The pine beetle infested more than 640,000 acres of Colorado forest last year and until we come up with a viable economic use for all that dead wood, the problem is only going to get worse.

Nothing less than the state's scenic beauty is at stake, along with whatever percentage of our economy is dependent on it. Even faint glimmers of hope are few and far between. Let's look at a few that may or may not pan out.

On Feb. 7, a Broomfield company, Range Fuels, announced plans to build the nation's first commercial plant to make ethanol from wood chips - in Georgia.

Why not Colorado? I spoke Friday with Mitch Mandich, Range Fuels' CEO. First, he explained, lumber is the second-largest industry in Georgia. Farmers there treat pine trees as a plantation crop. You can grow a 10-inch diameter tree in 10 years with their rain and soil conditions.

"In Georgia, there is an abundance of wood chips that sits in fields and rots and is of no value," Mandich said. "Georgia alone has the capacity on a renewable basis to provide wood chips that can make 2 billion gallons of cellulosic ethanol every year."

Range Fuels can take advantage, he said. "We don't have to build roads. We contract with timber companies and they bring the chips to us. We can put our plants right in the forests there."

A profitable cellulosic ethanol plant needs a reliable source of wood, Mandich said. "We don't have that here in Colorado. With the pine beetle situation, the infestation is spread out over thousands of miles. There is not a timber industry infrastructure in place. The pine here is a finite resource that can't be easily regrown. How many years would it last? We'd go through the supply in a short time. There's no easy way to cut it down and move it and bring it to a plant. It's just not feasible as a renewable resource."

Lynn Young, a retired U.S. Forest Service public information director, agreed: "It's too dry here, the soil's not deep and the trees are small - usually 6 inches to 8 inches in diameter."

To attack the beetle, the forests need to be thinned so it's difficult for them to jump from tree to tree, Young explained. "Thinning is really expensive if you don't have a use for the wood," Young said. "The problem for much of Colorado is there's not a market for the material. The Forest Service is desperately trying to locate and stimulate new markets because that's what it's going to take. Cellulosic ethanol is a real good product, but it's expensive to get it out of Colorado forests."

To underscore Young's point, Summit County just put out a contract to thin the forest behind its high school and hospital.

"The lowest bid was $1,600 an acre," said Gary Severson, executive director for the Northwest Colorado Council of Governments. "It's so expensive because there's no market for the wood. And at that price, there's simply not enough public money to thin the forests. The only way to do this to is to find some way to add value to this material. With small-diameter lodgepole pine, there aren't a lot of options."

Severson and others see two possibilities on the horizon. One is residential and commercial boilers that can be fueled by wood chips. There aren't many such boilers now, and at the current cost of diesel fuel, it's not economical to truck wood chips more than 30 miles to feed one. Natural gas is still too cheap.

"There's an economic gap that won't get closed for a while," Severson said.

Another option is wood pellets, which are simply ground-up, compressed wood chips, he said. "The beauty of pellets is that you compress BTUs into a smaller unit. Three truckloads of wood chips equal one truckload of pellets."

A major out-of-state investor is interested in opening a wood pellet plant in Colorado this year, he said, but he's not naming names yet.

"He has profitable plants in two other states," a hopeful Severson said.

"What it's going to take is involvement of the private sector. What can we as government do? Cut red tape. Provide some incentives to make things possible, so people say 'Hey, I can make a buck at this.' Then the problem begins to solve itself. Until then, economic disconnect is the big problem."

Business editor Rob Reuteman can be reached at 303-954-5177 or reutemanr@RockyMountainNews.com.