February 2007
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Dallas Co. Mill to Provide Alternative Energy for Europe

By Alvin Benn

 
Selma Mayor James Perkins Jr., right, presents a gift to Evan Bates and his wife, Paige, during a ceremony announcing Bates’ wood pellet plant for Dallas County.  
It looks like dry dog food, but could produce sirloin results if a group of entrepreneurs succeed with their $60 million wood pellet mill in Dallas County.

The company is called New Gas Concepts, Inc. and President Evan Bates is ready to bet the farm on a product many around the world feel is part of a continuing trend toward alternate fuel sources and away from oil that is often controlled by hostile countries.

Gov. Bob Riley has many invitations to attend events to speak and cut ribbons, but he put them all aside a few weeks ago to go to Selma to help announce plans for a wood pellet mill at the Alabama State Docks near here.

The Selma-Dallas County Centre for Commerce announced that the plant is expected to produce more than 200,000 tons of wood pellets a year for export. Investors hope it will eventually be much more than that.

The wood pellet industry is relatively new to the South, but it’s been around for decades in New England where the little rectangular chips of wood are used for home heaters.

What Bates and his staff are banking on are large orders of wood pellets for European power generators. According to Bates and his staff, European clients can’t wait to get Alabama wood chips.

 
  Pellets in Hands
"It’s going to be great for Alabama, and Selma in particular," said Alex Farris, one of Bates managers. "We know it’s going to be a bit of a challenge, but we have the time to do it and we expect to do it."

Riley and Bates announced that the capital investment is expected to top $60 million with about 100 people employed at annual salaries of $45,000 plus benefits.

"We have found a place with a wealth of natural resources, ready access to transportation and a supportive business environment from our Congressional delegation to the local county officials and business community," Bates said during the official announcement at the historic St. James Hotel.

Michael Rogers, New Gas Concepts’ vice president in charge of engineering and Steen Traylor, president of Blue Ox Forestry, a Dallas County company, said they expect the first wood pellets to be delivered to their European customers by the end of this year.

Wood pellets are a type of wood fuel, usually made from compacted sawdust. They evolve as a byproduct of the sawmill industry as well as other wood transformation activities.

According to industry analysts, wood pellets are extremely dense and can be produced with a low humidity content. That factor allows them to be burned with high combustion efficiency. High density also allows the pellets to be stored and shipped for long distances.

 
Pellet Types  
Wood pellets, chips, waste paper and cordwood and other agricultural by-products all fall under the category of biomass fuel. The most compelling principle of biomass is that it is renewable. Once fossil fuel is removed from the ground, it’s gone. Trees can always be replanted.

Wood pellet proponents point to numerous advantages over fossil fuel. For one thing, pellet high density and uniform shape can be stored in standard silos and easily transported by rail or barge. Pellets also pose none of the explosion risks or environmental pollution from spills as nonrenewable fossil fuels do.

Also, when biomass such as wood pellets, are heated, carbon dioxide is released into the atmosphere. Trees absorb it in equal amounts as they grow, so burning pellets does not increase the amount of greenhouse gas into the atmosphere.

Location is a major reason why Dallas County and a vacant State Docks grain silo facility adjacent to the Alabama River were chosen for the wood pellet project. The state is leasing the facility at a very reasonable rate, according to Dallas County officials.

Rogers said the total transformation time from raw wood to pellets will only be a couple of hours. The company anticipates three shifts with employees working around the clock to produce the wood pellets.

Once the pellets are produced from sawdust and other wood fiber sources, they will be loaded aboard barges and shipped to Mobile where they will be on their way to the Netherlands and the port at Rotterdam.

From there, the pellets will be headed to anxiously awaiting European customers to help fuel mammoth power generation facilities.

Traylor, a Dallas County native and successful forestry executive, said his company expects to produce about a million tons of wood pellets once it is operational. Compaction and other treatment procedures are expected to reduce the final amount produced at the plant.

He said the first few months of this year will be devoted to development of a wood procurement plan and then put into place.

"We’ll be dealing with several area mills," he said. "Right now we’re looking at buying wood from all of central Alabama, probably within a 100 mile radius of Selma."

In addition to standing trees, Traylor said New Gas Concepts will be buying wood waste as a result of right-of-way clearing, road widening projects and other sources.

"Instead of winding up in landfills, we’ll retrieve it from there to be used for pellets," Traylor said. "Selma and Dallas County have a lot of wood waste that winds up being discarded."

The financial aspect of retrieving waste wood is expected to benefit both the company and the city of Selma.

"It’s costing the city to get rid of the wood headed to landfills and we’ll be able to take it off their hands," said Traylor, indicating waste wood retrieval will be a "win-win" situation for New Gas Concepts and the municipal government.

Wood pellets are popular in frigid regions of the United States and Europe and a brisk home heating business has developed. The pellets are used to keep families warm in climates where temperatures often drop toward or below zero.

In Italy, a large market for automatically-fed pellet stoves has developed. Austria has the largest market in Europe for pellet central heating furnaces.

Last October, New England Wood Pellet LLC announced it has begun construction of its manufacturing plant in Schuyler, N.Y. Officials said it will produce 100,000 tons of pellets a year and become the largest of its kind in the United States—producing enough renewable energy annually to heat 40,000 homes.

The $12 million plant, within sight of the New York Thruway, is expected to have 20 employees when it begins production this May. Another 75 jobs are to be created by the facility in trucking and retailing and the local economy is expected to jump more than $10 million a year.

When compared with Dallas County’s $60 million project, the one in New England operation should come in a distant second according to New Gas Concepts officials who predict their facility will become the largest of its kind in the world. They say their wood pellet capacity should be much larger than the one being built for homeowner heat in New England.

There is a big difference between wood pellets to heat one house and another to power huge generators. That was a major factor in developing pellets for generators instead of small heating furnaces.

Rogers and Traylor say New Gas Concepts might one day consider going into the home heating business, but it is focusing right now on providing European customers with enough wood pellets to provide fuel for giant industrial power generators.

Another plus for the New Gas Concepts investors is the fact that production of wood pellets isn’t new. It’s been around for a while, thus reducing the chances of failure on a brand new venture.

The selection of Dallas County was not by accident. The company spent a long time considering locations in the U.S. and Europe and settled on the site next to the Alabama River for several reasons.

Centre for Commerce President Wayne Vardaman said "Alabama’s strong sustainable forestry program, waterways and a great workforce pool fit the profile for success."

Bates was just as enthusiastic, saying he and his aides found a location that fit right into their plans of making New Gas Concepts the largest facility of its kind in the world.

"There is a much bigger need over there where European countries are looking for alternatives to oil," Bates said after Riley congratulated him and his staff.

If everything falls into place the way Bates and his associates believe they will, Alabama will become a driving force in helping Europe achieve what it wants in terms of energy independence.

It won’t be bad for Selma and Dallas County, either.

Alvin Benn is a freelance writer from Selma.