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This study evaluated the operational performance and cost of an integrated harvesting system that harvested sawlogs and biomass (i.e., energy wood chips) in stand conversion clearcut operations. Douglas-fir (Pseudotsuga menziesii) trees were processed into sawlogs while whole trees of tanoak (Lithocarpus densiflorus), and sub-merchantable materials (small-diameter trees, tops and limbs) were fed directly into a chipper to produce biomass for energy production. A standard time study method was used to determine productivity and costs. Over 26 working days, the integrated system produced 1,316 bone-dry metric tonnes (BDTs) of sawlogs, and 5,415.89 BDT of chips, with an average moisture content of 43.2%. Using the joint products allocation costing method, the costs of the integrated system were $29.87/BDT for biomass and $4.26/BDT for sawlogs. Chipping utilization was as low as 41%, directly affecting production and cost of chipping operation. Single-lane, dirt, spur roads were the most costly road type to transport whole trees to a centralized processing site: transportation costs for biomass and sawlogs were increased by $0.08/BDT and $0.02/BDT, respectively, for every 50 meter increase in traveling distance. Diesel fuel price could raise total system cost for each product by $0.78/BDT and $0.08/BDT for each $0.10/liter increase.