It doesn’t take much time living in Pennsylvania to realize you aren’t going to stop the trees from growing.That’s according to Frank Kvietok, senior director of innovation with wood pellet manufacturer Lignetics Group Inc., the state and nation’s largest producer of wood pellets that operates three of the largest mills in Pennsylvania. The state lives up to its name, as the Latin word “sylva,” translates to forest, and over 60% of Pennsylvania (16.6 million acres) is covered by them, according to the state’s Department of Natural Resources. The majority of these forestlands (12 million acres) are privately owned by approximately 750,000 landowners, while the remaining 5 million acres are held publicly by government entities.&nbsp;These forestlands have been the lifeblood of Pennsylvania’s robust wood products industry that began well over two centuries ago. It has not only shaped its forestry-immersed culture, but makes an incredible economic impact, generating value to landowners, providing domestic and international lumber and wood products, and resulting in nearly 70,000 jobs that range from foresters to truck drivers to sawmill workers to pellet manufacturers, employment opportunities that are particularly crucial to rural communities.As for wood pellet production specifically, the state’s lumber industry supplies residuals to a total of 10 facilities across the state with production capacities ranging from 1,800 metric tons (mt) of pellets up to 125,000 mt.Packing a Punch&nbsp; With a total annual production capacity of 358,200 mt of finished product worth $75.3 million, the fuel pellet industry utilizes over 500,000 tons of residue per year, purchased for an estimated $20 million.Bruce Lisle, founder of Pennsylvania pellet plant Energex American, now works on strategic initiatives for Lignetics. With decades of experience, Lisle offers insight into the interplay between the state’s extensive wood products industry and the pellet industry. “We are the place people go to get rid of wood residues,” Lisle says. “And not just my plant, but all the rest of them. They’re part of the infrastructure. They are who the sawmillers know they can depend on to get rid of their [waste fiber]. In many cases, we cut travel costs. We have had guys who were driving by our plant and going 200 miles to deliver stuff to another market, but now, they only have to drive 25 miles.”Kvietok highlights the symbiotic relationship between the two industries, explaining that without pellet plants, sawmills would run out of space, forcing them to shut down. This role is so crucial that pellet mills were deemed an essential industry during the COVID-19 pandemic, due to the service they provide. Lignetics Group owns and operates 29 facilities across the U.S. and Canada that process wood waste, with 27 of those producing heating pellets.&nbsp;Kvietok emphasizes that the pellet industry does more than simply dispose of residuals, and instead “upcycles” the material into valuable heating fuel, along with products in the cooking, pet and industrial categories. “Without the pellet industry, for most wood products producers, those residues were a negative on their balance sheet, because they needed to pay someone to dispose of it,” he says.The importance of the pellet industry to the state’s economy is well understood by its congressional representative, according to Tim Portz, executive director of Pellet Fuels Institute. “Representative GT Thompson (PA-15) is as well versed in the value proposition of wood pellets as anyone in Congress,” Portz says. “At our last fly-in, he echoed all of our points and urged us to go further with regard to the carbon implications of wood pellets as a heating fuel.”Pennsylvanian Pellets&nbsp;&nbsp; Some pellet mills in the state work independently, gathering fiber from nearby wood products facilities, while others are colocated with a sawmill or wood products facility.&nbsp;Lignetics owns three pellet facilities in the state, all of which are standalone operations. PA Pellets, located in Ulysses, produces 37,200 mt of pellets. Started up in 2000 by Lisle and purchased by Lignetics in 2020, Energex American, located in Mifflintown, produces 125,000 mt of pellets. Lignetics of New England-Allegheny, located in Youngsville, produces 71,000 mt of pellets.&nbsp;Greene Team Pellet Fuel Company, located in Carmichaels, is also a standalone facility and produces 50,000 mt of pellets. Michael Galis, chief financial officer with Greene Team, explains that the pellet industry plays a role in helping the wood products industry become slightly more profitable than it would be otherwise because the pellet industry buys the residuals. “I can say with confidence that 100% of the wood fiber we purchase is not cut down in the forest with the sole intent of making wood pellets out of it,” he says. “It is all a byproduct of other industries.” &nbsp;The facilities tied to wood product manufacturers include Barefoot Pellet Co., located in Troy, which produces 70,000 mt of pellets; and C&amp;C Smith Lumber Company Pellet Plant in Summerhill, which produces 22,700 mt of pellets. Pennwood Products in East Berlin produces around 9,000 mt of pellets using residuals from hardwood flooring and molding production.The remaining facilities include the state’s smallest producer, Ironstone Mills, located in Leola, (2,000 mt); Pellheat Inc. in Glen Hope (5,000 mt); and Bio-Diversity in Sellingsville, which makes a wooden Envi Block and Tru-Wood premium wood pellets.Heating Consumers&nbsp;&nbsp; Homeowners in the Northeast often seek alternative heating options, with natural gas and heating oil being the leading sources overall. A strong heating market, Pennsylvania has plenty of heating days per year, with the season stretching from mid-September into May. The rural areas of the state lack natural gas infrastructure, which would otherwise be a key source of cheap heat, Lisle explains. Often, pellets are a great option and are a more convenient source of heat compared to logs for wood stoves—for example, older generations who don’t want to split wood find them easier to use. &nbsp;Jim Verbeke, vice president of sales for Hearth and Home Technologies’ stove business unit, explains that pellet stoves make up the biggest share of this unit, with roughly 20 different stoves and inserts available for purchase. Hearth and Home Technologies’ domestic production facility for stoves is located in Halifax, Pennsylvania. “We continue to produce and manufacture out of Halifax and—I would say just in general the Northeast, but specifically in Pennsylvania—there is a high demand for heating appliances like ours. This is for both pellets and wood, because consumers are looking for heating solutions alternative to what I call the traditional forms, and a lot of that also is driven by ways of lowering home heating costs,” Verbeke says.Another element that makes Pennsylvania a good market for pellet heat is the population dispersal throughout the center of the state. Although the population density is not comparable to regions around Pittsburgh and Philadelphia, the rural region is more densely populated than the population of a state like Wyoming, Kvietok explains. “When you get to those [very spread out] population densities, it actually becomes challenging to run a pellet facility because you don’t have enough customers within that 200 mile radius to serve,” he says. “Moderately dense rural areas are more economically feasible to supply, and the folks living there maintain a connection to the land and a desire for independent living that makes wood a very sensible choice.”Rural Pennsylvanians are comfortable with the idea of using wood as a “functional material,” he explains, not just as a fuel for something like a campfire or a wood fire in a fireplace on Christmas Eve.&nbsp;Adam Martin, president of Martin Sales and Service in Butler, operates the family business of selling, installing and servicing heating stoves and fireplaces. Originally founded by Martin’s father, the shop sells pellets all year long, supplying homeowners who want to prepare for the winter during summer, and then more during cold fall and winter months. Martin explains that he works to ensure the pellets sold at his store offer customers high BTUs at the most affordable price possible. “I think it’s important our industry continues to sell a quality product backed by a retailer that can offer the proper installation and proper service, and then also continue to sell a quality fuel to convey a positive image of pellet fuel to the consumer—that they are saving on heating bills, have a reliable heat source and a reliable stove,” he says.&nbsp;Martin emphasizes the importance of keeping prices down on both pellet stoves and fuel, as many of his customers look to pellet stoves as a way to offset heating costs. When sold at his store, pellet price averages range from $295 per ton to $325 per ton, with the majority of customers who use pellet stoves as a primary heating source purchasing two to three tons per year. “I can tell you that some [customers] have certainly told me over and over again that the amount of money that they’re spending to heat their home for a year with a pellet stove is what they were using to heat their home with alternative fuel for only a month’s ... worth of heat,” Martin says.&nbsp;Martin keeps costs affordable by finding local pellets, reducing the shipping cost. He is also selective about the brands of stove he carries, choosing to carry the best products that the industry has to offer as well as the service needed to maintain it. Martin believes that selling U.S.-made products and high-quality brands differentiates his shop from a big box store, which carries a wide array of products, but may not all be high quality. “For a fresh customer who doesn’t have a pellet stove to get involved, between the cost of the stove, the venting and installation of the stove, and then the fuel on top of it, I think it’s really important that our industry looks at these things, adds them up and understands that they’re making an investment in our industry,” Martin adds.Appliance Manufacturing&nbsp; The Harman brand pellet stoves sold at Martin’s store have roots in Pennsylvania. Verbeke explains that Hearth and Home Technologies’ history in the state began 18 years ago, when the company acquired the Harman stove brand and its manufacturing facility, located in Halifax. “Dane Harman, who was the original founder of Harman, lived in Halifax,” he says. “He saw a need for heating solutions and as a welder and engineer himself, it led to him creating the Harman brand.”After acquiring the brand, Hearth and Home Technologies decided to stay in Halifax because of the strong legacy of the brand in the community and the region’s pervasive use of pellet stove and wood stove heating. The stoves heat around 1,000 to 4,000 square feet and are typically used to heat a room or a whole floor of a building—often used to supplement a primary heating source—but they are capable of heating a small house.&nbsp;Another enticement for pellet stove purchases has been the tax incentives available to buyers. “Our particular tax credit is up to $2,000 tax credit or 30% of the value of the appliance and installation up to $2,000,” Verbeke says.&nbsp;While that has been the case since 2021, that tax credit is in danger of being eliminated. In May, it was stripped from the U.S. House of Representatives’ budget reconciliation bill, which is now in the Senate.&nbsp;Pennsylvania’s appreciation for wood’s usefulness and renewability helps keep the state a significant market for the wood pellets in the home heating space, Martin adds. “In this area of the country, I do feel that [the] customer loves wood heat, and loves that it’s renewable energy,” Martin says. “With a pellet customer ... they’re buying a leftover byproduct, which is sawdust coming from the lumber industry, and it makes them feel good.” &nbsp;Author: Katie Schroeder&nbsp; katie.schroeder@bbiinternational.com

2025-07-08 - Locked in on the Keystone State (Biomass Magazine)

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Pennsylvania’s pellet industry is a critical user of waste generated by the state’s robust wood product industry—with many significant benefits to boost.

Locked in on the Keystone State

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