Supporters of cross-laminated timber are pondering a chicken-or-the-egg problem – which will come first in the tall wood revolution: demand for CLT, or the domestic supply chain?

By now, in the Pacific Northwest and around the U.S. have reported on CLT and its sky-high potential – wooden skylines, a revitalized timber industry, healthier forests, etc.

But in Oregon and Washington, significant steps lie ahead before CLT fully takes hold. And least among them seems to be a by the steel and concrete industries.

“The single most important determinant of the on the West Coast will be: Does it save developers money?” said Greg Block, president of Sustainable Northwest.

Right now, it rarely does.

Intermediate objective

CLT is more expensive than its competitors, steel and concrete. However, labor costs can be lower for CLT projects because they can be built quicker. For CLT to take off, builders and developers, risk-averse by nature, need to be convinced that these cost savings justify adopting the emerging building product.

But there is a small and growing number of projects showcasing the new product in the Pacific Northwest. The Framework tower planned for the Pearl District will be the tallest wood-framed building in the U.S. With a large affordable housing component and ambitious design ideas, the project is intended to show off what CLT can do; the project would not likely have penciled out without the sizable federal grant it received. (Framework has received design approval and is awaiting construction permits.)

It remains to be seen what types of new construction will be CLT’s “sweet spot.” Though high-rises can be built using mass timber, some observers believe other uses of CLT would be more practical on a large scale.

Mid-rises and industrial applications are more likely, Block said.

“You may see some very tall towers, but that’s not where we’re anticipating the heavy investment is going to go,” he said. “It’s going to depend on the economies of scale for different types of buildings and the advantages and disadvantages of other competing materials. But people are going to experiment.”

Another showcase project is PATH Architecture‘s Carbon12 eight-story condo tower on North Williams Avenue. Though its team also received grant money to cover design concept costs, it was able to hustle and get the project topped out in a matter of weeks, generating considerable savings.

In North America there are two companies in the U.S. certified to manufacture CLT, and two in Canada. The first in the U.S. was D.R. Johnson, a family-owned mill based in Riddle.

At the time the Carbon12 project team was soliciting CLT suppliers, D.R. Johnson was unable to match its specifications, according to developer Ben Kaiser, who said he would have preferred to do business with an Oregon company. He got bids from European firms, before opting to go with Canadian company Structurlam.

Manufacturing demand

Rural economic development has always been a tough nut to crack. Sparsely-populated counties like Douglas and Lane don’t have many mid-rises, but officials hope that by creating a regulatory environment, they can be more inviting to businesses wishing to join the CLT supply chain.

“Timber is still one of our primary industries here in Lane County,” said Sarah Means, economic development director for Lane County. “And we see mass-timber products as a very intriguing innovation to the wood products industry … We know that we’ll each have a role to play if this moves forward, which we think it will.”

Though it’s near the Portland-metro area, is still timber country, said Rick Gruen, its economic development director. With 75 percent of its area forestland, economics and forestry are intrinsically tied together.

(One way Clackamas County has tried to attract development is by making its permitting and plan review process as stress-free for developers as possible, according to Gruen.)

Gruen and Clackamas County are big players in an alliance of economic development offices and research institutions looking at modernizing manufacturing in the Pacific Northwest – and the (PNMP) has been highly interested in the CLT supply chain.

The PNMP has identified the need for possible “intermediary facilities” to kiln-dry CLT to the building code-required level of 12 percent moisture (most lumber leaves the mill at around 18 percent).

Research by Oregon State University offers a thumbnail sketch of costs to enter the CLT market, including as an intermediary facility. If a company is already in the glulam business, gearing up for CLT would cost close to $15 million. Starting from scratch would cost around $40 million.

Lumber businesses that want to provide a CLT lumber line – by kiln-drying lumber up to 12 percent – are looking at a cost in the $4 million range.

Pool resources

Paying to build a manufacturing facility would require a lot of confidence in demand for CLT becoming sufficient to see the investment pay off. But once more domestic producers “jump in the pool,” the cost of CLT would likely drop.

“You’re unlikely to see significant demand pull without having a domestic manufactured product that’s cost-competitive,” Block said. “By the same token, once that becomes available, we’re going to see more algorithmic scaling of the adoption of CLT once this chicken-and-egg conundrum works itself out.”

Sustainable Northwest operates a for-profit subsidiary, Sustainable Northwest Wood, which sells wood from about 50 rural mills in Oregon and Washington. But some think that for CLT to “hit,” the large wood products manufacturers need to get on board. But many already have their own mass-timber products.

“We’re watching what happens with CLT with great interest,” said a spokeswoman for Roseburg Forest Products. “But right now we have no plans to enter that market.”

Both Roseburg Forest Products and Boise Cascade, another major manufacturer, already produce laminated veneer lumber (LVL), a mass-timber product that isn’t rated for as many uses as CLT. The byproducts of manufacturing LVL are more profitable than those from CLT. But amid the current mass-timber craze, the company is looking into expanding its LVL line, senior vice president John Sahlberg said.

One large mill is moving forward with a large CLT manufacturing component – Vaagan Brothers Lumber in Colville, Washington. There’s also a group in Spokane that has secured financing, Block said.

“I do think we’re highly likely to have additional manufacturing facilities online in the near future,” he said. “I’m aware of three serious and five proposed CLT manufacturers that are seeking financing.”

No big deal

The consensus is that both Oregon and Washington are providing supportive policy environments for CLT and new mass-timber building methods. Oregon’s building code is more CLT-friendly, but Washington has been more proactive with its procurement services promoting CLT, specifying the product for certain public school projects.

Washington’s 2016 budget directed $5.5 million to construction of modular classrooms for K-3 students as CLT demonstration projects.

Representatives from both states are serving on the International Code Council’s ad hoc group developing code updates for tall wood buildings for the scheduled 2018 updates. Three Washington projects are planned with CLT and may receive some state funding – the La Conner Library, the Aberdeen Gateway Center and a housing project in Spokane.

And demand-side problems still persist, according to Leda Chahim, government affairs specialist for Forterra, a sustainability-focused nonprofit in Washington state.

“For 20 years we’ve watched the decline of the timber industry in rural Oregon and Washington state,” she said. “CLT and mass timber have the potential to provide a sustainable and economically vibrant source of industry, and house our populations and put our people back to work.”

Some of the ideas to pay for it in rural areas include a federal tax incentive program called New Market Tax Credits – available only to lenders in America’s poorest communities.

The Wood Products Council’s Ethan Martin doesn’t expect CLT to “pop” until at least 2018. He said he used to hear about it every time a developer was considering using CLT or a similar product, but no more. It’s a sign the product is taking hold, he said.

“The beauty of it is that I’m hearing about it less and less,” he said. “People are more used to it. They don’t think to tell me anymore.”

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