In the US there is a wood pellet shortage, this occurs almost every year in the US however this years shortage is more severe. As oil prices rise more people have purchased pellet stoves, however at the same time the American housing market has crashed, therefore very few new homes been built. This lack of new houses means a lack of demand for wood, therefore a lack of the by-product sawdust for pellets. Below is a video from The Berkshire Eagle.
Here is an extract from the article on the Berkshire Eagle website:
The current shortage has left consumers scrambling. The sawdust used for the pellets is most commonly procured from sawmills, but a deflated housing market has dramatically impacted the supply. In addition, demands and shipping costs are making pellets increasingly expensive. And because it is a relatively small industry, many producers are wary of producing too many pellets and are not equipped to quickly react to large shifts in either demand or supply.
Pellets, which were being sold for $250 a ton earlier this spring, are currently being sold for more than $300 a ton. The average pellet stove will burn between 3 to 5 tons in an average winter.
The process has been difficult for many local suppliers. “It’s frustrating and challenging for us,” said Bart Raser, owner of Carr Hardware in Pittsfield. “People have relied upon us for years.” Raser said his store has no pellets, having sold more in August than in all of 2007. His current wait list is more than 150 people long. “It’s not looking very good for this year,” he said. “I anticipate the price will continue to rise and there will be limited supply all year.”
This is a clear example of the pellet fuel market relying on only large scale pellet plants that use only one resource (sawdust) to produce their pellets. Supply problems and price rises happen frequently, which mirrors using fossil fuels and foreign oil; it is only the consumer who suffers.
If the pellet market had more small-scale local producers, they would be able to aid market supply, reducing the risk of supply problems and keeping prices stable. Also more resources other than softwood sawdust need to be used, as this story shows sawdust is a limited resource, and as the sawdust supply drops, pellet prices rise just like oil prices.
With the PelHeat Mobile Pelletizer small groups could help to increase market supply and create stable market prices, while at the same time supporting the local economy.
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