Questions about finance and horticulture remain after Sacramento-based Eco2 Forests Inc. said last week it plans a forest of kiri trees north of Spanish Springs.
Experts in kiri trees which are known scientifically as Paulownia say the trees need far more water than the scant supplies available in northern Nevada.
Executives of Eco2 Forests acknowledge, meanwhile, that they're still raising the $10 million that they estimate is needed to get the project off the ground.
They plan to raise another $10 million in three years to finance a mill.
The project is to be located off Winnemucca Ranch Road on land leased from the Jaksick family, developer of the Arrowcreek and Montreux subdivisions.
The company said it plans to plant 2,000 acres of kiri trees in Washoe County, the first step toward a program of 14,000 acres of the trees in the United States.
Plans for a kiri plantation in arid Nevada raised the eyebrows of David Drexler, a Fitzgerald, Ga., grower of the trees who's active in the American Paulownia Association, which promotes cultivation of the trees.
"They require lots of water, a tremendous amount," said Drexler. "It's doomed to failure unless they install drip irrigation."
Drexler said growers also have found the trees require good soil and won't grow in poor soils. In the United States, the trees most commonly are grown in the Southeast.
A 2001 study by Oregon State University estimates costs of installing drip irrigation systems at $500 to $1,200 an acre a cost of at least $1 million at the Eco2 site.
Martin Tindall, president of Eco2 Forests, said the company chose the Washoe County site because of water rights that are available.
"This included four acre-feet of irrigation, which is essentially 48 inches of rainfall," he said in an email last week.
The Winnemucca Ranch project would employ about 280 people, Eco2 Forests said last week.
The company said it expects to generate revenues of $12 million a year from the sale of carbon credits from the forest as kiri trees sequester carbon dioxide from the atmosphere.
In January, the company said it struck a deal with Carbon X Trade Inc. of suburban Denver, which would pay approximately $10 each for 375,000 carbon credits generated by Eco2 Forests.
No telephone number is available for Carbon X Trade Inc. An address listed in Colorado corporate records for the company's headquarters is a home on a residential cul-de-sac in Lakewood, Colo. Those records show the company was formed last April.
Tindall said principals of Carbon X Trade and its parent, Green Futures Venture Fund, want to keep a low profile but bankrolled Eco2 Forests.
'They are planning on coming out with a big bang," he said.
The company said it expects to generate $213 million a year through the sale of timber from the Washoe County plantation, using an existing rail link and nearby roads to transport logs.
It expects a crop of kiri trees to be ready for harvest every seven years, although University of Tennessee researchers caution that fast-grown wood may be difficult to market to buyers who often prefer slower-grown logs.
Kiri wood commonly is exported to Asian markets, particularly Japan, where it used for furniture, clogs and musical instruments. Each tree usually produces one log.
Data on the market for kiri wood is difficult to pin down, and price quotations range widely.
"It's a relatively new industry," says Zoe'Anna Thies, who brokers sales of the wood from her office at Talmage, Calif. "But if I had the wood, I would be in high cotton. The demand is high for it."
The common stock of Eco2 Forests, which was known as Monster Motors Inc. until June 2009, began trading publicly on the Pink Sheets in September. The Pink Sheets venue doesn't require filing of financial statements, and Eco2 Forests has not filed any disclosure documents with the Securities and Exchange Commission.
It's issued 27 press releases about its progress since September, including seven since March 1.
The company's shares traded for less than a dime a share through most of 2009, spiked to 60 cents in November, and have been trading recently in the range of 20 cents. The shares fell nearly 17 percent after last week's announcement of the Washoe County project.
