Rural county stakes future on renewable energy

Caleb Diehl
Lakeview, Oregon

Solar and biofuels come to Lakeview. 

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The lake by Lakeview disappeared long ago, and so did the timber jobs. For years the seat of Southern Oregon’s Lake County wrestled with declining public services and economic stagnation.

Now a set of renewable energy projects offers hope. Colorado-based Red Rock Biofuels broke ground in July on a plant in Lakeview that officials hope will lead to jobs, improved forest management and natural gas. Elsewhere in the county, solar is brightening the horizon. Clean energy developer Obsidian Renewables is planning a large array, and a nonprofit is undertaking an innovative retrofitting project for small businesses. 

Downtown Lakeview resembles a charming all-American main street that has aged badly. Many of the historic buildings have fallen into disrepair. On the main drag, adjacent to a cluster of motels, a pair of marijuana shops sit next to a medical supply store and an all-terrain-vehicle retailer. A few buildings hold out hope—the classic 1950s-style Jerry’s diner, a gleaming public library, a well-stocked bike shop.  

 IMG 2264The main street in Lakeview, Oregon. Photo: Caleb Diehl

Through the 1960s, the Eastern Oregon town benefitted from five sawmills harvesting off the Fremont Winema National Forest. County Commissioner Bradley Winters grew up in a mill family, and worked for many years as a millwright. “The economy was good, family life was exceptional,” he remembers. “If you worked hard you’d get paid a decent wage.”

Winters blames the environmental movement for crippling the economy by protecting enough public land to close four of the mills. “The families associated with those working class jobs had to start leaving,” he says. “We lost a lot of very good people.”

Nowadays, the town, population 2,294, faces the challenges endemic to Oregon’s rural areas—neglected public services, persistent wildfire smoke, reliance on public agencies for jobs. Sometimes it can take 30 minutes for an ambulance in Lakeview to arrive. The brown tint of the town’s tap water prompted an investigation from the Oregon Health Authority. Tests confirmed the water is safe to drink, though some residents still seem uncertain.

There is no police chief in Lakeview. According to the Herald and News in Klamath Falls, the only person who applied this year ultimately gave up after it came to light that he harassed a reporter for looking into allegations of an illegal search and seizure in his last precinct, Baker City. Lakeview didn’t reject him; he turned down the job. The Herald and News reports that low officer salaries have led to chronic understaffing in the police department. Crammed with the fire department into one small emergency services building, the police are now down to one active duty cop.

The unemployment rate in Lake County hovers around 5%, a notch higher than the state average of 4%, and the median wage is $37,974. Around half of the labor force is employed with state or federal agencies, predominately the Oregon Department of Forestry, the Bureau of Land Management and the U.S. Forest Service. The largest employer is the nearby prison, Warner Creek Correctional Facility. The county desperately wants to grow its private-sector employment.

IMG 2266 
Jerry’s Restaurant, a diner in Lakeview. Photo: Caleb Diehl

So when Red Rock Biofuels offered to place its latest plant in Lakeview, Winters and other county politicians jumped at the chance. When completed, the plant will harvest dead and downed wood from forest land, transform it into diesel and jet biofuel and ship the finished product by rail. The company chose Lakeview, Winters says, for its proximity to both forestland and a working railroad. The CEO of Red Rock Biofuels could not be reached in time for this article.

Red Rock, a Colorado-based company, promised 31 factory jobs at 150% of median wage, commissioner Dan Shoun says, plus 70 to 100 more in related trades—gathering the wood and sending it to the plant for processing. Each year, the plant will process 136,000 tons of waste woody biomass into 15 million gallons of fuel.

After recognizing local businesses that have weathered the tough economic times in the county, Shoun says, Red Rock “is the single most important business for job creation, for forest-health cleanup, for schools and family-wage jobs. Our unemployment of employable people should be zero with this and all the other activities going on.”

For comparison, local officials say one new job in Lake County equals 520 in Multnomah. Other major employers in Lakeview include Pacific Pine Products, a door factory, with around 100 employees, and Collins, the last standing lumber mill, with around 80 workers.

Red Rock “is the single most important business for job creation, for forest-health cleanup, for schools and family-wage jobs.” 
—Dan Shoun

While county commissioners are already chalking up a win, several questions about the true economic development potential of Red Rock hang in the balance. For one, the exact job numbers are in dispute. Ginger Casto, rural development specialist for the South Central Oregon Economic Development District, says the possible number of outside contractors bringing in forest material might be closer to 20 to 75, not 70 to 100. Many of these jobs will be seasonal. 

For the 31 high-tech manufacturing jobs at the plant, she suspects the company might recruit more technically skilled workers from outside Lake County. Keeping the jobs in the community would require extensive workforce training to transition people from natural resource industries into manufacturing, which today relies to a large degree on information technology. “We’re really excited about it,” Casto says, “but we have a deficit of folks who know how to do the work.”

Shoun and Winters say Red Rock will provide some workforce training, and Klamath Community College programs will also help bridge the gap.

The job creation potential for Red Rock also hinges on the company’s ability to harvest downed wood from public land. Congress excludes biofuel projects on federal land from generating renewable indentification numbers (RINs), serial numbers for tracking biofuel. Without them, the projects become financially infeasible in the renewable energy marketplace.

Nick Johnson, executive director of the nonprofit Lake County Resources Institute, says changing the law is a “long-winded and complicated process” that faces resistance from some environmental groups. He says, “there’s a fear from environmentalists that opening federal forest to biofuel production would lead to more logging.”

Besides job creation, Red Rock’s boosters hope harvesting from federal land could provide an innovative model for wildfire prevention. Many Lake County residents can still taste the smoke that blanketed the region for the entire summer, crushing tourism numbers and degrading air quality. Shoun and Winters say one of the biggest factors in the hotter, more intense season is a surplus of fuel on the forest floor. “We are seeing overstocked forests and a lot of fuel on the ground” Johnson says.  Red Rock would remove some of that fuel load. 

Politicians are also leaning on the corporation to rebuild the county’s ageing infrastructure. In conjunction with state and federal grants, Red Rock will help pay for upgrades to the county’s railroads and bridges to meet the stringent safety requirements for transporting hazardous fuel. The county is eyeing a $5.6 million federal Build America grant to finish the job. Shoun expects a decision on the grant application in mid-December.

If all goes as planned, Red Rock will also help bring natural gas to Lakeview. For the first 15 years of the plant’s operation, Winters says, Red Rock will pay an annual “community service fee” of around $80,000 to the county and around $200,000 to Lakeview in lieu of the usual corporate tax rate. The county will reinvest some of the money into a natural gas pipeline that will benefit other businesses and residents. The county is working to find a utility to supply the natural gas.

Negotiations between Red Rock and the county have remained confidential up to this point, so it’s difficult to say what the final economic impact will be. Winters says of the company, “they like to fly under the radar” because “they just want to get the plant built.”

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Another bright spot for the county is a cluster of new solar arrays, made possible by an Obama-era renewable-energy program, that will soon go into construction. Lake County’s abundance of sunshine (some 300 days a year) and cheap, open land attracts solar developers.

Obsidian Renewables plans a 600 megawatt development over 7,000-acres at the north end of the county. Blue Marmot Solar has chosen a site near Lakeview for a 5,000-acre development. With a $56,034 grant from the U.S. Department of Agriculture, Lake County Resources Institute will conduct a $90,364 energy analysis on local businesses to determine if they’re suitable for rooftop solar. Johnson says the nonprofit is seeking additional funding to subsidize the cost of the arrays for businesses, and that the project might be among the first of its kind in the nation.

Lake County is also working to realize gains from an expanding outdoor-recreation-tourism sector, says Chamber of Commerce director Jessica Bogardus. The Oregon Timber Trail, a bikepacking route, and the 750-mile Oregon Desert Trail have brought a stream of outdoor enthusiasts into town. In an April rural tourism studio, Travel Oregon made recommendations for improving the visibility of the town’s outdoor attractions. Bogardus says the future could include a need for more guides and outfitters.

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While the county looks much different from the one Shoun and Winters grew up in, the commissioners are embracing new-economy business models. Though they come with some reservations, the recent renewable energy and tourism projects offer a way to repair the economic engine that used to be fueled by natural resources. “I think we’re going to see a shift,” Shoun says. “Our goal is to give people a skill base to improve their way of life.”

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