Pellet prices may be going up Europeans are importing from USA to replace coal burning power plants

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Todays wall street journal

http://online.wsj.com/article/SB124691728110402383.html

 

[Stentor]

I was going to post this link with a different title: "Increased Demand Means Cheaper Pellets."

Key points from the Journal article:

1. U.S. pellet production is increasing dramatically, especially in the southeast.

2. Wood pellets are becoming a valuable export for the U.S.

3. Increased demand is driven by large companies' requirements.

4. New U.S. energy policy to diversify fuel sources will increase domestic production.

 

[Stentor]

The important point to understand is that production is going up. That does not mean less pellet fuel for homeowners but potentially more. More pellets and a steadier supply could mean lower prices and better quality. If the product volume gets big enough, it can be stratified. Low grade high ash pellets (what we call "junk") will be fine for industrial use. Residential-quality pellets will be more available for individual homeowners like us.



Excerpts from the article:

1. " European utilities are snapping up the small combustible pellets to burn alongside coal in existing power plants. As a global marketplace emerges to feed their growing appetite for pellets, the Southeastern U.S. is becoming a major exporter, with pellet factories sprouting in Florida, Alabama and Arkansas."


2. "The wood-pellet market is booming because the European Union has rules requiring member countries to generate 20% of their electricity from renewable sources by 2020. Europe imported €66.2 million (about $92.6 million) of pellets and other wood-based fuels in the first three months of 2009, up 62% from the same period a year earlier, according to the EU's statistical arm."

3. "Until recently, there were only about 40 pellet factories in the U.S., which produced about 900,000 tons a year, mostly for heating homes. ... But in May 2008, Green Circle Bio Energy Inc. opened a pellet plant in Cottondale, Fla., that produces 500,000 tons of pellets a year; it ships them by rail to the coast and then on to Rotterdam, Netherlands. ...
Another 500,000-ton facility in Selma, Ala., owned by Dixie Pellet LLC, also opened last year. And Phoenix Renewable Energy LLC plans to break ground next month on a 250,000-ton-a-year pellet plant in Camden, Ark., .......The $100 million facility's output for five years has been contracted to go to Europe, and Phoenix is working on another five facilities."

4. "It is easy for these pellet plants to find raw material. The pulp and paper industry is declining, and the housing slump has sapped the need for hardwood. Forest owners are ecstatic that pellet plants are stepping in. ..."We are irrationally exuberant," said Lee Laechelt, executive vice president of the Alabama Forest Owners Association."

5. "Australia, New Zealand, Argentina and Vietnam are also shipping pellets to Europe, as are Canada and South Africa.."

6. "If a federal renewable energy standard is approved, 'we won't be shipping pellets overseas,' said Phoenix Renewable Energy's development director, Steve Walker. 'We'll be shipping them domestically.' "

 

[JustWood]

The important point to understand is that production is going up. That does not mean less pellet fuel for homeowners but potentially more. More pellets and a steadier supply could mean lower prices and better quality. If the product volume gets big enough, it can be stratified. Low grade high ash pellets (what we call "junk") will be fine for industrial use. Residential-quality pellets will be more available for individual homeowners like us.



Excerpts from the article:

1. " European utilities are snapping up the small combustible pellets to burn alongside coal in existing power plants. As a global marketplace emerges to feed their growing appetite for pellets, the Southeastern U.S. is becoming a major exporter, with pellet factories sprouting in Florida, Alabama and Arkansas."


2. "The wood-pellet market is booming because the European Union has rules requiring member countries to generate 20% of their electricity from renewable sources by 2020. Europe imported €66.2 million (about $92.6 million) of pellets and other wood-based fuels in the first three months of 2009, up 62% from the same period a year earlier, according to the EU's statistical arm."

3. "Until recently, there were only about 40 pellet factories in the U.S., which produced about 900,000 tons a year, mostly for heating homes. ... But in May 2008, Green Circle Bio Energy Inc. opened a pellet plant in Cottondale, Fla., that produces 500,000 tons of pellets a year; it ships them by rail to the coast and then on to Rotterdam, Netherlands. ...
Another 500,000-ton facility in Selma, Ala., owned by Dixie Pellet LLC, also opened last year. And Phoenix Renewable Energy LLC plans to break ground next month on a 250,000-ton-a-year pellet plant in Camden, Ark., .......The $100 million facility's output for five years has been contracted to go to Europe, and Phoenix is working on another five facilities."

4. "It is easy for these pellet plants to find raw material. The pulp and paper industry is declining, and the housing slump has sapped the need for hardwood. Forest owners are ecstatic that pellet plants are stepping in. ..."We are irrationally exuberant," said Lee Laechelt, executive vice president of the Alabama Forest Owners Association."

5. "Australia, New Zealand, Argentina and Vietnam are also shipping pellets to Europe, as are Canada and South Africa.."

6. "If a federal renewable energy standard is approved, 'we won't be shipping pellets overseas,' said Phoenix Renewable Energy's development director, Steve Walker. 'We'll be shipping them domestically.' "

Too bad many of these pellet plants are owned by foreign power companies and only look to serve their own interest.

 

[Stentor]

Excerpts from the article:

1. " European utilities are snapping up the small combustible pellets to burn alongside coal in existing power plants. As a global marketplace emerges to feed their growing appetite for pellets, the Southeastern U.S. is becoming a major exporter, with pellet factories sprouting in Florida, Alabama and Arkansas."


2. "The wood-pellet market is booming because the European Union has rules requiring member countries to generate 20% of their electricity from renewable sources by 2020. Europe imported €66.2 million (about $92.6 million) of pellets and other wood-based fuels in the first three months of 2009, up 62% from the same period a year earlier, according to the EU's statistical arm."

3. "Until recently, there were only about 40 pellet factories in the U.S., which produced about 900,000 tons a year, mostly for heating homes. ... But in May 2008, Green Circle Bio Energy Inc. opened a pellet plant in Cottondale, Fla., that produces 500,000 tons of pellets a year; it ships them by rail to the coast and then on to Rotterdam, Netherlands. ...
Another 500,000-ton facility in Selma, Ala., owned by Dixie Pellet LLC, also opened last year. And Phoenix Renewable Energy LLC plans to break ground next month on a 250,000-ton-a-year pellet plant in Camden, Ark., .......The $100 million facility's output for five years has been contracted to go to Europe, and Phoenix is working on another five facilities."

4. "It is easy for these pellet plants to find raw material. The pulp and paper industry is declining, and the housing slump has sapped the need for hardwood. Forest owners are ecstatic that pellet plants are stepping in. ..."We are irrationally exuberant," said Lee Laechelt, executive vice president of the Alabama Forest Owners Association."

5. "Australia, New Zealand, Argentina and Vietnam are also shipping pellets to Europe, as are Canada and South Africa.."

6. "If a federal renewable energy standard is approved, 'we won't be shipping pellets overseas,' said Phoenix Renewable Energy's development director, Steve Walker. 'We'll be shipping them domestically.' "

Too bad many of these pellet plants are owned by foreign power companies and only look to serve their own interest.

I agree. Maybe we should get off our behinds and build some more pellet plants ourselves? A little work and a little investment wouldn't hurt.