Tuesday, December 3, 2013

Enviva's North Carolina Forest Onslaught

 WSJ photo of Enviva's wilderness clear-cutting operations in an eighty-one acre tract along the Roanoke River in North Carolina
"European climate policy drives wood pellet boom in NC"
 Cut trees awaiting processing in the Enviva  Ahoskie, NC facility

"Renewable Energy Companies Flock to North Carolina's Northeast"
Enviva photo of processed wood fiber
 Enviva's finished product. These U.S. wood pellets fuel
European power plants

A cat crosses the road on a housing development in the shadow of Drax Power station, near Selby in north Yorkshire, UK
View of Drax Group's wood-burning power station in the U.K.

Enviva LP— a 2010 acquisition by the $20 billion private equity fund, Riverstone Holdings, LLC and the Carlyle Group— is in the business of harvesting and grinding trees for foreign wood pellet purchasers. It is a lucrative scheme because, as The Wall Street Journal reports, Enviva and its competitors have ample U.S. inventory and face minor if any regulatory constraints. In The Journal's words: "Europe's power plants are devouring wood from the U.S., where forests are bigger and restrictions fewer."

Enviva's response:
the only whole trees that Enviva uses are either young commercial softwood thinnings, which are cut to ensure healthy growth of high-value timber, or in some cases small, diseased or deformed trees that do not meet specifications for sawlogs. In many places, there is no other market for this wood. Often, what may appear to be a whole tree is actually the top of a trees [sic], which cannot be used to make the high-value wood products for which the trunks have been harvested.
The Wall Street Journal article, "Europe's Green-Fuel Search Turns to America's Forests," disputes Enviva's claims. The 24/7 Ahoskie  facility, one of two Enviva manufacturing sites in North Carolina, produces 1,000 tons of wood capsules per day. Forest to pellet [biomass] manufacturing advocates say wood is the new energy source for power generators and they expect exponential product growth in the coming years. Enviva says that it can produce 1.24 million tons of wood pellets annually. Otherwise stated,  Enviva has "shifted into high gear." Construction of Enviva's superdome wood pellet storage site may be viewed on youtube.

North Carolina's governor, Pat McCrory, favors Enviva's timbering operations and supports additional processing locations. Other state forests under logging assault by pellet manufacturers are AL, FL, GA, LA and VA.

Wood is a cheaper energy source than coal thus the principal reason for the crossover.

There are no cleaner air benefits: Organic matter be it wood or coal releases harmful to breathe particulates when burned.

Wood is touted as green fuel—trees grow back—but Enviva will not be able to restore the vast wetland ecosystems irrevocably damaged by its timber extraction practices.

Think about Enviva's bottom line: it makes sense to topple heavy tonnage trees.

Logs if purchased by timber mills fetch $20-40 a ton; those being pelletized return $2-8. Enviva wins either way because the company never has unsaleable inventory. Depending on tree weight, there are approximately 50 to 75 tons of chips per acre. Enviva advises that under optimum conditions it takes 30 years to produce an industry-usable pine tree crop.

Rules protect European forests from pillagers but there are none in North Carolina. Wall Street's faith in the wood pellet industry was demonstrated last year when financiers arranged a $120 million senior secured credit facility for Enviva.

Natural forests deserve protection but safeguards will not be forthcoming from Governor McCrory or state lawmakers.


When Britons learned that their homes were being heated by way of U.S. forest stock they told policy makers to think again. As result of public opprobrium the government will soon cease subsidizing wood-powered generators.

Ed Davey, U.K.'s Energy and Climate Change Secretary, confirmed this summer that wood resources are not reasonable solutions to the country's energy issues.

What effect U.K. policy changes will have on Enviva's viability is unknown, but it is worth noting that the United Kingdom is the company's primary marketplace.

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