Editorial: Pellets Down Pat
It has been clear for some time that any major growth in the Canadian wood pellet industry will come from new fibre sources.
August 24, 2009 By Scott Jamieson
It has been clear for some time that any major growth in the Canadian wood pellet industry will come from new fibre sources. With sawmill residues largely spoken for even before the current lumber market collapse, we’ve started eye-balling such alternatives as green roundwood or demolition/construction waste. As Wood Pellet Association of Canada president John Swann points out on page 15, the past few years of falling sawmilling production has only made the need to decouple the pellet sector from the forest products sector all the more urgent. In addition to providing John’s views on this new pellet business model, we’ve also gone out and found someone who’s doing just that.
Our cover story this issue is on Curran Renewable Energy (page 16), a spanking new pellet mill owned and operated by seasoned log harvesting and bush chipping veterans Lee, Pat, and Tim Curran. They have invested over $10 million in a modern wood pellet facility just over the border in Massena, NY, and shipped their first order to a Quebec client in July. It’s a staggering investment for a logging company, but more to the point, it’s 100% based on a fibre supply of green roundwood chips. The goal is to compensate for a declining local pulp market by sending unwanted or off-species chips to the pellet mill. The company can rely on an established and highly efficient transportation infrastructure, a skilled harvesting team, good relationships with local landowners, and a steady market for at least some of its pulp chips. It’s also perched on one of the largest domestic markets for wood pellets in North America, and one that suffered through shortages all last winter. In short, the new venture slides into the old one like a glove.
Yet the Currans’ situation is hardly unique. This scenario mirrors many struggling forest regions in Canada, from Newfoundland and New Brunswick to northern Quebec, Ontario, the prairies, and pockets of BC where beetle-kill fibre is not spoken for. Still, it’s not for the faint of heart. As Pat Curran says, they now own a company “with a lot of debt and not many assets.” Launching similar operations in Canada may require banding together several large contractors to get the deal done (already being discussed in BC), or may involve municipal or provincial incentives.
Above all, starting such operations in Canada will take imagination and daring, and not just from our forest entrepreneurs. Governments at all levels will have to get involved, even if only to remove barriers. Access to credit and fibre needs to be addressed, especially in areas where a crumbling old-guard forest industry still stands in the way. Finally, programs to encourage domestic pellet use for industrial and residential applications need to be developed for regions where the fibre is available and the fossil fuel alternatives unattractive.
Still, if one plucky logging company in upstate New York can do it, it can be done here too. Enjoy this first look at Curran Renewable Energy’s green chip pellet operation. We wish the Currans well, and will watch their progress closely. •
Scott Jamieson, Editor/Group Publisher
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