In the midst of mills being idled, pink slips issued, and companies filing for bankruptcy, there remains clear potential for the emerging bio-economy in Northwestern Ontario as long as the primary industry can hold on and remain functioning.
At the Northwestern Ontario Municipal Association conference held here last week, Steve Watson, forestry manager for AbitibiBowater Ontario Wood Products—Thunder Bay, and communications co-ordinator Sue Prodniuk explained there are opportunities for new ways to keep the forestry industry alive through product diversification.
Prodniuk said Northern Ontario has experienced an economic downturn, with 11,000 job losses in the forestry sector alone, many mills being idled indefinitely, and communities looking for economic solutions.
While some are looking at the bio-economy and value-added products as the “new panacea” to correct the economic downturn, and wondering if the biofibre economy is the “new gold rush,” she warned the reality of the situation is there are major factors in play, including:
•there are significant upfront costs and resources to access fibre in Ontario (e.g., a forest management plan costs $1 million and takes 36 months to complete);
•there is increasing pressure from environmental groups for additional parks and protected areas;
•forest companies have to be competitive on a global scale, and Ontario’s forest are relatively slow-growing and low volume compared with jurisdictions like British Columbia and South America;
•forestry operations are spread out and hauling costs are high; and
•labour inputs and energy costs are high, and integrated operations that can generate their own power (like the Fort Frances mill with its biomass boiler) have a greater chance of success.
That said, there are opportunities for diversification if the forestry industry here can stay alive long enough.
“For us to move forward and bring this new economy to fruition, we need to have the primary industry still in existence and functioning,” Watson stressed.
“It’s a critical component.”
He added that in order to be truly competitive in the global economy, the industry has to take full advantage of the resources available in the forest, such as tree tops, branches, and hardwood species like birch and poplar.
As well, there needs to be greater diversity in the products that are generated from our forests.
“Biofuels and pellets are where we are moving, where the opportunities are right now, but if you really want to grow your bio-economy, there are other opportunities we are going to need to take advantage of—co-generation, the combustion of black liquor from kraft mills, and also the creation of biochemicals,” Watson noted.
Another example is door panels made from sawdust, polymers, and biochemicals.
“It’s a technology that’s almost within our grasp right now,” Watson said. “What we’re grappling with right now is how to do it on a production basis.
“The main point I am trying to make here is the forest is a renewable resource we have available to us right now,” Watson continued. “And depending on how we take those resources and process them, we’re going to end up with a variety of products that can be generated from them.
“The more processes that we have in place, the wider the range of products that can be generated and the more diversity we’ll have in our economy,” he remarked.
Watson said in order for the new bio-economy to flourish, it requires a predictable and cost-effective supply of fibre, competitive power rates or self-sufficient energy generation, and a regional approach to developing a collaborative, integrated approach in the use of forest resources.
He noted that although there “is a lot of turmoil” right now in the region, in the long-term Northwestern Ontario “has all the key ingredients” to succeed, including the infrastructure to move the product, the existing industry and expertise, and forest resources.
But Watson stressed all levels of government have to come together and develop a collaborative, regional approach to develop the bio-economy, adding, “If we are all trying to do it ourselves, our chances of success are going to diminish.”
He concluded that the primary industry has to remain in place “as a solid foundation for growth,” and “there has to be an industry-friendly environment to attract new businesses and positive public policies to support that.”