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2009 FUEL WOOD PRICES
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Fuel-wood prices varied by region in 2009.
According to Forest2Market's Delivered Price Benchmark, the only pricing service in the South and
Pacific Northwest based on transaction data, prices for fuel-wood increased in the South and
decreased in the Pacific Northwest.
Across the South, fuel-wood prices averaged $20.98 per green ton, and in the Pacific
Northwest, wood fuel prices averaged $44.08 per dry ton.
More...
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POLICY
FOCUS: BIOFUELS
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When the
Biofuels Tax Credit of $1.00 per gallon expired at the end of 2009, some biofuels producers
discontinued production. Many of the rest are struggling to stay afloat. Into this environment,
President Obama announced a comprehensive and multi-pronged approach to achieving revised renewable
fuel standards (RFS2) with biofuels.
RFS2 Implementation Rules
RFS2
standards were set by Congress in the Energy Independence and Security Act (EISA). Proposed rules
were released in May 2009, and in early February, the EPA announced the
long-awaited rules for meeting RFS2. Significant changes were
made for the final rules.
Biomass Crop Assistance Program (BCAP) Proposed Rules
In
order to establish a biomass supply chain and make sure the supply is going to facilities that will
increase the amount of renewable energy produced in the US, the USDA announced a revised set of
rules for
BCAP's Collection, Harvest, Storage and Transportation (CHST)
matching payments program. In order to accomplish the program's intent, the new rules propose
changes to the structure of how payments are made.
An Umbrella Policy for Coordination and Accountability
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BREAKING
GROUND:
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Site Selection and Project
Bankability
With
the Biofuels Policy announcements made in early February, the U.S. governement
has demonstrated it is serious about replacing oil with domestic and renewable sources of
transportation fuel. This policy as well as others already underway will undoubtedly
provide the focus and investments needed to increase the number of proven technologies for
turning wood into energy. More industries, schools and government buildings will generate their own
power, more utility companies and independent producers will generate electricity for the grid,
more wood pellet manufacturers will serve domestic residential and industrial markets and
international markets, and more biodiesel, cellulosic ethanol and other bioproducts producers will
arrive on the scene.
We
will continue to see a significant increase in the number of operational wood bioenergy facilities
over the next five years. As this growth occurs, it is almost certain that competition for
wood fiber will intensify in local supply sheds.
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2009
WOOD PELLET PRODUCTION
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Outstrips Demand in the Pacific Northwest
Despite
all the announcements, demand for wood pellets in 2009 was well below both manufacturing capacity
and production levels in the Pacific Northwest. As a result, prices for sawdust and shavings (the
raw materials used by pellet manufacturers) moved off their 2008 highs.
Higher heating costs and a robust European market led to strong gains for the pellet
industry throughout most of the last decade. According to a June 2009 report by the USDA, wood
pellet capacity in North America increased from 1.2 million tons in 2003 to 4.6 million tons in
2008. (Note: All volumes have been converted from metric tonnes--the unit of measurement used by
the USDA--to U.S. short tons.)
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BIOBITS
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Range
Fuels, long the great hope for the wood-based cellulosic ethanol industry, expects to start up
gradually in the second quarter of 2010. According to the EPA, despite $150 million in federal
grants and loan guarantees and anticipation that the facility would produce 10 million gallons of
fuel in 2010, they are now expected to produce only a quarter of that total. See article in the
Washington Post.
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FOREST2MARKET
CELEBRATES 10-YEAR ANNIVERSARY
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In
January, Forest2Market celebrated its 10th Anniversary. Marking this occasion, Pete Stewart said,
"To a large degree, our success can be traced to an obsession with real data. I spent the first
decade of my career buying or selling timber and timberland without reliable data on its value. The
idea for Forest2Market originated there, and we have been offering solutions to industry
participants built on real market data ever since. To this day, every business solution we develop,
every piece of industry information or analysis we provide to our clients is based on
transaction-level data and a commitment to provide our clients with accurate and actionable
business information."
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