Testimony 

Before the Subcommittee on Forests and 

Forest Health, Committee on Resources, 

House of Representatives 

United States Government Accountability Office

GAO 

For Release on Delivery 

Expected at 2:00 p.m. EDT 

Tuesday, May 24, 2005 NATURAL RESOURCES

Federal Agencies Are 

Engaged in Numerous 

Woody Biomass Utilization 

Activities, but Significant 

Obstacles May Impede 

Their Efforts 

Statement of Robin M. Nazzaro, Director 

Natural Resources and Environment 

GAO-05-741T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-741T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Robin M. 

Nazzaro at (202) 512-3841 or 

nazzaror@gao.gov. 

Highlights of GAO-05-741T, a testimony 

before the Subcommittee on Forests and 

Forest Health, Committee on Resources, 

House of Representatives 

May 24, 2005

NATURAL RESOURCES 

Federal Agencies Are Engaged in 

Numerous Woody Biomass Utilization 

Activities, but Significant Obstacles May 

Impede Their Efforts 

Most woody biomass utilization activities are implemented by the 

Departments of Agriculture (USDA), Energy (DOE), and the Interior and 

include awarding grants to businesses, schools, Indian tribes, and others; 

conducting research; and providing education. Most of USDA’s woody 

biomass utilization activities are undertaken by the Forest Service and 

include grants for woody biomass utilization, research into the use of woody 

biomass in wood products, and education on potential uses for woody 

biomass. DOE’s woody biomass activities focus on research into using the 

material for renewable energy, while Interior’s efforts consist primarily of 

education and outreach. Other agencies also provide technical assistance or 

fund research activities. 

Federal agencies coordinate their woody biomass activities through formal 

and informal mechanisms. Although the agencies have established two 

interagency groups to coordinate their activities, most officials we spoke 

with emphasized informal communication—through e-mails, participation in 

conferences, and other means—as the primary vehicle for interagency 

coordination. Internally, DOE coordinates its woody biomass activities 

through its Office of Energy Efficiency and Renewable Energy, while Interior

and the Forest Service—the USDA agency with the most woody biomass 

activities—have appointed officials to oversee, and have issued guidance on, 

their woody biomass activities. 

 

The obstacles to using woody biomass cited most often by agency officials 

were the difficulty of using woody biomass cost-effectively and the lack of a 

reliable supply of the material; agency activities generally are targeted 

toward addressing these obstacles. Some officials told us their agencies are 

limited in their ability to address these obstacles and that incentives—such 

as subsidies and tax credits—beyond the agencies’ authority are needed. 

However, others disagreed with this approach for a variety of reasons, 

including the concern that expanding the market for woody biomass could 

lead to adverse ecological consequences if the demand for woody biomass 

leads to excessive thinning. 

Kiosk Constructed from Small-Diameter Wood 

Source: Forest Service.

In an effort to reduce the risk of 

wildland fires, many federal land 

managers—including the Forest 

Service and the Bureau of Land 

Management—are placing greater 

emphasis on thinning forests and 

rangelands to help reduce the 

buildup of potentially hazardous 

fuels. These thinning efforts 

generate considerable quantities of 

woody material, including many 

smaller trees, limbs, and brush—

referred to as woody biomass—

that currently have little or no 

commercial value. 

GAO was asked to determine 

(1) which federal agencies are 

involved in efforts to promote the 

use of woody biomass, and the 

actions they are undertaking; (2) 

how these agencies coordinate 

their activities; and (3) what the 

agencies see as obstacles to 

increasing the use of woody 

biomass, and the extent to which 

they are addressing the obstacles. 

This testimony is based on GAO’s 

report Natural Resources: Federal 

Agencies Are Engaged in Various 

Efforts to Promote the Utilization 

of Woody Biomass, but Significant 

Obstacles to Its Use Remain (GAO05-373), being released today. 

What GAO Recommends

In its report, GAO recommended 

that the Secretary of Agriculture 

direct the Chief of the Forest 

Service to appoint an official or 

organization responsible for 

overseeing and coordinating the 

agency’s woody biomass activities. 

The Forest Service has done so. 
Page 1 GAO-05-741T Woody Biomass 

Mr. Chairman and Members of the Subcommittee: 

I am pleased to be here today to discuss federal agency efforts to increase 

the utilization of woody biomass. As you know, federal land management 

agencies—including the Forest Service in the Department of Agriculture 

(USDA) and the Bureau of Land Management (BLM) in the Department of 

the Interior—continue to focus on the threat that wildland fire poses to 

our nation’s communities and ecosystems. In addressing this threat, 

agencies are placing greater emphasis on thinning forests and rangelands 

to help reduce the buildup of potentially hazardous fuels. These thinning 

efforts will generate considerable quantities of woody material, including 

some larger trees that are commercially valuable timber and many smaller 

trees, limbs, and brush that generally have little or no commercial value 

today. This low commercial value material is often referred to as woody 

biomass.1

Unlike commercial timber, this material typically has been piled and 

burned, left in the forest, or deposited in landfills because there is often 

little or no demand for it. Some industries make use of this woody 

biomass, however—for example, by burning it to generate electricity or 

turning it into products such as road signs or animal bedding. Using woody 

biomass in these and other ways can have several beneficial side effects, 

including stimulating local economies and potentially facilitating fuel 

reduction efforts by creating a demand for thinned material. However, the 

cost of harvesting and transporting the material, combined with the 

relatively low value of the products produced, has meant that woody 

biomass has not been widely utilized. 

My testimony today summarizes the findings of our report being released 

today that discusses federal agency activities to promote woody biomass 

utilization, agency efforts to coordinate their activities, and the primary 

obstacles that agencies believe are standing in the way of increased woody 

biomass utilization.2

 This report is based on our interviews of officials 

 1

Although biomass can be considered any sort of organic material—including trees, 

grasses, agricultural crops, and animal wastes—the term “woody biomass" in this 

testimony refers to small-diameter trees and other traditionally noncommercial material 

cut as part of thinning, harvesting, or other activities on forests or rangelands. The term 

“woody” is used to distinguish this material from agricultural biomass, such as corn stalks 

or sugar cane residue. 

2

GAO, Natural Resources: Federal Agencies Are Engaged in Various Efforts to Promote 

the Utilization of Woody Biomass, but Significant Obstacles to Its Use Remain, 

GAO-05-373 (Washington, D.C.: May 13, 2005). 
Page 2 GAO-05-741T Woody Biomass 

from a wide range of federal and nonfederal organizations, including the 

Departments of Agriculture, Commerce, Energy, the Interior, and 

Transportation, as well as various agencies within these departments; 

state governments; Indian tribes; environmental organizations; academia; 

and others. We also reviewed agency documents, federal and nonfederal 

studies of woody biomass utilization issues, and pertinent laws and other 

documents. 

Most woody biomass utilization activities within the federal government 

are being undertaken by USDA, the Department of Energy (DOE), and the 

Department of the Interior and include awarding grants to businesses, 

schools, Indian tribes, and others; conducting research; and providing 

education and outreach. Some of these activities involve multiagency 

efforts—for example, the three departments signed an agreement in 2003 

to support the utilization of woody biomass, and USDA and DOE jointly 

award grants for biomass research and development. Each department 

also carries out its own activities. 

Federal agency efforts to coordinate their woody biomass utilization 

activities, both among and within agencies, occur through both formal and 

informal mechanisms. Although the departments have established an 

interagency group to coordinate their activities, most agency officials we 

spoke with emphasized informal communication—such as telephone 

discussions, e-mails, participation in conferences, and other means—

rather than this group as the primary vehicle for interagency coordination. 

Regarding internal woody biomass activities, DOE coordinates its 

activities through its Office of Energy Efficiency and Renewable Energy, 

while both Interior and the Forest Service—the USDA agency with the 

most woody biomass activities—have appointed officials to oversee their 

woody biomass activities and have issued guidance on these activities. 

Agency officials cited two principal obstacles to increasing the use of 

woody biomass: the inherent difficulty in using woody biomass costeffectively, in large part because of the relatively high costs of harvesting 

and transporting it, and the lack of a reliable supply of the material. And 

although agency activities are generally targeted toward these obstacles 

and others identified by agency officials, some officials told us that 

additional steps that are beyond the agencies’ authority to implement—

such as subsidies or tax credits to offset the costs involved in using woody 

biomass—are needed. Other officials disagreed with this view, however, 

stating that neither subsidies nor tax credits were appropriate mechanisms 

for promoting the use of woody biomass and that such incentives could 

Summary 
Page 3 GAO-05-741T Woody Biomass 

have adverse, unintended consequences on the ecological health of the 

national forests. 

The Forest Service and Interior collectively manage about 700 million 

acres of federal land, much of which is considered to be at high risk of fire. 

Federal researchers estimate that from 90 million to 200 million acres of 

federal lands in the contiguous United States are at an elevated risk of fire 

because of abnormally dense accumulations of vegetation, and that these 

conditions also exist on many nonfederal lands. Addressing this fire risk 

has become a priority for the federal government, which in recent years 

has significantly increased funding for fuels reduction. Fuels reduction is 

generally done through prescribed burning, in which fires are deliberately 

lit in order to burn excess vegetation, and mechanical treatments, in which 

mechanical equipment is used to cut vegetation. 

Although prescribed burning is generally less expensive on a per-acre 

basis than mechanical treatment, prescribed fire may not always be the 

most appropriate method for accomplishing land management 

objectives—and in many locations it is not an option, because of concerns 

about smoke pollution, for example, or because vegetation is so dense that 

agency officials fear a prescribed fire could escape and burn out of 

control. In such situations, mechanical treatments are required, generating 

large amounts of wood—particularly small-diameter trees, limbs, brush, 

and other material that serve as fuel for wildland fires.3

Woody biomass can be used in many ways. Small logs can be peeled and 

used as fence posts, or can be joined together with specialized hardware 

to construct pole-frame buildings. Trees also can be milled into structural 

lumber or made into other wood products, such as furniture, flooring, and 

paneling. Woody biomass also can be chipped for use in paper pulp 

production and for other uses—for example, a New Mexico company 

combines juniper chips with plastic to create a composite material used to 

make road signs—and can be converted into other products such as 

 3

Fuel reduction efforts are not the only source of this material. Woody biomass can result 

from a variety of activities related to improving or maintaining forest and rangeland health, 

as well as forest management activities such as timber harvests. Further, according to 

Forest Service officials and others, millions of acres of pine trees in the southeastern 

United States face a depressed market because of the closure of pulp mills. These trees 

thus constitute another potential source of woody biomass. 

Background 
Page 4 GAO-05-741T Woody Biomass 

ethanol and adhesives. Finally, woody biomass can be chipped or ground 

for energy production in power plants and other applications. 

Citing biomass’s potential to serve as a source of electricity, fuel, 

chemicals, and other materials, the President and the Congress have 

encouraged federal activities regarding biomass utilization—but until 

recently, woody biomass received relatively little emphasis. Major 

congressional direction includes the Biomass Research and Development 

Act of 2000, the Farm Security and Rural Investment Act of 2002, the 

Healthy Forests Restoration Act of 2003, and the American Jobs Creation 

Act of 2004. Utilization of woody biomass also is emphasized in the federal 

government’s National Fire Plan, a strategy for planning and implementing 

agency activities related to wildland fire management. For example, a 

National Fire Plan strategy document cites biomass utilization as one of its 

guiding principles, recommending that the agencies “employ all 

appropriate means to stimulate industries that will utilize small-diameter 

woody material resulting from hazardous fuel reduction activities.”4

Federal agencies also are carrying out research concerning the utilization 

of small-diameter wood products as part of the Healthy Forests Initiative, 

the administration’s initiative for wildland fire prevention. 

Most of the federal government’s woody biomass utilization efforts are 

being undertaken by USDA, DOE, and Interior. While some activities are 

performed jointly, each department also conducts its own activities, which 

generally involve grants for small-scale woody biomass projects; research 

on woody biomass uses; and education, outreach, and technical assistance 

aimed at woody biomass users. 

 4

Departments of Agriculture and the Interior and the Western Governors’ Association, A 

Collaborative Approach for Reducing Wildland Fire Risks to Communities and the 

Environment: A 10-Year Comprehensive Strategy (Washington, D.C.; August 2001). 

Most Woody Biomass 

Utilization Activities 

Are Implemented by 

the Departments of 

Agriculture, Energy, 

and the Interior and 

Include Grants, 

Research, and 

Education 
Page 5 GAO-05-741T Woody Biomass 

USDA, DOE, and Interior have undertaken a number of joint efforts 

related to woody biomass. In June 2003, the three departments signed a 

memorandum of understanding on woody biomass utilization, and the 

departments sponsored a 3-day conference on woody biomass in January 

2004. The departments also have established an interagency Woody 

Biomass Utilization Group, which meets quarterly to discuss relevant 

developments and to coordinate departmental efforts. 

Another interdepartmental collaboration effort is the Joint Biomass 

Research and Development Initiative, a grant program conducted by 

USDA and DOE and authorized under the Biomass Research and 

Development Act of 2000. The program provides funds for research on 

biobased products. DOE also has collaborated with both USDA and BLM 

on assessment of biomass availability, while USDA and Interior have 

entered into a cooperative agreement with the National Association of 

Conservation Districts to promote woody biomass utilization.5

USDA, DOE, and Interior also participate in joint activities at the field 

level. For example, DOE’s National Renewable Energy Laboratory (NREL) 

and the Forest Service have collaborated in developing and demonstrating 

small power generators that use woody biomass for fuel. The Forest 

Service also collaborates with Interior in funding and awarding grants 

under the Fuels Utilization and Marketing program, which targets woody 

biomass utilization efforts in the Pacific Northwest. The agencies also 

collaborate with state and local governments to promote the use of woody 

biomass—for example, the Forest Service, NREL, and BLM entered into a 

memorandum of understanding with Jefferson County, Colorado, to study 

the feasibility of developing an electricity-generating facility that would 

use woody biomass. 

 5

The National Association of Conservation Districts is a nonprofit organization that 

represents the nation’s 3,000 conservation districts—local units of government established 

under state law to carry out natural resource management programs at the local level. 

Some Woody Biomass 

Activities Are Performed 

Jointly by Multiple 

Agencies 
Page 6 GAO-05-741T Woody Biomass 

Most of USDA’s woody biomass utilization activities are undertaken by the 

Forest Service and involve grants, research and development, and 

education, outreach, and technical assistance. The Forest Service provides 

grants through its Economic Action Programs, created to help rural 

communities and businesses dependent on natural resources become 

sustainable and self-sufficient. The Forest Service also has created a grant 

program in response to a provision in the Consolidated Appropriations Act 

for Fiscal Year 2005, which authorized up to $5 million for grants to create 

incentives for increased use of biomass from national forest lands. Two 

other USDA agencies—the Cooperative State Research, Education and 

Extension Service (CSREES) and USDA Rural Development—maintain 

programs that could include woody biomass utilization activities. CSREES 

oversees the Biobased Products and Bioenergy Production Research grant 

program and the McIntyre-Stennis grant program, which provides grants 

to states for research into forestry issues under the McIntyre-Stennis Act 

of 1962. Within USDA Rural Development, the Rural Business-Cooperative 

Service oversees a grant program emphasizing renewable energy systems 

and energy efficiency among rural small businesses, farmers, and 

ranchers, and the Rural Utilities Service maintains a loan program for 

renewable energy projects. 

Forest Service researchers are conducting research into a variety of 

woody biomass issues. Researchers have conducted assessments of the 

woody biomass potentially available through land management projects 

and have developed models of the costs and revenues associated with 

thinning projects. Researchers also are studying the economics of woody 

biomass use in other ways; one researcher, for example, is beginning an 

assessment of the economic, environmental, and energy-related impacts of 

using woody biomass for power generation. The Forest Service also 

conducts extensive research, primarily at its Forest Products Laboratory, 

into uses for woody biomass, including wood-plastic composites and 

water filtration systems that use woody biomass fibers, as well as less 

expensive ways of converting woody biomass to liquid fuels. 

In addition, the Forest Service conducts extensive education, outreach, 

and technical assistance activities. Much of this activity is conducted by 

the Technology Marketing Unit (TMU) at the Forest Products Laboratory, 

which provides woody biomass users with technical assistance and 

expertise in wood products utilization and marketing. Forest Service field 

office staff also provide education, outreach, and technical assistance, and 

each Forest Service region has an Economic Action Program coordinator 

who has involvement in woody biomass issues. For example, one such 

coordinator organized a “Sawmill Improvement Short Course” designed to 

USDA’s Efforts Related to 

Woody Biomass Utilization 

Are Concentrated in the 

Forest Service, with Some 

Efforts Under Way in 

Other USDA Agencies 
Page 7 GAO-05-741T Woody Biomass 

provide information to small-sawmill owners regarding how to better 

handle and use small-diameter material. The Forest Service also has 

partnerships with state and regional entities that provide a link between 

scientific and institutional knowledge and local users. 

Most of DOE’s woody biomass activities are overseen by its Office of the 

Biomass Program and focus primarily on research and development, 

although the department does have some grant and technical assistance 

activities. DOE’s research and development activities generally address 

the conversion of biomass, including woody biomass, to liquid fuels, 

power, chemicals, or heat. Much of this work is carried out by NREL, 

where DOE recently opened the Biomass Surface Characterization 

Laboratory. DOE also supports research into woody biomass through 

partnerships with industry and academia. Program management activities 

for these partnerships are conducted by DOE headquarters, with project 

management provided by DOE field offices. 

In addition to its research activities, DOE provides information and 

guidance to industry, stakeholder groups, and users through presentations, 

lectures, and DOE’s Web site, according to DOE officials. DOE also 

provides outreach and technical assistance through its State and Regional 

Partnership, Federal Energy Management Program (FEMP), and Tribal 

Energy Program. FEMP provides assistance to federal agencies seeking to 

implement renewable energy and energy efficiency projects, while the 

Tribal Energy Program provides technical assistance to tribes, including 

strategic planning and energy options analysis. 

DOE’s grant programs include (1) the National Biomass State and Regional 

Partnership, which provides grants to states for biomass-related activities 

through five regional partners; and (2) the State Energy Program, which 

provides grants to states to design and carry out their own renewable 

energy and energy efficiency programs. In addition, DOE’s Tribal Energy 

Program provides funds to promote energy sufficiency, economic 

development, and employment on tribal lands through renewable energy 

and energy efficiency technologies. 

Interior’s activities include providing education and outreach and 

conducting grant programs, but they do not include research into woody 

biomass utilization issues. Four Interior agencies—BLM, the Bureau of 

Indian Affairs (BIA), Fish and Wildlife Service (FWS), and National Park 

Service (NPS)—conduct activities related to woody biomass. These 

DOE Is Engaged Primarily 

in Biomass Research and 

Development Activities 

Interior’s Woody Biomass 

Activities Include 

Education, Outreach, and 

Some Grant Programs 
Page 8 GAO-05-741T Woody Biomass 

agencies conduct education, outreach, and technical assistance, but not to 

the same degree as the Forest Service. For example, BIA provides 

technical assistance to tribes seeking to implement renewable energy 

projects, and while FWS and NPS conduct relatively few woody biomass 

utilization activities, in some cases the agencies will work to find a woody 

biomass user nearby if a market exists for the material. Interior plans to 

expand its outreach efforts by using the National Association of 

Conservation Districts, with which it signed a cooperative agreement, to 

conduct outreach activities related to woody biomass. And while Interior’s 

grant programs generally do not target woody biomass, BIA has provided 

some grants to Indian tribes, including a 2004 grant to the Confederated 

Tribes of the Warm Springs Reservation in Oregon to conduct a feasibility 

study for updating and expanding a woody biomass-fueled power plant. 

Several other federal agencies are engaged in limited woody biomass 

activities through their advisory or research activities. The Environmental 

Protection Agency provides technical assistance, through its Combined 

Heat and Power Partnership, to power plants that generate combined heat 

and power from various sources, including woody biomass. Three other 

agencies—the National Science Foundation, Office of Science and 

Technology Development, and Office of the Federal Environmental 

Executive—also are involved in woody biomass activities through their 

membership on the Biomass Research and Development Board, which is 

responsible for coordinating federal activities for the purpose of 

promoting the use of biobased industrial products. 

Several Other Federal 

Agencies Participate in 

Woody Biomass Activities 
Page 9 GAO-05-741T Woody Biomass 

Two groups serve as formal vehicles for coordinating federal agency 

activities related to woody biomass utilization. One, the Woody Biomass 

Utilization Group, is a multiagency group that meets quarterly on woody 

biomass utilization issues and is open to all national, regional, and fieldlevel staff across numerous agencies. The other, the Biomass Research 

and Development Board, is responsible for coordinating federal activities 

to promote the use of biobased industrial products. The board consists of 

representatives from USDA, DOE, and Interior, as well as EPA, the 

National Science Foundation, Office of the Federal Environmental 

Executive, and Office of Science and Technology Policy. When discussing 

coordination among agencies, however, agency officials more frequently 

cited using informal mechanisms for coordination—through telephone 

discussions, e-mails, participation in conferences, and other means—

rather than the formal groups described above. Several officials told us 

that informal communication among networks of individuals was essential 

to coordination among agencies. Officials also described other forms of 

coordination, including joint review teams for interagency grant programs 

and multiagency working groups examining woody biomass at the regional 

or state level. 

The Forest Service—the USDA agency with the most woody biomass 

activities—developed a woody biomass policy in January 2005, and, in 

March 2005, in response to a recommendation in our draft report, the 

agency assigned responsibility for overseeing and coordinating its woody 

biomass activities to an official within the Forest Service’s Forest 

Management branch. In addition, the agency has created the Biomass 

Utilization Steering Committee, consisting of the staff directors of various 

Forest Service branches, to provide direction and support for agency 

biomass utilization. 

DOE coordinates its woody biomass utilization activities through its Office 

of Energy Efficiency and Renewable Energy. Within this office, the Office 

of the Biomass Program directs biomass research at DOE national 

laboratories and contract research organizations, while the Federal Energy 

Management Program and the Tribal Energy Program conduct a small 

number of other woody biomass activities. 

Interior has appointed a single official to oversee its woody biomass 

activities and is operating under a woody biomass policy adopting the 

principles of the June 2003 memorandum of understanding among USDA, 

DOE, and Interior. Interior also has appointed a Renewable Energy 

Ombudsman to coordinate all of the department’s renewable energy 

activities, including those related to woody biomass, and has worked with 

Woody Biomass 

Coordination Efforts 

among and within 

Federal Agencies 

Include Both Formal 

and Informal 

Mechanisms, and the 

Forest Service, DOE, 

and Interior Have 

Assigned 

Responsibility for 

Overseeing Woody 

Biomass Activities 
Page 10 GAO-05-741T Woody Biomass 

its land management agencies to develop woody biomass policies allowing 

service and timber contractors to remove woody biomass where 

ecologically appropriate. Similarly, BLM has appointed a single official to 

oversee woody biomass efforts and has developed a woody biomass 

utilization strategy to guide its activities that contains overall goals related 

to increasing the utilization of biomass from treatments on BLM lands. 

Agency officials cited two principal obstacles to increasing the use of 

woody biomass: the difficulty in using woody biomass cost-effectively and 

the lack of a reliable supply of the material. Agency activities are generally 

targeted toward the obstacles identified by agency officials, but some 

officials told us that their agencies are limited in their ability to fully 

address these obstacles and that additional steps beyond the agencies’ 

authority to implement are needed. However, not all agree that such steps 

are appropriate. 

The obstacle most commonly cited by officials we spoke with is the 

difficulty of using woody biomass cost-effectively. Officials told us the 

products that can be created from woody biomass—whether wood 

products, liquid fuels, or energy—often do not generate sufficient income 

to overcome the costs of acquiring and processing the raw material. One 

factor contributing to the difficulty in using woody biomass costeffectively is the cost incurred in harvesting and transporting woody 

biomass. 

Numerous officials told us that even if cost-effective means of using 

woody biomass were found, the lack of a reliable supply of woody 

biomass from federal lands presents an obstacle because business owners 

or investors will not establish businesses without assurances of a 

dependable supply of material. Officials identified several factors 

contributing to the lack of a reliable supply, including the lack of widely 

available long-term contracts for forest products, environmental groups’ 

opposition to federal projects, and the shortage of agency staff to conduct 

Most Officials Cited 

Economic Obstacles 

to Woody Biomass 

Utilization, and While 

Agencies Generally 

Targeted These 

Obstacles, Some 

Officials Believe 

Additional Steps 

beyond the Agencies’ 

Authority Are Needed 

Most Officials Noted the 

Difficulty Involved in 

Using Woody Biomass 

Cost-Effectively, and Many 

Also Cited the Lack of a 

Reliable Woody Biomass 

Supply 
Page 11 GAO-05-741T Woody Biomass 

activities. A few officials cited internal barriers that hamper agency 

effectiveness in promoting woody biomass utilization, including limited 

agency expertise related to woody biomass and limited agency 

commitment to the issue. A variety of other obstacles were noted as well, 

including the lack of a local infrastructure for handling woody biomass, 

consisting of loggers, mills, and equipment capable of treating smalldiameter material. 

Agency activities related to woody biomass were generally aimed at 

overcoming the obstacles agency officials identified, including many 

aimed at overcoming economic obstacles. For example, Forest Service 

staff have worked with potential users of woody biomass to develop 

products whose value is sufficient to overcome the costs of harvesting and 

transporting the material; Economic Action Program coordinators have 

worked with potential woody biomass users to overcome economic 

obstacles; and Forest Products Laboratory researchers are working with 

NREL to make wood-to-ethanol conversion more cost-effective. 

Despite ongoing agency activities, however, numerous officials believe 

that additional steps beyond the agencies’ authority are need to fully 

address obstacles to woody biomass utilization. Among these steps are 

subsidies and tax credits, which officials told us are necessary to develop 

a market for woody biomass but which are beyond the agencies’ authority. 

According to several officials, the obstacles to using woody biomass costeffectively are simply too great to overcome by using the tools—grants, 

outreach and education, and so forth—currently at the agencies’ disposal. 

One official stated that “in many areas, the economic return from smallerdiameter trees is less than production costs. Without some form of market 

intervention, such as tax incentives or other forms of subsidy, there is little 

short-term opportunity to increase utilization of such material.” Some 

officials stated that subsidies have the potential to create an important 

benefit—reduced fire risk through hazardous fuels reduction—if they 

promote additional thinning activities by stimulating the woody biomass 

market. Rather than incentives or subsidies, some officials noted the 

potential for increased use of woody biomass through state 

requirements—known as renewable portfolio standards—that utilities 

Agency Efforts Are 

Generally Targeted toward 

the Obstacles Identified, 

but Officials Cited the 

Need for Additional 

Actions Such as Subsidies 

and Tax Credits 
Page 12 GAO-05-741T Woody Biomass 

procure or generate a portion of their electricity by using renewable 

resources, which could include woody biomass.6

But not all officials believe these additional steps are efficient or 

appropriate. One official told us that, although he supports these activities, 

tax incentives and subsidies would create enormous administrative and 

monitoring requirements. Another official stated that although increased 

subsidies could address obstacles to woody biomass utilization, he does 

not believe they should be implemented, preferring instead to allow 

research and development efforts and market forces to establish the 

extent of woody biomass utilization. Further, not all agree that the market 

for woody biomass should be expanded. One agency official told us he is 

concerned that developing a market for woody biomass could result in 

overuse of mechanical treatment (rather than prescribed burning) as the 

market begins to drive the preferred treatment, and representatives of one 

national environmental group told us that relying on woody biomass as a 

renewable energy source will lead to overthinning, as demand exceeds the 

supply that is generated through responsible thinning. 

The amount of woody biomass resulting from increased thinning activities 

could be substantial, adding importance to the search for ways to use the 

material cost-effectively rather than simply disposing of it. However, the 

use of woody biomass will become commonplace only when doing so 

becomes economically advantageous for users—whether small forest 

businesses or large utilities. Federal agencies are targeting their activities 

toward overcoming economic and other obstacles, but some agency 

officials believe that these efforts alone will not be sufficient to stimulate a 

market that can accommodate the vast quantities of material expected—

and that additional action may be necessary at the federal and state levels. 

Nevertheless, we believe the agencies will continue to play an important 

role in stimulating woody biomass use. The Forest Service took a 

significant step recently by designating an agency lead for woody biomass 

activities, responding to a need we had identified in our draft report and 

enhancing the agency’s ability to ensure that its multiple activities 

contribute to its overall objectives. Given the magnitude of the woody 

biomass issue and the finite nature of agency budgets, it is essential that 

 6

According to the Database of State Incentives for Renewable Energy, a DOE-funded 

project, 19 states and the District of Columbia had renewable portfolio standards as of 

February 2005. 

Conclusions 
Page 13 GAO-05-741T Woody Biomass 

federal agencies appropriately coordinate their woody biomass 

activities—both within and across agencies—to maximize their potential 

for addressing the issue. 

Mr. Chairman, this concludes my prepared statement. I would be pleased 

to answer any questions that you or other Members of the Subcommittee 

may have at this time. 

For further information about this testimony, please contact me at (202) 

512-3841 or at nazzaror@gao.gov. David P. Bixler, James Espinoza, Steve 

Gaty, Richard Johnson, and Judy Pagano made key contributions to this 

statement. 

GAO Contacts and 

Staff 

Acknowledgments 

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