Atlantic Forestry September 2018

Dispatches from B.C.

by David Palmer
It was just two years ago that we sold my father’s house in Victoria and moved Dad to Fredericton so we could be near him in his final months. Now we are back in B.C., carrying his ashes home for interment in the family plot at St. Peter’s Church, near Duncan. Family and friends gather to say good-bye to a kind man with a consuming interest in life, a sharp wit, and a constant smile. We extend the bittersweet trip with visits to family in Cumberland, Kamloops, Chilliwack, Revelstoke, and Calgary – exploring places we’ve not seen before, and as always, keeping an ear open for an interesting forestry story.
A smoky haze envelops the mountains rimming Howe Sound; it’s hot enough in Lillooet to fry an egg on the sidewalk; a lightning strike starts a new fire on the mountainside just outside of Revelstoke; eerie amber charcoal smoke hangs over Banff and closes down Highway 93 between Lake Louise and Radium Hot Springs; and helicopters take off with buckets of water to drop on a roadside fire near Hedley that started from a chip truck. Other than that, it’s business as usual in Lotus Land – or perhaps vacation as usual, as everyone seems to be on holiday. The campgrounds, highways, hotels, trails, and parking lots are plugged, and a burning ban doesn’t keep people out of the beloved woods.

With much of the Mountain pine beetle (Dendroctonus ponderosae) infestation behind them, B.C. forestry communities and their fibre-dependent industries are taking stock, adjusting to reduced harvest volumes, and facing a new threat to the woods. It is estimated that the Mountain pine beetle (MPB) killed 50 percent of the total volume of B.C.’s commercial Lodgepole pine, a staple tree for interior sawmills. Now the Spruce beetle (Dendroctonus rufipennis) is taking a heavy toll. Centred in MacKenzie, north of Prince George, this infestation has affected 340,000 hectares, more than 45 times the pre-outbreak level of 2013.
To account for the reduced timber supply caused by MPB, Annual Allowable Cuts (AAC) are being reduced. In 2016 the AAC for the Merritt Timber Supply Area was reduced from 2.4 million cubic metres to 1.5 million, and in 2021 it will fall to 1.2 million. That was enough of a drop to prompt Tolko Forest Industries to close its Nicola Valley sawmill.
In the hard-hit Quesnel Timber Supply Area, the AAC was slashed from 4 million cubic metres to 1.6 million in 2017. That’s a lot of wood, especially when one considers that the Crown softwood AAC for the entire province of New Brunswick is only 4 million cubic metres, a volume that manages to keep 12 major mills operating, at least in part. Still, with a total provincial AAC of 72.5 million, the impact of the MPB in B.C. may not be as bad as originally feared. Although the insect chomped through a lot of forest – especially in the north central region – it was surprising to see relatively healthy Lodgepole pine forests in the Similkameen Valley.
In recent years, fires have taken a heavy toll on B.C.’s timber supply. The fires in 2017 consumed the equivalent of an entire year’s worth of AAC. Think about that number for a minute: roughly 70 million cubic metres of wood, wiped out in one year. That’s nearly 20 years’ supply of Crown softwood timber in New Brunswick!

Despite fires and beetles, a few B.C. companies are showing confidence in the future by making mill upgrades. Weyerhaeuser, for instance, has committed to a multi-year modernization project that will boost production from 225 to 300 million board feet at its Princeton sawmill. But investments like that are the exception. Given the dim outlook for B.C.’s timber supply, and attracted by a tariff-free environment and bounteous supplies of unregulated private timber, the real money is going to the southeastern U.S., where B.C.’s big three – Canfor, Interfor, and West Fraser – already own 46 sawmills, with more, including brand new “greenfield” mills, in the works.
While munching fish tacos and waiting for our flight home at the Vancouver airport, we land a table next to the project manager for one of these new mills, a friendly Newfoundlander named Phil from Twillingate, the iceberg capital of the world. Phil works for Nechako Mechanical in Vanderhoof, B.C., a community of 4,500, west of Prince George. Nechako is a partner in Prince George-based BID, which acquired controlling interest in Quebec-based sawmill manufacturer Comact in 2013. (Walk into any sawmill, and you’ll see a piece of Comact equipment at work.)
Phil has a big job on his hands. He is responsible for delivering a brand new 200-million-board-foot sawmill on budget and on time, in Urania, Louisiana. The joint-venture partners in this project are Tolko Forest Industries, headquartered in Vernon, B.C., and Hunt Forest Products, of Louisiana. The state-of-the-art plant, costing about $115 million and slated for completion by the end of 2018, will draw Southern yellow pine from a 90-mile radius, most of it grown on privately owned timberlands with a 20-year rotation.
“The 20-year rotation corresponds nicely to that of a sawmill,” commented Phil. “The only problem with Southern yellow pine is that it’s so damn heavy you’ve got to build everything with much more steel, and you can only dry the wood to 20 percent. Any drier than that, and it simply won’t take a nail.”
As project manager, Phil is responsible for holding together a team of 150-200 people, many of them drawn from the Mexican labour force, since good American workers are hard to find.
This is Tolko’s first venture into the U.S., but the company is certainly not alone. Canfor is building a 275-million-board-foot mill in Washington, Georgia. Rex Lumber is putting up a 240-million-board-foot mill in Alabama. Interfor is undertaking upgrades at two mills it owns in Georgia and Arkansas, while also considering a greenfield mill. Georgia Pacific is embarking on its third new sawmill in the region, a whopper churning out 300 million board feet a year in Albany, Georgia. After acquiring six sawmills in Florida and Georgia with its purchase of Gilman Forest Products in 2016, West Fraser vaulted to number-one North American lumber producer, and is undertaking a $33 million expansion at its mill in Newberry, South Carolina.
With all the new mills and expansions, things are getting downright congested in the South, but it wouldn’t come as a surprise if our own J.D. Irving had sawmill plans in the region, especially with the company’s new tissue mill under construction in Georgia. However, always strategic and never one to join a crowd, JDI may have other plans.
As for the robust lumber market currently in play, Phil reckons it’ll last another 10 years. That’s a long time for any commodity. Maybe he figures that since the market was down for 10 years, it might be up for 10. That’s probably not a safe bet.