Are pellets going to be impossible to find soon?

[MCPO]

John,

Fuel wood is available in thousands of places - like the woods behind my house! It can be harvested by anyone with a chain saw.

It is hard to say that anything which is manufactured and transported and involves millions in equipment is more reliable. ???

Using the simply rules of supply and demand, there are certainly more firewood processing operations in the Northeast than there are pellet mills. Also, a new one can be set up for as little as 250K worth of equipment (processor, truck, etc.), so the capital cost is tiny compared to pellets.

Pellets have a lot of advantages over fuel wood, but a dependable source of supply is not yet one which is proven by history.

OK, some good points to think about and hash over.
Keep in mind that not all fuel wood users have woods behind their homes and we don`t all live in rural Maine.
Fuel wood is definitely standing in thousands of places but certainly not available to everyone and certainly not all of it is there for harvest purposes . We also have to assume not everyone has or uses a chainsaw let alone a truck to transport it with.
Most folks who purchase fuel wood would still have to depend on someone else to find a woodlot source or purchase (hardwood only ) logs transport them to a processing location , then on to cut, split , and transport it to their customers. This will surely lead to an across the board increase in costs too.
Having burned wood thru 12 heating seasons my heat supply was always dependant upon the provider , his present health , his help , his log availability , and his time schedule.
I just called my local pellet dealer (lumber yard) and they admitted to have run out of pellets last year for a short period. His come in by RR car and from different sources and this year he is trying to make adjustments to prevent a run out but he cannot gaurantee a continuous supply either. So maybe neither source would be considered to be absolutely dependable as there are no guarantees with anything so having a backup has to be the prudent thing .
Yeah , burning wood can be good for a few industrious souls but as an industry I have to think it pales compared to a pellet operation but the fact that it is a far more simpler operation backed by centuries of experience it has been reasonably consistant.
John

 

[burntime]

I hope you are right, sucks to have equiptment that can not be used!

 

[compressedwoodsupplier]

but switch grass leaves behind more ash content also. not sure i want to deal with that can of worms they are considered a economy pellet

 

[MCPO]

I would like to wade in here with a few comments.

Europe is about ten years ahead of us with regards to using pellet fuels.


Rich

Hi Rich,

I assume you are talking about pellet useage (as you stated above) and not the technical aspect of burning pellets.

9-10 years ago I purchased a new European (made in Belgium or France) Franco Belge cast iron / steel #2 fuel oil stove (catalytic type) from my fuel oil distributor . I can recall it touted (advertised) as being years ahead of anything in the US used to burn fuel oil.
It has run flawlessly for 9-10 years in my totally finished basement having replaced the wood stove used there for the previous 12 years. We always loved having a stove of some kind in the house. Always cozy during the cold winter .
But the reality has always been that it did in fact use more fuel than my new (at that time) Burnham oil burner/ boiler did heating the same space , but fuel oil being reasonably cheap for those past years it was well worth having the luxury of a clean burning , quiet , no work or electricity involved , fuel oil stove in the middle of the room.

My point above is that I wouldn`t take for granted that Europe is ahead of us technologically with regards to heating equipment.
I think they make do with less whenever possible and maybe even whine less too.
That said they do have some interesting products that we could benefit from.
John

 

[lessoil]

Looks like another plant here in the NorthEast.

Berlin N.H.

See below:

(broken link removed to http://www.boston.com/news/local/new_hampshire/articles/2008/03/17/nh_to_help_wood_pellet_plant_with_wetlands/)

 

[MCPO]

Looks like another plant here in the NorthEast.

Berlin N.H.

See below:

(broken link removed to http://www.boston.com/news/local/new_hampshire/articles/2008/03/17/nh_to_help_wood_pellet_plant_with_wetlands/)

Yup, this this article bears out and re inforces the high probablility of re-deploying the lagging logging industry in another direction to support the ever increasing pellet industry.
News of the logging industry death has been greatly exaggerated.
This could very well be another shot in the arm with regards to pellet users worrying about pellet availablity.
John

 

[JustWood]

OK, OK, Uncle , You guys are killin' me with #4.
What you guys don't understand is with lumber markets down and all the mill closings the supply of sawdust is very low. Right guys , I think we all agree on that. BUT when logging for grade lumber is not taking place then pulp/polewood is not being produced either. Pulp is a byproduct of logging. It is not cost effective to produce pulp ONLY. Ya sure , there is always gonna be some dilhole logger out there that will deliver pulp at a loss but it's not gonna happen on a large enough scale to supply a pellet plant. SO , these pellet mills that have diversified into chipping pulp for raw material are still screwed unless they make it more cost effective to the logger to produce JUST pulp. In other words raising their scale prices dramatically which in turn will be passed on to YOU the consumer.
I know buyers and informed people on the inside of the forest products industry and they are all telling me to "go fishing" for at least the next year.It's gonna get uglier before it gets better but when it turns around the guys who survived this downturn will be winners in a sellers market.
Don't hold me to it but I'm predicting a substantial price increase in pellets by fall and possible supply issues. I'm not coninced that pellet suppliers are aware of or paying attention to what is going on in the raw material supply chain. I seriously doubt pellet heating costs will anywhere near equal oil but I do know that prices will go up.

Ok ,now go ahead and put me out of my misery with one last bullet! LOL

Well, you won`t get any points from me for predicting pellets will go up . Any product associated with transportation costs are expected to rise but the question from the OP is "are pellets going to be impossible to find" ?
You have to ask yourself if those new plants are being built with little to no planning regarding the procurement of wood product or do you know something they don`t?
Pellets will also certainly have to maintain a significant cost advantage over oil or the industry will die.
If and when the price of pellets get too close to the price of oil ,pellet burning will serve no useful purpose anymore .
The work / storage /inconvenience/etc associated with a pellet stove can be written off to the money saved but when that savings diminishes so will the demand for pellets.
John

Read my post a little closer ,I did predict supply issues.
I don't have a crystal ball so I can't tell you how bad it's going to get.
I'm done trying to split a yard grown sugar maple crotch here !!
BUT . I WILL BE BACK IN NOVEMBER TO TELL ALL YOU DOUBTING THOMAS' I TOLD YOU SO I TOLD YOU SO I TOLD YOU SO with absolutely NO remorse.
I don't own a pellet stove.
I don't sell my sawdust to pellet makers because they don't pay didly squat.
And I don't care if you guys pay $400/ton or just can't get them. I burn wood. Just trying to save a fellow man some bucks or aggravation this fall by letting you guys in on what I know. Like Craig said it's in their (pellet makers and distributors) best interest not yours , to tell you there are no issues with supply. Because if they did you would all sell your stoves and burn wood , coal, corn or kidney beans!

 

[webbie]

Again and again I hear the exact same stuff - word for word - that I heard in 1994 and again in 2004 - about cardboard, peanut, grass, hay pellets - amazing supply, low prices, etc.

After I heard it in 1992-1995, a number of pellet mills closed their doors and ceased to exist....

After I heard it in 2004, we had a shortage in 2005 which almost wiped the industry off the map (stove sales down 50% in one year).

We can speculate until the cows come home, but the bottom line is that no one knows. The Euro is worth a lot right now. What is stopping those pellet plants in Maine from selling MOST of their pellets to Europe? Does paper and construction lumber cost less in Maine because it is made there? (I assume not).

Anyway, I think we have heard most sides of the story. As we have all agreed many times before, we don't know and can only accurately gauge this when looking back. Still, folks should not dismiss information from the "inside" from folks like LEE and Eric Johnson......guys who have been involved personally in the business and have their finger on the pulse. Anything can happen, but history and experience are usually the best predictors of what WILL happen.

 

[mkmh]

Ok, ok...I got motivated enough to purchase 2 more tons today. (that makes 5 which is what I used this past year)
I called 3 places (2 NH, 1 in Maine) and all 3 had plenty on hand.
Best price was for Corinth Pellets from Great Works Pump Co in Berwick
244 per ton plus 30 bucks for delivery. 518 for 2 tons delivered...apparently their pre-buy ended last week (I could have saved 30 bucks!)
So now I can put it out of my mind for a year.

I'm going to remain optimistic and hopeful that the industry will step up and capitilize on the opportunity in the marketplace....but just in case the drop the ball, i'm covered for another year

 

[JustWood]

Holy sheet ! Their pre-buy is over already ! What would that tell ya !

 

[mkmh]

Every year I have ever bought pellets the pre-buy ended June 1st.
All 3 dealers acknowledged they were getting plenty of calls. No doubt demand is up.

 

[lessoil]

mkmh,
Same here.
I will be ordering 5 tons this week.
Hopefully they will be available.
As far as next year, we will see.

Need to order that stove before they are sold out!

Today's oil price at Dead River was $4.64/gal!!
Ouch!!

 

[JustWood]

Again and again I hear the exact same stuff - word for word - that I heard in 1994 and again in 2004 - about cardboard, peanut, grass, hay pellets - amazing supply, low prices, etc.

After I heard it in 1992-1995, a number of pellet mills closed their doors and ceased to exist....

After I heard it in 2004, we had a shortage in 2005 which almost wiped the industry off the map (stove sales down 50% in one year).

We can speculate until the cows come home, but the bottom line is that no one knows. The Euro is worth a lot right now. What is stopping those pellet plants in Maine from selling MOST of their pellets to Europe? Does paper and construction lumber cost less in Maine because it is made there? (I assume not).

Anyway, I think we have heard most sides of the story. As we have all agreed many times before, we don't know and can only accurately gauge this when looking back. Still, folks should not dismiss information from the "inside" from folks like LEE and Eric Johnson......guys who have been involved personally in the business and have their finger on the pulse. Anything can happen, but history and experience are usually the best predictors of what WILL happen.

Last Thursday I sat down with my high grade export log buyer to have a few hydraulic sandwichs and a few chicken wings. He told me "don't be bidding on any timber with alot of high grade because the market is DEAD" . Now this is unheard of even when the domestic lumber markets are down export logs always move and I told him that my mill was sold and I was just sitting back taking the ride with every other log jockey out there. I asked him " If foreign currencies are at an all time high then we should be exporting logs like nobodys business and what is causing this to take place"? He said this housing crisis is worse than most think AND it's WORLDWIDE. Everyone that has cash is holding onto it. Makes you really wonder whats in store. The value of the euro could play a HUGE role in pellet supply.

 

[Snipe]

Regarding Pelletsales.com, I called them last week to find out how far north in Maine they delivered and he said that the only way to tell would be for him to do the same thing that I would do and that is to input my zip and other info into the website and find out that way. He said that obviously I/he couldn't do that right now because the system was not working at the moment and giving the message that they are not taking more orders for early buying. He said that that would change in a couple of weeks and that they would be taking orders again after the pellet suppliers take a breath due to the overwhelming demand for pellets at the moment. Whatever that means.


Just to let you know what I was told.

Mark

 

[sinnian]

Regarding Pelletsales.com, I called them last week to find out how far north in Maine they delivered and he said that the only way to tell would be for him to do the same thing that I would do and that is to input my zip and other info into the website and find out that way. He said that obviously I/he couldn't do that right now because the system was not working at the moment and giving the message that they are not taking more orders for early buying. He said that that would change in a couple of weeks and that they would be taking orders again after the pellet suppliers take a breath due to the overwhelming demand for pellets at the moment. Whatever that means.


Just to let you know what I was told.

Mark

Mark,

They were not being 100% accurate with you. You can still order (or check to see if they will go to where you are in western Maine) by going through (broken link removed) , fill in your amount of tons and your zip code and it will take you to PelletSales.com where you can STILL order pellets.

 

[JustWood]

Regarding Pelletsales.com, I called them last week to find out how far north in Maine they delivered and he said that the only way to tell would be for him to do the same thing that I would do and that is to input my zip and other info into the website and find out that way. He said that obviously I/he couldn't do that right now because the system was not working at the moment and giving the message that they are not taking more orders for early buying. He said that that would change in a couple of weeks and that they would be taking orders again after the pellet suppliers take a breath due to the overwhelming demand for pellets at the moment. Whatever that means.


Just to let you know what I was told.

Mark

Hmmmmmm.
Pelletsales online ordering system down !
Not taking orders for a couple of weeks!
Pellet manufacturers taking a breath !
Whaaaaat , could it be................. ! ??????????????
NOPE, everything is just fine in Pellet Land , carry on folks, as you were. No need to read into this and jump to conclusions given the facts already presented.







Craig, you thinking what I'm thinking?

 

[webbie]

A Run on the Bank, so to speak....

Of course, the other side of the coin is that it can all loosen up within a matter of weeks or months. I've seen both (or many) sides of the coin!

For instance, the first BIG woodstove demand worked exactly like this - stoves started selling.......then sales blew through the roof in a matter of weeks when there were gas lines and 3 mile island, etc. (1979). So, there was a run on the bank. Dealers ordered 10X as many stoves as they needed - hoping they would get at least SOME. Manufacturers took the bait and produced all they could....guess what happened when the dealers got a phone call from the makers saying their truckload was ready? Yes, the dealers said they didn't need them, and 1/2 or more of the manufacturers ended up going out of biz in the next year or two.

So it works both ways. It could be that Pellet supply will build....and all of a sudden the Europeans won't want them and some middlemen might cancel their orders - and then you will see cheap pellets.

I'm on record here officially saying anything could happen. Just like the stock and commodity market. Chances are that pellets will find a range (in new england) of $225-$290 a ton delivered...which would be good considering current oil prices (for those who use oil!).....

There is so much of this that we don't know - for instance, what contracts that Home Depot, Lowes and the other big guys have. These companies will not always get the top dollar they can...they will often use a formula based on what they paid, not the replacement value (or "take advantage" value)....so that will help.

 

[RedRanger]

Actually Lee: I have to agree with you in the short term analysis, and disagree in the long term. Here is my reasoning.

Those same huge corporate entities that are downsizing right now cause they can`t even sell logs for export are going to look for something that is marketable-ie: pellets. Nothing,but nothing beats a homegrown maket. If things don`t improve with lumber,pulp, log exports? Then if they are intelligent? they will reinvest into harvesting for pellet material, and plants to produce them. It`s a win,win, no protestors? cause they are logging for a renawable heating source, helps to take away the dependence on foreign oil, provides jobs for americans and canadians, etc. And they can then market the equation that they are doing their best to keep us all warm.

There will be a lag time though, just like it has taken GM and Ford to wake up to the fact that we, the consumer are way ahead of them in forward thinking. It will happen,if for no other reason it is a sure and perpetual way to make a buck and keep the shareholders happy. I can see the day coming when most of our forests are used for home-heating and less and less for lumber, it just makes sense, we can`t compete with foreign labour to make the finished product, but we can more than compete when it comes to keep half of the US and all of Canada from freezing. And you can take that to the bank, my good friend ;-)

If you look around the corner, you can see this coming. only negative is pellet prices will rise, but unlike oil, there will be no question of them being unavailable. they will be there to heat your home. cause people will profit from it. still will never be as economical as wood heat though.

 

[webbie]

Hey, BC, your guess is as good as any....

But let me know when GM and Ford have a bunch of cars for me. The news says they are still firing people and closing plants. Not a good example of adaptation.

Also, it's a new world out there. The big money of the future involves things that are not made of logs and sawdust. I listen to a lot of podcasts featuring venture capitalists, and the big ones will not touch something like this.....not because of the risk - they gladly take risk. But because of the lack of reward. If it's not gonna make hundreds of millions in profits, it's off the radar screen.

There is small "venture" and "angel" money going into the stove and biomass biz....but the relative amounts are tiny compared to big solar, wind, electric cars, biodiesel and everything else. Sadly, wood stoves and residential biomass have - so far - stayed off the radar screen of the populist green revolution.

These day, when I look at a business (to invest, or even consider starting), I look at moving the LEAST weight for the most $$$. I suppose that is somewhat true of the big guys too!

 

[RedRanger]

Hey, BC, your guess is as good as any....

But let me know when GM and Ford have a bunch of cars for me. The news says they are still firing people and closing plants. Not a good example of adaptation.

Also, it's a new world out there. The big money of the future involves things that are not made of logs and sawdust. I listen to a lot of podcasts featuring venture capitalists, and the big ones will not touch something like this.....not because of the risk - they gladly take risk. But because of the lack of reward. If it's not gonna make hundreds of millions in profits, it's off the radar screen.

There is small "venture" and "angel" money going into the stove and biomass biz....but the relative amounts are tiny compared to big solar, wind, electric cars, biodiesel and everything else. Sadly, wood stoves and residential biomass have - so far - stayed off the radar screen of the populist green revolution.

These day, when I look at a business (to invest, or even consider starting), I look at moving the LEAST weight for the most $$$. I suppose that is somewhat true of the big guys too!

It`s not going to happen because I said it was. It will happen out of neccessity-Period!! And the pellets very well may equal the price of oil, specially if the big guys get involved,.. sniff,sniff, do I smell cartel? homegrown? but it will be available, but at what price??

Thought I covered that snippet about GM and Ford by saying we the consumer are way ahead of them. that is why they are losing market share? maybe craig should reread my original reply? I commended you for the new gas forum. but don`t forget that is also a non-renewable resource-cheap as it might seem right now, it too will go up in price as reserves decline. And decline they will.

There is nothing negative in the future-unless you want to make it so. I still say that north america has a large enough economy to be self-sustainable. we have forests that are being re-planted, and can heat our homes in perpetuity. Big market shift to be sure, but lots of profit to be made also.

Even BB refers to me as sonnyinbc, now you refering to me as bc, hmmm, so you are thinking of yourself as AD I guess? more advanced than bc? bc being more cro-magon, or something. thanks a lot. :down:

 

[gw2kpro]

I'm probably too simple of a thinker, but having recently purchased a pellet stove.......... I'd rather that people were buying pellets like mad (like they are today) than having declining demand.

To me, strong demand means this technology is likely to stay around for awhile, and I'd burn my stove if the price of pellets was exactly equal to the price of oil.

 

[RedRanger]

I'm probably too simple of a thinker, but having recently purchased a pellet stove.......... I'd rather that people were buying pellets like mad (like they are today) than having declining demand.

To me, strong demand means this technology is likely to stay around for awhile, and I'd burn my stove if the price of pellets was exactly equal to the price of oil.

Read my reply and take it to heart! Price is equal, so what, means jobs right here. and a renawable supply. You can bet your ass the way things are going, the middle and big corporations will be looking at this as serious business, and renewable profits for years to come. And that is key, renewable profits.!!
!!

 

[sinnian]

If there were not pellet mills springing up still I might see the "sky is falling" argument. However, companies ARE still building pellet mills. That takes money, i.e. venture capital. So SOME people with deep pockets and a vision think there is money in pellets.

Although it may not pay as much as the loggers would like, if the wood industry goes in the direction Lee and his insiders say it will, they can still provide the raw materials for pellets.

Work and 'some' money still pays better then "fishing for a year".

 

[compressedwoodsupplier]

I am trying to get ahold of someone at pelletsales.com to see if i can become a dealer for them up here in maine to help them cover the state of maine but doesnt seem like they are to eager to do anything. But for now i can say if anyone in maine needs any pellets to please contact me via pm or by phone 207-542-0834 delivery is available.

 

[mkmh]

One other "X" factor that could into play is Government Tinkering. For many years they've actively propped up oil companies and more recently the ethanol industry with subsidies etc. Well I think the political winds are finally starting to change on that.
I got a flyer last week for Adam Cote Maine democrat for congress. Don't know much about the guy, but his literature got my attention. On page there there is a picture of a set of hands sifting through....beautiful wood pellets!
Turns out this guy has an energy plan for the state that is designed to give a boost to the pellet industry and help to start reducing our dependence on foreign oil. The guy is an Iraq War Vet so a big part of his message seeems to be not letting our energy needs cloud our foreign policy decisions.
I'm not endorsing the guy (yet) but he has my attention.

Anyhoo -- a lil gubbinmint tinkering could give the industry the boost they need to get this sawdust shortage figured out.
A little optimism people! We don't have to bury our heads in the sand, but the doom and gloom isn't going to get anything done.

No doubt growing pains in the industry are coming, but long term I think the conditions could be right to take the industry to the next level. I'm not thinking we'll ever have a majority of people in the US heating with Pellets, but I could see more than 50% of Mainers (and select other states) heating with pellets in 20 years or so.