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Another venture that's also calling itself the world's largest pellet plant, Dixie Pellets LLC, is under way near Selma, Ala. European-bound pellets will be barged down the Alabama River and shipped out of Mobile.
Near Baxley, Ga., Fram Renewable Fuels is building a 145,000-ton- a-year pellet plant, called Appling County Pellets LLC. It's all headed to Europe, shipping through Savannah and Brunswick, Ga.
"There aren't too many of us exporting wood pellets successfully, but a lot of us are trying," said John Colquitt, Fram's president.
Colquitt made European contacts while operating a pellet mill outside Halifax, N.S. The overseas market is poised to grow because of a directive in the European Union linked to the Kyoto Protocol, which requires participating countries to cut carbon dioxide and other greenhouse gas emissions. One strategy is to mix in wood pellets at coal-burning power plants.
But the market can be fickle. A warm winter in Europe cut demand for all heating fuels, which hurt sales.
"There has been a real shaking out this spring," he said. "Some companies couldn't weather the storm."
Europeans are paying roughly $150 a ton wholesale for pellets landed there, Colquitt said. That's attractive, but exporters need to factor in the cost of wood supply, ocean freight, exchange rates and storage.
Those issues are being studied carefully by Armand Demers, the forest products director at Sprague Energy. He's been working with Ken Eldredge at Corinth Wood Pellets.
Corinth isn't near a rail line, so pellets would have to be trucked to Portland or Searsport. Pellets must stay bone dry, so they need special storage. And they degrade with heavy handling, so a conveyor system must be installed. Moving and storing wood pellets will require a multimillion-dollar investment, Demers said.
"The challenge is going to be how to get them from the mill to Europe and not make it uncompetitive," he said.
Charles Niebling hasn't been able to make the numbers add up.
Niebling is the procurement and sales manager at New England Wood Pellets LLC in Jaffrey, N.H., which currently calls itself the nation's largest pellet maker. The nine-year old mill turns out 75,000 tons a year. The company also bags 80,000 tons a year of pellets shipped by rail from British Columbia, and is building a 100,000-ton plant in Schuyler, N.Y.
Niebling has been selling bagged pellets for home heating in Europe, but saw sales drop this winter. And he hasn't been able to figure out an economic way to send bulk shipments to Europe, noting that American pellet makers also are competing with established companies in Scandinavia, Germany and Russia.
Niebling laments that Americans don't burn more wood pellets. The only sizable commercial burner he's aware of in New England is a new manufacturing and office building in Hinesburg, Vt., owned by wind energy equipment maker NRG Systems. That pellet boiler burns roughly 30 tons a year, he said.
Increased demand for pellets in American homes and businesses might boost supply and cut prices, said Matt Boucher, store manager at Yerxa's Lawn & Garden in South Portland.
The company has a subsidiary that sells the Harman Stove Co. pellet stoves. One popular model, which is thermostatically controlled and can keep an average house warm for 24 hours with 40 pounds of pellets, sells from $2,695.
Boucher was charging $250 a ton for pellets this year, up from $190 the previous winter. More domestic supply could drive prices back into the $200-a-ton range, he said, and that would make pellets more competitive with oil heat.
By Niebling's estimate, if only 5 percent of the oil-fired boilers in New England were replaced by pellet burners, a 300,000-ton-a-year plant could sell all its output at home. But in the absence of aggressive policies to displace oil in the United States, it's not surprising that wood pellet developers see opportunity in Europe.
"We're becoming a Third World nation, exporting our renewable resources," Niebling said.