Atlantic forestry industry’s future in biofuels

By John Morrissy
OTTAWA — The Atlantic region’s struggling forestry industry could reverse its fortunes by taking measures that would place it at the forefront of the renewable-energy economy, says a report Monday by PricewaterhouseCoopers.
“The region is now struggling to attract new investment and is facing the added challenges of high log and wage costs, weak markets and energy costs that are above average,” said Bruce McIntyre, leader of PwC’s forest, paper and packaging practice in Canada
“Without new investment, the business prospects for the region’s forest-products sector are bleak, with little room to improve energy efficiency, develop emerging technologies, or generate new sources of revenue,” McIntyre said in a report compiled by PwC and released Monday by the Atlantica Bioenergy Task Force.
Yet the industry could revitalize itself by making use of renewable forest supplies to produce biofuels, biochemicals and other products, said Thor Olesen, executive director of the task force, whose work focused on the forest products industry in New Brunswick, Nova Scotia and Maine.
The markets for such products are large and growing, presenting significant opportunities for forestry with new technologies that can extract the chemicals to produce ethanol from wood fibre and make plastics and wax materials, said Olesen.
U.S. demand for ethanol as a fuel supplement is destined to reach 35 billion gallons by 2015, of which only six to eight billion gallons can be produced from corn.
“Yet the capacity for forestry industry to produce large volumes of ethanol and green diesel, so to speak, is very real,” said Olesen, citing the fact that the necessary chemicals can be extracted 10 times more efficiently from wood than from grains.
The study’s renewable focus was mirrored in a recent request to Ottawa by the Forest Products Association of Canada recently to set up a $300-million bio-energy fund to develop and commercialize wood waste as an energy source.
The request was part of a broader search for assistance for an industry that has seen 207 mill closings and 38,000 layoffs across the country in the past five years as a soaring Canadian dollar and collapsing U.S. housing industry took their toll.
“Renewables have great potential for forestry, but there is limited participation at this point,” said Olesen.
He said it will take co-ordinated efforts on the part of government and industry to move such initiatives ahead.
The industry produces revenues of $5.4 billion annually in the four Atlantic provinces, where it employs 28,500 people, according to the forest products association. Nationally, it employs 300,000 and accounts for two per cent of Canada’s economic output and 12 per cent of national manufacturing activity. Source: Vancouver Sun.