East Texas to Become Europe’s Wood Basket
A Beaumont Enterprise Article
January 30, 2012
Beaumont, Texas—The region of East Texas once considered behind the “Pine Curtain” is now becoming the “wood basket.”
That “wood basket” describes a 75-mile radius from a wood-pellet mill to be built south of Woodville by a company called German Pellets.
The “basket” is a swath of East Texas timber country that provides the raw material with which to make wooden pellets, which are about the size of a dowel that might be used in furniture-making.
However, instead of joining legs to a table, the dowel-sized pellets are heading to the furnaces of electric power-generating plants in Europe. There, they will help replace coal.
German Pellets is making an investment of about $100 million at the former North American Procurement Co. plant about two miles south of Woodville, said Tyler County Judge Jacques Blanchette.
North American Procurement Co., or NAPCO, sold its shipping mill and acreage to German Pellets, which will demolish parts of the existing mill and build a pellet-making plant in its place. The pellets are produced from logged trees.
The new manufacturing plant and the existing timber activities that will support it amount to between 250 and 300 jobs, Blanchette said.
Tyler County Commissioners Court approved a 10-year tax abatement for the plant, offering a first-year abatement of 90 percent on improvements which goes down to 10 percent in the final year.
German Pellets still must secure applicable state permits to operate, which are expected at the earliest in February.
Peter Liebold, the Wismar, Germany-based company’s chief executive, said in a prepared statement that wood pellets are a “fuel of the future” and he expects European consumption to increase to between 15 million and 25 million metric tons per year by 2020. A metric ton is equal to 2,204 pounds. Current European consumption is 11 million metric tons.
The Woodville plant’s output is expected to be about 500,000 metric tons per year when production begins in 2013.
“The market for industrial-grade pellets will continue to experience especially strong growth due to coal-fired power plants switching from coal to pellets,” Liebold said.
Canada is Europe’s largest supplier at 1 million metric tons last year. However, Canada is expected to keep a larger percentage of its production for its own power generation, Liebold said.
German Pellets’ production in Woodville will be shipped through local ports, Liebold said.
A Houston-based company, Zilkha Biomass Fuels, is producing what it calls “black pellets” from a plant in Crockett. Zilkha shipped 6,000 metric tons of pellets from the Port of Beaumont to a customer in Europe in December as part of a test run, said Zilkha logistics coordinator Zoe Russell.
Zilkha said its patented process to make black pellets makes them waterproof, pre-drying them to reduce moisture content. Unlike white pellets, which can disintegrate on exposure to rain or snow, the black ones can be stored outdoors, the company contends.
The Crockett plant is capable of producing 40,000 metric tons per year, Russell said. If the company decides to expand to commercial scale, it could go to as much as 300,000 metric tons per year, she said.
One of the Port of Beaumont’s warehouses is filled with black pellets from Zilkha. The pellets have an earthy aroma, not as sharp as roasting coffee beans, but still noticeable. There isn’t any dust, but the pellets spill through crevices in the concrete walls of the bins where they are stored.
At a recent Port of Beaumont commissioners meeting, board member Henry Nix referred to a recent book titled “Back to Work” by Bill Clinton, in which the former president talks about the wood pellet business as an opportunity for American export and domestic jobs.
Nix is not alone in encouraging the wood pellet business. The Port of Port Arthur also is interested, said Orlando Ciramella, its director of trade development.
“We’re close to signing an agreement,” Ciramella said.
He said both ports can benefit because they are close to the source of timber and where pellet mills are being built.
“That makes it really feasible,” he said.