Tenure Trouble

Reliable fibre supply is the most important factor in any biomass operation, whether the fibre is used for combustion or further fashioning into value-added products. When British Columbia’s provincial government announced that it would be making some bioenergy tenures and licences available for the power sector, other biomass users were stunned. They’re uncertain how this move will affect their businesses and their access to the fibre they need.

Who gets to use the mountain pine beetle killed fibre?  Photo: Tony Sauder, FPInnovations

A mountain pine beetle infestation is killing many of British Columbia’s pine trees, and their quality and harvestability are deteriorating over time. Naturally, the provincial government does not want the trees to be wasted. With help from BC Hydro, the province is turning the beetle-killed timber into clean energy to power the grid. This solution was introduced through the BC Bioenergy Strategy, an important element of the BC Energy Plan, which was implemented in 2007 to reduce the province’s carbon footprint.

In the midst of these plans, other important industries seem inexplicably to have been forgotten. The wood pellet industry, in particular, has limited access to government-controlled timber under the province’s tenure allocation system, but had hoped to use the beetle-killed fibre as feedstock for pellet production. However, under the Bioenergy Strategy, the fibre will only be allocated to those who will use it to create energy to sell to BC Hydro. The unsettling thing is that there has been little explanation for this, leaving Gordon Murray, executive director of the Wood Pellet Association of Canada (WPAC), wondering why the wood pellet industry has been overlooked.

“All of our producers have put millions of dollars out building these new [pellet] plants, and we’re relying on that mountain pine beetle killed timber. Without consulting us, the government has decided that this timber should be made available for power production for BC Hydro,” he says.

Murray says that a provision in British Columbia’s Forest Act allows the government to award timber directly to those with a bioenergy licence. The pellet producers are excluded from this, and no one knows why.

“On the surface, it seems very unfair,” he says. 

He explains that the Ministry of Forests and Range and WPAC have a good working relationship, noting that the Honourable Pat Bell, minister of forests and range, has been a good friend to the WPAC. But in their few brief conversations, Murray hasn’t been given many answers. He was told that, in evaluating proposals from the power companies, the government will not approve any proposal that will interfere with existing manufacturing operations such as pellet plants. While the WPAC is happy to hear this, it’s not quite enough to satisfy them.

“We’ve had no proof of that yet; we need some stronger assurance. We think we should at least be on an equal footing with those power companies,” he says.

After several unsuccessful attempts to contact Minister Bell, Canadian Biomass was able to get a few statements via e-mail from Cheekwan Ho, a ministry spokesperson. With regards to the actions the provincial government is taking to avoid hurting the existing industries, Ho said, “The interests of existing industries are being protected wherever possible. For example, BC Hydro’s Phase II Bioenergy Call will focus where bioenergy fibre is most widely available, and there is little or no competition with existing pulp mills and OSB (oriented strand board) plants.” However, regarding the location of power plants and whether that will hinder or support existing biomass users, Ho says, “BC Hydro is seeking financially, technically, and operationally viable proposals from proponents capable of cost-effective, reliable, long-term supplies of biomass electricity from ‘greenfield’ projects. Determining the location of the proposed plant is the responsibility of the project proponent.”

Quite confusing, however, was the response received when questioned why the pellet industry is not on an equal footing with power generators and district heating sectors when it comes to receiving biomass. Ho did not directly answer the question, but stated:

“We’re committed to a healthy and sustainable bioenergy industry for British Columbia. This means all aspects of bioenergy – including wood pellets and district heating. B.C.’s pellet industry [is] a productive and quickly growing industry. British Columbia produced about one million tons of pellets in 2009 and is on track to produce about 1.1 million tons in 2010.  Practically non-existent a decade ago, it now contributes about $185 million annually to the provincial economy.”

These facts are great, but without any straight answers from the government, future options for the wood pellet industry in British Columbia are uncertain. Murray is worried about the investments made in an industry that’s having fibre taken from its basket.

“Somebody has determined that power has a higher value than any other use of biomass,” Murray says. Besides generating power from the damaged fibre, pulp chips and pellets can be made from it. Although he can’t speak for pulp and paper companies, he’s fairly certain they want access to the fibre as well.

“We [wood pellet producers] rely on sawdust and planer shavings from the sawmills as well as harvest residuals and waste for our fibre. The pulp mills rely on the sawmills because they make wood chips,” Murray says. “It all comes full circle. We all need each other, and there should be a way to work the power producers in as well. You don’t want to be sacrificing one industry to promote another. Naturally, we’re concerned.”