Story by Rich Donnell,
Editor-in-Chief
Your head would have to be buried in the sand to not hear or read about the ongoing developments in what we call “the new generation” wood bioenergy industry. Of course, many of you will recognize the new generation as similar to the old generation, particularly you old school pellet producers. Hamer Pellet Fuel, for example, which is featured in this issue beginning on page 18, has been producing pellets for nearly 25 years. It is an offshoot of the sawmill side of the family business, Jim C. Hamer Companies. Certainly many of you, if you’ve never produced pellets yourselves, have sold some of your byproduct to pellet mills. And certainly, many of you have diverted your byproduct toward your own cogeneration system for years.
When we talk about “new generation” we’re referencing the developments of the past several years—the whole renewable energy surge endorsed to various degrees by the federal and state governments, with emphasis on fuel pellets production for domestic and especially export markets, biomass induced power generation, cellulosic ethanol and woody raw materials feedstock procurement.
Just look at some of the news items in this issue: a sawmill company in Alabama may form a pellet plant venture with a major German pellets producer; a pellet plant is planned at the site of a former particleboard plant in Waverly, Va.; another pellet plant is planned at the site of a former sawmill in Ahoskie, NC; a biorefinery plant is planned in Alabama; a biofuels plant is planned for Mississippi; a long-time wood products company signs a deal to supply woody feedstock to a biopower plant in Florida.
While most sawmill businesses have been carefully guarding their dollars during the past couple of years (thus you haven’t seen a lot of sawmill project news announcements in recent issues), the wood bioenergy industry seems to be covered up in dough, some of it coming from federal loan and grant programs. This matter of free enterprise subsidization is another topic for another time, but for now it’s out there.
Amazingly, we still don’t know if the new generation wood bioenergy is going to stick. Environmentalists are taking shots at it, as are certain sectors of the wood products industry. One of the first big projects and most publicized, the Dixie Pellets plant in Alabama, the largest pellet plant in the world at the time, went under rather quickly. Range Fuels recently shut down—temporarily they say—its large cellulosic ethanol plant in Georgia.
Both experienced difficulty in production technologies. One apparently lost its marketplace because of it. The other is still trying to work through technology issues at the same time it is trying to locate (or even create) its market.
Here’s the burning question: Even if we establish the technology and the market acceptance, and stabilize our fiber procurement costs, transportation costs and other operational costs, is there enough profit (once the loan and grant money subsides) to make this thing everlasting? Or is it—as many a California gold rush prospector sadly observed—a mere flash in the pan?