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In this Week's Pellet Wire:
From the Director's Desk:
The Easy Math:
1000 Truck Loads Per Day, $300 Million Per Year
See if you can hold in your mind this picture. Imagine every sawmill and wood products manufacturing facility in the country were slammed together into one giant plant. This plant generated dimensional lumber, cabinets, millwork, hardwood floors, dowels and the multitude of other wood products commercially available today. Those products came off the line daily, delivered to waiting markets. At the same time, the sawdust, chips and shavings from the manufacture of those finished goods came out of a different door and went, where?
While I can’t speak for the destination of all these fiber residuals, I do know that nearly 1,000 truckloads per day (all 365 of them) of this material, went to waiting wood pellet mills. At the same time as this incredible volume of material was headed downstream to wood pellet producers, manufacturers were sending $836,685 (per day) back upstream bolstering the bottom lines of the facilities generating this fiber stream. At the end of the year, 8.8 million tons (over 365,000 truckloads) of wood fiber flowed from this mega plant to wood pellet manufacturers who paid $305,390,154 for those materials.
1,000 trucks of wood fiber a day come downstream to wood pellet producers. We send over $300 million back upstream every year. That’s the easy math, and an easy image to conjure in your mind or even better, an easy image to ask someone else to conjure in their mind.
The challenge, of course, is this isn’t our whole story. It isn’t even our entire fiber story. The scenario outlined above reflects the data captured by the Energy Information Administration (EIA) regarding fiber purchases by wood pellet producers from just two of the four fiber categories the EIA tracks and reports on, “Sawmill residuals” and “Wood product manufacturing residuals”. I did not include the categories “Other residuals” and “Roudwood/pulpwood”. For me, explaining the fiber dynamics of upstream wood processing facilities is a very straightforward endeavor. Someone with almost no understanding of how things are made from wood could be made to understand the dynamic I outlined above. In explaining the other two fiber categories, the level of difficulty climbs. To understand what “low-grade” fiber is, you’ve got to understand how modern forestry is practiced, and how long trees take to grow, and how they can’t all be perfect sawlogs, and the ups and downs of the paper market, and the historical markets for these pre-commercial thinnings and so on.
All of this handwringing is me working to come to terms with the difficulty of outlining and helping those outside of our sector understand how and why wood pellets are not only renewable, but also a fuel source with a lower carbon intensity than those fuels with which they compete. I recognize that the phrase “lower carbon intensity” may induce eye-rolls amongst the readership of the Pellet Wire. We can argue over the relative merits of decarbonizing our economy for years, but no one can deny that for the duration of the Biden administration at least the conversation around the future of energy will hinge on carbon.
An argument could be made for an ostrich response to the momentum of a low-carbon economy. What would be the risk of simply letting all of this excitement about carbon “blow over”? A person doesn’t have to read too far into the published ambitions of President Biden’s Clean Energy plan to see the risk of simply opting out of the carbon discussion. For instance, in the executive summary available online in a bulletized list of possible policy levers the administration is eyeing the plan reads, “spur the building retrofit and efficient-appliance manufacturing supply chain by funding direct cash rebates and low-cost financing to upgrade and electrify home appliances.” Whoever wrote that was not holding the image of a pellet stove in their mind while doing so.
The Pellet Fuels Institute’s ongoing refrain is we want our members to compete for their share of the energy on a level playing field. The passage of a portion of the BTU Act felt like a hard-earned victory towards that simple aim. Failing to understand that the current administration intends to determine who participates in its sweeping energy and infrastructure plans going forward with a high bias towards lower carbon intensity is a risk. That is plain to see. The size of the risk and how much of the PFI’s time and resources it warrants is less clear.
Finally, carbon accounting is complex. For now, it can’t be distilled down to the simple “1000 trucks per day” visual shorthand. The challenge before the PFI is to figure out how to establish our low carbon bona fides that feels straightforward and as easy to understand as the image of 1,000 trucks per day of residue. The story of forest products manufacturing in America is one of responsible use; use that has led to increased forest inventories over the last century. There is our low carbon story right there, for anyone who is interested to plainly see.
Note: The Bloomberg Law article “Scientists Fear Trump Wood-Burn Stance to Stay Under Regan EPA” included in today’s Pellet Wire news items section came across my desk while writing the column above. I think it warrants your attention and thought. Please do not mistake that for an endorsement. Far from it. Instead, I find it interesting precisely because the article mentions “burning wood for energy” and “wood pellets” both but never really feels like it's talking about us. I don’t know whether to take solace in that or find it discomforting.
—Tim Portz
Executive Director
Photo of the Week
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Industry News
Scientists Fear Trump Wood-Burn Stance to Stay Under Regan EPA
Academics and environmentalists say they’re worried the Biden administration won’t walk back a Trump-era endorsement of burning wood for energy—a technology they say emits more carbon than coal.
Some opponents of wood biomass, which uses plant or animal materials as fuel to produce electricity or heat, say they’re especially concerned about Environmental Protection Agency chief Michael Regan’s track record with the industry when he headed North Carolina’s Department of Environmental Quality.
During those years, Regan approved several permits for wood pellet plants in North Carolina, one of the nation’s biggest-producing states. Most of the state’s wood pellets are shipped overseas for energy production.
Regan hasn’t publicly commented on his plans for the wood biomass sector. An agency spokeswoman told Bloomberg Law that the issue is “a complex topic, and one that EPA is considering very carefully.” She also said the EPA is “committed to following science and the law as we determine next steps.” ...
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