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Blog

Forestry Related Industry News - May, 2014

May 27, 2014
Author: LeAndra Spicer

Timberland

Over the next five years, Mead Westvaco will sell 50,000 acres of rural land near East Edisto, South Carolina for uses including timberland, farming, hunting, recreational and rural housing. Currently, 4,000 acres are for sale in a variety of lot sizes.

Sawmills

On the heels of its purchase of Travis Lumber Company's sawmill and lumber manufacturing operations (Mansfield, Arkansas), West Fraser has also purchased Bibler Brothers Lumber in Russellville, Arkansas. The sawmill produced approximately 136 million board feet of lumber last year.

Hixson Lumber Sales will add a second sawmill at its Magnolia, Arkansas site. A building permit has been issued for the $455,000 project. While capacity has not been announced, Hixson plans to hire an additional 40 employees when the mill is completed; it currently employs 120 at the site’s first sawmill.

Louisiana-Pacific Corporation ’s $1.1-billion acquisition of Ainsworth Lumber Co. will not move forward. The intended purchase was announced in September 2013, but regulators did not allow the sale to proceed.

Bioenergy

NRG Energy Services has received the right to operate the foreclosed Aspen Power biomass power plant in Lufkin,Texas for at least one year. The power plant could reopen by mid-June and will be placed on the market for potential buyers. Touted as the first wood biomass power plant in Texas, the 57-MW power plant has been idle since 2012.

Rentech Inc. has acquired New England Wood Pellet (NEWP) in Jaffrey, New Hampshire for a total initial purchase price of $45.1 million. Serving the domestic heating market, NEWP’s three wood pellet facilities have a combined annual production capacity of 240,000 tons. The purchase comes approximately one year after Rentech began a transition from liquid to solid wood fuels with its purchase of Fulghum Fibres.

Geechee Energy LLC plans to break ground on the Ogeechee River Pellet Mill near Millen, Georgia later this year. The South Carolina-based company plans to use mill residues, forest residues, and roundwood logs as feedstock. The plant has a planned capacity of 360,000 tonnes per year and is scheduled for operation in early 2016.

In true “you win some, you lose some” fashion, Drax has received a Contract for Difference (CfD) for its Unit 3 but not its Unit 2 power generation plant. In December 2013, the UK Department of Energy and Climate Change (DECC) shortlisted both of the units. When the contracts were announced in late April, DECC indicated Unit 2 did not meet the criteria.

Drax can continue its planned conversion under the existing direct subsidy but is pursuing legal action against the decision, noting it made no changes to its plans for Unit 2 between the DECC’s shortlist and final decision.

Contracts for Difference guarantee the price generators receive for the power they produce for 15 years and are set to replace of Renewable Obligation Certificates (ROCs) under the UK’s new Electricity Market Reform program. Three of the initial eight projects awarded contracts were wood-to-energy plants. In addition to Drax’s successful Unit 1 conversion from coal to wood biomass last year, a biomass conversion planned by Lynemouth Power Ltd. (a subsidiary of RWE npower) and the Teesside biomass combined heat and power plant owned by MGT Power Ltd. were approved under the program.

The UK government is expected to publish additional details on the allocation process as well as make additional CfDs available this fall.

Meanwhile, various reports citing permit and grant applications indicate Drax plans to build a third wood pellet plant in the United States. The company has not yet confirmed the Pike BioEnergy LLC project in Magnolia, Mississippi.

Drax is presently building two pellet manufacturing facilities in the U.S., one in Gloster, Mississippi and one in Bastrop, Louisiana. The company is also building a storage and shipping facility at the Port of Greater Baton Rouge.

Biofuels

In April, American Process shipped its second commercial volume of cellulosic ethanol made from forest residue woodchips from its biorefinery in Alpena, Michigan. The shipment generated the first Renewable Identification Numbers (RIN) for cellulosic ethanol made from woody biomass in in the United States. The biorefinery has an approximate annual capacity of 894,000 gallons of cellulosic ethanol and 696,000 gallons of aqueous potassium acetate.

At the other end of the spectrum, KiOR has expressed “substantial doubt” regarding its ability to restart its Columbus, Mississippi facility. According to the company’s recently released quarterly report, design and reliability issues have caused the facility to run “significantly below” its capacity of 500 bone dry tons of biomass per day. KiOR has the funds necessary to operate through August but will require additional capital to continue past that time.

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