Wood Pellets - Supply and Demand - Published 10:55am Friday, July 8, 2011

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Don2222

Minister of Fire
Feb 1, 2010
8,824
Salem NH
Hello

News-Herald.com
http://www.roanoke-chowannewsherald.com/2011/07/08/supply-and-demand/

(Editor’s Note: This is the second in a six-part series that focuses on the growing wood pellet industry in northeastern North Carolina and southeastern Virginia.)

AHOSKIE – Burning wood to produce heat has been practiced since the very first caveman figured out the ignition process.

Now, thousands of years later, this simple practice has resulted in an explosion, figuratively, of the need for wood-based products.

Fueling that need is an overseas market that has upped its demand for wood, especially clean-burning pellets. The global wood pellets market has experienced a dramatic increase, from nearly 8 million tons per year in 2007 to more than 13 million tons in 2009. In 2009, the European countries alone consumed more than 8 million tons. In that same year, North American mills produced about 7 million tons of pellets in 2009, of which almost 5 million tons were intended for exports to Europe.

Leading countries in the consumption of pellets in Europe are Sweden, Austria and Finland, while Germany, France and Italy are experiencing the largest market growth in both capacity and consumption of pellets. In addition, countries such as Denmark, Belgium and Norway are experiencing the most significant increase of the region in pellet consumption.

So, with the increased demand, the European countries are noting a lack of production capacity to satisfy the internal needs, mainly due to the scarce availability of sustainable sources of raw material.

Seizing the opportunity to meet the needs of a growing demand, several companies have announced plans to open wood-pellet manufacturing facilities within the local region, including the old Georgia-Pacific plant in Ahoskie and the former International Paper mill in Franklin, Va.

“The short term and long term projections for wood pellet demand are varied, but all call for significant growth,†said Elizabeth Woodworth, a spokesperson for Enviva Biomass, a Richmond-based company that is currently building the Ahoskie plant, one capable of producing 350 million tons of wood pellets per year.

“The demand in Europe is primarily driven by the commitment on the part of the EU (European Union) to reduce GHG (Greenhouse Gas) emissions by 2020 by using renewables to generate 20 percent of their energy,†Woodworth added.

Additionally, Wood Fuel Developers of Chester, VA have plans for two, wood pellet mills (one in Greensville County, Va. and the other in Sussex County, Va.). Franklin Pellets, a newly formed partnership between Multifuels and CMI, is eyeing the possibility of opening a wood pellet shop within a portion of the now closed International Paper Mill in Franklin, Va.

According to a trio of wood products experts at NC State University in Raleigh, conditions are ripe for a massive increase in the production of wood pellets in the United States, particularly in the South due to favorable manufacturing conditions and the availability of raw materials.

In an article penned by Adrian Pirraglia, Ronalds Gonzalez and Daniel Saloni for the Biomass Power and Thermal Magazine (www.bbiinternational.com), with the opening of several new facilities in the Southern U.S, the capacity for exports has expanded and European countries with demand for pellets, such as Sweden, Italy, Denmark and Norway, may take advantage of their better prices, faster shipping and a steady availability and supply of pellets from these U.S. mills. These countries may switch from their traditional Canadian supplier, depending on delivered prices and long-term supply agreements.

According to Enviva’s Glenn Gray, who is overseeing the construction of the Ahoskie mill, there are 96 pellet mills currently operating in North America. To date, six of those produce more than 100,000 tons a year. Enviva is starting up three new plants, including Ahoskie, each capable of producing in excess of 100,000 tons annually.

“We’re not investing money in this plant in Ahoskie because we believe the market for our product will develop; that we’re hoping someone will buy this product…we are doing this because we at Enviva believe in long-term relationships with our customers, who allow us to invest heavily in manufacturing infrastructure, and raw material supply chains who allow us to deliver wood fiber to that customer,†said Enviva President and CEO John Keppler during a “meet-and-greet†held in Hertford County earlier this year. “We’re not here just for today, we’re here for this generation and the next.â€

The U.S South has the ability to supply pellets for the European market at a competitive price because of enhanced production capacity due to a sustainable wood source from plantations. In addition, it may become a better alternative for European buyers than Canada because of the locations of important ports, better road infrastructure and year-round harvesting.

Enviva has already invested in the shipping of its product by purchasing the Giant Cement Co. port terminal on the Elizabeth River in Chesapeake, VA for $11.7 million to export its wood biomass products, including those made in Ahoskie.

The NC State researchers said it is important to emphasize that wood pellets are not a new product, they have been utilized for decades, but it is only now that the world is experiencing a large demand increase and wood pellet potential is still underestimated.

Wood pellets represent an alternative to the use of coal, gas and even traditional wood logs and chips. Wood pellets are cylindrical, compressed wood particles used as burning fuel. Pellet size varies from one-fourth to one-third inches (6 to 8 millimeters) diameter and 1 to 1.5 inches (38 millimeters) in length, with a bulk density that is usually about 40 pounds per cubic feet (about two to three times the wood density of softwood).

Pellets offer better and more uniform heating properties per unit volume due to their low moisture content. Pellets burn cleaner, have reduced particulate emissions compared with coal, are more economical to transport due to increased bulk density and can be easily produced from wood waste and byproducts.

(Portions of this story were reprinted, with permission, from the Biomass Power and Thermal Magazine.)
 

iceman

Minister of Fire
Nov 18, 2006
2,403
Springfield Ma (western mass)
Overall, I am thinking not a good.thing ..... We are going to strip out Nat resources to heat Europe?
Pellets are good but for a %... Trees do not grow back by next season and if I read correctly 350 mill? Tons a year?
 

Delta-T

Minister of Fire
Feb 27, 2008
3,146
NH
350 million tons does seem like a lot, doesn't it? I do not think it sounds excessive though. To put that in perspective...up until very recently (last decade or so) here in NH, the Berlin Paper mill would generally consume over 1 millin tons of wood fiber, and there is not shortage of trees up there. This practice lasted for generations. Companies like GP know what they are doing. If it wasn't a "sustainable" figure they wouldn't be investing so heavily. Pellet manufacturing is an expensive game to get into. If you dont have a plan, you will fail.
 

SmokeyTheBear

Minister of Fire
Nov 10, 2008
13,363
Standish, ME
Delta-T said:
350 million tons does seem like a lot, doesn't it? I do not think it sounds excessive though. To put that in perspective...up until very recently (last decade or so) here in NH, the Berlin Paper mill would generally consume over 1 millin tons of wood fiber, and there is not shortage of trees up there. This practice lasted for generations. Companies like GP know what they are doing. If it wasn't a "sustainable" figure they wouldn't be investing so heavily. Pellet manufacturing is an expensive game to get into. If you dont have a plan, you will fail.

That is a very high rate of harvest compared to the former Berlin mill's use, what the effects will be depends upon what is available to harvest.

Never assume that any group is going to follow older practices and not go for a quick buck and out, leaving others holding the bag and cleaning up any messes.
 

Delta-T

Minister of Fire
Feb 27, 2008
3,146
NH
the wood mass has been there, and the industries that have , up to now, consumed that wood, are in a collapse. No more paper mills. More and more synthetic or composite materials in construction. More recycling. Add to that the manipulation of the trees themselves to grow faster and you have a supply that should be fairly stable. I never assume. The "older practices" were the quick buck. The cost to build a mill and produce pellets is very high. The best part of the profit to be seen is likely for the transportation end of the whole deal, not the pellets themselves.
 

SmokeyTheBear

Minister of Fire
Nov 10, 2008
13,363
Standish, ME
Delta-T said:
the wood mass has been there, and the industries that have , up to now, consumed that wood, are in a collapse. No more paper mills. More and more synthetic or composite materials in construction. More recycling. Add to that the manipulation of the trees themselves to grow faster and you have a supply that should be fairly stable. I never assume. The "older practices" were the quick buck. The cost to build a mill and produce pellets is very high. The best part of the profit to be seen is likely for the transportation end of the whole deal, not the pellets themselves.

The older practices I'm aware of that have been used were fully sustainable. Just so you know there are some older companies that still exist that have re-harvested several times on their land.

Like I said it depends and you can't take more out than what regrows in a year otherwise your supply goes away, it isn't the amount of wood still in the woods but what gets produced each year.

Just ask some of the pellet makers who were using mill waste. BTW do you know the current going price on Barefoot?
 

Delta-T

Minister of Fire
Feb 27, 2008
3,146
NH
i think our idears of "older practices" are different, I think "unbridled clear cutting" when I think older practices. totally agree that you need to grow, just about as many pounds of tree as you consume= sustainable.

dont know on the price of barefoots, sorry.
 

hoverfly

Minister of Fire
Jun 26, 2008
550
Southern NH
The worse thing to conciser is population growth will out strip wooded areas. It's time to gain control over modern suburbia, wood pellets are the best interim until solar becomes much more affordable, and/or efficient. Even then, pellets will still be needed to fill in areas where solar will not. Second sustainability needs to be implemented so up front costs do not become an issue later on.
 

save$

Minister of Fire
Sep 22, 2008
1,903
Chelsea Maine
Interesting fact is that we now have more trees in this country than we had 100 years ago. See http://www.mnn.com/earth-matters/wi...-trees-than-there-were-100-years-ago-its-true.
I spoke to a man from Colorado. He told me he had 4000 trees killed by a beetle infestation. cost him $5 per tree for the removal. I asked him about their use in the pellet industry. He told me it started off big, but the prices fell as did the demand.
Yes there is a potential for heavy biomass use, but that doesn't not necessarily mean outstripping supply. I am thinking that transportation will be more an issue than supply.
Need to remember that we live in such a Nanny nation, that it is a wonder any trees can be harvested without some one having cause to protest, or find a need to do some impact studies.
 

SmokeyTheBear

Minister of Fire
Nov 10, 2008
13,363
Standish, ME
Let's see if we push the limits in the seven state region there is about 14+ or - million tons per year of green wood available for use as burnables (they are saying 7+ or - to be conservative) according to that reports linked to by Scott. That is a very low amount compared to the earlier comment amount.

At least the NE group states that the growth to harvest ratio must be no lower than 1 for the operation to be sustainable.

Also just so everyone understands clear cutting does not always equate to unsustainable for if it did there would be far fewer trees in Maine today than there are.

Maine's woods began making its comeback in the early 1900's when heating went from wood to coal.
 
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