Wood pellets: US Less Known Energy Boom

Wood pellets: US Less Known Energy BoomWood pellets: US Less Known Energy Boom

Deep in the forests of the US South, tree scraps are fueling a little-known but controversial energy boom: wood pellets. Long used to heat homes in the country's Northeast, they're now destined for a new market.

Europe is importing the pellets in ever higher volumes, burning them for electricity to meet renewable energy targets. The demand has transformed the US industry, prompting a doubling of biomass exports last year, the National Geographic reported. More than half of the exports go to the United Kingdom, where the utility Drax is converting three of its six power plants to burn wood pellets instead of coal. Drax is setting up shop in the US to feed those plants, building two pellet mills in Louisiana and Mississippi that are slated to open next year.

Maryland-based Enviva, a Drax supplier, has opened five wood pellet mills in the last four years. At least four additional export-focused plants are under construction in the South, and a handful of others have been proposed, according to a database at Biomass magazine.

The pellet boom is not without controversy. While it hasn't generated the headlines or large protests that have accompanied the surge in US oil and natural gas production, there's still debate. The pellet industry says it's using wood by-products that would otherwise go to waste. Critics say the expansion hurts forests and does not help the climate.

Unlike fossil fuels such as coal and oil, wood is a renewable fuel: Where one tree goes down, another can grow. As a weapon against climate change, however, harvesting mass quantities of forest and shipping them across the Atlantic has drawn skepticism. A few years ago, about 80 percent of wood pellets produced in the US were consumed domestically, mostly for residential heating. Facing high oil costs and a lack of cheaper natural gas during recent freezing winters, Northeasterners have driven record demand for wood pellets. With global demand for wood pellets set to double over the next decade, the pellet industry is expanding in the southeastern United States. The South holds about 40 percent of the country's timberland, which has long supplied the lumber, pulp, and paper industries.

  Small, But Significant Change

While pellet mills alone are not likely to lead loggers into a stand of trees, environmental groups say increased demand for the lower quality wood on any given acre could create more incentive to cut natural forests or convert them to pine plantations. "The issue isn't just about acres of forest, it's about quality of forest," said Debbie Hammel, senior resource specialist at Natural Resources Defense Council (NRDC). She pointed to the south's dwindling bottomland hardwood forests, a critical wetlands habitat that helps preserve water supplies and is home to songbirds, Louisiana black bears, and other animals.

Hammel disputes the industry's suggestion that it is only using timber leftovers. "It's a bit misleading to use the term residue," she said, saying that wood pellet mills are taking "essentially everything that wouldn't go to a very selective sawmill." Without the wood pellet industry, she said, those younger trees would continue to grow, sequester carbon, and continue to provide habitat.

Only 10 percent of the remaining bottomland hardwood forest is legally protected from commercial activity, Hammel said. The NRDC wants to see stronger safeguards put in place to ensure that commercial activity in natural forests does not harm the ecosystem. The increased demand for pellets, Abt said, has led to higher pulpwood prices and an increase in wood harvesting. That's not necessarily a bad thing, from a carbon perspective.

  No Clear Answer on Climate Impact

Both industry and environmental groups point to a UK government analysis on the issue. Released in July, it looked at whether using North American wood to generate British electricity can truly cut down on greenhouse gas emissions. It found that using some types of biomass—"wood from a forest that would otherwise be harvested less frequently," for example—would actually send more carbon into the atmosphere than would burning coal.

The UK study, along with new guidance from the US Environmental Protection Agency, shows that determining the carbon benefits of biomass is anything but straightforward. Ironically, the economic and ecological impacts of the wood pellet industry growth might not be clear until the demand itself has flattened or fallen. After all, growing new trees takes a while—and so does forestry research.