Wood Pellets, A Green Opportunity for Northwoods Rail Freight.
Posted 05/16/2013
Leading WI-based producers of wood pellets for fuel met with representatives of DOA State Energy Office, DATCP's International Trade Representative, CFIRE (National Center for Freight & Infrastructure Research and Education, at UW-Madison), and MAFC (Mid-America Freight Coalition). WCGroup counsel and a Canadian National representative (providing expertise in wood pellet export markets) participated in the meeting at Rhinelander 4/18/2013.
Domestic demand is the key impediment for WI's wood pellet industry. Wood pellets for heat are competitive in markets in which natural gas is not available, in which wood pellets can compete effectively with coal, propane and fuel oil. Although the consensus in the discussion was that the economics for export by inland producers are too challenging, WCGroup suggests evaluation of synergies among projects to increase local and other domestic demand, export opportunities and a rail transportation component (raw fiber to pellet producer, producer to consumer) coordinated with log and intermodal strategies to increase density on CN/WC northern lines.