From the Director’s Desk: That's a Wrap - EIA Publishes December Data, Policy and Regulatory Watch (NEW!)
That's a Wrap - EIA Publishes December Data
Earlier this month, the EIA published its December data for the Monthly Densified Biomass Fuel Report, offering a complete look at a year that found soft demand for wood pellets across the country owing to an abnormally warm (record warmth in some areas) winter.
The Numbers (avg. of previous 5 years)
East Sales 1,073,233 tons (1,130,813 tons)
East Production 1,180,790 tons (1,147,981 tons)
East December Inventory 115,767 tons (52,740 tons)
West Sales 451,895 tons (454,098 tons)
West Production 462,016 tons (441,665 tons)
West December Inventory 29,555 tons (27,596 tons)
South Sales 266,938 tons (420,845 tons)
South Production 237,618 tons (249,941 tons)
South December Inventory 30,726 tons (24,826 tons)
U.S. Total Sales 1,789,090 tons (2,005,227 tons)
U.S. Total Production 1,873,619 tons (1,844,428 tons)
U.S. December Inventory 190,268 tons (102,957 tons)
It was nearly a weekly occurrence this winter for news outlets nationwide to report on a new daily high temperature being logged. Many locales recorded their warmest winter, ever. It is a winter like the one we’ve just had, most folks cheer, but ice fishing enthusiasts, snowmobilers, and wood pellet manufacturers loathe it.
Still, a review of the EIA numbers shows that the East and West regions finished the year relatively close to their respective 5-year averages. The difference for 2023 when compared to the stronger years of 2018-2020, was found in the South. In strong years, the South finished above 500,000 tons in sales. This year, the South achieved just over half of that. This is another data point in the EIA’s Monthly Densified Biomass Report that is on my list to ask our friends over there about. From 2016 to 2020, the South Region was humming along at a half-million-ton-per-year clip, falling off suddenly to the 200,000-ton range we’ve been experiencing since 2021. What happened?
The December inventory position is the data point that jumps out at me. The back half of the heating season didn’t deliver many cold snaps and once the January – March data starts to accumulate, it will be interesting to see how manufacturers feathered their production throttle. I suspect production throughout the country was off pace by 10% or more throughout the first quarter.
Policy and Regulatory Watch (NEW!)
Note: The Pellet Fuels Institute Legislative and Regulatory Committee meets monthly. The Pellet Wire will work to summarize important progress or changes in the policy and regulatory environment on a monthly basis. The Pellet Fuels Institute website is also a good resource for understanding what we are working on and watching closely. For more information on the Pellet Fuels Institute’s regulatory and policy objectives, please bookmark our Federal Policy Advocacy page. The notes that appear in the Pellet Wire won’t be exhaustive but will seek to provide short updates.
NAAQS (National Ambient Air Quality Standard): This is the PM 2.5 rule that justifiably got everyone in the country with an air permit fired up. The rule reduces the allowable PM 2.5 levels from 12 to 9 micrograms per cubic meter, a reduction which most manufacturing representatives agree will cripple American manufacturing. Director’s Note: I’ve included two links in the Industry News section of the Pellet Wire. The first is from the National Association of Manufacturers and includes details about their lawsuit (in conjunction with other industry groups) and the second is an opinion piece from the Wall Street Journal. The piece from the Wall Street Journal likely sits behind a paywall. Apologies for that if you aren’t a subscriber. The breadth of the industry groups (wood to concrete) signed on to the NAM lawsuit speaks volumes about the reach of this new standard.
Farm Bill: The Farm Bill is an every five years piece of sweeping legislation that impacts everything from school lunches to important provisions for the wood pellet sector including the Community Wood Energy Grant Program, Wood Innovation Grants, and perhaps most importantly the declaration that biomass is a carbon-neutral energy source. With a looming deadline in September Congress extended the existing Farm Bill by one year as they work towards a Farm Bill that can win the required votes to get passed.
PFI Annual Conference Registration Is Now Open
What are you doing in late June? How does a couple of days in historic Charleston, South Carolina, taking in all that city has to offer, playing a little golf, and connecting with your friends in the wood pellet industry sound? The 2024 Pellet Fuels Institute Annual Conference will be held at the Mills House (115 Meeting Street) on June 25-27th. The hotel is nestled in the heart of the action, one block north of Broad Street and just three blocks from the water. The Pellet Fuels Institute continues its march through cities across the United States that everyone should see at least once. Charleston absolutely fits that bill. The historic city has really leaned into its inner foodie and great cuisine abounds. Watch the Pellet Wire for more information about discussion topics, VIP night, and the 2024 Pellet Fuels Institute Golf Tournament.
