Regardless the policy mandates and investor interests, regional analysis of US bioenergy markets highlights how specific geographies provide superior access to raw material and infrastructure resources for supporting high growth investment opportunities.  The costs associated with locating and building wood bioenergy projects can exceed those to build and operate (in terms of dollars per unit of electricity output) natural gas or coal plants.  As such, factors determining the success and failure of projects matter.  And these factors differ by geographic region and technology type.

In the current issue of Wood Bioenergy US (WBUS), Brooks Mendell and Amanda Lang focus on two aspects of regional wood bioenergy markets.  First, they review the potential demand for pulpwood and chips by region to address the question “where does wood bioenergy most directly affect timberland investors and forest industry procurement managers at pulp mills and OSB plants?”  Second, they evaluate the ability of regional markets to absorb and support new wood bioenergy projects by prioritizing regions with large, established, high-volume pulpwood markets, suppliers and the related infrastructure.  The results show how “market depth” helps explain why new wood bioenergy investment and projects migrate to different parts of the United States, especially the US South (see Figure).

National update: as of June 25 2012, WBUS counts 454 announced and operating wood bioenergy projects in the US with total, potential wood use of 125.4 million tons per year by 2022.  Based on Forisk analysis, 297 projects representing potential wood use of 73.5 million tons per year pass basic viability screening.  To download the free WBUS summary, click here.

For investors and analysts tracking bioenergy, wood and timber REIT markets, Forisk offers “Timber Market Analysis” on August 15^th in Atlanta, a one-day course for anyone who wants a step-by-step process to understand, track, and analyze the price, demand, supply, and competitive dynamics of timber markets and wood baskets. For more information, click here.