Wood pellets heat up forest products industry

While pellets are rapidly catching on in Europe, Americans have been a little slower to adopt them, but that may be changing.

Pellet producers are popping up everywhere. Superior Wisconsin's Elkhorn Industries opened a 30,000-ton mill last year. They're thinking of expanding by more than 10 times. A mill just opened in Marcell, Minn., is producing 50,000 tons a year. Other mills are expected near Ashland and Hayward, Wisc., and Mountain Iron, Minn.

Wood pellets are not exactly new technology. The little shiny wood cylinders have been a primary source of heat for years at the French River fish hatchery near Duluth. Supervisor Fred Tureson said the hatchery has been burning wood since the early 1980s.

"We've had several different suppliers during that time," Tureson said. "It's been a good product."

The pellets look something like chunks of unpainted pencils. They're brought in by the truckload, and poured into a large metal bin just behind the hatchery. An auger carries pellets into a large, boxy boiler that heats water. The hatchery has fuel oil boilers as a back up, but Tureson said the wood pellets do the job at a third of the cost.

"Right now, we primarily burn wood pellets because it's quite a bit cheaper than No. 2 oil," he said.

Pellets can burn as efficiently as fuel oil, with air emissions far below that of conventional wood heat, but there is a catch. The hatchery's system needs daily ash removal, and another two or three hours of maintenance a week.

Pellets are typically made from scraps, like sawdust from furniture manufacturing. But they can come from whole trees, or other woody products like grass. And they don't all burn the same. That's where Chris Wiberg's laboratory comes into play, in Superior, Wisc.

"Moisture analysis is in this oven right here. These are both bomb calorimeters for doing the heat value. This is our sulfur analyzer," Wiberg said.

Wiberg's company, Twin Ports Testing, is working with an industry group to set wood pellet standards for things like energy content and ash deposits.

"That's where this industry has suffered a little bit, because everybody makes a standard -- they call it a premium grade pellet -- yet there's huge differences in the quality," Wiberg said. "The focus of this particular effort is to try and set quality standards, have routine testing procedures, and make sure that all mills are accountable for the quality of their product."

Quality problems aside, government regulation is helping the market for wood pellets, which are considered carbon neutral. They're a biomass. New Minnesota law requires utilities to use carbon neutral fuels like wood biomass. Overseas, countries like Ireland require biomass capability in new construction.

"Europe is way ahead of the United States in making use of this particular material. Their demand has really sky-rocketed, and they're consuming anything we can produce, it seems." Wiberg said.

On the other hand, he said, in America, people typically use the pellets as a supplemental heat, much like a wood stove.

"Some houses are set up that they can use it as their primary source of heat, but most aren't. They're just meant to be a pretty fireplace," Wiberg said. "If you look at the European application, they typically have pellet fired furnaces, or boilers, where they incorporate it into the laundry room as a central heater. They're not made to be pretty, they're made to be functional."

Now, with the cost of energy soaring, potential customers in the U.S. are taking notice. Tracy Ryks and her husband live in Duluth.

"Our propane bill, annually, is around $2,500. That gets pretty pricey. When we looked at replacing it with pellets, our bill would be around $500 or $800 a year," Ryks said.

Those economics could spell a boom for Minnesota's wood pellet mills.

The smaller mills, like the one in Marcell, aren't big employers, with a dozen or more workers. But they're putting money back into a forest industry that's been struggling for several years. That money will spread to loggers and trucking companies, and possibly to the Great Lakes shipping industry in Duluth and Superior.

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