1. U.S. Wood Energy and Pellet Markets: Update to the 2010 Resources Planning Act (RPA)Assessment
Karen Abt
USDA Forest Service
Southern Research Station
With Christopher Galik and Robert Abt, NCSU and Ken Skog, USFS (retired)

2. Outline US wood energy consumption and production Pellets
Future of wood energy markets
Take Home Messages
2020 RPA Assessment

3. Wood Energy Consumption and Production Data
Wood energy consumption—from US Dept. of Energy, Energy Information Administration (EIA)
Production of wood to be used for energy from USFS-FIA and Timber Product Output (TPO)
Residential data questions
Export data from US International Trade Commission (USTIC)
Monthly Energy Review, Table 10.2
EIA-63C—the Densified Biomass Report. Monthly since Jan about 4 month lag.

4. Consumption of Wood for Energy 1990-2016
US per capita consumption is about 0.7 cm per person, declining as paper declines and costs of other energy sources fall (including both other renewables and fossil fuels)
Low end of developed countries—finland is 7cm/person, Canada and Austria at 2.5cm/person

5. Pellets Exported from the US, 2012 to 2016 (USITC)
But the big story is not US wood energy consumption, it’s US wood energy exports. In the form of pellets.
UK increasing over time, others all declining over time
Still no Asian market

6. Why Pellets? Why now?
EU Renewable Energy Directives (2020 and 2030) require increases in renewable and low GHG emitting energy.
Some countries, UK in particular, have chosen to use wood pellets to cofire or direct fire in converted coal power plants.
Pelletizing makes shipping easier and safer, and makes the performance more consistent in power production.

7. Pellet Mill Capacity, Jobs, Mills, and Production, 2016 (EIA63C)
Num. of Mills
Export Quantity
Domestic Quantity
East
563
2,229,947 35
738,012
South
1,179
7,904,184 33
4,827,647
419,995
West
234
893,367 18
771,062 US
1,976
11,027,497 86
2,280,136
Small changes from jan to dec.
2 mills added
Cap ute is 64%

8. Wood sources for pellet production, 2016 by month (EIA 63C)
‘Other residuals’ is a catch-all, and includes “wood that is too poor in quality or too small to convert to industrial use”. This includes anything for which there is no other market—hickory trees; crooked or damaged trees; pulpwood material where there is no pulp mill.

9. Type of Densified Biomass being produced, 2016 (EIA 63C)
All of compressed bricks and logs are coming from the west.
All of the utility pellets are being produced in the south

10. Operating, planned, and temporarily shutdown pellet mills, 2016 (EIA63C)

11. How Important Are These New Pellet Mills to Wood Products Markets?
Wood used for pellets nationally is 1% of total
2% of southern harvest
4% of less-than-sawtimber-grade removals
Well within the normal range of market variation across the nation and across the south
In procurement basins
Could be a higher percent
Could be harvesting differently than in the past

12. Future of wood energy and pellet markets
New pellet mills are planned and under construction, so exports are expected to increase
Capacity utilization expected to rise
Longer term, much will depend on EU and UK policies on renewable energy and sustainable forestry
Prices for fossil fuels and other renewable energy sources, as well as paper production will influence US wood energy consumption

13. Take Home Messages (1)
Domestic wood energy consumption is low and declining
Pellets are the topic du jour—5 mm metric tons exported (from 11mm short tons green wood)
New mill openings in 2017 and 2018
Within the range of historic market variation (national and regional)

14. Take Home Messages (2)
Could create unwanted competition and forest changes, especially in local markets and basins
Provides local jobs and income to landowners
Future demand is uncertain (policies affecting biomass use)
Sustainability policies could influence supply and thus exports (forest land area, biodiversity, ecosystem services, GHG emissions)

15. Looking Ahead to the 2020 RPA Assessment
Wood energy will be included as a forest product in each of the scenarios
If possible, a subset of these scenarios will be run also including higher demands for domestic wood energy and/or wood energy exports
Carbon implications of increased domestic and exported wood energy will be considered.
Overall effect on harvesting and forestland needs further analysis