FutureMetrics: Northeast pellet heat could spur 1.3 million jobs

By Anna Simet | December 05, 2013

According to a new paper from FutureMetrics Inc., if the 6 million rural Northeast U.S. homes that currently utilize oil or propane for heating converted to pellet fuel, the economic impact would be significant and include the creation of about 1.34 million jobs.

Besides the positive benefits resulting from pellet boiler conversions, “How the Northern States can Heat with Renewable Energy and Create Jobs and Economic Growth while Significantly Lowering Carbon Emissions “examines the negative economic and environmental impacts from petroleum-based fuel in boilers or furnaces.

 Author William Strauss points out that if heating oil was a product of U.S. petroleum, one benefit of that would be that the money spent on heating would stay in the U.S. “But most of the heating oil refined in the U.S. for the Northeast markets is not made from U.S. petroleum,” Strauss states. “Only about 19 percent of the Northeast’s heating oil refined in the Gulf coast refineries comes from petroleum extracted from U.S. wells.”

Of that 81 percent imported into the U.S. Gulf of Mexico refineries, 52 percent is from OPEC, and the rest comes from Mexico and a variety of countries including Columbia, according to Strauss. “For those northern states that are heating oil dependent, the majority of every dollar spent on heating fuel leaves the local economy and much of that money spent on heating leaves the country."

At a price of $3.80 per gallon, FutureMetrics estimates that about 770,000 jobs are exported to the other countries that supply the petroleum for the heating fuel used to keep the northern tier states’ homes and business warm.

Strauss points out that it would be irresponsible, given the demands by pulp and paper and lumber manufacturers, to suggest that there is sufficient sustainable forest feedstock today to heat 6 million homes, but states, “…the world is changing and the primary demand for fiber from our working forests, paper making, will change dramatically in the coming decade. No one can accurately predict how fast and how far the drop on demand for paper will go but there is no doubt that it will drop.”

 The paper highlights the benefits of pellet conversions, which includes:  Locally produced pellet fuel keeps almost 100% of every dollar spent circulating locally, as 75 percent of each dollar spent on heating oil does not stay in the local economy, and jobs are exported along with that money; pellet fuel is about half the price of heating oil for the same heating energy; The supply chain for harvesting sustainable biomass and for manufacturing and distributing the fuel creates jobs; and accounting for the fossil fuel used in logging and trucking and electricity production for running the pellet refinery, pellet fuel has 87 percent lower carbon emission than heating oil and 80 percent lower carbon emissions than natural gas.

Access the free paper here.