Implementation of Pinyon-Juniper Woodland Treatment Elements of the BLM’s Ely RMP/EIS: Opportunities for Public-Private Partnerships to Secure Environmental and Economic Benefits in Lincoln County, Nevada Mike L. Baughman, Ph.D., CEcD Contract Executive Director Lincoln County Regional Development Authority December 8, 2010

BLM’s Ely RMP/EIS: A Roadmap for Environmental Stewardship and Multiple-Use for Public Land in Lincoln County, Nevada Final in November 2007, the Ely RMP/EIS resulted from nearly five years of planning and analysis Extensive public involvement – Scoping meetings throughout Nevada – 650 comment letters on the Draft Ely RMP/EIS Three federal agencies, four state agencies, four tribal governments and three local governments formally participated as cooperating agencies in preparation of the Ely RMP/EIS Science-based analyses 20-year plan Implementation-ready Tiering to EIS for individual treatment project EAs

Pinyon-Juniper Woodland Treatment Elements of the Ely RMP/EIS Pinyon-Juniper woodland acreage Ely District-wide – Mature woodlands 324,000 acres – Over-mature woodlands 2.9 million acres – Other woodlands 370,000 acres 2.7 million acres of Pinyon-Juniper in need of treatment Pinyon-Juniper treatment benefits – Increased mosaic of multiple-aged shrubs, forbs, and perennial grasses – Maintenance of soil stability – Cycling of energy, nutrients and water – Reduced risk of catastrophic wild fire – Enhanced wildlife habitat including for sage grouse

Impediments to Implementation of BLM Ely RMP/EIS Pinyon- Juniper Woodland Elements Funding – Program management/resource specialist staffing (planning; monitoring) – Professional contracts (NEPA, Section 106, ESA compliance) – Woodland treatment Disposal of biomass

Public/Private Partnership Opportunities to Address Impediments to Implementation of Pinyon-Juniper Elements of BLM’s Ely RMP/EIS Stewardship End Result Contracting – BLM/private parties – BLM/public entities – To perform PJ woodland treatment services to achieve environmental benefits – Encourage community involvement – Provide local economic/fiscal benefits Industrial Utilization of Treatment Related Biomass – Energy generation thermal electrical – building materials – bedding materials/mulch – Other Avoided costs to BLM for treatment of PJ woodlands

Lincoln County, Nevada Pinyon-Juniper Biomass Electrical Energy Generation Feasibility Study Board of Lincoln County Commissioners desire full implementation of BLM Ely RMP/EIS pinyon-juniper woodland treatment elements to achieve related environmental and wild fire risk reduction benefits A-Power Energy Generation Systems, Ltd. desires to develop a 10 MW pinyon-juniper biomass fired electrical generation project Lincoln County Power District No. 1 has identified two existing substations at which up to 10 MW of new generation can be added to existing transmission in the vicinity of Pioche (northern Lincoln County) September 2010 Board of Lincoln County Commissioners and A-Power Energy Generation Systems, Ltd. enter into Memorandum of Agreement to jointly fund pinyon-juniper biomass electrical energy generation feasibility study

Board of Lincoln County Commissioners/A-Power Energy Generation Systems, Ltd. Memorandum of Agreement County and A-Power each contribute $47,500 to fund feasibility study Scope of Work and Request for Proposal developed and issued The Beck Group (Portland, Oregon) retained to complete study Draft study due by mid-December 2010 Final study due by late-December 2010 Lincoln County to work with BLM to develop Stewardship Contract A-Power Energy Generation Systems, Ltd. to have first right of refusal to pinyon-juniper biomass covered by possible BLM /Lincoln County Stewardship Contract Decision by A-Power whether to proceed with project anticipated by mid- 2011

Lincoln County, Nevada Pinyon-Juniper Biomass Fired Electrical Generation Project Feasibility Study Outline Feasibility Study Outline – Biomass Fuel Supply Assessment (Chapter 5) – Assessment of Potential Plants Sites (Chapter 6) – Review of Alternative Markets and Products (Chapter 7) – Identification of Thermal Energy Uses in Lincoln County (Chapter 8) – Review of Power Transmission Infrastructure (Chapter 9) – Market Analysis of Power Sales (Chapter 10) – Evaluation of Optimal Facility Scale (Chapter 11) – Environmental Permitting & Regulatory Requirements (Chapter 12) – Evaluation of Energy Production Technology (Chapter 13) – Incentive Programs (Chapter 14) – Selection of Preferred Site for Biomass Power Generation Facility (Chapter 15) – Financial Analysis of Biomass Power Generation Facility at the Preferred Site (Chapter 16 )

Lincoln County, Nevada Pinyon-Juniper Biomass Fired Electrical Generation Project Feasibility Study Preliminary Results 10 MW biomass electrical generation project will require 66,000 bone dry tons (BDT) of fuel (woodchips) per year 30 year supply of biomass resulting from anticipated BLM treatment of PJ woodlands within 30 miles of alternative power plant sites Mechanized treatment of PJ woodlands may cost between approximately $45 and $80 per BDT depending upon stand density (lower cost for higher density stands) Transportation of biomass may cost between approximately $12 and $62 per BDT depending upon distance from treatment area to power plant site Biomass fuel resulting from BLM PJ woodland treatment within 30 miles of alternative power plant sites may cost approximately $60 per BDT

Factors Affecting the Feasibility of a Lincoln County, Nevada Pinyon-Juniper Biomass Electrical Generation Plant Price of electricity obtained through Power Purchase Agreement Rate of interest on construction and long term financing Amount of equity required to secure project financing Availability of sizeable customer for thermal energy by-product Facility scale Cost of treatment of PJ woodlands Cost of transportation of PJ biomass Extent of contribution by BLM to cost of planning, permitting and implementing PJ woodland treatment Availability of year Stewardship Contract

For Additional Information Contact: Mike Baughman, Ph.D., CEcD Contract Executive Director Lincoln County Regional Development Authority (775)