USIPA conference wraps with impassioned producer panel

By Tim Portz | October 03, 2014

The 2014 Export Pellets Conference concluded with a panel comprised of a selection of the producer members of the U.S. Industrial Pellet Association, moderated by the organization’s executive director, Seth Ginther.

 The session began with brief updates from each of the producers about their accomplishments and activities from the previous year. Joining the panel for the first time and introducing himself to the conference delegation was E-Pellets Group CEO Doug Albrecht. E-Pellets recently acquired the formally boarded up Louisiana Pacific OSB mill in Athens, Georgia, to convert it into a wood pellet production facility. The facility is expected to produce 450,000 metric tons annually by August 2015.  

Most notable during this introductory segment was an announcement from Zilkha Biomass CEO Jack Holmes that Zilkha’s first commercial-scale facility producing the much anticipated steam exploded pellets would be operational in January and expected to deliver its first shipment of pellets to Europe in March of 2015.

The bulk of the remaining discussion revolved around the continuing struggle producers are having placing their industry within the broader framework of North American forestry for skeptical foreign media outlets, nongovernmental organizations and policymakers. While earlier in the conference it was established that over 60 percent of British citizens support the use of biomass for power production, pellet producers are wary of a vocal and well organized minority adamantly opposed to the use of woody biomass as a coal replacement.

A Sept. 28 story published in the London Sunday times was referenced during the Q&A session, in which the author of the article, Danny Fortson described the regulation of North American forestry as “notoriously lax.”

Mike Williams of Westervelt Renewable Energy reacted to the quote and said, “We are more highly regulated than most people realize.” He cited the Clean Water Act, the Endangered Species Act and the Environmental Protection Agency as federal regulations that impact the activities of all forestry practices. He continued by citing the company’s voluntary certification programs and said, “I would invite him [Fotrson] to participate in our Sustainable Forestry Initiative, Forest Stewardship Council and Best Management Practice audits.

Morten Neraas, president and CEO from Green Circle added, “Often times people get on a crusade and begin to conveniently ignore the facts.” Ginther continued the conversation and recounted a meeting that he and USIPA Chairman Harold Arnold had with members of Greenpeace in England earlier this summer. “They simply had not taken a deep dive into how forestry worked,” said Ginther. Arnold followed Ginther and said, “I want to believe that these organizations have noble goals,” but then pivoted and called NGO practices “sensationalism” deployed largely to motivate the organization’s supporters to contribute more money to NGO coffers.

Despite the frustration, the panel was unanimous in their understanding that if they hoped to enjoy a long-term market opportunity in the U.K., this was a conversation they were going to have to continue to engage in. “The utilities are telling us to give them what they need to prove that what they are doing is sustainable and legal, and we need to be able to do that,” said Williams.

As the panel drew to a close, producers were asked to imagine what the pellet market would like in 2027 as the subsidies that support their use in British power plants expire that year. Ginther suggested that the industry would need to begin thinking and strategizing about how to become “subsidy independent” and others on the panel referred to the end of subsidies as a “cliff” that was now just over a decade away. Production and transportation efficiencies were all mentioned and progress in those categories were expected and cited, but no panelist thought these improvements and savings would be enough. “The cost of the fuel will never drive all of the cost reductions needed,” said Arnold.  While power stations in the U.S. and Canada were mentioned as potential candidates for future market growth, the panel cited a strong coal lobby and low shale gas prices as a barrier to the growth of that market.

Before the panel wrapped, Williams returned to the question of the industry’s overall sustainability and wondered aloud, “I just don’t understand how people would think we would destroy the resource that we rely on for our business.”