What's old is new in New Hampshire: Wood, pellets gain steam


CONCORD, N.H. -- There's renewed enthusiasm in heavily forested New Hampshire for the idea of homegrown heating sources, primarily wood and -- more recently -- wood pellets.

For the first time, the state's Office of Energy and Planning is posting the cost of wood pellets to compare to the other main heating sources. That outreach combined with a supportive regulatory structure have put wood back on the front burner as an environmentally attractive, inexpensive and local alternative to oil, gas and electricity.

In New Hampshire, about 33,500 homes, 6.5 percent, heat with wood, compared with about 2.1 percent of U.S. homes, according to U.S. Census figures. Most New Hampshire homes, about 50 percent, use oil.

Susan Thorne, state energy program associate, said the state has been looking for a way to prop up a timber industry hurt by the closure of the state's paper mills. New Hampshire's North Country once boasted about a half-dozen paper mills; all except one in Gorham were shuttered as loggers fought rising costs and growing competition from overseas.

Enter the wood pellet: Cleaner than hardwood, easier to handle and store, more efficient and ready to burn. The little compressed nuggets of sawdust are popping up in more houses, businesses and industrial sites.

"Wood pellets are a much more recent arrival but people have really embraced them," said Thorne. "It's still nascent but there's a lot of interest because of our timber resources here.

"One of the reasons, over 90 percent of our energy comes from outside New Hampshire," she said. "By increasing our ability to provide some of our own energy, it makes our energy security greater and benefits our economy."

Charlie Niebling, an energy consultant with Innovative Natural Resource Solutions and former plant manager at New England Wood Pellet, said that notion of energy security was driven home after the Sept. 11, 2001 terror attacks then dual 2005 hurricanes -- Katrina and Rita -- caused global spikes in petroleum costs. Importing petroleum products costs the state about $1 billion a year.

As of earlier this week, pellets -- when delivered in bulk -- cost more than only natural gas: $14.98 to produce 1 million BTUs compared to $11.46 for the cheapest natural gas, according to the Office of Energy and Planning. Cord wood was at $15.15, fuel oil at $26.07 while electric was the highest at $43.27 per million BTUs.

"Bulk" is an important word and it points out a problem with pellets: Most people who burn them pick up supplies in 40 pound bags, making transport something of a hassle. Bulk home deliveries range from three to 10 tons, with businesses getting 10 to 30 tons or more.

Thorne and Niebling acknowledge delivery of the pellets is expensive and said the state hopes to get more bulk delivery systems to make it easier for consumers to stock up. Niebling likens the disconnect between commodity and delivery to the same growing pains energy markets went through after World War II when the nation switched from coal to oil.

"It took the better part of two decades for a (fuel oil) distribution system to fall into place," Niebling said.

Ten years ago, there was one specialized -- and expensive -- truck to haul pellets in New Hampshire; today, there are about half a dozen, he said.

Cord wood also still maintains its allure: It's relatively cheap, plentiful and more accessible than pellets.

"If you look at wood, culturally, it's ingrained," said Sarah Smith, a forest industry specialist for the University of New Hampshire Cooperative Extension. "Pellets not so much because it's the new kid on the block. Those two are going to compete for the residential market."

According to the U.S. Energy Information Administration, more than 90 percent of the country will pay more to heat this winter compare to last, mostly because of higher projected costs for natural gas, propane and electricity. Natural gas users will pay an average of $679, about 13 percent higher than in 2012-13. Propane users will see a 9 percent hike to $1,666.

The state's two biggest natural gas providers recently received approval to raise their rates, increasing the cost for Liberty Utilities customers by 10.4 percent and by 9.8 percent for Northern Utilities consumers. Both companies say rising demand and limited supply in New England drove the rate hikes.


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