Fibre swap produces win-win-win
Nov. 21, 2014, Quesnel - In the BC Interior where West Fraser and Canfor made the surprising move of swapping tenures and closing a mill each in Quesnel and Houston, the dead pine is retreating from reasonably accessible regions and the AAC is going to shrink. In the heightened competitive market for logs, only the sawmills with the most efficient recovery rates will make it through the mid-term. Tolko's Questwood, a sawmill in Quesnel that doesn't fit the criteria, saw the writing on the wall.
At the same time, the provincial government was looking to give pellet producers access to the mountain pine beetle fibre they need as sawmills shut and the fibre basket gets increasingly strained. Pacific Bioenergy, a pellet mill based in nearby Prince George, was able to secure a forestry licence in the Quesnel Timber Supply Area that would change everything.
The pellet manufacturer signed a deal with a local First Nations band that has experience and equipment to do the logging, Nazko First Nation, and Tolko's Questwood sawmill where the logs would provide the necessary security to keep the mill in operation for at least another five years. Part of the deal was that they would build a merchandizing deck that would take wood that wasn't sawlog quality and chip them. These additional chips Tolko will produce for Pacific Bioenergy gives the pellet manufacturer much needed leverage when the fibre basket tightens further.
As fewer sawmills produce less of the residuals the pellet mill requires, Tolko has signed a back-up plan that has proven to be a win-win situation between Pacific Bioenergy, Tolko and Nazko First Nation. The biomass logs are piled high and most of the equipment has now been set up. It looks like this game-changing plan will be in operation in the coming weeks.
Updates, including a full feature, to come.