Low-cost natural gas to benefit bioenergy

By Staff | April 04, 2013

A white paper released by FutureMetrics Inc. finds that wood-to-energy projects will significantly benefit from low-cost natural gas. This includes European wood pellet export operations, as well as the domestic wood pellet boiler sector.

FutureMetrics based its assertion on the prediction that the U.S. will see a rapid transition from gasoline and diesel to compressed natural gas (CNG) transportation fuel, resulting in lower operation and transportation costs. This could potentially reduce woody feedstock costs, making them cost-competitive with pipeline natural gas and CNG.

The paper suggests that because natural gas equates to roughly 40 percent of the price of diesel when used as a diesel replacement, the impact on wood prices could be significant. The paper also assumes that the price of CNG will be less volatile than diesel, as it is not exposed to geopolitical risk.