VANCOUVER - As the mountain pine beetle munches a devastating path through B.C. forests, another blow for the down and out forestry industry, governments and corporations are working on better ways to use the dead wood in everything from furniture to energy production.
West Fraser Timber Co. Ltd. (TSX:WFT) and Epcor Utilities said recently they are contemplating building a power plant near Houston, B.C. that could be fuelled by pine-beetle-killed wood.
Pinnacle Pellet Inc. is one of a handful of private B.C. companies that has started turning shavings from beetle-affected wood into pellet fuel, a practice that is popular in Europe and gaining recognition in North America.
The University of Northern British Columbia has received government funding for a pilot project comparing beetle-wood pellets to natural gas for fuel in terms of cost, productivity and emissions. Researchers are also studying more X-ray style methods of looking inside the wood to find other uses.
"There are a lot of creative people out there right now trying to come up with ways to salvage the value of that wood,'' said Bruce McIntyre, who leads the forest, paper and packaging practice at consulting firm PricewaterhouseCoopers.
McIntyre said while there are economic reasons for using wood killed by the mountain pine beetle outbreak _ for companies and the communities they support _ harvesting it also helps with reforestation and improving safety for loggers.
"There are a lot of reasons why you would want to utilize it,'' he said.
The recent mountain pine beetle outbreak is the largest infestation in the recorded history of North America, having killed millions of acres of lodgepole pine, B.C.'s most commercially harvested tree.
The beetle has always been there, but consecutive mild winters and drought-like summers have caused it to spread.
Ottawa estimates that about 50 per cent of the mature pine is dead, a figure that will grow to 80 per cent by 2013. While B.C. has been the hardest hit, the beetle is also a threat to Alberta's lodgepole pine forests and jackpine stands of Canada's northern boreal forest.
The low price of lumber is already a problem in the forestry business due to oversupply from the slumping U.S. housing sector. Add a soaring Canadian dollar and taxes that have hit the bottom line of all forestry companies, and it's no surprise millions of dollars are being spent on ways to try to squeeze maximum value out of the dead wood.
Beetles attack pine trees by laying eggs under the bark, which when hatched cut off the tree's supply of nutrients. They also carry a fungus that causes dehydration and stains the wood blue or grey.
Experts say the discolouration doesn't impact the structure of the wood and if harvested on time, it can retain much of its original value.
West Fraser's proposed project with Epcor would see sawmill waste and low-grade beetle-killed wood developed for energy production.
The project would meet a BC Hydro's request for production from bio-energy projects and follows the provincial bioenergy strategy that targets small projects that can turn wood waste into energy.
For West Fraser, the deal is attractive because it operates sawmills and holds timber tenures in the Houston, B.C. area, while Epcor operates one of North America's largest biomass power plants, in nearby Williams Lake.
West Fraser also recently opened a new sawmill in Quesnel, B.C. equipped with X-ray technology that can help efficiently process beetle-killed wood.
Forestry Innovation Investment, a B.C. government agency that supports the forest sector, has spent nearly $6 million to research to develop new markets and products from beetle-killed wood.
It has launched dozens of projects focused on improving the quality of beetle-affected wood, as well as improving manufacturing methods and increasing mill efficiency.
Robert Parisotto, director of the agency's mountain pine beetle program, said there are many potential uses for the beetle wood.
"I don't know that there is going to be that one home run, but I think there will be a lot of singles that will be employed to allow us to make better use of it,'' Parisotto said.
Ottawa has promised to invest more than $33 million on projects that support economic growth, job creation and future sustainability of communities adversely affected by the beetle infestation.
Avrim Lazar, president and chief executive of the Forest Products Association of Canada, said while the government has been making "very good first steps'' on trying to find early economic uses for pine beetle wood, "it's very clear a bit more has to be done.''
As new projects move ahead, Lazar said there has to be a level playing field for both traditional and new users of the dead wood.
There is some concern in the industry that, with environmental projects currently in the spotlight, bioenergy projects could be favoured over traditional pulp ones. The result could mean the chip supply will be monopolized by bioenergy projects, creating an imbalance.
"The balance between making sure the wood is accessible for traditional uses and ensuring it is available for new uses, such as biofuel, has to be carefully considered,'' Lazar said.
"It has to be even for all.''
