EUGENE (AP) - It was problem waste once, sawdust and wood chips burned in countless “wigwam” burners that belched sparks and smoke through their screened-over tops at lumber mills across the West.

Some of the rusting hulks remain, but they're cold now. The chips and sawdust they burned are in short supply, valuable byproducts used for fiberboard, to generate energy and more.

And competition for the former waste products is on the rise.

Random Lengths, a Eugene-based forest products trade publication, says owners of fiberboard plants face a shortage.

The plants, including seven in Oregon, produce fiberboard used for kitchen countertops, cupboards and ready-to-assemble furniture.

But the drive for renewable energy spurred by incentives from the Oregon Energy Trust, a nonprofit organization funded by power companies, is creating competition for the sawdust.

Some plants are burning the material to produce heat used in industrial processes and to make steam-generated electricity.

On the horizon are biorefineries that can turn plant fiber, including sawdust, into ethanol, fuel for cars and trucks.

Fiberboard mills already are feeling the supply pinch, said Pete Malliris, associate editor at Random Lengths.

“Earlier in the year, when the market was screaming (for fiberboard), you had some (fiberboard) mills who could not increase production. They wanted to add new shifts and hire more workers, but they were unable to do it because they couldn't get enough raw material,” he said.

A sawdust shortage could affect fiberboard manufacturers in Springfield, Eugene, Medford, Albany, Roseburg and Klamath Falls, Malliris said.

“It makes it tougher. It drives our costs up,” said Rick Hogue, fiber manager for SierraPine's plant in Medford, who said he's been in bidding wars for sawdust with biomass buyers.

“I haven't been outbid. (But) I've had to raise values to maintain the fiber,” he said. “It's having an effect. There is no question about it.”

Oregon's fiberboard and particle board mills employ about 700 people, Hogue said. They're good, $20-an-hour jobs, he said, and the plants fatten property tax rolls.

If biomass or biorefineries suck up all the wood and knock out the fiberboard makers, it would be a loss to the state, Hogue said.

A large fiberboard mill may use from 800 to 1,500 tons of raw wood fiber every day, Malliris said.

Already, 10 industrial sites in Oregon use wood fiber biomass combustion boilers to power steam-driven generators that produce electricity, according to the state Energy Department.

That has picked up as state incentives come online.

Nationally, 200 companies many of them sawmills, are generating power from biomass, including wood fiber, according to the U.S. Department of Energy.

That's a lot of competition for raw material.

Researchers anticipate that a biorefinery will be built in the next several years that could process 10,000 tons of biomass including wood fiber a day.

“They're serious competitors for the resource,” Malliris said. It is not clear where such a refinery would be built.

But the shortages could help Oregon sawmills as their former waste products turn to profit.