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Retailers Rationing as Supply of Wood Pellets Dries Up

October 22, 2008 - WATERVILLE — First, it was a shortage in wood pellet-burning stoves. Now the pellets themselves are in short supply.

Central Maine residents are finding it difficult to get the pellets, even if they've ordered them. Bags of them can be seen stacked on store shelves, but retailers are rationing them.

Bill Peebles, general manager at Spring Brook Ice & Fuel Co., said his company is allowing customers just 2 tons of bags per pickup.

"Everybody wants a year's worth of pellets in three months," Peebles said. "If everybody in the state of Maine bought all their oil in the month of June, there'd be a shortage of oil."

Peebles predicted there will be plenty of wood pellets to go around by January.

"We've already seen a decline in new orders," he said.

Some Mainers are augmenting their supply with corn.

Brian Munroe of Solon has purchased a stove that can burn 75 percent corn and 25 percent wood pellets. He purchased 2 tons of corn fuel from Agra Energies of Maine LLC of Farmington. If the pellets were more readily available, Munroe would be burning just wood. He paid $294 a ton for the corn, while wood pellets are selling for $260 and up.

Wood pellet producers are having a hard time keeping up with orders.

Robert Linkletter, co-owner of Maine Woods Pellet LLC in Athens, last week said that his company can't meet demand. Maine Woods Pellet, Corinth Wood Pellets and the smaller Northeast Pellet LLC are the three Maine producers.

Another plant is under construction in Strong.

"We're quite a bit behind, but we're giving everybody some," Linkletter said. "It just seems to be no matter how much we make, we're behind. I know that people are panicking to get them all at once. They need to relax."

Linkletter said that the first-year company is operating at about 70 percent capacity and is having growing pains. Maine Woods Pellet produced 50 truckloads of 25 tons each last week and is averaging 10 loads per day. Pellets come in 40-pound bags.

"We just got started in May," he said. "We had to train four complete crews, and they make mistakes. Mistakes cause downtime. We're living and learning the hard way."

John Richardson, state economic and community development commissioner, said that most of the wood pellets that will be burned in Maine this year will come from out of state.

"We're somewhat overwhelmed by the demand," he said.

"We'll have enough wood pellets this winter, but the cost is unsure," Richardson said. "Much depends on the price of oil."

Todd Richard, who manages Northern Lights Hearth & Sports in Farmington, expects manufacturers and retailers to "get over the hump" of the current high demand.

That high demand, however, has Northern Lights charging $325 per ton of pellets, compared to the $260 many prepaid months ago. Northern Lights gets its pellets by rail from Montreal.

"We've been able to sell pellets to people just so they wouldn't be cold," Richard said. "People who wanted 6 tons might have 4. We can get pellets whenever we want, but it's the price."

Paul LePage, president of Marden's Discount Chain, said Marden's has 40 loads of pellets on order, but he isn't sure he'll get them.

By LARRY GRARD, Waterville Morning Sentinel October 20, 2008


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