Success Story
Release No.STELPRD4013046
, Nov 09, 2011 --

Carving out new jobs where a forest-based economy once was king

USDA and international researchers visit Oregon’s rural Wallowa County to see how unique natural and human resources are helping create new, green enterprises

By Jill Rees, USDA Rural Development

Last week, job creation in rural Oregon’s renewable energy sector was the focus for a group of international economists from the Organization for Economic Cooperation and Development (OECD), a collaborative effort among 34 member countries to identify and promote successful economic development strategies across the globe. As part of an ongoing multi-nation study, “The Economic Impact of Renewable Energy Projects on Rural Areas,” the OECD group trekked to the far northeastern corner of Oregon to witness firsthand how this remote, sparsely populated community is applying innovative new approaches after the decline of what was once their major economic driver, the timber industry.

With leadership and technical assistance from local nonprofit Wallowa Resources and support from regional nonprofit Sustainable Northwest, local residents, businesses and agency partners, are nurturing a renewable energy sector in the county. The result is a community-led and multi-lateral effort to create new natural resource-based jobs, keep money in the local economy through locally produced energy, and lower operating costs for agricultural producers, landowners, businesses and municipalities. To make this happen, the local players in the effort have all done outstanding work to create and maintain effective working partnerships and generate investments from federal, state and local entities, lenders and individuals working at different levels. USDA Rural Development is one of those funders. Thanks to the collaborative and innovative nature of the effort, USDA Rural Development has been able to leverage the federal investment in rural economic development and renewable energy with the funding of private businesses, lenders and other agencies to help generate impressive results within this small community.

In order to recognize why this effort is so unique, however, it is first important to know some background. For generations, rural residents in Oregon’s Wallowa County have depended on the region’s natural resources to make a living. Here, federally owned forests comprise 58 percent of the county’s land base, and from the early 1900s through the 1980s, forestry served as the county’s main economic driver supporting numerous jobs related to harvesting, milling and transporting forest products. In the early 1990s, however, litigation and forest management modifications related to endangered species resulted in large-scale suspensions of the sale of timber from federal forestlands. Timber harvests, which were as high as 94 MMBF (million board feet) in the 1980s, plummeted to less than 200 MBF (thousand board feet) in 1994. Over the long-term, timber harvests off public land in Wallowa County have declined by more than 90%. Until 1994, Wallowa County was home to three sawmills processing timber from within the county. The last mill struggled to remain operational for years, but finally closed in 2008. As jobs in the mills and the forests disappeared, Wallowa County began to face new challenges with unemployment, outmigration and dramatically diminished local revenues needed to support schools, public works and other community infrastructure and services.

For local leaders and residents in this isolated area, finding new economic opportunity has been no small task. In addition to its distance from commerce, transportation and population centers, the county is hemmed in by federal forests, the Wallowa Mountains and Hell’s Canyon. While these features offer a beautifully rugged landscape, they also contribute to an equally tough environment for business and economic development. Moreover, the often conflicting priorities, approaches and opinions of local residents, business interests, government agencies, environmental groups and other stakeholders regarding natural resource management were, in the 1990’s, putting people at odds and making workable, job-creating solutions more and more elusive. At that time, concerns had also kindled about the risk of catastrophic wildfire as a result of increasingly overstocked timber stands and a growing amount fuels in the surrounding forests. Under such circumstances, many communities might become mired in intractable conflict. Instead, the interested parties came together to find innovative solutions that are appropriate to this area’s unique set of conditions, economic challenges, and natural and human resources.

Since the 1990s, there’s been a lot of water under the bridge. The local activities to facilitate the environmental and economic sustainability are too numerous and nuanced to explain here. Suffice it to say, that it was – and still is – the local community’s ability to address issues in a straightforward way, take an innovative look at possibilities, and embrace new partnerships that has created new opportunities that are working for the residents of Wallowa County.

Throughout the effort, USDA Rural Development has been – and continues to be – an enthusiastic partner helping advance individual renewable energy projects and jumpstart new, green businesses through a number of programs, such as the Rural Energy for America Program, Rural Business Enterprise Grant and Advanced Biofuel Producer Payment Program. Through each of these programs, USDA Rural Development has made a number of small but strategic investments in biomass production, solar energy, and small-scale hydropower in Wallowa County. This funding has not only helped generate significant public and private investments from other sources, it is also helping to develop a new strategy for rural economic development through a number of small-scale projects. In turn, other communities will be able to adapt and apply the template created in Wallowa County.

One significant USDA investment is a $500,000 cooperative agreement USDA Rural Development provided to Sustainable Northwest in 2009 to help rural communities including Wallowa County to develop sustainable business opportunities through green enterprises. This foundation investment has helped Sustainable Northwest and local partner Wallowa Resources to provide technical assistance to develop capacity for renewable energy business development and wildfire mitigation locally and in communities across the region through the Dry Forest Investment Zone regional project.

Many other federal, state and private programs have touched the overall effort with programs that improve planning, enhance access to capital and mitigate risk. It must be said, however, that the greatest investments by far have been made by local governments, businesses, and residents. Their innovation and entrepreneurship have resulted in a number of significant successes, a few of which are listed below.

    • In the county, 48 electric and 5 heating systems fueled by renewable energy have been installed at public facilities, homes and businesses.

    • Partnership efforts to support development of a renewable energy have resulted in an industry cluster that provides improved access to capital, technical capacity, and market outlets a variety of renewable technologies. A number of local renewable energy businesses have either sprung up or gained new traction. These include biomass companies as well as consultants, manufacturers and installers for solar, thermal, and micro-hydro systems.

    • Wallowa County residents, businesses and municipalities spend $3.4 million of their total $5.1 million in annual energy expenditures on locally produced renewable energy. These dollars are retained in the county through local ownership or investment and contribute significantly to local prosperity and the ability to reinvest in the local economy.

    • Local renewable energy amounts to over 10,140 megawatt hours annually to power 27% of county households (840 homes).

    • Installation of a biomass boiler and energy-efficient lighting, room controls, insulation and ventilation saves the Enterprise School District $100,000 per year.

    • The Integrated Biomass Energy Center was created, producing thermal energy, wood chips, pellets, certified firewood, small diameter posts and other byproducts of forest management activities. The business supports up to 30 jobs in the plant and more for those working in the woods to remove overstocked timber creating wildfire hazards.

Local residents will benefit from these and many other renewable energy successes in a number of ways. It will be interesting to see what an international group of economists learned from all this, but the final OECD report will be instructive. It is clear, however, that the residents and partners in Wallowa County have provided a stunning example of locally led collaboration resulting in place-appropriate solutions to enhance rural prosperity and the quality of life for a new generation.