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CN’s wood pellet traffic growing at double-digit rates

CN is on track to haul more than 800,000 tons of wood pellets this year and sees more opportunities in the fut…

CN is on track to haul more than 800,000 tons of wood pellets this year and sees more opportunities in the future for this “green” source of heating energy.

“Since 2005, we have experienced a 16% compounded annual growth in our wood pellet traffic, and we see growing potential for this business in domestic and international markets,” says James Foote, executive vice-president, sales and marketing, for the rail company.

“Wood pellets are a renewable resource, right in our backyard,” Foote adds. “Our network has direct access to wood pellet production areas and reaches key consumption markets in eastern Canada and the northeastern U.S., as well as key export terminals on the Pacific, Atlantic and Gulf coasts.”

According to CN, global wood pellet production in 2008 was almost 11 million tons, and some analysts believe worldwide production could double by 2014. North American consumption is expected to exceed 3.3 million tons in 2010.

Ontario Power Generation (OPG), one of North America’s largest producers of electricity, is studying conversion of some coal-fired generating units to agricultural and forest-based biomass. CN serves the plant that OPG is targetting for the first conversion in 2012 — the Atikokan station in northwestern Ontario..

CN reports that Canada’s 29 wood pellet plants have a combined production capacity of approximately 2.2 million tons. Most producers are located in British Columbia, with some in Alberta and a few in Quebec. Facilities are also opening on CN lines in Wisconsin and Mississippi this year, and the first major Ontario producers are expected to start production in 2010.

Wood pellets are one of CN’s expanding sustainable energy business segments, which include biodiesel, ethanol and wind turbine components.