Woden wood chip co. suffering from biomass plant shut-downs - KTRE.com | Lufkin and Nacogdoches, Texas

Woden wood chip co. suffering from biomass plant shut-downs

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WODEN, TX (KTRE) -

The Christmas budget is strained for a lot of wood chip producers and haulers. Business went away when biomass plants shut down or cut back production.

East Texas New looked into why the lull in business is happening and how it's hurting workers right where it counts - in their pocket books.

Every day at Carrizo Wood Products near Woden, the wood chip piles grow deeper and deeper.

The chips are what's left over after producing wood pallet lumber.

"We generate approximately 10 semi loads of waste product a week," Phillip Cadman, the vice president of Carrizo Wood Products, said.

Just this summer, the family-owned and operated business was benefiting from a ready market for the chips. Southern Power, the biomass plant in Sacul, was buying the debris to power up the city of Austin.

"We ended up stock piling probably 300 semi loads prior to the plant opening in Sacul," Cadman said. "We were able to move probably 2/3 of that to the plant once it opened, and then they cut everyone off."

It happened when natural gas became cheaper than biofuel. All the promises made just a few months ago to hard working individuals means nothing to them today.

"We expect to burn over a million tons of wood waste a year and that million tons of wood waste will be purchased from local landowners that are primarily within 75 miles radius of this facility," Oscar Harper, the president of Southern Power, said on July 18, 2012.

It sounded convincing. Cadman saw it as a way to generate extra income.

"We generate $200,000 from fuel sales and in a bad year it might be $50,000," Cadman said.

But he has colleagues who sunk money into an opportunity. Now, they're staring at a bank note with no return. 

"There are companies that bought all kinds of equipment to set up for this," Cadman said. "The trucks and all the equipment to get the chips to the plant, and they're not making anything right now."

Southern Power continues to draw a check from Austin Power whether it generates energy or not, which creates a question for others with business sense.

"My question is was it more profitable to keep the plant sitting idle and pay them or to run or generate electricity at a loss?" Cadman asked.

Cadman said at least by running, it would be supportive of the local economy.

"These chips not moving; there are a lot of trucks sitting idle," Cadman said.

Cadman sells what chips he can to cover the floors of chicken houses and to beautify people's flower beds. It's certainly not the anticipated business he had his sights on.

Copyright 2012 KTRE. All rights reserved.

 

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