This post includes excerpts from the Q1 2015 Forisk Research Quarterly (FRQ).  The chapter on wood bioenergy details the current status and expected progress of the wood pellet, wood electricity and wood biofuels sectors in the United States, and their potential influence on timber prices.

 

U.S. wood pellet production could grow 6.0 million tons by 2018; of this growth, 97% would be intended for export markets.

The single largest source of growth in U.S. wood bioenergy markets are pellet projects planned and under construction in the South built to serve export markets to the U.K. and EU.  As of January 2015, the U.S. had at least 129 operating wood pellet projects; of these, 25 (19%) by count serve, primarily, export markets.  Forisk screening and analysis of announced projects indicates at least 137 operating wood pellet projects in the U.S. by 2018 of which 31 (23%) would focus on export markets. The project counts, of course, understate the shift as reflected in the large average capacity of the newer and under construction export-oriented facilities summarized in the Figure below.

Source: Q1 2015 Forisk Research Quarterly

 

The wood biofuels sector in the United States made little commercial progress in 2014.

The U.S. wood-derived liquid fuels sector has stalled. Of the 27 operating and advancing projects as of year-end 2014, at least 12 are pilot projects or demonstration facilities. Of the 5 projects with stated capacities of 10 million gallons per year or higher, none are operating. The entire sector has a maximum potential capacity of 151 million gallons per year, or enough fuel to power cars for less than 1⁄2 a day in the U.S.  [According to EIA, the U.S. consumed over 134 billion gallons of gasoline in 2013.]

 

Wood Bioenergy Market Update:  As of January 2015, Forisk’s Wood Bioenergy US Database counts 430 announced and operating wood bioenergy projects in the U.S. with total, potential wood use of 123.1 million tons per year by 2024.  Based on Forisk analysis, 299 projects representing potential wood use of 85.7 million tons per year pass basic viability screening. To download the free Wood Bioenergy US summary, click here.