Moving Day

By Tim Portz | July 15, 2014

In a July 11 story posted on Biomass Magazine’s online offering, Erin Voegele reported that Drax Biomass is moving its headquarters from Burlington, Mass. to a Sandy Spring, Georgia, an Atlanta Suburb. On or about that same day, I completed an interview for a feature I’m writing about pellet press manufacturers and learned that CPM is also making a brick and mortar move into the southeast as well with a parts and service offering in Jackson, Miss. These deployments and investments are the kinds of announcements that economic development professionals work tirelessly toward.  Voegele quotes Brian McGowan, executive vice president and chief operating officer of the Metro Atlanta Chamber who sums it all up saying, “Selecting Atlanta for its U.S. headquarters brings new jobs to our region and expands our reputation as an ideal location for foreign companies, and contributes to the strength of our growing clean tech sector.”

The jobs are welcome to be sure. This spring, as reported in earlier installments of Ash Content, I had the good fortune of spending two days touring both Plum Creek nurseries and forests as well as Drax Biomass’s under construction Amite Bioenergy pellet facility. The facility, named for Amite County is located just outside Gloster, Mississippi. Gloster has seen better times. Like rural communities all across this country, Gloster is working to revitalize itself and capitalize on any economic opportunity that comes its way. While in Gloster I listened intently as another journalist writing for a British paper talked to two gentlemen sitting having some lunch in the same café we were in. Their sentiment was overwhelmingly positive. The pellet facility coming out of the ground just down the road would not only bring full time jobs, but was already driving economic activity back into the community as evidenced by the standing room only condition in the café’s dining room. Sitting in Gloster, it wasn’t hard to see how a handful of daily visitors (vendors, service technicians, truck drivers) will be very welcome to main street Gloster.

While the direct jobs, headquarter and service center redeployments are deservingly celebrated I think the real story, and the more difficult one to tell here is the market created for low value pulpwood with every pellet facility that gets built. Forestry is a complex story to tell, and regrettably an easy one to manipulate to foment public discontent. While I don’t want to give too much away about a story I’ll be writing for the October issue of Biomass Magazine (our Feedstock Certification and Sustainability issue), the simple fact is that while pulp markets are crucial for the forestry sector, they don’t drive the bus. I’ve heard Seth Ginther and others repeat this again and again at conferences and I was able to get some numbers that help frame this situation up. Roughly speaking, about 30% of the total revenue derived from an acre of managed forest comes from low value pulp. The bulk (70%) of the value comes from the final 100 or so individual trees on the acre that are harvested for saw logs for conversion into dimensional lumber. Perhaps my numbers are off slightly, and if so, please comment or send me an email. The important thing however, is that while vital to the forestry sector, pellet production fits neatly into a well-established system, offering demand for low value pulp which has withered as more pulp and paper mills in the region have closed.

Finally, I wanted to thank those producers that responded to my request to take part in our last survey. With some work we were able to get to a respectable level of respondents and the results of the survey are being incorporated into my pellet press feature. Watch for that in the August issue of Biomass Magazine.