Left unchecked, the emerald ash borer could destroy state's 147 million ash trees
By Tammy Webber (tammy.webber@indystar.com)
DECATUR, Ind. -- Tromping through the woods north of town, Karen Cox stopped to examine the saplings, scrutinizing their bark, branch patterns and buds.
Satisfied they were young ash trees, Cox sprayed a band of orange paint around the trunks, then yelled to a fellow state forester keeping tally: "Dawn, three cheeseburgers!" -- using the code for trees less than 4 inches in diameter.
Although healthy, these will be among thousands of Indiana ash trees cut down early next year in an all-out effort to halt the spread of the emerald ash borer. They are too close to an ash infected with the tree-eating beetle that is so deadly it could destroy every ash in the state if left unchecked.
Already, more than 100,000 Indiana ash trees have been cut down. Millions of ashes in other states have met the same fate.
There are an estimated 147 million ash trees in Indiana's forests and perhaps an equal number in its cities. With its rounded crown and vibrant gold fall color, the ash is a popular street and yard tree. Ash comprises about 6 percent of the state's forests, 70 percent of which are south of Indianapolis.
Three years ago, U.S. bug experts didn't know of the ash borer. Today, experts at the Indiana Department of Natural Resources fear that if the beetle reaches the large cities and southern forests, it might be impossible to control. "For all practical purposes, ash could be wiped out," DNR entomologist Robert Waltz said.
Strong and easily worked, ash is used for making tool handles, baseball bats and furniture. The wood also is important in American Indian religious ceremonies and basket-making. Experts agree a widening infestation would have a significant effect on Indiana's $8 billion-a-year forestry industry.
Discovered in Detroit in 2002, the half-inch-long, dark metallic green insect -- an Asia and Eastern European native believed to have hitched a ride on wooden packing material -- wiped out that city's ash trees and since has spread into most of Michigan's lower peninsula.
The insect has led to the destruction of about 15 million ash trees in Michigan, the hardest-hit state. The beetle also has been discovered in parts of Ontario, Canada, Ohio and in four Indiana counties near the Michigan and Ohio borders: Adams, LaGrange, Randolph and Steuben.
On its own, the beetle, which can fly, moves about a half-mile a year. But it has spread much faster due to infested firewood, nursery trees and logs being moved.
"If we educate citizens so they realize the consequences of moving (ash), that can go a long way to stopping it," Waltz said.
Areas in the four Indiana counties have been placed under quarantine, meaning no ash trees or logs may be moved into or out of the area without state approval.
Also, more than 118,000 ash trees have been cut down in Indiana's infested areas. About 15,000 will be cut early next year in Decatur, which is in Adams County, where the beetle was discovered this fall. Forestry officials estimate another 15,000 will be cut in Winchester, in Randolph County.
Some are massive trees more than 75 years old, including one in Decatur that is 51 inches across.
"I just wanted to cry. It's heart-rending because we will never see (an ash) this size again in our lifetime" in Decatur, said Dawn Bale, a member of the forestry crew. "But it is for the greater good."
Once an infested tree is identified, all ash trees within a half-mile radius must be cut down. The hope is to eliminate the ash borer's only food source, said Jodie Ellis, an exotic insects expert at Purdue University.
Adult ash borers lay eggs on the bark of ash trees. When larvae hatch, they burrow beneath the bark and feed on the tree's vascular tissue, the systems that carry water and nutrients. Infested trees starve to death within one to three years. Once a tree is bug-ridden, there is no way to save it.
"This is a fascinating story but a terrible story. I wish this had never happened," Ellis said. "But if people would comply and not move this thing, we might be able to get a grip on it."
What state is doing
Indiana officials are taking several steps to stop the spread of the emerald ash borer:
• Nine townships in four counties -- Adams, LaGrange, Randolph and Steuben -- are under a quarantine that prohibits the movement of ash firewood, logs and nursery trees without permission from the state. Violation of the quarantine carries a minimum $250 fine; moving ash across state lines could result in a $2,500 federal fine.
• Thousands of ash trees are being cut down in infested areas to slow or stop the beetles' spread. More than 118,000 trees have been cut to date; an additional 30,000 are expected to be cut in early 2006. Indiana has about $2.2 million to spend on eradication, of which about $1.8 million is federal money.
• State officials are asking the public to avoid moving ash and to report any suspected sightings of the emerald ash borer or infested trees.
Emerald ash borer
• How does it kill trees? The beetle lays eggs on the trunk of ash trees. When the larvae hatch, they burrow beneath the bark and feed on the trees' vascular tissues, which transport nutrients and water. Trees usually starve to death within one to three years, with one-third to one-half of the branches dying in a year.
• Where did it come from? Its natural range is eastern Russia, northern China, Japan and Korea.
• How did it get to the United States? Researchers believe it came here in the 1990s on wooden packing or crating material or in wood used to stabilize cargo on ships.
Source: Michigan Department of Agriculture
Tuesday, December 27, 2005
Saturday, December 17, 2005
Lumber crisis: Despite closings, layoffs, not one federal party is addressing recent problems of Canada's iconic industry
Dec. 17, 2005. 12:50 AM
DAVID OLIVE | Toronto Star
The holiday spirit isn't much in evidence in a dozen or so mill towns across the country.
The past week alone has brought distressing news to more than 1,700 forest products workers at five mills, spanning Stephenville, Nfld., to Squamish, B.C., who have been notified their jobs will soon be terminated.
On Wednesday, newsprint giant Abitibi-Consolidated Inc. dropped the axe on more than 600 jobs at mills it will close in Stephenville and Kenora, Ont. A day later, it was the turn of Western Forest Products Inc., which said it will begin shutting down its Squamish pulp mill the week of Jan. 23 — election day, as it happens — with a resulting loss of 323 jobs.
Later the same day, Weyerhaeuser Co. said production at its Prince Albert, Sask., pulp and paper facility will end this month, affecting 690 employees. And one of the firm's paper machines at Dryden, Ont., will be shut down in April, with the loss of another 80 jobs in that one-industry town.
The cruelly timed announcements follow hard on decisions by Domtar Inc., Cascades Inc. and Tembec Inc. last month to close or streamline mills, with a loss of more than 2,000 jobs.
That brings the total number of jobs eliminated in the industry to more than 42,000 over the past five years — or about 15 per cent of the total workforce. The damage is more widespread than those numbers suggest, given that an estimated two indirect jobs are supported by each mill worker.
As employees at General Motors of Canada Ltd. learned with the recent announcement of major job cuts in Oshawa at one of the company's most efficient plants worldwide, worker ingenuity in boosting a facility's competitive prowess means little if markets are weak, a strong loonie conspires in favour of offshore producers, or management miscalculates the product mix best matching customer demand.
"We have broken production records as well as improved the quality of the papers over the past few months," Ron Bucks, president of the Communications, Energy and Paperworkers union local at Weyerhaeuser's Prince Albert mill, told Canadian Press last week. "These machines are world class and profitable and this announcement makes no sense at all."
There is worse to come.
Tembec, a sizeable lumber producer based in Montreal, warns of bigger cuts down the road as it copes with weak demand and rising energy costs.
And Weyerhaeuser, a $23 billion (U.S.) behemoth headquartered in Washington state, says the market for paper products is so poor that the "urgent changes" necessary "to improve the competitiveness and lagging performance of this business" are not over. "We anticipate future changes," CEO Stephen Rogel said Thursday — a euphemism for more cutbacks in the absence of a miracle turnaround in the industry's fortunes.
Somehow, the crisis in one of Canada's iconic industries is not an issue in the current federal election campaign. Indeed, the entire economy is a non-issue, as parties dwell on the long-ago sponsorship scandal, the exposure and resolution of which are draining the federal treasury but creating jobs only among a passel of big-city lawyers.
The Liberal platform makes commitments to R&D spending and specialized job training. But the Martin government has not developed either a national industrial strategy or comprehensive plans for reviving selected troubled sectors.
The NDP decries a 12-year Grit legacy of "no national strategy to help jobs-rich industries adapt to changing markets and rising costs — like steel, aerospace, shipbuilding, forestry and agriculture." Alas, the NDP's own turnaround strategies for those sectors is a well-kept secret in a poll-driven campaign that identifies Liberal corruption, healthcare and tax breaks as the vote-getting issues.
The Tories correctly note that "this election is a chance for working families to send Ottawa a wake-up call on job losses in sectors such as manufacturing, natural resources and agriculture."
But the Tories also offer no specific plans for rescuing towns and regions dependent on those ailing sectors.
It's not like the solutions require more than the usual brainstorming. The response of Queen's Park to a similar forestry crisis a decade ago was to bail out troubled mills, modernize them and usher them into the hands of new private-sector owners.
Once again, it's Ontario and Quebec that have responded to a forestry crisis, with a combined $780 million in proposed industry funding. But that money isn't enough to finance an overdue renaissance for an industry that needs to replace obsolete plants — some dating from the 1920s — with state-of-the-art technology by which European producers have continued to thrive in the current downturn by developing innovative products and manufacturing processes.
To the residents of Dryden, Thunder Bay, Stephenville and Squamish, the electoral contest must seem surreal indeed.
Elsewhere in the country, many voters are sanguine about an economy with a 6.4 per cent jobless rate, the lowest in three decades; and debate on how best to treat ourselves to the $80 billion in projected federal surpluses over the next decade or so — a reward, many would understandably see it, for the sacrifices in high taxes and social-services cuts of the 1990s.
But the dynamic economic recovery of recent years bypassed many parts of the country, which appear to be alone in thinking that an obvious use of a modest portion of that surplus would be a nation-building exercise in restoring prosperity to troubled communities.
The spirit of the season is lost on Dave Coles, a CEP union vice-president, whose negotiations with Weyerhaeuser and the Saskatchewan government were abruptly short-circuited by the company's "horrific" announcement last week.
"To string our members along for more than two months and then slam them with this news 10 days before Christmas is simply unconscionable," Coles said. It's not easy to find gentler words for the political leaders whose campaign-trail priorities so far betray a similar insensitivity. (*)
Weyerhaeuser shuts Ontario and Prairie Mills
U.S. forestry giant shuts Ontario and Prairie mills
Dec. 16, 2005. 01:00 AM
U.S. forestry giant Weyerhaeuser Co. is closing two paper operations in Canada, affecting more than 800 jobs in northern Ontario and Saskatchewan.
The moves, announced late yesterday, reflect a continued slump in the North American paper industry, which has been hit hard by rising energy costs and weak demand.
Weyerhaeuser said one of the paper machines at its Dryden pulp and paper mill in northern Ontario will close April 1, affecting 80 of the mill's 795 employees. Another 40 jobs were cut earlier.
Meanwhile, the Prince Albert pulp and paper mill in Saskatchewan, which the company said in October it would shut down, will end paper production at the end of this month.
The pulp mill, which is being put up for sale, will continue operating until spring to minimize risk of cold-weather damage.
The Prince Albert mill employs 690 employees.
The Federal Way, Wash., company said the latest cuts will result in a pre-tax charge of $380 million (U.S.) to $385 million in the fourth quarter.
Weyerhaeuser is one of the world's largest integrated forest products companies, with 2004 sales of $22.7 billion.
Weyerhaeuser's announcement comes a day after Abitibi-Consolidated Inc. said it had permanently closed two newsprint mills — one in Stephenville, Nfld., that employed 300 people, and another in Kenora, Ont., where 320 people had worked.
The Tory government in Newfoundland and Labrador said yesterday it will consider expropriating Abitibi's Stephenville mill if a buyer appears. Both Premier Danny Williams and Natural Resources Minister Ed Byrne said the tough measure is being kept as an option.
Abitibi has made it clear it hasn't obtained a buyer for the plant or equipment, nor does it plan on selling at this point.
Abitibi-Consolidated said the closings were brought on by high costs and an inability to renegotiate a union contract.
The decision has embarrassed the government in Newfoundland, which just a month ago offered the company $150 million in assistance over 10 years to keep the plant going.
Canadian Press
Tuesday, December 13, 2005
Have a hot, dry, stormy life, kids
SOURCE: International Herald Tribune
OTTAWA My wife and I recently became empty-nesters. Our children moved out, and we began to think of downsizing. But climate change is forcing us to reconsider. My children may need shelter yet.
The thousands of delegates who attended the United Nations conference on climate change in Montreal, which concluded on Dec. 9, reinforced the fact that after some 20 years of debate, the threat of climate change is indisputable and pervasive.
To be sure, climate is not static. It has always changed over time. But this is the first time that humans have been the principal drivers of such change. In heating our homes or propelling ourselves across our planet, we are contributing to the rate of change.
And because there are so many of us, we are now using energy in unprecedented amounts. We are converting carbon stored in coal and oil into atmospheric gases, and the increased carbon dioxide along with other gases in the atmosphere traps heat. The conveniences we use today have serious consequences for our children and grandchildren.
What if one ignores all this and says, If my children are affected, I will provide for them. If they are living in areas likely to be flooded or afflicted by severe droughts, or if they must escape conflicts over resources, or lose their jobs or run out of food, I will take them in, and their children, and maybe even some of their friends.
Those with children living in low-lying areas of the world, and particularly in hurricane-prone regions, must definitely start making plans now. Ocean waters are rising, and storms of increased intensity and frequency are already upon us. The displaced people of New Orleans are still looking for a semblance of normalcy and stability. Island states in the Pacific are building up walls that are probably as vulnerable to breeching as the Louisiana levees.
Oceans are changing. The algae in the seas are absorbing some of the excessive carbon in the air, but as they do so, the acidity of the oceans is rising. You may recall from your chemistry class how calcium carbonate fizzes when acid is poured on it. Shellfish do poorly in acidic waters, so there goes the shrimp, crab and lobster fishing industries. What will your children eat when they move in with you?
In the past, mountain glaciers melted in the warm summer months and were replenished with winter snowfalls, providing a regular source of water downstream. Urban centers expanded, farmlands were irrigated and oil production was enhanced by the water pumped into the ground.
However, as glaciers recede and disappear, water will become scarce, droughts will increase and farm crops will fail. The ice on Africa's Mount Kilimanjaro is already gone. Conflicts are inevitable, as we cannot live without water; I hope you will have some for your children to drink.
Diseases and pests that have been kept in check by limiting temperatures are on the move. Forest-killing beetles are eating their way across areas never touched before in British Columbia and now Alberta. The forests of Saskatchewan, Manitoba and Ontario await them. Forestry jobs are at risk, and the dead trees heighten the risk of fires; if your children will be affected, better make some room.
If all that is not enough, polar ice caps are melting and are expected to release a plug of cold, fresh water that could drastically affect ocean currents. Moderating currents like the Gulf Stream will be abruptly deflected, leaving northern countries in the cold and contributing to drought. Wherever they live, our children will have to burn more fossil fuels, perpetuating the problems we are creating for them.
If you are still smug about global warming, I would like to know where you live. I need to move to this safe haven and wait for my children to arrive, along with other displaced people.
Just think of the level of investment we will need to secure this zone. I can't help believing that any measures we can take now would be justified if it will help avoid such chaos in the future. That would enable us to downsize, and to stop using up fuel to heat my empty nest.
(Nikita Lopoukhine, formerly director general of national parks in Canada is chairman of the World Commission on Protected Areas of the World Conservation Union.)
OTTAWA My wife and I recently became empty-nesters. Our children moved out, and we began to think of downsizing. But climate change is forcing us to reconsider. My children may need shelter yet.
The thousands of delegates who attended the United Nations conference on climate change in Montreal, which concluded on Dec. 9, reinforced the fact that after some 20 years of debate, the threat of climate change is indisputable and pervasive.
To be sure, climate is not static. It has always changed over time. But this is the first time that humans have been the principal drivers of such change. In heating our homes or propelling ourselves across our planet, we are contributing to the rate of change.
And because there are so many of us, we are now using energy in unprecedented amounts. We are converting carbon stored in coal and oil into atmospheric gases, and the increased carbon dioxide along with other gases in the atmosphere traps heat. The conveniences we use today have serious consequences for our children and grandchildren.
What if one ignores all this and says, If my children are affected, I will provide for them. If they are living in areas likely to be flooded or afflicted by severe droughts, or if they must escape conflicts over resources, or lose their jobs or run out of food, I will take them in, and their children, and maybe even some of their friends.
Those with children living in low-lying areas of the world, and particularly in hurricane-prone regions, must definitely start making plans now. Ocean waters are rising, and storms of increased intensity and frequency are already upon us. The displaced people of New Orleans are still looking for a semblance of normalcy and stability. Island states in the Pacific are building up walls that are probably as vulnerable to breeching as the Louisiana levees.
Oceans are changing. The algae in the seas are absorbing some of the excessive carbon in the air, but as they do so, the acidity of the oceans is rising. You may recall from your chemistry class how calcium carbonate fizzes when acid is poured on it. Shellfish do poorly in acidic waters, so there goes the shrimp, crab and lobster fishing industries. What will your children eat when they move in with you?
In the past, mountain glaciers melted in the warm summer months and were replenished with winter snowfalls, providing a regular source of water downstream. Urban centers expanded, farmlands were irrigated and oil production was enhanced by the water pumped into the ground.
However, as glaciers recede and disappear, water will become scarce, droughts will increase and farm crops will fail. The ice on Africa's Mount Kilimanjaro is already gone. Conflicts are inevitable, as we cannot live without water; I hope you will have some for your children to drink.
Diseases and pests that have been kept in check by limiting temperatures are on the move. Forest-killing beetles are eating their way across areas never touched before in British Columbia and now Alberta. The forests of Saskatchewan, Manitoba and Ontario await them. Forestry jobs are at risk, and the dead trees heighten the risk of fires; if your children will be affected, better make some room.
If all that is not enough, polar ice caps are melting and are expected to release a plug of cold, fresh water that could drastically affect ocean currents. Moderating currents like the Gulf Stream will be abruptly deflected, leaving northern countries in the cold and contributing to drought. Wherever they live, our children will have to burn more fossil fuels, perpetuating the problems we are creating for them.
If you are still smug about global warming, I would like to know where you live. I need to move to this safe haven and wait for my children to arrive, along with other displaced people.
Just think of the level of investment we will need to secure this zone. I can't help believing that any measures we can take now would be justified if it will help avoid such chaos in the future. That would enable us to downsize, and to stop using up fuel to heat my empty nest.
(Nikita Lopoukhine, formerly director general of national parks in Canada is chairman of the World Commission on Protected Areas of the World Conservation Union.)
Monday, December 12, 2005
Forests Urged as New Front in Global Warming Fight
December 02, 2005 — By Alister Doyle, Reuters
MONTREAL — Forest preservation should be the new front in the fight against global warming with Third World nations earning cash for protecting trees, tropical countries told a U.N. climate conference Wednesday.
"The present state of affairs is untenable," Papua New Guinea and Costa Rica wrote in a proposal backed by seven other developing nations, complaining that they lacked incentives to slow logging or forest clearance for farming.
"Globally ... tropical deforestation is the second leading cause of climate change behind fossil fuel combustion," they said in the report to a 190-country climate meeting in Montreal from Nov. 28-Dec. 9.
Most efforts to curb global warming center on reining in emissions from burning fossil fuels in power plants, factories and cars in industrial nations. But trees soak up carbon dioxide, the main gas blamed for global warming, as they grow. They release it when they die and rot.
The report suggested that tropical nations that slow the rate of deforestation -- perhaps tracked from space by satellites -- might win cash incentives from rich nations to encourage better management and more tree plantings.
It estimated that deforestation, from the Amazon to Africa, represented losses of billions of dollars. Forests are home to half the species living on land and a key source of food, building materials and medicines for people.
LOST FORESTS
A net 7.3 million hectares (18.04 million acres) of forests -- the size of Panama or Sierra Leone -- was lost each year from 2000-2005, according to United Nations data.
The conference agreed to study the proposal and report back in a year's time. The proposal also had backing from Bolivia, the Central African Republic, Chile, Congo, Democratic Republic of the Congo, Dominican Republic and Nicaragua.
Richard Kinley, acting head of the secretariat of the U.N. Framework Convention on Climate Change, said the reaction among delegations was "very positive."
"We'd be very interested in exploring it further," said Sarah Hendry, head of the British delegation. Britain holds the European Union's rotating presidency. Some delegates warned, however, that it was extremely hard to measure forest area.
The Montreal talks are also looking at ways to widen a U.N.-led fight against global warming to involve poor nations and the United States and Australia, the two main industrial nations outside the U.N.'s Kyoto Protocol.
Under Kyoto, about 40 industrial states are trying to cut emissions by 5.2 percent below 1990 levels by 2008-12 to curb warming that may cause catastrophic effects including more powerful storms, rising sea levels and more desertification.
Source: Reuters
MONTREAL — Forest preservation should be the new front in the fight against global warming with Third World nations earning cash for protecting trees, tropical countries told a U.N. climate conference Wednesday.
"The present state of affairs is untenable," Papua New Guinea and Costa Rica wrote in a proposal backed by seven other developing nations, complaining that they lacked incentives to slow logging or forest clearance for farming.
"Globally ... tropical deforestation is the second leading cause of climate change behind fossil fuel combustion," they said in the report to a 190-country climate meeting in Montreal from Nov. 28-Dec. 9.
Most efforts to curb global warming center on reining in emissions from burning fossil fuels in power plants, factories and cars in industrial nations. But trees soak up carbon dioxide, the main gas blamed for global warming, as they grow. They release it when they die and rot.
The report suggested that tropical nations that slow the rate of deforestation -- perhaps tracked from space by satellites -- might win cash incentives from rich nations to encourage better management and more tree plantings.
It estimated that deforestation, from the Amazon to Africa, represented losses of billions of dollars. Forests are home to half the species living on land and a key source of food, building materials and medicines for people.
LOST FORESTS
A net 7.3 million hectares (18.04 million acres) of forests -- the size of Panama or Sierra Leone -- was lost each year from 2000-2005, according to United Nations data.
The conference agreed to study the proposal and report back in a year's time. The proposal also had backing from Bolivia, the Central African Republic, Chile, Congo, Democratic Republic of the Congo, Dominican Republic and Nicaragua.
Richard Kinley, acting head of the secretariat of the U.N. Framework Convention on Climate Change, said the reaction among delegations was "very positive."
"We'd be very interested in exploring it further," said Sarah Hendry, head of the British delegation. Britain holds the European Union's rotating presidency. Some delegates warned, however, that it was extremely hard to measure forest area.
The Montreal talks are also looking at ways to widen a U.N.-led fight against global warming to involve poor nations and the United States and Australia, the two main industrial nations outside the U.N.'s Kyoto Protocol.
Under Kyoto, about 40 industrial states are trying to cut emissions by 5.2 percent below 1990 levels by 2008-12 to curb warming that may cause catastrophic effects including more powerful storms, rising sea levels and more desertification.
Source: Reuters
Tuesday, December 06, 2005
What's a boreal forest really worth?
By Mark Hume (Globe and Mail)
Friday, November 25, 2005 Page A9Key
VANCOUVER -- How much is a forest worth if it's simply left standing instead of being logged and sent to a mill?
That question, in simple terms, is what researchers from the Pembina Institute set out to answer in a two-year study that calculated for the first time the "natural capital" contained in Canada's boreal forest ecosystem.
Considering everything from the pest-control services provided by birds to the worth of having peat lands filter drinking water, the researchers calculated the boreal forest ecosystem's non-market value at more than $93- billion annually.
In addition, the study found that the boreal forest, which reaches from Yukon to the Eastern Seaboard, works as a massive carbon sink. It stores an estimated 67 billion tonnes of carbon, the equivalent of 303 years of Canada's total 2002 carbon emissions. Considering the global effort to control carbon emissions, researchers said the boreal forest could be looked at like a "carbon bank account" worth $3.1-trillion (U.S.).
David Schindler, a professor of ecology in the faculty of science at the University of Alberta, said the Pembina Institute report should help convince Canadians that nature has far more to offer than just aesthetic value.
"Dollars and cents are part of a language everyone understands," Prof. Schindler said. "I hope this will make people sit up and take notice of the value of the resources around them and the value of the services they provide."
He said society generally looks only at the market value of natural resources, without taking into account the services that forests and wetlands are providing for free.
Prof. Schindler said the value of the "natural capital" must be considered whenever resource projects are contemplated in the boreal forest region.
"What it's saying is, 'Look at these values before you turn the forest into another pile of logs and sell it.' "
The Pembina Institute, an independent, not-for-profit policy research organization, undertook the study for the Canadian Boreal Initiative, a conservation group concentrating on issues affecting the boreal forest. The report is to be released today.
The report defines natural capital as the "resources, living systems, and ecosystem services," that provide benefits to humans.
When that value is added to the balance sheet, the study states, the picture is more complete, and remarkably different.
The report says the non-market values to be considered include: $5.4- billion for pest-control services by birds; $4.5-billion for nature-related activities; $575-million in subsistence value for aboriginal peoples; $79- million in non-timber forest products and $18-million for watershed services, such as holding municipal water resources.(*)
Wednesday, November 30, 2005
Domtar to Cut 1,800 Jobs, Close Some Mills
November 30, 2005 11:31 AM ET | Associated Press
MONTREAL (AP) - Canadian paper-maker Domtar Inc. is cutting 1,800 jobs and plans to close or sell several mills as part of a plan to steer the company back into profitability amid a downturn in the paper industry.
Montreal-based Domtar said Wednesday it expects to permanently shutter its mill in Cornwall, Ontario, and parts of its Ottawa, Ontario, mills. Under the plan, Domtar also would sell its mill in Vancouver, British Columbia, and shut its sawmills in Grand Remous and Malartic, Quebec.
The Cornwall cuts include 390 positions already eliminated in December 2004. The Cornwall mill is the largest to be closed, with 910 workers and a total capacity of 265,000 tons of uncoated and coated printing grades on three paper machines
Domtar is North America's third-biggest producer of free sheet paper, which is used for photocopying, as well as a major producer of other business papers and lumber products.
As part of the plan, the company's North American administrative offices will be consolidated in Montreal and Cincinnati, and Domtar will overhaul its supply chain. In all, the measures will result in pretax restructuring charges of $505 million, the company said.
"Unfortunately, sustained actions and dedicated efforts by our employees, as well as capital investments by the company, were not sufficient to guarantee the long-term viability of these operations within Domtar," Chief Executive Raymond Royer said in a prepared statement.
Employees affected by the cuts will receive financial assistance and be offered access to job-search services, Royer added.
Domtar's cuts follow similar moves by a number of other paper and lumber companies in recent months as they cope with rising energy costs and weak markets. For example, Atlanta-based Georgia-Pacific Corp., maker of Brawney paper towels and other products, said in October it would cut 1,100 jobs worldwide and 850 in North America in a broad restructuring that aims to save $100 million a year.
Domtar also blamed a stronger Canadian dollar, which has made its products more difficult to sell in the key U.S. market.
"The strengthening of the Canadian dollar has pushed some of our Canadian mills to negative cash-flow generation and we must focus on our most efficient mills in order to return to profitability in the foreseeable future," said Richard Garneau, executive vice president of operations. The strategy should improve cash flow by $160 million, he said.
Last week the forestry giant abruptly shut down its Lebel-sur-Quevillon pulp mill in northwestern Quebec, cutting 425 jobs. It cited rising costs and weak markets for pulp. The company warned last month it was considering closures as it posted a loss of $52 million in the third quarter. Domtar also canceled its dividend.
Domtar has 10,000 employees across North America and owns 50 percent of Norampac Inc., Canada's largest cardboard producer, which also reported a third-quarter loss -- of $11 million.
Domtar also said it has amended its credit facility, which matures in 2010, "to improve financial flexibility." The new arrangement includes a maximum debt-to-capitalization ratio of 60 percent and reduces the company's credit line by $100 million to $600 million.
U.S. shares of Domtar fell 8 cents, or 1.5 percent, to $5.24 in morning trading on the New York Stock Exchange. The stock has traded in a 52-week range between $4 and $12.64. (*)
Wednesday, November 23, 2005
Cascades shuts down Thunder Bay fine paper mill
Another hit to Northern Ontario’s forestry industry...
By Peter James | Kenora Daily Miner and News | Wednesday November 23, 2005
Northern Ontario’s forest industry took another big hit Tuesday as Cascades announced it is shutting down its Thunder Bay fine paper mill.
“This is starting to get scary,” Kenora Mayor Dave Canfield said, when reached at the Association of Manitoba Municipalities Conference in Brandon.
The shutdown is the latest in a long line of cutbacks and mill closures that have hit workers and communities across the region in recent months.
Cascades hinted earlier this fall the Thunder Bay mill was on shaky ground. Originally they had planned to shut down one paper machine and cut 150 jobs. Now they’ve decided to close the doors completely, putting an additional 375 people out of work.
“The sad truth is this isn’t going to end anytime soon,” Communications, Energy and Paperworkers Union Ontario vice-president Cecil Makowski said of the closures of mills across the north.
Makowski said Cascades decision to shut the mill comes at a strange time considering the federal government is set to announce an aid package for the sector. But speaking on CBC Radio Cascades spokesman Hubert Bolduc said he expects the federal package will be targeted more towards the sawmill sector.
Ontario NDP Leader Howard Hampton put the blame for the closure on the provincial government’s energy policies. He said other challenges the industry is facing, like falling prices and a rising Canadian dollar are the same across Canada, yet Ontario firms also have to deal with higher costs for electricity. “As long as that disparity continues more Northern Ontario paper mills will be pushed over the edge,” he said.
The closure of the mill should signal that the provincial government needs to do more to help the industry or the whole region will suffer, Canfield said. Thunder Bay’s economy will suffer the biggest blow as they will lose not only the mill but also any associated jobs.
“They are the service centre for the industry,” he said.
Makowski said the mill jobs are even more important because they’re difficult to replace. “When it closes you lose primary employees. You can’t absorb those jobs anymore,” he said.
Bowater’s Thunder Bay mill, already on shaky ground, could also be affected by the Cascades closure. Makowski said Cascades buys market pulp from Bowater. “It’s tightening the noose around that mill,” he said.
There is plenty of uncertainty about the future of other Thunder Bay mills. Abitibi-Consolidated still has its Fort William mill and the associated timberlands on the selling block. “We are expecting that the sale process will be completed by the end of the year,” company spokesman Denis Leclerc said.
In Kenora the Devlin Timber mill closed in February and the Abitibi-Consolidated mill hasn’t been making paper for a month and the long-term future is still up in the air. (*)
Tuesday, November 15, 2005
Thunder Bay: 40 mill jobs axed
From the Chronicle journal (Thunder Bay, Ontario)
Regional News | By BRYAN MEADOWS | Nov 15, 2005, 22:40
Another wave of layoffs is coming in the perfect storm facing Northwestern Ontario’s forest industry. Citing high energy and wood fibre costs, Weyerhaeuser will permanently shut down the round-wood processing plant at its Dryden paper mill on March 31. About 40 employees will lose their jobs — 35 in the mill and five in contract harvesting operations — when the wood-room closes. Mill management told employees of the closure Monday morning.
Weyerhaeuser vice-president of Ontario operations Norm Bush said the action comes in the face of rising costs, a rapidly appreciating Canadian dollar, declining demand for fine papers and industry oversupply.
“This is one step in our drive to reduce our delivered fibre costs,” Bush said, explaining that current technology allows wood chips to be delivered to the mill for about the same cost as delivering an unprocessed log, which then requires chipping in the wood-room.
In addition, he said, concerns about chip quality have been addressed by new technology used in on-site wood-chipping equipment in the bush.
The layoffs come as Dryden continues to battle economic and social demons from a restructuring exercise at the local mill two years ago that chopped more than 385 workers.
“It’s a sad day for our community,” said Dryden Mayor Anne Krassilowsky. These cuts, she said, “compound the effects on everyone in the community as well as individual families. It causes a chain reaction across the community (with far-reaching effects on) individual homes, businesses and tradespeople.”
“I’m disappointed in the provincial government for not taking the necessary steps” to prevent further forestry job losses, Krassilowsky said. “The provincial government is missing in action.”
NDP Leader and Kenora-Rainy MPP Howard Hampton agreed. “The McGuinty government has done nothing to reduce the high electrical and wood fibre costs” crippling the forest industry.
While the government claims only older, smaller newsprint mills are shutting down machines and laying off people, Hampton said the Weyerhaeuser mill is perhaps the most modern in Ontario, and it produces fine paper.
“It shows the McGuinty government is wrong again,” he said, adding the plant closure is at a mill that’s modern and owned by a company that has invested millions on infrastructure, “yet it is being forced to the wall.”
Communications, Energy and Paperworkers Union spokesman Cec Makowski called the province’s inaction “a travesty.” “To date nothing substantial has been done to reduce the cost of delivering fibre to the mills,” he said. “It’s the workers who continue to pay the price of this inaction.”
Weyerhaeuser spokeswoman Bonny Skene said the province needs to do more to help the industry become more competitive. “We’re calling on the province to focus on fibre costs and make them competitive . . . (and) we have asked them to reduce fibre costs (immediately) by at least $5 per cubic metre.”
Skene said the forest industry aid package reduced fibre costs by only 78 cents per cubic metre, while the global and Ontario “gap” in costs is about $20. The average cost of wood delivered to Ontario mills is about $55 per cubic metre while the global cost averages to $35.
The wood-room closure had been the subject of speculation in the community over the past few weeks, and it was tied to a rumour that the mill’s finishing room was also facing the axe. Skene refused comment on the finishing room.
“We’re looking for all cost reduction opportunities that are within our control,’’ she said. “We have cost reduction teams in place throughout the mill.”
In the 2003 restructuring exercise in Dryden, Weyerhaeuser closed its studmill and chopped the workforce at its pulp and paper mill by about 25 per cent, citing factors including high manufacturing costs, overcapacity in lumber production in North America, the rising Canadian dollar and the impact of U.S. duties on Canadian softwood.
© Copyright by Chronicle journal.com
Regional News | By BRYAN MEADOWS | Nov 15, 2005, 22:40
Another wave of layoffs is coming in the perfect storm facing Northwestern Ontario’s forest industry. Citing high energy and wood fibre costs, Weyerhaeuser will permanently shut down the round-wood processing plant at its Dryden paper mill on March 31. About 40 employees will lose their jobs — 35 in the mill and five in contract harvesting operations — when the wood-room closes. Mill management told employees of the closure Monday morning.
Weyerhaeuser vice-president of Ontario operations Norm Bush said the action comes in the face of rising costs, a rapidly appreciating Canadian dollar, declining demand for fine papers and industry oversupply.
“This is one step in our drive to reduce our delivered fibre costs,” Bush said, explaining that current technology allows wood chips to be delivered to the mill for about the same cost as delivering an unprocessed log, which then requires chipping in the wood-room.
In addition, he said, concerns about chip quality have been addressed by new technology used in on-site wood-chipping equipment in the bush.
The layoffs come as Dryden continues to battle economic and social demons from a restructuring exercise at the local mill two years ago that chopped more than 385 workers.
“It’s a sad day for our community,” said Dryden Mayor Anne Krassilowsky. These cuts, she said, “compound the effects on everyone in the community as well as individual families. It causes a chain reaction across the community (with far-reaching effects on) individual homes, businesses and tradespeople.”
“I’m disappointed in the provincial government for not taking the necessary steps” to prevent further forestry job losses, Krassilowsky said. “The provincial government is missing in action.”
NDP Leader and Kenora-Rainy MPP Howard Hampton agreed. “The McGuinty government has done nothing to reduce the high electrical and wood fibre costs” crippling the forest industry.
While the government claims only older, smaller newsprint mills are shutting down machines and laying off people, Hampton said the Weyerhaeuser mill is perhaps the most modern in Ontario, and it produces fine paper.
“It shows the McGuinty government is wrong again,” he said, adding the plant closure is at a mill that’s modern and owned by a company that has invested millions on infrastructure, “yet it is being forced to the wall.”
Communications, Energy and Paperworkers Union spokesman Cec Makowski called the province’s inaction “a travesty.” “To date nothing substantial has been done to reduce the cost of delivering fibre to the mills,” he said. “It’s the workers who continue to pay the price of this inaction.”
Weyerhaeuser spokeswoman Bonny Skene said the province needs to do more to help the industry become more competitive. “We’re calling on the province to focus on fibre costs and make them competitive . . . (and) we have asked them to reduce fibre costs (immediately) by at least $5 per cubic metre.”
Skene said the forest industry aid package reduced fibre costs by only 78 cents per cubic metre, while the global and Ontario “gap” in costs is about $20. The average cost of wood delivered to Ontario mills is about $55 per cubic metre while the global cost averages to $35.
The wood-room closure had been the subject of speculation in the community over the past few weeks, and it was tied to a rumour that the mill’s finishing room was also facing the axe. Skene refused comment on the finishing room.
“We’re looking for all cost reduction opportunities that are within our control,’’ she said. “We have cost reduction teams in place throughout the mill.”
In the 2003 restructuring exercise in Dryden, Weyerhaeuser closed its studmill and chopped the workforce at its pulp and paper mill by about 25 per cent, citing factors including high manufacturing costs, overcapacity in lumber production in North America, the rising Canadian dollar and the impact of U.S. duties on Canadian softwood.
© Copyright by Chronicle journal.com
Friday, November 11, 2005
Loonie looms large as forest sector deals with junk ratings
By HARRY KOZA | Friday, November 11, 2005 | Globe and Mail
Shed a tear for the vanishing Canadian lumberjack. It's tough work in the woodlot at the best of times, and these days, what with the strong Canadian dollar, softwood tariffs, and soaring energy costs, companies that employ lumberjacks are in rough shape.
It's not a sector that I usually pay a lot of attention to, as most of the bonds issued by domestic forest products companies are U.S. dollar-denominated high-yield debt, and we seldom see any of it trade up here in the Great White North.
Still, the papers are full of the travails of the forest sector lately. Jobs are being clear-cut, stock analysts are doing the earnings-estimate limbo every quarter (How low can they go?) and politicians are promising new subsidies and handouts and rattling their, er, chainsaws. As if any of our Solons in Ottawa knows one end of a chainsaw from the other.
Actually, that's something I'd really like to see: Paul Martin down in Washington to talk to the U.S. Senate about softwood lumber and he puts on a goalie mask and fires up the old McCulloch and cuts the podium in half. That'd get their attention.
Anyway, I hadn't realized just how sweaty the bonds issued by forest companies are getting these days, but then I looked at a Canadian forest industry report card that the credit boffins over at Standard & Poor's released this week. If this was your kid's report card, little Johnny would be permanently grounded, and you'd be considering sending him to military school.
S&P rates 13 Canadian forest firms and four building materials companies. Fifteen out of the 17 companies are rated as junk -- or non-investment grade. Of the forest firms, two are triple-B, which is the low end of investment grade; four are double-B-plus, which is the high end of the junk spectrum; one double-B, two double-B-minus, two B-plus, one B, and one triple-C-plus.
Even worse, eight of the companies have negative ratings outlooks, and none of them have positive outlooks. The best that bondholders can hope for is that the companies' credit quality doesn't get any worse. It's like your doctor telling you there's good news and bad news: The bad news is that you are sick as hell and not getting any better, and the good news is, at least you aren't getting any worse.
Yet the individual company ratings are a litany of the same endemic problems: "credit metrics remain stretched as the appreciation of the Canadian dollar and rising energy costs will hurt earnings." ". . . energy and resin costs have increased." " . . . remains under pressure from the Canadian dollar and energy costs." ". . . continues to face a strong Canadian dollar and rising energy costs." ". . . compounding the problem is the rising Canadian dollar and energy costs" ". . . cost reduction initiatives . . . are absolutely critical for long-term survival." Gee, I'm beginning to see a pattern here.
The big burden for these companies has been the loonie. Most of the industry's costs are in Canadian dollars, and most of their revenues are in U.S. dollars. For pulp and paper companies it's an even more bitter pill: While pulp and paper prices, denominated in U.S. dollars, have been rising for more than two years, the appreciation of the Canadian dollar has wiped out the gains.
That's really harsh -- you're in a cyclical business and when the up-cycle comes, it still isn't enough to cover your currency losses. In Canadian-dollar terms, prices have gone nowhere.
It gets worse, though. Energy costs have risen too, for oil, gas, and -- especially in Ontario -- electricity. That's had a nasty impact on direct costs, but it has also raised costs for freight, chemicals and resins.
Meanwhile, the softwood lumber dispute goes on and on and on, despite the macho posturing and tough talk from Ottawa. It's about $5-billion in duties, and counting. If that ever gets resolved, the return of those duties will be a shot in the arm for a lot of these companies. But no one can predict how long it will take before any refunds are forthcoming, and the dispute continues without any resolution, so we could be talking geological time here, folks.
There's a couple of other fundamental problems with the industry, too. One is a lack of pricing power. Costs rise, and the companies can't raise prices to cover them, because there is too much overcapacity. And every year, they have to haul the logs further to the mill.
S&P says these conditions will continue, and thus credit quality will "decrease in the near term." Gee, if you're already rated triple-C-plus, any further decrease in credit quality will put you in receivership.
Maybe it's high time someone does put on a goalie mask and trims a few slabs off the West Wing.
Harry Koza is senior Canadian markets analyst at Thomson Financial and a columnist for GlobeinvestorGOLD.com.
Shed a tear for the vanishing Canadian lumberjack. It's tough work in the woodlot at the best of times, and these days, what with the strong Canadian dollar, softwood tariffs, and soaring energy costs, companies that employ lumberjacks are in rough shape.
It's not a sector that I usually pay a lot of attention to, as most of the bonds issued by domestic forest products companies are U.S. dollar-denominated high-yield debt, and we seldom see any of it trade up here in the Great White North.
Still, the papers are full of the travails of the forest sector lately. Jobs are being clear-cut, stock analysts are doing the earnings-estimate limbo every quarter (How low can they go?) and politicians are promising new subsidies and handouts and rattling their, er, chainsaws. As if any of our Solons in Ottawa knows one end of a chainsaw from the other.
Actually, that's something I'd really like to see: Paul Martin down in Washington to talk to the U.S. Senate about softwood lumber and he puts on a goalie mask and fires up the old McCulloch and cuts the podium in half. That'd get their attention.
Anyway, I hadn't realized just how sweaty the bonds issued by forest companies are getting these days, but then I looked at a Canadian forest industry report card that the credit boffins over at Standard & Poor's released this week. If this was your kid's report card, little Johnny would be permanently grounded, and you'd be considering sending him to military school.
S&P rates 13 Canadian forest firms and four building materials companies. Fifteen out of the 17 companies are rated as junk -- or non-investment grade. Of the forest firms, two are triple-B, which is the low end of investment grade; four are double-B-plus, which is the high end of the junk spectrum; one double-B, two double-B-minus, two B-plus, one B, and one triple-C-plus.
Even worse, eight of the companies have negative ratings outlooks, and none of them have positive outlooks. The best that bondholders can hope for is that the companies' credit quality doesn't get any worse. It's like your doctor telling you there's good news and bad news: The bad news is that you are sick as hell and not getting any better, and the good news is, at least you aren't getting any worse.
Yet the individual company ratings are a litany of the same endemic problems: "credit metrics remain stretched as the appreciation of the Canadian dollar and rising energy costs will hurt earnings." ". . . energy and resin costs have increased." " . . . remains under pressure from the Canadian dollar and energy costs." ". . . continues to face a strong Canadian dollar and rising energy costs." ". . . compounding the problem is the rising Canadian dollar and energy costs" ". . . cost reduction initiatives . . . are absolutely critical for long-term survival." Gee, I'm beginning to see a pattern here.
The big burden for these companies has been the loonie. Most of the industry's costs are in Canadian dollars, and most of their revenues are in U.S. dollars. For pulp and paper companies it's an even more bitter pill: While pulp and paper prices, denominated in U.S. dollars, have been rising for more than two years, the appreciation of the Canadian dollar has wiped out the gains.
That's really harsh -- you're in a cyclical business and when the up-cycle comes, it still isn't enough to cover your currency losses. In Canadian-dollar terms, prices have gone nowhere.
It gets worse, though. Energy costs have risen too, for oil, gas, and -- especially in Ontario -- electricity. That's had a nasty impact on direct costs, but it has also raised costs for freight, chemicals and resins.
Meanwhile, the softwood lumber dispute goes on and on and on, despite the macho posturing and tough talk from Ottawa. It's about $5-billion in duties, and counting. If that ever gets resolved, the return of those duties will be a shot in the arm for a lot of these companies. But no one can predict how long it will take before any refunds are forthcoming, and the dispute continues without any resolution, so we could be talking geological time here, folks.
There's a couple of other fundamental problems with the industry, too. One is a lack of pricing power. Costs rise, and the companies can't raise prices to cover them, because there is too much overcapacity. And every year, they have to haul the logs further to the mill.
S&P says these conditions will continue, and thus credit quality will "decrease in the near term." Gee, if you're already rated triple-C-plus, any further decrease in credit quality will put you in receivership.
Maybe it's high time someone does put on a goalie mask and trims a few slabs off the West Wing.
Harry Koza is senior Canadian markets analyst at Thomson Financial and a columnist for GlobeinvestorGOLD.com.
Interview: Frank Dottori, Tembec
Out of the fire
By GORDON PITTS
Tuesday, November 8, 2005 Posted at 11:51 AM EST
From Friday's Globe and Mail
For 32 years, Frank Dottori, CEO of Tembec Inc., was the growth-happy warrior of the forestry industry, creating a diversified, billion-dollar company from its roots in an employee-owned pulp mill in Temiscaming, Quebec. At the end of this year, the 66-year-old onetime engineer will step aside for veteran company executive James Lopez. Dottori leaves a debt-laden company reeling from the high Canadian dollar, new competition and U.S. lumber duties that, he says, have cost Tembec $300 million. Still, Dottori remains unrepentant about his aggressive strategy for growth.
Did you expect to leave when the company was doing poorly?
No, I didn't, but this is a cyclical business. I think this particular decline turned out to be significantly worse than anticipated. It's now going into its fifth year; it normally lasts three years. There are some new factors, particularly in the pulp business, which has been hit the hardest. It's an issue of Third World production becoming about the same size as Canadian production, and therefore a major factor in global pricing.
You've been depicted as someone who adheres to a strategy of growth at all costs. Is that fair?
I don't think we've bought anything that doesn't fit in strategically, contrary to what some analysts have written in the past. There was criticism levelled at us when we bought some sawmills two to three years ago. But we said this is a business that we have to look at long-term, and ensure our wood supply. Today, we're lucky we bought these sawmills.
Do you find the criticism hard to take?
That's one of the negative sides of our business. At one time, it was more of a long-term thing: You invest in multimillion-dollar projects, which can only be done with 10- and 15-year horizons. But most mutual fund investors are thinking quarter to quarter. That's incompatible, especially in a cyclical business. So I think you'll see a lot of companies go private.
Will you still stay on as a director of the company?
As the founder of the company, and as a fairly dominant, opinionated type of personality, I think my presence as a director would create undue stress on the new CEO. I just think this makes it clean cut. It's his show now, but if he wants any advice, he can call me.
What will you do with your time?
I bought a cottage recently, and rebuilding it should keep me busy for six months. I get requests to sit on voluntary boards. So I think I'll do a couple of those things, and maybe a few corporate directorships.
You have been called a genius at employee buyouts. What was your best deal?
Along with its employees and townspeople, we bought the Spruce Falls, Ontario, newsprint mill in 1991; that was a hell of a good deal. At the same time, we were taking tremendous criticism on the pulp side, which was doing terribly. So I had a split personality--half of me was bright and half of me was dumb.
Does employee ownership still work?
You can't ask your employees to be loyal to the company and make the extra effort unless you do something to protect their jobs and their security. Today, with this ruthless competition, it's tough saying, "I'm going to eliminate 30% of the jobs and I want you guys to keep working hard and be loyal and make an effort." And they're going to say, "Why don't you protect our jobs?"
But hasn't Tembec embarked on aggressive cost-cutting measures?
Yes, but there has never been anything like a Friday afternoon where we go whack. I think it's part of the culture of Tembec, that if we do good planning and use attrition, we shouldn't have to do it on a Friday.
Do you have any regrets?
Three to four years ago, we were trying to make some significant mergers and acquisitions, but I succumbed to public pressure. If we had just gone ahead and done a few of the transactions, we would be the biggest wood fibre company in Canada. I think if I had a bit stronger character and marched on, and said the hell with the analysts and the hell with the worrywarts, we'd be an extremely successful company, and I'd be sitting here today at the top of the heap.
Pine beetles march on, despite rigorous effort
By MARK HUME
Wednesday, November 9, 2005 Page A2 | Globe and Mail
VANCOUVER -- Using methods that seem designed to battle an invading army, government officials in British Columbia and Alberta have been burning forests along their shared border in an attempt to stop a massive infestation of pine beetles from spreading eastward.
But despite the extreme measures, which this fall included the destruction of about 5,000 trees in Willmore Wilderness Park, about 150 kilometres north of Jasper, the pine beetle has rapidly been making inroads into Alberta, jumping from B.C.'s lodgepole pine to the jack pine of the boreal forests.
The insect has been slipping through mountain passes from the Peace River country, in northern British Columbia, to the Bow Valley, west of Calgary.
With more than 3,500 infestation spots now identified east of the Rocky Mountains, which long served as a natural barrier to the insects, the way seems clear for an outbreak in the northern boreal forest, which reaches from British Columbia to Labrador.
Scientists say the beetle, which leaves valleys of dying, red trees in its wake, is spreading because global warming has reduced the winter cold snaps that used to kill off the insect.
The leading edge of the mountain pine beetle infestation moved into the Peace River district in 2002, where it is now well established, said Allan Carroll, a scientist with the federal Pacific Forestry Centre in Victoria.
"The bulk of the population has breached the Rocky Mountain barrier," Mr. Carroll said in an interview yesterday. "It comprises several thousand spot infestations, all of which have become reasonably well established and have been growing since their arrival. . . . It's quite worrisome because we have this large population sitting now adjacent to the most logical corridor into the boreal forest."
In Alberta, officials have deployed aerial surveys, ground patrols and rapid-response teams to cut and burn trees infested with mountain pine beetles. But Mr. Carroll said the insects are almost impossible to eradicate.
"We certainly have every reason to think we can slow it, but stopping it is difficult," he said. "Once it becomes established in a pine forest, it becomes a part of that ecosystem and can exist at extremely low levels, levels that we are pretty much unable to detect. It remains at background levels until conditions arise that allow it to erupt."
Some researchers warn that the pine beetle could spread through Canada's boreal forest and across North America.
"If mountain pine beetle is successful in colonizing jack pine, there is a continuous connection of suitable host species across the boreal forest, down the East Coast of the United States all the way to Texas. What we are describing here is a potential biogeographic event of continental scale with unknown, but potentially devastating, ecological consequences," researchers Jesse Logan, of the U.S. Forest Service, and James Powell, of Utah State University, said in a recent paper.
The scientists said the scale of the outbreak in B.C. is "truly astounding."
Across the Prairies, resource managers are taking note.
Rory McIntosh, forest insect and disease specialist with Saskatchewan Environment, said his province has been anticipating a possible pine beetle invasion for years. "We are very concerned about this. It's certainly a major item on the agenda at the provincial and national level."
In a few weeks, he said, signs will be going up on major highways along the border with Alberta, urging people not to import into Saskatchewan any wood with the bark still in place.
Mr. McIntosh said if an infested forest spot is detected "we would do an immediate cut-and-burn, and we'd cut 50 to 75 metres into the edge of the forest around that."
That's the kind of rapid response Alberta has been using - swooping down on wilderness valleys to cut and burn any infected trees they find.
In B.C., the outbreak covers more than seven million hectares and has cost the provincial economy an estimated $6-billion. In Alberta, more than two million hectares of pine forest are at risk along the eastern slopes of the Rockies, with an estimated commercial value of $23-billion.
Tuesday, November 08, 2005
Selective logging, if done properly, not destructive: Proper logging techniques should be applied in the Amazon
Rome, 3 November 2005 - Selective logging is not necessarily destructive and can be done with low impact on the remaining forests, if the proper techniques are applied, FAO said today, in response to a recent study on logging impacts in the Amazon.
Researchers at Stanford University have recently been successful in developing sophisticated methodologies and in applying them on satellite data from the Amazon to show the extent of selective logging in the forests, which had previously been missed in other assessments.
"The approach developed by the researchers helps to monitor the impacts of logging in the Amazon and shows us where forests are harvested unsustainably. However, selective logging is not in principle that destructive. Sound logging practices allows the use of the forest without losing it or risking its regenerative capacity," said Wulf Killmann, Director of the Forest Products and Economics Division at FAO. "The severe logging damage shown in the study is unacceptable and sustainable logging practices should be applied."
Reduced Impact Logging
Good forest harvesting practices or so called reduced impact logging should be applied when logging, according to FAO. By using reduced impact logging, forests can be harvested while providing economic benefits as well as protecting the soil, water and biodiversity.
Reduced impact logging refers to widely-accepted practical steps to be taken when logging. It includes specific measures such as assessments before and after harvesting, careful construction and maintenance of forest roads, and cutting down trees at a certain direction and of climbing vines.
According to a global study carried out by FAO, the University of British Columbia and the Lakehead University in Canada, reduced impact logging, if done properly, reduces not only disturbance to the remaining tree stand but also logging waste, compared to other conventional practices.
"Selective logging can sustainably deliver timber with minimum detrimental impact on forests. If forests do not generate income, forest owners tend to convert it to other land uses, which is worse than selective logging." Killmann said.
To help implement reduced impact logging, FAO developed together with countries, regional and national codes for forest harvesting for Asian and African countries. A regional code is now underway for the tropical rainforests of South America, including the Amazon.
See Also...
* Reduced Impact Logging Web site
Exploring the elusive hydro question
Recent announcements by the provincial government on the fate of the coal-fired electricity-generating plants in Atikokan come on the heels of major layoffs taking place in the forestry industry, adding to an already precarious economic situation in northwestern Ontario. While there are many reasons for the decline in an industry that provides over 40 per cent of the jobs in this region, one that has been cited over and over is the increasing cost of energy. In fact, hydro costs in this region are now some of the highest in North America. In this article, I will attempt to put into perspective what is now becoming a Hydro Saga for the Northwest.
Ontario Hydro was built on the concept of providing power at cost to the people and industries of this province. This combination has fuelled the engine of the Ontario economy for over a century, helping make it the most prosperous province in the country. Environmental concerns, inflationary pressures, government changes and a host of other factors prompted a re-evaluation and a policy change. Ontario Hydro was split into separate business units and eventually started moving towards privatization.
The deregulation of the electricity market was part and parcel of the previous provincial government’s plan to privatize what once was a monopoly. This change was not only driven by the government’s philosophical bent towards privatization, but also by the thinking that permeates large sector industries and that has led to deregulation in the whole field of energy (oil and gas industries).
This thinking is based on the premise that competition and market forces alone will maintain a balance between supply and demand and produce efficiencies sufficient to provide a reasonable rate of return to investors while maintaining competitive rates to consumers and industry. While this ideology sounds great in theory, the reality is quite different. To dispel the notion of a well-balanced free energy market environment, it is sufficient to point out to the skyrocketing cost of natural gas and gasoline all over North America. And that’s not to mention the price fixing fiasco in the hydro market in California just a few years ago that almost bankrupted one of the richest American states.
The former provincial government found out the hard way that such a move was full of dangers for both the consumer and the economy (not to mention their own political future), and froze the rates once prices went through the roof right after deregulation was implemented. The new provincial government seems to have learned only part of the lesson, and in its eagerness to appeal to the environmentalist-minded voters last month announced that it is moving ahead with the shut down of the coal-fired generating plants by 2007.
As a budget co-ordinator for Ontario Hydro-Northwestern Ontario Region from 1987 to 1995, I watched a sequence of provincial governments (Liberal, NDP, Conservative, and now Liberal again) take this crown corporation from its stated objective of delivering power at cost to an instrument of social policy, to full deregulation, and now to a mix of private-public utilities.
Each new vision supposedly implemented to correct the flows of the previous one. The most recent based on the premise that a mix of regulated and free-market prices will provide the best protection for the consumer.
So what does this mean for the average consumer and business who wants nothing more than a stable and fair pricing structure? According to a market surveillance report by the Independent Electricity Market Operators (IMO), Ontario’s electricity system is facing insufficient capacity and ability to supply power at a time of growing demand. If this situation is not corrected quickly, “Ontario could be facing even more serious reliability problems in the near future, leading to the possibility of supply interruptions and continued upward pressure on prices during period of peak demand.” In fact, this summer industrial and commercial users in northwestern Ontario have been paying exorbitant prices (at imported costs) due to extremely high peak demand down east, while this region has been producing more power than it needs. And they want to shut down fossil fuel generation that provides 26 per cent of the total supply in Ontario?
What will that do to prices in the future?
While the debate on whether Hydro One should remain completely in public hands or move towards privatization will continue, the mix of supply and demand as well as other global changes will be shaping electricity and energy markets for years to come. The way this province and region respond to such events will also have serious implications for our economic wellbeing. In the next article I will highlight the proposed changes and its implications for northwestern Ontario.
Frank Pullia is a Certified Management Accountant (CMA), Principal of Pullia Accounting & Consulting and a former city councillor. He can be reached at 767-6579 or via e-mail atfrank@frankpullia.com
Saturday, November 05, 2005
Forestry companies heading into perfect storm
By ERIC REGULY | Saturday, November 5, 2005 | Globe and Mail
American airlines and the Canadian forest products sector have, sadly, a lot in common. Both industries suffer from a capacity glut, brutal competition, legacy costs, waning pricing power, rising energy prices and sinking demand for some products. Four of the Big Six airlines, including Delta and United, are dealing with the grim reality in the bankruptcy courts. You have to wonder whether the same fate awaits some of the forestry firms.
Canada's oil, rocks and trees economy is running on two of three cylinders. The trees are sputtering out, especially in Eastern Canada. The share prices of Tembec, Domtar and Abitibi-Consolidated have fallen between 50 and 70 per cent this year alone. Dominion Bond Rating Service this week downgraded the debt of Domtar and Abitibi. Domtar just killed its dividend and Abitibi may be next. Tembec is a rotting stump of a company and is in danger of becoming a penny stock.
Buying opportunity? Companies in crisis are sometimes worth a flyer.
Samuel Johnson said: "The prospect of hanging tomorrow focuses the mind today," and forestry company bosses are doing a lot of focusing. Surplus mill capacity is being shut down. Assets are being sold to reduce debt and buy time with nervous bankers. Higher-margin products are being pumped out.
But judging from the deteriorating financial performance of the companies, the reshaping isn't happening fast enough. Things are more likely to get worse before they get better, especially if the Canadian dollar keeps rising and energy prices, which have come off their peak, reverse direction.
Forestry companies, especially of the Canadian variety, are complicated beasts. Like French auto makers after the Second World War, some began life as instruments of social policy. Job One was to keep northern towns alive; Job Two was to turn the brutal art of killing trees into a profit machine. Job One hasn't completely vanished from their DNA.
Politicians put pressure on them to keep mills going and use tax incentives to sweeten the argument. The companies are often slow to respond to obvious signs of excess capacity. Sometimes managers know they have to close a mill but wait for a rival to move first -- and wait and wait in a damaging game of brinkmanship.
The other complicating factor is the sheer range of products, from newsprint and ground wood papers to pulp and paperboard. Want to dull up your dinner party? Talk about lignosulfonates, better known as tree-sap chemicals, to those lacking PhDs in tree engineering. A lot of the products can be out of favour at once, with dire results. Newsprint is a fine example of relentless decline. Tembec makes it. Abitibi is the continent's biggest newsprint maker.
The newspaper you are holding may not exist in a decade as more and more readers migrate to the websites. Readership and circulation apparently are in irreversible decline as competing media become more popular. In the United States, circulation has dropped by about 1 per cent a year since 1990, in spite of the big rise in the number of households. In 1950, more than 120 per cent of households bought a newspaper (that is, some households bought more than one paper). Today, only about half of households take papers. Junior is plugged into his iPod; papers are so uncool if you're under 30.
As a result, total North American newsprint consumption has fallen from about 11.7 million tonnes in 1994 to 9.5 million tonnes. Newspapers are not only getting fewer in number and smaller in size, they're also using paper that weighs less. The circulation scandal in the United States, in which certain titles allegedly inflated their numbers, hasn't helped the case for papers as mass-market advertising vehicles. The Newspaper Association of America has forecast a 1-per-cent drop in ad linage this year even as the U.S. economy expands at an impressive rate.
Abitibi and Tembec have been reducing capacity as demand falls. Newsprint prices have gone up recently, but are still well below their mid-1990s peak. The truth is newsprint is in slow, steady decline and the survivors will have to find something more valuable to produce. Abitibi is pushing hard in "equal offset" paper, used in reference and instruction books such as the Dummies guides. The market for such paper is growing. There is no guarantee it will turn around the newsprint maker's fortunes.
The eastern forestry products companies face something close to the perfect storm. They are getting clobbered by the rising Canadian dollar (60 per cent of Abitibi's production is in Canada). Oil prices, while down in recent weeks, are still about $20 (U.S.) a barrel higher than they were a year ago. Profits are vanishing, liquidity is becoming an issue and deals are being done out of apparent desperation. Abitibi has sold its stake in PanAsia Paper, bought only two years ago and touted as its most promising growth asset, so it could pay down debt.
The time will come when the stocks will look attractive again. It's not now.
ereguly@globeandmail.ca
American airlines and the Canadian forest products sector have, sadly, a lot in common. Both industries suffer from a capacity glut, brutal competition, legacy costs, waning pricing power, rising energy prices and sinking demand for some products. Four of the Big Six airlines, including Delta and United, are dealing with the grim reality in the bankruptcy courts. You have to wonder whether the same fate awaits some of the forestry firms.
Canada's oil, rocks and trees economy is running on two of three cylinders. The trees are sputtering out, especially in Eastern Canada. The share prices of Tembec, Domtar and Abitibi-Consolidated have fallen between 50 and 70 per cent this year alone. Dominion Bond Rating Service this week downgraded the debt of Domtar and Abitibi. Domtar just killed its dividend and Abitibi may be next. Tembec is a rotting stump of a company and is in danger of becoming a penny stock.
Buying opportunity? Companies in crisis are sometimes worth a flyer.
Samuel Johnson said: "The prospect of hanging tomorrow focuses the mind today," and forestry company bosses are doing a lot of focusing. Surplus mill capacity is being shut down. Assets are being sold to reduce debt and buy time with nervous bankers. Higher-margin products are being pumped out.
But judging from the deteriorating financial performance of the companies, the reshaping isn't happening fast enough. Things are more likely to get worse before they get better, especially if the Canadian dollar keeps rising and energy prices, which have come off their peak, reverse direction.
Forestry companies, especially of the Canadian variety, are complicated beasts. Like French auto makers after the Second World War, some began life as instruments of social policy. Job One was to keep northern towns alive; Job Two was to turn the brutal art of killing trees into a profit machine. Job One hasn't completely vanished from their DNA.
Politicians put pressure on them to keep mills going and use tax incentives to sweeten the argument. The companies are often slow to respond to obvious signs of excess capacity. Sometimes managers know they have to close a mill but wait for a rival to move first -- and wait and wait in a damaging game of brinkmanship.
The other complicating factor is the sheer range of products, from newsprint and ground wood papers to pulp and paperboard. Want to dull up your dinner party? Talk about lignosulfonates, better known as tree-sap chemicals, to those lacking PhDs in tree engineering. A lot of the products can be out of favour at once, with dire results. Newsprint is a fine example of relentless decline. Tembec makes it. Abitibi is the continent's biggest newsprint maker.
The newspaper you are holding may not exist in a decade as more and more readers migrate to the websites. Readership and circulation apparently are in irreversible decline as competing media become more popular. In the United States, circulation has dropped by about 1 per cent a year since 1990, in spite of the big rise in the number of households. In 1950, more than 120 per cent of households bought a newspaper (that is, some households bought more than one paper). Today, only about half of households take papers. Junior is plugged into his iPod; papers are so uncool if you're under 30.
As a result, total North American newsprint consumption has fallen from about 11.7 million tonnes in 1994 to 9.5 million tonnes. Newspapers are not only getting fewer in number and smaller in size, they're also using paper that weighs less. The circulation scandal in the United States, in which certain titles allegedly inflated their numbers, hasn't helped the case for papers as mass-market advertising vehicles. The Newspaper Association of America has forecast a 1-per-cent drop in ad linage this year even as the U.S. economy expands at an impressive rate.
Abitibi and Tembec have been reducing capacity as demand falls. Newsprint prices have gone up recently, but are still well below their mid-1990s peak. The truth is newsprint is in slow, steady decline and the survivors will have to find something more valuable to produce. Abitibi is pushing hard in "equal offset" paper, used in reference and instruction books such as the Dummies guides. The market for such paper is growing. There is no guarantee it will turn around the newsprint maker's fortunes.
The eastern forestry products companies face something close to the perfect storm. They are getting clobbered by the rising Canadian dollar (60 per cent of Abitibi's production is in Canada). Oil prices, while down in recent weeks, are still about $20 (U.S.) a barrel higher than they were a year ago. Profits are vanishing, liquidity is becoming an issue and deals are being done out of apparent desperation. Abitibi has sold its stake in PanAsia Paper, bought only two years ago and touted as its most promising growth asset, so it could pay down debt.
The time will come when the stocks will look attractive again. It's not now.
ereguly@globeandmail.ca
Sunday, October 30, 2005
Paper mill may have to seek new energy source
By CHRISTINE S. DIAMOND The Lufkin Daily News
Source: Lufkin Daily News | Sunday, October 30, 2005
If Abitibi Consolidated were to reopen its Lufkin paper mill — its only mill to rely solely on natural gas for fuel — some say it would have to convert to another energy source as many East Texas mills have already begun doing.
The price of natural gas fuel was a driving factor in Abitibi Consolidated Inc.'s decision to close the plant in early 2004 after acquiring the plant in 2000.
"The company had every intention of turning the Lufkin mill into a world class facility, however a decline in world markets for supercalendered paper coupled with unexpected high prices for natural gas led to a decision to indefinitely idle the facility," Debbie Johnston, spokeswoman for Abitibi Consolidated, stated in an e-mail interview. "A number of our mills in Quebec, Ontario, and Newfoundland generate their own electricity through hydro-electric generating stations attached to the mills. This means of power generation is very low cost — providing a significant advantage over natural gas or oil."
Traditionally, electric power in East Texas is produced from oil, natural gas and its native lignite coal — which contains high levels of mercury.
As these forms become increasingly cost prohibitive, East Texans are looking at alternative renewable fuels ranging from biomass/biofuels, solar, wind and hydro-electric. While wind-powered technology has vastly improved and the U.S.'s first offshore site is expected to start catching wind off of Galveston Island in five years, the future for wind energy in East Texas is slim compared to the potential of solar and biomass fuels, according to Travis Brown, energy projects director for Public Citizen.
Even though "technology has improved so much — it takes less and less wind to make electricity — about 15 mph ... (East Texas) just doesn't have the wind velocity that would be efficient to sell to the grid and make a profit," Brown said. "Other renewable energy in East Texas that shows promise are solar and even bigger is biomass to generate electricity."
Biomass has been the largest source of renewable energy in the U.S. for the last five years, according to the U.S. Department of Energy.
"Biomass is one of our most important energy resources," states the DOE's Web site. "Biomass use strengthens rural economies, decreases America's dependence on imported oil, avoids use of MTBE or other highly toxic fuel additives, reduces air and water pollution, and reduces greenhouse gas emissions.
"The biggest industrial stakeholder is the forest products industry, which consumes 85 percent of all wood waste used for energy in the U.S. and they are able to generate over half of their own energy from woody waste products and other renewable sources of fuel."
"Over the past 18 months (Abitibi) has continued to support efforts to identify new grades to manufacture, and to develop options for new energy sources that would change the cost structure of the mill and allow it to operate profitably," Johnston said.
Ron Hufford with the Texas Forestry Association in Lufkin said the paper mill will have to reduce its dependency on natural gas.
"Abitibi is going to have to convert to biomass," Hufford said of an alternative fuel process already used by many East Texas wood product mills to supply a large percent of their energy needs.
Outside East Texas the term "biomass" as fuel usually conjures up pictures of cornfields or sugar cane as opposed to the by-products of a timber harvests that are converted to steam energy by a growing number of East Texas facilities.
"Normally when we talk about tree biomass for fuel, we're talking about logging slash/debris — tops and limps left over after a harvest operation, and mill residue — by-products of chips, sawdust, shavings, and bark, that might be used for fuel," said Burl Carraway, with Texas Forest Service, in an e-mail interview.
The use of wood waste for fuel is a favorite topic of Paul Hale, coordinator of the Texas Logging Council, who doesn't endorse using traditional food crops for fuel like soybeans and corn.
"Efficiency has been established in using ground-up and chipped-up wood waste for producing electricity," Hale said in an e-mail interview. "It has not been established yet in producing liquid fuel.
"There is approximately 4 to 5 million tons of limbs, tree tops and wood debris left behind on logging sites in the state of Texas each year," Hale said. "This is not a supply that will go away, this supply is sustainable. Right now it is left to rot each year or to be a fire hazard."
Hurricane Rita exponentially increased the amount of biomass waste available in East Texas. Piles of vegetative and woody debris are being removed from wherever Rita left it and taken by FEMA to empty lots where they are piled up or dropped in pits.
"Obviously, Texas Forest Service would rather see this material being used to make a product or energy, not just wasted," Carraway said. "There is also an air quality issue in that burning this debris produces much more particulate matter than if it were used in an industrial process where 'scrubbing' is required."
Scrubbing is a process industry of any kind uses to reduce the amount of particulates being released into the air.
"Burning the mix of wood waste, tires, and garbage can produce a green product that will prevent landfills full of garbage and tires and leave the forest floor clean," Hale said. "Everything considered, using this resource that is free compared to leaving it behind to rot is not only the answer to efficient electricity, but the prevention of the mammoth sized burial sites for household garbage and tires. This only makes too much sense, we have to find a way to turn that switch on. As a society and responsible citizens, we owe it to ourselves to quit burying this other stuff in the ground and to quit wasting something just because we haven't traditionally used it. Ag refuse including wood waste will be used in the future for this purpose. We should choose the near future.
"This is more than a concept — many companies are already using this stuff to power their mills," Hale said.
According to Texas Commission on Environmental Quality spokeswoman Andrea Morrow, "Vegetative debris and wood waste is currently used as supplementary boiler fuel by several paper mills” including International Paper in Mansfield; Temple-Inland particleboard and paper mill in Orange, and the mill in Diboll; Louisiana Pacific in Carthage; and Mead-Westvaco in Evadale.
On Oct. 19 Norboard Industries, a mill in Jefferson, re-opened its mill after a 21-day shutdown for an conversion that majorly reduced the company's reliance on natural gas, according to Mike Kile.
While biomass has proven to be an efficient fuel source, Hale said the switch will be a costly one for lignite coal plants in the short run.
"Electrical power plants are scared to make the commitment to biomass because there are not enough producers of biomass to supply the plant," Hale said. "Imagine a giant 'on switch.' To turn the switch on overnight to swap resources for power, a power company would have to convert their system spending millions to create several producers that also requires millions invested in each one along with the creation of many jobs, and the coordination of all the contracts and people in the chain of issues connected to it."
However, Hale said, "As pollution laws stiffen in the future, I think the clean burning wood waste will win as being the main resource for electricity.
"Texas is a state that has it's own power grid. It looks very achievable to me if this state wants to make a good change."
At least one company is tentatively looking into opening a biomass energy plant to sell electricity to the grid in Deep East Texas, according to Hufford.
Christine S. Diamond's e-mail address is cdiamond@coxnews.com.
Source: Lufkin Daily News | Sunday, October 30, 2005
If Abitibi Consolidated were to reopen its Lufkin paper mill — its only mill to rely solely on natural gas for fuel — some say it would have to convert to another energy source as many East Texas mills have already begun doing.
The price of natural gas fuel was a driving factor in Abitibi Consolidated Inc.'s decision to close the plant in early 2004 after acquiring the plant in 2000.
"The company had every intention of turning the Lufkin mill into a world class facility, however a decline in world markets for supercalendered paper coupled with unexpected high prices for natural gas led to a decision to indefinitely idle the facility," Debbie Johnston, spokeswoman for Abitibi Consolidated, stated in an e-mail interview. "A number of our mills in Quebec, Ontario, and Newfoundland generate their own electricity through hydro-electric generating stations attached to the mills. This means of power generation is very low cost — providing a significant advantage over natural gas or oil."
Traditionally, electric power in East Texas is produced from oil, natural gas and its native lignite coal — which contains high levels of mercury.
As these forms become increasingly cost prohibitive, East Texans are looking at alternative renewable fuels ranging from biomass/biofuels, solar, wind and hydro-electric. While wind-powered technology has vastly improved and the U.S.'s first offshore site is expected to start catching wind off of Galveston Island in five years, the future for wind energy in East Texas is slim compared to the potential of solar and biomass fuels, according to Travis Brown, energy projects director for Public Citizen.
Even though "technology has improved so much — it takes less and less wind to make electricity — about 15 mph ... (East Texas) just doesn't have the wind velocity that would be efficient to sell to the grid and make a profit," Brown said. "Other renewable energy in East Texas that shows promise are solar and even bigger is biomass to generate electricity."
Biomass has been the largest source of renewable energy in the U.S. for the last five years, according to the U.S. Department of Energy.
"Biomass is one of our most important energy resources," states the DOE's Web site. "Biomass use strengthens rural economies, decreases America's dependence on imported oil, avoids use of MTBE or other highly toxic fuel additives, reduces air and water pollution, and reduces greenhouse gas emissions.
"The biggest industrial stakeholder is the forest products industry, which consumes 85 percent of all wood waste used for energy in the U.S. and they are able to generate over half of their own energy from woody waste products and other renewable sources of fuel."
"Over the past 18 months (Abitibi) has continued to support efforts to identify new grades to manufacture, and to develop options for new energy sources that would change the cost structure of the mill and allow it to operate profitably," Johnston said.
Ron Hufford with the Texas Forestry Association in Lufkin said the paper mill will have to reduce its dependency on natural gas.
"Abitibi is going to have to convert to biomass," Hufford said of an alternative fuel process already used by many East Texas wood product mills to supply a large percent of their energy needs.
Outside East Texas the term "biomass" as fuel usually conjures up pictures of cornfields or sugar cane as opposed to the by-products of a timber harvests that are converted to steam energy by a growing number of East Texas facilities.
"Normally when we talk about tree biomass for fuel, we're talking about logging slash/debris — tops and limps left over after a harvest operation, and mill residue — by-products of chips, sawdust, shavings, and bark, that might be used for fuel," said Burl Carraway, with Texas Forest Service, in an e-mail interview.
The use of wood waste for fuel is a favorite topic of Paul Hale, coordinator of the Texas Logging Council, who doesn't endorse using traditional food crops for fuel like soybeans and corn.
"Efficiency has been established in using ground-up and chipped-up wood waste for producing electricity," Hale said in an e-mail interview. "It has not been established yet in producing liquid fuel.
"There is approximately 4 to 5 million tons of limbs, tree tops and wood debris left behind on logging sites in the state of Texas each year," Hale said. "This is not a supply that will go away, this supply is sustainable. Right now it is left to rot each year or to be a fire hazard."
Hurricane Rita exponentially increased the amount of biomass waste available in East Texas. Piles of vegetative and woody debris are being removed from wherever Rita left it and taken by FEMA to empty lots where they are piled up or dropped in pits.
"Obviously, Texas Forest Service would rather see this material being used to make a product or energy, not just wasted," Carraway said. "There is also an air quality issue in that burning this debris produces much more particulate matter than if it were used in an industrial process where 'scrubbing' is required."
Scrubbing is a process industry of any kind uses to reduce the amount of particulates being released into the air.
"Burning the mix of wood waste, tires, and garbage can produce a green product that will prevent landfills full of garbage and tires and leave the forest floor clean," Hale said. "Everything considered, using this resource that is free compared to leaving it behind to rot is not only the answer to efficient electricity, but the prevention of the mammoth sized burial sites for household garbage and tires. This only makes too much sense, we have to find a way to turn that switch on. As a society and responsible citizens, we owe it to ourselves to quit burying this other stuff in the ground and to quit wasting something just because we haven't traditionally used it. Ag refuse including wood waste will be used in the future for this purpose. We should choose the near future.
"This is more than a concept — many companies are already using this stuff to power their mills," Hale said.
According to Texas Commission on Environmental Quality spokeswoman Andrea Morrow, "Vegetative debris and wood waste is currently used as supplementary boiler fuel by several paper mills” including International Paper in Mansfield; Temple-Inland particleboard and paper mill in Orange, and the mill in Diboll; Louisiana Pacific in Carthage; and Mead-Westvaco in Evadale.
On Oct. 19 Norboard Industries, a mill in Jefferson, re-opened its mill after a 21-day shutdown for an conversion that majorly reduced the company's reliance on natural gas, according to Mike Kile.
While biomass has proven to be an efficient fuel source, Hale said the switch will be a costly one for lignite coal plants in the short run.
"Electrical power plants are scared to make the commitment to biomass because there are not enough producers of biomass to supply the plant," Hale said. "Imagine a giant 'on switch.' To turn the switch on overnight to swap resources for power, a power company would have to convert their system spending millions to create several producers that also requires millions invested in each one along with the creation of many jobs, and the coordination of all the contracts and people in the chain of issues connected to it."
However, Hale said, "As pollution laws stiffen in the future, I think the clean burning wood waste will win as being the main resource for electricity.
"Texas is a state that has it's own power grid. It looks very achievable to me if this state wants to make a good change."
At least one company is tentatively looking into opening a biomass energy plant to sell electricity to the grid in Deep East Texas, according to Hufford.
Christine S. Diamond's e-mail address is cdiamond@coxnews.com.
Saturday, October 29, 2005
Amazon Forests Depleting Rapidly
Source: Internet Scout Report
Amazon “stealth” logging revealed
http://news.bbc.co.uk/2/hi/americas/4362760.stm
Does Brazil have to choose between economic growth and preserving the endangered Amazon?
http://www.economist.com/world/la/displayStory.cfm?story_id=2597880
Deforestation patterns in the Amazon
http://earthobservatory.nasa.gov/Newsroom/NewImages/images.php3?img_id=16511
The causes of Deforestation are Complex
http://earthobservatory.nasa.gov/Library/Deforestation/
New highways drive accelerating deforestation in Amazon
http://www.scienceblog.com/community/article2744.html
Stanford scientist develops satellite to study Amazon
http://daily.stanford.edu/tempo?page=content&id=12852&repository=0001_article
Amazon drought emergency widens
http://news.bbc.co.uk/2/hi/americas/4344310.stm
Despite earlier claims by the Brazilian government that the rate of deforestation in the Amazon had fallen by as much as 50%, scientists from the U.S. and Brazil have found that the Amazon Rainforests are being depleted more rapidly than previously thought. The deforestation is so rapid and expansive that the only effective means by which to measure is by using satellite imagery. Satellite imagery not only detects vast tracts of clear cutting, it is also able to detect selective logging. Selective logging is a process in which loggers only cut down valuable trees, leaving the remainder of the forest alone. Logging companies claim that this process is much more environmentally friendly than clear cutting. While this may be true, environmentalists believe that tree removal of any kind can be detrimental to an ecosystem. They claim that the process of building roads and bringing heavy equipment into these forests is disruptive and damaging. The scientists producing this study claim that deforestation of the Brazilian Amazon has been underestimated by as much as 60%. The Brazilian government stated that although they welcomed the research the numbers were exaggerated. Deforestation is only one of many environmental calamities causing harm to the Amazon. A severe drought, coupled with severe cases of industrial pollution, is making the Amazon a severely endangered ecosystem. [CMH]
The first link is to a BBC News article on the new evidence on “stealth” logging as well as the new deforestation numbers based on the satellite images. The second link is to an article studying the economic issues of deforestation. The third link illustrates the deforestation patterns in the Amazon using the satellite images. The fourth is a link, which examines the many issues surrounding deforestation in social, economic, and environmental terms. The fifth link is an article discussing issues of highway construction and its connection to deforestation and pollution. The sixth link is to an article detailing the satellite developed at Stanford University designed to study the Amazon. The final link is an article by the BBC with information on the severe drought plaguing the Amazon. [CMH]
Friday, October 21, 2005
Researchers: No way to halt tree-killing beetle's destruction
October 21, 2005, 11:12 AM | Detroit Free Press
COLUMBUS, Ohio (AP) -- The Canadian government and some U.S. researchers say there's no way to stop an Asian beetle from steadily spreading to attack and kill all 10 billion ash trees in the United States and Canada.
The emerald ash borer was found in the popular shade trees just three years ago in the Detroit area, but researchers suspect it arrived as much as a decade ago. The U.S. government has stuck with a strategy of cutting down swaths of trees to keep it from spreading, but more researchers are saying that approach will at best slow the insect.
The beetle is concentrated in Michigan, northern Ohio and Indiana, and southern Ontario. Small infestations were found in Maryland and Virginia. If it uses Ohio or Michigan's Upper Peninsula as a bridge, it could devastate dense ash forests from Minnesota to Maine.
Ash makes up 10 percent of Ohio's forests, and the tree is found in forests throughout the eastern United States. Many cities planted ash trees after the devastation of Dutch elm disease, and its strong wood is valued for furniture and baseball bats.
Ohio agriculture officials announced Thursday the beetle has spread farther east in the state, to a golf course and three other scattered properties near the Ohio Turnpike in Erie County. Money came through this fall for crews to attack spot infestations in Delaware County in central Ohio and Auglaize County in western Ohio.
The Canadian government's official position is that the technology and efforts available cannot stop the ash borer's march, a forestry official told The Associated Press in an e-mail.
"It is well-established and is much too difficult to detect at low levels, and pesticides do not work well enough to be used in a quarantine context," said Ken Marchant, a forestry specialist with the Canadian Food Inspection Service, which regulates exotic pests. "It is the general consensus of quarantine experts here that EAB (emerald ash borer) will continue to spread despite past, present and future actions to control it."
Ohio is sticking with the containment strategy and believes it can beat the pest, said Melissa Brewer, spokeswoman for the Ohio Department of Agriculture. (*)
Wednesday, October 19, 2005
Ontario calls on Prime Minister to help our forest industry
SooToday.com | Tuesday, October 18, 2005
ONTARIO MINISTRY OF NATURAL RESOURCES
*******************
Statement by Minister of Natural Resources David Ramsay
TORONTO — Ontario’s Minister of Natural Resources, David Ramsay, issued the following statement:
With the Government of Canada's announcement of support for the Province of Quebec's forest industry through an investment of $50 million, all Ontarians now eagerly await the Government of Canada's support for Ontario's industry.
The Prime Minister made a commitment to the people of Ontario that the federal government would support this province's industry through a national strategy.
Minister Ralph Goodale two weeks ago echoed the Prime Minister's commitment to a national strategy.
A truly national strategy must treat all provinces equally, taking into account the special challenges and opportunities that exist, helping to overcome the former and embrace the latter.
The forest industry employs 88,000 Ontarians directly and is second only to automobiles in exports from the province.
It generates $18.7 billion in product shipments annually, including $8.5 billion in exports and $1.5 billion in federal taxes.
Last month I announced Phase 2 of Ontario’s $680 million package of new investment for our industry at a time when this government is overcoming a budget deficit.
Given the Government of Canada’s fiscal position, achieved through the leadership and perseverance of the Prime Minister, I would hope that the federal government's package would match and complement ours.
There is no quick fix to the issues facing the forestry sector.
All levels of government need to work together to find long-term solutions and to develop an attractive and prosperous business climate.
We need to encourage both reinvestment to modernize existing facilities and further investment in new opportunities.
Tuesday, October 18, 2005
Forests and floods
New UN study rejects myth that deforestation and logging cause major flooding
Thailand, 13 Oct 2005 -- The massive flooding this week in Central America has prompted the press and well-intentioned advocacy groups to blame the flooding following heavy rain from Hurricane Stan on excessive runoff caused by “extensive deforestation.” But in a report that seeks to separate fact from fiction when it comes to forests and floods, the Food and Agriculture Organization of the United Nations (FAO) and the Center for International Forestry Research (CIFOR) say there is no scientific evidence linking large-scale flooding to deforestation. The same holds true, according to the report, for recent flooding in China, Thailand and Viet Nam.
The report, “Forests and Floods: Drowning in Fiction or Thriving on Facts?” should prompt close examination of the many issues surrounding major flood events —and an abandonment of the myth that deforestation is the root cause. The report comes as major floods around the world are taking place, particularly in the Asian lowlands, Eastern and Central Europe and Central America.
“Government decision makers, international aid groups, and the media are often quick to blame flooding on deforestation caused by small farmers and loggers,” said Patrick Durst, Senior Forestry Officer for FAO Bangkok. “The conclusion is not only wrong, scientifically, but such misguided views have in the past prompted governments to make life harder for poor farmers by driving them off their lands and away from the forests, while doing nothing to prevent future flooding.”
The FAO/CIFOR report acknowledges that forests can play a role in minimizing runoff that causes localized flooding. But it concludes that there is no evidence that a loss of trees significantly contributes to severe widespread flooding. […]
“Planting trees and protecting forests can have many environmental benefits, but preventing large scale floods is not one of them,” said David Kaimowitz, Director-General of CIFOR. “The frequency of major flooding events has remained the same over the last 120 years going back to the days when lush forests were abundant.”
FAO/CIFOR report point outs that the sharp increase in the economic and human losses attributed to flooding is caused not by deforestation but mainly by the simple fact that more people are living and working in flood plains. As a result, many floods that previously would have been only minor events now become major disasters.
“We need to stop blaming people who live and work in and around forests for floods that affect entire river basins, and instead consider the effect of a wide variety of land-use issues, which can in some instances include poor logging techniques,” said Dr. Pal Singh of the World Agroforestry Center. “Policy makers and development agencies have a moral and ethical responsibility to pursue solutions that are rooted in the best available science.”
As far back as the 19th century and continuing to the present, the conventional view has been that forests prevent floods by acting as a giant sponge, soaking up water during heavy rainfalls. But the massive floods that are blamed on deforestation almost always occur after prolonged periods of rains, which saturate the soil, including forest soil, so that it can no longer absorb additional water. Rainfall then has nowhere to go but into rivers where it fills them to the point of overflow.
But according to FAO and CIFOR analysts, there can be a political interest in leaving the conventional wisdom about forests and floods unchallenged. For example, it allows governments to respond with logging bans and give the appearance to the public they are taking decisive steps to stop flooding. The practical effect of such policies is to force poor farmers—who are routinely portrayed as major perpetrators of “illegal logging”— to abandon their lands. For example, catastrophic floods in China, Thailand and the Philippines prompted logging bans that put millions of people out of work. […]
More information at:
http://www.fao.org/documents/show_cdr.asp?url_file=/docrep/008/ae929e/ae929e00.htm
Friday, October 14, 2005
Forestry industry facing tough fight
10 / 13 / 2005 - Vol. 1, No. 20 - Ontario Edition
Production costs, changing markets hit competitiveness
By Charles Wyatt - Business Edge | Published: 10/13/2005 - Vol. 1, No. 20
Ontario's $19-billion forest industry is still on life support despite the provincial government's recent $330-million aid package.
"The Ontario forest industry operates in one of the highest-cost jurisdictions in the world," says Jamie Lim, president of the Ontario Forest Industries Association (OFIA). "The government's package hasn't changed that."
The OFIA represents 29 Ontario forestry companies managing 90 per cent of the wood fibre on Ontario's Crown lands.
Since January 2005, 10 Ontario paper and wood production mills have been shut down with the loss of hundreds of jobs. There have been more than 2,300 permanent job losses in the Ontario forest industry in the last three years, according to the OFIA.
In late September, the provincial government announced a five-year $330-million aid package to help the troubled industry respond to changing global markets, increasing competition from low-cost countries such as Russia and China, escalating fuel and electricity costs, and a rising Canadian dollar.
The plan includes a Forest Sector Prosperity Fund of $150 million over three years to encourage forestry companies to expand and modernize. The private sector will have to pay most of the costs of the projects, however.
"We basically think the $150 million could lever up to $1.2 billion in new investment," provincial Natural Resources Minister Dave Ramsay said when he made the announcement in Thunder Bay.
The forestry loan program is similar to the provincial government's $500-million package for the auto sector, which has generated billions in new investments from Ford and General Motors.
Premier Dalton McGuinty has admitted the package will not prevent more mill closures and layoffs, but says it is aimed at helping the province's forest companies be more competitive. "It's designed to help put the industry on a stronger footing going forward. It is not designed, because it would be impossible to do so, to protect all existing jobs," McGuinty says.
In June, the government announced it would provide up to $350 million in loan guarantees to stimulate investment.
Ontario's forest industry, the second largest after auto manufacturing, has annual sales of about $19 billion and provides direct and indirect employment for about 250,000 people, the OFIA says. It pays $2.5 billion annually in provincial, municipal and federal taxes and provincial stumpage fees.
Higher delivered wood costs and increasing energy costs are having a significant impact on forest products producers in Eastern Canada, where costs are 60 per cent higher than in Western Canada, according to Natural Resources Canada. The recent elimination of price protection on electricity rates in Ontario has boosted prices by more than 30 per cent.
The industry and dozens of Northern Ontario communities now hope an appeal to the government to reduce energy costs in the north may stem the tide of mill closures.
A final report in May from the Minister's Council on Forest Sector Competitiveness said the Ontario forest industry "is in crisis" and "urgent action is required to prevent predictable and irreversible consequences for communities, business and workers.”
The 17-member council was created last November by Ramsay.
The council report warns of the imminent closure of 12 mills in Northern Ontario and the loss of 7,500 direct jobs and more than 20,000 indirect jobs in northern and southern Ontario.
The pace of mill closures has been steady. In July, Abitibi Consolidated Inc. announced the permanent closure of one newsprint machine and the shutdown for an indefinite period of another. In September, Norampac Inc. announced the closure of its 150,000-tonne containerboard facility in Red Rock and the loss of up to 175 jobs.
On the eve of the announcement of the Ontario government's new aid package, Uniboard Canada Inc. announced the permanent closure of its New Liskeard operation, which will eliminate 73 jobs.
The plant's manufacturing unit costs were higher than the industry average, the company said in a news release.
The cost to deliver cut timber from the forest to mills in Ontario is $55 US per cubic metre, compared to $36 in Manitoba and $44 in B.C., Lim says. "That's a $20 gap."
The OFIA did not expect the government's package to close the $20 gap in one step, Lim says, but it was expecting it to bring costs below $50. Under the announced program, costs "dropped by a dollar," she adds.
For the Ontario forest industry to begin to recover, remain competitive and keep investment in the province, the cost of delivered wood must be reduced significantly, Lim says. "There may be some firms out there that can access the prosperity fund, but you still have at the end of the day the highest wood costs."
The OFIA was not alone in saying the government's aid package failed to address the situation.
"We're not happy with what they've done," says Norman Rivard, chair of the United Steelworkers of America IWA Council, which wanted timber-cutting rights tied to the northern communities and a review of mill closures.
"The package may help the companies. It doesn't do anything to help the Northern Ontario communities and keep jobs in the communities."
Ontario's Communications, Energy and Paperworkers Union called the government's package "pathetically anemic" and says it will do nothing to help the troubled industry.
Greenstone Mayor Michael Power, who is also head of the Northwestern Ontario Municipal Association, says the government "fell far short on reducing delivered wood costs," although the Prosperity Fund may help Greenstone get a proposed $300-million strand board plant.
"We are anxious to see the details of the minister's prosperity fund to learn what, if any, new opportunities might exist for this proposed plant. My goal for Greenstone is that we get this investment."
Greenstone is about 215 kilometres northeast of Thunder Bay.
The government's announcement did not include the 50-per-cent reduction in provincial fuel-tax credit for hauling wood from the forest to the mills, or return to the provincial government financial responsibility for primary road construction and maintenance, as the minister's council report had recommended.
"The government chose not to respond to that (the fuel-tax credit)," OFIA's Lim says. "It was really critical these be addressed because they go directly to reducing delivered wood costs.
"Plants in Ontario are closing not because the industry isn't modernized, but because it operates in one of the highest-cost jurisdictions in the world," Lim says. "Forest companies have already invested hundreds of millions of dollars in modernizing their plants in Northern Ontario."
Weyerhaeuser invested $350 million in a new plant in Kenora in 2002. Bowater Canadian Forest Products in the past few years invested hundreds of millions of dollars in Thunder Bay to build one of the world's most modern sawmills, Lim says.
"Companies seek out low-cost jurisdictions to operate in," Lim says. "That's just what they do."
Lim now hopes there will be an announcement later this month from the government on what it plans to do about high energy costs. "That's the other part of the puzzle."
The industry is asking the government to allow the creation of new supplies of lower-cost energy. The annual electricity costs for the Ontario forest industry are about $500 million and represent up to one-third of operating costs, the council's report says.
Manufacturing plants in Manitoba and Quebec have electricity costs 50 per cent less and 20 per cent less, respectively, according to the Association of Major Power Consumers of Ontario.
The Ontario mining industry has also asked the government to lower the price of electricity because it makes its products uncompetitive.
"I am disappointed, but not discouraged. This government certainly has shown willingness to listen and work with us, more than any other previous government in 20 years," Lim says.
"For the first time, the forest industry is on the radar screen at Queen's Park," she says.
- With files from The Canadian Pres
(Charles Wyatt can be reached at wyatt@businessedge.ca)
Production costs, changing markets hit competitiveness
By Charles Wyatt - Business Edge | Published: 10/13/2005 - Vol. 1, No. 20
Ontario's $19-billion forest industry is still on life support despite the provincial government's recent $330-million aid package.
"The Ontario forest industry operates in one of the highest-cost jurisdictions in the world," says Jamie Lim, president of the Ontario Forest Industries Association (OFIA). "The government's package hasn't changed that."
The OFIA represents 29 Ontario forestry companies managing 90 per cent of the wood fibre on Ontario's Crown lands.
Since January 2005, 10 Ontario paper and wood production mills have been shut down with the loss of hundreds of jobs. There have been more than 2,300 permanent job losses in the Ontario forest industry in the last three years, according to the OFIA.
In late September, the provincial government announced a five-year $330-million aid package to help the troubled industry respond to changing global markets, increasing competition from low-cost countries such as Russia and China, escalating fuel and electricity costs, and a rising Canadian dollar.
The plan includes a Forest Sector Prosperity Fund of $150 million over three years to encourage forestry companies to expand and modernize. The private sector will have to pay most of the costs of the projects, however.
"We basically think the $150 million could lever up to $1.2 billion in new investment," provincial Natural Resources Minister Dave Ramsay said when he made the announcement in Thunder Bay.
The forestry loan program is similar to the provincial government's $500-million package for the auto sector, which has generated billions in new investments from Ford and General Motors.
Premier Dalton McGuinty has admitted the package will not prevent more mill closures and layoffs, but says it is aimed at helping the province's forest companies be more competitive. "It's designed to help put the industry on a stronger footing going forward. It is not designed, because it would be impossible to do so, to protect all existing jobs," McGuinty says.
In June, the government announced it would provide up to $350 million in loan guarantees to stimulate investment.
Ontario's forest industry, the second largest after auto manufacturing, has annual sales of about $19 billion and provides direct and indirect employment for about 250,000 people, the OFIA says. It pays $2.5 billion annually in provincial, municipal and federal taxes and provincial stumpage fees.
Higher delivered wood costs and increasing energy costs are having a significant impact on forest products producers in Eastern Canada, where costs are 60 per cent higher than in Western Canada, according to Natural Resources Canada. The recent elimination of price protection on electricity rates in Ontario has boosted prices by more than 30 per cent.
The industry and dozens of Northern Ontario communities now hope an appeal to the government to reduce energy costs in the north may stem the tide of mill closures.
A final report in May from the Minister's Council on Forest Sector Competitiveness said the Ontario forest industry "is in crisis" and "urgent action is required to prevent predictable and irreversible consequences for communities, business and workers.”
The 17-member council was created last November by Ramsay.
The council report warns of the imminent closure of 12 mills in Northern Ontario and the loss of 7,500 direct jobs and more than 20,000 indirect jobs in northern and southern Ontario.
The pace of mill closures has been steady. In July, Abitibi Consolidated Inc. announced the permanent closure of one newsprint machine and the shutdown for an indefinite period of another. In September, Norampac Inc. announced the closure of its 150,000-tonne containerboard facility in Red Rock and the loss of up to 175 jobs.
On the eve of the announcement of the Ontario government's new aid package, Uniboard Canada Inc. announced the permanent closure of its New Liskeard operation, which will eliminate 73 jobs.
The plant's manufacturing unit costs were higher than the industry average, the company said in a news release.
The cost to deliver cut timber from the forest to mills in Ontario is $55 US per cubic metre, compared to $36 in Manitoba and $44 in B.C., Lim says. "That's a $20 gap."
The OFIA did not expect the government's package to close the $20 gap in one step, Lim says, but it was expecting it to bring costs below $50. Under the announced program, costs "dropped by a dollar," she adds.
For the Ontario forest industry to begin to recover, remain competitive and keep investment in the province, the cost of delivered wood must be reduced significantly, Lim says. "There may be some firms out there that can access the prosperity fund, but you still have at the end of the day the highest wood costs."
The OFIA was not alone in saying the government's aid package failed to address the situation.
"We're not happy with what they've done," says Norman Rivard, chair of the United Steelworkers of America IWA Council, which wanted timber-cutting rights tied to the northern communities and a review of mill closures.
"The package may help the companies. It doesn't do anything to help the Northern Ontario communities and keep jobs in the communities."
Ontario's Communications, Energy and Paperworkers Union called the government's package "pathetically anemic" and says it will do nothing to help the troubled industry.
Greenstone Mayor Michael Power, who is also head of the Northwestern Ontario Municipal Association, says the government "fell far short on reducing delivered wood costs," although the Prosperity Fund may help Greenstone get a proposed $300-million strand board plant.
"We are anxious to see the details of the minister's prosperity fund to learn what, if any, new opportunities might exist for this proposed plant. My goal for Greenstone is that we get this investment."
Greenstone is about 215 kilometres northeast of Thunder Bay.
The government's announcement did not include the 50-per-cent reduction in provincial fuel-tax credit for hauling wood from the forest to the mills, or return to the provincial government financial responsibility for primary road construction and maintenance, as the minister's council report had recommended.
"The government chose not to respond to that (the fuel-tax credit)," OFIA's Lim says. "It was really critical these be addressed because they go directly to reducing delivered wood costs.
"Plants in Ontario are closing not because the industry isn't modernized, but because it operates in one of the highest-cost jurisdictions in the world," Lim says. "Forest companies have already invested hundreds of millions of dollars in modernizing their plants in Northern Ontario."
Weyerhaeuser invested $350 million in a new plant in Kenora in 2002. Bowater Canadian Forest Products in the past few years invested hundreds of millions of dollars in Thunder Bay to build one of the world's most modern sawmills, Lim says.
"Companies seek out low-cost jurisdictions to operate in," Lim says. "That's just what they do."
Lim now hopes there will be an announcement later this month from the government on what it plans to do about high energy costs. "That's the other part of the puzzle."
The industry is asking the government to allow the creation of new supplies of lower-cost energy. The annual electricity costs for the Ontario forest industry are about $500 million and represent up to one-third of operating costs, the council's report says.
Manufacturing plants in Manitoba and Quebec have electricity costs 50 per cent less and 20 per cent less, respectively, according to the Association of Major Power Consumers of Ontario.
The Ontario mining industry has also asked the government to lower the price of electricity because it makes its products uncompetitive.
"I am disappointed, but not discouraged. This government certainly has shown willingness to listen and work with us, more than any other previous government in 20 years," Lim says.
"For the first time, the forest industry is on the radar screen at Queen's Park," she says.
- With files from The Canadian Pres
(Charles Wyatt can be reached at wyatt@businessedge.ca)
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