Wood Pellet Mills, Automated Wood Boilers in Vermont's Future?

One of the organizations that the High Meadows Fund has supported is the Northern Forest Center (NFC). In the interest of full disclosure, I am on the boards of both organizations. Through its Model Neighborhood Projects, NFC has been promoting the installation of high efficiency wood pellet boilers in homes, apartment buildings, and businesses in Berlin, NH, Farmington, ME and, soon, Lyndonville, VT. The objective is to replace heating oil with a locally-produced fuel, create more jobs in the forest industry, and keep our heating dollars circulating in the local economy. So far, the homeowners who have installed these automated boilers (and tightened up their home insulation at the same time) have been very pleased with the convenience, fuel savings, and comfort of these systems.

Last month, NFC conducted a tour in Vermont to look at the supply side of the chain. We visited the Vermont Wood Pellet Company (VWP) in North Clarendon, VT and a Gagnon Lumber logging site in Pittsford, VT. VWP's mill is considered "community scale," using approximately 45,000-50,000 green tons of softwood annually, almost all drawn from within 30 miles of the plant. (In contrast, pellet mills in the South consume 650-750,000 tons annually.) The pellets are delivered to users in 40 pound bags or blown into hoppers by a delivery truck. Gagnon Lumber, which mostly saws lumber, delivers wood chips for heating to several schools in southern Vermont.

Interestingly, both companies chip the wood at the mill rather than in the woods. For years, wood energy advocates have claimed that wood energy market would give landowners an opportunity to "weed the forest", removing low-quality wood to give the better trees room to grow. That promise has been mostly unrealized, because the capital cost of equipping a whole-tree harvesting operation (now in excess of $1.5 million) makes clear-cutting almost an economic necessity. With these two mills, a conventional logger can deliver firewood and pulp logs without any extra investment, and get twice the price that they would receive from the nearest paper mill because the trucking distances are so much shorter. At the Gagnon site, the forest had clearly been "weeded" with the future saw timber, Gagnon's primary product, dominating the site.

The owners of both companies made several interesting observations: Chris Brooks of VWP said when the mill opened, they had one logger under age 40. Now, 20 loggers under 40 are supplying wood, an encouraging sign for an industry that has been losing its younger workers. Ken Gagnon said that in the past, if a logging job had 60% pulp wood, no logger was interested. Now, because of the higher price paid for low quality material, these jobs have become more attractive.

There are still questions and concerns about wood energy—how much wood can be cut sustainably, the impact on the soil nutrient cycle and carbon emissions, whether the pellets will be used locally and shipped out of state. However, by focusing on thermal heating (instead of electrical generation) and keeping the systems small, Vermont has an opportunity to mitigate the potential negative impacts of wood energy and realize both economic and environmental benefits from this growing market.

Darby Bradley, Calais, VT
May 2014