Wood supply from Tasmanian native forests and plantations

Wood for biofuels; a missed opportunity


Summary
Throughout the pulp mill saga, the politicians have assumed that there is no alternative use for Tasmania's plantation resource. But the rapid change in concern for global warming and greenhouse gas emissions has brought biofuels very much to the fore.

The only source of renewable biomass capable of replacing the amount of fossil fuel required to meet greenhouse gas reduction targets without detracting from food production is plantation forest grown on low value land.

A forest biofuels industry to produce fuels from wood in Tasmania would be substantially more beneficial than pulp at every level, economically, environmentally and socially. However, no one is going to invest in biofuels when the forests have already been promised to a powerful monopoly.

Ignoring the prospects for a biofuels industry exposes the failings of both major parties and demonstrates how short sighted the 20year contract with Gunns is.

Download Mike Scott's Biofuels Proposal.pdf submission to the State Government Alternative Fuels Inquiry; The Joint standing Committee on Environment, Resources and Development.


The problem with the pulp mill and wood supply contract
The big problem with the current pulp mill proposal is that the timber contracts required to supply the mill will leave no flexibility for the development of a forest based biofuels industry. Biofuels and pulp need not be mutually exclusive. Indeed most nations that have substantial forest resources and established pulp plants are already making commitments to biofuels. For instance Sweden has made a commitment to be 'independent of oil imports' by 2020 and to do that they have recognised the need to re-evaluate how they can balance traditional and new processes within the limitations of a sustainably managed forest.


Failure of State Government
The only excuse the state government can have for signing contracts that cede monopoly control of the State's hardwood resource to a private company is that there is no alternative.

This is a profoundly false premise. The State Government has now been put on notice, through the Alternative Fuels Inquiry, that there are alternative, low carbon emission, renewable uses for plantation hardwood. The attachment below is a proposal from Mike Scott CEng, to this inquiry detailing the prospects for high value, high-volume fuels and oil based products that can be derived from wood.

According to government figures such products will be viable without the need for subsidy or carbon credit. Given that there are other uses for the timber resources.

• If the Liberal party was firm in its conviction that free markets are the best mechanism for determining the highest returns to all stakeholders then their candidates should be insisting that all forest supply contracts should be short term (annual) and subject to competitive tender. This would maximise timber values and allow the growth of new business,
• If the Labour party (and CFMEU) were serious in their avowed support for the timber industry and timber communities then their candidates would support the development of growth industries that offer a plurality of value streams, providing long term stability and a variety of competing customers for their services.

That neither Federal party is questioning the appropriateness of the contracts clearly shows that they are abrogating their principles in favour of the interests of a private company.

Whatever our beliefs in the growth of plantations and MIS inducements, the ignored prospects for a biofuels industry exposes the failings of both major parties and demonstrates how short sighted the 20year contracts with Gunns are.

By offering exclusive timber supply contracts with variable price dependent on earnings to a private company the government is essentially allowing the state to act as profit guarantor. If the mill proposal is not viable without such exclusivity then it is clearly dependent on controlled low feedstock price, in effect a subsidy by forest stakeholders.

The timber industry, MIS investors and the sectors of our society that have been led to believe that the pulp mill will be a boon for them and the State have been misinformed. This artificial monopoly is a boon for Gunns and for Gunns alone.


The benefits of planning for biofuels in Tasmania
There is so much to be gained and so little to be lost if Tasmania were to be able to pursue a future that included biofuels. Now that wood based biofuels are a reality, if timber supply contracts from public forests are signed for the pulp mill, that exclude the development of such an industry for the foreseeable future, the State government will be abrogating their duty of care to Tasmanians (as forest stakeholders), the forest services industry and plantation investors. These are the people to whom the government should have primary concern and their best interests would be served by a free competitive market and multiple value streams.

A substantially smaller pulp mill would have many advantages:

• By providing flexibility in down-stream processing of the plantation resource and allowing other value streams to develop (ie. biofuels, construction timber) a genuine market could be established for the timber itself and for the services of forestry contractors (harvester, haulage etc). This is the only way of guaranteeing that all the stakeholders in the supply chain can maximise their returns.
• Product variety would mean that a depressed market in one sector would not have as significant an effect on overall returns, effectively acting as a degree of protection for these stakeholders.

By enabling a plurality of value streams, including biofuels, Tasmania could benefit on many fronts:

• Economy: maximised returns for plantation stakeholders and timber service contractors. Protection against global price movements. Greater value adding within Tasmania and substantial import replacement. Long term stability for the timber industry.
• Environment: Tasmania could be a regional leader in meeting commitments to protecting the world from global warming. There is a fair bit of research showing that biofuels can also reduce noxious tailpipe emissions from vehicles.
• Strategic: Reduced dependence on energy imports from unstable nations.
• Social: With biofuels complementing hydro and wind power generation, Tasmanians could soon boast the smallest 'environmental footprint' of any state citizens in Australia, possibly in the whole developed world. This could be a source of pride in the community and help to heal the rift that has been allowed to develop. By aligning the goals of the timber industry with the aspirations of the broader community, by enabling this industry to be seen as part of the solution rather than part of the problem, a much more cohesive and productive society could emerge.

Conclusion
There are huge benefits, both financially and socially for developing a legislative framework that encourages the growth of a wood based biofuels industry in Tasmania. We have, after all, a great advantage to start with; the resource is growing on our hills.

Mike Scott CEng

Alternative Uses of plantation wood

Tasmania’s hardwood plantation resource is of vital importance to future economic growth.

However, the currently favoured option of converting plantations to wood chips and pulp offers Tasmania:

• declining returns;
  
• processes with high environmental impact;
• commercial disadvantages for businesses involved in the forest products supply chain;
• inflexibility in developing high value alternative products.

There are real OPTIONS that offer:

• environmentally benign processes;
• multiple high value products that provide competition in the market place for the forest resource;
• compatibility with other growth areas of the local economy that depend on Tasmania’s clean image;
• effective linking to the existing high tech skills base in Tasmania.

Other options for using plantation wood include:

• replacing products hitherto manufactured from crude oil such as plastics, paints, pharmaceuticals and adhesives;
• producing transport fuels;
• using biomass as a fuel source for power, etc.

Download the independent report by engineer Michael Scott on Tasmania’s options for best use of hardwood plantations ‘Prospects for downstream processing of plantation hardwood.pdf’

George Town Council Report

Both the Labor Government and Gunns claim that rail is the preferred option for transporting logs. However, a report for the George Town Council meeting of 26 July 2007 concludes that rail is not practical.

In a review of the transport arrangements for the pulp mill, the planning officer concludes on p 69:

'rail cannot practically be used as the main carrier of mill input. In the short term it has limited capacity and in the long term timber input to the mill will tend to shift increasingly to plantations in the closer North East region which would be almost impossible to encourage onto rail.'

Download George Town Council Report rail is not practical from below.

URS Forestry Report

Report by URS Forestry commissioned by the RPDC on the IIS.

It suggests that the proponent has not adequately explained their wood supply.

URS Forestry report on the IIS 96 Kb