Yesterday, I had the pleasure of attending a Western Forestry and Conservation Association&rsquo;s conference, &ldquo;<a href="http://www.westernforestry.org/Events/conference/mapping-the-course/">Mapping the Course: 2014 Timberlands, Forest Products Processing and Energy Issues on the North American West Coast</a>&rdquo; in Vancouver, WA. The all-day event featured presentations by forestry experts on North America's western wood market influences, outcomes, and future trajectories. A prominent theme among presenters was the higher price for whole logs, lumber, and wood product in the Pacific Northwest relative to other regions of North America. David West from Kapstone demonstrated in his presentation that, from 2009 to 2013, the market price for a whole log Douglas fir from the Pacific Northwest increased from $60 to over $100 per cubic meter. Over that same period, the whole-log price for pine from the southeastern U.S. remained around $60 per cubic meter. Mr. West and later speakers attributed the increase in Pacific Northwest log prices to a surge in demand from China for whole logs rather than sawn lumber. In recent years, China has experienced a construction boom, and to support concrete forms and framing China has looked to the west coast of North America for whole logs. Rather than import more expensive sawn lumber, Chinese importers bring in logs and saw them into lumber themselves at a lower cost. While forest land owners in the Pacific Northwest have benefitted from the surge in Chinese demand and the higher cost for logs, saw mills and other forest product industries in the Pacific Northwest have suffered. When the U.S. housing market crashed in 2008, mills took a considerable hit from the loss of domestic demand. Coupled with the increase cost of whole logs, many mills in the Pacific Northwest closed in the subsequent years. For the ones that remain open, it has been a challenge to maintain profitability with the higher cost for logs and the resurging but smaller housing market.
Less production from Pacific Northwest saw mills has caused greater competition among wood product industries in the region for mill residues. Fewer saw mills and, subsequently, less feedstock has made it difficult for the industries that look to mills for input to remain operational and profitable. A considerable portion of the bioenergy industry uses forest and mill residues as a feedstock. In a competitive market where there is a high demand for mill residue, bioenergy has a difficult time competing with other forest product industries that also use residue. Brooks Mendell, President of Forisk Consulting, noted that bioenergy pencils out when it is coupled with a saw mill or other forest products plant, not as a stand alone entity. With fewer sawmills, bioenergy has a tough time finding feedstock providers at a reasonable price.
How new bioenergy projects fit into a mature and the rapidly changing wood basket of the Pacific Northwest was a pressing theme of the conference. The Pacific Northwest has a healthy wood basket that in theory would support a strong bioenergy industry. In reality, the mill residue market of the Pacific Northwest is saturated with competitors, and new bioenergy projects have a hard time squeezing in. Bioenergy developers that hope to grow the industry in the Pacific Northwest will have to look more to forest residue rather than mill residue for fuel feedstock.
The forests are crowded, but there is room for us; we just have to find it through inovative strategies of existing underutilized feedstocks.
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Mapping a Course for Bioenergy In the Pacific Northwest

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