Hillwood photo.

Cook, Minn. — Minnesota forestry and agricultural industries are helping the state’s steel industry process taconite.

As an alternative to oil, natural gas and coal, Hill Wood Products produces dry solid fuel from wood byproducts. The fuel is used to fire taconite pellets at US Steel’s Minntac plant in Mountain Iron, Minn.

Increasing demand for the fuel, now competitive due to rising natural gas prices, has led Hill Wood to a promising new source of fuel material: ag byproducts.

Expanding fuel

Last year, Hill completed a major expansion of its Minntac fuel facility, says owner Steve Hill.

As large consumers of energy, steel producers look for the lowest fuel prices, and Hill Wood’s Iron Range location reduces fuel delivery costs for US Steel. “We’re more than competitive with natural gas today,” Hill said this spring. “Six months ago, we were not. It’s a commodity market.”

There’s room for growth, he adds: “The mines are big. They consume massive amounts of energy.”

When natural gas prices went up last year, US Steel and other large energy users approached AURI for help with alternative fuels, says Jack Johnson, AURI engineer. “Through these end users, we were contacted by suppliers such as Hill Wood Products. They were looking for ag residues.”

Demand for Hill Wood’s sawdust-based fuel had reached 330 truckloads a month, outpacing supply. Johnson started sourcing other suitable ag materials, including oat hulls and corn. He is currently analyzing ag residues and whole grains to determine Btus (heating ability) and ash content.

Johnson sees an increase coming in alternative energy demand, expanding coproduct use from fertilizers and feeds to fuels. “It’s a cost issue. As the price of petroleum-based fuels goes up, it’s more attractive to use ag-based renewables.”

“Minnesota is pretty energy wise,” Hill says. “Not a lot of (ag materials) are being wasted. If the bedding market doesn’t get it, the fuel industry gets it.”

Mountains of bark

Hill Wood Products, an employer of 60, makes wood moldings, mulch, fiber mats, bedding and wood fiber for composites. Hill says the company struggled with “mountains of bark and sawdust” — waste that can’t be burned because of environmental regulations.

Burning the waste as fuel is a different matter, however. So Hill’s company built a dehydration plant to dry bark, sawdust and other materials. A mill turns the dried materials into a fine powder “too volatile for boiler fuel,” Hill says. “It’s like pouring gas on a fire. It ignites instantly.”

Hill’s plants in Cook and at Minntac are completely automated. “To do what we did at Minntac is in the millions (of dollars),” Hill says. “They use trailer dumps, mills; they move a truckload every 15 minutes.” Hill’s company delivers fuel right up to the burner nozzles, and the steel company maintains the burners and piping.

Hill expects that demand for biomass-generated fuel will continue to increase. “More natural gas is being consumed every day so prices will stay high; that will make us viable.”