The great wood pellet shortage of 2014

Originally published August, 2014

The Great Wood Pellet Shortage of 2014 - Part 1

I got a call yesterday from my main supplier of wood pellets, New England Wood Pellets (NEWP), which no one in the supply business ever wants to get. They informed me they will not be able to approve my company’s allocation for wood pellets in the fourth quarter because they will need that time to meet their orders for the third quarter. It was explained to me that I was not the only one who was losing their allocation, which I did confirm with some other dealers. Crowley Fuel will receive the rest of the pellets for the third quarter but will have to wait until sometime in October to get them all.
 
What happened? The main reason is that NEWP’s mills have not been able to keep up with the demand. This spring, they got a late start catching up from a long, cold heating season and weren’t able to build up much inventory over the summer. The also had problems to deal with, such as fires and other safety concerns, which reduced production considerably. The company has had to pay some hefty fines for these safety violations.
 
In addition, NEWP was bought by a company called Rentech this past May, and I’m sure this has had an impact. I read the press release from Los Angeles, Calif. dated May 1, 2014 with great interest. Of concern to me was the lack of any real plan for increasing productivity and that Rentech plans to “open up new geographic markets.” I can’t be sure, but it looks like their plan is to do what many pellet producers do; ship their pellets to locations out of this area. That would be unfortunate, because we have the demand for pellets, and it’s growing at a fast pace here in Central Massachusetts. For us, one of the great environmental benefits of using New England Wood Pellets are the low shipping costs, since we’re not a long distance away.  
 
What pellet fuel customers of Crowley Fuel need to know is that you are our first priority. We will deliver New England Wood Pellets to you while supplies last, starting with the orders that we currently have. We can also offer North Country Wood Pellets (NCWP) which are softwood pellets made from Douglas Fir in Alberta or British Columbia, Canada. They are a little more expensive, but they provide more BTUs and produce less ash. They do take a long train ride which can result in some of the bags being damaged, and the higher cost is due to the extra transportation. We are also in contact with other suppliers of wood pellets and hope to make up the loss of the NEWP with other high-quality brands.
 
Keep checking our website for the latest information and prices.

Bob 

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