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Few bidders interested in beetle timber
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by GORDON HOEKSTRA Citizen staff
The province is putting millions of cubic metres of mountain pine beetle-killed timber up for bid, but there hasn't been as much interest as expected. The first three, smaller beetle-timber licences put up to tender last fall enticed only a handful of bidders.
B & T Forest Products Ltd. was the only bidder on a 50,000 cubic metre a year licence -- about 1,000 logging truck loads -- in the Vanderhoof area.
Two other beetle salvage licences -- one for 25,000 cubic metres and another for 50,000 cubic metres were awarded to Canfor and West Fraser respectively in the Quesnel area. For the licence Canfor won, their were two other bidders, while there was one other bidder for the West Fraser licence.
"The interesting thing is there's been a lot of talk about access to wood, but the number of bidders on this were disappointing from my perspective," junior forests minister Roger Harris said.
Harris said he had expected to see a greater amount of smaller operators bid on the first three licences.
The province has tried to tailor bids to expressions of interests it had solicited through last summer. It had received more than 60 ideas that ranged from using beetle-killed timber to produce oriented strand board, wood pellets, electricity and log homes.
Harris said he's now going back to the different potential timber bidders to ask for feedback. "We're asking, 'We thought this is what you wanted? If this is not, what are you looking for?'" said Harris.
Other beetle-salvage timber licences up for bid include a pair of large, long-term licences -- 700,000 cubic metres annually for 15 years -- meant to attract a major new manufacturing facility that doesn't produce lumber. Those bids end on March 3.
The forests ministry also posted more timber licences last week.
They include a 300,000 annual cubic-metre licence for 10 years in the Quesnel area with a deadline of March 24, and three, 250,000 cubic-metre licences for 10 years in the Vanderhoof area with a deadline of April 7.
The new postings also require the start-up of new manufacturing facilities that don't produce lumber, an effort by the B.C. government to not create more lumber capacity in the midst of the nearly four-year-old softwood trade fight with the U.S.
The province also hopes to encourage more and diversified manufacturing entrants to create more competition for timber.
Harris said the province is holding back another two million cubic metres of beetle-killed timber to see how the first wave of licences fare.
Forest sector groups who want to see new wood manufacturing players enter the market are closely watching what happens to the beetle timber.
Federation of B.C. Woodlot Associations general manager Brian McNaughton said the lack of interest in the first three beetle timber licences is likely a result of several factors. Those include the declining quality of the timber, the fact the licences end after a fixed period of time and that there are no guarantees the timber will be available for the full term of the licence. Any operators would need long-term timber rights to justify capital investments for a new wood facility, said McNaughton.
The existing timber pricing system is also based on the price of lumber and wood chips, so it doesn't recognize other lesser value products, he said. It's not likely that someone will be able to grind a tree into shavings to make wood pellets and pay stumpage based on lumber, explained McNaughton.
Brink Forest Products president John Brink said he'd like to see successful bidders still have the ability to produce lumber from the beetle timber. That way secondary manufacturers could produce lumber and have a wood supply for other products, he said. "Forget about the end-products, that's a red herring." said Brink, an outspoken Prince George secondary manufacturer who is interested in the beetle timber.
The other option for secondary manufacturers of trying to trade timber to sawmills for lumber or other products will likely not work, he said. That's because there's already so much timber on the market, value-added operators will have a hard time finding a buyer for beetle timber, said Brink.
©Copyright 2005 Prince George Citizen
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