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Glatfelter completing $63 million natural gas conversion

David Weissman
  • Glatfelter to complete $63 million conversion to natural gas boilers at Spring Grove facility.
  • Conversion from coal-fired boilers related to environmental compliance regulations due in 2017.
  • Panelists discuss benefits of natural gas for local manufacturers.

Glatfelter is working to complete its $63 million renovations to convert from coal to natural gas boilers at its Spring Grove facility by the end of the year.

James Loder, director of energy management for Glatfelter, discusses why the company is converting to natural gas boilers at its Spring Grove facility. David Weissman photo

Glatfelter, which has its headquarters at 96 S. George St., York, is a global leader in the manufacturing of specialty papers and fiber-based materials. The company, which celebrated its 150th anniversary in 2014, has facilities in North America, Europe, and Asia.

In Spring Grove, the two natural gas boilers replace three long-used coal-fired boilers, which will be retired once construction is complete, global director of energy management James Loder said.

Loder spoke about the decision to switch to natural gas boilers as a panelist at The Keystone Energy Forum earlier this month at the Homewood Suites in Manchester Township.

The panel, which also included KCF Technologies' Ben Lawrence and UGI Energy's Max Rishel, discussed the benefits of natural gas for local manufacturers.

Loder said Glatfelter officials explored numerous options when deciding how to bring the Spring Grove facility within environmental compliance. Other options included installing scrubbers on the current coal-fired boilers or converting to biomass boilers, he said.

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Natural gas was ultimately the choice for reasons including lower emissions, increased efficiency, lower variable costs and supporting a resource critical to the state's economic health, according to Loder.

Rishel said the Marcellus Shale has been a boon for the local natural gas market, with prices dropping rapidly and the volatility that was previously associated with the energy source dissipating.

Loder mentioned price volatility as a risk in the conversion, but he added that advancements in fracking technology have helped reduce major ups and downs. Other risks included pipeline capacity constraints and pipeline interruptions.

Glatfelter's pipeline will be owned and operated by Columbia Gas of Pennsylvania, he added.

Less than 20 percent of the total cost of the project will actually be spent on the natural gas boilers, Loder said. Other major costs include a new water system, a new building to house the water system and boilers, the pipeline and permitting.

The company is receiving $8 million in state grants to help fund the project, according to previous reports, including $5 million from the Redevelopment Assistance Capital Program (RACP) and $3 million in Alternative and Clean Energy grants.

Tom Palisin, executive director of the Manufacturing Association of Southcentral Pennsylvania, which cosponsored the forum, said he's heard from several members that the increased use of natural gas in energy production has lowered costs and increased sales margins.

Gas versus solar: Seb Henbest, the author of a Bloomberg study which looks at the future of the world's power market previously said that, while natural gas is moving strongly right now, it's not going to be cheap forever.

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Henbest's report suggests that few countries outside the U.S. will replace coal plants with natural gas, and utility-scale solar will be cheaper than natural gas production in the U.S. by 2036.

"Prices tend to rise in extracting industries," he said. "(As coal production drops off), you're going to get to the point where gas is just competing with renewables, and that's when things get less rosy for gas."

Loder said Glatfelter has explored the use of solar technology and will continue to look at it, but the company's energy capital is currently tied up in projects such as the one occurring in Spring Grove.

— Reach David Weissman at dweissman@yorkdispatch.com or on Twitter at @DispatchDavid.