Ute Mountain Pellet Proposal
A small, economically viable pellet mill produces 25,000 – 35,000 tons per year. If the local market expanded from 1 percent to 7 percent (8,400 households), the small mill capacity would be matched. Market expansion will take place as the cost of conventional energy increases, but will be slow in the near term without a strategy. If steps are not initiated now to encourage and capture a growing market, it will be filled by a pellet plant from outside the region.
Here are some safe bets:
Non-renewable fuel prices will remain volatile with increasing spikes due to political and natural disruptions.
•
Renewable fuel sources like wood, solar, geothermal will grow in use and affordability.
•
There will be a market shake-out in the pellet industry over the next three years due to a lag between production
• capacity and market.Given current and projected demographics within the Four Corners region there is room for one pellet mill of moderate size (25,000 to 35,000 tons annually). We recommend a phased strategy beginning in 2008 with strategic commercial and residential market development. Construction of the plant will be triggered by capture of at least 5 percent of the residential market. The estimated investment for all phases is between $7 million and $10 million. Investment in this proposal will place the Ute Mountain Ute Tribe in a position to capitalize on the mill opportunity and other related business ventures as well as benefit the residents of Indian Country.
Strategic Steps:
Build bag and bulk pellet delivery routes in up to 300 mile loops linking together towns in a 100 mile radius
• thus servicing homes, hospitals, schools, offices and other buildings in Indian Country and high elevation communities.Make all public buildings “Native Wood Ready” in the design phase and invest in pellet boiler retrofits for those
• in the “green zones” on the map.Initiate a subsidized pellet stove installation program for eligible families within the “green zone.” The program
• can be modeled after the EPA’s Great American Woodstove Changeout program. See this site for information on EPA’s program http://epa.gov/woodstoves/how-to-guide.html Decent stoves installed cost approximately $2500. The program could offer a $1000 subsidy and $1500 zero interest loan. The program achieves immediate benefits regarding heating bills, air quality, and market build-up. Utilize Forest Energy Corp as the bag and bulk pellet supplier while markets are stabilizing. Either buy, store,
• and disperse pellets from a centralized location on tribal land or arrange for delivery by Forest Energy Corp. Propane carriers can adapt to carry pellets as well. If silos are added to the installation program, delivery costs can be cut in half and thus consumer prices.
