Sunrise Industry | Alberta’s Forest Industry Strives To Become a Bio-Economy

Green Future: Drayton Valley Mayor Moe Hamdon sees a cluster of bio-industries for his community

On the southern outskirts of Drayton Valley you’ll find an inauspicious stretch off Highway 22 that local boosters have branded the “Bio Mile.” Right now it amounts to a Weyerhaeuser sawmill, the Valley Power Generating Station and a series of overgrown, vacant lots. You have to close your eyes and open your mind to see what Moe Hamdon sees: a fully integrated industrial cluster making not just two-by-fours and electricity – but also fibre mats for car doors, ethanol, syngas, building insulation, “geotextiles” used in land reclamation and chemical solvents and resins. An added bonus comes with greenhouses using the excess heat and waste water from these operations. Here, as well as in other forest communities, laboratories and industrial parks around Alberta, people like Hamdon are working towards a future for the forest industry that, in contrast to recent times, could be very bright indeed.

“There may not be much to see today, but in a few years a lot of that hard work will show [and] will pay off,” predicts Hamdon, Drayton Valley’s mayor.

For towns like Drayton Valley, it has to. The resource town of 6,900 is just one of 32 Alberta communities whose economy depends in large part on the fortunes of the forest industry, and for more than a decade those fortunes have looked grim. Markets for the industry’s traditional products, lumber and paper, have been battered by everything from the United States’ housing collapse, to the migration of advertising to electronic media, to cutthroat competition from the U.S. pine belt, Russia and the developing world.

But there is hope for the industry, summarized in a report released last February by the Forest Products Association of Canada.

Entitled Transforming Canada’s Forest Products Industry, it envisions a coming “bio-age” where carbon-neutral products from forests take the place of those currently derived from non-renewable resources. “The ability to produce energy, fuel and chemicals from wood fibre, along with forests’ capacity to sequester carbon from the atmosphere, will change the nature of the game for Canada’s forest products industry,” the report says. Moreover, with its huge forest lands, “Canada has the potential to become a bio-energy and bio-product powerhouse.”

Pie in the sky? Not really. It’s already happening in Alberta’s forests, at least in a small way. Virtually all of Alberta’s mills are now engaged in bio-energy in one way or another, either producing electricity in cogeneration facilities like Valley Power or biofuels such as wood pellets and fire logs from residual bark, chips and sawdust. Not long ago, that wood waste was simply incinerated in teepee burners.

About five years ago, for example, Canadian Forest Products Corp.’s sawmill in Grande Prairie entered into an arrangement with Canadian Gas and Electric Co. (now TransAlta Corp.) whereby Canfor would supply between 3,000 and 4,000 tonnes of mill residue per month – 60% from its own operations, the rest bought from other mills – to an adjacent cogeneration plant. In return, Canfor obtains electricity from the plant at below-market prices and steam to heat its kilns for drying lumber. Plus, it accumulates carbon credits for offsetting the emissions it used to produce in consuming natural gas and power off the grid. It recently sold several years’ worth of these credits at the prevailing price of between $12 and $15 a tonne under Alberta’s fledgling carbon market.

“No public funds went into that plant. The activity there is based solely on what the market will bear now,” notes woodlands operations manager Jim Stephenson. And though the return on investment is hard to gauge, Stephenson has no doubt that the investment was worthwhile.

What’s less clear is whether bio-energy will ever be more than a sideline to the mainline lumber and pulp revenue streams. The economics don’t currently support trucking waste wood from logging operations to the mill and power plant, Stephenson cautions. This becomes more of a sticking point when you consider the stands damaged by the mountain pine beetle infestation that with each passing year become more degraded and unsuitable for milling – but could be turned into energy if prices supported it.

In Drayton Valley, Valley Power (a unit of Algonquin Power & Utilities Corp. of Oakville, Ont.) likewise uses sawmill waste to generate 12 MW of power, but a Minnesota company, Otoka Energy Corp., is looking to take things a step further with a $240-million biomass plant in the Bio Mile. It would use logging waste such as treetops and branches to produce both power and fuels like ethanol and natural gas. Last year the project was awarded a total of $25 million in government funding.

Burning wood waste to produce energy is considered carbon-neutral because it simply releases back into the atmosphere the carbon that the tree consumed in its lifetime, and not burning it – leaving it to rot in a chip pile or on the forest floor – would do the same thing. You still have to haul the pellets to the plant by truck or train, but a University of Toronto study concluded that wood-fired electricity reduces greenhouse gas emissions by 78% over natural gas and 91% compared with coal.

The Alberta Research Council, which this year was folded into Alberta Innovates – Technology Futures, has been developing new uses for wood fibre for more than 20 years. Its greatest success was oriented strand board (OSB), an alternative to plywood and other panels that utilize lower grades of wood and smaller trees common to Alberta. (At one point, the province boasted half a dozen OSB mills, though that market too has been adversely affected by the American housing downturn and half have been shut down.)

Today John Wolodko heads the Advanced Materials Business Unit, focused on three streams of “biocomposites.” The first is thermoplastics, a flexible product derived from wood fibre. The second is thermoset polymers, more rigid materials targeted as alternatives to non-renewable fibreglass. The last is fibre-reinforced cements that are resistant to cracking.

“We are substituting a synthetic fibre with a natural fibre,” Wolodko explains. “Down the road we want to develop an all-green product with biologically derived resins and fibres.” But for now the achievable goal is developing lighter, stronger, cost-competitive substitutes for carbon fibre and fibreglass. They are also more soundproof, heat- and cold-resistant.

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