Natural Gas Displacing Biomass

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RISI’s April International Woodfiber Report observes that the abundance of natural gas, and falling prices, has prompted many U.S. pulp and paper mills to launch processes to switch “to higher gas consumption, displacing substantial volumes of traditional in-woods biomass.” RISI quotes the phrase “permanent for the foreseeable future” with respect to this switchover and points out that it “could crush the largest existing biomass market in North America.” The report also chronicles some of the immediate consequences for enterprises heavily invested in serving the biomass market. While elsewhere in this issue, we note the savings the natural gas boom may offer to wood suppliers, we are also hearing loggers’ strident observations about the competitive pressures hydraulic fracturing (“fracking”) operators are placing on trucking assets, in regions where logging and fracking co-exist.

 

Meanwhile, RISI cites a report from a major paper and board producer to the effect that energy costs represented 9% of its total operating costs for its North American mills in 2011, pointing out that the pre-recession proportion was 13%.