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Wood Pellet Heating. The economic & environmental benefits.

by Tom Boodle

Wood Pellet Heating. The economic & environmental benefits.

Findings from the Futuremetrics study of the wood pellet industry, December 2013

By Futuremetrics President William Struass, PHD.

When people talk about energy, particularly at the federal level, they think of electricity and transportation. In the northern states, those two large sectors account for about 65% of energy use. The other 35% is often ignored in policy discussions. It is the need for heating homes and businesses over the long cold winters.

The reason this matters is that for many the heat is produced from burning imported petroleum-based fossil fuel in boilers or furnaces.The negative economic and environmental impacts of this dependency are significant. But the positive benefits that accrue from the conversion of homes and businesses from fossil fueled heating systems to renewable premium pellet fueled systems are significant.

For those northern states that are heating oil dependent, the majority of every dollar spent on heating fuel leaves the local economy and much of that money spent on heating leaves the country. At a price of $3.80/gallon FutureMetrics estimates that about 770,000 jobs are exported to the other countries that supply the petroleum for the heating fuel used to keep the northern tier states homes and business warm.

The conversion of homes from heating oil to locally-made premium wood pellet fuel has many benefits. The benefits accrue from three key pathways: (1) Locally produced pellet fuel keeps almost 100% of every dollar spent circulating locally. (More than 75% of each dollar spent on heating oil does not stay in the local economy. Jobs are exported along with that money.); (2) Pellet fuel is about half the price of heating oil for the same heating energy. Those savings increase the income that households and businesses have for spending in the local economy. The increased disposable income that homes and businesses have after conversion is money that stays in the local economy and creates commerce and

jobs. (3) The supply chain for harvesting sustainable biomass and for manufacturing and distributing the fuel creates jobs. All of these pathways have significant positive multiplier effects.

The environmental benefits are also significant. Particulate emissions from modern fully automatic pellet boilers are about the same as heating oil boilers. And carbon emissions are much lower. Every pound of carbon dioxide produced in the combustion of pellet fuel is reabsorbed by the new growth in the sustainably managed forests from which the fuel originated. Accounting for the fossil fuel used in logging and trucking and electricity production for running the pellet refinery, pellet fuel has 87% lower carbon emission than heating oil and 80% lower carbon emissions than natural gas.

The job creation effects from the conversion from heating oil and propane to premium regionally produces wood pellet fuel are significant. Creating need jobs for low and moderately skilled workers should be a major component of an energy policy; and the premium pellet market delivers on that.


A significant market will never be served by natural gas pipelines and which is dependent on heating oil primarily refined from foreign petroleum and propane. About 6 million homes in the US northern states are in rural locations (will not have natural gas) and use heating oil or propane.

The economic impacts that would accrue from the conversion of homes and businesses from heating oil or propane boilers to premium pellet fuel used in modern pellet boilers is very significant. About 1.34 million jobs will be created when those 6 million homes are fueled with domestically produced renewable premium wood pellet fuel. In an era when downsizing is viewed positively for its impact on the bottom line, the wood pellet sector delivers a better bottom line from producer to user, and generates sustainable economic benefits and higher energy independence.

Finally, even though the US currently does not explicitly have policies that incentivize lower carbon emissions, the wood pellet sector delivers anyway. The significant economic benefits are accompanied by significant environmental benefits.

The premium wood pellet sector can deliver lower end user heating costs, a higher degree of energy independence, needed jobs from three important pathways, and can reduce CO2 emissions while doing so.

To learn more about how heating with premium wood pellets will help your home or business visit the Marth Wood booth at Farm technology Days, August 12-14 th , 2014 or visit www.marthwood.com


How the Northern States can Heat with Renewable Energy and Create Jobs and Economic Growth while Significantly Lowering Carbon Emissions: And Why Natural Gas is not an Option for Millions of Homes and Businesses

By William Strauss, PhD, President, FutureMetrics -- December, 2013