Finding value in lumber mill leftovers
Pellets of fuel made from recycled sawdust.
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Kai Ryssdal: Even if you don't read the financial news all that closely, you can probably name at least a couple of commodities right off the top of your head, right?
I bet sawdust didn't come to mind. Most of us probably think of it as something to sweep into the garbage after the sawing's done, but demand has grown enormously.
As Vermont Public Radio's Nina Keck reports with wood manufacturing and construction down due to the housing slump, sawdust is at a premium.
Nina Keck: Gagnon Lumber in Pittsford, Vermont produces between 25 to 30 tons of sawdust a week. Underneath the saws, a conveyor belt carries a steady stream of the sweet smelling remnants to a huge pile.
Owner Ken Gagnon says he sells most of it to area farmers.
Ken Gagnon: The sawmill business and agricultural farming have been hand in hand through history, so there's always been a market for a certain amount of sawdust, whatever the farmers could use for his cows.
But sawdust has come a long way from its use as a cushy barn bed. Landscapers and gardeners like it for mulch while meat smokers use it as an aromatic flavoring. Finely ground sawdust is a lightweight filler in many plastic products. It's used to make particle and fiberboard and it's become a valuable renewable fuel source in the form of wood pellets.
Charlie Niebling runs a wood pellet plant in Jaffrey, New Hampshire.
Charlie Niebling: With heating oil approaching $5 a gallon, people are genuinely concerned and anxious. A lot of people are thinking seriously about alternatives now.
Niebling says he can't make wood pellets fast enough. But while demand for wood byproducts is at an all-time high, supplies are down.
Ken Gagnon and mill owners across the country blame the drop in construction.
Gagnon: We've been going through a correction for pretty near two years here on our level, so we're actually not producing as much lumber as we could, which has an indirect effect on how much sawdust we make.
But if sawdust is so precious, I asked Gagnon why not make more of it? For now, he says, even in the middle of a housing slump, it's still more profitable to mill lumber.
Gagnon: It may come to a time where the byproducts are going to be the saving grace of the lumber industry. I think the housing market will come back, but I really see the byproducts, primarily the biofuels, whether it's sawdust or chips, will be a big part of things to come.
Chris Recchia thinks that's already happening. Recchia is Executive Director of the Biomas Energy Research Center.
Chris Recchia: This has transitioned from a waste product, a byproduct, to a real commodity. That is the turning point that we're at right now, which we think is a very good thing.
Because, Recchia says, it's encouraging better use of resources. Typically when loggers finish a job, they'll leave behind a lot of low grade cuttings not suitable for lumber. Now that wood byproducts are fetching a higher price, loggers can process and sell what they used to consider waste wood to people like Charlie Niebling of New England Wood Pellet.
Niebling: We are purchasing material from logging contractors who harvest this low grade material that otherwise has little value, take the bark off of it for us, chip it and send the chips to us and that simply wasn't possible three or four years ago.
Niebling says in their company, the term "waste wood" no longer exists.
For Marketplace, I'm Nina Keck in Chittenden, Vermont.