Published: Monday, July 22, 2013 at 3:14 p.m.
A worker piles wood pellets at a holding facility at the Georgia Ports Authority in Brunswick, Ga., in 2011. Courtesy photo
Energy policy changes across the Atlantic could affect how long
the boom in the U.S. wood pellet industry will last, forestry experts
and industry opponents say.
But the company that
plans to invest millions into building a pellet-exporting facility at
the Port of Wilmington says those changes were long anticipated and have
provided certainty for the industry to continue rapid growth.
The
United Kingdom, where North Carolina's pellets will be shipped, is
changing some of its rules that favor use of pellets in place of coal.
It is cutting out subsidies for new power plants that would burn pellets
while eventually ending them for plants that are converting from coal
to pellets, according to news reports.
The
U.K.'s decisions "give certainty to the major utilities there so they
can make good investments in converting existing coal-fired plants to
biomass (wood products) plants," Enviva Chairman and CEO John Keppler
said Monday.
"We have some pretty aggressive plans under way" for the Port of Wilmington and elsewhere in North Carolina, he said.
Enviva
has two pellet-producing facilities in North Carolina, at Ahoskie and
Northhampton, and has identified several sites in the state for a
possible third facility, Keppler said.
Enviva
plans to build two concrete storage domes, rail and truck unloading
stations and a ship loader/dock-conveyer system at Wilmington. Enviva is
not involved in pellet-exporting plans at the Port of Morehead City,
which have been scaled back. The cutback is unrelated to European
environmental policies, said Laura Blair, spokeswoman for the N.C. State
Ports Authority.
U.S. production of pellets is
expected to increase from 3 million tons in 2009 to 10 million by 2015,
according to a study by Daniel Saloni of the Department of Forest
Biomaterials at N.C. State University.
There
are or will be six Atlantic ports handling wood pellets between Norfolk
and Brunswick, Ga., according to the Southern Environmental Law Center,
an environmental advocacy organization based in Charlottesville, Va.
Pascagoula, Miss., is joining the push, planning to spend $30 million to accommodate future pellet exports.
Viable business?
But some question the limits of the wood-pellet export boom.
Opponents
of the industry are arguing that burning wood pellets to produce energy
not only doesn't make environmental sense but that it eventually won't
make economic sense, either.
In
addition to the U.K.'s new biomass subsidy policy, Europe is looking at
whether it will require stricter requirements that the wood it receives
from the United States is third-party-certified as sustainable,
according to Dennis Hazel, associate professor and extension specialist
for the Department of Forestry and Environmental Resources at N.C. State
University.
One of the
largest certifying groups is the Forest Stewardship Council, which
originated from the Rain Forest Alliance, Hazel said.
"If your forest is certified, every product" that comes from it is certified, including pellets, he said Monday.
Problem is, there is little third-party-certified land in North Carolina, Hazel said.
If
Europe decides to require strict certification, it may cloud the
long-term viability of the pellet industry in the state, he said.
Lack of certification by either independent or industry groups is not to say the state's forests are managed badly.
The U.S. Forestry Service
thinks "we do forestry pretty well in the Southeast. Most of our land is
adequately regenerated" after trees are cut, Hazel said. That means
that most cutting, even clear-cutting, allows the forests to come back.
That, in turn, shrinks the relative carbon footprint of using North
Carolina pellets for power production, he said.
But
the forest watchdog group Dogwood Alliance says using the state's
forests to produce pellets for power production is far from the European
goal to be carbon neutral – producing no more carbon dioxide than is
absorbed by regenerated forests.
The
alliance's executor director, Danna Smith, said burning pellets for
electricity may actually increase carbon emissions compared to coal.
But she also argued that pellet companies are limited in their ability to make money from selling to the United Kingdom.
"It is not a long-term strategy for (the companies)," Smith said. "This is not going to be a long-term development opportunity.
"The
justification for this (pellet) market is emission reductions. When you
burn a tree that is, say, 20 years old, all that carbon is going into
the atmosphere. If that tree had not been logged it would have been
storing that carbon plus absorbing more carbon from the atmosphere."
In other words, the forests just can't regenerate fast enough to make the harvesting-burning process carbon neutral, she added.
But the pellet-burning process is never going to be carbon neutral, Hazel said. It, however, can be relatively beneficial.
In
the short term, burning pellets may be less advantageous than burning
coal. But in the long term it looks good compared to coal, because the
forests have time to regenerate, he said.
Regardless
of the arguments, Keppler is confident in his company's and the pellet
industry's course of high investment and growth.
Nothing, he reiterated, has changed in Enviva's ambitious plans for the Port of Wilmington.
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