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| Wood energy emerging as key forest strategy |
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2005/10/27
A collision of two crises, the mountain pine beetle and soaring energy costs, has turned the forest industry in a new direction.
The B.C. government confirmed a deal last week that will see the construction of four industrial wood pellet plants in the Interior to process beetle-killed trees. Timber cutting rights to 4.7 million cubic metres of pine in the Prince George and Quesnel forest districts is only the first stage of a plan that will see another 21 million cubic metres licenced "in the near future," said Forests and Range Minister Rich Coleman.
North Vancouver-based C.H. Anderson and two Swedish partners agreed to spend $110 million for the plants, expected to create about 600 new jobs. The pellets are to be sold to power plants in Europe as as a substitute for coal.
"Our investment will help offset the impact of the mountain pine beetle devastation by using as much damaged wood as possible and rehabilitating the forests," said C.H. Anderson CEO Gary Griffith.
Wood waste used as biofuel is also a key strategy for the Forest Products Association of Canada, presented to the House of Commons finance committee in Vancouver last week. Assocation president Avrim Lazar described what he calls a "perfect storm" of pressures on the competitiveness of Canadian forest products, led by a 34 per cent rise in the Canadian dollar against U.S. currency, and aggravated by increased energy costs as well as the hotly disputed U.S. import duties on Canadian lumber.
In an interview with Black Press after his presentation, Lazar said pulp and paper operations especially need new investment to develop biofuel and other new technologies. He pitched federal officials on the benefits of capital investment tax credits, as well as pleading for the Bank of Canada to hold off on interest rate hikes that would push the Canadian dollar higher.
Softwood lumber tariffs imposed on Canada are helping international competitors gain a foothold in the U.S. market with cheaper prices than Canadian mills, Lazar said.
"Brazil, Indonesia, China, of course there's always competition from Europe and now there's also new competition from Russia, and it's very much a global marketplace," he said. "We're still very dominant in the U.S. market, but exports from other countries gain ground in dimensional lumber and in pulp and paper every single year."
Shortly after Lazar's presentation, the Bank of Canada raised the rate it charges banks by a quarter point to three per cent. It's the second increase this year, designed to head off inflation that is also being fuelled by high energy prices.
Lazar said the financial pressures go well beyond the forest industry.
"What we're worried about is a hollowing out of all Canadian manufacturing," he said. "You add the high energy prices to the rising Canadian dollar, and we're not only going to lose a lot of jobs in the forest product sector, we're going to lose a lot of jobs throughout manufacturing." |
| Source:http://www.theprogress.com |
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