SITESelection

BY ADAM BRUNSManaging Editor

Thepastyearhasbeenfilledwith progressively busier proj-ect location and constructionactivity by biomass fuel firmEnviva, which until last yearwas known as Intrinergy. Andthere's even more on the imme-diatehorizon. The seven-year-oldfirm,nowbased in Bethesda, Md., af-ter relocating from Richmond,Va.,hasonlybeensupplyingitsproductssince2007. It receiveda hefty investment in March2010 from private equity firmRiverstoneHoldings.InAugust,Enviva, described as part ofIntrinergyHoldingsLP,acquiredCKS Energy Inc., a privatelyheldcompanythatmanufactureswoodpelletsforindustrial,com-mercialandresidentialuses. Based inAmory, Miss., CKSwas one of the few U.S.-basedcompanieswithasuccessfultrackrecordofmanufacturingandex-porting sustainable, high-qualitywoodpelletbiomassfuelforutil-itycustomers,saidEnviva.Mostof those customers are based inEurope, where the use of woodpellets iswell integrated into allareas of the energy sector. Enviva immediately an-nounced it would double theAmory facility's capacity toapproximately 100,000 tons ayear, sourcing material locallyfrom the plentiful "wood bas-ket," mainly pine, stretchingfromMississippiacrosstoNorthCarolina.Pelletsfromthatplant,

located along the Tennessee-Tombigbee Waterway system, areexportedthroughthePortofMobile.Soarepelletsfromtheformer PineyWood Pellets fa-cility inWiggins,Miss.,whichEnviva acquired in October2010 and expanded to 150,000tons of capacity. Buttheotherendofthatwoodbasket beckoned. In December2010, Enviva announced an-other new location, at a formerGeorgia Pacific lumber millin Ahoskie, N.C., in HertfordCountyhardbytheVirginiastateline in the northeastern part ofthe state. The new wood pelletmanufacturingfacilitywasslatedtobring53jobstothearea,andwould produce 330,000 tons ofwoodpelletsannuallyfrommorethan 600,000 tons of rawwoodsupplies.Thenewplantreceivedgrant support from the state'sOneNorthCarolinaFund. "The region's abundant re-sources,proximitytoports,andwealth of skilled labor havemade it a focus of Enviva'splansforfuturegrowth,"Envivasaid then. "Based on increas-ing demand from its domesticand European customer base,Enviva is contemplating thedevelopmentofatleasttwoad-ditionalmanufacturingplantsinthearea,withsiteselectionex-pected to be completed within18to24months."

Perfect Port Less than two months later,Enviva announced it had ac-quired a port terminal just an

hour northeast of Ahoskie inChesapeake, Va., from Giant Cement Co. The terminal willenableEnviva to create the ca-pacitytoreceive,storeandloadin excess of 3 million tons ofsustainably generated woodybiomassforexporteachyear. "The Chesapeake region hasforalongtimebeenakeynex-us of international trade in theUnited States,"said EnvivaCEO JohnKepp l e r. "Weare particularlyexcited to beone of the firstgreen economy manufacturerstorebalancetheflowof trade infavorofexportsfrom this port in Virginia." The terminal,locatedona50-acre (20-hect-are) site, can accommodateawide rangeofships and load-ing options re-quired for theexport of morethan 40,000metric tons of Enviva'swoodpelletspervessel.Elizabeth Woodworth, directorof marketing and communica-tions for Enviva, says the compa-nyisretrofittinganexistingcranethatwasusedbyGiant.Thereisplentyofroomforadditionalsi-losasvolumeincreases.Andthe

possibility exists that a secondberthcouldbecreatedontheop-posite sideof the terminal fromtheexistingberth. Immediate work on the ter-minal was expected to requireup to 60 tradesmen and con-tractors, with a permanent staff of12expectedtodoublebythethirdyearofoperation.Theter-minalupgradesareexpectedto

becompleteinNovember2011,tocoincidewithpelletproduc-tion in Ahoskie. Meanwhile,Giant will continue to use aportion of the terminal for ce-mentsales. "Theporthashandledource-mentvolumesfor11yearsand

Pellet Run Proximity to ports and to fiber determines facility locations for Enviva

May 2011Vol. 3, Issue 05

THE MAGAZINE OF CORPORATE REAL ESTATE STRATEGY & AREA ECONOMIC DEVELOPMENT

On May 11, Enviva LP infLatEd a 157-ft. dome manufactured by Idaho-based Dome Technology at its new port terminal facility in Chesapeake, Va., where Enviva will have the capacity to export 3 million tons of biomass annu-ally. Above, Dr. Alan Krasnoff (left), mayor of Chesapeake, celebrates with John Keppler, chairman and CEO of Enviva.

has been an important asset for our company," said DuncanGage, president and CEO ofGiant."Itisoneoftheonlyas-sets of its type on the Eastern Seaboard, and we believe thatEnviva is well-positioned tocapitalizeonthepotentialofthisterminalandincreaseitsimpor-tancetotheregion." EvenasEnvivacontinuesitssearch for newpellet plant lo-cations, however, it saw an op-portunitywhere itwas alreadybarely planted. On May 2,2011, in response to increaseddemand, it said it would in-crease production capacity inAhoskie by another 50,000metric tons, to 350,000 totalmetric tons. Total job creationisnowexpectedtoreachmorethan60. As part of that announce-ment,Enviva said itwas "cur-rentlydevelopingsites for twoadditional wood pellet manu-facturing plants in the mid-Atlantic region, eachofwhichcould be operational by late2012,andanothersiteineitherMississippi orAlabamawhichcould become operational inearly2013."Thecompanyhaslong operated one overseasplantaswell,a50,000-metric-ton combined-heat-and-powerandwoodpelletfacilityoutsideBrussels,Belgium. Woodworthsaysproximitytoboththewoodandthedeepwa-ter ports to ship pellets are thetwo prime factors in the compa-ny'ssiteselection.Buttransportoptionsbetweenallthoseplacesarealsoimportant. "Ideallywe'd like to be on amajorwaterway likewe are inAmory, on the Tenn-Tombigbee Waterway," she says,citing thelow-cost and low-carbon ad-vantages of using barges. "Oursecond favorite isby rail."Thecompany plans to make primeuse of a Norfolk Southernline serving that terminal inChesapeake. "In the next year we haveplannedtoannouncepotentiallythree more sites in the NorthCarolina-Mississippi-Alabama

region,"shesays."Andin2012the potential is for expandingevenmore."

Green Enough? So: How does harvestingwood for pellets differ fromharvesting it for lumber as faras sustainability goes? Envivasays it's all about sustainablysourced raw material, basedon a blend of adherence toworldwide sustainable forestrystandardsanddevelopingcloserelationships with landown-ers.Enviva receivedSFIFiberSourcing certification in thefirst quarter of this year, andwillpursueSFI,FSCandPEFCChainofCustodycertificationsover the courseof the remain-derof2011. "Multiplestudiesbyleadingresearchinstitutesconfirmthatfiring woody biomass is themost commercially attractiveand effective way to reduceGHG emissions from fos-sil fuel-based power plants,"says the company's docu-mentonprocurementfromthe

Southeast. "Studies byE4tech(UK) and other government-backed and private researchbodies show that electricityproduced from wood pelletsharvested and manufacturedin, and transported to Europefrom, the Southeast UnitedStates reducesgreenhousegasemissions by at least 80 per-cent compared to electricityproducedfromcoal. "The Southeast U.S. woodbasket is a sourceof plentiful,sustainable biomass. This re-gion consistently grows moretimberthanisharvested—thenetvolumeoftimbergrownonforested land in the SoutheastUnitedStateshasroughlydou-bled in thepast60years.Thistrend continues today. Otherregions of the United Stateshaveseensimilarincreases,ledby the Northern United Stateswhere forest inventories have swelledover130percentinthepast60years. "U.S.forestsaregrowingmoretimberthanisbeingharvestedev-eryyear.Since1953,thevolume

ofgrowingstockson timberlandin the South has increased from148billioncubicfeet(4.2billioncubicmeters)toover288billioncubic feet (8.2billion cubicme-ters).Since1997,growingstocksinthesouthhaveincreasedby32billioncubicfeet(1billioncubicmeters) or almost 13 percent.(Source:U.S.D.A.ForestService:U.S. Forest Resource Facts andHistoricalTrends2010)." In addition to the multiplecertifications, says Woodworth,Enviva's site selection strategyitself makes sure transport dis-tancesforbothrawmaterialsandpellets are kept to a minimum.What'smore, the companyusesbiomasstorunitsdryers.Finally,thecompany'sheadquartersislo-catedinaLEED-SilverbuildinginBethesda. "Intermsofourcarbonfoot-print,wemeasurethatfromfor-esttofurnace,"shesays."Icanhonestly say that sustainabilityisabsolutelypartofourDNA."

Enviva LOads pellets onto a barge on the Tenn-Tom Waterway from its facility in Amory, Miss.

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