Pellets expected to roll off line this month

Published on March 18, 2011

Roddickton — When the Northern Peninsula timber industry ground to a halt in 2008, there were fears the wheels of industry would never get rolling again.

A $10-million investment to refit the Holson Forest Products sawmill and build a pellet production plant has given new life to an industry and a region that has seen its share of tough times.

Pellet production is expected to begin at the end of this month, vindicating the decision of mill owner Ted Lewis to move his company in a new direction.

With the plant having the potential to produce up to 50,000 tonnes of pellets, Holson will become part of Canadian production line that produces a renewable heat and energy source for Europe.

Holson’s contribution will be significantly larger than what already exists on the island.

Cottles Island, at Summerford, produces about 10,000 tonnes while Exploits Pelletizing at Bishops Falls produces about 1,500 tonnes annually.

Because the Canadian domestic market is almost negligible in terms of consumption, most of the pellets will be shipped overseas until the province and this country switches over to what is considered a cleaner source of energy.

That’s not to say they don’t want to sell to this region and province first.

“It is our goal to sell them here first, because the true environmental benefit comes when they are burnt here and not Europe,” pellet division general manager Todd May said.

“When it comes to carbon emissions then there will be significant greenhouse gas reduction.”

Renewable energy is a dominant source of heat and power in Europe. Wood pellets, which will be sold directly from the Roddickton mill along with the stoves, furnaces and boilers required to burn them — are one of the key sources of renewable energy across Europe, he said.

“It’s very rare to see any other source of heat in central Europe,” he said. “Renewable energy is a way of life there.”

“Over the next five to 10 years, though, we expect to see a dramatic shift to using wood pellets, but that could be a lot quicker if there’s a desire among area residents and government leaders to do that.

“If there is a want and desire of local administrators to change over their facilities from oil to wood pellets, it can be done very fast, but if everybody wants to wait and see, it’s going to take a lot longer.”

When Corner Brook Pulp and Paper decided it was unfeasible to truck lumber from the Northern Peninsula, Holson had two choices. It could close its doors, displacing all of its employees, or it could look at other ways to keep the industry alive.

“Holson wasn’t able to saw lumber anymore because you can’t just go in and harvest saw logs and leave the rest of the timber there — it’s just not feasible,” he said.

It needed to come up with another plan to use energy, wood, or pulp fibre, but around the same time the government commissioned a study showing alternative uses for wood products and a growing international demand for wood pellets.

Holson developed a business plan for the pellet plant and the wheels were in motion.

First it upgraded its sawmill from four million board feet to 10 million — a feasible sized operation for this region, though small compared to Ontario and Quebec, whose mills produce an average of 100 million board feet per year.

Government funds became available in August 2009 and by November the sawmill had been gutted, ready to be upgraded and the slab poured for the pellet mill.

While construction was going on, timber was still being sourced.

“We needed to keep the wood operation side operating,” May said.

“If the harvesting contractors stopped while we were developing, they would have all gone out of business.”

To keep the forest industry moving, Holson bought and stockpiled 42,000 cubic metres of energy wood and saw logs; the latter would be sent to the sawmill to be turned into timber products while the former would be stored for the pellet mill.

“We’ve got a very large stockpile of wood, but in the future you are not going to see that much here,” he said.

“When we’re operating you won’t see as much wood on the ground.”

Why all the fuss about wood pellets?

“In terms of cost, one tonne of wood pellet gives the same heat value as 120 gallons of oil,” May said.

“Right now, 120 gallons of oil is close to $700, whereas a tonne of pellet is $330, so it’s about half of the cost. If you burn wood and buy wood it works out the same, dollar-wise, but the difference is there’s no work and no mess. It’s a very simple process keeping your stove, furnace or boiler going.”

Not only can they be used residentially — the conversion process for a home can be as easy as simply swapping furnaces in less than a day — but the big market is commercial and industrial applications.

Arctic Green Energy has converted a host of structures in the Northwest Territories to wood pellets, including a correctional facility, high school and it’s working on the legislative assembly building.

May said the same could happen here.

“St. Anthony hospital, the hospital in Corner Brook, Memorial University in St. John’s could all be converted,” he said.

“You don’t have to reinvent the wheel, and in a short period of time start saving money from energy costs.”

There are still a few issues to be sorted out before full-scale production can take place.

“Our real hindrance is the infrastructure to support the movement of pellets, be it Roddickton or St. Anthony — there’s no solid holding capacity for pellets,” May said.

“We need to be able to hold 7,000 to 10,000 tonnes of pellets so they can maintain dryness and be easily loaded onto a ship.”

A lot of pellet producers in Western Canada are using old grain silos and in Eastern Canada one facility at the port of Halifax is an old grain and flour silo, but over in New Brunswick, a special structure was built to warehouse up to 10,000 tonnes of wood pellets.

“Our only option (for shipping) is St. Anthony at the moment because the dock at Roddickton is not big enough and is in a state of disrepair. But in saying that, there is no temporary or permanent facility and it’s something we have to resolve very quickly.”

The Northern Pen