Seeing the Forest for the Trees

Joann (Tink) Birchem is a Minnesota logger and wood pellet manufacturer whose goal is to see wood-pellet furnaces used as the primary source of heat for Minnesota and the Dakotas. With the rising price of fuel she believes it's a matter of economics that will soon be unavoidable.
By Timothy Charles Holmseth
Joann (Tink) Birchem says she "can see the forest for the trees." In time, everyone else will see it too, she says. Birchem and her husband Jerry, own Valley Forest Wood Products LLC and Birchem Logging Inc., both in Mountain Iron, Minn.

Somewhere in northeast Minnesota, where thousands of trees dot the landscape, Tink Birchem saw the forest that she believes holds the future of heating. That future is in the form of a small wood pellet that burns hot and clean inside special furnaces. Eventually, everyone is going to need them and the reason can be explained in one word-cost, Birchem says. As people struggle with rising energy costs, they will take notice of the relief wood-pellet furnaces offer the pocketbook.

There is a noticeable price difference between the price of wood pellets versus fuel oil, and there's no getting around the outcome. "Wood pellets cost half of what fuel oil is right now," Birchem says. Despite the large price gap, the heating alternative has not had much of a behavior-changing impact on consumers, a fact that doesn't surprise Birchem. "I think it's just a matter of educating the public," she says. "A lot of people don't know about wood pellets."

Americans don't seem to be aware of the green-friendly fuel's success in Europe. The informational disconnect in the United States between the general public, and the option of wood pellets as a source of heat didn't always exist. "[Wood pellets] were actually invented in the late 1970s in the United States," says Christian Rakos, chief executive officer of proPellets Austria. "[Pellets] led a very quiet life in small niches for two decades before a furious market development started in Europe." The growing use of pellets as a heating source in Europe demonstrates an awakening in this country that can't be ignored, Rakos says. "Sweden, Denmark, Austria, Germany and Italy have been growing on the average of 30 percent to 50 percent per year during the past decade," he says.

Gerald Brown, marketing director of Valley Forest Wood Products, says the success of pellets is a proven fact overseas. "If you look on an [industry] map in Europe, you'll see in 2005 there were 242 pellet plants listed," he says. "That was back in 2005, there's more than that now. When you look on a map for 2005 in the U.S. you will see 60."

Although the Europeans are ahead of the United States in terms of pellet use, it didn't come on the scene there until recently. "Generally speaking, not even one bag of wood pellets was sold in England 30 months ago," he says. "Last year there was a million tons sold in all of the U.K." The big difference is in the behavior of the Europeans, Brown says. "It's the difference in lifestyles." Europeans have always viewed the biomass resources that lie in their own backyards much differently than Americans. "Biomass has been around a long time in Europe, in the consciousness of the country, and the people who live there," he says.

Brown credits Birchem for introducing the wood-pellet heating industry to northwest Minnesota. "Tink Birchem was the first one to catch on in our area that biofuels are a big-ticket item because of what she was hearing about in Europe," he says.

Europe is a real-time demonstration of the promise wood pellets hold, and the country has proven that it can very quickly become vibrant when economic conditions are optimal, Birchem says. "My husband and I have been to Finland and Sweden five different times," she says, explaining the methodical economic utilization of lumber and forest products there. "They really work the tree. They utilize every part. The tops and limbs they use for biomass."

Even a cursory look at the numbers as one scans Europe to assess industry growth is an eye-brow lifter, Rakos says. "Ireland is an example of how fast a market can be established by financial incentives," he says. Pellet-heating in Ireland was virtually nonexistent until March 2006, when a program called the Greener Home Scheme was available.

Within a year 4,000 applications were received, and according to Sustainable Fuels Ireland, 1,900 pellet boilers, 240 central heating stoves, and 330 stoves were installed between April 2006 and August 2007.

During her global travels, Birchem says she was able to fully process and appreciate how and why people in other countries have been so successful with wood-pellet furnaces and heating. She described one town she visited where a biomass plant was used to generate steam heat and hot water to supply city buildings, including a hospital. "They call their forests "green gold," she says.

Birchem's observations of common-sense solutions and prudent use of the obvious and available, lend themselves to the vision she has for Minnesota and the Dakotas. "It's the least expensive thing the Europeans have to make heat and electricity," she says. "Sweden and Denmark are leading the world in biomass generation of electricity."

A speed bump to progress in the industry of wood pellets in the United States is subtle, but significant. The idea of handling a bag of pellets can be seen as an unattractive and inconvenient prospect to some Americans, Brown says. It has become a commonly accepted state-of-affairs that Americans simply don't want to deal with a bag of pellets.

Brown says the notion that using wood pellets would be an inconvenient task in someone's day is misguided; explaining how the process of heating this way in Europe is far past the log-cabin mentality some may still possess. "Europe is already 10 years ahead of us on wood pellets," he says, explaining how the process has been modernized there. "They're ahead of us to the point of delivery by trucks that blow the pellets into holding rooms and tanks built in houses, with augers that automatically feed a furnace, the same as fuel oil and propane." He says. "A person fills up once a year, turns on the thermostat and never touches anything again-it's all automated."

Birchem has incorporated automation technology into her optimistic plans. "There are furnaces coming on line now where a truck would just come in and fill up your furnace with pellets, and with another hose would suck out the ash," she says. "That's what they are doing in the Europe."

Production and consumption at Valley Forest Wood Products for the time being is running quite smoothly. "Wood pellets being produced right now are going to schools," Birchem says. She says the success of Minnesota schools utilizing wood pellets serves as a virtual mirror, albeit on a smaller scale, of the success that is been experienced in Europe. Brown says he talked with the person who handles the heating at the school in Goodridge, Minn., and learned the school was watching money go up in smoke. "All fuels are calculated to compare the cost per million Btu (British thermal unit)," Brown explains. "The school was paying $28.17 per million BTU's," he says. "Pellets would cost $10.81 per million BTU, delivered. That's almost a 65 percent savings to use pellets."

The pellets are also more environmentally friendly than fuel oil, Brown says. "They are 92 percent cleaner in particulates than cord wood," he says. "That's documented, both by a Swedish study and a New Zealand study."

Birchem's desire to offer an economical heating alternative to the region is an ongoing process. The company is constantly testing and improving its product. Although she admits she's often frustrated with some of the industry standards surrounding labeling and quality issues, stronger oversight is something she pushes. "We test our pellets to make sure that we're getting a premium pellet," she says. "A lot of manufactures say they have premium pellets and they don't, and there are no regulations to monitor this." There is a significant difference between premium and standard pellets, much of it relates to ash production. A furnace that isn't made to handle a high percentage of ash can get clogged, Brown says. "If [a company is producing] a standard pellet, they should say it's a standard pellet, and people should have to pay less for that," Birchem says.

Birchem believes that Europe is proof that pellets are the heating fuel of the future. Although Europe is fertile ground for sales and Valley Forest Products has business relationships firmly established in Italy, Birchem doesn't expect to export any product, yet. "If I make more pellets than what I can sell here in the states, I can ship them to Europe and they will sell them there," she says. However, she would prefer that the forest resource be kept "here at home."

Birchem says the industry she works in is fascinating and exciting, but it can be tiring at times. "I'm heading to Atlanta today and then it's on to [Washington] D.C.," she says. As it is with pioneers, it appears the enigmatic part of a person that is inclined to look back before going any further into the great unknown, doesn't exist in Birchem. Soft spoken, friendly, intelligent, matter-of-fact and worldly, the girl, dubbed "Tinkerbell" by her father, has a picture in her head of the wood-pelleting industry, and it most certainly isn't make-believe.

Timothy Charles Holmseth is a Biomass Magazine staff writer. Reach him at [email protected] or (701) 738-4962.