Environment Be Damned, Oil Prices Spark Wood Sales (Update2)

By Robert Tuttle

Nov. 21 (Bloomberg) -- More American households, faced with an 83 percent increase in heating-oil prices over the past year, are turning to an alternative as old as the Stone Age: wood.

While the typical wood stove emits as much as 350 times more pollution than an oil furnace, according to the U.S. Environmental Protection Agency, some homeowners find the economics compelling. Firewood costs less than half as much as heating oil in terms of energy produced, based on prices from the U.S. Energy Department and firewoodcenter.com.

``I got nearly a $2,500-a-year saving by putting in a wood boiler,'' says Wendy Wells, a 39-year-old New Hampshire bookkeeper who replaced her oil furnace two years ago with a $3,700 wood-oil combination.

Sales of wood-pellet stoves, the least environmentally harmful wood-heating devices, more than tripled since 1999 to 133,105 last year, according to the Hearth, Patio & Barbecue Association in Arlington, Virginia. At Thayer Nursery in Milton, Massachusetts, owner Josh Oldfield says firewood sales are 15 to 18 percent higher than a year ago.

``As oil creeps up toward $100 a barrel, firewood sales have increased dramatically,'' Oldfield says. ``There is definitely a correlation.''

Business also has picked up for sellers of wood stoves, boilers and ovens used to dry wood, or kilns, says Sherri Latulip, co-owner of Mountain Firewood Kilns in Littleton, New Hampshire.

`They Start Buying'

The company's sales have tripled, says her husband, Bill. Mountain Firewood's kilns retail for $21,800, and combination wood-oil boilers, for as much as $6,490.

``We really started getting the run on them at the end of August, early September,'' he says. ``When people hear oil is going to get expensive, they start buying.''

Crude oil, which accounts for about 60 percent of heating oil's retail price, rose to a record $99.29 a barrel in today's session in New York. Crude oil for January delivery rose 15 cents to $98.18 a barrel at 10:41 a.m. on the New York Mercantile Exchange.

Heating oil futures, which represent wholesale prices, have gained 56 percent in the past year, pushed higher by crude oil. The retail price of the fuel averaged a record $3.21 a gallon on Nov. 12, the most recent available, according to the Energy Department. Natural gas prices have fallen 6.5 percent in the past year.

Wood prices have increased more slowly than oil because of abundant supply and people's ability to gather and split their own wood, particularly in the Northeast where usage is concentrated.

Primary Heating Source

Ray Colton, owner of Colton Enterprises Inc. in Pittsfield, Vermont, says he sells kiln-dried firewood for $220 a cord, the same as last year. A cord, 128 cubic feet (3.6 cubic meters) of stacked firewood, is about equal to the amount that can be loaded onto two full-sized pick-up trucks. The national average is about $160 a cord, according to firewoodcenter.com.

Wood was the primary heating source for about 1.3 percent of U.S. households in 2005, according to the most-recent Energy Department data. That was down from 7.1 percent 20 years earlier. Seven percent of homes use heating oil, 58 percent natural gas and 30 percent electricity. Propane and other fuels account for the remainder.

Pollution is the big drawback. Even stoves that burn dog- food sized pellets of compressed sawdust emit about 40 times more particulate matter, similar to soot, than an oil furnace, according to the EPA.

Federal Regulations

The emissions can contribute to respiratory illnesses such as asthma, says David Wright, a supervisor with Maine's Department of Environmental Protection. Wood burning for residential heating accounted for 57 percent of toxic air emissions in the state, he says.

The federal EPA issued regulations for woodstoves in 1989, mandating that they emit no more than 4.1 grams of smoke an hour for catalytic stoves, which convert particulates and harmful gases into less-polluting exhaust, and 7.5 grams an hour for ordinary stoves. Manufacturers that fail to meet those standards may be fined as much as much as $100 a stove, says John Dupree, supervisor of the EPA's wood heater program.

Several states, including New Jersey, Vermont and Washington, also have regulations to control pollution, says George Allen, a senior scientist at the Boston-based Northeast States for Coordinated Air Use Management, a nonprofit association of state air-quality agencies.

New Jersey, Connecticut

New Jersey has a law, enforced by fines, that forbids use of outdoor wood boilers that emit smoke, says Lisa Rector, senior policy analyst for the group. States including Connecticut and Vermont have rules that require wood boilers to be placed a given distance from a neighbor's property.

Wells says air quality isn't a major concern for people in her part of New Hampshire, where the temperature falls to minus 20 degrees Fahrenheit (minus 29 degrees Celsius) for weeks at a time. Almost everyone burns wood, she says.

``It is very expensive to heat our houses up here because we are so far north and the climate is so cold,'' Wells says. ``We live among the trees, where the deer and antelope play.''

To contact the reporter on this story: Robert Tuttle in New York at rtuttle@bloomberg.net

Last Updated: November 21, 2007 10:52 EST