by Cowford
Yes, I'm ever the skeptic:
1) It stands to reason that if demand for forest products is in the toilet (I guess in the case of TP, it always is ), then wouldn't the supply of wood biomass? Lower supply equals higher prices. And Millinocket wouldn't be the only location burning biomass (Bucksport, others?)... more consumption equals higher demand equals higher prices. I wonder how grounded in reality the study's biomass cost/BTU is? PS: The STUDY cost $1.5 million... ah, to be a consulting engineer.
2) Residual fuel oil is now about 50%+ cheaper than it was when the mill shut down/the study was started. It's a good bet that the economics of this project are based on a $2+ gal fuel oil comparison. If the project can't prove itself compared to sub $1/gal resid, this will turn out to be an albatross for the mill and a(nother) fleecing of the taxpayer... and unless you agree with the "subsidies for Everyone!" mentality, it already is.
3) Burning biomass doesn't increase demand for paper. (That is, unless you burn the paper as the fuel.) Thinking that this will solve the mill's fundamental problem- that people ain't buying paper- is naive. Maybe they'll have luck channeling the electricity to the grid and turn the mill into a power plant???
4) According to the article, the mill burned 400k bbls of resid in 2007. That works out to 700+ carloads/yr for MMA. I may be wrong, but I can't see much biomass moving inbound by rail. Is this hogged fuel? Chipped slash? Rail profitability on fuel oil is traditionally pretty skinny... margins hauling biomass certainly wouldn't be better.
If I owned MMA, I might be crossing my fingers for further resid price drops.
1) It stands to reason that if demand for forest products is in the toilet (I guess in the case of TP, it always is ), then wouldn't the supply of wood biomass? Lower supply equals higher prices. And Millinocket wouldn't be the only location burning biomass (Bucksport, others?)... more consumption equals higher demand equals higher prices. I wonder how grounded in reality the study's biomass cost/BTU is? PS: The STUDY cost $1.5 million... ah, to be a consulting engineer.
2) Residual fuel oil is now about 50%+ cheaper than it was when the mill shut down/the study was started. It's a good bet that the economics of this project are based on a $2+ gal fuel oil comparison. If the project can't prove itself compared to sub $1/gal resid, this will turn out to be an albatross for the mill and a(nother) fleecing of the taxpayer... and unless you agree with the "subsidies for Everyone!" mentality, it already is.
3) Burning biomass doesn't increase demand for paper. (That is, unless you burn the paper as the fuel.) Thinking that this will solve the mill's fundamental problem- that people ain't buying paper- is naive. Maybe they'll have luck channeling the electricity to the grid and turn the mill into a power plant???
4) According to the article, the mill burned 400k bbls of resid in 2007. That works out to 700+ carloads/yr for MMA. I may be wrong, but I can't see much biomass moving inbound by rail. Is this hogged fuel? Chipped slash? Rail profitability on fuel oil is traditionally pretty skinny... margins hauling biomass certainly wouldn't be better.
If I owned MMA, I might be crossing my fingers for further resid price drops.