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Friday, April 5, 2019 | Your community newspaper since 1916

CITIZEN PHOTO BY BRENT BRAATEN

Hitting the dirt Edward Duncan, 3 1/2, laughs after a crash on the BMX track at Duchess Park on Thursday morning.

Forestry convention focuses on challenges Derrick PENNER Vancouver Sun

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Forest companies regularly burn slash piles after harvesting a site for lumber and pulp. Bioenergy companies say slash burning is a waste because they could use the waste material to create pellets.

Bioenergy sector burned up over slash piles Frank PEEBLES Citizen staff fpeebles@pgcitizen.ca Smoke plumes are rising from the backcountry all around Prince George. They are the telltale signs of spring in the forest industry, the annual burn-off of wood waste from winter logging, but the bioenergy sector is fuming over this old way of scorching the leftovers. Every one of those debris piles is burning jobs that Prince George workers could have had, and burning money foreign countries were lined up to invest in the local economy, said John Stirling, president of Pacific Bioenergy (PacBio). “We want to put it to productive use,” said Stirling. “The idea that we don’t have to burn things into the airshed, we can mitigate the risk of forest fire, and take that forest residual in as a product we can make use of, products we can sell into Japan where we are offsetting nuclear and coal emissions, what could be better?” All wood-pellet (also called bioenergy, biomass or biofuel) plants in northern B.C. already sell as much product as they can manufacture, as fast as they can make it. Most of it goes to Asia or Europe where it is used in industrial furnaces or electricity

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generation facilities to reduce the amount of coal, natural gas, nuclear and the worst of the greenhouse gases pollutants used by factories, mills and communities. Pacific Bioenergy recently signed the biggest contracts in the history of the fledgling bioenergy sector, a sector that was pioneered out of Prince George. These pacts are for the largest amounts of pellets ever asked for and for the longest duration ever established. “These new contracts, which extend to 2030 and 2035, represent a major extension to PacBio’s existing contracted sale portfolio,” said company CEO Don Steele. “This new business assures the continued strong presence of our Prince George and affiliated manufacturing operations in the dynamic and growing Asian market. This business, in addition to existing contracts in the European and Japanese markets, demonstrates the fulfillment of over 12 years of pioneering market development work in the Asia region.” Why, then, ask company officials, are brush piles burning all around the city when all of that woody debris – considered bush garbage by the lumber industry – is exactly what they need to fulfill these lucrative, long-term contracts? — see ‘WE RAN OUT, page 3

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The challenge of producing lumber from B.C.’s mountain-pine-beetle and wildfire-ravaged forests will be a top topic at the Council of Forest Industries’ annual convention in Vancouver on Thursday and Friday. For producers such as Canfor Corp. and West Fraser Timber Co. Ltd, adjusting has meant reducing mill capacity in B.C. while continuing to buy and build mills where trees are more plentiful, such as the U.S. south and even Scandinavia. “Fibre availability is obviously critically important,” said Susan Yurkovich, CEO of the Council of Forest Industries, about the need for companies to “rightsize the industry” in response to declining timber harvests. The province, in its most recent budget, indicated that annual timber harvests will have to be reduced to 56 million cubic metres by 2021-22 from 58 million cubic metres in 2018-19. That will be a continuation of a trend that B.C. provincial trade statistics show that B.C.’s lumber exports shrank by five per cent in 2018 with reductions in shipments to the United States, China and Japan – all of the biggest export markets. “The challenge of log supply in the interior has been long known by government,” Forest Minister Doug Donaldson said in an emailed statement, noting that the previous government knew as far back as 2006 that companies would run out of beetle-killed timber. “This, combined with the impacts of climate change, meant that harvest levels would need to be reduced,” he said. For most of the last decade, B.C. companies such as Canfor, West Fraser and Interfor Corp. have been buying or building mills in the U.S. south to compensate and in 2018, the credit-rating firm DBRS estimates that Canfor hit a milestone. It is likely that the share of Canfor’s lumber production in Canada fell to 51 per cent in 2018 from 73 per cent at the end of 2017, the agency wrote thanks to increasing production from U.S. operations and a big new acquisition in Scandinavia. Canfor announced last fall that it was buying a 70-per-cent stake in Sweden’s Vida Group for the equivalent of $580 million, which DBRS estimated would account for 16 per cent of Canfor’s overall lumber production.

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See page 2 for more details and short-term forecasts

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Canadian lumber producers have no choice but to expand further outside their base in order to adapt to the difficulties they have in sourcing logs in Western Canada. — DBRS statement West Fraser’s production in Canada is believed to have slipped to 55 per cent, compared with 57 per cent in 2017, and its production in the U.S. rise to 45 per cent from 43 per cent in 2017, DBRS wrote. “Canadian lumber producers have no choice but to expand further outside their base in order to adapt to the difficulties they have in sourcing logs in Western Canada,” DBRS said. Yurkovich likened it to an investment fund not putting all of its money into one stock. “You diversify to mitigate risk,” Yurkovich said. “And to be able to grow, you want to also go where fibre might be more available. If you can’t supply your customers, they will find other people who can, and they are likely to be in other parts of Europe, America or Russia.” Yurkovich said those firms are still world-leading companies that are headquartered in B.C., and “we are superproud that we have globally significant companies,” of all sizes, capable of operating outside the province’s borders. Donaldson said the province’s focus remains pushing the industry to get more value and create more jobs from every tree that is logged. That includes promoting the use of engineered mass-timber wood products, Donaldson said, through amendments to the B.C. building code to include their use in buildings as tall as 12 storeys, which the province announced March 12. Previously, such buildings were approved as one-off exceptions to the building code. “The industry is certainly in transition, but as we’ve seen with recent investments (by companies) the forest sector has the willingness and capacity to be innovative,” Donaldson said.

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