Maintaining Profitability

Energy markets have always been a low-margin game, but current conditions leave producers little margin for error. Thoughtful, well considered operations and maintenance strategies may well be the surest path to profitability.
By Tim Portz | December 30, 2015

The impact that a quality maintenance program can have on a bioenergy facility cannot be overstated.


In the case of Scotia Atlantic Biomass, a pellet producer in the heart of Newfoundand’s forest products industry, a revamped operations and maintenance program is being credited with ushering an era of profitability. For Associate Editor Katie Fletcher’s page-28 story, she caught up with Viridis Energy’s Michele Rebiere, who shared with her how the company migrated away from 24/7 operation while making maintenance a routine weekly discipline. Julie Millington, Scotia general manager, told Fletcher that the new program not only allows her team to keep the facility “spick and span,” but also provides an opportunity to think proactively about repairs.

Also on the roster of stories this month is a piece written by Stacy Cook, a Biomass Magazine editorial board member and plant manager at Koda Energy. The article, on page 16, provides a task-by-task account of the goals Cook and his team have for their facility’s planned outages, and offers a front row view of what Cook makes clear are among the most critical three days in the plant’s calendar year. More accurately, three days is a measure of how long the plant is offline and delivering neither heat nor electric power. Preparing for an outage is an ongoing discipline, and the planning for Koda’s next one began while this one was underway.

Since late summer, our team has been looking for an opportunity to explore what the trend of lower oil prices means for the biomass industry. As the price of oil reached a six-year low, Senior Editor Ron Kotrba reached out to producers to better understand how market conditions are affecting operations and profitability. He opens his page-22 story by comparing the current prices of a number of energy commodities with prices from a year ago. Despite working every day in the space, seeing the numbers reported in this rat-a-tat fashion was jarring. Unless winter comes on with a vengeance, heating oil expenditures this year will be as low as they’ve been in a decade. Knowing that these low prices will eventually impact the revenue side of their ledgers, savvy producers are working to capture all of the savings they possibly can, wherever they spend money on petroleum in the operation of their business.

Kotrba’s story underscores the lessons offered in the issue’s other pieces. Energy markets have always been a low-margin game, but current conditions leave producers little margin for error. Thoughtful, well considered operations and maintenance strategies may well be the surest path to profitability.

Author: Tim Portz
Vice President of Content  & Executive Editor
tportz@bbiinternational.com