LOW OIL PRICES SOFTEN BIOMASS ENERGY MARKET

In the past few years, there’s been a lot more research into all kinds of new innovative uses for wood fibers. As reported in the Pallet Enterprise’s September edition by writer Rick LeBlanc, “Researchers are unlocking many uses for wood beyond the traditional markets…Wood fiber is being used creatively in the development of soon-to-be-affordable microchips, beer bottles, wood foam packaging material, super strong paper that can replace metal, 3D printing, multi-story buildings and more.”

Many of the products being developed or researched are taking advantage of cellulose nanofiber technology, which basically uses the minute fibers in wood combined with other materials, to make an even stronger material. While there hasn’t been much of a commercial impact yet, one or two products made with this technology are starting to trickle into the marketplace. The Mitsubishi Pencil Co., for example, now sells a $2 pen in North America, which is one of the first commercial products made in Japan with this technology.

Japan, like many other countries, is starting to take a closer look at cellulose nanofiber technology because of the country’s limited resources. Japan imports almost all the metal it uses in manufacturing, but with the new technology, organic substances like wood, and even food waste like orange peels, can be converted into materials that can be just as strong as steel.

While you would think that all these different uses for wood fiber – what used to be considered a wood waste by-product – would be driving up both the demand and the price of it, that’s not the case.

The reason is that recent drops in oil prices has basically thrown a monkey wrench into the whole market. Oil prices have dropped more than 70% since the middle of 2014 and are expected to stay low due to a global supply glut that doesn’t appear to be going away any time soon.

“The value of oil has thrown a huge amount of uncertainty into the market,” according to Tim Gammell, the editor of the North American Wood Fiber Review, a publication of Wood Resources International that has been tracking pulpwood and biomass markets in the United States and Canada since 1983.

Gammell, like many others, believes oil prices will to continue to run low at least for the foreseeable future. And as a result, wood fiber prices are also soft right now due to an overall fall in demand.

“With the prices of oil dropping, a lot of biomass plants are not running, and the whole market in Europe where a lot of the exports go is slowing as well,” he commented on the wood pellet market.

He pointed out that two of the largest biofuels startups in the United States in the past several years, KiOR, which opened a commercial scale cellulosic fuel facility in Columbus, Mississippi, in 2012, and Range Fuels in Soperton, Georgia, have both ended up filing bankruptcy. So while companies like this show that the technology can work, they are also examples of how difficult it is to make them profitable enough to keep them going.

KiOR developed a proprietary technology platform to convert biomass into renewable crude oil that is processed into gasoline, diesel and fuel oil blendstocks, according to the company’s website. Range Fuels was a company that shut down in 2011, after trying to develop technology for the conversion of bio-mass into ethanol.

Looking at the much newer technologies evolving around wood nanofibers, Gammell said, “I think that’s promising, but we’re way down the road yet until there’s a commercial impact.”

(TheBiomassMonitor)

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