Louisiana May Get $124M Wood Pellet Plant

Proposed agreement says Port of Greater Baton Rouge will be site of $124 million wood pellet-making plant, whose products will be sold overseas and used as fuel.

BATON ROUGE, La. (AP) -- The Port of Greater Baton Rouge will become the site of a $124 million wood pellet-making plant, whose products will be sold overseas and used as fuel, under a proposed lease agreement.

The port's executive committee is scheduled to consider the lease Thursday.

William New, the Wisconsin-based chairman and chief executive officer of Point Bio Energy LLC of Baton Rouge, said the plant will employ between 85 and 100 people and generate 500 to 1,000 other related jobs as it taps the area's timber industry for its raw materials and makes use of the port

"The capacity of the plant is 400,000 to 450,000 tons a year," New said. "We have ongoing discussions with a number of people in Europe to take all or part of the production of the plant."

New said the company has been working on the lease with port officials for some time. Last year, Point Bio made a presentation to commissioners.

At the time, Hardman said the project could benefit the state's timber industry and the port. The new business could take advantage of underutilized resources while bringing back deep-draft shipping to Baton Rouge, he said.

New said green or renewable energy requirements in the European Union are driving demand for the wood pellets, which power plants burn as fuel.

Wood pellets provide roughly the same amount of energy as low-grade coal, and the pellets can be easily burned in coal-fired power plants, New said.

In northern Europe, the demand for wood pellets is around 8 million tons a year, and that number is expected to double or triple over the next decade, New said.

According to Wood Resource Quarterly, an industry publication, the global trade for woody biomass, particularly pellets, nearly doubled between 2003 and 2008, to around 3 million tons.

Production capacity in North America grew from 1 million tons in 2004 to more than 6 million tons in 2009, according to the U.S. Department of Agriculture.

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