Wood Pellet Manufacturer Locates In Monticello

Jul 30, 2014

Monticello will soon be the site of a facility specializing in the production of a dense, water resistant wood pellet, marketed as an alternative to coal fuel. The Houston, Texas-based Zilkha Biomass Energy will locate the first facility of its kind in the state, choosing an area known for its timber production and densely forested lands. The company says it will employ 52 people and invest 90 million dollars in the area, according to a news release.

Dr. Mathew Pelkki, a professor of Forest Economics and Management at the University of Arkansas at Monticello, says Zilkha has had success selling the wood pellet (known as the “black pellet”) to energy utilities across Europe, as a way of reducing carbon emissions. He says that market could eventually expand in the US, but in the near term, the economy of Drew County and its surrounding areas should benefit.

“The exciting thing is that the presence of this facility in Arkansas will give Arkansas energy producers an opportunity to test and experiment with this material and hopefully incorporate it fairly quickly,” says Pelkki. “The Europeans have looked at a lot of things and have found this to be the most cost effective for their investment in their coal energy infrastructure to reduce carbon emissions.”

The black pellets are created through a process called torrefaction, according to Pelkki. Wood pellets are heated to 500-600 degrees centigrade in a low oxygen environment, which crystallizes the pellets to the consistency of coal, making them water-resistant and easy to transport. Pelkki, who was contacted by Zilkha to make an impartial assessment of the region's forest sustainability and pricing about 2 years ago, says the company also looked to locate there because of its rail infrastructure and proximity to ports along the Mississippi River.

Pelkki says that since the most recent economic recession, timber harvesting in Arkansas has declined, leaving an oversupply of the natural resource. Citing statistics from the U.S. Forest Service, Pelkki says Arkansas has had an annual growth of about 10 million tons of softwood fiber above its mortality and harvest.

Before the recession in 2005, Pelkki says Arkansas harvested about 25 million tons of wood. In 2009, that number dropped to 17 million.

The area surrounding Monticello has long held an industry benefiting from harvestable forests. Pelkki cites paper mills in nearby Arkansas City, Pine Bluff, Clearwater and Crossett as examples, along with saw mills located in Monticello and Warren. The workforce employed at those facilities and training programs at UAM will likely supply Zilkha’s plant with competent workers, he says. Landowners will also likely benefit.

“The landowners in the region will have one more company competing with them for the wood their growing, which should help sell the trees that they’ve grown. It may increase prices. But there probably won’t be [an increase] in prices for wood because there’s just so much out there. But people who have trees to sell can cut them. And because they haven’t been able to do that in the past few years, we’ve had some concerns about forest health,” he says.

Pelkki says over-forestation can have be just as detrimental to forest health as over-harvesting.