An Economic Feasibility Study for Forest Industry in Challis, Idaho

The U.S. Forest Service and local stakeholders are interested in understanding future opportunities for utilizing timber and biomass from the Salmon-Challis National Forest. The research team will conduct an economic feasibility assessment focused on Challis, Idaho, which will help identify the type and scale of forest industry projects that are likely to be successful and benefit the forest and surrounding communities. 

The Salmon-Challis National Forest Plan Revision began in January 2017 and the Assessment Phase was completed in July 2018. In August 2020, the forest released its Current Plan Evaluation Summary, a short document summarizing the extensive review of the existing forest plans. During the Assessment Phase, the forest and RMRS hosted two economic workshops seeking input from stakeholders, as previous forest planning meetings had highlighted public interest in increasing forest industry in the region. Public and stakeholder engagement revealed a need for a formal evaluation of wood supply and economic opportunities for harvesting and marketing wood products from the Salmon-Challis National Forest. 

Image: During the Resource Assessment, researchers will integrate a map of haul time for transporting forest products to Challis, ID with resource availability. This sample map shows areas with less than 1.5 hours of haul time to Challis.

To achieve this goal, partners in industry, academia, and the agency are working together to conduct a forest industry feasibility assessment focused on the Salmon-Challis National Forest and Challis, Idaho. 

The assessment will be conducted in three parts using standardized datasets to ensure comparable and complementary results: 

1. Resource Assessment: Resource characterization and supply modeling with spatial analysis and mapping, led by the University of Idaho
2. Technoeconomic Analysis: Financial analysis of a variety of small to medium scale project options, led by the Rocky Mountain Research Station
3. Sawmill Feasibility Assessment: Evaluation of the feasibility of a new sawmill in Challis, led by ATICA, Inc.

Approach

The resource assessment will address three primary questions: What are the characteristics of the resource in terms of location, quality and access? How do we expect the resource to flow and change over time? How much does it cost to manage, harvest and transport logs and woody biomass from the forest to a facility in Challis? Combining these elements, the University of Idaho team will also conduct a transportation network analysis and produce supply cost curves for timber product flows to a hypothetical facility in Challis. 

RMRS will conduct technoeconomic analysis (TEA) to determine the potential financial outcomes of investment in various types of forest industry enterprises at different scales under a range of market conditions. TEA is a modeling process that combines detailed technical specifications of a project with benefit-cost analysis to estimate financial outcomes of investment. TEA facilitates accurate comparisons of different project options and quantifies each project’s potential for success. This method also identifies the factors to which profitability is most sensitive and guides decisions about R&D investments to improve viability. TEA will include bioenergy thermal, bioenergy electric power, post and pole production, commercial firewood, biochar production, and other project options.

The potential to build and operate a sawmill is of particular interest to many stakeholders but is beyond the scope of the TEA because of the complexity of sawmill investment and operation. Leveraging deep expertise in this area, ATICA will conduct a sawmill feasibility assessment for Challis. They will determine the resource demand, production, and economics of an appropriately scaled facility in light of the resource assessment conducted by the University of Idaho. 

Deliverables

• A resource assessment and associated mapping products that synthesize information about the resource characteristics, access, supply and costs 
• Technoeconomic summaries and comparison of various types of forest industry enterprises at different scales to help guide potential investment
• A report describing resource and investment requirements for a sawmill and conclusions regarding the economic feasibility of a new sawmill in Challis
• An executive summary that includes key findings from all three parts of the project
• A workshop to present results to key stakeholders

Project Impacts 

The results of this project will facilitate dialogue about the local forest industry and provide a better understanding of the financial viability of investment in various forest industry enterprises linked to timber and biomass from Salmon-Challis National Forest. This project will identify potential opportunities for new and successful forest industry in the communities in this region.