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Burned by demand: The price of winter's hottest fuel soars
The Providence Journal


February 12, 2006

Pellets, please?

That's the cry heard around New England this winter by people who bought wood-pellet stoves.

When headlines warned that heating costs this winter would skyrocket, many sought alternatives, such as this specialized type of stove that burns pellets made from compressed sawdust.

The problem was, a lot of people had the same idea. And so the fuel for the stoves - 3/4-inch pellets that look like rabbit food - has been difficult to find.

"I was getting 50 calls a day for pellets in September and October, before the season really started," said Anthony Martini, a salesman at Ocean State Stove and Fuel in Warwick, R.I.

The store decided to limit sales of the pellets to their stove-buying customers.




In Swansea, Mass., Paul Travers was also flooded with calls at R.B. Negus Lumber Co., which he runs with his brother, Peter.

When the store ran out of pellets and he couldn't get them from New England dealers, he got creative.

He said he contacted a pellet maker in British Columbia, in western Canada. He arranged to have 80 tons of pellets shipped by rail across the country.

While the pellets were in transit, Travers put a sign in front of his store, saying something to the effect of "two carloads of wood pellets on the way," he said. And when they finally arrived: "Plenty of wood pellets in stock."

Don Hysko, of People's Coal in Cumberland, R.I., holds a handful of wood pellets, which are burned in pellet stoves. With the rise in heating costs, many homeowners bought pellet stoves as an alternative, with the result that there was a shortage of pellets. The shortage has eased, but the price has more than doubled from last year.

The shortage of pellets appears to be easing now. But high demand has pushed up the price. For example, Martini, of Ocean State Stove and Fuel, said that 40-pound bags of pellets sold last year for $2 to $2.10 each. This year, prices have risen to $5 to $6 a bag, he said.

The shortage is a classic case of demand outstripping supply. Pellet manufacturers simply weren't prepared for the onslaught of orders this winter.

"We regret that due to the surge in popularity of our fuels that we have not been able to keep up with demand in recent months," says a note on the Web site of New England Wood Pellet, a Jaffrey, N.H., company that makes wood pellets and supplies them to dealers.

"We are moving aggressively to increase our manufacturing capacity," the site says.

The company's operations manager, Norwood "Woody" Keeney, said in an interview that the company began its most recent expansion more than a year ago, but that it has taken longer than expected. The company will add a fourth "pelletizer" this spring, enabling the production of 100,000 tons next heating season, compared with about 50,000 tons this winter, he said.

The pellets are made from sawdust gathered from various sources, such as furniture makers and sawmills, Keeney said.

Sawdust from freshly cut, or "green," wood contains about 50 percent water and needs to be dried, Keeney said. Furniture sawdust has already been dried, he said.

The material is then put in a machine that compresses it. It is extruded and cut to length, he said. No other materials are added to the sawdust, he said.

Wood pellets are more efficient than standard cut and split hardwood because they don't contain the bark, which produces more ash. More ash means incomplete combustion, he said.

Trees are not cut down specifically for making wood pellets. It all comes from waste wood, or from trees removed because of forest management, Keeney said.


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