Anchorage Daily News

WASILLA -- A company run by a Wasilla man is going some 300 miles north to open the state's first large-scale wood pellet plant near Fairbanks.

Superior Pellet Fuels LLC said the plant, scheduled to open in the fall, will offer residents there a cheaper alternative to costly fuel oil.

So why not open one in the Mat-Su, where residents are reeling from high heating bills too?

The company's manager says the location boils down to basic economics: There's more demand, and ample raw materials, in the Fairbanks area.

Fairbanks residents rely on costly fuel oil to stay warm through long, frigid winters, said Chad Schumacher, the Wasilla man who will be Superior Pellet's general manager.

Mat-Su residents pay high prices too, but many have access to natural gas which currently costs about three-quarters as much as fuel oil.

"Essentially, that was our biggest market," Schumacher said.

"With the available natural resources up in that area, it seemed like the perfect fit."

Wood pellet stoves burn cleaner than wood stoves, a potential selling point given the wintertime inversions that trap wood smoke and other particulates over Fairbanks.

But they cost more, require more maintenance, and most require electricity to operate.

Plants make the pellets -- they resemble rabbit chow -- from compacted wood waste.

Superior Pellet will use sawdust, shavings and chips from local sawmills, as well as from land-clearing contractors and fire mitigation projects, Schumacher said.

The company plans to produce 30,000 tons of pellets a year from a 10,000-square-foot plant just outside Fairbanks. The plant could create as many as 15 jobs after it opens in September, company and Fairbanks officials say.

Schumacher plans to move to Fairbanks next month to start work for Superior Pellet.

He currently serves as logistics manager for NPI LLC, a timber and resource import-export company at Point MacKenzie. NPI is a subsidiary of an Oklahoma firm, Horizon Natural Resources Inc.

Superior Pellet appears to be connected to Horizon as well.

A state records database lists corporate officers as Debra and Dale Rich of Tulsa, Okla. Dale Rich is Horizon's president. Schumacher would only describe the pair as investors he knew "through a previous business relationship."

Schumacher said a 2005 logging moratorium on Matanuska-Susitna Borough lands was not a factor in the decision to locate in Fairbanks.

But NPI sued the borough over timber availability in 2007.

The moratorium stymied plans to export wood chips from thick birch forests on borough parcels near Port MacKenzie, company officials said at the time.

Despite media reports last year that Houston was a contender for a pellet plant, "that was never the case," Schumacher said last week.

He did make a presentation to Houston's city council, he said, but only to talk up wood pellets in general.

Superior Pellet will have some company in the Interior.

A small pellet plant operates out of the Dry Creek area near Fairbanks, with another one-man operation in the works at Delta Junction, said Cassie Pinkel, project manager with the Fairbanks Economic Development Corp.

"Wood pellets have been a hot commodity up there," Schumacher agreed. "They can't keep a steady supply of materials available."

The nonprofit development corporation provided Superior Pellets with a study showing a high level of interest in pellet heat from locals who rely on fuel oil with wood stoves as backup, Pinkel said.

The study showed less interest in the Mat-Su and Kenai, given the availability of natural gas, she said.

But last year's spectacular demand may have waned a bit, pointed out Mark Wiebold, who sells stoves at The Woodway in Fairbanks.

Fuel oil prices have since dropped, and a new pellet stove can cost $4,000, Wiebold said.

"We think there's going to be a strong demand for pellets in Fairbanks, (but) it's an economics deal," he said.

"People paying attention are going to be looking at pellets and comparing it to the cost of fuel oil."

Find Zaz Hollander online at adn.com/contact/zhollander or call 352-6711.

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