Ontario's changing biomass landscape: an interview with MNR Minister Cansfield, and industry representative.(BIOMASS)(Interview)

Through the partnering of the province of Ontario, its Forest Industry, and our First Nations; the future of forestry in Ontario is a forever changing landscape. This partnering future will include a new market for the province's forest resources, that being biomass and the resulting bio-fibre, and the timing of this new opportunity cannot come fast enough as the forest industry struggles with an unprecedented down cycle and the province seeks new power alternatives. The Minister of Natural Resources explains the province's approach to this new opportunity and an industry representative seeks answers to his questions as you will read in this article on biomass.

Historically forestry in Ontario consisted of trees harvested for specific primary products such as pulp, paper or building products. The remaining portions of the tree and any associated under-utilized species would be left behind, which many felt was an opportunity in-waiting. Now, through the vision of the province, combined with an increased interest in alternative value-added products, non-timber forest products, and the increasing demand for alternative energy we are seeing a movement towards new opportunities, such as biomass and bio-fibre.

Ministry of Natural Resources (MNR) Minister Donna Cansfield explained in an exclusive interview regarding biomass, that she "sees a bright future in a diversified forest industry that will not concentrate solely on primary products, but rather include alternative biomass fuels, chemicals and at the same time with the inclusion of our First Nation's people, so they can contribute their sustainable development ideas".

The province is helping to move this transformation forward with a number of new initiatives, one being their recently announced new wood fibre allocation opportunity, "Request for Expression of Interest" (RFEI) for under-utilized Crown wood fibre and traditionally undesired species that exist in our Forests. "Stage 1 of this RFEI was just completed and it is expected the process will see businesses acquiring these new wood fibre allocations by the fall. The response to the RFEI was overwhelming with over 130 proposals with a 50/50 split between biomass and bio-fibres, and value-added forest products, Cansfield explained.

This is a new opportunity for Ontario where we have traditionally viewed the forest opportunity for building materials only. It is far more prudent to capture the opportunities that exist elsewhere in the world; otherwise we will be left behind, Cansfield added.

For this to work smoothly, Cansfield said the Ontario Power Authority (OPA) and the MNR must coordinate their activities. It is why the ministry released the RFEI in conjunction with the new Green Energy Act, another new provincial initiative.

"It was not by coincidence."

Denis Magne, EKT 90 Inc's vice president of a Thunder Bay based biomass engineering firm wondered what the limit on the wood fibre supply will be to match the new interest.

"The MNR is developing a new inventory for biomass and bio-fibre," she said.

" As we have not previously looked at this new opportunity, the inventory will be achieved through a collective approach of known harvesting data and opening nup the forest tenure to these new firms. A new forest tenure system will be following these announcements to take us into the future," Cansfield added.

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With the rush to jump at these new opportunities stakeholders were interested to latch on to any data to determine the economic feasibility of processing trees and slash for conversion to products such as power. It so happens the MNR has completed research into the economics and referred to a University of Calgary study that outlined the unique opportunities presented to northern Ontario.

"Through our transportation networks such as rail and the H20 highway option, with our Great Lakes waterways, we have economical methods for a biomass supply route to the US Midwest. Transportation is a cost factor that forces us to look at alternative methods to market our new products," Canfield explained.

Cansfield went on to say how Northern Ontarians will have to begin to think differently.

"Look at the abandoned farmland around North Bay for an example; it is a prime location to grow new bio-fibre crops. They have a historical agriculture presence and can make this easy transition to these new value-added opportunities," she added.

The new Green Energy Act is an associated dramatic change for the province that can help the forest industry. Magne and his firm are well-versed in biomass to power conversions. He stated that this new Act "provides the right to citizens of Ontario to create power and the province will consume it."

"This is such a change for the province," Magne added, and he could only see positives coming from this change of direction. How this will all play out remains to be seen and Magne has a number of unanswered questions, such as "What will the rate paid to the generator be for biomass conversion, what about the carbon credits that are offset by converting biomass?" He pointed out that the negotiated rate has to provide an incentive to "the operator to consider spending $50 million to build the infrastructure to generate power. Once you sign a contract, Magne explained, you have to produce, so there has to be an incentive for the generator to live with this risk. The same he explained with the carbon credits," this is a whole new way of thinking, the carbon credits are valuable to the generator."

Magne said that a forest product facility that cannot create power for sale will not fit the new model.

"The new model sees the forest product as a by-product to power. Power does not have the cycles of traditional forest products," he added.

Change create questions, and only time will tell whether the province of Ontario, and its forest industry is ready to embrace these changes. "We need to diversify the forest industry," Cansfield explained and it now appears that the province is providing the necessary tools for this transformation.

By MIKE SHUSTERMAN

For Northern Ontario Business