fertility would be anticipated to occur as a result of foreseeable future biomass projects that follow the MFRC Site-Level Forest Management Guidelines (including the recently-added woody biomass harvesting guidelines) and avoid removal of timber harvest residue on sites with deep organic soils.14 Therefore, since Mountain Timber will require that their woody biomass suppliers conform to the Site-Level Forest Management Guidelines, the Mountain Timber project would not adversely impact soil fertility in forests used to supply woody biomass to the project. If all woody biomass project proposers agree to conform to the Guidelines, potential cumulative effects on forest soils from forest harvest residue for biomass would be further minimized.

Invasive Species The gathering and transport of timber harvest residue increases concerns about the spread of potentially damaging invasive species (particularly terrestrial plants and worms) as woody biomass materials are transported from the harvest site to biomass facilities. A possible mitigation to reduce the potential for spreading invasive species would be to remove loose vegetation and soil from the harvested biomass, and covering transport trucks before they leave harvest sites. Another concern relates to increased potential for the introduction of invasive species on biomass harvest sites. Biomass removal results in the development or exposure of seedbeds, thus creating potential entry points for invasive species, especially if much of the material is taken off the site. Adherence to the MFRC woody biomass harvest guidelines may help address some of this concern. Monitoring of biomass harvest sites for increases in invasive species will also be important. In addition, the Mountain Timber project site (i.e., location of the plant) – as well as the sites for other recently completed and proposed plant sites – should be monitored for potential invasive species introductions. Mountain Timber will require that their woody biomass suppliers conform to the Site-Level Forest Management Guidelines, thereby minimizing the potential for invasive species impacts. As the Project propsosers will require woody biomass vendors to abide by the MFRC guidelines, the potential for invasive species to adversely impact the harvest sites is minimized. As such, the procurement of woody biomass for this Project is not expected to contribute to an adverse cumulative effect on native species.

30. Other Potential Environmental Impacts. If the project may cause any adverse environmental impacts

not addressed by items 1 to 28, identify and discuss them here, along with any proposed mitigation. 31. Summary of issues. List any impacts and issues identified above that may require further

investigation before the project is begun. Discuss any alternatives or mitigative measures that have been or may be considered for these impacts and issues, including those that have been or may be ordered as permit conditions.

Harvesting and Forest Management in Minnesota,’ 2004.

14 The MFRC guidance provides a description of management practices that will maintain soil productivity. The forest biomass and brushland biomass sections reference the soil productivity practices within the timber harvesting section. These activities include avoidance of soil productivity, no more than 1-3% of harvest area occupied by roads/landings, no more than 10-15% of the harvest area covered by skid trails, etc..

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Mountain Timber Wood Fuel Pellet Facility Environmental Assessment Mountain Iron, Minnesota 29 Worksheet

Forest and Wildlife As described in Item 11 above, Mountain Timber plans to utilize approximately 200,000 green tons of woody biomass raw materials a year. Wood harvesting could adversely affect wildlife resources and habitats if conducted inappropriately. Potential impacts from wood harvest activities will be mitigated by Mountain Timber’s commitment to include language in their contracts with woody biomass raw material vendors, requiring certification that the woody material supplied by vendors was harvested from land certified to conform to forest sustainability management guidelines and/or that the wood biomass was harvested in conformance with the Minnesota Forest Resources Council (MFRC) Site-Level Forest Management Guidelines (including the recently-added woody biomass harvesting guidelines). Water Quality – Surface Water Runoff The proposed project will result in an additional approximately 2.9 acres of impervious surfaces in roadway and buildings (bringing the total impervious surface area to 4.6 acres), plus approximately 14.8 acres of outside material storage areas that would initially be unpaved, but are ultimately planned to be paved. Since the site plan is only developed to a concept level, detailed stormwater modeling and stormwater management plans have not been prepared yet. A rough estimate of increased runoff following development of the site can be made by assuming 100 percent runoff from a ½-inch rainfall event. For this assumed condition, the additional 17.7 acres of impervious surface on the Mountain Timber site would generate approximately 0.7 acre-feet of runoff. However, as noted in Item 19 below, the soils on the site appear to be coarse-textured, which would allow for some soil infiltration – decreasing stormwater pond capacity requirements – if ditches are used to convey surface water across the site. There is an existing stormwater pond (see location shown on Exhibit B) that could be used to treat a portion of the surface water runoff from the Mountain Timber facility prior to discharge, as required by the MPCA NPDES/State Disposal System (SDS) Construction Stormwater Permit Program. As part of the MPCA’s NPDES/SDS permitting program, the proposed project would also be required to implement a stormwater management plan/stormwater pollution prevention plan for construction and post-construction stormwater treatment as well as best management practices to minimize erosion and sedimentation during and after construction. Traffic No traffic operations impacts are anticipated to result from the proposed Mountain Timber project. However, the project proposer has been requested by the city to require trucks to use TH 169 to CR 102 to access the site, instead of going through downtown Mountain Iron. The proposer would make this a requirement of their supply/shipping truckers. Air Quality Permit Conditions The following are air quality dispersion modeling-based permit conditions based on the March 3, 2008, submittal (technical memorandum and CD-ROM) for the proposed Mountain Timber Wood Products wood pellet facility in Mountain Iron, Minnesota.

Stack Sources

• The process drying stack shall not exceed 0.015 grains per dry standard cubic foot (gr/dscf). • The baghouse dust collector stack shall not exceed 0.010 gr/dscf. • The process drying stack height shall be at least 70.0 feet above grade. • The baghouse dust collector stack height shall be at least 50.0 feet above grade. • The main processing building height shall not exceed 28.75 feet above grade.

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Mountain Timber Wood Fuel Pellet Facility Environmental Assessment Mountain Iron, Minnesota 30 Worksheet

Fugitive Sources

• Facility-wide speed limit of 10 mph for all on-site locations (roads and storage yards). • Facility-wide truck limit of 71 trucks per day (grand total of all ash trucks, chip/sawdust

trucks, roundwood trucks, and pellet load-out trucks). • All on-site roads shall be paved. • All on-site roads shall be vacuumed swept daily (unless wet or snow covered). • All on-site paved road silt loadings shall not exceed values in the latest modeling and

concurrent Standardized Air Modeling (SAM) spreadsheet. • The roundwood storage yard silt content not to exceed 5.7 percent (i.e. use class 5 or class 6 or better) --

see "Mn/ROAD Aggregate Profile" • The roundwood storage yard shall use chemical dust suppression with 80 percent control or better -- see

Boise Cascade's Fugitive Emissions Control Plan • The sawdust/chip storage yard shall be paved. • The sawdust/chip storage yard silt loading shall not exceed 25 grams per square meter. Silt Testing

• The on-site paved road silt loading testing requirements are as follows (to be determined for each road

segment shown on page A-6 of the technical memorandum dated March 3, 2008). • The sawdust/chip storage yard (paved area) silt loading testing requirements are as follows (to be

determined). • The roundwood storage yard (unpaved area) silt content testing requirements are as follows (to be

determined). PM10 Re-modeling

• PM10 re-modeling is required if silt loading testing or silt content testing indicates values greater than

those assumed in the March 3, 2008, submittal. • PM10 re-modeling is required if the facility can not meet any other of the above conditions.

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Wenck Associates, Inc.Environmental Engineers

Property Boundary

Mt. Timber Wood Products: EAWProject Location

FEB 2008Figure 11800 Pioneer Creek Center

Maple Plain, MN 55359-0429

COPY

RIGH

T

2,000 0 2,0001,000Feet

Eveleth 7.5 Minute Quadrangle (USGS: 1983)Virginia 7.5 Minute Quadrangle (USGS: 1985)Kinney 7.5 Minute Quadrangle (USGS: 1985)Kirk 7.5 Minute Quadrangle (USGS: 1983)

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Area of Detail

St. Louis County

EXHIBIT A

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Wenck Associates, Inc.Environmental Engineers

Employee Entranceand Exit

Truck Entranceand Exit

Existing GasPipeline

SouthStormwater

Pond

NorthStormwater

Pond

Slate St

SV001 Dryer

SV002 Baghouse

169

102

Unknown or No Streetname

6th St

Mt. Timber Wood Products: EAWProposed Facility Layout

FEB 2008Figure 21800 Pioneer Creek Center

Maple Plain, MN 55359-0429

COPY

RIGH

T

400 0 400200Feet

2006 Aerial Photograph (Source: LMIC)

LegendSV001 - DryerSV002 - BaghouseEmployee ParkingMill BuildingProperty LineRound WoodStormwater PondTruck Scale

Chips/SawdustEmployee RouteExisting Gas PipelineLoader PathTruck Path for Pellet TrucksTruck Path for Roundwood, Sawdust and ChipsRailroads

Mxd: L:\1836\06\mxd\Facility Map.mxdLast Modified: 1/17/2008 3:30:21 PM

EXHIBIT B

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Wenck Associates, Inc.Environmental Engineers

Lake Superior

Upper Red Lake

Leech Lake

Mille Lacs Lake

Lower Red Lake

Rainy Lake

Trout Lake

Basswood Lake

Mississippi River

Zim

Day

Max

Ely

Orr

Ray

Shaw

AvonLuck

Tony

Rice Bock

Page MoraEarl

Isle

Glen

Bena

Buhl

Wirt

TogoCook

Saum

Gowan

Elmer Payne

LomanIndus

Crown

Duelm

Bruce

Foley DalboPease

Brill

Lewis

Siren

Pierz

Askov

BrunoMalmo

Cable Morse

Oylen

UpsonMason

Hines Brule

Emily

Nevis

RemerWarba

BoveyWales

Inger

Whyte

HinesBritt

Tofte

RedbyEffie

Tower

Gheen

Buyck

Lawler

Wright

Kelsey Cotton

Forbes

Margie

RoscoeIsanti Branch

Canton

AlbanyHarris

Grandy

Campia Ingram

Gilman

HaugenKennan

BrahamMilaca

Sarona

Hertel

Genola Quamba Beroun

Ojibwa Winter

Onamia WarmanWahkon

Minong

Motley Baxter

Gordon

Denham

CrosbyLeader Nisswa Cuyuna

Mellen

Aitkin Barnum

Nimrod

BenoitMoquah

Backus Outing

Odanah

Akeley

Arnold

Alborn

WalkerWawina Canyon

ZempleMarble

Aurora

Angora

Shooks

Lutsen

Soudan

Winton

Cusson

Toivola

Melrude

Makinen

Ponemah

Waskish

Manitou

SartellMelrose

CushingRonneby

HawkinsCatawba

ElmdaleMorrill

Exeland

OgilvieBuckman

SpoonerWebster

Reserve

HillmanLastrup

Randall

Loretta

Danbury

Cushing Harding

Lampson

Fifield

Hayward

Lincoln McGrathBarrows

Wascott

Staples

Glidden

KerrickChaffey

HolyokeBennett

HassmanJenkins

Marengo

MahtowaAshland

Cloquet

Swatara

Tobique

Laporte

Guthrie Calumet

Rollins

Brimson

BemidjiLavinia

Hibbing Eveleth

MarcellBiwabik

Puposky AlvwoodBigfork

Funkley

Babbitt

Gemmell

Pelland

Phillips

KimberlyMcGregor

Jacobson

BaudetteGraceton

Richmond Centuria

SantiagoAlmelund Milltown

Freeport

Oak ParkFrederic

RoyaltonGrasston

Sobieski

RadissonCouderay

FreedhemHinckley

New Post

Vineland

GarrisonPillager Rutledge

Brainerd DuquetteRiverton

Deerwood

Drummond

PalisadeCromwell Superior Washburn

Herbster

Whipholt

GoodlandHighland

PengillyNashwauk Keewatin

ChisholmVirginia

Isabella

Northome

Kelliher

Williams

East Lake

Sheshebee

Floodwood

Big Falls

Rockville Zimmerman

Greenwald PrincetonCambridge Rice Lake

Ladysmith

Rush CityBarronett

Birchwood

Swanville

Pine City

Flensburg

MarkvilleSandstoneButternut

Finlayson DairylandKingsdaleClam Lake

Namekagon

WrenshallBlueberry

WentworthBarksdale

Port WingBrookston

LongvilleInguadona

La Pointe

Hill City

Red Cliff

Boy River

WilkinsonBall Club

Cass Lake

Tenstrike

Blackduck

Schroeder

Embarrass

Nett Lake

Ericsburg

Cross Lake

Clementson

Clear LakeWaite Park Cumberland

Saint Rosa

Glen Flora

Trade LakeRock Creek Grantsburg

Shell Lake

Stone Lake

Brook Park Park Falls

Moose LakeGrand View

Pine River

Iron River

Hackensack

HermantownCornucopia

Swan River

BlackberryLa Prairie

Deer RiverBeaver Bay

Pennington

Silver Bay

Squaw Lake

Hoyt Lakes

Craigville

Crane Lake

Littlefork

Meadowlands

Grand Falls

Spring Hill

Balsam Lake

Sauk Rapids

Holdingford

Yellow Lake

Browerville

Springbrook

Fort Ripley

High Bridge

Fifty Lakes

Two Harbors

Federal Dam

Spring Lake

Murphy City

Island View

Saint Joseph

North Branch Weyerhaeuser

Ward Springs

Long Prairie

Kettle River

Pequot Lakes Breezy Point

French River

Grand Marais

Saint Augusta

Saint Anthony Saint Stephen

Solon Springs

Castle Danger

Little Marais

Mountain Iron

East Gull Lake

Lake Nebagamon

Little Round Lake

International Falls

Duluth

61

7153

169

35

210

63

2

13

2

27

Mountain TimberWood Products

Quetico Provincial Park

Lake of the WoodsProvincial Park

Lake SuperiorLake Superior

Lake of the WoodsLake of the Woods

Dryberry LakeDryberry Lake

100 Miles

75 Miles

50 Miles

25 Miles

Fort Frances

Atikokan

17

11

71

Superior NFChippewa NF

Chequamegon NF

Voyageurs NP

Mt. Timber Wood Products: EAWWood Biomass Supply Area

FEB 2008Figure 31800 Pioneer Creek Center

Maple Plain, MN 55359-0429

COPY

RIGH

T

30 0 3015Miles

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EXHIBIT C1

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Wenck Associates, Inc.Environmental Engineers

Mountain TimberWood Products

100 Miles

75 Miles

50 Miles

25 Miles

Duluth

Bemidji

Brainerd

Virginia

Grand Rapids

Mt. Timber Wood Products: EAWWood Biomass Supply Area Vegetation Cover Types

FEB 2008Figure 41800 Pioneer Creek Center

Maple Plain, MN 55359-0429

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30 0 3015Miles

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LegendNational Land Cover

Open Water and IceDeveloped/Open SpaceDeveloped, Low Intensity

Developed, Medium DensityDeveloped High IntensityBarren LandDecidous forest

Evergreen ForestMixed ForestShrub/ScrubGrassland/Herbaceous

Pasture/HayCultivated CropsWoody WetlandsEmergent Herbeous Wetland

EXHIBIT C2

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Wenck Associates, Inc.Environmental Engineers

169

102

6th St

5th St

Slate St

Mt. Timber Wood Products: EAWEstimated Wetland Boundaries

FEB 2008Figure 51800 Pioneer Creek Center

Maple Plain, MN 55359-0429

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RIGH

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500 0 500250Feet

2003 Aerial Photograph (Source: LMIC)

LegendPotential Wetland AreasProperty LineWetland Boundary (Approximate)

Potential WetlandArea A

Potential WetlandArea B

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EXHIBIT E

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Page 44: Mountain Timber Wood Products EAW · maximum possible wood product from the dryer prior to pelletizing. This high efficiency also minimizes wood product air emissions from the facility

Table 1

Woody Biomass Supply – Possible Scenarios(1)

Scenario 1 – Maximum Small Diameter Material Supplied(1)

Assumed green tons (GT) supplied

GT equivalent in cords

GT equivalent in acres of round wood harvested

GT equivalent in acres of forest residue collected(4)

Comparison to available forest resources (5) (6)

Assessment of Potential Impacts

Saw mill residue 20,000 NA NA NA NA Assumes current market production is adequate to meet Mountain Timber needs for this material.

Small diameter woody biomass(2)

61,200 (HW) 118,800 (SW)

NA NA

NA NA

5,370 ac/yr 13,180 ac/yr

5,370 ac/yr = 8% of the 70,700 ac/yr total hardwood harvested within the 100-mi project biomass supply area(5)

13,180 ac/yr = 55% of the 23,970 ac/yr total softwood harvested within the 100-mi project biomass supply area; OR 76% of the 17,280 ac/yr total within the 75-mi supply area(5)

This analysis suggests that there is an adequate available supply of this material available for the Mountain Timber facility. Additional harvests of small diameter woody biomass raise concerns about impacts to wildlife, soil productivity and spread of harmful invasive species. Mitigation of potential impacts would occur primarily through the application of the MFRC Site-Level Forest Management Guidelines, including the recently completed woody biomass harvesting guideline, including: retaining 33% of fine woody debris on harvest sites; following wildlife habitat protection practices from the guidelines; and avoiding biomass harvesting on ombrotrophic organic soils (see text for discussion). Not a likely scenario, since 1) there are a number of potential woody biomass materials available (e.g., forest thinnings, non-marketable or

EXHIBIT J

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under-utilized round wood), and market availability and price would likely result in use of other sources in addition to harvest residue and 2) this scenario would primarily produce ‘dirty chips,’ resulting in a lower market value product.

Non-marketable round wood biomass (3)

0 0 0 0 NA No impact – no additional round wood harvest would occur (i.e., no harvest in addition to harvesting required to meet other commercial forest product demands) with this scenario.

Scenario 2 – Maximum Non-Marketable Round Wood Material Supplied(1)

Assumed green tons (GT) supplied

GT equivalent in cords

GT equivalent in acres of round wood harvested

GT equivalent in acres of forest residue collected(4)

Comparison to available forest resources (5) (6)

Assessment of Potential Impacts

Saw mill residue 20,000 NA NA NA NA Assumes current market production is adequate to meet Mountain Timber needs for this material.

Small diameter woody biomass(2)

0 0 0 0 NA No impact.

Non-marketable round wood biomass (3)

61,200 (HW) 118,800 (SW)

26,600 (HW) 57,950 (SW)

1,150 (HW) 3,400 (SW)

0 (HW) 0 (SW)

1,150 ac/yr = 1.6% of the 99,640 ac/yr total estimated current hardwood harvested within the 100-mi radius project supply area(5)

3,400 ac/yr = 10% of the 34,090 ac/yr total estimated current softwood harvested within the 100-mi supply area(5)

ALSO 3,400 ac = 27% of the 12,660 ac of eastern larch beetle mortality mapped in MN in 2007 OR 3% of the 101,400 ac of spruce budworm defoliation mapped in MN in 2007(located

Most of the round wood used for the Mountain Timber project is expected to come from species currently in low demand (e.g., tamarack, ash, basswood – see Table 2), and insect and disease killed or damaged trees (e.g., spruce budworm, eastern larch beetle, pine bark beetle). As a result, the project is not expected to contribute substantially to the overall round wood demand within the project supply area for species currently used by the primary forest products industries. Potential additional round wood harvest under

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primarily within the 100-mi supply radius). (6)

this scenario would not likely generate additional significant potential impacts beyond what was anticipated and for which mitigations were proposed by the 1994 GEIS. Mitigation of potential impacts from round wood harvests for this project would occur primarily through the ongoing application of the MFRC Site-Level Forest Management Guidelines and other harvesting guidelines and restrictions applied by the various forest land owners (e.g., USDA Forest Service, DNR, counties). Some forest health benefits (e.g., reducing risk of wildfire, reducing spread of disease or insect infestation, etc.) could result from removing the insect-infested/killed material from the forests. (7) Not a likely scenario, since there are a number of potential woody biomass materials available (e.g., forest thinnings, forest harvest residue, non-marketable round wood), and market availability and price would likely result in use of other sources in addition to round wood sources assessed in this scenario.

Scenario 3 – 25% Small Diameter Material and 75% Non-Marketable Round Wood (1)

Assumed green tons (GT) supplied

GT equivalent in cords

GT equivalent in acres of round wood harvested

GT equivalent in acres of forest residue collected(4)

Comparison to available forest resources (5) (6)

Assessment of Potential Impacts

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Saw mill residue 20,000 NA NA NA NA Assumes current market production is adequate to meet Mountain Timber needs for this material.

Small diameter woody biomass(2)

15,300 (HW) 29,700 (SW)

NA NA

NA NA

1,340 (HW) 3,290 (SW)

1,340 ac/yr = 2% of the 70,700 ac/yr total hardwood harvested within the 100-mi project biomass supply area OR 3% of the 52,600 ac/yr within the 75-mi supply area (5)

3,290 ac/yr = 14% of the 23,970 ac/yr total softwood harvested within the 100-mi project biomass supply area OR 19% of the 17,280 ac/yr within the 75-mi supply area (5)

Similar concerns about impacts as in Scenario 1, but to a lesser extent since less small diameter woody biomass would be harvested for the project.

Non-marketable round wood biomass (3)

45,900 (HW) 89,100 (SW)

19,950 (HW) 43,460 (SW)

1,170 (HW) 2,560 (SW)

NA NA

1,170 ac/yr = 1.2% of the 99,640 ac/yr total hardwood harvested within the 100-mi supply radius for the project(5)

2,560 ac/yr = 7.5% of the 34,090 ac/yr total softwood harvested within the 100-mi supply radius for the project(5)

ALSO 2,560 ac = 20% of the 12,660 ac of eastern larch beetle mortality mapped in MN in 2007 OR 2.5% of the 101,400 ac of spruce budworm defoliation mapped in MN in 2007 (located primarily within the 100-mi supply radius) (6)

Similar to Scenario 2, but to a even lesser extent since round wood harvests would be less than in Scenario 2. It is likely that some variation of Scenario 3 (i.e., varying combinations of small-diameter woody biomass and non-marketable round wood biomass) would be used by Mountain Timber, based on changes in market supply and demand.

(1) All scenarios assume 20,000 GT of woody biomass would be supplied from sawmill residue and 180,000 GT of woody material would be supplied from small diameter woody material and/or non-marketable round wood biomass. The differences among scenarios reflect different assumptions regarding the availability of small diameter woody material (e.g., harvest residue) and non-marketable round wood biomass (e.g., insect damaged and/or under-utilized tree species round wood) (2) Assumes ‘worst case’ of 100% harvest residue, and no pre-commercial thinning materials. (3) Assumes ‘worst case’ of all non-marketable round wood material being supplied by insect-infested tree species, requiring logging to supply the woody biomass (i.e., does not assume use of damaged round wood already existing in the marketplace or use of underutilized tree species). See ‘Assessment of Potential Impacts’ column – and Table 2 – for information on availability of round wood from under-utilized species.

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(4) The acreage given represents estimates that assume 33% of the harvest residue would remain in the forest based on the MFRC Site-Level Forest Management Guidelines, including the recently-added woody biomass harvest guidelines. (5) Calculated statewide values are based on data (in cords) from Minnesota Forest Resources – 2007 MnDNR Forest Products Utilization Unit report, adjusted to the 100-mi supply radius values, based on the proportion of timber land located within the 100-mi supply radius vs. the total state timberland, i.e. = 61% (i.e., 9,240,968 acres of timberland within 100-mile radius vs. 15,112,725 acres statewide). (6) Based on data from Federal Conditions Report – 2007 MnDNR Forest Health Unit report. Note that trees recently killed are still a fit for a number of traditional forest products markets. Not all of the trees in these affected acres are killed or even if killed, many remain marketable for the traditional forest products industry for a period of time. The longer they have been dead (e.g., > 1 year), the more unlikely they can be used by forest products industry. As a result, only a portion of these affected areas would be available for biomass without competing with traditional forest products industry. (7) The MFRC Guidelines do not specifically address salvage harvest situations (i.e., where the large majority of trees in a contiguous area are damaged or killed as a result of fire, wind or insects/disease). In harvesting such sites for biomass, consideration should be given to leaving additional standing snags and down materials (beyond what is suggested for a normal “live” tree harvest situation).

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Table 2

(A) (B) (C) (D) = (B - A) (E) = (C - A)

2005 Harvest

(cords)

Estimated Long-Term Annual Sustainable Harvest (cords/yr)

2005 Estimated Net Annual Growth

(cords/yr)

Estimated Annual Surplus-Above Sustainable Harvest

(cords/yr)

Estimated Annual Surplus-Above Net Annual Growth

(cords/yr)

Hardwoods

Ash 50,020 215,696 371,917 171,776 321,897

Basswood 33,367 170,983 170,983 137,616 137,616

Hardwoods Subtotals (cords/yr) 309,392 459,513

Hardwoods Subtotals (green tons roundwood/yr)(4) 696,132 1,033,904

Softwoods

Tamarack 39,467 70,028 86,986 30,561 47,519

Softwood Subtotal (cords/yr) 30,561 47,519 Softwood Subtotal (green tons roundwood/yr)(5) 62,650 97,414

TOTAL 758,782 1,131,318 (1) Analysis is based on data from "Minnesota's Forest Resources - December 2007" report ("2007 Report"), DNR - Division of Forestry

(2) Note: The data in this table reflects estimated quantities within the 100-mile supply area for Minnesota Timber, based on the statewide harvest and growth values (see Table 2A) pro-rated to reflect the percentage of total statewide forest land that is located within the 100-mile radius supply area; i.e., 9,240,968 acres of timberland within the 100-mile radius area vs. 15,112,725 acres of timberland statewide = 61% is within the Mountain Timber supply area. (3) Note: This table only summarizes the estimated available quantities of 3 under-utilized tree species. Woody biomass for the Mountain Timber project - and other projects requiring woody biomass - would come from a variety of sources in addition to these underutilized species. Other potential sources could include:

● forest thinnings ● damaged roundwood (un-marketable) ● insect-damaged stands ●small diameter harvest residue ● brushland woody biomass (4) Assumes average 2.25 GT/cord for hardwoods

(5) Assumes average 2.05 GT/cord for softwoods

Note: GT/yr = green tons per year