Morehouse Catchment Area Analysis - Drax

Morehouse Catchment Area Analysis

The Drax Forestry team assesses report illustrating that our North Louisiana pellet plant sits in a well-established working forest landscape dominated by saw-timber and pulp & paper markets

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The forest area around the Drax Morehouse BioEnergy plant has a long history of active management for timber production. 96% of the forest owners are private and around half of these are corporate investors seeking a financial return from forest management. The pulp and paper (p&p) sector dominates the market for low grade roundwood with over 75% of the total demand. The wood pellet markets use only 6% of the roundwood, of which 4% is used by Morehouse.

Given the small scale of demand in the pellet sector, the extent of influence is limited. However, the new pellet markets have had a positive impact, replacing some of the declining demand in the p&p sector and providing a market for thinnings for some forest owners and a new off-take for sawmill residues.

Pine forest is dominant in this area with an increasing inventory (growing stock) despite a stable forest area. Active management of pine forests has increased the amount of timber stored in the standing trees by 68 million tonnes from 2006 to 2018.  Over the same period the hardwood inventory remained static.

Chart showing historic inventory and timberland area in Morehouse catchment

Historic inventory and timberland area in Morehouse catchment; click to view/download.

US Forest Service FIA data shows that the pine resource in this catchment area has been maturing, the volume of timber has been increasing in each size class year on year. This means that the volume available for harvesting is increasing and that more markets will be required to utilise this surplus volume and ensure that the long-term future of the forest area can be maintained.

Chart showing historic pine inventory by DBH Class

Historic pine inventory by DBH Class in Morehouse catchment; click to view/download.

This is reflected in the growth drain ratio – the comparison of annual growth versus harvesting. A ratio of one shows a forest area in balance, less than one shows that harvesting is greater than growth. This can be the case when the forest area is predominantly mature and at the age when clear cutting is necessary.

A growth drain ratio of more than one shows that growth exceeds harvesting, this is typically the case in younger forests that are not yet ready for harvesting and are in the peak growing phase, but it can also occur when insufficient market demand exists and owners are forced to retain stands for longer in the absence of a viable market.

Drax Morehouse plant

Drax’s Morehouse BioEnergy compressed wood pellet plant in northern Louisiana

This can have a negative impact on the future growth of the forest; limiting the financial return to forest owners and reducing the cumulative sequestration of carbon by enforcing sub-optimal rotation lengths.

The current growth drain ratio of pine around Morehouse is 1.67 with an average annual surplus of around 7 million metric tonnes. This surplus of growth is partly due to a decline in saw-timber demand due to the global financial crisis but also due to the maturing age class of the forest resource and the increasing quantity of timber available for harvesting.

Historic growth and removals of pine in Morehouse catchment (million metric tonnes)

YearGrowthRemovalsNet GrowthGrowth-to-Drain
200914.112960762411.1860124622.92694830041.26166145535
201014.580331100610.91819493463.662136166021.33541589869
201115.129903273610.72162297824.408280295451.41115792865
201215.357258404710.30755904395.049699360811.48990254039
201315.63898206189.701617808065.93736425371.61199733603
201415.91041518229.376564771556.533850410651.69682773701
201515.94235364499.669133266476.273220378431.64878828387
201616.43527840789.579357241816.855921165961.71569740985
201716.838075354610.1594737396.678601615681.65737672908
201817.770968348910.65938820047.111580148561.66716588371

The chart below shows the decline in pine saw-timber demand in the catchment area following the financial crisis in 2008. It also shows the recent increase in pulpwood demand driven by the new pellet mill markets that have supplemented the declining p&p mills.

Sawmills are a vital component of the forest industry around Morehouse, with most private owners seeking to maximise revenue through saw-timber production from pine forests.

As detailed in the table below, there are 70 markets for higher value timber products around this catchment area. These mills also need an off-taker for their residues and the pellet mills can provide a valuable market for this material, increasing the viability of the saw-timber market.

Operating grade-using facilities near Morehouse timber market

TypeNumber of MillsCapacityCapacity UnitsHardwood Roundwood At Mill From Market Softwood Roundwood At Mill From Market 
Total701.737194320550.88604623042614.02919939586.20597939376
Consumption, million green metric tonnes
Lumber6810538.8235294M m³1.737194320550.88604623042613.06745552335.69986977638
Plywood/Veneer2904M m³000.9617438725360.506109617373

Pulp and paper mills dominate the low grade roundwood market for both hardwood and softwood. The pellet mill market is small with just 3 mills and therefore does not influence forest management decisions or macro trends in the catchment area. However, demand for wood pellet feedstock exceeds 1.5 million tonnes p.a. and this can provide a valuable market for thinnings and sawmill residues. A healthy forest landscape requires a combination of diverse markets co-existing to utilise the full range of forest products.

Operating pulpwood-using facilities near Morehouse timber market

TypeNumber of MillsCapacityCapacity UnitsHardwood Roundwood At Mill From Market Softwood Roundwood At Mill From Market 
Total346.428736648862.6574151836917.49043945866.06363526426
Consumption, million green metric tons
Pulp/Paper117634.86896M metric tons3.489826926741.192570970097.557287050371.66598821268
OSB/Panel62412.55M m³002.567325398621.19890681942
Chips178395.08999M metric tons2.938909722111.46484421365.287607151192.18745126814
Pellets31573.965975M metric tons002.078219858451.01128896402

In its analysis, Forisk Consulting considered the impact that the new pellet mills including Morehouse BioEnergy have had on the significant trends in the local forest industry. The tables below summarise the Forisk view on the key issues. In its opinion, the Morehouse plant has had no negative impact.

Bioenergy impacts on markets and forest supplies in the Morehouse market

ActivityIs there evidence that bioenergy demand has caused the following?Explanation
DeforestationNo
Change in forest management practiceNo
Diversion from other marketsPossiblyBioenergy plants compete with pulp/paper and OSB mills for pulpwood and residual feedstocks. There is no evidence that these facilities reduced production as a result of bioenergy markets, however.
Increase in wood priceNoThere is no evidence that bioenergy demand increased stumpage prices in the market.
Reduction in growing stocking timberNo
Reduction in sequestration of carbon / growth rateNo
Increasing harvesting above the sustainable yieldNo

Bioenergy impacts on forests markets in the Morehouse market

Forest metric Bioenergy impact
Growing Stock Neutral
Growth Rates Neutral
Forest Area Neutral
Wood Prices Neutral
Markets for Solid Wood Neutral to Positive*
*Access to viable residual markets benefits users of solid wood (i.e. lumber producers).

Read the full report: Morehouse, Louisiana Catchment Area Analysis. An interview with the co-author, Amanda Hamsley Lang, COO and partner at Forisk Consulting, can be read here. Explore every delivery of wood to Morehouse BioEnergy using our ForestScope data transparency tool.

This is part of a series of catchment area analyses around the forest biomass pellet plants supplying Drax Power Station with renewable fuel. Others in the series include: Amite BioEnergy.