Risk and Feasibility of Processing Small-Diameter Material in the U.S. West Part II: Market Pulp and Oriented Strandboard‪.‬

Abstract The reduction of stocking levels has been proposed as one part of a larger plan to restore western forests to sustainable ecological conditions and reduce fire hazard levels. The cost effective removal of trees as part of an effort to approximate natural-disturbance processes in various western forest types will require the development of new markets for small-diameter material. Prior work utilized Monte Carlo simulation techniques to assess the feasibility of constructing a new sawmill optimized specifically for processing small-diameter material. The results of the analysis were favorable, which prompted the further question as to the feasibility of producing oriented strandboard (OSB) and market pulp from small-diameter forest removals. In this analysis, Monte Carlo simulation techniques were again used to assess the feasibility of investments in constructing new OSB and bleached chemithermomechanical pulp (BCTMP) mills to utilize this material. The results do not the support the construction of a BCTMP mill due to the high initial capital investment requirements and the relatively low prices for BCTMP market pulp at this time. The feasibility of constructing a new OSB mill was more favorable, but would probably require a modest subsidy in the form of zero stumpage prices as well as long-term supply assurances, before a company would seriously consider an investment of this type.