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April 28, 2017

Boothbay pellet plant all set to enter heating fuel marketplace

C and L Forestry Wood Pellets has completed machinery set-up at its manufacturing plant in the Boothbay Industrial Park and is now offering wood pellets for heating fuel.

The Boothbay Register reported it took owner Erik Carlson, a professional forester and arborist for over 20 years, a while to set up the manufacturing plant after he decided to start producing pellets around two years ago. Carlson brought cost-effective pellet-producing equipment from China in 2016, the newspaper reported, but machine assembly was delayed because the instructions had to be translated from Chinese.

The company then spent the past winter perfecting pellet quality and testing them against Pellet Fuels Institute requirements through the University of Maine. The pellets recently received approval and product marketing has begun, the newspaper reported, adding that the pellets are made from sustainably managed local forests. The company's goal is to produce three tons per day.

"It's been pretty much trial-and-error for the last year and a half, but after a while you figure it all out," Carlson told the paper.

According to a 2014 report by FutureMetrics LLC, a consultant in wood pellet project development in Bethel, the market potential for wood pellet heating is big, with a forecasted growth of 67% from 2013 to 2020, from 3.3 to 5.5 million tons, in the U.S.

According to the Wood Pellet Association of Canada's market outlook report for 2017, the U.S., heating pellet market growth is highly correlated to heating oil and propane prices. The larger the gap between the break-even price of heating oil versus pellets the more demand for pellets grows as pellet stove and boiler sales increase. Weather always will create variation around the mean annual demand; but higher growth depends on oil prices rising above about $63 per barrel.

Despite 10 years of concerted efforts to tighten Maine homes and shift to other forms of heating, Maine still remains the state most dependent on heating oil, the Governor's Energy Office recently reported. The report said that wood pellet systems are among the systems adopted—along with wood systems, propane, natural gas and cold-climate heat pumps—over the past decade by Maine households to reduce reliance on heating oil as their primary fuel source.

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