STEAMBOAT SPRINGS, Colo. (AP) - About 2,000 tons of wood pellets are bagged and stacked in Confluence Energy's yard in Kremmling, but the only thing moving the material last week was the wind.

A shipping truck was nowhere to be seen.

"We have more capacity than we have utilization of the product," plant owner Mark Mathis said diplomatically. "We've got a little bit of inventory that we're still moving through."

The winter was a tough one for Mathis and, he said, for the pellet industry across the country. When he began production at the Kremmling plant in September 2008, less than two years ago, the market for biomass and alternative energy sources such as wood pellets seemed boundless.

Prospects were so good, Mathis said, that he and John Frink, of Rocky Mountain Pellet Co. in Walden, dismissed the idea of consolidating their efforts into one plant. Instead, they each opened for production and business.

Then, regional pellet markets became saturated, heating oil prices dipped -- causing consumers to look less for alternative fuel sources -- the economic recession struck and a mild winter dropped demand for pellets even further, creating what Mathis called "the worst year (the pellet industry) has ever had."

"I think a lot of people woefully misjudged the strength of the market," he said. "Of the 70 or 80 wood pellet plants (nationwide) that I'm aware of, there's only one that's running right now."

In January, MaineBusiness.com reported that Maine Energy Systems, a wood pellet startup, was unprofitable while facing the recession and relatively low oil prices. Partner Dutch Dresser recalled better times.

"A couple of years ago, we couldn't answer the phone fast enough," the website quoted Dresser as saying.

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By Mike Lawrence

Steamboat Springs — About 2,000 tons of wood pellets are bagged and stacked in Confluence Energy’s yard in Kremmling, but the only thing moving the material last week was the wind.

A shipping truck was nowhere to be seen.

“We have more capacity than we have utilization of the product,” plant owner Mark Mathis said diplomatically. “We’ve got a little bit of inventory that we’re still moving through.”

The winter was a tough one for Mathis and, he said, for the pellet industry across the country. When he began production at the Kremmling plant in September 2008, less than two years ago, the market for biomass and alternative energy sources such as wood pellets seemed boundless. Prospects were so good, Mathis said, that he and John Frink, of Rocky Mountain Pellet Co. in Walden, dismissed the idea of consolidating their efforts into one plant. Instead, they each opened for production and business.

Then, regional pellet markets became saturated, heating oil prices dipped — causing consumers to look less for alternative fuel sources — the economic recession struck and a mild winter dropped demand for pellets even further, creating what Mathis called “the worst year (the pellet industry) has ever had.”

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www.2theadvocate.com

• By TED GRIGGS
• Advocate business writer

European Union demand for wooden pellets will continue to drive U.S. production but will also limit the industry’s profitability, according to the head of a bioenergy, wood and forest products consulting firm.

“The pellet business is marginal,” said Pete Stewart, president and chief executive officer of Forest2Market, based in Charlotte, N.C. “The Europeans know how much it costs to produce pellets, and they’re not going to pay more.”

Stewart was the keynote speaker at the first day of the LSU AgCenter’s Louisiana Forest Products Development Center conference on wood-based biofuels, biomass and bioenergy. Around 80 people attended Thursday’s sessions.

Europe is about 15 years ahead of the United States in terms of legislation to limit carbon emissions, Stewart said. In the United Kingdom, 20 percent of the country’s energy must be produced by renewable resources by 2020; only six percent is green energy now.

To meet those goals, the United Kingdom will have to import about 12 million tons of pellets a year, Stewart said. If one-third of that production comes from the United States, then eight to 12 new pellet plants will be needed.

And that doesn’t include the demand that will be generated by northern Europe and France, he said.

Pellets are made from the less costly wood used by pulp and paper mills. The wood is ground into sawdust and pressed into small pellets, which are burned in power-generation plants.

POWNAL -- In addition to a proposed solar generating facility, the former Green Mountain Race Track site also might host a 29-megawatt biomass generation facility and wood pellet manufacturing plant.

The announcement was made Wednesday by Peter Odierna, executive director of the Bennington County Industrial Corp., during the organization’s annual meeting at the Mount Anthony Country Club. Odierna said the property’s owners, Green Mountain Energy Park, LLC, formerly known as Progress Partners, has entered into a lease agreement that will allow the entity to begin filing for permits.

Permits required

Odierna said the biomass facility will require a permit from the Vermont Public Service Board. He said he could not release further details.

Green Mountain Energy Park plans to change its name to Southern Vermont Energy Park, because the Green Mountain name is owned by a person in Texas, said Chic Paustian, an officer of the park company. Paustian said he is not able to release information on the company seeking to build the biomass facility, but said it is based in New England.

The company hopes to lease the 144-acre site to producers of renewable energy, and to that end has entered into an agreement with EOS Ventures, a company based in Hancock, Mass., and affiliated with Jiminy Peak, to build a 2.2 megawatt, $10 million, solar panel array over the area where the track’s dilapidated horse barns now sit.

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