Spring 2012 Pellet Mill Magazine

INSIDE: UNDERSTANDING FOREST CERTIFICATION PROGRAMS

Spring 2012

Pine Beetle Plague Removal of Ravaged Trees Creates Feedstock Page 14

Plus: Philippines Project Includes Community Improvement Page 22

Pellet Industry is Ripe with New Ideas Page 28

www.biomassmagazine.com/pellets

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Pellet Mill Magazine

Contents »

Advertisers' Index

SPRING 2012 | VOLUME 2 | ISSUE 1

FEATURES

17 Airoflex Equipment 31 ANBO Machining Ltd.

14

40 Andritz Feed & Biofuel A/s

Multiple factors have exacerbated the devastation caused by pine beetles in the Rocky Mountains, and some of the dead material needs to be removed.

By Anna Austin

11 B&W Mechanical Handling, Ltd. 39 BBI Consulting Services 6 BRUKS Rockwood

22

INTERNATIONAL

Pellets and Power for All

One partnership’s vision for waste reduction in the Philippines could spread worldwide, providing pellets, power, jobs and homes.

By Lisa Gibson

12 Buhler Inc. 5 CPM Roskamp Champion 13 CST Industries, Inc.

FEEDSTOCK

Energy-Charged Epidemic

28

26 D&S Engineering, Inc.

INNOVATION

Obvious Originality

The wood pellet industry has made great strides and has no shortage of applications showcasing developers’ creativity and prowess.

By Luke Geiver

36 Dieffenbacher 37 Fike Corporation

CONTRIBUTIONS

27 GreCon, Inc. 30 Industrial Bulk Lubricants 25 Intersystems 20 KEITH Manufacturing Company 2 Millard Maritime 32 Minnesota Valley Testing Laboratories 33 Olson Search International, Inc. 38 Pellet Fuels Institute 19 Scheuch GmbH 21 Timber Products Inspection/Biomass Energy Laboratories 24 Twin Ports Testing 18 Vecoplan Midwest, LLC 16 West Salem Machinery Co.

34

STANDARDS

Forest Certification: Opportunity and Challenge for the Wood Pellet Industry

Securing woody biomass from sustainable sources is increasingly important, but navigating the forest certification maze is no simple task.

By Ron Lovaglio and Scott Berg

DEPARTMENTS 04 EDITOR’S NOTE

Building on Success

By Lisa Gibson

06 INDUSTRY EVENTS 07 STANDARDS STEWARD

Fracking Changes Everything

By John Crouch

08 TESTING GROUNDS

Proceed, But be Informed and Have a Solid Plan

By Chris Wiberg

09 MAINE-LY PELLETS

Government Assistance: Double-Edged Sword?

By Bill Bell

10 INDUSTRIAL INSIGHT

Industrial Wood Pellet Industry is Sustainable and Carbon Neutral

By M. Seth Ginther

12 BUSINESS BRIEFS SPRING 2012 | PELLET MILL MAGAZINE 3

« Editor’s Note

Building on Success

Lisa Gibson

Editor lgibson@bbiinternational.com

I’ve heard the term up-and-coming used to describe the wood pellet industry in the U.S., but from my perspective, it’s already here. At this point, I would say it’s simply continuing to expand.

Export markets and global demand that North American pellet mills are expected to satisfy seem to increase a bit with each new study released. Development in the Southeast U.S. is explosive and port authorities are taking notice, expanding their own capabilities to accommodate the new opportunities afforded to them through the pellet industry’s growth.

While multiple producers are positioning themselves to take advantage of the massive foreign demand, even more are happy with the domestic market they supply here, mainly in residential heating applications. In the West, pellet mills are using wood that has fallen victim to the pine beetle infestation, helping to remove dead and dying material that could interfere with forest health. Read more about the epidemic and its causes in a feature article by Associate Editor Anna Austin beginning on page 14.

In the Northeast U.S., some state-level policies and reports are illustrating current and projected pellet popularity. Both New Hampshire and Maine have added wood pellets to their fuel price reports, and a residential pellet boiler subsidy program in Berlin, N.H., has been extended indefinitely. The program aims to assist with installations of residential boilers for homeowners switching to pellet fuel. Its organizers say interest in pellet heat is growing in the Northeast and the program can help more people save money on heating bills.

And pellets are in the spotlight even on the federal level. In March, the U.S. Department of Housing and Urban Development announced that wood pellet boilers will be classified as a conventional, primary heating source, and therefore will qualify for Federal Housing Authority funding, provided they meet the other guidelines. HUD officials admitted the agency was perhaps behind the times in recognizing pellet boilers as a qualifying technology and promised that the handbooks would be updated to reflect the new classification.

As the industry continues to evolve from its already-healthy position, there is no shortage of new ideas and ingenuity. Starting on page 28, Associate Editor Luke Geiver showcases some innovative pellet boiler installations that set themselves apart in areas ranging from feedstock handling to overall design and appearance.

The pellet industry has arrived and is continuing its U.S. growth in both the domestic and export markets. Producers here are recognized as major players on the world stage.

And they’re prepared to provide millions of tons of pellets to keep that stage warm and bright.

For more news, information and perspective, visit www.biomassmagazine.com/pellets

Contributors

Scott Berg

Ron Lovaglio

Ron Lovaglio, president of Ron Lovaglio LLC, and Scott Berg, president of R.S. Berg & Associates, dive into the confusing and sometimes conflicting forest certification systems used around the world, outlining common standards and answering frequently asked questions. They offer a simplified overview of the certification process for pellet producers, and give helpful tips.

4 PELLET MILL MAGAZINE | SPRING 2012

Bill Bell

In this month’s Maine-ly Pellets column, Bill Bell, executive director of the Maine Pellet Fuels Association, addresses the public perception of the pellet industry’s requests for government assistance, following failed projects in other renewable sectors that wasted federal funding.

He explains how the proper, wellcrafted request for helpful incentives can make all the difference.

Editorial EDITOR Lisa Gibson lgibson@bbiinternational.com ASSOCIATE EDITORS Anna Austin aaustin@bbiinternational.com Luke Geiver lgeiver@bbiinternational.com COPY EDITOR Jan Tellmann jtellmann@bbiinternational.com

Art ART DIRECTOR Jaci Satterlund jsatterlund@bbiinternational.com GRAPHIC DESIGNER Elizabeth Burslie bburslie@bbiinternational.com

Publishing & Sales CHAIRMAN Mike Bryan mbryan@bbiinternational.com CEO Joe Bryan jbryan@bbiinternational.com VICE PRESIDENT Tom Bryan tbryan@bbiinternational.com VICE PRESIDENT, SALES & MARKETING Matthew Spoor mspoor@bbiinternational.com EXECUTIVE ACCOUNT MANAGER Howard Brockhouse hbrockhouse@bbiinternational.com SENIOR ACCOUNT MANAGER Jeremy Hanson jhanson@bbiinternational.com ACCOUNT MANAGERS Marty Steen msteen@bbiinternational.com Bob Brown bbrown@bbiinternational.com Andrea Anderson aanderson@bbiinternational.com Dave Austin daustin@bbiinternational.com CIRCULATION MANAGER Jessica Beaudry jbeaudry@bbiinternational.com ADVERTISING COORDINATOR Marla DeFoe mdefoe@bbiinternational.com SENIOR MARKETING MANAGER John Nelson jnelson@bbiinternational.com

Subscriptions to Pellet Mill Magazine are free of charge—distributed twice a year—to Biomass Power & Thermal subscribers.To subscribe, visit www.BiomassMagazine.com or you can send your mailing address to Pellet Mill Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to (701) 746-5367. Back Issues & Reprints Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at (866) 746-8385 or service@bbiinternational.com.

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We are committed to editorial excellence and high-quality print production. To find out more about Pellet Mill Magazine advertising opportunities, please contact us at (866) 746-8385 or service@ bbiinternational.com. Letters to the Editor We welcome letters to the editor. Send to Pellet Mill Magazine Letters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or e-mail to lgibson@bbiinternational.com. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

Please recycle this magazine and remove inserts or samples before recycling

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SPRING 2012 | PELLET MILL MAGAZINE 5

« Industry Events Rocky Mountain Forest Restoration & Bioenergy Summit APRIL 16, 2012

Colorado Convention Center Denver, Colorado The Rocky Mountain Forest Restoration & Bioenergy Summit will bring together experts to share their diverse perspectives on forestry, bioenergy and public policy.

This one-day, content-rich event will outline the current condition of the Rocky Mountain forests and detail how the health of these forests can be improved through collaborative efforts with bioenergy producers.

(866) 746-8385 www.biomassconference.com

International Biomass Conference & Expo APRIL 16-19, 2012

Colorado Convention Center Denver, Colorado A New Era in Energy: The Future is Growing Organized by BBI International and coproduced by Biomass Power & Thermal and Biorefining Magazine, this event brings current and future producers of bioenergy and biobased products together with waste generators, energy crop growers, municipal leaders, utility executives, technology providers, equipment manufacturers, project developers, investors and policy makers. Register today for the world’s premier educational and networking junction for the biomass industry.

(866) 746-8385 www.biomassconference.com

International Fuel Ethanol Workshop & Expo JUNE 4-7, 2012

Minneapolis Convention Center Minneapolis, Minnesota Evolution Through Innovation Now in its 28th year, the FEW provides the ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-tobusiness environment. As the largest, longest-running ethanol conference in the world, the FEW is renowned for its superb programming—powered by Ethanol Producer Magazine. Early bird registration rates expire April 23.

(866) 746-8385 www.fuelethanolworkshop.com

International Biorefining Conference & Trade Show NOVEMBER 27-29, 2012

Hilton Americas - Houston Houston, Texas Organized by BBI International and produced by Biorefining Magazine, the International Biorefining Conference & Trade Show brings together agricultural, forestry, waste, and petrochemical professionals to explore the value-added opportunities awaiting them and their organizations within the quickly maturing biorefining industry. Contact a knowledgeable account representative to reserve booth space now.

(866) 746-8385 www.biorefiningconference.com

Standards Steward »

Fracking Changes Everything

BY JOHN CROUCH

A headwind is approaching the biomass energy sector, and it’s called cheap natural gas. Fracking has dramatically changed the supply outlook for natural gas in North America for the foreseeable future and biomass proponents who fail to factor it into their planning will regret it.

The impact on the economics of proposed projects is obvious, but I think the impact on the political process could be even more profound. The decrease in heating energy costs will predominantly impact our urban communities, and it may also widen the gulf between urban and rural energy costs in both the U.S. and Canada.

Although the rise in the price of oil is getting all the press, the wholesale price of natural gas has sharply declined in real terms over the past three years, as a direct result of fracking. Shale gas fracking is being explored all around the world.

Just a few years ago, we were debating the licensing of natural gas import terminals in the United States.

In an amazingly short time, many of those applications have been resubmitted as export terminals Shipping and transport have never been a strong point for natural gas. It is essentially a stranded fuel and is generally utilized on the continent in which it is produced, which has always benefited North American consumers. Oil and propane, on the other hand, are transportable, but that is a longterm weakness from a price volatility standpoint, as they are world

commodities. Maine and Alaska are the U.S. states most dependent on heating oil, and most alarmed by the future prospects for the price of that fuel.

A future of declining real gas prices may have two important impacts on the biomass industry, specifically pellets. First, rural institutions and businesses must be weaned off heating oil, but will need significant financial assistance to support the installation of the hundreds of new boilers. The second potential impact is that NG is a cheap method to generate electricity, and this may change the dynamics of biomass electrical generation, or at least make it even more dependent on renewable energy credits and state renewable portfolio standards. That may change the competition for feedstock.

The fundamental challenge facing pellets will not be cheap gas, however, but its availability to a majority of homes, and the resultant impact on votes. According to the American Gas Association, more than 55 percent of American households heat with natural gas, which means that these households (voters) may not see much change in their energy bills this decade.

Consequently, the majority of the electorate will not view home energy costs as an issue. Meanwhile, the rural minority will be “dying on the vine,” potentially strangled by increasing thermal energy costs that eviscerate budgets of households, school districts and rural hospitals.

And abundant natural gas

changes the political landscape for all alternatives. Most incentive programs could be imperiled by an electorate that is dominated by households using cheap gas. Our current successes in building political momentum for biomass thermal, and our hopes for much more, may not last, as the cost of heating fades as an issue for the majority of energy users. All of us who are committed to pellets and thermal biomass need to redouble our cooperative efforts in the political arena right now.

The energy crisis may be over, at least for home heating in the urban majority. That means the political window for incentive programs, sales tax exemptions, new loans, and grant programs is closing. Even the once unimaginable possibility of the roll back of state portfolio standards may rear its ugly head in the face of economic hard times and cheap natural gas. So for those of you who are sitting back, focused on your own projects, I encourage you to get involved at the state and national levels in existing initiatives supporting the biomass thermal industry. Once the electorate no longer sees a crisis, it moves on to other issues, and it could be a long, cold decade for folks who provide pellet fuel.

Author: John Crouch Director of Public Affairs Pellet Fuels Institute (916) 536-2390 crouch@pelletheat.org www.pelletheat.org

SPRING 2012 | PELLET MILL MAGAZINE 7

« Testing Grounds

Proceed, But be Informed and Have a Solid Plan

BY CHRIS WIBERG

In my last column, titled “The End of an Era,” I described a fundamental shift that I observed over the past year pertaining to standardization of the pellet fuels industry.

Essentially, the industry has generally accepted that standardization is upon us and it is now time to implement programs that have long been in the works.

Since the last issue of Pellet Mill Magazine was published, the Pellet Fuels Institute and the American Lumber Standard Committee have finalized an agreement, and ALSC has accredited several auditing agencies and testing labs for the purpose of implementing the domestic residential/commercial densified fuel standards program.

The European Pellet Council continues to add to its list of countries that are implementing the EN plus pellet certification scheme on an international basis. In addition, the Industrial Wood Pellet Buyers initiative in Europe to develop standard specification for industrial wood pellets has progressed by opening the door to U.S. pellet producer feedback through the U.S. Industrial Pellet Association. This provides collaboration critical in the implementation of a mutually acceptable standard for international shipments to European utilities.

Along with standardization, we anticipate better consistency within our fuel streams, better performance for the combustion appliances and mechanical handling systems, and of course, happier customers. Unfortunately, standardization is likely to result in some growing pains, as well. As an active participant in all 8 PELLET MILL MAGAZINE | SPRING 2012

of these standards development initiatives, I feel obligated to make you aware of a common theme that the industry as a whole needs to understand. These are new programs and will need to be refined as we identify shortcomings during their implementation. I am not trying to imply that they have not been thoroughly researched. Quite the contrary, but I think we can all relate to two concepts: there is always room for improvement, and it doesn’t always work as well in practice as it did on paper. The implementation of standards is much like the scaling up of any new technology to commercialization. As you ramp up, you identify problems and then modify the design as necessary until it works the way it is intended. The difference is that when standards are specified in contracts, they become legally binding. We need to be very careful that in an effort to grow consistency and reliability within the industry we don’t create a situation where producers are left holding the bag (or ship, literally) or worse yet, recalling it due to an unforeseen yet preventable issue. That is why it is essential for every fuel producer to fully understand any standard it intends to implement and to have a solid plan for implementation.

The best advice is to do your homework beforehand. All of these standards programs are welldefined. Take the time to read them carefully and relate them back to your process. Ask yourself if the standard is achievable for your facility, and how confident you are taking on the implementation. If you are not sure, then do more research

or ask for help. Also, do not be afraid to bring questions or concerns with any of these standards back to the standards developers. In all cases, I can assure you that they are eager for feedback and want to improve them.

You should also carefully consider your quality team. Make sure your quality manager knows this is a primary responsibility and not just an additional duty. Select people who know and understand quality management or who have sufficient background and/or capabilities to be trained into the role. A meticulous mindset is very helpful here. In short, get the right people on your quality team. This also applies to your external support companies such as auditors, laboratories, logistics coordinators, and others. When in doubt, these entities should be able to answer your questions. If they cannot, you are probably working with the wrong people.

In a perfect world, there would be a simple step-by-step guide that everyone could use to gain compliance with these new standards, but every facility is unique with its specific feedstock materials, equipment, people, intended markets, etc.

Compliance will need to be achieved one production facility at a time, each with its own unique circumstances. It’s a step toward strengthening this industry through which we all will find growth. Proceed, but be informed and have a solid plan.

Author: Chris Wiberg Manager, Biomass Energy Laboratory (218) 428-3583 cwiberg@tpinspection.com

Maine-ly Pellets »

Government Assistance: Double-Edged Sword?

BY BILL BELL

“Wood Pellet Producers Ask Federal Government for Help.” So read the unfortunate headline of the Bangor Daily News article describing a February meeting of Maine’s pellet industry leaders with USDA Rural Development Undersecretary Dallas Tonsager.

A predictable reader reaction in the comments blog accompanying the online version of the newspaper was “Great, another industry looking for a handout.” Of greater concern was the fact that of the 129 posted comments, this particular response was “liked” by 78 viewers, far more than the response to any other set of remarks.

Even allowing for the infantile nature of many commenters and their respondents, this reaction needs to be recognized for what it is. Our industry needs to adjust for the fact that federal energy assistance programs are now going to be “Solyndra-shy.” Add to this the fact that one of our biomass champions, U.S. Sen. Olympia Snowe, R-Maine, has announced that she will not be seeking re-election. Add to all that the fossil fuel industry’s success in getting the “government shouldn’t pick winners and losers” mantra adopted in many circles.

We need to ask of government only that which clearly makes sense to virtually every consumer and voter.

In many states, common-sense concerns about the cost of constructing new electrical generating facilities has led to a very modest systems benefit charge added to every electric bill. Those funds are then used to bring about significant efficiencies, and reductions in electricity consumption, to electricity consumers of all classes.

Concerned citizens, legislators, and public utility regulators in half of our states have used somewhat the same electricity-oriented approach to establish renewable portfolio standards mandating that a percentage of the electricity delivered in those states come from renewable sources.

In Maine, however, a yellow light has just flicked on. The attempt by environmental groups to place on the November ballot an increase in the required renewables has fallen short of the required petition signatures, and is postponed for a year.

Public measures to promote pellet heat will succeed only if they are seen by the consumers as truly cost-saving. The best thing happening now, in terms of public support for fuel-switching, is the media advertising presently taking place in Maine by both stove retailers and a major pellet boiler firm, all stressing that pellets are half the price of oil. Once this simple claim becomes widely accepted as fact, arguments about climate change, economic benefits of keeping fuel dollars in-state, and increased employment in the forest products industry suddenly carry much more weight.

But let’s be careful what we wish for. Short-term subsidies such as the very successful Maine Forest Service grants to schools installing pellet heat are enduring only if they can inspire other school officials, architects, heating consultants, and local taxpayers to make similar investments without grant assistance. Public financing for wood heating systems will be successful if it is in the form not of outright taxpayer expenditures, but instead of loan guarantees such as those USDA

already provides for a myriad of rural development purposes.

Maine’s energy agencies are currently considering a pilot project that will enable 500 clients of the Low Income Home Energy Assistance Program to install pellet stoves, getting them off the ever-escalating oil treadmill. This has potentially great value both for our industry and for the community action agencies administering the LIHEAP program. It will show taxpayer funds being channeled to purchase a local fuel and provide jobs to Maine workers, while helping needy persons get through the winter.

There is, of course, one request of public officials that generally engenders strong public support: sensible regulation. In response to a strong request from Dutch Dresser, president of the Maine Pellet Fuels Association, Sen. Susan Collins, R-Maine, and the U.S. Secretary Housing and Urban Development announced March 2 that pellet heating systems are now to be accepted as a primary heating source for FHA financing. “There are moments when the federal government can be a little behind the cutting edge in terms of new technology,” HUD Secretary Shaun Donovan conceded.

This recognition of pellet heat removes what has been a major roadblock for heating installers.

Government support: not a good request. Fair treatment for pellet heating customers: a popular goal. Go figure.

Author: Bill Bell Executive Director Maine Pellet Fuels Association (207) 752-1392 feedalliance@gwi.net

SPRING 2012 | PELLET MILL MAGAZINE 9

ÂŤ Industrial Insight

Industrial Wood Pellet Industry is Sustainable and Carbon Neutral

BY M. SETH GINTHER

Wood resources for bioenergy, specifically industrial wood pellets, are carbon neutral. When used for energy, the release of carbon into the atmosphere never exceeds the amount of carbon that was absorbed during the life of the tree. In fact, trees in their growth phase absorb carbon at a faster rate than older, mature trees and this is particularly true for forests in the Southeastern U.S., where the climate is warm and conducive to faster growth. The U.S. Southeast is actually home to some of the most robust forests in the world, where many species naturally propagate multiple tree saplings for every one tree harvested, which means more carbon sequestration overall.

Well-managed forests that provide raw materials for the industrial pellet industry and other forest products continue to have positive growth-to-drain ratios (greater than one) where forest growth exceeds harvests and carbon absorption

10 PELLET MILL MAGAZINE | SPRING 2012

rates increase year after year. The practice of sustainable rotational harvesting means that there will be a continuous cycle of new growth in the forest. Moreover, trees in their growth phase absorb carbon at a faster rate than older, mature trees.

Accordingly, the practice of sustainable rotational harvesting means that there will be a continuous cycle of new growth of the forest.

Managed forests have trees of various ages and species, sequester more carbon than older growth stands, and continually accumulate carbon and maintain stable carbon stocks. Indeed, the regular removal of woody biomass maintains and improves a forest’s health.

It improves wildlife habitat and biodiversity; it gives forest stands the light needed to not only survive, but thrive.

The majority of forestland in the Southeast U.S. is owned by small forest owners, who have owned their land for generations and live

on the revenue it generates. Strong timber markets ensure that these land owners will maintain their forests as forests and not sell or convert. If forest landowners see new markets (e.g. bioenergy from industrial wood pellets) for the trees they are growing, they will respond by growing more.

Finally, the wood pellet industry is one of the few growing industries in today’s challenged economy. It provides direct manufacturing jobs and indirect supply chain jobs in rural areas, an economic channel for forest/land owners, and wood pellet export is helping to rebalance the U.S. trade deficit. The industry model is founded on sound, sustainable forestry practices, without which the industry could not and would not succeed or survive.

Author: M. Seth Ginther Executive Director U.S. Industrial Pellet Association (804) 771-9540 www.theusipa.org

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Business Briefs

PEOPLE, PRODUCTS & PARTNERSHIPS

Vecoplan introduces new wood waste grinder Vecoplan has added the VAZ 1300 to its selection of wood waste grinders.

The system incorporates elements that improve performance, increase durability and decrease maintenance time.

Cardan shaft drives eliminate drive belts, lower maintenance costs and decrease overall machine base widths.

Double sidewalls reduce wear, eliminate contamination of bearings, as well as heat transfer to bearings, and increase durabil-

ity. Reversible counter knives deliver twice the life, and hydraulic swing-up screen carriages provide quick and easy access to the rotor for cutter replacements, tramp metal removal, and other routine maintenance. Rotatable screens can be turned 180 degrees, increasing wear life by a factor of 1.5, and externally adjustable counter knives allow the operator to maintain optimal cutting tolerances quickly and easily.

Alliance for Green Heat launches wood stove design challenge The Alliance for Green Heat has publicly launched its Next Generation Wood Stove Design Challenge. The program will highlight and promote innovation in wood stoves.

Organizations supporting the challenge include Popular Mechanics magazine, the

Washington State Department of Ecology, the New York State Energy Research & Development Authority, and the Global Alliance for Clean Cookstoves.

The deadline for initial applications is Dec. 20 and the finalists will bring their stoves to Washington for the Decathlon in November 2013. The winning design will receive $25,000 and coverage in Popular Mechanics. Second place winners will share a $10,000 award. For rules and more information about the Wood Stove Design Challenge, visit www. forgreenheat.org/stovedesign.

Eucalyptus and pine log prices in Brazil neared all-time highs in 2011 Eucalyptus log prices in Brazil reached a peak in the third quarter of 2011, but fell almost 8 percent in the fourth quarter in U.S. dollar terms, according to Wood Resources International LLC.

A hammer blow to your operating costs. The hammer mill Granulex™ is the new dynamic grinding machine from Bühler. Designed for ultimate power, Granulex™ delivers high capacity grinding up to 15 t/h for wood and 75 t/h for biomass. Heavy design and supreme ease of maintenance minimize downtime, so you can make maximum use of this productivity. It’s an investment in quality that is sure to show a rapid return – and deliver a hammer blow to your operating costs.

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Screens and hammers designed for replacement by a single person in less than 30 minutes.

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Innovations for a better world.

Prices for Eucalyptus pulpwood traded in the open market are high not only from a historical perspective, but also as compared to many other regions around the world. Only pulp mills in Europe and Australia had higher hardwood fiber costs than Brazil in late 2011, while North America, Chile, Russia and Indonesia all had lower hardwood log prices than Brazil, the world’s largest market pulp exporter, Wood Resources International reported. Wood fiber cost is by far the most important cost component for Brazilian pulpmills, more so than for most other pulp mills in the world.

Fecon celebrates 20 years Feb. 17 marked Fecon Inc.’s 20th anniversary in the forestry mulching business. The company will host a Field Day/Open House on April 26 featuring

live demonstrations, machine displays, factory tours, a night out at the ballpark, and more.

Fecon started in 1992 to serve the growing needs of the organic resource recovery industry. Its first Bull Hog was sold 20 years ago and is still running today with more than 20,000 hours on it.

Today, with 107 employees, Fecon calls its 111,000-square-foot factory in Lebanon, Ohio, home.

For more information on the event, visit www.fecon.com/field-day.

Jansen announces new senior consultant Jansen Combustion and Boiler Technologies Inc. has hired Roger Lawton as a senior consultant. Lawton began his work with the company Feb. 27 out of the Atlanta, Ga., area.

He brings to his position with Jansen more than 35 years of experience in the areas of chemical recovery and biomass boilers. Lawton holds a bachelor’s Roger Lawton of science degree in civil engineering and a master’s degree in business administration finance. He earned both from the University of Connecticut.

SHARE YOUR INDUSTRY NEWS: To be included in the Business Briefs, send information (including photos and logos, if available) to Industry Briefs, Pellet Mill Magazine, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You may also e-mail information to lgibson@bbiinternational.com. Please include your name and telephone number in all correspondence.

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SPRING 2012 | PELLET MILL MAGAZINE 13

« Feedstock

SEA OF GRAY: A pine tree forest north of Breckenridge, Colo., shows more signs of beetle damage than of forest health.

PHOTO: HUSTVEDT, WIKIMEDIA COMMONS

14 PELLET MILL MAGAZINE | SPRING 2012

Feedstock Âť

Energy-Charged

Epidemic

An exploration of the mountain pine beetle infestation reveals its depth, possible ways to combat it, and uses for millions of acres of dead wood

BY ANNA AUSTIN

SPRING 2012 | PELLET MILL MAGAZINE 15

« Feedstock Letting nature take its course has historically been one of the most effective ways to deal with natural disasters, as oftentimes these matters are out of the hands of mankind. Occasionally, however, there are ways to miti-

PHOTO: LADD LIVINGSTON, IDAHO DEPARTMENT OF PUBLIC LANDS, BUGWOOD.ORG

gate these occurrences while drawing value from them.

The great pine beetle outbreak of the Rocky Mountain West is a good example. The epidemic has swept across the forests of Colorado and Wyoming, devouring more than 3.5 million acres of forests, and it stretches all the way from Mexico to British Columbia, where more than 40 million acres are infested.

While there’s been no way to stop the epidemic, the worst in recorded history, huge efforts are being made to manage the affected forests to prevent forest fires. The harvested beetle-killed wood is being used for a variety of applications, including unique furniture, wood chips and wood pellets for heat and power production Daniel Tinker, forest ecologist for the University of Wyoming, says there are three main reasons for such a rampant epidemic, and while some of the materials should be removed and used for bioenergy and other purposes, some should be left alone.

Beetle Basics Four primary species of bark beetle are active in the Rocky Mountain West, according to Tinker. “They are all specific on different trees, so pretty much all trees have a bark beetle attacking them right now,” he says.

Adult pine beetles, precisely the size of a grain of rice, enter the trees during the summer and dig birthing galleries, where they lay their eggs. This happens just underneath the bark in the layer of the tree called the phloem, where nutrient transport takes place, Tinker explains.

Once the eggs hatch into larvae, they feed on the phloem

16 PELLET MILL MAGAZINE | SPRING 2012

PATHS OF PESTS: The destruction pine beetles cause can be clearly seen on tree trunks.

PHOTO: BILL CIESLA, COURTESY OF COLORADO STATE FOREST SERVICE

Feedstock »

PHOTO: S. SKY STEPHENS, COURTESY OF COLORADO STATE FOREST SERVICE

FALLEN FORESTS: A large swath of trees topples from pine beetle attacks.

DOTTED DEVASTATION: Dead trees in the affected areas often turn purple or red from the damage.

layer, essentially interrupting the transport of nutrients up and down the tree. “More importantly, the beetle introduces a fungus into the tree,” he says. “It’s a symbiotic fungus that relies on the bark beetle, and the larvae feed on the spores of that fungus during the winter.”

Blue stain fungus is its common name, and it clogs up the water conducting field, or xylem. Within about 60 days, the tree is dying of thirst and can’t transport water from the roots to the leaves, so it dies.

So what’s the reason for an epidemic of such a caliber?

“Conventional wisdom is that there are three reasons, and one is that we don’t have as cold of winter temperatures as we have had historically,” Tinker says. “If the winter temperatures get cold enough at the right times of the year, in early November or late April, and stay cold for several days, it can kill the larvae. We don’t have those temperatures as frequently anymore.”

The second reason is the fact that the West is coming out of about 10 years of drought, so the trees are already stressed. “A lot of the time they can fight the beetle off, if they’re healthy and have plenty of resources and water,” Tinker says. “As the beetles drill in, they’ll produce a lot of pitch and sap and (they pitch) the beetle right back out of the hole, but they can’t do that when they are drought stressed.”

Last, many of the trees across the West are just the right age and size and in the right kind of forest structure to support this kind of an epidemic. From Tinker’s perspective, there’s really nothing that can be done to stop it, but the state of the forests should begin improving. “It’s kind of running it’s course now,” he says. “The beetles are running out of resources and we’re having some wetter winters and springs, so the trees’ health is improving a little. I’m not sure we can prevent it from happening again—beetles come in about 30-year cycles—but we haven’t seen one to this extent in recorded history.”

SPRING 2012 | PELLET MILL MAGAZINE 17

« Feedstock Many people believe the pine beetle problem can be resolved by intentionally managing the forests so they are not as dense. Tinker says that isn’t necessarily true. “Forests kind of do that on their own,” he says. “And some papers have printed that we’ll lose the lodge pole pine in North America, but that’s just not true.”

PHOTO: CONFLUENCE ENERGY

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There’s a good mixture of trees left in the wake of the pine beetle epidemic, as some are tall, old trees and many are young. “So we’ll have a nice mix of ages and species, though some areas will shift to a dominant species,” Tinker says. “In my opinion ecologically, it’s been catastrophic in some ways, but it’s a big natural thinning event that probably needed to happen.”

A lot of the forest material is dead, however, and in some places it needs to be removed, especially hazard areas. “I don’t think we need to go in and clear all the dead wood out to try to prevent fires,” Tinker says. “A lot of

PHOTO: JOE DUDA, COLORADO STATE FOREST SERVICE

Feedstock » using the material for bioenergy,” he says. “We see a lot of push towards biomass electricity, but for Colorado, thermal makes sense. With the cold weather and rural communities, it’s a critical point that needs to be made.”

Managing for an epidemic that is now 3.3 million acres in size—or just slightly smaller than the state of Connecticut—is significant, particularly from a public health standpoint and in light of the energy crunch we’re facing, from Eckhoff ’s perspective. “If there is a way to address both, by using that material to burn in pellet stoves or something else, it makes a lot of sense.”

Confluence Energy, a pellet manufacturer outside of Kremmling, Colo., is one company doing just that.

Pine Beetle Pellets

Confluence Energy is one of a few pellet plants in the state using exclusively pine beetlekilled wood, and has been since 2008. CEO Mark Mathis says that while the sentiment may be that there is an excess supply of free or cheap pine beetle-killed wood for the taking, that’s not the case.

“There was a bit of a misnomer out there. People came into [some projects] thinking that there’s so much of it that it must be free, but that’s just not true,” he says. “We actually had a bit of a shortfall of wood last fall when they started pulling firewood. Part of it’s an infra-

SPREADING SICKNESS: Dead and dying trees surround a patch of forest still green and growing.

times fires are inevitable, and some dead wood is important to the ground and small animals. But, there is an opportunity to get it out in a lot of places and make use out of it, including bioenergy purposes.”

Mike Eckhoff, a forest scientist at Colorado State University, points out that biomass is the one renewable energy source that can hurt people if it’s not used. “Colorado has been at the forefront in

SPRING 2012 | PELLET MILL MAGAZINE 19

PHOTO: KENNETH E. GIBSON, USDA FOREST SERVICE, BUGWOOD.ORG

« Feedstock

SUITABLE STOCK: Damaged wood that remains upright is still usable for pellet production.

20 PELLET MILL MAGAZINE | SPRING 2012

structure issue, and since the material is often small diameter and cracked, the yields on the saw end of things aren’t very high because there are limitations on what you can do with it for higher value. The pellet side is the low-value utilization.”

So is there ever a point where the wood is so damaged it can’t be used for pellets? “The nice thing is that a lot of it stays standing vertical, and as long as it does that, it’s suitable for pellets for about five years,” Mathis says.

Confluence Energy is able to contract about 35 to 40 percent of its feedstock, and the rest is paid according to market price flow, Mathis says. And while the pellet business is rumored to be lucrative, he says right now there’s an over-capacity in Colorado, roughly 200,000-plus tons, while the whole residential market demand is about 70,000 tons. “When the pellet mills began in Colorado a few years ago it was great times, but as the cost of energy went up and more people entered the field, eventually there was this glut,” Mathis says. “It’s been kind of a boom-andbust cycle, and the warmer winters certainly aren’t helping. The trick is learning where your markets are and adapting to those conditions. Pellets

make sense from an energy perspective and public perspective, but there are other uses for this material that compliment the energy perspective, and they should be included.”

For some, vast opportunity may lie in exporting their pellets to overseas customers, but Mathis says that concept isn’t equal across the board, at least not for those located in states like Colorado. “One can only transport pellets so far, and because we’re landlocked, exporting into Europe where the market is big is not really viable,” he explains. “We may have a little cheaper feedstock, but that’s cancelled out trying to get closer to a port. Here, pellets aren’t a viable export market, and there’s only so much residential application. It’s a seasonal business, and it’s tough to run a plant 40 percent of the time and make any money.”

Along with building a pellet or bioenergy industry based on that material in Colorado come concerns about a temporary feedstock running out. “There has always been the sentiment that if you build a biomass energy industry, eventually you’re feeding the beast, but that hasn’t materialized as of yet,” Eckhoff says.

In fact, there is actually too much material being left in the woods, ac-

PHOTO: BCHERNICOFF, WIKIMEDIA COMMONS

Feedstock »

with rising fuel prices,” he says. Typically you’ll find the material is so low value, doing anything with it beyond a 15-mile radius is problematic.”

In Duda’s professional opinion, there needs to be much more action than there has been on the lands that are available. “That’s whether they are private or federal, because we can make a difference,” he says.

And if the pine beetle-affected states really want to be effective in creating a market for the wood, harnessing all possible value, that means making a broad array of products, everything from bioenergy to higher value use, Duda adds.

“We just need to capture all the value we can.”

Author:Anna Austin Associate Editor, Pellet Mill Magazine (701) 751-2756 aaustin@bbiinternational.com

SAD SCENERY: Beetle-killed trees are common in Colorado's Rocky Mountains.

cording to Joe Duda, deputy state forester at Colorado State Forest Service.

Accessibility and More “One important thing to know is that the total U.S. Forest Service landownership is about 10 million forest acres, and generally only about 2.8 million are used for harvesting,” Duda says. “In all reality, the vast majority of the mountain pine beetle-affected timber is in some form of landownership where it probably won’t be harvested. If we were extremely optimistic, we’d say maybe 20 percent will get treated, but it’s probably close to half of that.”

That can be attributed to a number of factors, including land allocation, wilderness, lack of roads, steep slopes, and unstable soil.

Overall, about one-third of the state is forested, and about three out of four of those acres are publicly owned and federally managed, according to Eckhoff. “So about 75 percent of the epidemic is on public lands,” he says.

And as Duda mentioned, Eckhoff says there are many factors that affect retrieval of the wood, factors that make utilizing it uneconomical. “There are supplies being made available, but we’ve had a number of contracts go no-bid because while the material there is relatively inexpensive, accessing, harvesting and bringing it back for manufacture and distribution is prohibitively expensive, especially

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ÂŤ International

POWER PRODUCTS: A project in San Fernando, Philippines, is making pellets from MSW for gasification and power production.

PHOTO: TRUE GREEN ENERGY GROUP

22 PELLET MILL MAGAZINE | SPRING 2012

International »

Pellets and Power

All

for

A novel and intricate project model will bring housing, jobs and clean energy to communities around the world

BY LISA GIBSON

Cecilia Huapaya has a vision of a clean planet where everyone has access to a good job that affords sturdy housing in a healthy, interlaced community. With the help of several companies and people who share her vision, she is working to make it a reality.

Huapaya is the president of CJ Consortium, a group of 26 companies, including equipment and other product manufacturers, that has helped develop a business model to build homes and produce pellets for gasification and subsequent power generation, as well as bunker oil, carbon black, fertilizer, and polyzonic acids. But these pellets and co-products won’t come from wood or agricultural biomass.

They will come from landfills and the municipal solid waste (MSW) that rots there. Whatever isn’t used for those products will be recycled to allow 98 to 99 percent cleanup of pollutant-emitting landfills in the world, according to Lucas Delorraine, vice president of international relations for True Green Energy Group. TGEG recently partnered with CJ Consortium to bring the project model to the Philippines.

“Nothing goes to waste,” Delorraine says.

The structure includes the construction of lowcost, energy-saving homes that can be purchased with low-interest mortgages by residents who will be working at the plants. For areas such as the Philippines with overflowing, decomposing landfills and electricity shortages, it could be the all-inclusive answer.

“Our concept is very different from everybody else,” Delorraine says.

SPRING 2012 | PELLET MILL MAGAZINE 23

« International TGEG began work on its pellet production and gasification project in San Fernando, Philippines, about five years ago, Delorraine says. CEO Ronald Flynn wanted to clean up landfills, while powering off-grid sites. Most areas in the country use oil, but constant power supply is a luxury afforded almost exclusively to larger municipalities. The shortage is particularly clear in the Mindanao grid, where brownouts have been frequent since the beginning of January, according to the Philippines Department of Energy.

“By doing this, we’ll be able to provide better quality of life,” Delorraine says. “Even if the place that we are putting the gasifier doesn’t have enough waste to produce pellets, we can ship the pellets and the gasifier can produce 24/7 electricity for the island.”

The gasification system that will HELPING HANDS: The manual separation line employs up to 50 people. be used for the projects was developed mostly plastics and organics, is shredded, mixed with limestone, and

by Beltran Technologies and can use either pellets or shredded MSW. TGEG produces pellets because the fed into a dryer that reaches 150 degrees Celsius and continues the mill was already set up when the company chose Beltran's system. limestone mixing step. The high drying temperature and limestone The project site in San Fernando is already producing test batches mixing, which traps heavy metals and removes contaminants, are of pellets and is awaiting installation of its gasifier, which should the secret to the innovative project model, Delorraine says. They be operational in September. The process begins with the deposit help produce a material with merely 8 percent moisture that can of garbage into a large bin, where it is sprayed with a disinfecting then be transformed into a squared pellet-type product sized someenzyme and left overnight, Delorraine says. The next morning, the where between traditional pellets and briquettes.

“At this point, we don’t call it MSW anymore,” he says. “It is garbage heads to a manual separation line where roughly 50 employees pick out contaminants and recyclables. The remaining material, RDF (refuse-derived fuel). The pellets come out really, really good.”

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Powering the Philippines

International »

PHOTO: TRUE GREEN ENERGY GROUP

and the gasifier will require 25 metric tons per day of feedstock. By July, the San Fernando mill will produce 1,000 metric tons of pellets per day.

The syngas from gasifying a product made from garbage can’t be expected to come out clean, but Beltran’s process utilizes a fiber filter, electrostatic precipitator, and a scrubber to convert the dirty, red syngas into a gas that emits a clean blue flame when burned, Delorraine explains. “What you get out is just steam. No pollution at all.” The project, and each identical system installed around the world, will be able to produce 2 megawatt hours of power for local communities.

The Philippines does have emissions regulations, but not as strict as those in other countries. Delorraine isn’t concerned, however, comforted by the fact that a Beltran gasifier in England sits next to a college dormitory. “England is really, really regulated AMASSING MSW: Before the pelletizing process, feedstock is put into a bin and sprayed with a and if it works for England, I believe it disinfecting enzyme. will work anywhere.” He adds that the The properties of the resulting densified products are currently besystem would pass even U.S. emissions requirements. ing tested, but Delorraine expects they’ll have a calorific value of The San Fernando operation has made pellets from industrial, between 25 and 30 percent. “If the pellets come up with a high residential and separated qualifi ed waste, but for now, most areas calorific value, then we have an almost perfect pellet. Not only can employing the system will provide more residential waste than oththis pellet now be used by us, it can be used by a lot of other iner types. dustries.”

The idea is a perfect fit for integration with CJ Consortium’s The San Fernando site will have more pellets than it will need home-building strategy, benefiting both organizations, as well as for its gasifier, so the excess will be sold, and numerous companies local communities.

“We’re pretty much the answer for them, and have expressed interest in purchasing, Delorraine says. Currently, they’re pretty much the answer for us,” Delorraine says. the operation processes 400 metric tons (440 tons) of MSW per day,

SPRING 2012 | PELLET MILL MAGAZINE 25

« International “We have made a joint venture with TGEG and we are now looking for a solution to the problem of waste in the world,” Cecilia Huapaya says.

Speaking in Spanish with a translator, Al Serrano, executive sales director for CJ Consortium, Huapaya explains how delighted she was when she first met with TGEG’s Ronald Flynn and discovered they shared the same passion for cleaning up waste and simultaneously advancing humanity’s existence. “I was happy to find when I reached the Philippines that Ronald Flynn had the same interest in taking to all the Third World countries the latest technology,” she says. “All countries have huge problems with landfills polluting the Earth.”

Each project site around the world will be located near a landfill and will provide housing for any homeless people who count on them to survive.

“These houses will be sold because these people that are living around there, like beggers and peasants, they’re living off the garbage; they’re eating the garbage,”

PHOTO: TRUE GREEN ENERGY GROUP

Putting it All Together

FULL-FLEDGED FACTORY: The gasification system should be fully operational and ready to take pellets in September.

26 PELLET MILL MAGAZINE | SPRING 2012

International » Serrano says, adding that the strategy will modernize those povertyridden areas. “They will have a good job, they will have health care and they will have an opportunity to own their own homes, so they’ll be proud.”

Serrano is clear in pointing out that the housing and job creation will bring prosperity for the residents and for the countries they inhabit. CJ Consortium is financing the projects as they develop, with the help of many local governments and banks offering 30- to 40year mortgages with interest as low as 1 percent. “So these people can afford to have a much better quality of life,” Serrano says. “We’re going to give them work, we’re going to give them education, and we’re going to give them decent housing.”

In addition, the project partners will give a percentage of revenue back to the communities, depending on the amount of revenue each project brings in. Serrano emphasizes that the money can be used to build schools, parks, libraries and fire stations.

For the Future San Fernando is expected to host the first fully operational integrated project, but negotiations are ongoing with the Philippine city of Manila. “We are going to clean up the Smokey Mountain landfill in Manila,” Delorraine excitedly shares. The enormous landfill causes numerous problems, including for the health of surrounding citizens.

“So the government is very interested in our project,” he says.

“Definitely there is potential for waste-to-energy projects,” says Romeo Marcos Galamgam, senior science research specialist in the Philippines DOE Biomass Energy Management Division. “It was

pegged that .3 [kilograms] of MSW per person per day is being generated. In Metro Manila alone, it can generate 6,200 metric tons of MSW per day.” He adds that the Philippines’ National Solid Waste Management Commission is pushing waste-to-energy technologies similar to the one developing in San Fernando to address the quickly filling landfills. The San Fernando project has been confirmed by the DOE, but not yet registered, he adds.

And national-level officials and groups aren’t the only ones offering support. “All the local governments in the project areas are joining us in the struggle to maintain a green planet and conserve our resources,” Serrano says.

Outside the Philippines, Huapaya is working on two contracts in Brazil, as well as others in Peru, the Dominican Republic and several countries in Africa. “We have people waiting in line, but we can only go at a certain pace,” Serrano explains, adding that the project model can be implemented anywhere and will soon be employed in the U.S., also. “We intend to start in South Caroline and Virginia.”

Although the pellet production aspect of the San Fernando project is the only one completed and hasn’t been scaled up, excitement among the developers is palpable. “This company, within five years, will have 20 to 25 plants worldwide,” Delorraine says.

“I’ve been in the oil industry a long time,” he adds. “To be quite honest, this is a beautiful project. I’ve never seen anything like it in my life.”

Author: Lisa Gibson Editor, Pellet Mill Magazine lgibson@bbiinternational.com (701) 738-4952

SPRING 2012 | PELLET MILL MAGAZINE 27

ÂŤ Innovation

DOME DESIGN: Enviva LP's Port of Chesapeake pellet storage facility is a giant white dome that can withstand earthquakes and hurricane force winds.

PHOTO: ENVIVA LP

28 PELLET MILL MAGAZINE | SPRING 2012

Innovation Âť

Obvious Originality The pellet industry is not lacking in creativity, evidenced by a number of novel project strategies

BY LUKE GEIVER

SPRING 2012 | PELLET MILL MAGAZINE 29

« Innovation The Windsor Village Elderly Housing facility in Windsor, Vt., occupies what used to be the state’s oldest prison, and had all of the old basement jail cells intact until recently. With the installa-

PHOTO: SUNWOOD BIOMASS

tion of a biomass boiler, a few changes had to be made.

The housing facility allowed its tenants to use the basement cells as secure storage units, but now the converted building, dating back to 1808, is almost jail cellfree. “We commandeered two groups of five (cells),” David Frank, co-founder of Vermont-based biomass project integrator and developer SunWood Biomass, says of his team’s work in transforming the historic building. He and his workers knocked down the walls between the cells with a jack hammer to create a long trough that would eventually feature a V-bottom interior storage design for wood pellets.

“We almost lost that project because of the historical preservation folks,” Frank says. Those folks, he explains, did not want

the grounds outside the two-century-old building to feature a storage silo for the pellet feedstock. So SunWood got creative.

The team adapted a run of pneumatic piping into six filling ports that opened into the jail cell trough. Roughly 100 feet separated the filling ports from the pellet delivery location. The piping is traditionally used in the food industry to move product between storage and processing because it offers the least amount of friction and resistance.

SunWood had to determine what air volumes and pressures were required to send the pellets from the truck to the six ports, Frank explains. “We used a couple of suppliers to help us run the test in a warehouse to see if it could be done and if the pellets wouldn’t be damaged.” They proved it was possible, and the pellets weren’t damaged, making the hidden project a success without any impact on the old facility’s character.

Today, SunWood Biomass is working on six other historic preservation sites

HISTORICAL HOUSE: A red schoolhouse at Vermont Technical College is equipped with a pellet boiler and basement feedstock storage to avoid impact on the historic building's appearance.

30 PELLET MILL MAGAZINE | SPRING 2012

Innovation » where silos cannot be used. Project developers like Frank have plenty of similar stories about projects in the wood pellet industry. It’s an industry with a surplus of ingenuity, creativity and innovation.

Equipment Ingenuity

PHOTO: SUNWOOD BIOMASS

Averill Cook of Massachusetts-based Biomass Commodities, is in Serbia helping Michelin Tire develop an effective practice to pelletize its tires. Cook knows all about the impact creative thinking can have on a difficult project, having already completed roughly 25 pellet boiler installation jobs with his team. “I think that the industry is getting more installations and being more recognized, and the concept is growing,” he says.

The availability of biomass boilers in the U.S. is indeed growing and that is where Cook sees the most innovation in the industry. Cook and his team are working with an engineering firm to install a boiler system at a community college in the Northeast. He hopes the project will start a new market.

“The system is unique because it pulverizes the pellets into dust and sprays them in,” he explains. Although this type of boiler has been around for some time, Cook says clients looking for district heating applications could benefit from employing it. The technology can be more easily retrofitted into existing boilers than a standard pellet system, and is more versatile and efficient because it is dual fuel, he explains. Operators can play the market by running different types of fuel or pellets.

Tom Miles, founder of T.R. Miles Technical Consultants Inc., shares Cook’s sentiments about the evolving landscape of biomass boilers.

“One thing that is kind of striking or compelling is the success of what they have been calling in places like Alaska the boiler in the box,” he says. The set-up utilizes a boiler placed in a durable container and installed over a poured slab roughly 15 feet by 20 feet. The simple installation can be done efficiently and economically, Miles says, citing an application at an airport in Oregon.

CLEVER CONCEPTION: An artificial hose drying tower disguises pellet storage at the East Montpelier, Vt., fire hall.

SPRING 2012 | PELLET MILL MAGAZINE 31

« Innovation ‘The initial adoption curve was very steep, but now it is becoming fairly prolific in terms of acceptance, and engineers are even suggesting planning [pellet boilers] into a project.’

PHOTO: SUNWOOD BIOMASS

—David Frank, SunWood Biomass co-founder

SHROUDED STORAGE: The hollow tower hides pellet feedstock from view and keeps the fire hall silo-free.

32 PELLET MILL MAGAZINE | SPRING 2012

The boiler-in-a-box option saves money because it doesn’t require a developer to build a separate building for a boiler, or to shoehorn one next to an existing heating appliance, Miles says. “I think that these kinds of easy-to-install, lower-cost pellet boilers are probably a good bulk market expansion strategy for these pellet producers.”

Miles hopes further innovations in boiler set-ups can correlate to the use of lower-grade fuel pellets. “The reality is, to be practical and economical, we need to be able to handle pellets that don’t necessarily meet the residential standard,” he says.

“If boilers were designed with staged combustion and staged gasification that would handle higher ash fuel…you could open up potentially lower-cost fuel markets.”

Miles, Frank and Cook all believe access to boilers manufactured in the U.S. offer their clients more options for projects in North America. And they all agree that innovation plays a huge role in biomass boiler development and conveyor system designs, whether they’re for a jail cell or underneath a parking lot.

Like boilers, pellet conveyor and delivery system installations can also use a little ingenuity. Cook has completed a project that required moving pellets on a conveyor belt underground, below a parking lot.

Biomass Commodities also has a number of projects where storage silos are more than 200 feet from the boiler room. Such challenges can be overcome, but the most difficulty comes when engineers and architects don’t understand fuel pellet handlings.

“When they do a drawing with a right angle on a fuel conveyor, you have to tell them, ‘That is not going to work,’” Cook says.

Innovation » Frank and Cook are always discovering innovative ways to move pellets and fortunately, pellet delivery trucks in the Northeast U.S. have evolved. When Frank first started helping clients bring in pellets, the norm was to use grain delivery trucks that featured a conventional airlock system.

Today he uses trucks developed in Europe specifically for pellets that reduce breakage during delivery.

Enviva LP is yet another leader in pellet industry revolution. Its Port of Chesapeake, Va., storage silo dome, 157 feet tall and 175 feet wide, can withstand hurricane force winds and earthquakes, while maintaining a controlled temperature for optimal pellet quality. It allows storage of up to 50,000 metric tons of wood pellets. “It is critical for us to have a storage system that is designed specifically for wood pellets,” says Elizabeth Woodworth, the company’s director of marketing, communications and sustainability. The system, she says, includes more than 100 temperature sensors that allow an operator to monitor the temperature of the stored pellets at any time via computer screen. That operator, she adds, can control the temperature of the dome by switching a ventilation system on or off. Woodworth says there is virtually no chance of fire or sparks because Enviva is currently installing an injection system to put out any sparks. Of all the elements that make the system innovative and unique, Woodworth says safety is the number one aspect the company was focused on when it designed the dome.

Clearly, pellet use today is a combination of creative thought and remarkable implementation skills. In the Northeast alone, Frank and Cook have completed installations at churches, garages, schools, old prisons, and firehouses. Frank also has projects in Utah, Alaska and elsewhere. “We completed a project with a fire department where they didn’t want the sight of a silo outside a brand new modern-looking building,” Frank says. So he and his team crafted an artificial tower, similar to those used for hose drying, for pellet storage.

People are Talking Cook says such ingenuity in the pellet industry is drumming up more discussion.

“The culture is starting to turn and with the higher oil prices people are going to start looking more at this,” he says. That means school districts looking to save money, new hospitals looking to secure future heating costs at a stable price, or the engineers who help design the projects. “The engineering firms keep on coming back,” he adds. “They are excited about [pellet projects] and they are very proud of it. They start to tell more people about it and the snowball is getting big.” And with oil prices rising, that snowball is only going to roll faster.

Frank would agree. “The initial adoption curve was very steep, but now it is becoming fairly prolific in terms of acceptance, and engineers are even suggesting planning [pellet boilers] into a project.” He attributes that turn of events, in part, to the fact that the necessary equipment already exists, even though each job will bring new project planning and implementation strategies. And with further innovation still coming down the pike, the job will only get easier, and busier.

Author: Luke Geiver Associate Editor, Pellet Mill Magazine (701) 738-4944 lgeiver@bbiinternational.com

SPRING 2012 | PELLET MILL MAGAZINE 33

ÂŤ Standards CONTRIBUTION

Forest Certification: Opportunity and Challenge for the Wood Pellet Industry Forest certification standards are increasingly important in the pellet industry, but can be confusing to producers and customers alike

BY SCOTT BERG AND RON LOVAGLIO

The surge in energy costs, the new direction toward renewable energy sources, and European initiatives to limit carbon emissions all have created a tremendous opportunity for North American wood pellets.

In the wood products industry, however, you can’t go very far without hearing the word green. Customers are demanding assurances that the wood products they buy are from legal and sustainable sources. And they often purchase with a preference or

34 PELLET MILL MAGAZINE | SPRING 2012

requirement for wood products that are independently certified to a recognized forest certification standard.

But forest certification is an alphabet soup of standards, claims and labels, all of which can be confusing and overwhelming to those in the pellet industry who have other demands on their time. Thankfully, help is available from standard-setting organizations, trade associations and consultants.

Demand for Pellets RISI projects that by 2014, demand for North American wood resources for pellet production will grow to around 30 million green tons.

In 2008, more than 80 percent of U.S. pellets were used domestically, while 90 percent of Canadian pellets were exported to Europe, according to the U.S. Forest Service.

Interest in North American pellets continues to grow because of constrained wood supplies in Europe and regulatory mandates to

The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Pellet Mill Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

Standards »

North American Wood Biomass Demand

Includes wood use among projects with confirmed start dates.

SOURCE: RISI WOOD BIOMASS MARKET REPORT

increase the use of renewable fuels. Because wood pellets are cheaper than solar and wind power, demand for them is expected to explode.

The use of wood for pellets, however, is causing concern among environmental activists, government agencies and competing sectors of the forest and paper industries. A study by a team of environmental organizations, including the National Wildlife Federation and the Southern Environmental Law Center, says the atmospheric impact of biomass production, at least in the short term, is not carbon neutral. But a number of studies argue otherwise.

While early domestic pellet demand was mostly bags for fireplace inserts and freestanding stoves, bulk delivery is increasing with greater demand for industrial boiler feedstock. In Europe, bulk deliveries to electric power plants are common, as power generators are under pressure to increase their use of renewable fuels by up to 20 percent.

Pellets are an excellent supplement to coal in power plants and can reduce carbon emissions by about 15 percent without disrupting current power plants and industrial processes, according to the February study “Biomass Supply and Carbon Accounting for Southeastern Forests.” With about half of the electricity in the U.S. produced by coal plants, a domestic switch to wood pellets represents another huge market opportunity.

Certification As with any fuel source, customers want to know where the feedstock comes from and if it is sustainable. Third-party certification is a valuable tool to reassure them that pellets come from sustainably managed forests, eliminating the need to continually justify that the resource is renewable. It is a growing criterion for export to Europe, where numerous policies mandate renewable energy production.

The Sustainable Forestry Initiative, American Tree Farm System, Forest Stewardship Council, and Program for the Endorsement of Forest Certification are the largest forest certification standard organizations and systems in the world. SFI and FSC are recognized in the U.S., while FSC and PEFC have solid reputations in Europe. Moreover, PEFC recognizes the SFI and American Tree Farm Standards as criterion for its Chain of Custody program.

All major certification programs include chain-of-custody standards and land management standards. The latter require protection of water, wildlife, visual quality, special sites and other important resources.

Chain-of-custody standards allow consuming mills to track wood inputs back to independently certified forests. All programs mandate compliance with national laws and regulations, as well as different balances between social, environmental and economic considerations.

SPRING 2012 | PELLET MILL MAGAZINE 35

ÂŤ Standards

About 19 percent of U.S. commercial forestland is certified to three major U.S. standards, but certified lands are not evenly distributed. Most are located in the lake states, in the midst of large state and county public ownerships, while the majority of forestlands in the south are owned by small private family owners and are not widely certified. The challenge for the U.S. in general is the roughly 10 million fiercely independent family forest owners who own 60 percent of the forest land.

SFI incorporates a third approach to its standards: the certified sourcing claim, by which consuming mills that procure wood can also be third-party certified to use the SFI claim and label. While not a chain-ofcustody certification, the certified sourcing procurement standard requires promotion of sustainable forestry with those that own the forests, but does not require that landowners undergo separate third-party audits of their forests.

Rotary Dryer

To make a chain-of-custody claim where certified and uncertified wood is mixed together, the uncertified portion of the wood supply must be from sources that meet the respective FSC controlled wood and/or the SFI and PEFC noncontroversial criteria.

The FSC controlled wood standard dictates five categories that must be avoided: illegally harvested wood; wood harvested in violation of traditional or civil rights; wood harvested in forests where high conservation values are threatened by management activities; wood harvested in forests being converted to plantations or non-forest use; and wood harvested from forests that contain genetically modified trees.

Claims and Labels The home or bagged pellet market offers a real opportunity to prominently affix an on-product label to packages. That creates, in theory, demand pull where discrimi-

m rgy Syste Heat Ene

nating consumers look for the certified pellets the next time they shop. The most common on-product labels are attractive and help communicate certification efforts to the customer. Each standard has rules for the use of its trademarks and labels.

Wood products customers have adopted procurement policies seeking to weed out wood that is not legally sourced or from sustainably managed forests. The European Commission recently adopted a regulation that will require operators, including importers, to exercise due diligence to assure legality. “Certification has been one of the tools to encourage the sustainability of forest management and allow consumers to discriminate positively in favor of wood products originating from sustainably managed forests,� reads a statement from the European Commission.

But some customers do not understand the different and often competing certifica-

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Standards »

tion standards. It is also understandable that pellet manufacturers don’t know where to start and are equally confused by the array of standards, claims and labels. Many procurement policies support major certification schemes to ensure maximum availability of certified wood inputs.

Companies in other sectors of the wood and paper industry can attest that without substantial assistance, they would not be able to achieve certification in a timely and efficient manner. Because pellet manufacturers are in the middle of the supply chain between their customers and the wood supply base, it is critical to understand which certification standards are the best.

So, what’s a pellet company to do to satisfy its customer base and ensure market access? Clearly, pellet producers need to take steps to address the new market realties dictated by the increasing demand for renewable, certified products.

Certification Process Pellet producers interested in certification should first conduct an internal gap analysis addressing demand for certified product, type of certification needed (chain-of-custody or certified sourcing), availability of certified wood inputs, market opportunity to label product, and whether customers are willing to pay a premium for certified wood pellets.

Next, producers need to compare their situation to the standards in order to determine which certification protocol best fits their objectives. Discussions with the standard-setting bodies, trade associations and specialized, experienced consultants can simplify the process.

The U.S. wood pellet industry is no longer below the radar. While hurdles such as wood supply, transportation and markets still linger, certification removes consumer and environmental group concerns, perhaps before they even develop, and favor-

Explosion Protection Codes and Regulations Overwhelming You?

ably positions the pellet industry squarely in the renewable clean fuel camp.

Those pellet producers who get ahead of the learning curve have a better chance at being successful. Those who do not address customer concerns about the sustainability of the forest could face a number of jarring speed bumps along the way.

Producers should ensure that they know more about forest certification issues and applicable standards, claims and labels than their customers do, and that they are prepared to assure customers that their wood pellets are legally and sustainably sourced.

Authors: Scott Berg R.S. Berg & Associates, Inc. (904) 277-4596 RSBergAssoc@aol.com Ron Lovaglio Ron Lovaglio, LLC (207) 660-8561 RonLovaglio@roadrunner.com

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To find out more about the benefits of joining PFI, visit the PFI website at www.pelletheat.org and click on Join PFI. PFI is a North American trade association promoting energy independence through the efficient use of clean, densified biomass fuel.

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