Relatively low fossil fuel prices have reduced the demand and prices of woody biomass throughout the U.S. the past three years, reports the North American Wood Fiber Review. The Pacific Northwest currently has the lowest biomass prices, slightly lower than the South, while the Northeast continues to have among the highest costs in the country.
Prices for woody biomass in the U.S., whether sawmill byproducts, forest residues or urban wood waste, have been sliding for most of the past three years but were still higher in the 4Q/11 in most regions than they were five years ago, according to the North American Wood Fiber Review. The price drop seen in 2010 was mainly the result of lower prices for fossil fuels, particularly that of natural gas, and reduced demand for energy. This declining price trend has reduced the interest by both commercial and residential energy consumers in switching to more expensive green energy.
The two major sources for woody biomass are bark from sawmills/plywood plants, and forest residues left after logging operations. In the major biomass-consuming regions of the U.S., prices for forest biomass have been $10-20/odmt higher than for mill biomass during most of 2011. The region with the lowest biomass prices in the 4Q/11 was the West, while Maine and New Hampshire continue to have some of the highest prices in the country. In the U.S. South, prices have fallen 15-20% since early 2010 and forest biomass prices in the South Central states in particular have come down lately thanks to favorable weather conditions.
As long as prices for natural gas and oil are relatively low, there will not be much increase in demand for biomass and biomass prices will continue to stay relatively low throughout the country, according to the North American Wood Fiber Review.