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Sierra Pacific to commit 60,000 acres to carbon sequestration

Sierra Pacific to commit 60,000 acres to carbon sequestration

PORTLAND, OR, Oct. 1, 2009 (RISI) - On Wednesday evening, California Governor Arnold Schwarzenegger and Sierra Pacific

industries, of Redding, California, announced the country's largest forest carbon-offset project, totaling 60,000 acres of timberlands owned by Sierra Pacific. Last week, the California Air Resources Board (CARB) adopted new rules concerning forest offsets. Advocates of those rules say this move indicates that the public will view the regulations with favor.

Those who have concerns with the regulations, including some environmental groups, view this agreement between the state and Sierra Pacific with disfavor. One of the provisions in the regulations is a clause allowing clear cutting of forests. Michael Endicott, of Sierra Club California, said, "This is the thing we were worried about."

The agreement concerning Sierra Pacific land coincides with an international climate summit that Schwarzenegger is hosting in Los Angeles this week. Mark Pawlicki, speaking for Sierra Pacific Industries, said, "We can still manage our forests, but we have to meet or exceed our baseline conditions." The agreement is expected to keep over 1.5 million metric tons of carbon out of the atmosphere over the next eighty years, or the volume generated by 170 million gallons of gasoline.

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Timber Industry Information

RISI conference reviews wave of biomass projects in North America

SAN FRANCISCO, Sept. 18, 2009 (RISI) - The tidal wave of wood biomass projects in the US and Canada and their impact on the pulp and paper industry came under the spotlight at RISI's 24th annual North American Forest Products Conference in San Diego this week. Speakers reviewed the sheer magnitude of new wood demand from the energy plants and whether they will be sustainable after much-criticized government subsidies fade away.

"The wood biomass sector promises to take off," said RISI Wood Biomass Market Report executive editor William Perritt, who said it has been exciting to watch an industry "rise from the ashes." Yet existing forest industry wood procurement managers are very concerned the new players "will come after my woodpile."

Noting the industry's historic use of wood biomass as hogfuel, "wood was and still remains the number one source of renewable energy in the US," Perritt commented. He said he has tracked 175 projects under development in North America as well as several large projects in the UK that are targeting wood supply from the US. Estimates of 48 million green tons of wood biomass used for electricity and pellets in 2008 in the US will rise to 55 million green tons in 2009 and up by 65 million green tons of new demand by 2015, if all the projects go through.
Noting the industry's historic use of wood biomass as hogfuel, "wood was and still remains the number one source of renewable energy in the US," Perritt commented. He said he has tracked 175 projects under development in North America as well as several large projects in the UK that are targeting wood supply from the US. Estimates of 48 million green tons of wood biomass used for electricity and pellets in 2008 in the US will rise to 55 million green tons in 2009 and up by 65 million green tons of new demand by 2015, if all the projects go through.

Noting the industry's historic use of wood biomass as hogfuel, "wood was and still remains the number one source of renewable energy in the US," Perritt commented. He said he has tracked 175 projects under development in North America as well as several large projects in the UK that are targeting wood supply from the US. Estimates of 48 million green tons of wood biomass used for electricity and pellets in 2008 in the US will rise to 55 million green tons in 2009 and up by 65 million green tons of new demand by 2015, if all the projects go through.

A stream of new project announcements is "showing no signs of abatement," he added. "It adds up to a lot of wood."

The vast majority of US projects are related to electricity and steam power but also for the fast-growing wood pellet market to supply mostly European customers. Perritt also noted up to 20 biomass projects in the UK that could amount to 30 million green tons of wood demand, eclipsing the UK's current timber harvest total of almost 9 million tons. Half of the new UK demand could come from the US.

Most new US demand is concentrated in the Southeast although the Northeast has seen the most recent market volatility.

Most new US demand is concentrated in the Southeast although the Northeast has seen the most recent market volatility.

Drivers of the new projects include the price of oil, efforts to reduce fossil fuel use through carbon credits and a potential carbon cap and trade system in the US, as well as localized renewable energy standards in up to 33 states.

Supply will likely come from traditional sources of wood for pulp and paper mills such as sawmill residuals and even whole tree chipping but also logging residues, slash and urban wastewood. Yet with the overall decline in US pulpwood demand, biomass will simply move into some wood markets that have been hurt by mill and machine closures.

New markets are already developing in the woodbaskets around the new biomass projects for a previously low-value resource that as hogfuel was traded basically at the cost of shipping."Yes there is wood out there," Perritt summarized, "but how much will it cost?"

A panel discussion at the conference tackled the issues of government subsidies to the new projects. Speakers noted previous subsidy efforts in the industry including local funding to US market deinked pulp mills using recovered fiber in the 1990s, most of which went bankrupt at some stage. Government support for pulp and paper projects have also been too common, mirroring the current trend supporting wood biomass energy plants. "
There is example after example of dysfunctional situations," commented panelist Deutsche Bank managing director Mark Wilde. "We are naïve if we think energy policy won't be inherently political."
Forest Products Assn. of Canada CEO Avrim Lazar said development of the biomass industry has become a public policy imperative that is a "heroic" attempt to "de-link" green house gas emissions from the industrial economy.

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Wood Products Industry Information

CROW'S PAGE ONE: New protocol opens up opportunities for commercial timberland owners

PORTLAND, OR, Oct. 12, 2009 (RISI) - Whether considered a massive scheme based on thin scientific evidence or a necessary step to saving the world, or perhaps something somewhere in between, the attempt to reduce greenhouse gases has momentum. California recently implemented an ambitious system of imploring forestland owners and wood products producers to increase the removal of carbon from the atmosphere.
On September 24, the Air Resources Board (ARB) of California adopted an updated Forest Project Protocol, which gives timberland owners across the country a more reasonable opportunity to participate in atmospheric carbon removal. The response within the wood products industry was swift, evidenced by a major timberland owner jumping into the movement within a week of the announcement

The updated protocol allows private timberland owners to basically use their forests as carbon stores, or offsets, for other companies emitting what is considered to be excessive carbon. The transaction is referred to as "carbon trading." It is based on the process of photosynthesis, in which plants remove carbon from the atmosphere and retain it as part of the plant's growth (this is often called carbon sequestration). In forests, the carbon-store potential is immense (forests are usually considered "carbon sinks") and can be multiplied through the manufacture of wood products and sustainable forestry methods that increase timber volumes (see Crow's Weekly Market Report, Sept. 18, 2009)

The ARB chairman Barbara Riordan noted the diversified expertise used to develop the protocol. "Landowners, forestry experts, academics, environmentalists and government agencies all came together to produce a protocol that will capture and store millions of CO2 emissions every year through cost-effective, sustainable forestry practices."

The protocol establishes both a scientific means to measure the carbon stored in forests and accounting methods. In 2007, California was the first state to adopt rules intended to account for carbon storage projects. That carbon-offset program was limited to private forestlands in California and contained obligations that were unappealing to private commercial timberland owners. The new program allows both private and public forests throughout the U.S. to participate and removes barriers that inhibited commercial timberland owners from the process.

According to the ARB, the Forest Project Protocol 3.0 "provides requirements and guidance for quantifying the net climate benefits of activities that sequester carbon on forestland. The protocol provides project eligibility rules; methods to calculate a project's net effects on greenhouse gas (GHG) emissions and removals of CO2 from the atmosphere; procedures for assessing the risk that carbon sequestered by a project may be reversed (i.e. released back to the atmosphere); and approaches for long term project monitoring and reports."
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