In January 2016, the U.S. Energy Information Administration, a reporting agency under the Department of Energy, began a new survey that was designed to collect data on biomass production and inventory, including wood pellets. The goal was to survey operating pellet plants across the nation (on a monthly basis for facilities that produced 10,000 tons or more per year, and on an annual basis for smaller facilities) to identify and analyze trends in the still-growing biomass fuel industry.
Now, the EIA has released the first monthly report for January, sharing valuable information about the present state of American wood pellet production.
Capacity Mainly Focused in the South
The EIA divides the nation into three regions for purposes of reporting: East (includes states north of Arkansas, Kentucky, and Virginia, and east of the Dakotas, Nebraska, Kansas, and New Mexico); South (from Texas to Virginia, and from Florida to Kentucky); and West (all other states).
According to the first report, the bulk of the nation’s operating capacity is contained in the South. The South has a total annual capacity of 10.82 million tons. The next largest region is the East, with 2.86 million tons, followed by the West, with 1.15 million tons.
Additionally, the South has seven of the 14 manufacturing facilities currently either planned or under construction. Georgia and South Carolina have two of these sites; no other state has more than one.
In all, the U.S. currently possesses 11.52 million tons of production capacity, produced via 105 facilities that are now in operation. Another 2.74 million tons of capacity is being scheduled or constructed.
Report Shows Sales and Destinations
The report for January also reveals insightful data about where manufactured wood pellets are shipped and for what purpose they are created.
During the first six months, facilities produced 3.3 million tons of wood pellets, and sold 93.5 percent, mainly to foreign consumers. Of these pellet sales, 82 percent were exported and destined for utilities – and of those, 85 percent went to the United Kingdom’s Drax power plant. The remainder of the pellets sold went to domestic heating producers.
Just about all utility-grade wood pellets were produced and sold by the South, while the East produced a majority – 61 percent – of heating pellets while selling 43 percent. The relatively-low sales percentage in the East (the East still outstripped the South’s 17-percent sales rate and the West’s 24-percent sales rate) can be chalked up to unusually high temperatures during the last winter.
Insights from the Wood Pellet Report
There are a few insights one can gain from analyzing the report:
- American wood pellet production is still maturing and developing. If all planned projects come to fruition, that would represent a 24-percent increase in current capacity over the next few years.
- Foreign buyers still outweigh domestic buyers for U.S.-produced wood pellets, a trend that will gradually reverse itself if/when more states embrace biomass energy production.
- Most of the latest advances in pro-biomass legislation have occurred in the Pacific Northwest and New England, yet the most progress is actually being made in the South, which includes four of the top 15 coal-producing states in the nation.
In the next release, the EIA is scheduled to produce multiple months’ worth of data.
As more coal plants – driven by the falling price of coal and tighter regulations on carbon emissions – convert to biomass in part or in whole, the nation’s supply capacity will steadily grow to meet the new demand.
For now, growth in the biomass industry remains slowly progressing forward as the U.S. and its energy producers and consumers move into a new administration with a decidedly different take on domestic energy than the Obama administration.