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August 26, 2008

BIOMASS - the next card in the deck?

Analysis of: Sawmills Falling Silent | www.nationalpost.com
This analysis is solely the work of the author. It has not been edited or endorsed by GLG.
Analysis By:
Brad Franchi, PresidentBrad Franchi
President, Forest Strategies, LLC.
Implications: As the author points up - chip supplies for pulp mills are becoming hard to procure.  The next "wave" of change is the emerging (erupting?) biomass markets.  There are over 40 US mills either announced, under construction, or running.  The largest of the bio pellet plants rival pulpmills in wood consumption.  These plants are running on fuelwood - except the Cottondale, FL mill - which started up recently on pulpwood.  Wood Pellets and cellulose ethanol are the leading outputs of these plants.  Wood Pellets require about 2 tons of residue per ton of pellets and ethanol yields about 30-40 gallons per ton of residue.  

Analysis:  Even if these plants do not consume any sawmill chips or pulpwood - they will most definitely raise costs for the pulpmills - as many pulpmills burn wood residues - internal as well as purchased.  Analysis of the FIA data of the USFS for Pennsylvania depicts huge volumes of untapped biomass - left in the woods.  At some cost - it will become more cost and process effective - to log these small trees and other residues.

Once again, the Forest will shift gears to fuel the needs of all, and possibly reduce dependence on fossil fuels, at least somewhat.

Other Analyses of the Same Source Article:
When will the sawmills come back?
June 16, 2008, Author: Robert Weinberger, Sole Proprietor, Bob Weinberger Forest Management Consulting
Pulp mills formerly depended on sawmills for chips - what do they do now?
June 16, 2008, Author: Dave Hillman, Independent Consultant, Dave Hillman

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