WOOD PELLET NEWSLETTER
September 2010
Gerald W brown * 7202 County Road U * Danbury, WI 54830 Phone 715-866-8535
Gerald Brown is solely responsible for the content in this newsletter

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• BIOMASS CREDIT UPDATE: A LOOK AT BCAP’S PAST AND FUTURE IMPACT

• DEERE SELLS JOHN DEERE RENEWABLES

• WOOD PELLET SPOT PRICE DIPS ON LOW DEMAND

• TRADING COAL FOR BIOMASS AT ATIKOKAN

• MISSISSIPPI SUPPORTS FIVE WOOD-TO-CRUDE OIL PLANTS

• PELLET COMPANY FOCUS OF PROPOSED ORDINANCE

• WOOD PELLETS ADVANTAGES

• WOOD-PELLET PROJECT EYES INVESTMENT-FOR-VISA DEAL

• U.S. KEEPING UP WITH EUROPEAN BIOMASS DEMAND

• BIOMASS CHP PLANT FUELS WOOD PELLET PRODUCTION

• PSC: NO ENVIRONMENTAL IMPACT STUDY FOR BIOMASS PLANT

• LET THE BIOMASS CONVERSION BEGIN

• U.S. KEEPING UP WITH EUROPEAN BIOMASS DEMAND

• WOOD FIBER COSTS FOR THE GLOBAL PULP INDUSTRY FELL IN Q2 AFTER HAVING INCREASED FOR 18 MONTHS


• FIRE AT PINE BLUFF WOOD PELLET PLANT GUTS BUILDING

• MARYLAND: A SOCIAL JUSTICE CASE STUDY IN RESIDENTIAL RENEWABLE ENERGY INCENTIVES

• DUTCH POWER GOES GREEN WITH WOOD PELLETS

• HODES BACKS RADICAL CLIMATE CONTROL BILL

• COAST GUARD CHOOSES PELLET HEAT FOR SITKA STATION








BIOMASS CREDIT UPDATE: A LOOK AT BCAP’S PAST AND FUTURE IMPACT


By DeAnna Stephens Baker
Date Posted: 9/1/2010
The U.S. Department of Agriculture’s (USDA) Farm Service Agency (FSA) has still not issued the final rules for the Biomass Crop Assistance Program (BCAP), yet preparations for the reinstatement of the subsidy are already well on their way. The following is a look at the affect BCAP has already had on the pallet industry as well as a glimpse at technology development and business plans being put in place with the imminent release of the final BCAP rules in mind.
According to the USDA, more than $224 million in BCAP payments have been made through August of this year. The original Notice of Funds Availability (NOFA) was published by the USDA in June 2009, but payments were suspended in February 2010, followed by the release of the proposed revisions to the BCAP rules. Seven months later, the waiting game continues. FSA is currently reviewing comments and drafting the final rule, which is expected to be published in the Federal Register in fall 2010. For now, the freeze put on the program in February will remain in place, as the FSA wades through the more than 24,000 comments received on the proposed rule.
The original BCAP NOFA had mostly negative effects on the pallet industry. BCAP was originally designed to stimulate development of innovative technology and alternative energy markets primarily with crops. Unfortunately, instead of prompting the development of new energy crops, it created a new demand for low-grade lumber, creating distortions in the market felt keenly by the wood pallet manufacturing industry. “In certain markets, BCAP drove the price of wood biomass up to a point where it was about the same as pulpwood,” said William Perritt, executive editor of RISI’s Wood Biomass Market Report. “This reduced the incentive for producers to sort pulp-grade from biomass-grade wood, and forced some pulp mills to raise prices to compete with the subsidized market.” This price increase for low-grade lumber left pallet manufacturers competing for a material that had previously been their almost exclusive territory. “Conditions were most pronounced in the Northeast, especially Maine and Northern New England where there is a concentration of both wood energy facilities and pulp producers,” said Perritt.
However, there were significant price increases all over the country. A pallet company in eastern North Carolina experienced the price jumps firsthand with its suppliers when procuring logs for its scragg mill. “The loggers started chipping everything,” said the owner. “They chipped whatever they could get in the chipper, even the bigger logs.” The company reported an average price jump of around 30% for both softwood and hardwood logs during the time that BCAP payments were being made. Prices went from around $30 per ton for both
softwood and hardwood to about $40 per ton.
“Loggers got to the point that they told us we were going to have to pay at least $40 per ton or they’re not shipping us anything,” the North Carolina pallet company stated. “Two loggers kept shipping to us only because they were friends of ours.” However, they saw prices quickly return to pre-BCAP levels after payments were suspended earlier this year. “When they killed the program we went straight back to $32 per ton,” the owner said. “They were happy to take $30 per ton and get paid immediately.”
To address the issue of how BCAP caused this and other market distortions, the proposed rules specifically prohibit wood materials that might otherwise be used for higher-value products. The biggest question now is whether the final rule will successfully prevent this problem from happening again. Many in the industry are concerned that, as proposed, BCAP’s matching payments program would cause a return of the same type of market distortion.
The American Forest & Paper Association (AF&PA) said that the matching payments component of the proposed rule discriminates against the forest products industry and will create serious unintended harms unless significantly revised. In their comments on the proposed rule, AF&PA said the proposed rule:
• Attempts to exclude some, but not all, forms of woody biomass used in value-added production processes from eligible materials.
• Clearly favors other forms of existing Energy production, such as biomass-fired utilities, co-fired utilities, and pellet plants, over energy production at forest products facilities, especially with the black liquor exclusion.
• Favors new energy production over existing energy production (e.g., establishing an historical baseline for existing energy production and providing a much richer subsidy for cellulosic ethanol).
“In sum, the proposed BCAP regulations do not provide a level playing field for key segments of the forest products industry and contradict the stated goal of avoiding the diversion of any materials potentially eligible for BCAP matching payments from existing value added production processes already occurring in the marketplace,” stated AF&PA.
Perritt does not believe the prohibition as presented in the proposed draft, is sufficient to protect existing markets, either. “While this could effectively take pellet mills out of the eligibility category for sawmill residuals, pulp mills will still have to compete with wood energy producers,” he said. The pallet company in North Carolina is so concerned about what the reinstatement of BCAP will do to prices that while prices are down they are stocking up on logs; currently they have even their overflow yard around 75% full.
Other changes proposed in the draft included replacing the dry tonnage measure with industry norms and reducing matching collection, harvest, storage and transportation (CHST) payments. The complete draft rules can be read online at www.fsa.usda.gov.
Despite its negative impact on the low-grade lumber market, BCAP does seem to have prompted some technological advancement. Research into ways to increase the efficiency of transporting woody biomass is an example of advances that could benefit the forest products industry. In-woods residues are not typically collected for bioenergy use due to the challenge of collecting and transporting it in an efficient matter.
“Even in systems where the harvesting of biomass is conducted simultaneously with the harvest of sawtimber or other products, the low bulk density of residues makes collection and transport difficult and expensive,” said a report from University of Tennessee’s Institute of Agriculture.
Despite these economic hurdles, interest in such activities is increasing, according to a report by Dr. Samuel Jackson, a research assistant professor with the Tennessee Agricultural Experiment Station. One and two pass harvest systems to remove in-woods material, both of which could be used in typical logging situations, have been receiving the most research and development.
Research into new technologies may be able to minimize the trade-off between transportation costs and the cost of altering the material before transport, thereby increasing the profitability of slash and other residues in the biomass market. Advances in bundling and densification equipment will be of great benefit to the forest products industry based on their cost reduction possibilities alone.
“In-woods chipping at the time of harvest can reduce costs by $56.76 to $216.76 per acre when compared to operations that cut, pile, and mulch, due to reduced handling of the material over time,” said Jackson’s report.
The development of more cost-effective processes could be what enables landowners and logging companies to expand into collecting for bioenergy use and new business models, which may be crucial for survival. Jackson’s report commented “some analysts feel that the basic industry models of the past are dead and that, to survive, the forest products industry will have to adjust, explore new opportunities, and take risks.”
Some companies are already preparing to cash in on the new opportunities that the reinstatement of BCAP will present, even though the details are still unknown.
“Biomass developers are preparing business plans in anticipation that the USDA will issue final BCAP rules later this year,” said Gregory Lynch, co-chair of the Renewable Energy Practice Group and managing partner of Michael Best & Friedrich LLP. “The specific terms are unknown so developers are modeling the projected financial statements under multiple potential BCAP funding scenarios.”
With thirty-three states already mandating renewable energy goals and five more with voluntary goals in place, there is no doubt that renewable energy is the future. Wood pellet use in the United States alone tripled between 2000 and 2007, from 3 million tons to 9 million tons. Though the exact role that biomass will play is still being worked out, companies already involved in the biomass market are poised to profit greatly.
“When the final rules are issued, it is possible (and perhaps likely), that many biomass projects will move ahead aggressively with project financing and development,” said Lynch. “As part of this process the biomass facilities would be actively negotiating for feedstock supplies, including forest products. The forest products industry should fully understand the final BCAP rules so that they can maximize potential revenue under BCAP.”
The companies that will benefit the most under the new BCAP rules will be those that take the time to understand them, look for ways to expand into the new markets and build relationships with biomass facilities now.



DEERE SELLS JOHN DEERE RENEWABLES

Sept. 1, 2010, Moline, IL – Deere & Company has signed a definitive agreement to sell John Deere Renewables LLC, its wind energy business, to Exelon Generation Company LLC, a wholly owned subsidiary of Exelon Corporation.

"As Deere sharpens its own strategic focus, we have concluded that the company's resources are best invested in growing our core equipment businesses around the world," says Samuel Allen, Deere & Company chair and CEO.

John Deere Renewables includes 36 completed projects in eight states with an operational capacity of 735 MW. The definitive agreement includes the completed projects plus numerous others in development. Subject to regulatory approvals, Deere anticipates the transaction to close within the 2010 calendar year.

"John Deere's initiative with Adage in biomass energy is not part of John Deere Renewables and therefore is not affected by the announcement that Deere has reached an agreement to sell its John Deere Renewables business unit," says Ken Golden, director of strategic public relations for Deere & Company.



WOOD PELLET SPOT PRICE DIPS ON LOW DEMAND
Written by Argus Media

Aug. 25, 2010, London, UK – Spot prices for industrial wood pellets slipped lower in northwest Europe during the past week. Producers on both sides of the Atlantic failed to find bids for heavily discounted cargoes, as many utilities have already filled the majority of winter requirements.

The lack of demand for pellets for power generation has seen several European traders turn their attention to facilitating district heating demand requirements. The Scandinavian market is the primary target, but Germany, Italy, and Austria have requirements as they move into heating season.

U.S. producers not locked into long-term contracts are continuing to offer cheap cargoes to Europe at discounted levels. Many participants expect to see producers continue to offer at levels below €110/tonne CIF ARA into the fourth quarter.

“Producers who do not have long-term prices locked into supply deals are vulnerable and willing to offer at discounted levels in an attempt to offload stock,” one European trader said. “The situation could be exacerbated by the opening of large pellet plants in Russia by Ekman; Germany's RWE in Georgia, USA, and Electrabel/GDF Suez in British Columbia, Canada. So the outlook is bearish for many of the world's 50–70 wood pellet producers with open positions fighting to secure offers.”

Another European trader issued a sell tender for a 5,000-tonne cargo from North America at €120/tonne on an FOB basis, but confirmed that it has received no interested offers as yet.

Pellet throughputs at Rotterdam reveal this year's collapse in demand. Major biomass handler European Bulk Services said throughputs so far this year stand at 90,000 tonnes. Last year, the terminal saw a rise of over 60% to 240,000 tonnes over the 2008 period.




TRADING COAL FOR BIOMASS AT ATIKOKAN

Aug. 27, 2010 – Ontario is turning off coal and switching on biomass at the Atikokan Generating Station, a move that supports jobs in the community and takes the province a step closer to eliminating coal-fired electricity generation by the end of 2014. The conversion will create up to 200 construction jobs, support an estimated 20 to 25 jobs in Ontario related to the production of wood pellets, and sustain other jobs in the forestry sector. The project is expected to take up to three years to complete. Once converted, the plant is expected to generate 150 million kWh of renewable power, enough to power 15,000 homes each year.

"This announcement is a major milestone for our Atikokan biomass project. Atikokan can provide Ontario with a new source of renewable energy and northwestern Ontario with economic benefits for years to come," says Frank Chiarotto,
 senior vice president, thermal, Ontario Power Generation (OPG).

The government of Ontario has directed the Ontario Power Authority to negotiate an agreement to buy the biomass power generated at Atikokan from OPG, which is a critical step in the process of converting the plant to biomass. The annual fuel requirements for the plant, in the form of wood pellets, are estimated to amount to less than 1% of the total allowable forest harvest in Ontario each year. Atikokan is located approximately 200 km northwest of Thunder Bay.


MISSISSIPPI SUPPORTS FIVE WOOD-TO-CRUDE OIL PLANTS


Aug. 30, 2010, Pasadena, TX – KiOR Inc., a next-generation energy company, has agreed to build five commercial-scale renewable crude oil production facilities in Mississippi in return for a state assistance package that includes a $75 million loan. According to the agreement, KiOR will build three of the five facilities over the next five years. By 2015, the project will deliver more than 1,000 direct and indirect jobs and an estimated $500 million worth of investment. In addition to the loan, the state’s package includes assistance with infrastructure needs and workforce training.

The company plans to use Mississippi’s abundant supply of woody biomass to produce commercial volumes of Re-Crude, a high-quality crude oil that can be refined into conventional fuel products, including gasoline and diesel, and deployed in the country’s existing transportation fuels infrastructure.

KiOR has developed a biomass-to-renewable crude oil conversion process that uses a proprietary catalyst system and leverages a proven technology used in the oil refining industry. It has significant cost advantages, including lower capital and operating costs, compared to other biofuels technologies. KiOR will initially use woody biomass in its process, but the technology can eventually take advantage of other feedstocks such as agricultural residue or purpose-grown energy crops. The process is being demonstrated successfully at the company’s facility located outside of Houston, Texas, which is producing up to 15 barrels/day of renewable crude oil from woodchips, a 400-times scale-up from the company’s pilot plant.





PELLET COMPANY FOCUS OF PROPOSED ORDINANCE
By MARCUS RAUHUT Staff writer


Guilford Township supervisors will consider an ordinance tonight that would declare a Marion pellet manufacturer a "dangerous structure and a public nuisance."
AJ Stoves & Pellets has been the site of at least three dust explosions over the past two years, including one a month ago.
The board of supervisors is to consider the ordinance at its regularly scheduled meeting tonight. The township is following the advice of its attorney, Salzmann Hughes P.C., according to Guilford Township Supervisor Greg Cook.
Cook said the ordinance will "give Guilford Township several additional alternatives in dealing with this problem that are provided within a second-class township code."
The ordinance text states that if the property owner does not abate the dangerous structure and public nuisance after a notice from the township, the township personnel and consultants are authorized to take actions "reasonably necessary" to abate the dangerous condition or nuisance.
"Guilford Township had issued a zoning permit for pellet manufacturing sales, meaning that the manufacturing of pellets is a legal use in this building. However, AJ Stoves & Pellets has proven they cannot operate this pellet business safely," Cook said.
The facility on Colorado Street Extended makes wood pellets to burn in wood-burning stoves.
Firefighters were called to two separate dust explosions at the building in the summer of 2008. The township's Uniform Construction Code official declared
the building to be unsafe, and improvements were made to the building but they failed to prevent another explosion and fire on Aug. 2 of this year.
The day after the latest incident, the code official ordered the vacation of the structure.
Nobody was injured in the Aug. 2 incident, according to fire officials.
Archie Jones, the owner of AJ Stoves & Pellets, said he was not familiar with the proposed ordinance when contacted by a reporter Wednesday. He said he made required improvements to the building but declined to comment any further.
The U.S. Occupational Safety & Health Administration is currently investigating the explosion. OSHA does not comment on ongoing investigations but a spokesperson said the investigation must be completed within six months.
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Marcus Rauhut can be reached at mrauhut@publicopinionnews.com or 262-4752.





WOOD PELLETS ADVANTAGES

Nizhny Novgorod -- Aug 28, 2010 / (http://www.myprgenie.com) -- Ever since their introduction as a response to the energy crisis of the 1970′s, wood pellet fuel has gained considerable momentum in the alternative energy marketplace. Today, millions of households around the world either use wood pellet fuel as their primary fuel source, or at the very least as a supplementary heating source. In either case, these homeowners typically experience substantial cost savings and benefits that conventional fuels can't provide.

The first big advantage of using wood pellet fuel is the fact that wood pellets are made from a renewable material -- wood. What's nice about this is that high value wood isn't needed to make them. In fact, a large advantage of using wood byproducts or wood waste for pellets comes from the fact that it is already reduced in size. Smaller size raw material means less processing time and labor needed, and in turn lower final cost.

Another advantage is that they're extremely efficient and clean burning. They owe this to the fact that the moisture and ash levels are very low. Moisture content is held to 4%-6% in commercially manufactured pellets, and the ash levels are limited to 1% for premium pellets, and 3% for standard pellets. Because of these low limits, the efficiency of the wood pellet is high - almost all of the pellet is burned and converted to heat.

One of the most profound advantages of wood pellet fuel comes from their effect on the environment. Pellets are very environmentally friendly they can be made from a wood waste product that otherwise may have ended up in the landfill, and they are carbon neutral.

With all the talk of global warming and climate change, it's in everyone's best interest to move away from a carbon based fuel source like oil, to one that's carbon neutral or carbon free. In the near future, there's a strong likelihood that some kind of carbon emissions limit will be legally mandated, i.e. cap and trade. When this happens, we'll be forced to move away from carbon based fossil fuels, and use alternative energy sources that don't add to carbon dioxide emissions. Wood pellets fit this requirement nicely.

So as you can see, there are many advantages to using wood pellets as a fuel source. In fact, there are many others that weren't listed, but these are the main benefits that have led to their wide acceptance, and are helping to ensure their viability in the future.

here are a number of benefits of using wood pellets. As you may know, wood pellets are gaining in popularity again, driven in large part by the sharp increases in fossil fuel prices, and also the uncertainty associated with a stable supply. Even though 'peak oil' may or may not be here, it doesn't change the fact that many people are spooked by the possibility, and in turn market prices have become extremely volatile. And it doesn't look as if the situation will resolve itself anytime soon. So in the meantime, thousands of people are moving towards a more sustainable and stable fuel choice -- Wood Pellets.

It doesn't take very much research before you start to realize just how many benefits there are to using wood or biomass pellets as a fuel source. One of the most important advantages is that wood pellets make use of waste byproducts from the wood industry. The raw material for wood pellets is typically sawdust, wood chips, or ground up wood waste. Not only does the use of wood byproducts help to keep the cost of the wood pellets low, it also helps by reducing the need for more landfills.

The second best benefit of using wood pellets is that they are a carbon neutral fuel source. With all the talk of carbon credits, and proposed legislation limiting carbon emissions, i.e. cap and trade, wood pellets have a distinct edge over fossil fuels. And while this may not be important today, with global climate change gaining in acceptance, it's almost a sure thing that carbon emissions will be limited by legislation in the near future. And when it does, you're likely to see very large increases in the cost of your heating fuels. Unfortunately, the government doesn't want you to think of it as another tax on energy but it will be. The large companies that will be required to buy carbon credits will pass these costs on to the consumer, and you'll end up paying for it. So be prepared.

So as you can see, these two main benefits of using wood pellets should be enough to convince you of their potential, and that's not even taking into account using other types of biomass for pellet manufacture. If you happen to have access to a supply of wood or biomass wastes, you could realize even more savings by making your own pellets instead of buying them. In either case, it pellet fuels are a great source of heat that are here for the long rung.

Our company has created a new business, now we can make and supply pellets from pine and spruce.

WOOD-PELLET PROJECT EYES INVESTMENT-FOR-VISA DEAL

NEAL P. GOSWAMI
Posted: 09/02/2010 10:56:48 PM EDT


Thursday September 2, 2010
POWNAL -- A proposed $500 million wood-pellet manufacturing facility and biomass plant at the former Green Mountain Race Track site might use a federal program that provides foreigners with green cards in exchange for capital investment.
Beaver Wood Energy, LLC, a Massachusetts-based company, has applied for the EB-5 visa program to help raise capital for the project. Established by Congress in 1990, the program, run by United States Citizenship and Immigration Services, provides a fast-track for foreign nationals hoping to reside in the U.S. if they provide money to boost the economy and it creates at least 10 full-time jobs.
Easier access
The state of Vermont runs a statewide EB-5 regional center which provides easier access to the program, said James Candido, an economic development specialist with the Vermont Department of Economic Development. The regional center pilot program also allows foreign investors and their families to access green cards for a $500,000 investment rather than the required $1 million in the standard EB-5 program.
The state has operated the regional center since 1997, Candido said, but the program was difficult for companies to use prior to 2004 because of "technical reasons." Last year, however, the program attracted $40.5 million from foreign investors, and the amount "should be significantly more" in 2010 because of a major expansion at Jay Peak, he said.
More than 1,000 jobs have been
created in Vermont with the program, according to Candido.
Thomas Emero, a managing director with Beaver Wood Energy, said the company hopes to use the program. It will provide the project with part of the required investment, and allow for legal immigration.
"You don’t just invest money, you have to invest money in the state that creates jobs," Emero said. "To me, that’s a foreign investor that has a vested interest in the country he’s coming to. He’s already a giver, not just a taker."
Ted Verrill, another managing director with Beaver Wood Energy, said the two facilities the company hopes to build will create "well over 1,000 jobs." Not all of the created positions are direct jobs, however, and many will be temporary, such as construction.
The biomass electricity generation plant and the wood-pellet facility are expected to cost about $250 million each. The company hopes to raise about 10 percent of the total cost, or about $50 million, through foreign investors, Verrill said.
Verrill said the company is confident the needed capital can be raised with or without the EB-5 program. "We can raise it through other means," he said. Company officials "knew nothing" about the program until meeting with Agency of Commerce and Community Development Secretary Kevin Dorn, according to Verrill.
The project is currently in a development phase. State permits must still be acquired for the project to move forward, Verrill said.
"No lender is going to put money out the door ... unless you have the governmental approval in place," he said. "We’re not at the stage where we can entertain approaching foreign investors or anything of that nature."
Verrill said permits are expected to be in place by mid-2011.
Candido said potential investors are screened by the federal government, not the state. "Our oversight is really on a project level, making sure that they’re within the parameters of EB-5 ... and they’re putting the money where they said they’re going to," Candido said.
Investors are attracted to the program because it provides "a quicker process" for legal residency in the U.S., he said. The program, nationwide, allows for 10,000 such visas -- including immediate family members -- each year. That number has never been reached, however, Candido said.
"We’ve had a lot of success with it and we’re growing. We have seven approved projects right now, which is a positive direction for the program," he said.
Verrill said the company believes the two facilities will prove successful because they will provide a new market for the state’s struggling logging industry. The biomass plant can use "waste wood" from damaged or diseased trees that would otherwise hold no value, Verrill said.
"You can’t sell that product in the market," he said. "We’re creating a market."




U.S. KEEPING UP WITH EUROPEAN BIOMASS DEMAND

by Stephen Lacey, Editor
Published: September 2, 2010
Belgium -- The U.S. has some of the best biomass resources in the world. The ironic thing is, we ship a lot of it over to Europe, where they put it to good use for heat and electricity.
Most European countries have far fewer biomass than the U.S., particularly in the Northwest, Northeast and Southeast. Yet countries in the EU have much larger, more sophisticated markets.
In the last decade, Southeastern states like South Carolina, Alabama and Florida have been building plants capable of producing hundreds of thousands of pellets a year. A large portion of those pellets have been going across the Altlantic to Europe. In 2009, Europe imported about $250 million worth of pellets from the U.S., Australia and Vietnam.
A recent agreement between the pellet maker Enviva Materials and the large French utility GDF Suez for 480,000 metric tons of wood pellets is another example of this trend. The pellets will be used for an electric power plant in Belgium.
American pellet producers and equipment sellers are starting to see more demand for biomass in the U.S. But with virtually no attention paid to the renewable heating market in the country, Europe will likely continue to lead in the adoption of residential and utility-scale biomass heating and electricity.
So while the Europeans rely on Americans for their biomass, the Americans rely on the Europeans for high-quality technologies. It's truly a global market.

BIOMASS CHP PLANT FUELS WOOD PELLET PRODUCTION


3 September 2010 - RWE Innogy and German Pellets have inaugurated RWE's biomass-fuelled cogeneration station and the neighbouring pellet plant at the Wittgenstein industrial estate in Germany.

The biomass fired cogeneration station has fed electricity into the grid since early 2010, and, since the start of pellet production, both plants have been operating in combination.

In this mode, the combined heat and power (CHP) station supplies the heat required for the production of the pellets. The CHP plant has a thermal capacity of 30 MW and an electrical output of 5 MW.

The combined production of heat and power results in relatively high energy efficiency - up to 70%.

The pellet plant has a production capacity of 120,000 tonnes of quality pellets per year.
Approximately 220,000 tonnes of round wood residuals and sawmill wood leftovers from the region are used as feedstock.

NRW Pellets is the operator of the pellet plant.

PSC: NO ENVIRONMENTAL IMPACT STUDY FOR BIOMASS PLANT

By: Kathleen Foody Wausau Daily Herald

State regulators announced Friday they will not produce an environmental impact statement demanded by opponents of a proposed biomass plant in Rothschild.

In the Wisconsin Public Service Commission's first assessment of the proposed project, it said the plant, which will burn timber debris, will not have a "significant impact on the human environment" if built. Rob Hughes, a member of the citizen group Save Our Air Resources, said the decision was deflating.

"We wanted reassurance, and that's what an impact statement represented," he said. "I've got friends, family in this neighborhood, and I want to live here for years. We wanted the best, thorough assessment possible."

The six-page statement released Friday previews a draft environmental assessment completed by the PSC, examining all the effects that the $250 million plant proposed by We Energies could have on the surrounding community. The full assessment is expected to be released Monday, about 51/2 months after the utility submitted its project application to the PSC.

Public comment on the draft assessment will be allowed until Sept. 9 by mail or e-mail. A final environmental assessment will be released after the public comments are reviewed by the regulators.

The project has split neighbors in Rothschild and the Wausau area. The central concern of project opponents is whether the utility is trustworthy. Proponents hail the 400 construction jobs that the project is expected to create and the maintenance of existing jobs on the mill site at Domtar and neighboring Lignotech.

The proposed plant would be located next to the Domtar Paper Mill. A new boiler would burn the tops and limbs of trees carried in from a 75-mile radius, producing steam to power the mill's paper-making process and produce electricity for sale in Wisconsin and other states.

We Energies was required to apply for an operating permit from the PSC, which evaluates all utility rate or construction requests, and a separate air permit from the Wisconsin Department of Natural Resources.

The DNR is expected to release its own environmental assessment of the project "soon," according to the PSC, focusing on the effects on air quality in the area.

For opponents, an environmental impact statement represented another way to vet the plant or at least slow down the approval process.

Several local groups and national environmental organizations filed requests for the statement with the PSC, including the Sierra Club and Clean Wisconsin.

"We always support a thorough assessment of projects of this size," Clean Wisconsin's staff scientist Peter Taglia said. "All the information was provided, and performing an (environmental impact statement) isn't an onerous burden."


LET THE BIOMASS CONVERSION BEGIN

The Ontario government has given the official green light to begin converting the Atikokan Generating Station from burning coal to biomass

Source: Northern Ontario Business

The Ontario government has given the official green light to begin converting the Atikokan Generating Station from burning coal to biomass.

The Ontario Power Authority has been directed by the government to negotiate an agreement to buy biomass power generated at Atikokan from Ontario Power Generation, the plant's owners.

The conversion will create as many as 200 construction jobs and will support 20 to 25 jobs at an Ontario pellet facility, helping to sustain jobs in the forestry sector.

The plant employs 90 people. The three-year conversion process is designed to meet the McGuinty's government long-standing commitment to be off coal by 2014.

In an Aug. 26 statement, Thunder Bay-Atikokan MPP Bill Mauro said the announcement marks the end of six years of effort to keep the northwestern Ontario power plant running. Besides providing construction jobs and protecting existing plant jobs, "this will spur on a new industry that will create more jobs and we've secured a large part of the municipal tax base."

"This is splendid news for Atikokan," said Mayor Dennis Brown."We are grateful to Bill Mauro, our MPP; the Minister of Energy, Brad Duguid, and the entire McGuinty government for this great announcement."


U.S. KEEPING UP WITH EUROPEAN BIOMASS DEMAND


Source: EnergyWorld.com

The U.S. has some of the best biomass resources in the world. The ironic thing is, we ship a lot of it over to Europe, where they put it to good use for heat and electricity.

Most European countries have far fewer biomass than the U.S., particularly in the Northwest, Northeast and Southeast. Yet countries in the EU have much larger, more sophisticated markets.

In the last decade, Southeastern states like South Carolina, Alabama and Florida have been building plants capable of producing hundreds of thousands of pellets a year. A large portion of those pellets have been going across the Altlantic to Europe. In 2009, Europe imported about $250 million worth of pellets from the U.S., Australia and Vietnam.

A recent agreement between the pellet maker Enviva Materials and the large French utility GDF Suez for 480,000 metric tons of wood pellets is another example of this trend. The pellets will be used for an electric power plant in Belgium.

American pellet producers and equipment sellers are starting to see more demand for biomass in the U.S. But with virtually no attention paid to the renewable heating market in the country, Europe will likely continue to lead in the adoption of residential and utility-scale biomass heating and electricity.

So while the Europeans rely on Americans for their biomass, the Americans rely on the Europeans for high-quality technologies. It's truly a global market.




WOOD FIBER COSTS FOR THE GLOBAL PULP INDUSTRY FELL IN Q2 AFTER HAVING INCREASED FOR 18 MONTHS
September 07, 2010
By: Wood Resource Quarterly
Wood fiber cost, which is by far the largest cost component when manufacturing wood pulp, declined for many pulp producers worldwide in the 2Q/10 in US dollar terms. Hardwood fiber prices (in US dollar terms) fell in the US, Australia, and most countries in Europe. As a result, the Hardwood Wood Fiber Price Index (HFPI) was down 2.3% from the previous quarter to US$103.37/odmt, but it was still nine percent higher than 12 months ago.The Softwood Wood Fiber Price Index (SFPI) fell in the 2Q for the first time since early 2009. The SFPI was US$98.29/odmt, which was down 1.2 % from the previous quarter, but 9.1% higher than the 2Q/09. Softwood fiber prices fell the most in the US, Eastern Canada, Germany, Spain and the Nordic countries, while prices were higher Quarterover-
Quarter in Western Canada, Russia and New Zealand. The declining wood fiber indices were mostly the result of a strengthening US dollar against most other currencies in the 2Q. In the local currencies, prices of both wood chips and pulpwood actually increased in a majority of the 17 regions tracked by the Wood Resource Quarterly.
With higher pulp production in Western Canada, demand for wood fiber has increased. This has not had a direct impact on fiber costs because wood chip prices are often set based on a formula linked to the market pulp price. In the 2Q/10, chip prices jumped 20 percent from the previous quarter to their highest levels in two years, according to Wood Resources Quarterly. Despite the increase, British Columbia and Alberta wood chip prices are still the lowest in Canada, although the price discrepancy relative to the Eastern provinces is lower than it has been in a very long time.
In the US South, which is the largest consumer of softwood fiber for pulp production in the world, late winter rains caused forest access problems, subsequent wood shortages and price increases in the 1Q/10. However, just as quickly as prices spiked in the 1Q, they dropped in the 2Q when the logging conditions improved. The average price for softwood chip was down over six percent from its all-time high in the 1Q/10.


FIRE AT PINE BLUFF WOOD PELLET PLANT GUTS BUILDING

By Associated Press
Associated Press
Posted Sep 10, 2010 @ 10:11 AM
PINE BLUFF, Ark. —
A fire at a Pine Bluff plant that makes wood products burned up to 850 tons of sawdust but officials said Friday no workers or firefighters were injured.
The fire started at about 5:30 p.m. Thursday with a sawdust explosion that occurred as a loader was working at a storage bin, said John Weaver, controller for the Fiber Resources Inc. plant.
The cause of the fire was still under investigation Friday, Lt. Harold Clark of the Pine Bluff Fire Department. The fire burned well into the night but was out Friday morning.
About 20 workers were on duty, but Weaver told the Pine Bluff Commercial that none were injured. Workers assisted firefighters by moving sawdust from warehouses so the material could be hosed down and by knocking down walls of the metal storage bins so firefighters could reach the blaze with their hoses.
The fire reached the production area but it appeared the facility may be salvagable.
"That's a lot of money," Weaver told the newspaper. "This is going to shut us down for awhile."
Two storage bins were a total loss, he said.
The Fiber Resources Inc. plant produces barbecue wood chips, wood pellets and wood chip animal bedding.
"We suspect that the fire started with (a heavy loader), with some heat or a spark," Weaver said. "There was a sawdust explosion, and it set the bin on fire. We had our workers in there working on it with our fire system, and the (loader) was in there exploding as more parts of it caught fire."
The fire spread to a second storage bin. The plant has a system to extinguish fires, which workers used for about 15 minutes before the system failed, Weaver said. Workers could then only watch as the blaze touched off more and more sawdust until fire trucks began to arrive.
One of the warehouse-like bins was half full with about 400 to 500 tons of sawdust, and the other was about one-third full with 350 tons of sawdust, Weaver said. None of the burned sawdust can be salvaged.
The plant has been in operation since 1982. Large mounds of waste paper are stored at the site, and firefighters battled a blaze in that part of the plant last year. Weaver said Thursday's fire was the first time the main plant area had a fire.
Multiple fire departments and volunteer fire departments were on the scene, including: Pine Bluff, White Hall, Altheimer, Wabbaseka, Watson Chapel, Hardin, Linwood, Moscow and Highway 15 South.
Wednesday, September 15, 2010

MARYLAND: A SOCIAL JUSTICE CASE STUDY IN RESIDENTIAL RENEWABLE ENERGY INCENTIVES

Maryland, like many states, provides generous grants to families who can afford solar, geothermal and wind systems. The only major renewable left out of Maryland’s programs is wood for heat, despite the existence of modern, clean burning systems like pellet stoves and advanced wood combustion (AWC) that are popular in Europe.
In 2009, the State of Maryland invested $3,920,000 in residential wind, solar and geothermal energies to subsidize 873 families or small businesses to lower their carbon footprint. This averages out to giving about $4,500 to these 873 families to eliminate 2,205 metric tons of carbon per year. This comes to $90 per ton of carbon, assuming a 20-year lifespan of the systems, excluding all the administrative costs incurred by the state to run the program. The price per ton of carbon avoided through Cash for Clunkers was estimated to be $50 by one authoritative source and in excess of $200 by some critics.
While the Alliance for Green Heat support incentives for solar, wind and geothermal, the incentives tend to go to families whose joint incomes are likely in excess of $150,000 because the upfront costs are usually $20,000 - $30,000 with 5 – 15 year payback periods. Giving checks to the wealthiest Maryland citizens, when tens of thousands of low-income Maryland residents are struggling to pay their utilities and their food bills is an ethical issue that has received scant public consideration.
If Maryland had used that same budget, $3,920,000, to subsidize modern, low emission pellet stoves or advanced wood combustion systems, it could have helped three times more families and helped working families install systems that would help them lower their utility bills with only a 2 -5 year payback period. And, we could reduce 3 or 4 times as much carbon, costing the state about $25 per ton.
The beauty of the modern pellet or wood stove is that it emits under 2 or 3 grams of particulates per hour, unlike traditional stoves that emit 30 – 40 grams per hour. Modern stoves cost $2,000-3,000 (including installation) and are already popular in rural, low-income areas where many Maryland residents get their fuel from storm-felled trees or the wood waste stream.
Maryland renewable energy subsidies comparison*
Renewable energy Cost CO2 Offset Households effected
Solar $2,750,000 1,293 metric tons 500
Geothermal $1,000,000 718 metric tons 350
Wind $170,000 194 metric tons 23
Total $3,920,000 2,205.5 metric tons 873
Wood $3,920,000 8,820 metric tons 3,920
• Note: Table provided for comparison purposes only. The Alliance for Green Heat does not advocate replacing incentives for solar, geothermal and wind, only adding wood heat to the list of approved technologies.
• The number of woodstoves incentivized is calculated from a $1,000 per stove grant, or about one third to one half the purchase price. The CO2 offsets are calculated by converting the heat source or electricity displaced with each energy source into equivalent CO2.
Maryland’s low-income population has been largely overlooked in renewable energy policy. There are other little-known benefits of wood heat: low-income families who heat primarily with wood are 2 – 3 times less likely to be on public heating assistance than low-income families using fossil fuel heat. Wood allows families to be self-sufficient and it usually directly offsets imported heating oil, or electric heat -- which in Maryland is primarily made with coal.
Solar panels remain out of the grasp of low and middle income families in Maryland, where the median household income is $70,000. Geothermal and wind energy tell similar stories. It’s time to include low-income households in the state’s renewable energy policy. Luckily, Maryland has progressive officials who are interested and open to the benefits of wood heat as long as modern, low emission systems are being considered.
Wood heat is great at reducing our carbon footprint, but it can’t do what solar and wind can: efficiently provide electricity. Similarly, wood can meet needs that solar and wind can’t: efficiently provide space heating. These technologies together will be far more effective than any of them alone.


DUTCH POWER GOES GREEN WITH WOOD PELLETS


ARNHEM, Netherlands, Sept. 24 (UPI) -- Using sustainable biomass at a power plant in the Netherlands is part of process meant to reduce greenhouse gas emissions, an executive said.
German energy company RWE said its Amer power plant in the Netherlands is gearing up to use more sustainable biomass as an energy source.
An executive at RWE's Dutch utility division Essent said the facility through green-energy efforts will supply sustainable energy for nearly 750,000 Dutch households.
"This is a clear and concrete step toward achieving our objectives; a 50 percent reduction in CO2 emissions between 2020 and 2030 and operating CO2 neutrally by 2050," said Peter Terium, the utility's top executive, in a statement.
The statements, published on RWE's Web site, add that using biomass from wood pellets is cheaper than building offshore wind farms or solar power plants.
The company said the Amer power plant is already the European leader in biomass use, relying on the fuel source for 33 percent of the production of sustainable energy.
HODES BACKS RADICAL CLIMATE CONTROL BILL
September 28, 2010 2:00 AM
Sept. 23 — To the Editor:
I watched the Paul Hodes vs. Kelly Ayotte Senate debate the night of Sept. 22.
Hodes voted for the $862 billion stimulus law. He twice pointed to it containing a 30 percent tax credit for the purchase of an EPA-approved wood burning or wood pellet stove.
Regretfully, that credit expires Dec. 31. He did not take credit for voting for the House's climate control bill designed to make us dependent on solar and wind generated energy and to reduce our use of oil, natural gas, etc. to the levels of 1867.
Rep. Carol Shea-Porter also voted for the bill. The bill exempts wood burning or pellet stoves. However, it makes illegal upon the bill becoming law the sale of anything but EPA-approved stoves. It does not establish a 30 percent credit for purchasing a new EPA stove, but does give free stoves and the installation thereof to very low income people up to the limit of the funds appropriated.
The climate control bill would make energy very costly by mainly limiting you to expensive wind and solar power (nuclear will be frustrated by regulations), so many will want a wood or pellet stove. You may be economically forced into buying one and you will not receive any offset. Welcome to a more primitive America.
Kelly Ayotte, on the other hand, will not buy into this radical climate control bill.
Tom Pearson
Rye

COAST GUARD CHOOSES PELLET HEAT FOR SITKA STATION
Posted 9/26/2010 6:26 PM ET

SITKA, Alaska (AP) — The Coast Guard plans to install a wood-fired boiler to provide heat to the Sitka Air Station.
The pellet-burning system will save money on heating bills and help the Coast Guard meet a federal mandate to reduce carbon emissions, said Sudie Hargis, an energy program specialist with the Coast Guard civil engineering division in Juneau.
The wood pellet boiler should be installed by next winter, replacing traditional oil-fired boilers at the air station on Japonski Island.
"We're going down the pellet path," Hargis said.
The air station, not including the Coast Guard housing on Japonski, burns about 90,000 gallons of heating oil a year, Hargis said. Burning the wood pellets will reduce the oil consumption dramatically and "displace" 1,800 tons of carbon emissions each year, she said.
Some Coast Guard housing in New England is heated with wood. The Sitka boiler will be the first to heat a commercial-size building in the agency with wood, she said.
There are no pellet manufacturers in southeast Alaska but Hargis told the Sitka Sentinel she hopes one will emerge. Sealaska Corp. is converting its downtown Juneau corporate headquarters to a wood pellet heating system and has purchased a truck to help deliver and store the biomass product. The Coast Guard has had preliminary discussions with the regional Native corporation about working together to obtain pellets, which initially will be shipped from Prince Rupert, B.C., or Seattle.
A draft report released Wednesday was paid for with stimulus money from the Federal Energy Management Program, an arm of the Department of Energy. The report found that it was not economically viable for a central plant to heat the Coast Guard air station, University of Alaska buildings, Mount Edgecumbe High School and a hospital in part because of the distance between the buildings.
The study grew out of the Coast Guard effort to reduce carbon emissions but was expanded when other entities on Japonski Island expressed interest in biomass heat.
The Ohio consulting firm Leonardo Technologies said the wood pellet heating facility at the air station should pay for itself in about eight years.