Alaska’s sole coal producer, Usibelli Mines, Inc. is expanding into biomass, using wood from Interior Alaska’s vast forests.

The company announced Friday that it has acquired Superior Pellet Fuels of Fairbanks, a manufacturer of wood pellets and compressed wood logs for local markets.

Aurora Energy Solutions, a new Usibelli subsidiary, will also construct a new-technology wood kiln using waste heat from a local coal-fired power plant operated by Usibelli subsidiary Aurora Energy.

Fairbanks has serious winter air quality problems created in part by emissions from wood-burning stoves widely used in the community that use wet wood for fuel. Drying the wood reduces harmful emissions.

Usibelli owns and operates a coal mine at Healy, 115 miles south of Fairbanks, to supply coal to power plants at Interior Alaska military installations, the University of Alaska in Fairbanks and its own Aurora Energy plant in Fairbanks itself.

“This new facility will allow for the production of kiln-dried firewood that is far more efficient as a home-heating resource, while also greatly reducing the emissions from wood burning,” said Joe Usibelli Jr., Managing Member of Usibelli Investments.

The kiln will produce clean-burning dry firewood that, along with expanded sales of wood pellets and compressed logs, will help the community achieve required reductions in PM 2.5 emissions. Fairbanks has been out of compliance for years with U.S. Environmental Protection Agency air quality standards because of local temperature inversions during cold winter weather that concentrate pollutants at low levels in the community, creating health hazards.

Use of local firewood is popular with local residents because it is inexpensive relative to the cost of oil heating, but the wood is typically wet and its smoke is a major contributor to high concentrations of PM 2.5 particulates in the air, the source of health problems. While a small local natural gas utility is expanding using trucked liquefied natural gas, developing ways to use cleaner biomass from Interior Alaska forests is also seen as a solution.

Fairbanks state legislators praised the development.

“The Interior has long been plagued by high energy prices and air quality issues. This community-based, private sector solution by Usibelli and Aurora Energy, along with clean-burning natural gas will be essential elements in bringing our community into attainment,” said Rep. Bart LeBon, R-Fairbanks

Rep. Adam Wool, a Fairbanks Democrat, said “I think it’s a very creative use of Aurora Energy’s waste heat that can help reduce emissions into the Fairbanks community. The PM 2.5 problem is a big issue and this could help Interior residents burn properly dried wood.”

A bill passed by the Legislature in March, House Bill 232, helps make the project economic by allowing the City of Fairbanks and Fairbanks North Star Borough to create tax credits for energy projects, said Rep. Grier Hopkins, D-Fairbanks, prime sponsor of the bill.

Usibelli said Superior Pellet Fuels has offered premium wood pellets and compressed logs to the community for the last 10 years but has been hampered in its ability to finance an expansion. The connection with Usibelli, a well-established company, provides that.

“The combination of kiln-dried firewood provides local residents and businesses with several cleaner-burning heating options that are locally sourced, and manufactured here in Alaska,” Usibelli said.

SII Dry Kilns of North Carolina, a leader in manufacturing, building, and installing kilns for the lumber and forest products industries, is customizing the Aurora Energy Solutions kiln. The components of the kiln should arrive in Fairbanks in August and enter operational service in the fall. Aurora Energy Solutions is preparing a site in the Fairbanks industrial area, near Phillips Field Road, to accommodate the kiln and a sales office.

Rob Brown, president of Aurora Energy Solutions, said energy for the wood kiln would come from the Fairbanks district heat system operated by the Aurora Energy coal-fired power plant in downtown Fairbanks.

“Aurora Energy district heat will flow into the kiln and dry the wood,” said Brown. “This is a win-win. Our wood kiln can operate with zero new emissions, and the dry wood product we produce can have a dramatic impact on lowering PM 2.5 emissions and will improve air quality in the community.”

Chad Schumacher, former general manager of Superior Pellet Fuels, will serve as the new general manager of Aurora Energy Solutions and will oversee the new kiln and the continued wood pellet and compressed log operations.

Schumacher said opportunities lie ahead for both operations.

“Because of the investments being made by Aurora Energy Solutions, the pellet plant operations can transition from seasonal to year-round,” said Schumacher.

“As a result of having a consistent employee base combined with improvements that will be made to existing infrastructure, we’ll not only gain operational efficiencies, but our customers can expect to see higher quality premium pellets and compressed log products.”

Brown said the new venture creates 10 new jobs (six full-time and four part-time) and will provide other benefits.

“This project provides a home-grown solution for local challenges. There’s been a long-time problem of not having a reliable, year-round supply of high-quality, dry firewood,” Brown said. “Now we’ll be able to produce up to 7,000 cords of dried firewood each year.”

The company plans to offer wholesale and direct retail sales to consumers for kiln-dried firewood, premium wood pellets, and compressed logs at its locations in Fairbanks and North Pole.

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