Renewable fuel’s appeal growing
Posted on Sunday, November 12, 2006
PINE BLUFF — Biomass is nothing new to the Weavers.
Since 1990, long before the recent increase in fossilfuel prices, the Weavers’ family business has been turning waste organic matter into fuel.
Located near International Paper Co. ’s pulp and paper mill on the outskirts of Pine Bluff, Fiber Resources Inc. manufactures wood pellets — sawdust compressed into uniform pellets for use in residential heating stoves.
“Recycling has always been our focus,” said Bill Weaver, who helped establish Fiber Resources in 1982 along with his father, Bob. The company initially manufactured industrial fuel cubes, extracting fiber from IP’s settling ponds, drying it and forming cubes that IP could burn in its boilers.
Although Bob has retired, Bill, now president of the company, has been joined by his brother, John Weaver, who serves as controller, and his sister Candy Weaver, who oversees marketing and sales.
“Our goal has been to use surplus wood and paper residues — divert them out of landfills and find uses that are good for consumers and the environment,” Bill Weaver said.
Four other groups of Arkansas entrepreneurs recently have seen the profit potential offered by wood pellets, and they have either begun producing pellets or plan to do so soon.
The market for the alternative heating fuel is booming in North America and Europe as consumers have turned to the environmentally friendly, renewable fuel made from recycled waste wood. Because pellets are uniform in size, shape, moisture and density, they burn efficiently and produce only a fraction of the ash and smoke normally associated with wood fires.
“The [wood-pellet ] industry has grown tremendously in the last two years,” and continued growth is expected, said Leslie Wheeler, communications director for the Hearth, Patio and Barbecue Association, an industry trade group based in suburban Washington, D. C.
About 60 U. S. and Canadian pellet plants produced approximately 1. 1 million tons of wood pellets in the 2005-06 heating season, according to the Pellet Fuels Institute, a companion of the Hearth, Patio and Barbecue Association. Pellets are a $ 250 million industry, based on an average worth of about $ 230 per ton, Wheeler said.
Pellet production, however, has had trouble keeping up with the sale of pellet stoves.
More than 600, 000 North American homes are equipped with specialized wood-pellet stoves and fireplace inserts, according to the Hearth, Patio and Barbecue Association. More than 118, 000 new units were shipped last year, a 76 percent increase from 2004.
The growth trend appears even stronger in 2006, with pellet-appliance shipments increasing 157 percent during the first two quarters of this year compared with the same period a year ago, the association said.
Pellet stoves, which require electricity and a flue, range in price from about $ 2, 500 to $ 3, 500 installed, Wheeler said. About two dozen manufacturers now produce the units, many of which come equipped with thermostatic controls, automated ignitions and fuel-supply systems.
To help consumers determine which is the most economical home-heating fuel — wood pellets, fuel oil, electricity, natural gas, propane, cordwood or coal — the Pellet Fuels Institute Web site, www. pelletheat. org, has a fuel-cost comparison page where local prices can be entered.
A 40-pound bag of wood pellets generally costs about $ 4, but prices can vary by region of the country and season of the year. Typically, the fuel is sold by fireplace dealers and nurseries as well as building-supply, farm-supply and garden-supply stores.
To manufacture its fuel pellets, Fiber Resources buys about 10 truckloads of red-oak and white-oak sawdust daily from suppliers including Armstrong World Industries Inc. ’s hardwood flooring plant in Warren, Bill Weaver said. The material is placed in a “hammer mill” that grinds it to a consistent size. After adding some moisture, the kiln-dried material then passes through a “pellet mill,” which applies heat — about 350 degrees Fahrenheit — and then extrudes the material through a die — under about 50, 000 pounds per square inch of pressure.
No adhesives are needed to form the 1 / 4-inch diameter fuel pellets, John Weaver said.
“You’re actually using the natural glues within the wood, the lignin. Temperature and pressure are what form the pellets,” he said.
Since 1990, Fiber Resources had begun producing a number of new products, including fire logs — basically oversized pellets that measure about 3 inches in diameter and up to 12 inches in length. In 1999, the company introduced a line of smoke-flavoring wood pellets for grilling. The line now includes 14 varieties ranging from hickory and mesquite to alder and pecan.
Fiber Resources also uses pine sawdust, purchased from south Arkansas pine sawmills, to produce cat litter and bedding for horses and small animals or reptiles. A naturally absorbent material, pine wicks up liquid, emits a fresh scent and is biodegradable. The company’s newest product, a clumping-type pine cat litter, has just been patented.
The Weavers estimate that they produce a total of 330 tons of products daily on four different production lines, and a fifth set of machinery is scheduled to begin operation this month. Fiber Resources operates 24 hours a day, six days a week, and employs about 50 people. Its products are distributed nationwide and can be purchased in such stores as Wal-Mart, Lowe’s and Tractor Supply.
NEW ENTRANTS Arkansas’ second wood-pellet factory, Sparkman Wood Pellets LLC in Mountain View, began production in August, said Ralph Teed, a dentist in Newport and Batesville. He’s one of the business’s four owners, along with Don Hitt, Bill Rosa Sr. and Bill Rosa Jr. Sparkman has three pellet mills and eventually will be able to produce about 70 tons of pellets per day, Teed said. The plant, in the Stone County Industrial Park, buys its sawdust from hardwood sawmills in the area, he said.
Most of the company’s pellets are being sold to Wal-Mart, Sam’s Club and So-Mo Agri Supply, said Teed, who handles Sparkman’s sales.
“I’m already sold out through January. We were sold out before we opened our doors,” he said.
A third pellet plant is scheduled to begin production next month in Monticello. BioWood LLC is a partnership between Wilson Maxwell and his sister, Kristi Prince.
BioWood will have two pellet machines and should be able to manufacture 40, 000 tons of pellets per year, Maxwell said.
Located next door to their father’s oak flooring business, Maxwell Hardwood Inc., Bio-Wood will buy 75-80 percent of its sawdust from Maxwell Hardwood and Warren-based Ouachita Hardwood Flooring LLC, in which Wilson Maxwell is a partner.
The sawdust currently is sold as boiler fuel, Prince said.
“It just seemed like a logical thing to do, being environmentally friendly and adding value to a product that we were already making,” she said.
Wood pellets also seemed like a logical fit for FutureFuel Chemical Co., said Gary McDonald, who serves as biofuels business director for the company. FutureFuel, just outside Batesville, was created Nov. 1 from the sale of Eastman Chemical Co. ’s Arkansas operations to a group of St. Louis-based investors affiliated with Apex Oil Co. Inc.
FutureFuel, Arkansas’ largest biodiesel producer, became the state’s first biofuel manufacturer in October 2005.
“We’ve been looking at [wood pellets ] for several months as part of the bioproducts, alternative fuel, renewable resource initiative that we’ve got,” Mc-Donald said.
“It just fits. It’s a fuel, it’s from a renewable resource, the raw material is available locally and the finished product will be sold locally as well.” FutureFuel, which plans to start production during the first quarter of 2007, will be able to produce about 30, 000 tons of pellets annually, McDonald said. The product will be marketed to everything from small, familyowned hardware stores to bigbox chain stores, he said.
A fifth pellet plant is likely in Hamburg, said Phil Barnes, who owns Barnes Brothers Hardwood Flooring with his brother, Robert. The plant should be able to produce about 40 tons of pellets daily, using only the sawdust generated by their hardwood flooring operation, Barnes said. “If anybody can make pellets, we ought to be able to,” he said.
KYOTO PROTOCOL Once you’ve made the pellets, selling them is simple, according to Teed of Sparkman Wood Pellets. “The marketing has been phenomenal. I literally get two or three calls a day from Europe, Korea, Canada and all over the United States,” he said. Although the wood-pellet industry began in the 1970 s in the United States, the European market is probably larger now, industry spokesman Wheeler said. By 2003, for example, per capita pellet-fuel consumption in Sweden, Denmark and Austria far outstripped per capita consumption in either Canada or the United States.
European demand is being driven in large part by the Kyoto Protocol to the UN Framework Convention on Climate Change. Under that treaty amendment, which entered into force in February 2005, the 25 member nations of the European Union have until 2012 to reduce their emissions of carbon dioxide and five other so-called greenhouse gases to a level approximately 5 percent below their 1990 emissions.
Burning wood pellets in coalfired power plants is seen as one way for countries to meet their Kyoto targets. Although pellets release carbon dioxide when burned, the trees from which they are made absorb an equal amount of carbon dioxide as they grew. So the net effect on greenhouse gas levels in the atmosphere is zero, according to the U. S. Department of Energy’s Web site.
Given the incentives being offered by many EU governments to encourage compliance with Kyoto, many European buyers are seeking to import North American pellets.
Last month, a Swedish company, Green Circle Bio Energy Inc., announced that it would build what is being billed as the world’s largest wood-pellet plant in Panama City, Fla. Able to produce 500, 000 tons of southernyellow-pine pellets annually, the plant would begin shipping 60 percent of its pellets to Europe in January 2008, Green Circle said.
Although the United States has not signed the Kyoto Protocol, some states are incorporating environmental requirements into their utility regulations. Texas and California, for example, require that a small percentage of the energy used within their borders be generated from renewable resources. Whether that will translate to pellet-fuel demand on a commercial scale in North America remains to be seen.
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