Very interesting idea!
To determine the viability of pine-needles as a fuel source you need 2 pieces of information:
Required energy to pulp and form the pine-needles into pellets;
and
Calories per pound of pine-needles energy yield when burnt.
To measure energy release:
http://www.wikihow.com/Measure-Thermal-Energy-Released-from-a-Flame (This doesn't seem like an ideal way to measure energy yield but it
should work. This method measures kcals)
To measure the energy required to process the pine-needles:
Run your machine for a fixed amount of time with a sizable measured quantity of pine-needles.
Measure fuel before and after.
5,749.35 kcal energy per gallon of
gasoline.
(Assuming the engine runs at roughly 20% efficiency)
If energy yield is more than the required energy to process, you have a fuel source. If not, you have a means to store energy.
..and I probably just went off on a tangent regarding your question.
Edit_1: I should add, pine sap burns quite well and is very flammable. Since dry pine-needles contain a good amount of dried sap, they have the potential to store allot more energy than standard
wood pellets.
I'm sure you know that pine smoke is rather noxious --should probably take that into account as well. (expect lots of soot/choking smoke)
Edit_2: As far as making pellets: Machines like this one seem to be rather common
http://www.youtube.com/watch?v=SoDdlc0dpUg&feature=player_embedded