Eastern Shore sawmill announces $7M wood pellet operation
SALISBURY, Md. — Eastern Shore Forest Products, a significant buyer in the regional forestry and logging industries, announced recently a $7 million expansion to the multi-state company’s wood pellet operation.
The expansion, which will create 20 to 25 new jobs between its Salisbury and Pocomoke City facilities, should more than make up for revenue the company expects to lose after a Somerset County prison transitions from wood energy to natural gas next year, said Tom Johnson, company owner and CEO.
“It’s actually going to be a higher-value product,” he said. “As far as the economy for the Shore, we’re better off for it.”
The company is in the process of engineering and obtaining permits for the two-phase expansion. Once completed, the company would accept wood chips at its Salisbury facility for grinding and drying before trucking them to Pocomoke City for pelletizing and packaging, Johnson said.
The pellets will be sold into the retail marketplace as animal bedding, cat litter and fuel. The company will manufacture between 30,000 and 50,000 tons of pellets per year, and the new business should help preserve the Shore’s forestry efforts, which were partially threatened when the state announced its intention to decommission a wood-burning power plant at Eastern Correctional Institution, a medium-security prison in Westover, Johnson said.
Forest “landowners have to have a market for that. It’s just part of forest management,” he said. “You cannot properly manage a forest without having an outlet for low-grade wood.”
The prison contract helps thin about 1,000 acres of forest across the region each year, according to the Maryland Forestry Association, which represents landowners, loggers and other industry interests. The company, using contractors and its own crews, harvests small-diameter trees with minimal commercial value to shred them into chips, thinning the forest and allowing remaining trees to grow faster, larger and more valuable for use as hardwood. That process provides income for landowners and keeps forests from being developed.
Leaders in the forestry and logging industries began lobbying Gov. Larry Hogan more than a year ago after discovering the state’s plan to replace the 30-year-old wood-burning prison plant with natural gas service, part of a larger pipeline project to bring gas to Somerset County. Eastern Shore Forest Products employs about 15 people to service its contract with the prison, which consumes about 55,000 tons of wood chips each year, about a third of the Shore’s total chip production.
Forestry advocates feared the Shore would lose 50 jobs and $7 million in yearly economic activity without that business, including $300,000 in payments to landowners whose forests are harvested for the chips. In the spring, the state’s forestry and logging industries suffered a much larger blow after the Verso Corp. shuttered its 131-year-old paper mill in Allegany County. The mill’s appetite for low-grade wood supported forestry efforts in the Virginias, Pennsylvania and across Maryland. In response, the state announced last month several studies to redesign and revive Maryland’s forestry and logging industries.
After the state moved forward with its gas pipeline plans, Eastern Shore Forest Products decided to expand its Maryland pellet operation, Johnson said. The company already produces about 50,000 tons of pellets each year at a new facility just north of Houston, Texas. Maryland crews who sell wood to the company could have gone out of business, he said.
“I’m not going to let that happen,” Johnson said. “We knew we had to come up with something.”
The company continues to provide wood chips to the prison, which will transition to natural gas in October 2021, said Daniel Faoro, spokesperson for the Maryland Environmental Service, which is overseeing the project. After that, Eastern Shore Forest Products will likely expand its pellet operation, Johnson said.
“It just so happens that the prison closing is going to free up a bunch of wood,” he said.
The company is scheduled to begin making wood pellets in August, Johnson said.
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