Friday, June 24, 2011

Raw Log Exports

This is a rather emotional issue in BC and when you listen to the rhetoric you would think most of the timber in BC is being exported as raw logs, but this is simply not the case.   The reasons for why there are exports of raw logs are also not as simplistic as the rhetoric makes it sound.

In BC there is about 65 to 70 million cubic metres of timber harvested in most years.   In the last few years about 4.5 million cubic metres has been exported as a raw logs.   Of that amount, about 2 million cubic metres of raw logs that are exported is timber not under the jurisdiction of the province.  Around 2.5 million cubic metres come from public forest lands.

In BC, private lands that existed before the first Forest Act are not subject to any restrictions on export of timber by the province.   These lands are under the jurisdiction of the federal government when it comes to export.  

In Northwest BC there are no primary timber processing facilities.   The Northwest BC Forest Coalition is making it clear they have 2.7 million cubic metres of fibre available for any mill that would open in the northwest.   There is enough decent timber there to allow for a modern large scale sawmill that could produce 600,000,000 board feet of lumber.  A mill of this scale would currently gross about $160 million a year, the timber inputs would cost $80 to $90 million dollars.

In the absence of any mills, the timber harvesting end of the business needs exports of raw logs as a way to ensure there is a forest industry at all.

There are industrial lands to build the mills and a secure source of fibre for the mills, but still no one is stepping forward to build the mills.

The world of raw log exports is very different depending on where you are in BC.   In the southern interior there is almost no export of timber, I have tried to get permits to export for some clients and have never managed to have any success.   In the northern interior region, other than the three forest districts in the northwest, there are also more or less no timber exports.

Historically raw log exports have fluctuated in BC depending on market conditions.  The rate we are exporting at now is on the higher end but not unprecedented.  The difference at this time is that there is now a lack of processing facilities on the coast and the northwest.

If mills were around to make use of this timber, there would be an extra 1500 jobs in BC.   There would also be a higher harvest overall because for a log to be economic for export it has to a decent quality sawlog - pulp logs are not going to be exported.

But if no major company is willing to make the investment, how do you get the mills?

Small scale mills in rural BC are not an option because no one can get financing to open one.   Banks are adverse to lending to small town businesses and really adverse to lending any money to new businesses in the forest industry.

As long as there are no new modern mills opened on the coast or the northwest, there is no option but to continue allowing raw log exports.   It will not matter who is government, the raw log exports will continue.

The pictures I have uploaded here are all of timber harvesting areas on private lands outside of the jurisdiction of the province.   The timber felled in these locations in 2010 could have been exported.
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