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Stearns' Death Ripples Through Industry
The recent death of a great innovator, Clyde W. Stearns, shocked the wood bioenergy and wood products industries recently. Stearns died February 18 due to an undiagnosed heart condition. He was 66.
Stearns’ career spanned more than 40 years in sales, design, manufacture, installation and plant startup, with his most recent years devoted to the wood-to-energy industry.
Stearns was president of his consulting firm, Bio-Green Engineering in Houston, Texas, upon his death, and prior to that, from 2011-2015, was vice president of engineering for Zilkha Biomass. He was instrumental in the engineering and startup of the Zilkha “black pellets” manufacturing plant in Selma, Ala., which implemented new steam explosion (thermal treatment) technology.
Stearns commented in 2015 to Wood Bioenergy magazine: “I personally believe once this is a commercially available product and the world can see that it can be produced in large quantities, I believe that in the next five years 75% of the industry will convert to a second generation pellet of some kind—a second generation pellet being one that has the attributes that we’ve got here, the higher energy content, behaves more like coal, water resistant, low dust. I believe this is a game changer.”
In 2014 Stearns was a finalist for the World Bioenergy Man of the Year as selected by the World Bioenergy Assn.
Previously, Stearns was sales manager over biomass and wood pelleting machinery for Bühler.
He served the wood products industry as an engineering manager at Teal Sales Inc. (TSI), as general manager at WPS Industries, and as operations manager at Globe Machine Manufacturing. He shared patents for an end dogging feeding device and board edger optimization in the sawmill industry.
Stearns was a warm-hearted gentleman with a quick wit and sense of humor, and very much a family man.
Born in Kalispell, Mont., Stearns met his high school sweetheart, Candi Hart, to whom he was married for 45 years. He earned a Bachelor of Science in engineering from Montana State University.
Stearns was an avid outdoor enthusiast who enjoyed hiking, skiing, camping, fly fishing, rock climbing and biking. He earned his pilot’s license as a teenager.
He is survived by his wife, Candi; his daughters, Brittany Johnson and husband Tory, Brooke Stearns Lawson and husband Jelani; five grandchildren; his mother, Beulah Clothier; his father, George Stearns and wife, Fran; a sister, Linda Robinson and husband, Royce; his twin sister, Claire Svejkovsky and husband, Toby; nieces, nephews and cousins; and countless friends.
A celebration of his life will be held in the Flathead Valley this summer.
German Pellets Fate Hangs In The Balance
A week after an insolvency court in Germany initiated proceedings against the assets of German Pellets GmbH, one of German Pellets’ affiliate wood pellet operations in the U.S., Louisiana Pellets (also German Pellets Louisiana), commenced filings on February 18 for Chapter 11 with the U.S. Bankruptcy Court for the Western District of Louisiana.
Peter Leipold, leading family principal and CEO with the privately owned German Pellets, in a declaration statement notes that construction of the pellet plant in Urania, La. was planned for two startup phases for a total production capacity of 1 million metric tons. He also notes a contract was in place with E.ON UK, a United Kingdom utility company, to purchase the wood pellet production from the facilitiy.
Leipold says phase one of the project for startup of half of production was substantially completed in late 2015 and put into limited production to conduct required emissions and production tests. However, according to Leipold, those tests revealed defective and substandard electrical work. After those issues are addressed, the plant expected phase one production to reach capacity by this summer.
Leipold notes that phase two is still under construction and may require an additional 12 months to complete.
Leipold says the project has experienced numerous cost overruns and delays, including the electrical deficiencies, weather events, delays in steel deliveries, and other subcontractor delays including delays in earth and concrete work, and the insolvency and liquidation of project subcontractors.
Louisiana Pellets defaulted under taxable finance bonds due to an inability to make a required payment of more than $4.2 million at the first of 2016.
Louisiana Pellets is exploring options to address the need for liquidity to complete phase one and two construction, including a potential transaction with one or more interested parties—discussions which are ongoing, according to Leipold.
German Pellets started up its first pellet plant in the U.S. at Woodville, Texas last July and built a handling and shipping facility at Port Arthur.
Meanwhile the German insolvency court appointed an attorney from the German law firm White & Case as provisional solvency administrator. The court instructed the attorney to safeguard the company’s assets while ascertaining whether there are sufficient grounds to commence proceedings and assessing the prospects for the company’s continued existence.
German Pellets expects those proceedings to commence in May.
German Pellets is one of the largest producers and suppliers of wood pellets worldwide. The owner-managed family company was founded 11 years ago and has established numerous plants in Europe as well as the two in the U.S. The company reported 442.5 million euros in revenue through the first three quarters of 2015 and an operating profit of 38 million euros, but increased debt and decling value of bonds issued by German Pellets is apparently anchoring the business.
Before the German court intervention, German Pellets apparently offered a refinancing proposal to bond creditors that a bearer bond due at the end of March be revaluated and adjusted. Apart from the extension of the term by two years, German Pellets owners, the Leibold family, offered to put up as collateral 50% of their shareholdings.
“This revaluation of what was a non-collateralized bond brings about a risk-reduction for the investors and forms the basis for the planned adjustment of the interest rate, setting it at 5.25% for the extension period (compared to the existing 7.25%),” the company stated.
The insolvency court could still consider elements of that plan.
German Pellets stated that despite the current development in oil prices, the market opportunities for the pellet sector remain positive, citing market forecasts for global pellet demand to reach 49 million tonnes in 2019 (from 29 million in 2015).
Renewables Group Seeks Tight Policy
The European renewables industry has weighed in on a call from the European Commission for input on an EU policy for sustainable bioenergy from 2020 to 2030.
The Commission earlier announced it will present an improved EU policy for sustainable bioenergy for the period after 2020, as part of the revision of the renewable energy directive due by the end of 2016. This relates to the EU’s climate and energy targets for 2030, including cutting greenhouse gas emissions by 40% compared to 2005, improving energy efficiency by at least 27% and increasing the share of renewable energy to at least a 27% in overall energy consumption.
Elements of the European renewable industry have collectively presented 10 priorities while stating that the European Commission should propose an ambitious post-2020 renewable energy package that fosters a vibrant home market with clear growth perspectives.
The renewables consortium expressed cocnern that investment in renewable energy assets in the EU dropped by 18% in 2015. However, it noted that the recent Paris climate treaty signed by 195 governments provides a clear signal that high-carbon assets are not viable and that transition toward a renewable-based economy should be accelerated. “The EU has played a key role in brokering the Paris deal. Yet it needs to translate its climate leadership into domestic policy,” the renewables consortium said.
The renewables consortium is calling for increased binding measures in legislation and regulation to ensure predictability for producers and investors. It says the Commission should propose ambitious mechanisms that protect and incentivise Member States to pledge higher than 27% renewable. It says the Commission should offer a uniform template for climate and energy plans to ensure consistency and comparability among Member States. European Biomass Assn. (AEBIOM) is one of the signatories on the proposal, as are wind and solar representatives.
TEAM Safe Trucking: Elevate The Standard
Enthusiasm is building for the ambitious plan of TEAM Safe Trucking (TST), a broad-based non-profit group seeking to elevate the standard and performance of the American forest industry’s deeply troubled transportation sector, which organizers contend is the most serious problem confronting the wood fiber supply chain.
TEAM Safe Trucking is developing a module program that will embrace awareness/education and intensely focus on driver training. It can be tweaked for use in different regions and sub-regions and will be available to those who have log/chip transportation operations or are exposed to such operations. Drawing on a $5,000 commitment from Forest/Loggers/Mauck Insurance Agencies, based in Newberry, Mich., along with other resources, the group expects to launch a web site by spring and have the program in gear by August.
Now regional in scope, TST expects to expand its program nationwide as it secures additional funding through donations from stakeholders and from grants. Virginia Tech University has committed funds and a graduate student to conduct log/chip truck accident research, beginning later this year. The two-year study will help guide the project’s work going forward.
Consisting of logging companies, paper/wood products manufacturers, truck and trailer manufacturers, insurance companies and logging and forestry association representatives, the organization aims to emulate the success of TEAM Fire, another cooperative effort created 20 years ago that eventually drove down logging equipment fire incidents and claims, lowered insurance premiums and helped make automatic fire suppression systems more affordable.
TSI is guided by Rick Quagliaroli, owner of Swamp Fox Agency, Inc., an established South Carolina-based business that interfaces with forest industry interests in three states. According to him, many loggers and log truckers now do a commendable job but the industry’s trucking segment overall is performing poorly, resulting in increasing mishaps and multiple forms of costly, disruptive, traumatic fallout. This is forcing some truckers to the side of the road and causing some insurance providers to abandon the market.
“TEAM Safe Trucking’s goal is to set a high standard for driver training and continuing education, and we’ll focus the training program specifically on hauling logs and chips,” Quagliaroli comments. “The program will be designed to help make the industry’s log and chip trucking segment safer and more efficient, and every party that has an interest in trucking will need to ‘buy in’ for it to be truly successful. It will take some time. For the good of the industry as a whole, we’re asking for support up and down the line.”
For more information, e-mail or call Quagliaroli: rick@swampfoxagencyinc.net, 843-761-3999; or Jimmie Locklear: jlocklear@forestrymutual.com, 910-733-3300.
EP UK Purchases Lynemouth Power
EP UK Investments Ltd., a subsidiary of Energetický a průmyslový holding, a leading Central European energy group, is purchasing Lynemouth Power from RWE Supply & Trading GMBH.
Lynemouth Power was a 420 MW coal fired station that is currently converting to biomass fuel, having received clearance from the EU. The UK Government intends to support the project in the form of a premium paid on top of the market price of the electricity generated (a so-called “Contract for Difference”). The project will receive aid until 2027 and will use approximately 1.5 million tonnes of wood pellets per year, mainly sourced from the U.S., Canada and Europe.
Euro Pellet Group Names Leadership
European Pellet Council (EPC), which represents national pellet associations and related organizations from 17 countries, named new leadership. Eric Vial, Director of Propellet France, was appointed as EPC President. Didzis Palejs, Chairman of Latbio’s and AEBIOM’s boards, was named Vice President.
Forest Owners Want EPA Clarity On CPP
National Alliance of Forest Owners (NAFO) is urging the U.S. Environmental Protection Agency (EPA) to clarify its policy on forest biomass as set out in the Clean Power Plan (CPP) in its implementation guidance to States.
“EPA states in the preamble to the CPP that biomass is part of the solution in helping states meet their carbon-reduction goals yet provides no useful direction in draft guidance to states on how they can include biomass as a compliance option,” says Dave Tenny, NAFO President and CEO. “In fact, EPA excludes biomass from much of the guidance while seeking public comment on unprecedented and potentially complex sustainability and verification requirements that increase uncertainty among states. EPA now must clarify its guidance to the states to avoid confusion and jeopardize the ability of states to fully capture the carbon benefits of biomass energy under the CPP.”
The science on the carbon neutrality of forest biomass is clear, according to Tenny:
EPA’s “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,” also called the “Clean Power Plan,” was published in the Federal Register in mid-October. It has since temporarily stalled in the courts.
According to EPA, the Clean Power Plan will reduce carbon pollution from the power sector by 32% (870 million tons less) by 2030, while reducing emissions of sulfur dioxide from power plants by 90% and nitrogen oxides by 72%.
The Plan provides guidelines for the development, submittal and implementation of state plans, allowing renewable energy standards and programs as part of those plans. It also allows for “emissions trading” between states and power plants.
The EPA plan cracks the door open for new forest biomass power generation as part of renewable energy considerations in the state plans, but doesn’t guarantee acceptance of biomass as carbon neutral.
The Plan states, “While the EPA believes it is reasonable to consider generation from these fuels and technologies to be forms of RE generation, the fact that they can produce stack emissions containing CO2 means that a section plan seeking to permit use of such generation to serve as the basis for issuance of ERCs (emission rate credits) must include appropriate consideration of feedstock characteristics and climate benefits. Specifically, the use of some kinds of biomass has the potential to offer a wide range of environmental benefits, including carbon benefits. However these benefits can only be realized if biomass feedstocks are sourced responsibly and attributes of the carbon cycle related to the biomass feedstock are taken into account.”
The Plan also states, “It is not scientifically valid to assume that all biogenic feedstocks are ‘carbon neutral’ and that the net biogenic CO2 atmospheric contribution of different biogenic feedstocks generally depends on various factors related to feedstock characteristics, production, processing and combustion practices.”
The Plan adds that State plan submissions must describe the types of biomass that are being proposed and how those feedstocks can control increases of CO2 levels.
Consultant Says EPA Plan Is Foundation
An internationally renown consultant to the wood-to-energy industry says the recently released EPA Clean Power Plan is a “rational and pragmatic off-ramp towards a more decarbonized future” and calls for those who oppose it to reconsider.
Noting that the increase in carbon dioxide concentrations in the atmosphere in recent decades is unprecedented in measurable geologic history, and even if there is justifiable debate over the timing of the impacts on oceans and climate, consultuant William Strauss of Future Metrics says the EPA Clean Power Plan is an official indicator that the U.S. has joined the global community with regard to compliance strategies and deployment to combat CO2 emissions.
“Even those that are skeptics of the science should assess the risk of doing nothing,” Strauss says. “The Clean Power Plan is the foundation…but can the U.S. as a nation actually have a strategic plan for environmental stewardship?”
Strauss adds—as he has stated earlier—that one action strategy in the U.S. would be to blend industrial wood pellets with coal as a “low cost, easily deployable, dispatchable and sustainable solution” for lowering carbon emissions from coal power plants.
The U.S. is already a major player in the industrial wood pellet sector, Strauss says. “But every tonne of industrial wood pellets produced in the U.S. is shipped overseas. The U.S. could very easily suppy its own power stations with industrial pellets” while maintaining the integrity of the coal industry.
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