Wednesday, January 25, 2006
Customers are Lining Up for Shipments of Stove Fuel Which Is Currently in Short Supply
By Rick Nathanson
Journal Staff Writer
Tom Deering isn't a stalker. He's just cold. For the past two days he has parked himself outside a local Lowe's home improvement center awaiting a pre-sunrise shipment of wood pellets that never arrived.
The problem is that wood pellets, which cost $4 to $6 for a 40-pound bag, are about as scarce as snow in the Albuquerque metro area.
The shortage is nationwide, and largely a function of supply and demand. And the pellet picture is likely to stay bleak the rest of the winter, manufacturers say.
[+] Click for photos from weekRandy Siner/For the Journal People line up in the Northeast Heights at 5:40 a.m., waiting for a shipment of wood pellets, only to be told when the store opened at 6 a.m. that the truck wasn't coming any time soon.
Photos from this week's ABQjournal.com Journal Photos
Deering, a 45-year-old computer consultant, lives in San Ysidro, and a pellet stove is his home's sole heating source.
"The temperature in my bedroom was 45 degrees last week," he said.
Nearly every retailer that sells pellets is having trouble getting them, and when a delivery is made they are sold as quickly as the truck can be unloaded.
"People are like piranhas; it's like a feeding frenzy," Deering said, noting that in one frenzy last week at the Home Depot on Coors near I-40, he was able to snag 15 bags enough to fill up his Volkswagen Beetle, but not nearly enough to get him through the rest of winter.
So Deering phoned the Arizona pellet manufacturer that supplies Lowe's and learned the store would receive a shipment Monday or Tuesday.
He said his Monday vigil began at 6 a.m. and lasted for six hours, the monotony broken only by the appearance of a police officer who thought he was loitering. His Tuesday vigil was over almost before it started. Deering drove away empty handed, as did a dozen other customers waiting for the same delivery.
As fossil fuel prices soared in the wake of last summer's Hurricane Katrina, people across the country anticipated that their winter heating bills would likewise rise. Many invested in alternative home heating sources, including pellet stoves. Others, who had pellet stoves but seldom used them, began firing them up as the weather turned colder, said Curtis Rogers. He is general manager and co-founder of Forest Energy Corp., the Show Low, Ariz., company that is the largest provider of wood pellets in the Southwest.
"For 14 years we've been able to make more pellets than we could sell, until this year. This year we've already sold more than we sold during all of last winter, and we're not even close to meeting demand," Rogers said.
Forest Energy is running its processing mill 24/7 to produce pellets marketed under the Heaters, Terra Amigo and Green Tree brands. It ships about 10 loads a week to stores in the Albuquerque area. Each load is 24 tons, or 1,200 bags. On average, people burn one ton, or 50 bags of pellets, during a normal winter; twice that if the season is particularly cold.
Forest Energy, Rogers said, has begun construction of a wood pellet plant in New Mexico on Ohkay Owingeh, formerly San Juan Pueblo, which will double its current production of 60,000 tons by next winter, too late to address the existing shortage.
There are two smaller pellet mills in New Mexico, but their customer base is primarily in the areas where they are located. Tierra Alta Wood Products in Silver city produces 2,000 to 3,000 tons of pellets each year. Mount Taylor Machine in Milan makes the Calientitos brand of pellets. It produces about 6,000 tons yearly and plans to open another pellet plant to double its capacity in time for next winter, said owner and president Matt Allen.
"In September 2004, I had 2,000 tons of inventory; by the first week of September 2005 there was no inventory. We were wiped out."
And it isn't just pellets that are in short supply. Try to find a pellet stove.
"I have a few left, but not many," said Matt Mossman, owner of two Matt's The Pool and Fire Place stores. "Industrywide, 300 percent more pellet stoves were sold this year than last."
And that increased demand is what people like Deering find confusing and annoying.
"Why would they keep selling the stoves but not make sure they had the pellets available to burn in them?" he asked. "What if you bought a brand-new diesel pickup truck only to discover that there was no diesel available within 200 miles? Don't you think that's the kind of thing they should have told you when you bought the truck?"