Alternative heat source is running out of steam

Shortage noted for wood pellets that fuel stoves

January 22, 2001

Melissa Curtis Cherry, By Jamie ManfusoSUN STAFF

For the past few winters, Melissa Curtis Cherry and her husband have cut their home heating costs in half by using a wood-pellet stove instead of their electric baseboard heat.

But the Cherrys, like many other pellet stove owners in the Baltimore area and across the nation, have found that it's almost impossible to buy the pellets now. Their supply ran out about a month ago, forcing them to turn to more expensive electric heat.

"This is our third season with the pellet stove, but we've never had problems finding pellets before," Cherry said.

Several factors - including an unusually cold winter, increasing energy prices and industry dynamics - have pushed demand for the wood pellets, which are made from sawdust, beyond what manufacturers can provide.

"I've never seen a year like this," said Leslie Wheeler, a spokeswoman for the Pellet Fuels Institute, an industry trade association in Arlington, Va. Demand for the pellets has increased 50 percent over last year, she said.

Wood-pellet stoves are a less expensive heating alternative for homeowners, even more so this year, given the price increases for home heating oil and natural gas. The stoves differ from traditional wood stoves in several ways: automatic stokers allow a pellet stove to run continuously throughout the day on a few dollars' worth of pellets, as long as its hopper is filled; the pellets create less ash than firewood; and pellets make use of sawdust, a waste product. Depending on size, wood-pellet stoves cost more than traditional wood stoves.

The institute estimates that 500,000 wood-pellet stoves are in use across the United States. Sales peaked during the mid-1990s and have leveled off since, but some dealers claim that the market bounced back this year. Sales in the Northeast are growing by 8 percent annually, according to the institute's figures.

Now all the sellers and buyers need is a steady supply of wood pellets.

Last week at the Green Thumb, a nursery and garden center near Westminster, a 22-ton shipment of pellets that arrived Monday was gone by Tuesday afternoon. Store manager Sherry Griffin hopes to receive another shipment this week, but she isn't promising anything.

"It almost feels like I'm selling Ravens shirts or Ravens hats," Griffin said.

The shortage has led stove owners to go to great lengths for the fuel.

Unable to find the pellets at stores in Baltimore or Baltimore and Frederick counties, Cherry drove 40 minutes from her Mount Airy home to buy pellets at the Green Thumb.

Since the shortage hit, Griffin said, she has enforced a limit of 10 40-pound bags - approximately 10 days' worth of fuel - per person. Customers have lined up 10 to 15 cars deep in her parking lot to pick up their rations.

The store has taken other precautions: "We used to leave pellets out at night," said Kris Metcalf, who works at the center. "Not anymore."

The situation is as bad or worse at other Baltimore-area dealers. The pellets were among the most-requested items last week at Home Depot in Owings Mills, a store manager said. Dawn Crook, an assistant manager at Lowe's in Westminster, said the earliest she is likely to see another shipment is later this week.

The pellets consist of compressed sawdust left over from hardwoods used in the lumber and furniture industries. Natural wood resins are used to hold the sawdust together.

A 40-pound bag of half-inch pellets costs between $3.50 and $4, and can heat a home for a day or more. On average, a residential wood-pellet stove burns 2.5 tons to 3 tons of pellets each year.

The industry of about 60 pellet producers has been caught off-guard by the increased demand.

Don Horner, general manager for the Lignetics Inc. pellet manufacturing plant in West Virginia, called the situation "a disaster." After each of the last three mild winters, he said, manufacturers' lots were full of unused pellets. Expecting another mild winter, many stopped production in the spring.

"After three scenarios like that, why build more inventory?" Horner said.

Since November, the Lignetics plant has been operating around the clock to try to meet demand. Horner even catered Thanksgiving and Christmas dinners for his employees to keep his plant operating. But, he said, the industry will have a hard time catching up to demand soon.

"None of the pellet-makers are big companies," Horner said. "They can't just triple production at the spur of the moment."

Other manufacturers lack the raw materials for pellets.

Ron Leofsky, owner of Allegheny Pellet Corp. in Youngsville, Pa., said the mills that usually supply him with sawdust are using it instead to heat their facilities this winter. Leofsky gets enough sawdust to make pellets for 15 hours per day.

"We all thought we were ready, and we all found out we weren't," he said.

Others in the industry say the supply of sawdust can be put to more profitable uses. Of all potential uses of sawdust - such as paper, charcoal and particle board - fuel pellets fetch the lowest prices.

Many area dealers expect supplies to rebound in March. Until then, customers like Jason Peltzer will have to scour the state for the pellets.

The Towson University student drove 50 minutes from Lutherville to the Green Thumb on Tuesday afternoon to buy pellets for his parents, who prefer to use a pellet stove to heat their Hampstead home.

As his car was loaded with bags of the precious pellets, Peltzer said, "I left work for this."

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