Forest Biomass Energy In British Columbia Opportunities .

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ISSN-0705-3274FOREST BIOMASS ENERGY IN BRITISH COLUMBIAOPPORTUNITIES, IMPACTS, AND CONSTRAINTSEnvironment CanadaCanadian Forestry ServicePacific Forest Research Centre506 West Burnside RoadVictoria, B.C. V8Z 1M5BC-X-2261982Prepared by:T.L. McDanielsMcDaniels Research Limited111 Water Street, Suite 12Vancouver, B.C.

ABSTRACTForest biomass has strong potential as an economicallyviable energy source in British Columbia. Developmentof this potential would pose no severe problems forthe resource management system. Large positiveimpacts could be expected upon the forest industry,regional economic conditions, and environmentalconditions. At present, a range of institutional factorsconstrain the realization of this potential; a variety ofincentive measures and recommendations are provided to eliminate these constraints.RESUMELa biomasse forestière comporte un potentiel élevéen tant que source d'énergie économiquement viableen Columbie-Britannique. Le développement de cepotentiel ne poserait pas de problèmes sérieux pour lesystème de gestion des ressources. On pourraits'attendre à des incidences en grande partie positivessur l'industrie forestière, les conditions économiquesrégionales, et les conditions environnementales. Aprésent, une série de facteurs d'ordre institutionnelgênent la réalisation de ce potentiel; diverses mesuresde stimulation ainsi que dg recommendations sontproposées à l’effet d'éliminer ces constraintes.

TABLE OF CONTENTSABSTRACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .iiLIST OF FIGURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xiiLIST OF TABLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xiiiACKNOWLEDGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xviFOREWORD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xviiCHAPTER I:CHAPTER I IINTRODUCTION.1.0OBJECTIVES.2.0ISSUES AND ORGANIZATION1.1POTENTIAL FOREST ENERGY USE.1.0OVERVIEW.2.0BIOMASS SUPPLY ISSUES2.1Mill Residuesa)b)c)d)2.23.4.Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Future Production. .Production and UtilizationCosts. . . . . . .4677.QuantitiesCosts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Future Availability .91113.14Quantities .Potential Availability for Energy .costs. . . . . . . . . . . .141515Alternative Uses of Forest Biomass. .16Pulp Industry .16b)c)Underutilized Species.a)b)c)2.43.Forest Residues.a)2.3.a).iii

CHAPTER II (continued)2.4 a)Pulp Industry (continued).Technical Factors . . . . . . . . . .Chip Utilization and Pulp Expansion. . . . . . . . . . . . . . .Outlook for Residue Utilization .Particle Board and Composite Products . . . . . . . . . . . . . . . . .Hardwood Products . . . . . . .b)c)2.53.0.Conclusion.19.19Chemical Pulp Millsa)c)Power Boilers . . . . . . . . . . . .Newsprint Mills3.3Wood NT ENERGY USE PATTERNSIN THE PROViNCiAL FOREST INDUSTRY .3.14.0.1616171818.Lumber Kilns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Veneer Kilns . . . . . . . . .Cogeneration.ENERGY PRICE ISSUES . . . . . . . . . . . . . . . . . . .4.1An Economic Basis for Energy Prices4.2Price Assumptions for EOil.,Natural Gasd)Wood Biomass.272829.3030. . . . . . . . . . . . . . . 315.1Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.2Near-Term Potential. . . . . . . . . .b)25262628POTENTIAL DEMANDS FOR BIOMASS. ENERGYa)2327.a)bl19.31. . . . . . . . 31. . . . . . .Pulp and Paper MillsDirect CombustionGasificationCogenerationWood Products .Direct Combustion.Gasification . . . . . . . . . . . . . . . . .Cogeneration .3232343535353737

CHAPTER II (continued)5.3Longer-Term Potentiala)b).Electrical GenerationLiquid Fuels.39Technology and Economic Potential . . . . . . . . . . . . . . . . .4043. . .Potential DemandOther Uses. . . . . . . . . . . . . . . . . . . .44.c)6.0CONCLUSION6.1.Demand and Supply of Biomass Energy. .a)b)CHAPTER 111:.45.Demands.Potential Shortages of Mill Residues4545.6.2Effects of Mill Residue Shortages6.3Economic Prioritiesfor Biomass Energy Uses47. . . . . . . . . . . . . . . . . . . 48RESOURCE MANAGEMENT ISSUES.1.0INTRODUCTION . . . . . . .2.0EXISTING FOREST MANAGEMENT SYSTEMForest Management Goals.2.2Forest Management Practicea)b)c)d)3.04.0.3.1Utilization3.2Rate of Harvest3.3Fluctuation in Harvest and Sectoral Demand51515153.54.5456ISSUES IN DISTRIBUTION OF BIOMASS.5759.59.604.1Competitive Allocation.4.2Real-World Situation4.350Maximum Sustained Yield. .Utilization Standards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .The Tenure System .The Stumpage System .EFFECTS ON HARVESTS.a)b)50.2.150Forest TenuresVertical integrationConsequences of StructureV.62

CHAPTER I I I (continued)4.3Consequences of Structure (continued)4.4.c).Prescription for Distribution .a)b)5.0EFFECTS ON THE VALUE OF FOREST RESOURCES5.1Competition Between Alternative Usesa)b)c)d)e)f)5.25.3.Dimensionsof CompetitionQuality of Fibre as a Factor in CompetitionPossible Increases in Residue SupplyConsequencesof CompetitionA Possible Source of Misallocation . .Final Observations.Stumpage Payments .a)b)6.0Lack of Market PricesUnequal Market PowerThe Drive for Security of Supply.62626364656565666668697171.ConceptsPractice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7172.73Increased Values of Future HarvestsCONCLUSIONS.73CHAPTER IV: IMPACTS OF FOREST ENERGY UTILIZATION.1.0INTRODUCTION2.0IMPACTS ON THE FOREST INDUSTRY.2.1Introduction2.2The Extant lndustry ngSawmillingPlywoodChemical PulpVertical IntegrationImpacts of Biomass Energy Usea)75.LoggingLumberScale of Mill OperationsRetrofitNew Installation .Sale of Mill ResidualsConclusion.VI79808081828282

CHAPTER IV (continued)2.3Impacts of Biomass Energy Use (continued).8282838384848485858586ENVIRONMENTAL QUALITY IMPACTS .863.1Introduction .863.2Effects of Wood Waste Utilization.87Retrofit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .New InstallationsBiomass Fuel Costs.d)PulpRetrofite)3.0a)b).Vertical Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Economies in IntegrationIntegration Economiesin Biomass Energy . . . . . . . . . .Outlook For Further Integration.Waste Disposal Regulations .Environmental Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Landfill Leachates . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Air Emission From IncineratorsEnvironmental Costsof Waste Disposal . . . . . . . . . . . . . . . . . . .Environmental Benefits of Wood Waste Utilization.c)d)3.3.Effects of Forest Residues Utilizationa)b).d)3.491Effects on the Forest EnvironmentSoil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Water .Air . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Effectson Silviculture and Forest ProductivityStand EstablishmentStand Development . . . . . . . .Fire Prevention . . . . . . . . . . . .InsectsEffects on Alternative Users of the ForestFish Habitat .Wildlife Habitat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Recreationand Aesthetics .Environmental Costs andBenefitsof Forest Residue Utilization92929294949494949494959595Direct Combustion .PotentiaI Pollutants . . . . . . . . . . . . . . . . . . . . . . . . . . . .Air Quality Objectivesand Impacts . . . . . . . . . . . . . . . . . .Other Impacts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Gasification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9797989899.c)878989909191.96Effects of Biomass Energy Conversion Facilities . . . . . . . . . . . . . . . . . 96a)b)vii

CHAPTER IV (continued)3.4Effects of Biomass Energy Conversion Facilities (continued)c)d)4.0Gas Conversion. .99Environmental Costs of Conversion Facilities . . . . . . . . . . . . . . .99.1024.1Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1024.2Employment Effects.102SOCIO-ECONOMIC IMPACTSIntroduction.102Harvesting Sector103103Pulp Industry Boiler Applications104Transportation Employment .104Operation Employment .105Wood Products Application .105Electrical Generation Employment .Methanol Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .106Residue Recovery Employment. . . . . . . . . . . . . . . . . . . .106Operation Employment . . . . . . . . . . . . . . . . . . . . . . . . .107Direct and Indirect Employment Summary . . . . . . . . . . . . . . .107108Employment Stability .d)f)4.3RegionalConsiderations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .a)b)4.45.0CHAPTER V:108Regional Patternsof Biomass Energy Employment . . . . . . . . . . . 108Forest Biomass Energy Utilizationas a Factor in Regional Development.109Forest Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .109Methanol Production .109.110.111Social Effects.CONCLUSIONSCONSTRAINTS TO FOREST BIOMASS ENERGY dology and Organization.115.115.116Cost Minimization.Investment Criteria.116116.117THE FOREST INDUSTRY2.1The Profit Objective.a)b)2.2Other Objectivesviii

CHAPTER V (continued)2.2Other Objectives (continued)a)b)3.0THE ENERGY INDUSTRY.3.13.2119a).119119.120Inland Natural Gas Co.Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . .120121Pacific Northern Gas Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . .The Proposed Vancouver Island Gas Pipeline . . . . . . . . . . . . . . .I22.122Cogeneration.Pricing Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .i)Absolute Level of Pricesii) Uniform Regional Prices. . . . . . . . . .iii) Energy Capacity Chargesiv) Standby ChargesAttitude Toward Cogeneration. . . . . . . . . .Quesnel Thermal Electric Pla123123123123123123124125.GOVERNMENTAL ENERGY AGENCIES.4.2.B.C. Hydro and Power Authorityb)Federal Energy Issues.125126a)Oil Pricesand Industry incentives.prices . . . . . . . . . . . . . . . . . . . . . . . . . . .Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .126126126b)Biomass Energy Policy . .128Constraints. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .128.129Provincial Energy Issuesa)b)c)5.0Gas Producers.Oil Producers.Natural Gas Distributors.a)4.1119.a)b)c)3.3.Gas and oil Producersb)4.0Diversification Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . .117Lack of Diversification .1188Lack of Managers Knowledgeable in Energy . . . . . . . . . . . .118Lack of Available Capital . . . . . . . . . . . . . .Desirefor Security of Supply. . . . . . . . . . . . . . . .Natural Gas Prices. .129Electricity Pricesand Utility Regulation . . . . . . . . . . . . . . . . . .130Biomass Energy Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .130THE MINISTRY OF FORESTS. . . . . . . . . . . . . . . . . . . . . . . . . . . .ix130

,-CHAPTER V (continued)5.1Current Administrative Practices5.2Future Policy issues. . .a)b)c)d)e)6.07.0.Scale-BasedStumpage . . . . . . . . . . . . . . . . . .Cut-Control AccountsStumpage Charges Incorporating Energy Values . .Regional Markets.Attitudes Within the Ministry . . . . . . . . . . . . . .Transport of Biomass and Fuel Taxes6.2Provincial Property TaxesCONCLUSIONSc)d)e).133.133.134.Review of Chief Constraintsa)b)131.6.1.131132132. .132.OTHER SOURCES OF CONSTRAINTS.,7.1.134Constraints Affecting Biomass Supply134Constraints Affecting.134Thermal Applications in the Forest IndustryConstraints AffectingCogeneration by the Forest Industry . . . . . . . . . . . . . . . . . . .134Constraints AffectingThermal Electric Generation .134Constraints Affecting134Bioconversionto Alcohol Fuels .7.2ComparativeAnalysis of Selected Constraints . . . . . . . . . . . . . . . . . .1347.3Distribution Effects.a)b)c)d)CHAPTER VI:.135.Gainers.Losers. . . . . . . .Mixed EffectsConclusion. . . . . . . . . . . . .136136.137.INCENTiVES AND RECOMMENDATIONSLITERATURE CITED1.0INTRODUCTlON2.0ENERGY PRICE RECOMMENDATIONS3.0RECOMMENDATIONS FOR INCENTIVES.,.1384.0ADMINISTRATIVE RECOMMENDATIONS.1435.0RECOMMENDATIONS FOR FURTHER RESEARCH. . . . . . . . . . . . . . .145.X137146

.!APPENDICESIIIDATA SOURCES AND METHODOLOGY OF CONVERSION MODEL.TABLES OF EQUIVALENTS AND ABBREVIATIONS.!xi,. . . . , . . . , . . ,152. . . . , . . . . . . . . . . . . . . . . . . . 154

LIST OF FIGURES.55.58111-1Marginal Costs and Revenues of Increased Harvests111-2Fluctuations of British Columbia Pulp. Chip. and Lumber Production.xii

LIST OF TABLESCHAPTER I III-1Mill Waste Production and Utilization . 1976. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5II-2Projected Total Mill Waste Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8II-3Projections of Merchantable Logging ResiduesFalling Within Close Utilization Standards. 197810II-4Cost Estimatesfor Recovery of Logging Residues. Excluding Transport . . . . . . . . . . . . . . . . . . . .12II-5Estimated Truck Transportation Costs for Forest Biomass. 1980.13II-6Hatvest and Annual Allowable Cut (AAC) of Hardwoods by Forest District. . . . . . . . . . . . . . . . . 14II-7Projections of Forest Biomass Available for Energy Use in British Columbia. . . . . . . . . . . . . . . . . 20II-8Consumption of Energy in the British Columbia Pulp and Paper Sector11.9Industrial Fossil Fuel Prices in Vancouver11-10Consumption of Purchased Energy in theBritish Columbia Wood Products Sector by Fuel Type.21.22.25II-11Primary Fuel Sourcesfor Lumber Kilns at Provincial Sawmills . . . . . . . . . . . . . . . . . . . . . . . . . .2611-12Economic Returnsfrom Investment inHog Fuel Boilers a t Major British Columbia Pulp and Paper Mills.33.36II-14Costs of Methane-Hybrid Plant Methanol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4111.15Costs of Simple Gasification Plant.4111.16Potential Annual Demands for Forest BiomassEnergy in British Columbia by 199546Percentage Reductions in Potential Forest BiomassDemand Due To Increased Hog Fuel Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4611-1311-17Economic Returnsfrom Investment in a High-pressure Boiler andTurbogenerator at Major British Columbia Pulp and Paper Mills.xiii

CHAPTER I I IIII-1Distribution of Timber Rights and Processing Capacity.Ten Largest British Columbia Forest Products Companies. 1975. . . . .61III-2Comparative Chip Prices in Different Locations. 1979.63III-3Quality and Suitability of Fibre Sourcesfor Pulp Production . . . . . . . . . . . . . . . . . . . . . . . . . . .67III-4Effects of Increasing Prices on Supplyand Demand of Forest Biomass Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69Biomass Energy Conversion Projects That Provide MinimumAcceptable Returns When Operatedfor Different Time Periods .70Potential Cost Savings Resultingfrom Residue Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73III-5III-6.IV-1IV-2CHAPTER I VConcentration of Harvesting Rights WithinRegulated Forest Units. British Columbia. 1975.Concentration of Harvesting Rights OutsideRegulated Units. British Columbia. 1975 .7676IV-3Concentration of Sawmilling Capacity. British Columbia. 1975.77IV-4Softwood Lumber Production by Speciesand Region. British Columbia. 1978 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78Distribution of Capacity AmongstMajor Integrated Firms. British Columbia. 197578IV-5.IV-6Number of Sawmills and Average Capacity. British Columbia. 1950-1974IV-7Size Distribution of Sawmiliswith Kilns. Nelson Forest District . 1975.81IV-8Size Distribution of Plywood Mills byPrimary Energy Source and Size Class. 1979.83Plywood Manufacturing Costs for British Columbia Interior.U.S Northwest. and Southern Pine Regions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84.88IV-9IV-10.Landfill Operating Objectives for the Forest Industry. British ColumbiaIV-11 Selected Air Emission Objectivesfor the Forest Industry. British Columbia. . . . . . . . . . . . . . . . .88. . . . . . . . . . . . . . . . . .89IV-12Selected Air Quality Objectivesfor the Forest industry British ColumbiaIV-13Peak Concentrations in Wood Waste Leachates .xiv8090

IV-14IV-I5Distribution of Nutrients and Organic Matterin a 35-Year-Old Second-Growth Douglas-Fir Ecosystem.Hypothetical Distribution of BiomassandNitrogen in a 400-Year-Old Stand of Douglas-Fir.93.93.IV-16Ultimate Analyses of Selected Solid FuelsIV-177Summary of Environmental Impacts from aHypothetical 5,000/MTD Wood Pyrolysis Plant.IV-18Alternative Emission Control Technologiesfor a Hog Fuel BoilerIV-199Possible Direct Employment Resultingfrom Biomass Energy Utilization by 1995IV-20IV-21IV-22V-2. . . . . . . . . . . . . . . . . . . . .101107.112Summary of Environmental ImpactsResultingfrom Biomass Energy Utilization.113Summary of Socio-Economic ImpactsResulting from Biomass Energy Utilization.114CHAPTERV-1100.Summary of Impacts Upon the ForestIndustry Resultingfrom Biomass Energy Utilization97VEffects of Energy Price Changes on theViability of Selected Pulp Mill Boiler Replacement Projects.Sensitivity of Returnson Investment inHog Fuel Boilers to Changes in Cost and Revenue Parameters.127135CHAPTER VIVI-1Effects of Various Incentive Measures onRates of Return for Investment in Pulp Mill Boiler Replacement.140

ACKNOWLEDGEMENTSThis report, prepared by McDaniels Research Limited,was commissioned by the ENFOR Secretariat of theCanadian Forestry Service. Work on the study beganin September 1979 and was completed in March1981. In the course of this research, the consultantsbenefitted from technical direction provided byDr. G. Manning of the Pacific Forest Research Centrein Victoria, British Columbia. Also, many people ingovernment agencies, private industry, and researchorganizations provided their time and expertise tohelp the consultants understand the complexities ofbiomassenegy use.The study team for this project included ProfessorR. Schwindt of Simon Fraser University, who wasthe principal author of Chapter III, Section 5.0;and Chapter IV. Section 2.0. K. Cooke, PlanningConsultant, was the principal author of Chapter IV,Section 4.0. G. Robinson, Consulting Economist,provided statistical analysis for the pulp mill conversion model. The whole report was read by L. Burdakand R. Yates. Finally, Mrs. L. Burdak deserves thanksfor her excellent report preparation services.xvi

FOREWORDENFOR is the bilingual acronym for the CanadianForestry Service's ENergy from the FORest (ENergiede la FORet) program of research and developmentaimed at securing the knowledge and technical competence to facilitate, in the medium to long term, agreatly increased contribution from forest biomassto our nation's primary energy production. Thisprogram is pari of a much larger federal governmentinitiative to promote the development and use ofrenewable energy as a means of reducing our dependence on petroleum and other nonrenewableenergysources.ENFOR projects are selected from among proposalssubmitted by private and public research organizations according to scientific and technical merit, inthe light of program objectives and priorities. Regardless of proposal source, projects are carried outprimarily by contract. For further information onthe ENFOR program, contact:ENFOR SecretariatCanadian Forestry ServiceDepartment of the EnvironmentOttawa, OntarioCanadaK I A 1G5or thedirector of the establishment issuingthe report.This report, based on ENFOR project P-135, wasproduced under contract OSB79-00160 by McDanielsResearch Ltd., Vancouver, B.C. Readers are remindedthat, as the major portionof this report was completedin 1980, some factors may have changed by the timeof publication. The conclusions of the report are thesole responsibility of the author and may not correspond to the policies or views of the government ofCanada, its departments. or agencies.xvii

CHAPTER IINTRODUCTION1.0OBJECTIVESCanadians are faced in the 1980s with drasticincreases in petroleum prices and dwindling suppliesof petroleum fuels. This dismal economic outlook forconventional energy sources has naturally providedan incentive t o develop substitutes. To LE consideredviable, energy alternatives should LE cost competitive.renewable, and environmentally acceptable. Onealternative energy source with strong potential tomeet these criteria is forest biomass.A number of factors make wood biomass anattractive source of energy. Forest materials areavailable in vast measurable quantities in manyparts of Canada. Unlike some other alternativesources. the technology for producing various formsof energy from wood biomass is well established.An extensive industry already functions efficientlyby growing and harvesting wood, and large amountsof wastes are produced as by-products from forestindustry sawmills. Finally, wood appears to be acleaner fuel with fewer environmental problems thancoal or nuclear energy.Even though the gross quantities of potentialforest energy are formidable, few people wouldsupport the view that wood alone could remedyCanada's future shortfalls in energy supply. Rather,wood energy belongs to the growing category ofsupplementary fuels, which, together, are expectedto fill the gap. The proper role for wood energy willbe in specific applications that can make use of itsparticular advantages and avoid its pitfalls. Government initiatives in research and policy developmentcan be expected to help identify the appropriateapplications for forest biomass energy.Although the Canadian government has set anobjective of national energy self-sufficiency by 1990,no targets or specific policies for renewable resources,including forest biomass, have been enunciated. Butthe federal view of the potential for forest energyutilization can be inferred from its FIRE incentiveprogram', its reports on forest energy (Love andOverend, 1978). and its research initiatives.The ENFOR program of the Canadian ForestryService is a major federal research program aimed a tfostering an increased role for forest biomass innational energy production. In June 1979, theENFOR Secretariat selected McDaniels ResearchLimited to undertake a study of the implicationsof increased forest biomass energy use in BritishColumbia. The focus of the study is to be uponeconomic and institutional aspects of forest energyuse, rather than on silvicultural or technical issues.The research has three primary objectives:(1)to examine how changes in energy prices wouldalter wood biomass energy use in BritishColumbia, and then to trace through theimpacts of these changing-use patterns ondifferent aspects of the forest industry;(2)to identify institutional barriers that couldconstrain use of foresi biomass energy; and(3)to consider incentives or other approaches thatwould eliminate constraints to utilization ofthis energy resource.2.0ISSUES AND ORGANIZATIONForest biomass energy will play a major role inBritish Columbia, only if it is economically feasibleand is consistent with institutional goals. If forestenergy is too costly, relative to other sources, noincentive will exist to develop it. If institutions didnot perceive that use of the forest for energy meetstheir particular goals and provides overall benefits,its exploitation would be slowed. InstitutionalThe Forest Industry Renewable Energy Program (FIRE), a capital cost grant for assistance in conversion from fossil fuel to forest biomass, is summarized in W. Wardrop and Associates (1979).Effectivenessof this and other incentive programsis considered in Chapter VI.

-2-questions are particularly important because therearepowerful organizations that have interest in forestutilization and others that have interest in energydevelopment.These issues and possible responses by the BritishColumbia Forest Service are analyzed in Chapter III.The purpose is to show how a new use for forest materials could be affected by the management system.Economic aspects of forest energy hinge onthe pervasive issue of future prices for petroleumfuels. Expected increases in the costs of petrole

FOREST BIOMASS ENERGY IN BRITISH COLUMBIA OPPORTUNITIES, IMPACTS, AND CONSTRAINTS Environment Canada . McDaniels Research Limited 111 Water Street, Suite 12 Vancouver, B.C. ABSTRACT Forest biomass has strong potential as an economically viable energy source in British Columbia. Development of this potential would pose no severe problems for .

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