Wood pellet market needs a push

This is another winter of our heating discontent. Escalating oil prices hurt every time the oil delivery truck arrives. Nonetheless, we just keep on paying.

Businesses and homeowners started to find a way out of this dilemma during an earlier oil price spike. In the 1970s many designed and built wood stoves and boilers, tramped through their houses with stick wood, and endured smoke and occasional chimney fires. Some especially venturesome souls even installed solar hot water systems.

Then oil prices dropped. It was the Reagan revolution and oil was 80 cents a gallon. Eventually we decided that wood was a hassle and let the solar-heat system slip into disrepair or, like our president, removed it when it came time to re-roof the house.

Perhaps 1970s concerns about oil were put aside prematurely. Oil may or may not be running out, but stable and dependable providers are. Maintaining access to most remaining oil entangles us in dangerous and expensive ventures. Just as significantly, burning fossil fuels creates environmental problems far worse than dirt on the floor.

Maine has the resources and skills to address this problem. We have an edge over many other states. We live in one of the most forested states in the country. Wood is also a solar product, chemically stored sunlight.

In addition, as Tom Gocze, the host of the “Hot and Cold” radio and TV programs here in Maine and an expert on energy and housing matters, recently pointed out to me: “There is a new generation of wood pellet stoves and boilers that eliminate many of the older problems. Although these stoves must be cleaned, they need it less often than a wood stove. They do not require chimneys. They are thermostatically controlled, and most of them can start a fire automatically.”

Gocze also reminds us that “a growing number of Maine firms manufacture wood pellets, many of which are exported to Europe, and Maine has the stove technology.” Gocze estimates that a state-of-the-art pellet stove, at about $3,000, could easily save half a year’s heating costs, of about $1,000 a year. The obvious question becomes: Shouldn’t we have a pellet stove in every home? Why doesn’t our market economy, with stove makers seeking to

expand their market and consumers to save money, lead to dramatic increases in demand for this product?

There are several reasons the market’s invisible hand may deserve a modest boost. The initial expense is anywhere from $1,300 to $3,000 for a stove and $4,000 to $12,000 for central heating pellet systems. This expense deters many working- and middle-class homeowners. They often need a quick and relatively certain payback, but they currently receive relatively little information about alternative technologies. Much of what they do hear is generated by industry sources and therefore in need of validation.

The need for quick paybacks and relative certainty has become especially acute in a market where credit has become especially tight.

Market costs for various heating systems and fuels do not reflect all the social costs and benefits associated with those systems. Earlier this month Gov. John Baldacci introduced a “Wood-to-Energy Initiative” to bring Maine-made sources of heat to the homes and businesses of Maine.

His initiative correctly recognizes that many of the benefits from Maine residents’ purchases of stoves and pellets made here go beyond the initial consumer and producer. Reducing fossil fuel consumption not only

trims greenhouse gas emissions but also lessens our dependence on fragile foreign energy sources. Here in Maine, a flourishing stove and pellet industry could keep more consumer dollars in Maine and stimulate

other Maine businesses. All of these factors suggest a compelling reason to look to proactive strategies to increase purchases and use of these stoves.

Free market devotees argue that government should never be in the business of choosing winners. Yet I would not have the computer on which I am writing this piece if government had not both funded basic research on computers and purchased several generations of computers to track its missiles. In the process, learning curves were advanced and costs driven down.

Spreading the word on new versions of old technologies such as pellet stoves is one positive step that media and concerned citizens can take to advance both social justice and ecological concerns. Nonetheless, nonprofits and governments at the state and federal levels have at least as important a role to play, a theme I will address in my next column.

John Buell is a political economist who lives in Southwest Harbor. Readers may contact him at jbuell@acadia.net.