Executive Summary
This study shows that a pellet mill can be an economically viable business in the Taholah area and that it should be pursued not only to provide employment but also to reduce both pollution and reliance on fossil fuel.
Burning wood to produce power (in the form of heat, steam, or electricity) is classified as carbon neutral. The carbon released during the combustion of wood is carbon that was sequestered from the air over the life of the tree. No new carbon is released into the atmosphere as occurs in the combustion of fossil fuels. Further- more, because Washington’s forests grow at a much faster rate than those in Europe, it is cheaper for us to manufacture pellets which should allow for the U.S. manufacturers to export them and be competitive in a world market. Japan is a consumer of wood pellets that has little or no means of supplying for their own needs and would perhaps be a customer that could be pursued once the new pellet plant is firmly established. Japan and Europe are much further ahead in switching to biomass fuels, and they utilize wood pellets as a high density renewable fuel. Wood pellets are a good solution because material handling is simplified and the fuel meets the requirements of the Kyoto Protocol since it is carbon neutral. The potential growth of the pellet industry is promising and as the timber industry begins to recover, the market for pellets should grow.
Pellet Plant Feasibility Report prepared by George M. Richmond, P.E., Richmond Engineering.
A pellet mill, producing 480 tons per month, would cost $1.3-1.5 million to construct over a two year period. This sized production facility would be adequate to supply the proposed heating plant for the Taholah administrative buildings and educational facilities with surplus product to market. It is economically viable and should be considered as a means of reducing heating fuel costs while consuming a large portion of the slash from Reservation logging operations. The economic gains for the Taholah region do not end with just the few jobs that the mill will provide, it will also benefit from spin-off businesses such as pellet stove and boiler installers as well as the jobs to produce logging or mill waste materials that are needed at the pellet mill.
Raw material This report will show that while there may be adequate volumes of hog fuel, logging slash, pre-commercial thinning waste, and other wood debris to meet the local region’s demand for wood pellets, these materials aren’t suitable for producing the premium grade pellets needed.
While fiber is available in adequate volume, the type of fiber required is going to be the problem. Clean, debarked wood fiber suitable for premium grade pellets, such as sawdust and shaving waste is already a sought after commodity in the pulp industry. The plant under consideration here is small compared to the fiber resources available. The available materials are best used in large industrial type heating plants where robust ash handling equipment can accommodate the ash volumes and clinkers associated with burning lower quality wood fiber pellets. Residential wood stove owners will not be satisfied with anything less than premium grade pellets.
Burn Test Results
Labor costs
A modern pellet plant sized to meet the local region demand would employ approximately 5 people with family wage jobs. The pellet plant envisioned by this study would best fit an owner/operator with a small core-group of full time employees. Although peak pellet production would take place in the summer, peak sales are in the winter heating months. The fiber gathering and pellet distribution activities can easily become a year-round operation.
Transportation costs
A plant sized to meet the local region wood pellet energy demand would limit haul distances to approximately 60 miles, inherently limiting transportation costs. Raw fiber haul costs would be $15 and less per ton with similar expense for pellet delivery. The region is estimated to have a population base of approximately 60,000 people within a 60 mile radius
Market demand for pellets
Residential, commercial, and public heating demand within 60 miles of Taholah has been estimated at approximately 10,000 tons of wood pellets per year. This would equate to approximately 24,000 tons of green, wet sawdust and hog fuel. These numbers assume that less than 50% of the existing heating systems would be converted to pellets.
Environmental concerns
Working with environmental regulations would be a frequent occurrence for the operator of the pellet plant, from logging regulations in fiber procurement to emission regulations controlling particulate release during combustion. In particular, air quality regulations for solid fuel combustion will present the most challenging obstacles to expanding pellet heating systems into a larger customer base spreading across residential, commercial, and public buildings. Existing air quality regulations cover large power producers and small residential stoves but there are no regulations now in place to certify the in- between sized furnaces suitable for large residential and small commercial heating systems. This leaves most potential commercial heating systems without a cost effective solution to use wood pellets as a heating fuel.