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Wood Bioenergy: Analysis of Wood Demand from Bioenergy and Forecasted Pulpwood Prices in the South

This post includes an excerpt from the feature article in the August/September edition of Wood Bioenergy US (WBUS) about how wood demand from bioenergy is expected to affect state-by-state pine pulpwood stumpage prices.

Wood bioenergy markets continue to impact timberland investments and the forest products industry differently across states and local markets.  Each successful bioenergy project represents a “point source” of demand; this impact becomes relevant as increases in wood demand from these projects affect stumpage prices received by local timberland owners and paid by wood procurement foresters for standing timber.

State-level forecasts of pine pulpwood prices in the U.S. South highlight how bioenergy projects drive potential price increases over the next ten years.  The analysis shows that announced and operating biomass projects, and assumptions of project viability, affect stumpage prices to a greater degree than assumptions regarding changes in demand for traditional forest products such as pulp and paper and OSB that also depend on pulpwood. Projected increases in the use of pine pulpwood and logging residuals by bioenergy projects will increase stumpage prices in the U.S. South.  According to the 2013 Mid-Year Forisk Forecast, pine pulpwood stumpage prices are projected to average $13.76 per ton in the U.S. South in the Base Case in 2023, an increase of 48% from the current price. On average for the U.S. South, 77% of the increase in pine pulpwood stumpage prices is associated with increased demand from viable wood bioenergy projects (that pass Forisk status and technology screens).

WBUS Market Update:  As of September 2013, WBUS counts 464 announced and operating wood bioenergy projects in the U.S. with total, potential wood use of 129.3 million tons per year by 2023.  Based on Forisk analysis, 298 projects representing potential wood use of 79.4 million tons per year pass basic viability screening.  To download the free WBUS summary, click here.

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