Pellet Industry In Northern Maine Adjusting To Falling Oil Prices

Two and a half years after building a 4-million dollar biomass plant at the former site of the Fort Kent Armory, officials with the University of Maine at Fort Kent say the college and SAD 27 have been well-serviced. But the need for pellets is sometimes less than at other times. 

This week, after cutting back production and limiting hours of its 13 employees in Ashland, Northeast Pellets is looking to weather a demand setback and move toward future contracts. One of its major contractees, The University of Maine at Fort Kent, received 50 tons of wood pellets from Northeast Pellets via supplier Daigle Oil Company on New Year's Eve.

The Fort Kent college's two-year fuel contract for a biomass plant that's shared with the local school district requires two sources of wood pellets. Northeast Pellets is the only manufacturer in Aroostook County. Thus, UMFK's second account is with a New Brunswick company.

UMFK interim President John Murphy told the Bangor Daily News the biomass plant hadn't been used as much early this season because of warmer temperatures through December. There's also been maintenance work done to the boiler and pellet storage area. He said pellet pricing was fixed at the start of the contract, so the weak Canadian dollar is not affecting how much the New Brunswick supplier is used,

The Maine Pellet Fuels Association says biomass product the past few years was a bargain compared to oil and propane. But, with oil now as low as $1.60 a gallon, pellets have become less competitive, particularly after some clients stocked up in tonnage last winter.

Maine has four pellet manufacturers. One of those, Geneva Wood Fuels of Strong, was bought by national supplier Lygnetics last fall.