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Wood Pellets

Fresh from the Woods

George Soffron of Corinth Wood Pellets stands in front of the raw material for tons of Maine-made wood pellets. (Photos by Andrew Kekacs)

Blue-ribbon panel says: Heat with wood pellets, by George!

By Andrew Kekacs

Editor's note: Economic turmoil, global warming and wildly fluctuating energy costs have led policy makers, scientists and investors to look more closely at the world's forests. The shift in attention from Wall Street to Wytopitlock offers great promise and potential problems for Maine, the nation's most heavily forested state. In the coming months, Fresh from the Woods will focus on the capacity of Maine's forests to provide new products and good jobs in an uncertain world.

Even as scientists race to find ways to produce plant-based alternatives to things now made from oil, the world's oldest use for wood has found new life.

When heating oil prices skyrocketed in early 2008, Maine Gov. John E. Baldacci created a task force to investigate ways to reduce the state's dependence on foreign oil by using the state's forest resources. After eight months of meetings, the Wood-to-Energy Task Force issued a final report in August. Among its findings:

• Maine is the most oil-dependent state in the nation. More than 80 percent of Maine homes use oil-based heating systems, burning about 400 million gallons of #2 fuel oil per year, at a cost of $1.37 billion in 2007. Commercial buildings use another 100 million gallons. That means every $1 increase in the price of a gallon of heating oil costs Maine homeowners and businesses strips $500 million, much of which leaves the state. Rising oil prices force residents to cut back spending in other areas, further harming the Maine economy.

• While wood has the potential to provide a greater percentage of Maine's energy, the sustainable management of forest resources is a primary concern. Among the considerations are the ratio of harvest to growth in the forest, and the protection of water quality and wildlife habitat.

• The use of wood to reduce dependence on foreign oil must not result in negative health or environmental consequences. The expanded use of older woodstoves and non-EPA certified outdoor wood boilers, for example, could pose a substantial pollution problem.

• The replacement or supplementation of oil-fired home and small business heating systems with pellet-fueled heating systems could have a significant impact on Maine’s economy. Pellet stoves are very efficient and clean burning, though they need to be loaded, typically once a day, from 40-pound bags of pellets. The bags are sold at local stores or delivered on one-ton pallets.

• Fully automated, pellet-fueled home heating systems that use a boiler to heat water for baseboards and domestic hot water are also available in Maine. Such systems are common in Europe; 80 percent of new homes in Sweden and 76 percent in Austria are built with pellet-fueled central heating systems. Like oil, pellet fuel is delivered in bulk by delivery trucks into basement storage tanks that hold from several months' to a full winter’s supply of fuel.

Maine's wood pellet manufacturers (who tend to be named George) say the state is well positioned to supply the growing local and regional demand for pellets.

"This is an absolutely fascinating business," said George Soffron, chief executive officer at Corinth Wood Pellets in Corinth. "It's not easy, but it's not rocket science. We're not waiting for a breakthrough in technology. We don't need to be located in a state that offers subsidies [for alternative fuel production] to make it work."

While there are substantial environmental benefits from using wood pellets instead of oil, Soffron said most homeowners are focused on cost. "To make in-roads into fossil fuels, we have to be cost-effective," he said. "This is cost-effective now."

Even with fuel oil at less than half the cost of six months ago, wood pellets are a viable choice for home heating fuel, according to George Rybarczyk, a partner in Maine Woods Pellet Co. of Athens.

George Rybarczyk of Maine Woods Pellet Co. holds a double-handful of pellets.

"[Pellets are] competitive with oil as cheap as $1.80 per gallon," said Rybarczyk, who has been burning wood pellets since 1993. "When we started planning for this plant, oil was at $55 per barrel, and I still thought it was a good idea. The spike in [oil] prices just motivated more people to get involved."

Pellets can be produced from virtually any source of wood -- hardwood and softwood logs or chips, sawdust and wood scraps from mills, shavings or construction scraps. Soffron said his company buys all the mill waste and scraps it can find, because it is typically lower in cost and is "the right thing to do." Rybarczyk is partnered with the Linkletter family of Athens, which operates a substantial logging business.

Wood supply is a key issue, both men said. "We have a forester on staff, and we are looking to be [green] certified," said Soffron. "We are lining up small landowners, particularly those who are not managing their lots. [Good management] can maintain value, both environmentally and economically. Small landowners really seem to be interested in that."

Rybarczyk said inability to get raw materials was the key reason for failure in other wood-pellet plants he studied. "Supply was my key concern going in," he said. "We use chips from the Linkletters' whole tree chipping operation."

Wood pellets are a bulky and relatively low-value item. That means manufacturing is likely to be regional, rather than national. The two Maine mills are focusing on distribution within New England, with Maine as the primary emphasis.

Production of pellets is relatively straightforward and environmentally benign. Wood is ground, then extruded through a die that creates the worm-like pellets. There is nothing in the pellets but wood; the pressure and heat of the process is enough to bind the pellets and give them a glossy shine.

Both mills are new and employ similar technology. The Athens facility is geared toward the sale of pellets for bulk delivery, which Rybarczyk acknowledges is probably several years away. Meanwhile, the output is mostly sold in 40-pound bags.

The mills employ 30-40 people each, a substantial number for the two rural communities. In addition, the output of the mills is displacing millions of dollars of foreign oil. The fuel cost savings, payroll and purchases of the mills are pumping money into the Maine economy that would otherwise flow out of state.

Ground wood is extruded through a die to make the worm-like pellets.

There are a number of other pellet mills built, under construction or proposed in Maine. At a cost of more than $10 million per facility, the investment is substantial. But the manufacturers hope to see 10 percent of Maine households heated with wood pellets in five years.

"The industry is new," said Soffron. "To a degree, we are pioneers. We have the opportunity to find a path that makes sense, environmentally and economically, from start to finish."

Several questions remain:

Is it possible to find the raw material for wood pellets without jeopardizing the long-term health of the Maine Woods? How much would come from the forest, rather than from waste, and who would cut it? How would a growing demand for pellets affect the raw-material costs -- and therefore the viability -- of other manufacturers of wood products?

Fresh from the Woods will take a close look at these and other questions in the next few months.

Fresh from the Woods is produced by Forests for Maine's Future, a collaboration of Maine TREE Foundation, the Small Woodland Owners Association of Maine, the Maine Forest Service, and the University of Maine.