The Electric-Car Era Needs a Lot of Really Big Trees

Employees cruise surrounding pine plantations, marking pole-worthy loblolly and longleaf and making offers. The bigger, the better these days, given how much more equipment and cable poles must hold in the era of fiber optics and electric cars, said Jim Healey, Koppers’ vice president of utility and industrial products.

For landowners, especially the families and individuals who grow much of the South’s pine, the pole boom means higher prices for standout trees than what sawmills pay.

Shareholders of the two firms that dominate the American pole business—as well as railroad ties—have also been winners. Over the past year, Pittsburgh’s Koppers and Montreal’s

 are up 49% and 87%, respectively, compared with a 16% rise in the S&P 500 stock index.

“Demand right now in North America for utility poles is outpacing capacity,” said

This summer Stella bought pole facilities in Alabama, Georgia and Mississippi, where it also opened a new peeling plant. Additional plants are planned for next year in British Columbia and North Carolina. Stella also installed automated drilling equipment at its Eugene, Ore., facility and is looking for other places robots can speed output.

Koppers, which notched record domestic pole sales and profit during the summer quarter, is adding drying capacity to plants in Alabama, North Carolina and Virginia. A new one is under construction in Louisiana’s western woodlands to feed peeled poles to a rail-tie treating facility in a part of Texas without many pine trees.

“We see a very good peak market for the next three to five years,” Healey said.

Makers of concrete, steel and composite poles are also ramping up. Steel-pole supplier

 has a concrete-pole plant under way in Florida. RS Technologies raised about $270 million in debt and equity to expand factories in Utah and Ontario where it forms poles from polyurethane resin, and to build another in Houston. “It is an absolute infrastructure boom going on right now,” said RS CEO George Kirby.

Some demand may not materialize. High yields on supersafe Treasurys have drawn investors from dividend-paying utility stocks, which are on track for their worst year since the market rout of 2008. That has choked off an important way for utilities to raise money for big expenses, such as poles. Shares of renewable-energy developers have been hit even harder by high interest rates, as well as supply-chain problems, jeopardizing plans for wind and solar projects.

Still, many poles are needed no matter the financial-market conditions.

A chunk of the more than $60 billion allocated by the federal government to extend high-speed internet to rural areas will be spent on poles. So will some of the $1.2 trillion in 2021’s infrastructure bill. Meanwhile, last year’s climate, tax and healthcare law encouraged a boom in solar installations, many of which are sprouting up in remote locations and must be connected to the grid.

Plus, a lot of the more than 120 million wood poles standing in the U.S. need to be replaced. Many are decades older than they were intended to last and deteriorating, or built to outdated standards, such as the Hawaiian Electric poles toppled by hurricane-strength winds during this summer’s deadly fires. Woodpeckers are a persistent problem in the North.

Communications technology has come light years since telegraph lines were hung in the 1840s, but poles haven’t changed much. One difference is utilities and telecom companies want larger poles than before.

The most popular lately is a 45-foot Class 2 pole, said Brad Singleton, who manages Koppers’ Vidalia plant. That is taller and two sizes thicker than the 40-foot Class 4 pole that has long ruled the roadside.

“They don’t know what’s coming next,” Singleton said. “They want room to add things.”