Natural Resources Committee on Nov. 29th, 2017

[Gordon Murray]

Location is certainly an important issue, because wood pellets are a commodity product and a low-value product. We can't pay a lot for the feedstock, so we can't transport it very far.

We can certainly incorporate cedar into the feedstock. You probably know that cedar bark is a bit challenging to handle because it's stringy and it's hard to process through equipment. Generally speaking, we prefer to use the white wood or wood fibre, as opposed to the bark. You can use a limited amount of bark in the pellets, but the more bark you use, the more ash content you get, and the customers like to keep the ash minimized.

Generally what we'll do is take the bark in and use it for the process heat. We'll run the bark into a boiler and then use the heat from the boiler to run the dryer, and then the dryer will dry the pellet fibre. We'll use the wood fibre to make the pellets and the bark to create the energy. We can use anything.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Right. Okay.

You state that using wood pellets decreases greenhouse gas emissions as compared with coal. I am wondering how that calculation is made. Is that just the whole process calculation, or does it have to include the forestry end of things?

[Gordon Murray]

A biogenic carbon, carbon that's grown on the surface of the earth, is recycled through photosynthesis. When it's combusted, it turns into carbon dioxide, which is reuptaken through plants' photosynthesis. It's circular.

Without taking the processing into account, terrestrial biomass—as opposed to coal, which takes millions of years to sequester—is carbon neutral, except you have to take into account that you're using some fossil fuels during the processing. That's when you're driving your skidder out to drag the trees in or you're transporting your pellets to market. We track the greenhouse gas balance throughout the whole supply chain, from the stump through to the power plants. By our calculations, which are audited by third parties and have to be reported to governments, we're about 90% better than coal would be, on average.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thanks.

[The Chair, Liberal, James Maloney]

Ms. Ng, we'll go over to you.

[Mary Ng, Liberal, Markham—Thornhill, ON]

Thank you so very much for all of your testimonies.

I am going to start with Mr. Kariya.

We had heard here at committee about an issue around secondary producers. While it is growing and there are certainly opportunities for development and continuous marketplace growth for the secondary market, and you've talked about that, there is some issue around connecting to the primary sector and having a healthy primary sector. You've talked a bit about the work that you and your nations are doing around the preservation and regeneration of the forest. Can you talk to us a bit more about that on the supply side and what some of those strategies are for a healthy supply?

[Paul Kariya]

As we all know, the natural resources economy is what British Columbia has been built on. It was furs, fish, trees, minerals, and so forth.

On the forest side, tenuring and how tenures have been issued have been the dominant feature on the landscape, and remain so. Through the negotiations in the Great Bear, it was first nations who led the charge to say we're concerned about sustainability. We're not anti-forestry; we are anti-forestry at the level of cut that's going on, and the cut in some of the sacred areas and other places that are important to other species that rely upon the forest. As a result, there has been a very extensive land use process, working with government and industry. Industry might have been unwilling to do this in the beginning, but to be fair to them today, they're at the table and there's a proper process.

What it meant very much was that the annual allowable cut was reduced. That has an impact on jobs and productivity as we would measure it economically, but on the benefit side, I think it has helped to restore certain watersheds. It has brought back the opportunity for other activities on the landscape. It certainly has permitted first nations to exercise more of the gathering of their medicines and so on. I think we've come to a place where we're probably not perfect yet, and further planning and further dialogue need to occur on where certain areas need to be protected, where we go with sustainability of certain animal species, and that sort of thing. All of that's data driven, and our members are certainly collecting that data.

A great uncertainty is in terms of the changing climate. Greater uncertainty is where the terrestrial impacts the oceans. As the warming oceans become less productive in some areas and more productive in others, there is a linkage; they're not isolated from the forest and so on. I and our members think we should approach this in a precautionary way, and we have stewardship directors in each of the communities.

I think the protection of the environment is first. Second comes any kind of infrastructure development, and third comes economic development. Gosh, these communities are starved for jobs and need an economy, but I think they'd put the primacy of the environment first. They have their priorities correct on that front.

[Mary Ng, Liberal, Markham—Thornhill, ON]

Thank you for that. It links a little bit to the Wood Pellet Association, hearing some of the opportunity to be able to convert from coal to wood pellets, and that conversion is sustainable, it's helping our environment, and at the same time it's creating opportunities in economic development.

Do you see an ability for that kind of connection with aboriginal communities, and therefore greater collaboration? This is to the Wood Pellet Association, please.

[Gordon Murray]

Absolutely. We've had some real successes working with aboriginal communities. In fact, one of the largest pellet plants in British Columbia is located in Houston and is a three-way joint venture among Canfor, Pinnacle—which is the largest pellet producer—and the Moricetown Band. Pacific BioEnergy also has a very large plant in the Prince George area that's partnered with Sumitomo from Japan and the Nazko First Nation that is west of Quesnel. There are a number of forest licences that we're accessing fibre from that are first nations-owned. There's very close collaboration between our industry and first nations for sure.

[Mary Ng, Liberal, Markham—Thornhill, ON]

If you were to give advice to this committee as we're studying secondary products from forestry, what can the federal government do to assist in a greater acceleration of this sector that will be beneficial and respectful of government-to-government relations, to the first nations communities, and to industry, while developing this sector and doing it in a sustainable way? What can we do as a government?

I know you talked about the helpfulness of the NRCan programs, but what else could we do?

[Gordon Murray]

Well, we've watched the pan-Canadian climate framework. In there is a lot of stuff that's very exciting to us, such as decarbonizing remote communities. We think using wood pellets is going to be a good answer there.

It was just in September that Minister Carr and the Canadian Council of Forest Ministers came out with “A Forest Bioeconomy Framework for Canada”. I guess we look at those measures as works in progress. The intentions are there and we like the direction, but we haven't necessarily seen the regulatory support behind it. We're watching Canada's new clean fuel standard that is still under development, which we think will be beneficial. We like what Canada is doing with pricing carbon in the provinces, with the export support.

Quite frankly, we're pretty happy with the direction that government is going. If anything, I guess we'd just say to go faster—

[The Chair, Liberal, James Maloney]

Which is what we're going to have to do here, unfortunately. I'm sorry about that.

Go ahead, Mr. Schmale, for five minutes.

I understand, Ms. Yan, that you have to leave to catch a flight. Do you?

[Ning Yan]

Yes.

[The Chair, Liberal, James Maloney]

Okay If you want to take the opportunity to extricate yourself from here right now, it would probably be a good time.

Thank you very much for joining us today. We very much appreciate your contribution.

[Ning Yan]

Sure. Thank you.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Thank you, Chair. Thank you, gentlemen.

Mr. Murray, with regard to your comment on government going faster, I think everyone yells that from time to time. I think “Get out of the way” is the other one.

I was going to ask Ms. Yan this question, but I know she is just leaving, so I'll leave it up to you two. I don't know who would be better to answer, so feel free. It was more to her comments, but both of you alluded to getting people into the lumber industry, and I expand this to the skilled trades as well: how can we help to get you the workforce that you and your industry need?

Mr. Kariya, do you want to start?

[Paul Kariya]

Sure.

We have a strategy. Our communities are located in very remote areas. Half of the communities are still on diesel and half of the communities don't have road access. We've done modelling of what jobs we need between now and the year 2038. A good chunk of those jobs are going to come from the fish sector. These are fishing people, and we have to begin there. Secondarily, forestry can play a role, both traditional forestry and value-added.

However, both fisheries and forestry are not areas with potential for high growth. We know that public administration—band administration, if you will—is going to be a big part of this, and we need to train people that way.

One very important area in that public service is stewardship. Stewardship is a broad word; however, taking over responsibility on a governmental basis for the Great Bear Rainforest requires that we have people who are enforcers and have delegated authority, as well as compliance officers to gather information and collect baseline data on what is happening with returning salmon or not, what is happening in the forest, and collecting information on animals. It's an indirect response to being stewards and keepers of the land. People are going to need to be trained, and I think our people recognize that.

We've initiated a curriculum with Vancouver Island University on stewardship. We've had three years of delivering it. These are university credit courses. We need more of that activity. We need help in capacity development. It's not to focus just on one sector; we're trying hard to be a diverse economy and be diversified on the landscape, lighter on the landscape, to provide the wherewithal for human well-being.

The government's help in terms of the relationship is very much appreciated. We applaud the Liberal government for starting the relationship. We need to continue with that. We need funding and we need government-to-government planning across ministries, not just one or two.

I'm very excited about what we're doing in fisheries, what we're starting to do in oceans, and what we need to do in government relations and capacity training, and so forth.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Mr. Murray, would you comment?

[Gordon Murray]

Our greatest need has been in the area of skilled trades, such as millwrights, electricians, and certified equipment operators. Fortunately for us, we locate a lot of our plants in small communities. The employment in the pulp and paper sector and the sawmill sector has declined in recent years, so we have not really had much trouble finding the kind of skilled people we need.

There have been initiatives at the provincial level to improve local employment. Quite frankly, it just hasn't been an issue for us.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Okay. That's all I have. I don't know if Ted or Shannon has anything.

[The Chair, Liberal, James Maloney]

Mr. Arseneault, you are going to split your five-minute segment, I believe.

[René Arseneault, Liberal, Madawaska—Restigouche, NB]

Thank you, Mr. Chair.

I'd just like to take a quick second to say something. I'm not a standing member of the committee. I'm filling in for my friend Marc Serré, whose father passed away. I'm sure the committee joins me in sending the entire Serré family our condolences.

My first question is for Mr. Murray.

I represent the Madawaska—Restigouche riding, in New Brunswick. The forestry sector is the economic heart and lungs of my entire riding. When you talk about wood pellets and other forest products, I hear you loud and clear.

We hear a lot about wood pellets for domestic use, among other things. Efforts are being made to repurpose coal power plants to use wood pellets for heating. I'd just like to let you know that, in New Brunswick, the government is running a pilot project. A hospital is being heated using strictly wood pellets, in order to compare the institution's costs and savings. It's at the Grand Falls General Hospital, in my colleague T.J. Harvey's riding.

I'm going to play the devil's advocate for a minute. An inventor in my riding has a technology that can dry biomass without an external heat source, in other words, without diesel or wood chips to remove moisture; I saw it in action. The result is significant. The dried biomass powder generates so many kilojoules that pulp and paper boilers wouldn't be able to keep up. The biomass-drying process uses friction, but they are electric motors. No external components are necessary, neither motor nor diesel. Nothing else is involved.

A few months ago, European scientists talked to the committee about biomass torrefaction, which creates an even more efficient powder that perfectly meets the needs of most European plants. One of the scientists was from the Netherlands, if my memory serves me correctly.

I'm playing the devil's advocate here. Although I love wood pellets, aren't they a bit outdated? Can't we do better with our biomass?

[Gordon Murray]

The first thing I have to say is that New Brunswick has more pellet boilers.... I think at last count there were 30 boilers like the one at the hospital that you mentioned. They are in hospitals, schools, churches, and government office buildings. New Brunswick has been a real leader in that way.

We're holding a forum in Fredericton at the Crowne Plaza Lord Beaverbrook Hotel on December 12, and at last count I think we have five government ministers coming. That's been a bright spot for our industry.

I have to plead ignorance on this friction drying that you're talking about. This is the first I've heard of it.

On the torrefaction, you're drying fibre in a low-oxygen environment and creating a product that has a little higher energy density than wood pellets. It's essentially a pellet, but it's a more refined pellet. One of the OPG plants in Ontario is using a product like advanced wood pellets right now. The technologies are out there and available, but so far the European power utilities have just not been willing to use the torrefied product. We've been trying since about 2010 to get market penetration of torrefied pellets, and the minute a market emerges, we'll be there to make it. You can essentially use all the existing equipment in the pellet plant and just add one more process to make that torrefied product.

[The Chair, Liberal, James Maloney]

I'm going to have to stop you there.

[René Arseneault, Liberal, Madawaska—Restigouche, NB]

Thank you, Mr. Murray.