Mississippi Logging finds Business Opportunities Across the Pond

Jan 13, 2017  | 6 min  | Ep4221

This week, China’s ministry of Commerce announced that U.S. distiller’s dried grains will face a more than 50 percent tariff. This comes just days after China increased the ethanol tax from five to 30 percent.

The new administration has vowed to get tough with trading partners like China.

Trade has taken a seat on the bus of concerns for some in rural America as companies need new markets to stay profitable.

Delaney Howell reports how one organization has turned to innovation to be competitive both here and abroad.

 

Better known for its production in cotton, catfish, and sweet potatoes, Mississippi is one of the leading producers in another agricultural industry: forests.

Across Mississippi, some 350,000 private landowners control approximately 75 percent of all the forest area in the state, which contributed $1.16 billion to the state’s economy in 2015. A majority of these private owners sell their wood to companies like Weyerhaeuser.

Controlling more than 26 million acres of forestland around the world, the company thins the timber to retain high value trees for use as dimensional lumber and plywood. The remaining majority of the smaller, lower value trees are used to make pulp and paper products.

However, over the past two decades a decline in print and paper use has taken its toll on the forest industry.

Jason Gibson, Weyerhaeuser Marketing Forester: “We've seen a decline in the southern United States in the pulp and paper industry in the last few years. And as those mills have gone out we've lost some markets that we really need to be able to keep our forests growing at a sustainable level.

Five southern states including Georgia, Alabama, Mississippi, Louisiana, and South Carolina, produce over 50 percent of the nation’s wood used for pulp and paper production.

Scurrying to find a new industry to sell lower grade timber, and to ensure that forests would be preserved, the pellet industry took root.

Jason Gibson, Forester, Weyerhaeuser Marketing: And so that's what the pellet mills have allowed for us as they have come in, they have helped us create some new markets for that pulpwood and that's why we're thinning this stand right now is we're able to take it to a pellet facility.”

One company has helped ensure that these lower-grade wood thinnings have had a market-place since the decline in consumption of pulp and paper.

Drax Group PLC, was originally built in the United Kingdom to provide energy via coal but soon found that was not the answer.

Richard Perberdy, V.P. of Sustainability Drax Biomass: Our facility in the UK was built in about the 1970s and it was built as a coal burning power station. Well it has become increasingly apparent that burning coal is not good for the environment and the UK government have recognized this, society has recognized that and the UK government is increasingly trying to withdrawal from the burning of fossil fuels and coal and our company has responded by replacing coal with compressed wood pellets.

Needing a steady supply, Drax Group PLC decided to seek out sources in the United States. In August of 2011, Drax Biomass, opened its domestic headquarters – initially in Boston, Massachusetts before relocating to Atlanta, Georgia in 2014.

Extensive testing was done prior to selecting wood pellets as a fuel source, but efficient burn rates combined with low carbon emissions, made the product an easy choice for the company.

Richard Perberdy, V.P. of Sustainability: “So rather than using a fossil fuel where there is additional carbon being pumped into the air, by using a renewable fuel such as compressed wood pellets we can stop that and in fact we show that when we calculate all of the savings associated with our activity, we do use some fossil fuels of course in the harvesting of the tree and the transportation, even in some instances in the growing of the crop, we take all of that into account, when all that is taken into account at the power station we make savings in excess of 80% in terms of carbon emissions compared to coal.”

Following the decision to utilize pellets, two processing facilities went up in the fall of 2015; the Amite facility located in Gloster, Mississippi and the Morehouse facility located in rural Northeastern Louisiana.

Gavin Black, Amite Plant manager: “So the reason we produce pellets is for shipping efficiency. Ideally you can get more into a hold, into a cargo container, into a van on a truck, all that you can get more tonnage through, it's more cost effective, it's more fuel efficient, it lowers the carbon footprint by having more density in the material that you're shipping. So or us that's why we do the pellets because the pellets have a higher density than say a natural wood does or even chips or sawdust or anything like that.”

After the pelletizing process, the materials are sent by rail or truck to an export facility in Baton Rouge, Louisiana where up to 2 million metric tons of pellets can be exported annually.

Along with the environmental benefits, the communities near the two pellet facilities have seen major returns to their local economies.

Gavin Black, Amite Plant Manager: “Locally obviously it brings in 60 direct jobs here at the facility. Usually we say that's a three times multiplier so about 175 jobs, indirect jobs in the area. And then construction even more so because of all the construction personnel that were on site, close to 300 at one time, during the construction process. So it's definitely a shot in the arm of the community we're in by operating here.”

Since transitioning to pellets, the U.K. power plant now provides approximately 8% of the country’s electric needs. Although the amount of power generated by burning wood pellets in the U.S. is relatively low, Black is optimistic about what the technology has to offer.

Gavin Black, Amite Plant Manager: “I think the domestic side is going to grow. It's up and coming. Obviously in Europe they're well-established and it has been something that they've done successfully for many years. I do believe that domestically here in the United States we're going to see that market grow in the coming years.”

For Market to Market, I’m Delaney Howell.

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