Friday Offcuts – 29 January 2010
Clean energy project developers and climate change supporters were dealt another blow this week when U.S. Democrats lost their Senate supermajority, potentially killing a federal cap-and-trade scheme in the US for years to come. Any move after Copenhagen to stitch together any sort of international agreement (not a lot of faith is being put into the accord - a non-binding political agreement currently being worked on with nations asked to submit their goals to reduce planet-warming emissions by the end of this month) for reducing emissions just got a whole lot tougher. Related to global warming and the impact on forestry companies, in this week's issue we profile a new documentary (that can be viewed on-line), "Carbon Hunters" that comes out of Canada which looks at carbon trading that has grown out of the global warming crisis, we detail how New Zealand forest owners are now moving to sell last year's carbon credits as NZUs start to flow into owners' accounts and some of the uncertainty that's now surrounding Australia's forestry carbon offsets. Of course, we have the results from our short on-line Friday Offcuts poll on global warming that appeared in last week's issue. Although Copenhagen is now long dead in the water, the passion behind the issue certainly isn't. Check out this week's Letters to the Editor. The poll wasn't delving into the science behind whether global warming is "fact of fiction" but rather, the perception of the issue by our readers. In the recent NZ Herald on-line poll, almost one in five Kiwi's that responded said the concept was a giant con, and a further 28 per cent said global warming had not been conclusively proved. The forestry community is even more sceptical - or at least those responding to the Friday Offcuts poll this week were. A significant 35% of respondents said the concept was all a big con and another 25% said global warming had not been conclusively proved. Interestingly, only a third of readers responding to the poll thought global warming was either the planet's biggest challenge just at the moment or at least a serious problem. Subscribe a friend
This week we have for you:
Forest Products Commission looking to change direction
In a media release put out yesterday by the Minister for Forestry, Terry Redman, changes to the scope of activities carried out by the Forest Products Commission in Western Australia were announced.
Forest management resources now on-line
The independent two-yearly update of forest data collection, inventory and forest management planning tools out in the market place drew in around 200 forestry staff from throughout Australasia and North America. On the Technology showcase, some 300 presentations/papers have been added for use by forest products companies in this part of the world - making it one of the most up-to-date references on new and emerging forestry and wood products technologies on the web. For those wanting a full set of proceedings on the programme - or want to check out some of the images collected as part of the series, please visit www.foresttechevents.com. For ForestTECH 2010, plans are already underway at the moment on the November 2010 series which this year will be covering the other forest management themes; genetics and tree breeding, nursery technologies, land preparation, fertiliser and herbicide trials and application, plantation silviculture and fire fighting technologies.
New Zealand Log Prices - January 2010
For export log prices, in-market pricing for KS and KI logs have firmed US$1/JASm3 as some stability entered the markets through the recent holiday period. CFR rates for a KS and KI log are currently priced in at US$123/JASm3 and US$117/JASm3 respectively. For more detailed reports contact Agri-Fax at: www.agri-fax.co.nz/enquiries.cfm
Credit-rich foresters looking for buyers
New Zealand forest owners are moving to sell last year's carbon credits as NZUs start to flow into owners' accounts. Owners who have lodged claims for last year's credits started receiving their allocations this week. At least two significant forest owners - Malaysian-owned Ernslaw One and Dunedin City Council-owned City Forests - are preparing sales, and industry sources say that other forward deals have been done.
New US$22 million campaign to prevent forest fires
The Chilean Agriculture Ministry and the National Forestry Corporation has launched a new campaign that seeks to educate the Chilean population on how to avoid forest fires. According to the Agriculture Minister, Marigen Hornkohl, 99.9 percent of forest fires in Chile are caused by people. The Government, therefore, will be investing US$22 million in this new campaign, an 11,8 % increase in funds from last year's anti-forest fire campaign. Chile has suffered approximately 6,166 fires over the past 10 years, which have destroyed more than 44,551 hectares across the country.
World's largest pellet factory planned in U.S.
RWE Innogy is to build a factory to produce biomass pellets in the southern part of the U.S. state of Georgia. The plant will have an annual production capacity of 750,000 tonnes, making it the biggest and most modern of its type in the world, the company says. Around 1.5 million metric tonnes of fresh wood are needed each year to produce 750,000 tonnes of pellets.
Global carbon trade profiled in new documentary
""Carbon Hunters" is a new documentary by Vancouver Sun columnist Miro Cernetig about the carbon trade that has grown out of the global warming crisis. The film premiered on November 26, 2009 on CBC-TV. The promo for the show says that:
NZ's sawmilling consolidation nears completion
Closures accounted for around 25% of the total number of "industrial" sawmills operating in 2003. Particularly hard hit was the structural lumber sector, producing for the N.Z/Australian housing market; and mills focussed on cutting Mldg. & Btr. lumber for the USA. New Zealand's richest man, Graeme Hart (Rank Group) closed four structural sawmills; including one which he paid a lot of money for, just so he could immediately close it down. However, his moves have actually helped the sector remove a chronic lumber oversupply, and in 2010 have enabled him (and others) to force through the first decent lumber price increases in years. The USA Mldg. & Btr. lumber grade market became the sizzle market of the 1990s. Forest owners and sawmillers both expected dazzling returns from pruned logs, and from subsequent knot free lumber destined for the USA market. Alas the market has faded in both volume and price terms for almost a decade, and is unlikely to recover for many years, if ever. New Zealand exports of lumber to the USA have fallen from almost 550,000 cubic metres at its peak in 2002, to less than 170,000 cubic metres in 2009; a reduction of 70%. Imports into the USA are down almost 30% in 2009 alone. No wonder several sawmillers gave up the ghost on this market. In contrast to the 32 mill closures, there have been two new mills that have opened since 2003: one a tiny mill and one a large mill based on imported second hand equipment. Lumber markets have finally strengthened in early- 2010. If price increases stick, and the NZ FX behaves itself, perhaps this massive consolidation is nearing an end. Source: 2010 New Zealand Forest Products Industry Review, www.dana.co.nz
New biomass pellet plant being constructed in Australia
Plantation Energy Australia has announced it is constructing a AU$25 million wood pellet plant at Wandilo, near Mount Gambier in South Australia, with production expected to begin in March 2010. It is estimated that AU$40 million will be injected into the local economy annually. Approval for their second project (the first one is near Albany, WA) follows Plantation Energy signing a AU$70 million export agreement with Belgium's Electrabel with the aim of producing up to 500,000 tonnes of wood pellets per year at its South Australian plant.
Top 10 worst attempts at cutting down a tree
I don't know what it is about idiots and cutting down trees, but for some reason they never remember to expect the worst. I guess I should cut them some slack, though. Sometimes there are so many worst case scenarios, it's got to be impossible to remember them all. The tree could fall on you, on your house, on a neighbour's house, on your car, someone else's car. If you're climbing up the tree, you could fall out of it. The possibilities are endless, but that doesn't change the fact that only one of them is good. That one doesn't happen in any of these videos.
Uncertainty with Australia's forestry carbon offsets
Australia's forest industry is facing widespread regulatory uncertainty as the country's Greenhouse Friendly program moves toward expiration on 30 June. It's not clear whether Parliament will pass related programmes by that date, The Sydney Morning Herald has reported.
Methyl Bromide ban needed now
The NZ Council of Trade Unions is calling for the use of methyl bromide to be completely banned in New Zealand as evidence mounts that it puts worker health and safety at serious risk. Methyl bromide is used for the pre-export fumigation of logs.
Will US programme increase the supply of woody biomass?
As of 15 December, it had not yet been determined how much funding the program could have for 2010. So far, US$517 million has been allocated for the period 1 January through 31 March 31 2010. There have been loud protests from both North American and European forest industry organisations who are concerned that the BCAP program will unfairly favour US energy companies and that sawdust and wood chip costs will go up as the result of the programme. With the first payments from the government having been distributed in mid December, it is still too early to conclude how much the biomass energy subsidy will impact prices for wood chips, shavings, sawdust and hog fuel in the coming months. The BCAP programme is available for producers/sellers of biomass for a period of two years, and both the seller and the conversion facility have to apply to participate in the programme. As of 15 December 2009, 306 conversion facilities had qualified. At this point, it seems unlikely that the BCAP program will have anything near the impact that the black liquor tax credit has had (an estimated 8-9 billion dollars was transferred to the US pulp industry). It may very well be that in the end, the BCAP program will not add as much biomass to the market as was intended. In fact, most of the biomass supply that will enter the market in the coming years would likely have been available even without the subsidy. The only difference is that biomass consumer may benefit from lower fiber costs and suppliers will increase their profits from the sales of forest and agricultural residues. Source: Wood Resources International LLC, www.woodprices.com
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...and one to end the week on...the broken lawn mower
Marriage is a relationship in which one person is always right and the other is usually the husband. When our lawn mower broke and wouldn't run, my wife kept hinting to me that I should get it fixed. But somehow I always had something else to take care of first: the truck, the car, e-mail, fishing, always something more important to me. Finally she thought of a clever way to make her point. And on that note, have a great weekend. Cheers. We welcome comments and contributions on Friday Offcuts. For details on advertising for positions within the forest products industry or for products and services, either within the weekly newsletter or on this web page, please contact us.
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