Pellets Production

The Die Is Cast

Now it gets interesting. Wood pellets production in the U.S., that is. One question we asked Enviva CEO John Keppler (see interview starting on page 18) was whether “overcapacity” had entered the mindset of wood pellet producers. He basically said it wasn’t a concern at this moment, and speculated that future demand will need to be met by pellet plants yet to be built.

We figured as much (a day doesn’t go by when a forecast tells us that worldwide pellet demand and production will reach dizzying heights). We heard several such forecasts at our Wood Bioenergy Conference & Expo in Atlanta this past March.

Keppler added this: that as the industry continues to grow to meet this demand, it shouldn’t forget that its purpose is to deliver a clean, sustainable energy source and that development must be “in tune with the nature of our forest resources.”

Well put, John.

What prompted the question, even though we knew the answer, was the continuing onslaught of pellet mill project announcements. As we report in our news section of this issue, England-based Drax (or portions of Drax) has made inquiries into building pellets plants in Mississippi and South Carolina, beyond the ones it is already building in Mississippi and Louisiana. We’ve reported on other projects in previous issues—Green Circle, German Pellets, Fram—companies who have already built and started up pellet plants, and now are building more.

And Keppler, in our interview, confirmed that Enviva, which operates five pellet mills, is looking hard at adding more capacity toward the coast of North Carolina.

From the perspective of the trade press, this is great material.

Biomass Resource Image 001
From Left: Rich Donnell, Editor-in-Chief; Jay Donnell, Associate Editor; Dan Shell, Western Editor; Jessica Johnson, Associate Editor; David Abbott, Senior Associate Editor; David (DK) Knight, Co-Publisher/Executive Editor

Many of you are aware that Wood Bioenergy magazine is but one of several wood industry magazines that we manage. One of the other ones is Panel World magazine, and one of its subjects is the oriented strandboard (OSB) industry. OSB, if you don’t know, is primarily a structural panel composed of wood flakes and resin that has superceded softwood plywood in certain building applications.

While indeed wood pellets seem to be cutting in on coal (overseas anyway), the comparison that interests us is the OSB industry in the U.S.—when it emerged in the late 1970s and early 1980s—as compared to the rearing of the industrial wood pellet industry that is going on now in the U.S.

By 1990, in a span of 13 years, about 30 OSB mills had been built and started up in the U.S. Sixteen of those were built by Louisiana-Pacific. Georgia-Pacific built four, as did Weyerhaeuser, and Potlatch built three in addition to the one it had started up a few years earlier. These companies would build more later, but the fun speculation is whether, looking ahead, the number of U.S. industry wood pellet plants will be flirting with 30 in a similar time span.

If that happens, in conjunction with the new pellet plants built in Canada and elsewhere in the world, it will be interesting to see if the overcapacity factor enters the wood pellets picture, just as it did (and still does) in the OSB industry.