Soaring heating oil prices ignite firewood demand

DURHAM, Maine - On a recent scorching-hot summer day, workers at Reed's Firewood used heavy equipment to cut and split logs into firewood until it was too dark to see.

Despite its relentless pace, the family-run business is failing to keep up with demand as homeowners shellshocked by the price of heating oil look to old-fashioned firewood as a way to lower their bills this winter.

The cost of seasoned firewood in Maine has jumped roughly 50 percent from a year ago, but it remains a relative bargain when compared with heating oil, which is nearly $2 per gallon more than last year. Many customers are doubling their usual orders and some firewood dealers are turning away customers.

"We've really never seen anything like this before," said Lloyd Irland, who teaches forestry economics at Yale University and runs a consulting business in Maine.

While most heating oil customers aren't dumping the fuel altogether, they're using less by upgrading furnaces, turning down thermostats, insulating their homes and turning to alternative fuels, including firewood.

A survey by the Maine Forest Service found most dealers out of seasoned firewood and some short of green wood, which doesn't burn as well because it isn't dry enough.

Paul Reed, the owner of Reed's, tells customers he has plenty of firewood, as long as they're willing to wait until December - and accept possible price increases. "I've been called a couple of choice words," Reed said while making a delivery.

For the first time in his 23 years in the business, volatility in the market has forced Reed to abandon fixed pricing that customers count on. His price for a cord - a tight stack 4 feet high, 4 feet wide and 8 feet long - rose from $190 early last winter to $255 for green and $300 for seasoned wood.

Firewood remains a deal for those who don't mind the hassle of lugging it around and periodically feeding their wood stoves or fireplaces.

On average, a cord of firewood has the same heating potential as 155 gallons of heating oil, said Peter Lammert of the Maine Forest Service. Thus, a cord of seasoned firewood costing $300 is a bargain compared to 155 gallons of heating oil costing $685.10, based on $4.42 per gallon, the current statewide average.

It's a stark contrast to the mid-1990s, when heating oil sold for around 79 or 80 cents a gallon - and a cord of seasoned firewood was about $125.

Oil was so cheap then - trading at less than $20 a barrel, compared with roughly $120 today - that Reed resorted to calling longtime firewood customers in the spring to drum up orders.

Today, Maine's firewood producers are heavily competing for the same hardwood logs used by paper mills to produce pulp. Both are paying more because loggers have to pay so much more for diesel fuel, paper industry officials say.

The rush to buy more firewood is having an impact on heating oil dealers.

Last year, heating oil consumption fell 13 percent nationwide, in part because of homeowners' fuel efficiency efforts, said John Huber, president of the National Oilheat Research Alliance. Huber expects consumption to drop again this winter, but not by as much.

The environmental impact of the shift from oil to wood is unclear. State-of-the-art woodstoves are cleaner than older models, but particulate emissions remain higher than those of oil furnaces. Emerging wood-burning technology promises to be even cleaner.

The run on firewood started last winter when heating oil surpassed $3 a gallon and kept on climbing. This summer, some customers were close to panic as heating oil approached $5 a gallon before dropping over the last couple of weeks.

Heating oil is the dominant home-heating fuel in New England, ranging from 75 percent of homes in Maine to about 40 percent in Massachusetts.

Richard Cote, director of New Hampshire's Division of Weights and Measures, said the switch to wood made sense. "This is a renewable resource for us in northern New England," he said.

Still, David Rooker feels lucky he was able to get the two cords piled in his driveway in South Portland.

"With the price of heating oil, we'll have fires every night," said Rooker, who estimates he saved $1,000 on oil the first year he installed a wood stove. The savings have grown as oil prices have risen.

Reed's, Maine's largest firewood dealer, has a pile of logs stacked 20 feet high and stretching more than a football field long. The company expects to deliver nearly 4,000 cords, a record.

A pulp loader picks up the logs and puts them onto a processor, which saws them to length and splits them. A conveyor belt dumps the firewood into trucks.

While Reed is making deliveries, his father and his two teenage sons keep at it to make sure there's another loaded truck ready when he returns. Reed's is getting 40 to 60 calls a day from customers and has more than 1,000 cords worth of logs waiting to be cut.

But other dealers are struggling to get raw logs.

Southern Maine Firewood, a large dealer in Gorham, had only 100 cords worth recently but orders for 1,000 cords of firewood.

"It's just a nightmare right now," owner Jake Dyer said. "You'd think in a state like this that you could get wood."