Supply of Pellets Goes Up in Smoke

Jan. 22--Booming sales of wood-pellet stoves for home heating have led to a severe lack of pellets this winter.

Stores across the Northern San Joaquin Valley that sell pellets reported receiving a very limited supply in recent weeks.

The sacks they did get sold within hours, if not minutes.

And when temperatures dropped below freezing recently, stores reported being swamped with calls from frantic customers.

"They were just not ready for the demand," said Misty Peters, a cashier at the Orchard Supply Hardware store in Manteca, of pellet manufacturers. "We even had one person who came from San Mateo looking."

The president of a pellet manufacturing company in Idaho said a number of factors led to the shortage, which he expected to last one more month.

"The pellet stove sellers had two years of phenomenal growth," said Eric Hanson, president of Coeur d'Alene Fiber Fuel Inc. in Coeur d'Alene, Idaho. "We were caught off guard completely.

"Even if we'd been able to plan for it, there still would've been a shortage."

He said wood pellet manufacturers, many in the Pacific Northwest and Canada, can't produce enough to meet demand.

They also don't have enough of a necessary ingredient: sawdust. The slowing home-building market means a drop in available sawdust from lumber mills, he said.

By one estimate, the shortage in wood pellets will be as much as 244,000 tons by the end of this year.

Hanson said the shortage was compounded when his company's factory closed in October because it lost its lease.

Coeur d'Alene Fiber Fuels produces the Atlas brand, which is sold in many valley stores.

Another plant will open next month, Hanson said, but the lengthy permit process for such projects makes it hard to open a plant quickly.

Lending institutions also are reluctant to provide financing for new factories, he added.

That means that even if this shortage eases, more are likely if wood pellet stoves remain popular, he said.

"I think everybody out there is making as much product as they possibly can," he said.

An employee who answered the phone at Idaho-based Lignetics Inc., which also sells wood pellets in the valley, said the company would not comment.

The shortage made one Modesto resident scramble a bit. Sherri Boer, 45, said her wood pellet stove is her family's only source of heat.

"When we got down to six bags, I started getting nervous," she said, adding that one bag of pellets will keep a house warm for about 20 hours. "We don't have a switch we can turn on."

She said she called a company in Idaho, then distributors in Oregon and San Francisco before finding pellets at a country store outside Woodland, near Sacramento.

Because she bought enough to last beyond the end of winter, she said, she's put a few bags up for sale on the Craigslist Web site.

"I figure there are other people who will need them like us," she said.

The search for pellets has spread to stores that sell the stoves.

Jeanette King, co-owner of Valley Fire Place Inc. in Salida, said she's gotten calls from customers, but she has no good answers for where to find the bags of pellets.

"I sympathize," she said. "It's really unfortunate."

She said the stoves sold well in the past couple of years because of fears of higher natural gas prices, among other factors.

Marta Joseph, co-owner of Stanislaus Stove & Flue in Modesto, said she's gotten three to four calls about wood pellets daily in the past week.

"Right now, I'm not sure who has any," she said. "You have to get on the phone and really check. The bottom line is you're having to purchase pellets way in the beginning of the season."

Although wood pellets burn cleaner than firewood, there is no advantage to a wood pellet stove from the San Joaquin Valley Air Pollution Control District's perspective.

A district official said such stoves are subject to the same restrictions on burning as other stoves are on days with poor air quality.

Despite the shortage, prices for wood pellets haven't shot up.

Peters at OSH's Manteca store said that when bags are available, the store has sold them at the regular price of about $5, or $250 for a ton.

Coeur d'Alene Fiber Fuel's Hanson said his price for wood pellets is usually contracted months in advance.

"It doesn't matter what someone offers me right now," he added. "I can't deliver on it."

Bee staff writer Ben van der Meer can be reached at 578-2331 or bvandermeer@modbee.com.

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Copyright (c) 2007, The Modesto Bee, Calif.

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