Industrial Pellets

Leading The Charge

A recent editorial trip to North Carolina to gather stories for Hatton-Brown’s logging and sawmill publications revealed two recurrent themes among the logging operations and sawmills visited: First, many loggers indicated that they have curtailed fuel wood chipping due to inadequate return on investment. Second, several operators admitted a belief the biomass industry in the region would be dead in the water without industrial wood fuel pellet exporting.

Certainly low natural gas prices have hurt the prospects for increased biomass power demand in the near future as many power producers with the ability to do so switch to natural gas at almost every opportunity. Some in-woods chipping operations have found markets with pellet wood chipping to replace hog fuel outlets (see story on page 18).

That leads to the second point. European demand continues to drive growth of wood pellet manufacturing in the U.S. According to industry analysts, exports of wood pellets from North America to Europe set a new record in 2012 as European utilities and power producers increased imports by 60% from 2011 to 2012 while export value has increased from $40 million in 2004 to $400 million in 2012. Projections for the future of European pellet consumption vary, but all are pointing well upward, with a rough consensus among third-party observers of 15-20 million tons annually by 2020.

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From Left: David (DK) Knight, Co-Publisher/Executive Editor; David Abbott, Senior Associate Editor; Dan Shell, Western Editor; Jessica Johnson, Associate Editor; Rich Donnell, Editor-in-Chief

Consider several large pellet projects on the horizon. In April, German Pellets began working on a wood pellet production facility in Urania, La., set to go online in April 2014. It will double the capacity output of the company’s plant in Woodville, Tex. In February, Thermogen Industries, a subsidiary of Cate Street Capital, announced its plans for a wood pellet plant near Eastport, Me. to begin production in 2014 of between 200,000 and 300,000 tons annually.

That doesn’t include this issue’s news section featuring three additional pellet plants announced for the Gulf Coast region—and Rentech’s acquisition of Fulghum Fibres’ extensive network of 32 chip mills with an eye toward developing industrial pellet production capacity.

The natural gas boom and price drop could be short-lived given the fluctuating nature of fossil fuel markets, breathing new life into biomass power some time in the future, but for now industrial pellet exports are leading the wood bioenergy charge in North America