You Wouldn't Forget Wood Would You?

December 14, 2008 – Vol.13 No.39

YOU WOULDN’T FORGET WOOD WOULD YOU?

Here’s a quick way to take the pulse of an industry. Search the news and see what comes up.

On this cold and wintry day in the U.S. Mid-Atlantic with news of record ice storms in the New England and snow in the Big Easy the keyword search is “wood pellets.” The search results were, well, like a burning pellet stove: heartwarming.

Despite the slow economy most of the news of wood pellets is upbeat. Stories of pellet shortages are plenty as are stories of increased sales of pellet stoves. Consider these good omens for the industry and renewable energy itself. While demand for most products is cold the demand for pellet heat is not.

The shortages of pellets may be, in part, a side effect of the slowdown in the construction industry. Wood pellets, for the most part, come from sawmill waste. If sawmills aren’t churning out lumber to build houses, then they won’t be churning out wood pellets.

Yet the demand for pellets is apparently so strong that in some cases trees are being harvested for the sole purpose of grinding them up to compress the dust into those rabbit feed-sized pellets.

By all accounts, pellet demand is growing, enough so that new pellet enterprises are opening to supply the demand.

The Watertown Daily Times, of Watertown, New York, reports that Curran Renewable Energy is nearing completion of its pellet producing and packaging facilities in Massena that will be able to manufacture 100,000 tons of wood pellets each year. The pellet plant was created to help its owner Patrick J. Curran ensure the existence of his other business, Seaway Timber Harvesting. If he can’t sell timber to be cut up into boards he’ll grind those trees up for pellets.

"What I'm hoping is we'll be able to ensure a market for Seaway Timber," he said.

Curran thinks his plant will need to be open 7 days a week, and will create 50 new jobs over the next three years.

There’s still more news of the growth of wood pellet making.

Biomass Magazine reports that the Strong Maine Wood Pellet facility in Strong, Maine, is set to open. Owned by Geneva Wood Fuels, pellets will be sold in 40-pound bags to distribution outlets in the Northeast and possibly Pennsylvania. The facility was built to meet the demand for wood pellets in the Northeast because of the explosive growth of wood pellet stove sales that increased 500 percent from 2007 to 2008.

The Inter-County Leader, serving Northwest Wisconsin, notes that High Quality Shavings in Centuria is building a 47,500-square-foot facility that will produce wood pellets and shavings for heating and animal bedding. The plant will be open 24/7 360 days a year, but half to two-thirds of the pellets will be an export item for the company (and the country). In Italy, for example, 90 percent of the homes use pellet stoves for heat and hot water, and the pellets are imported. (Export items are a good thing for the cash-strapped country.)

The Citizen Journal of Boyne City, Michigan reports that pellet maker Kirtland Products of the same town will be up and running in 2009. Founded by ex-autoworkers, the company should employ about 25 people in its office and plant and another 40 workers in harvesting and transporting the wood.

As recommended by the Michigan Department of Natural Resources, Kirtland plans to use primarily Jack Pine trees as the source for the pellets. The Jack Pine is not a straight growing tree, thus a bad choice for lumber, but also middle aged Jack Pines make nice homes for Kirtland's Warbler. The birds like to nest near the ground in the sturdy lower branches of trees between 5 and 15 years old. Thus Kirtland Products will be harvesting the older trees to allow the young growth to spread and that will provide a larger habitat for the birds.

(It’s nice to name a company after an endangered species, isn't it?)

RISI, which calls itself the leading information provider for the global forest products industry, hopes the incoming Obama administration won’t forget wood energy in its push for new renewables. In its Wood Biomass Market Report, RISI says that the “ federal stimulus package suggests that the green component (wood, wind, solar, etc.) will be a whopping $50 billion over two years. If 20 percent falls to wood energy, near term spending of $10 billion would spur formidable growth, providing tens of thousands of new jobs -- and wood demand of perhaps 120 million green tons, long-term. Compared to an estimated 215 million green tons of consumption currently by the nation's pulp & paper industry, this new demand will be significant, and could create a $3 billion per year wood energy market at current prices.

“The Report also says that a good bit of this expansion is already underway, with current projects topping 32 million tons. Wood-derived fuels already account for a full third of the nation's renewable energy, 50 percent if hydroelectricity were excluded. RISI projects that this increased demand will occur most in the U.S. South, followed by the U.S. West, and then the U.S. North.”

Links:

The Watertown Daily Times
http://www.watertowndailytimes.com

Kirtland Products
http://www.kirtlandproducts.com

Biomass Magazine
http://www.biomassmagazine.com

The Inter-County Leader
http://www.the-leader.net

The Citizen Journal
http://www.citizenandjournal.com

RISI
http://www.risiinfo.com