By the

YSC Forest Products Marketing Board

March , 2007

ENERGY SECTION

The report identifies six key areas for energy development. None of them have anything to do with using our own natural resources. The report points out that New Brunswick is not blessed with Alberta’s vast oil resources nor Quebec’s impressive hydro-electric power. What it does not point out is that New Brunswick does have significant bio-energy reserves contained within our seven million hectares of forest.

It is estimated that for every three tonnes of wood harvested from the province’s forests, there is another one tonne of bio-mass that can easily be recovered and converted into energy or other high-value products. Since the provincial harvest is roughly ten million tonnes annually, there are three million tonnes of energy fibre available. That is the equivalent of approximately three million barrels of oil.

To overlook this fantastic opportunity to diversify and develop our forest energy industry at a time when the potential of the new bio-economy is just emerging and being recognized by many jurisdictions is to look a gift horse in the mouth.

In the forestry section of the report, the value of this resource is off-handedly mentioned with a recommendation that “the government should consider giving forestry companies sole access to forest biomass to produce power”. If implemented, this short-sighted recommendation would lock up the resource and couple it to an already struggling industry, thus closing off other potentially more valuable options for that resource.

Using forest bio-mass in municipal co-heat and power facilities could make many communities energy self-sufficient, reduce green-house gases, and create a stimulus for the improved management of private woodlots. With a market for the low quality material from the forest, it would start to make economic sense once again to properly manage a woodlot.

In a presentation made at SylviCon, Jim Rechard, Business New Brunswick’s forest strategy advisor, identified three pillars of strength for the future of the forest industry. The first was panelized housing. The other two were to use our low-grade wood fibre (bio-mass) for making wood pellets, and to extract valuable wood chemicals from the lignin and hemi-cellulose of wood fibre in forest bio-refineries. Mr. Rechard’s vision for the forest industry offers a much more self-sufficient future than simply turning over the resource to our existing forest industry.

Typical logging slash available for bio-energy applications.

FORESTRY SECTION.

Turning to forestry, the Task Force makes several recommendations that we think are fundamentally counter to the self-sufficiency of woodlot owners, and if implemented, would make us more dependent on government largesse for our survival. One of them is particularly alarming.

That is the recommendation that “compensation should be provided to mill owners who voluntarily relinquish their wood allocation. This allocation would then be used to create a larger wood allotment for the remaining forestry companies.” This proposal is tantamount to bribing viable, going-concern businesses into going out of business so that they can be swallowed up by a bigger fish. Who are the remaining forestry companies who stand to gain from this scheme?

Of the 5.4 million cubic metres of spruce-fir softwood consumed by New Brunswick sawmills annually, Irving’s six sawmills account for 3.5 million (about 65%). Another 19% is used by Fraser Papers at its two sawmills, while the remaining 16% is used by the remaining 10 or 12 independent sawmills.

For the province’s 40,000 woodlot owners, those 10 or 12 mills represent 50% or more of our market. If they go, we go. We will be relegated to selling to one, or at best two companies. This is not a vision of self-sufficiency, this is our worst nightmare come true.

The question we need to be asking of these smaller sawmills is “what can we do to help you stay in business, provide jobs and make an economic contribution to your community, not offer them some money and suggest they close down their business.”

Irving’s Spruce-Fir Sawmills - 3.5 million cubic metres

Baker Brook	Acquired 2006 from Bowater, converted to pine, cedar
St. Leonard	Largest sawmill in the Maritimes
Deersdale	Uses less than 10% private wood
Grand Lake	Second largest Irving mill
Sussex	Probably slated for closure
Kedgewick	Acquired 2004 from Deniso-Lebel, closed more than open last three years. Almost 100% Crown wood

Fraser Paper’s Spruce-Fir Sawmills - 1.0 million cubic metres

Plaster Rock	Both mills have been closed almost as much as open for last 12 months
Juniper

Independent or Partly Independent Spruce-Fir Sawmills - 900,000 cubic metres.

Chaleur Sawmill	Belledune, 1/3 owned by Bowater.
Bathurst Lumber	Owned by UPM
Blackville Lumber	Owned by UPM
Newcastle Lumber	Downtown Miramichi
Delco	Rexton
Fawcett	Petitcodiac, long rumored to be 49% Irving owned, now reportedly 51%
Goguen Lumber	Saws hemlock and other materials too, Cocagne
Downey’s	Hillsborough, a true independent
Devon Lumber	Fredericton, a spruce/cedar mill, very well run
ML Wilkins	Fredericton
Crabbe Lumber	Bristol - another fine independent
Little’s	Pine and hemlock, acquired by Marwood, Harvey
NAFP	St. Quentin