By David Abbott
Wood Bioenergy, woodbioenergymagazine.com
June 2017, page 18
PINE BLUFF, Ark. In April this year, the first train load of product from Highland Pellets, LLC left the facility in Pine Bluff, Ark., bound for the port of Baton Rouge, La., there delivered to a Drax Biomass loading facility and shipped to the United Kingdom. With two of its four lines currently completed and in production, Highland principals predict the plant will be fully operational by the fourth quarter this year, well under budget and ahead of schedule. That’s always a plus.
Highland started as an idea to enter the wood pellet market in 2011, when investor and entrepreneur Tom Reilley teamed with fellow company founders Rob McKenzie and Alex Adome. Reilley and McKenzie had both worked for years in the UK, including in developing energy companies, and McKenzie and Adome had worked together at Cargill, Inc., a global corporation based in Minnesota. They got together with representatives from Wagner Construction, Inc., another Minnesota-based company that specializes in underground utilities and heavy civil construction. These included company founder Dennis Wagner, President Kalan Wagner, and chief financial officer Marty Goulet. The group brought Highland into existence as a legal entity in 2012.
Reilley serves as chairman of the board, McKenzie as Managing Director and Adome as Director of Finance. From Wagner, Goulet also sits on the Highland Board/management team, and Dennis Wagner is on the Highland Board of Advisors. According to Jody Doak, Plant Manager, "They spent quite a bit of time and did their due diligence on identifying the proper path to pursue." With Pine Bluff selected as the location for what is intended to be only the first of several operations, the company broke ground here in November 2015.
Wagner Construction has served as the civil contractor for the still-ongoing project. Doak says that the second pellet line started operating in early May and that all four lines will be fully operational by November. "When we built this plant our initial thought was that we were going to ship by barge down the nearby Arkansas River to port," Doak explains. Instead, they ultimately negotiated an agreement with Union Pacific railroad to transport all of Highland's production by rail, though the river barge alternative is still a backup plan.
Highland's customer is Drax Biomass, which takes ownership of the product at Port Allen in Baton Rouge, where they have a loading station. The end product will end up in Great Britain. Drax has agreed to a long-term deal with Highland Pellets to supply 600,000 metric tons a year to the Drax power plant several hours north of London. With that agreement in place, Highland was also able to secure long-term contracts for railroad access, power and wood supply. Having all that in place helped secure financing. Along with investment from the Arkansas Teacher Retirement System, Highland obtained financing from a well known credit fund to finance the project. That was in place by late March 2016, barely a year ago. In what Highland says is a record for the industry, all of the equipment for the plant was manufactured by the end of the year.
Astec Industries, Inc., a Chattanooga, Tenn.-based engineering firm that has focused on infrastructure equipment and asphalt plants in the past, manufactured the lion’s share of the equipment at Highland, as well as serving as the EPC (Engineering, Procurement and Construction) contractor for the project. Astec, which had been expanding into the renewable fuel industry for some time, had already built a prototype facility at its factory in Tennessee to test its designs. Taking lessons learned there, Astec built its first pellet plant for Fram Renewable Fuels in Hazlehurst, Ga., last year (see article in February 2017 Wood Bioenergy). Dubbed Hazlehurst Wood Pellets LLC, that plant is built to produce 400,000 metric tons on three lines. Highland principals wanted a 600,000 metric ton plant, so Astec built four lines here. Andritz and Progress Industries have provided the pellet mill and wood yard equipment.
Highland held a ribbon cutting ceremony last November, and the first test pellets from Line 1 were produced on December 31, 2016. "We came into service in December 2016, and then started back up at the end of January," Doak says. By April, the business was operational, only 13 months after financing was officially secured. Once fully operational, the facility will provide 68 full-time jobs to the local community (at a reported average salary of $60,000, including the value of benefits), not to mention 450+ indirect jobs in transportation and in the harvesting supply chain. Highland estimates the direct annual economic benefit to the Pine Bluff area at $77 million annually.
Looking beyond the completion of the Pine Bluff facility later this year, company owners are already planning to build three more similar plants. Areas currently under consideration include another location in Arkansas, one in Enterprise, Miss. and one in Maine. Doak adds that the two pellet startup biggest factors that determine the choice of location are the fiber supply and the logistics of getting the product to port. Secondary considerations include things like the availability of a skilled labor work force in the area and existing infrastructure to support manufacturing.
In Pine Bluff, Doak says, "We are situated on a 209-acre plot of land where we have a good wood fiber basket, and good logistics to port." The source material is mostly from southern yellow pine plantations. "These are typically 8-10 in. butts and that is what we use here," the plant manager continues. Wood comes in tree length. Source material is currently 80% forest thinning and 20% tops. In the near future, Highland will also use mill residuals. "We strip the bark off and utilize it in our furnace to generate our heat source. The whitewood we process into a chip form and that is what goes into our pellets. We use a microchip, target size of ½ in. or less
Due to sustainability requirements, Highland does not buy any gatewood. Instead, the company has developed a partnership with Weyerhaeuser, which serves as a broker to provide a legal and sustainable log supply through the proper channels. Doak explains, “It is a track and trace program, so I can track from where each load was harvested to where I provide the pellet to the customer.” A Progress Industries chipping operation is currently under construction and should be finished in June. Until then the Pine Bluff facility is using a portable Peterson 4810F chain flail debarker and 4300B microchipper on site to generate its chip supply. For now, Cat 988 loaders unload trucks and a Prentice knuckle-boom machine feeds the Peterson 4300B drum chipper. Once fully operational, the mill is expected to consume 160 log truck loads daily. The mill has capacity for around 50,000 tons of roundwood storage, an inventory that the plant will cycle through every three weeks.
One Progress Industries 180 ft. radial crane is already in place, and a second 125 ft. crane will soon be installed. When finished, the two cranes will feed a 120 ft. Progress Industries debarker, which in turn will lead to the Progress Industries chipper. From there the Astec system conveys material to various storage areas to await processing in one of the four pellet lines. From the storage silos, fiber runs through Astec’s Hot Oil Tube Dryer system. Two dryers on each line, a pre-dryer followed by a primary dryer, utilize hot oil flowing through the tube as a medium to dry chips. Doak calls the dryer system “one of the beauties of the Astec design. In a conventional heating system, the air stream carries fiber through a rotary dryer. Once removed you have to separate particulate matter from the air stream using cyclones. The air stream is dirty with VOCs (volatile organic compounds) and dust particulate. So typically in this industry we have to send air stream through a scrubber or WESP (wet electrostatic precipitator) to remove particulate, then to RTOs (regenerative thermal oxidizer) to disintegrate any remaining VOCs,” the plant manager explains.
With this Astec system, he continues, the fiber never touches any air stream. “We pull heat off our Sigma Thermal furnace and that heat goes across a heat exchanger. The hot air off the furnace blows across the radiator or heat exchanger. Thermal oil pumps circulate the heated oil through the pipes and the wet green fiber never touches the air. Particulate is only off the furnace, so there is less ash and lower VOC content than in a normal drying system.” What emissions do remain is sent through a hot bag house to consume that particulate before it is sent out into the atmosphere. As such, Highland Pellets does not require ESPs or RTOs to meet its environmental standards.
The dried chips then flow through a hammermill system before ending up in one of four Andritz PM 30 pellet mills on each line. Pellets drop out to one of five Chief bins per line, each capable of holding 1,500 metric tons of pellets. After cooling, pellets load directly to rail cars on a spur Highland built. Union Pacific picks up an 80-car train unit every four-five days. From start to finish, the entire process from green chips to pellets takes about two hours.
Highland is slated to produce more than 600,000 metric tons annually, based on 7,500 hour-operating year. The mill will operate 24/7, 365 days a year on three shifts. Each of the four lines can produce 20 tons of pellets an hour, so with all four lines in operation the facility is designed to produce 80 tons per hour. In order to ensure a consistent 20-ton per hour production pace, each line actually has five pellet mills: four running with one backup. Whenever one pellet machine has to be shut down for repairs or maintenance, the extra one will start up. "Inherent to the process we have dies and roller heads that wear out, so every 1,500 hours or so you have to change those out," Doak says. It takes five or six hours. "Instead of taking one mill out of production for six hours, I shut one down and start another, and we only lose about 30 minutes."
The redundancy of having five pellet machines promotes higher uptime but there are a lot more moving parts, so a top-notch preventative maintenance program is a critical and never-ending process. Besides routine die and roller head replacement, there are a number of high-wear replacement areas, Doak says: hammers and screens and tooling that constantly have to be replaced.
Aside from that there is power transmission upkeep, bearings, belts, pumps. The job doesn't fall only on the shoulders of he maintenance department, Doak stresses. Operators are responsible for much of it.
Highland currently employs 58, just 10 shy of the number it will employ when in full operation. Most come from Pine Bluff and surrounding counties. Doak estimates 95% of the work force commutes under 30 miles. Of course, few of them—five, to be precise—had ever previously worked in a pellet mill. “I was very lucky that I was able to pull a handful of employees, maybe a dozen, with some experience in wood manufacturing or biomass,” Doak says. Upon hiring, employees underwent a month-long orientation that included OSHA training and an education on the wood pellet manufacturing process. Representatives from Astec, Andritz and furnace maker Sigma Thermal helped explain the concepts. “The beauty of it was that we did it during construction, so they were able to get a mix of classroom training and hands-on training,” Doak notes.
Developing a culture of safety was paramount from day one, he adds. "We have a full-time EHS (environmental health and safety) officer and she is responsible for ensuring we stay within the regulations," the manager says. New employee orientation includes extensive safety training on lockout/tagout procedures, use of proper personal protective equipment and so on. Supervisors in each area guide new hires in the proper use of equipment and conduct weekly safety meetings. Topics vary for each crew on each shift each week, ranging from reviews of the hot work policy to fall protection to OSHA guidelines, proper use of harness and ties and everything in between. "It is very important to our culture," Doak asserts. "From the owners on down, it is not just about meeting what's required by law but truly doing everything we can to make sure everyone goes home with all their fingers and toes intact."