Perfect Storm for a Pellet and Firewood Shortage

As winter approaches, the groundwork is being laid for a perfect storm of unprecedented firewood shortages in the Northeast and Great Lake states.
By John Ackerly | November 01, 2014

As winter approaches, the groundwork is being laid for a perfect storm of unprecedented firewood shortages in the Northeast and Great Lake states.  This may result in the impression that biomass is taxing our forests too heavily, when it’s almost entirely due to other factors.

Like last year’s pellet “shortage,” this year’s shortages are mostly a supply chain issue.  Industry has been waiting for the consumers, and now that they're here, is playing catch-up. As far south as Maryland, people couldn’t even find pellets in late September. 

So far, coverage of the firewood shortage has been good, and scores of articles typically cite the causes as: last year’s cold winter, a wet spring and summer kept loggers out of the woods, a declining number of loggers, competition with other biomass users, new restrictions from transporting wood over state lines to combat invasive species, and more people heating with wood and and pellets.

There is one thing none of the articles mention: the shortage is likely to result in far more smoke because more people will be using unseasoned wood. The shortage began as a shortage of seasoned wood.  Now it’s a shortage of any wood. 

Also, coverage rarely mentions that about half of American homes that heat with cordwood—5 million—obtain their own wood and will not be affected by this shortage. 

The real seasoned wood heaters have a two-year supply of wood in storage, because even wood purchased in the spring is not necessarily ready in the late fall.  It’s many of the people new to heating with wood who are the least prepared this winter and don’t have enough seasoned wood.

If we have another cold winter like last year, this shortage will be far worse than it’s already shaping up to be. And if there is also another pellet shortage, it may shake the confidence of potential wood and pellet stove customers and lead to more concern over how the U.S. can sell millions of tons of pellets to heat European homes instead of serving the American market.  Generous European subsidies, particularly in the U.K., make pellets an economical choice to make electricity at only 30 percent efficiency, instead of using this resource at 70 to 80 percent efficiency for heat. 

The market is definitely giving signals that higher demand for both pellets and cordwood is not just short-term. More pellet mills are being built, and hopefully, more customers will learn to order early in the year. Pellet mills are making sure to first take care of their bulk customers: residential, commercial and institutional.  What’s left over gets bagged.

The cordwood industry is, for better or worse, incredibly decentralized and unregulated.  Each state has hundreds of retailers who source wood from a variety of ways, some buying it and others cutting it themselves.  This shortage could help expand operations that kiln-dry wood and sell by the cord, not just in small, shrink-wrapped bundles. Operations with robust kilns that can get green wood one week and deliver it seasoned the next week command $400 and higher, instead of the normal $225 to $275 per cord.  Regardless, this winter, normal prices will move moving upwards of $300 for any cord of wood.
 Unlike most cordwood, kiln-dried wood can cross state lines or be transported further than 50 miles, as long as it’s dried to federal specifications that assure all bugs are killed.  Kiln drying operations are much more common in Europe. Expansion in the U.S. would be a great way to ensure more of our firewood supply is properly split and seasoned, resulting in higher efficiency and lower emissions.

While Maryland is already experiencing a pellet shortage, there is no firewood shortage here, or in many major suburban areas outside of the northern Snow Belt. In fact, there is still a slew of free, precut firewood from tree cutting companies, some that will deliver it for free. One company just posted a big, permanent sign advertising “free firewood” on a major thoroughfare, and several local tree trimmers drop cords of unsplit, 18-inch pieces there every month.  I often drive by and am tempted to grab it, but my wife reminds me that we already have two years of seasoned wood out back.

Author: John Ackerly
President, Alliance for Green Heat