One warm winter
June 25, 2016 - As we work our way through the spring months in Canada, we are starting to gain a clear understanding of the devastation dealt to the biomass and bioenergy industry during the warmest Canadian winter on record.
The warmth spread from Ontario east to the Atlantic Ocean, blowing through the Atlantic provinces and sweeping up Maine in its wake. In some regions, there was so little snowfall that shovels rarely left the front stoop and the traditional sound of snowplows were almost non-existent.
While most people throughout the region were excited by the mild weather, it wasn’t just the ski and snowboarding industries that took a beating as a result. For those producing pellets, chips and dust for bioenergy, the ones already getting pummeled by the low cost of natural gas and oil, the warm winter was more akin to the knockout punch in a 12-round slugfest.
In Quebec, where much of the pellet production is for domestic consumption, many manufacturers found themselves running at high production levels without any home for the volumes created. Many of them entered the spring and summer with significantly larger stockpiles than usual, hoping to find a home for the pellets in the summer or fall.
Atlantic Canada faced much the same dilemma: keep producing in hopes of finding a buyer or curtail production that would cause staff to be laid off? Much like Quebec, many of them soldiered on and kept production steady.
The one saving grace for these producers should have been the low value of the Canadian dollar, and how it would present opportunities to ship pellets south to the U.S. However, struck by a similarly warm winter, there were few takers for the Canadian pellet production.
Thankfully, producers have taken steps to reduce the impact of future mild winters in Canada. A group of pellet producers from Quebec and Atlantic Canada travelled to Europe with representatives from the Quebec Wood Export Bureau (QWEB) in search of new markets for Canadian pellets. According to John Arsenault of QWEB, the group was the largest he has taken to Europe in search of new business opportunities.
The results were positive, as at least two of the producers on the tour were able to gain new customers. Those new customers will help to sustain the wood pellet industry in Eastern Canada, and could allow those same companies to expand, or leave domestic quotas for other Canadian producers.
Coming off of an extremely cold and bitter winter in the same region just one year earlier, it is great to see the pellet industry in Eastern Canada stay resilient through such a difficult business climate. Even if the warm weather acted as an immediate catalyst to push these producers to look for new markets across the Atlantic, they used the resources available and made the smart business decision to look elsewhere.
Smart business decisions like these, regardless of the original cause, will help keep the wood pellet industry going strong in Canada.