From the Director's Desk: A Look at January Data, Conversations for Austin

A Look at January Data

For three years I’ve counted on the EIA updating the data on the Monthly Densified Biomass Fuel Report on Wednesdays in the middle of the month. Starting this month and moving forward, new data will be published on the first business day of the month. This shortens the “look back” by a couple of weeks, and I’ll certainly cheer for that.

Let’s have a look at the January numbers (average):

Sales: 154,507 (171,543)
Production: 175,084* (144,408)
Inventory: 103,827 (169,626 in January 2022)

First, some explanation on the asterisk next to the production number. Those of you who are familiar with the report know that almost all of the data points are broken out by region. The production data for the West region for this reporting period (January 2023) was 60,420 tons, a notable departure from the 35,000 – 40,000 ton range the region has been reporting since mid-2019. Also raising questions about the veracity of the number is the lackluster sales in the region in January. At 34,546 tons, the lowest sales volume in the region in the history of the report, producers weren’t excited about more production by a rush of inbound purchase orders. I’ve raised an inquiry with our friends at the EIA and if necessary, they will correct the number with the February data release next month. Let’s keep an eye on that region’s data next month. 

Conversations for Austin

We are just six weeks out from the Pellet Fuels Institute Annual Conference. I hope you have made or will shortly make plans to attend. As a reminder, the conference is scheduled for June 6-8 in Austin, Texas. There’s BBQ there, and good music, and for those three days in June, plenty of discussions about the domestic wood pellet market. Here are the three conversations I’m most looking forward to:

1. Whatever happened to the massive demand expected for U.S. heating pellets from Europe this past heating season? Overseas demand was the biggest story on stage and in the hallways at last year’s annual conference. One year ago, producers were running the traps on how much of their annual production they could cut loose and sell to buyers hungry for volumes to fill the void created by the Russian pellet volumes that weren’t available because of sanctions imposed after the invasion of Ukraine. Things got off to a promising start with many PFI members taking orders in the late summer and early fall and then, what happened? Orders slowed to a trickle. The after-action review on what happened with this here today, gone tomorrow opportunity will be interesting, to say the least. Folks capable of offering commentary on this subject are all over the agenda, but I would point specifically to Gilles Gauthier from Hawkins Wright and Holger Welling from CM Biomass as featured presenters regarding this market phenomenon.
2. Where does the push for electrification of all things leave wood pellet heating? I’m really excited about this discussion. I’ve offered plenty of commentary on this matter in the Pellet Wire over the past 18 months, but this issue is absolutely coming to a head. This week I testified before the International Energy Code Council as they consider language that may exclude wood pellets from a list of technologies that can qualify as ‘renewable’. If you are having trouble seeing the connecting, I urge you to take in the 10:40 am session on Thursday morning for the “Electrification Nation” panel. As our policymakers and think tanks work to decarbonize our economy, it is critical that the PFI and wood pellet industry defend the carbon benefits of wood pellet manufacturing and use. While outright bans on wood pellets for home heating isn’t on the radar, industry proponents (this one included) are suspicious of growing anti-combustion sentiments and what it foretells for the long-term right to do business as producers of solid heating fuel.  
3. How are our retail partners faring and what can they tell us about consumer sentiments toward our products? This panel is finally taking shape and I encourage you to keep an eye on the agenda as we add retailers to this important panel. Retailers are at the tip of the spear of new wood pellet user acquisition. Retailers welcome folks needing space heating solutions into their locations and hear every day the decision-making rubric consumers are using to evaluate their options. Retailer insights about why people select wood pellet heating, or why they select away from it are solid gold information for producers to hear and reflect on. Just after lunch we’ll put three retailers on stage and talk specifically with them about consumer attitudes regarding our favorite heating and cooking product. 

—Tim Portz
 Executive Director