Getting heated Supply and demand drives cost of wood pellets up

HAMPTON FALLS, N.H. – The high cost of heating fuel has turned many people to wood pellets, prompting “staggering demand” among pellet makers and brisk business for dealers.

Panic, now that home heating oil prices have spiked, has sent the pellet stove market into overdrive, said Jim Fallon, owner of Home & Hearth, in Hampton Falls.

“People are very scared and don’t know if they are going to be able to heat their homes this year,” he told Foster’s Sunday Citizen.

The average cost of a gallon of home heating oil was $2.67 recently, according to the New Hampshire Office of Energy and Planning in Concord. Fallon said he sells wood pellets for $210 per ton, up $11 from a year ago. Heating a home with oil costs up to several thousand dollars over six months, compared to about $850 with wood pellets.

Steve Walker, the owner and president of New England Wood in Jaffrey, the state’s sole wood pellet maker, said concerns about wood pellet shortages this winter are valid. There are no wood pellet makers in Maine.

“There is just staggering demand, and we’re running the plant 24 hours a day, seven days a week,” Walker said. “We’re doing our very best, but I don’t think we will be able to make as much as people want this year.”

Walker said he expected steady growth when he built his plant in 1998. But he said he never dreamed the price of home heating oil would skyrocket as it has.

“We have the highest growth expectations we’ve ever had in 13 years for the next three years,” Walker said.

New Hampshire and the nation’s Northeast can offset oil dependence with wood pellets, said U.S. Rep. Charles Bass, R-N.H. He arranged for a five-year, $1 billion program to reimburse consumers 25 percent, up to $3,000, of the installation cost for alternative energy systems. His rebate program was added to the latest energy bill.

He also called it important for the wood pellet industry to build more plants and for the logging and timber industry to grow and provide more of the low-grade wood needed to make wood pellets.

“Over the long term, it will be very good for New Hampshire,” Bass said.

Conservationists agreed. If more plants are built and the state’s logging industry adds jobs, there will be plenty of low-grade wood for wood pellets, said Charles Niebling, vice president of policy and land management at the Society for the Protection of New Hampshire Forests in Concord. New Hampshire has 4.8 million acres of forest. The state conservatively can grow about 2.5 million cords of wood annually, Niebling said.

As the demand and price for low-grade wood increases with the demand for wood pellets, Niebling said, more landowners will harvest more timber to feed the plants.

James F. McManus Jr., owner of Rochester Stove Co. in Rochester, said his wood pellet stove sales have been strong. He sold 12 stoves last weekend and 250 since January, double the number he sold last year.

Fallon said he sold slightly more than 900 wood pellet stoves last year, but estimated that he could sell 1,500 this year. Customers have preordered hundreds of wood pellet stoves, and each customer will need an average of about 3 to 4 tons of wood pellets to get through the winter and early spring months, he said.

All about pellets

What are pellets?

The most common residential pellets are made of compressed sawdust and ground woodchips, which are waste materials from trees used to make furniture, lumber and other products. Resin and binders occurring naturally in the sawdust hold wood pellets together, so they usually contain no additives.

How does a pellet stove work?

A pellet stove is an automated wood burner. Once the stove’s hopper is loaded with pellets and the stove is lit, (automatically or manually), an automated feed system delivers the fuel into a burn chamber. An electric fan delivers air to the fire and blows exhaust out a vent pipe to the outside. Another fan delivers heat to the home by blowing air through heat exchangers in the stove and out into the home. Heating efficiency is enhanced by removing the heat from the appliance before it can exit the system.

What fuel advantages do pellets offer?

Convenience is a major appeal. Bags of pellets store easily and loading the stove’s hopper is normally required only one a day. Pellet burn is very efficient due to the low moisture content of pellets and the ability to precisely regulate combustion air flow, yielding high heat output and low unwanted emissions.

How does a pellet stove vent?

Since pellet stoves are power vented, they can be installed anywhere in the home, with venting through the ceiling, through a wall or into an existing masonry chimney. The stove must be installed a specific distance away from combustible surfaces and materials.

What happens when there is a power outage?

Fuel feed stops in a power outage but the pellets in the burn pot may continue to burn or smolder. If the exhaust vent does not have vertical sections to provide natural draft, smoke may spill into the home.