WSCA Annual Conference, AGM and Trade Show February 2-4, 2011 Delta Grand Okanagan Resort and Convention Center, Kelowna

1. Community Bio-Energy Reserve Proposal: Reducing the Wildfire Threat, Framing the Bio-Energy Potential and Creating Opportunities for Contractors WSCA Annual Conference, AGM and Trade Show February 2-4, 2011 Delta Grand Okanagan Resort and Convention Center, Kelowna, BC Robert W. Gray, Fire Ecologist, R.W. Gray Consulting, Ltd.

2. Wildfires in the Wildland-Urban Interface • How do we reduce their destructive potential? • Is there a way to fund fuels management that is revenue neutral or even profit generating? • What policy/regulation changes are needed?

3. Filmon Firestorm Report: Fuels and Forest Practices Central issues: • changes to forest policy, • Licensee involvement in solving the WUI hazard issue, • How to treat private land hazardous fuels, • Finding an economical solution to the removal/treatment of small-diameter and dead wood, • Building “programs” to manage fuels over the long-term.

4. Provincial Response to Filmon: Fuel Management • Set up Strategic Wildfire Prevention Program Initiative under Union of BC Municipalities, • Under SWPPI provided partial funding for: • Community Wildfire Protection Plans, • Fuel treatment pilot projects, • Operational fuel treatments. • SWPPI provided up to $15,000 of 50-50 in-kind for CWPP development, • Initially provided 50% of the funding for fuel treatments if no MPB-killed trees involved, and 75% if MPB-killed trees involved (later adjusted to all funded at 75%), • As funding started to run out the program only funded the treatment of high hazard stands as identified on PSTA map, • No strategy for treating private land.

5. Additional Funding Sources Local government was encouraged by WMB to seek out any and all sources of in-kind funding for fuel treatments. Since 2004 these have included: • Natural Resources Canada Mountain Pine Beetle Fund, • Community Adjustment Fund • Job Opportunities Program

6. How well has the SWPPI addressed the central issues? Forest Policy: • Forest policy in BC did not change in the wake of the 2003 fire season and the Filmon Report (AAC for the WUI has not changed), • Timber/fiber production (maximization) is still the primary objective driving forest management in the WUI in BC, • Hazard reduction is not the primary objective, • Significant silviculture impediments still persist: • stocking standards do not take into consideration the long-term need to reduce wildfire hazard, • preferred tree species does not take into consideration the long-term need to reduce wildfire hazard.

7. Local government is in the role of advocating for the treatment of hazardous stands adjacent to their communities that are under license to private timber companies, Licensee Cooperation: • Licensees are hesitant to work in the WUI for a number of reasons: • poor wood quality, • substantial constraints, • expensive public consultation, • high treatment standards (hazardous fuels).

8. Operational Fuel Treatments Merchantable wood involved Unmerchantable wood involved Local government/UBCM fund treatment Local government leads Licensee leads Local government/UBCM fund clean-up LG has to cover cost/risk of thinning operation If small amount of merch. treat as unmerch. Local government pays stumpage to crown Local government/UBCM fund clean-up

9. Large proportion of interface lands surrounding communities is private; most are small landowners, some own large holdings, • Many landowners are absentee landowners, • No federal, provincial, or local government grants available to treat hazardous fuels on private land, • Few options available to local government to “encourage” landowners to treat their land: • education campaigns, including FireSmart and Firewise have limited, short-term success, • hazard abatement by-laws. Treating private land: • Treatment costs can be prohibitive due to poor quality wood, and low volumes coming off small lots, • Larger lots fall prey to predatory “high-grade” loggers leaving a greater hazard after the treatment.

10. Adding value to small-diameter trees and dead wood: • Large proportion of the hazard fuels issue is comprised of small-diameter trees and downed wood, • In many cases this stand structure does not fit the profile of the local licensees manufacturing facility, • Provincial government has encouraged local government to develop bioenergy solutions using salvage licenses, OLC, mill waste, and landing piles as feedstock, • Economies of scale not considered in provincial solutions, • Local government cannot gain access to sufficient predictable quantities of feedstock to support private investment in bioenergy industry. • Researchers have concluded that feedstock “supply” is the single greatest issue affecting bioenergy feasibility.

11. 43,000 ha of fuel treatment completed out of 1.8 million ha of WUI (2%), • $50+ million spent on CWPP’s and operational fuel treatments, • As of December 2010: UBCM funds completely depleted, • As of March 2011: CAF, JOP and NRCAN funds depleted and programs terminated. Building fuel management programs: • Provincial approach was “project” based, not “program” based; each treatment unit was approached in isolation of other units vs as part of a landscape-level solution.

12. Building fuel management programs: • Companies can’t invest in personnel (enhanced skills training) and equipment, Implications for contractors and communities • Companies can’t retain their best personnel, • As grants have dried up workers have had to move to new regions despite their home and community still a risk, • Need entrepreneurial solutions from the small business sector to advance the bioenergy sector but this won’t happen until the supply of material is freed up.

13. Resolving Critical Issues: The Provincial Program Small Wood Economics Private Land Hazards Forest Policy Solving the WUI Wildfire Hazard Issue Fuel Mgmt Programs Licensee Involvement

14. Solution: WUI Bio-Energy Reserve • Recognize WUI as having different management goal than rest of landscape, • If local government responsible for their own safety they should manage the WUI, • Delineate the boundary of the WUI based on a combination of fire behavior and economics, • Long-term, consistent funding is required to initially treat fuels plus maintenance, • Local government to use sale of fiber (sawlogs, pulp, and hog) to fund long-term fuels management program.

15. Forest Policy Changes/Licensee Involvement • Amend existing forest management legislation to recognize the WUI as having the over-arching goal of hazard reduction. This will lead to changes in practices that are currently at odds with this goal, such as: changes in required stocking density, preferred species, and long-run contribution to the AAC, and stronger emphasis on fuels management, • AAC will drop significantly before leveling off at a much lower rate. This is in accordance with the need to drastically reduce hazards and maintain them over the long-term, • Reality is, even though the WUI is in the AAC calculation it is not contributing because the licensees are not operating there, • Tenure arrangement doesn’t have to change – existing licensee can remain, however, the following must take place in accordance with new legislation: • Cut level in the WUI must increase dramatically with the goal of completing a first pass through the WUI in 10 – 20 years vs several hundred years, • Licensee must treat all stands regardless of the profile they require for their manufacturing facility, • Post-harvest fuels must be cleaned-up to a much higher standard than is currently accepted by the MoFR, • All stumpage goes back into fuels treatments in the WUI.

16. Solution to Private Land Issue • Tied to local government access to feedstock and development of bioenergy industries, • With ability to pay a fair market price for chips private land owners can be encouraged to treat their land – greater likelihood of breaking even or making a profit, • Local government can consider stronger action now that an economical solution is available – by-laws with penalties that are more than the treatment cost.

17. Adding Value to Traditionally Unmerchantable Material • Small-diameter trees, dead-downed wood, and other waste material from sawtimber harvest (boles, limbs, tops) has value as a source of energy (thermal or electric), • Financial viability is dependent on a number of factors including: volume/ha, mix of sawtimber and hog material, hauling distance, and the end user (electricity generation, densified wood product, district heating system), • Economies of scale are critical as is access to long-term supply, • WUI forests contain large quantities of unmerchantable material close to communities – Province needs to make this material available to local government in order to encourage investors in bioenergy industries, • Chicken and egg dilemma – need material to encourage investment to use the material.

18. WUI Fuels/Biomass and Bioenergy: Two Approaches Province “encouraging “ local government to get involved in the new bioenergy field. Passive, “Opportunistic” Approach – demand driven “Supply” “Demand” Active, “Directed” Approach – supply driven

19. Passive, “Opportunistic” Approach • Start with the desire to use biomass as an energy source or as a product; initiative starts from the “demand” side, • Convert publicly-owned buildings to bioenergy or build new publicly-owned buildings and use bioenergy to heat and/or power them, • Develop manufacturing of bioenergy products for local, regional and international sale, i.e., briquettes, pellets, biochar, biodiesel, etc. • Reliant on the availability of cheap chips and hog fuel, • Feedstock sources include mill waste, landing piles, land clearing waste, subsidized fuel treatment waste, etc.

20. Passive, “Opportunistic” Approach Issues with this approach: • Starts from the “demand” side, not the “supply” side, • Annual predictability and availability of feedstock depended on the viability of other industries; end users are not in control of feedstock source: • In the case of sawmill mill waste, if the sawmill stops manufacturing sawtimber there is no source of mill waste, • In the case of land clearing, if the local real estate market or availability of developable land goes down there is no land clearing waste, • In the case of interface fuel treatments, if the availability of government subsidies goes down there is no waste material generated, • landing piles are only available if there is heavy, local forest industry activity; if not, there is no landing pile waste available.

21. “Active”, Directed Approach • Encourage bioenergy in order to solve an existing biomass issue; initiative starts from the “supply” side, • Determine the scale of the biomass issue, i.e., volume of biomass, where is it, how fast does it accrue, etc. • From the biomass “inventory” analysis determine how many users (thermal heat) and industries (bioenergy products) can be developed, • Feedstock is predictable and available because the end users control the feedstock source, • With this approach bioenergy can be used to solve an existing biomass accumulation issue, such as: • Interface fuels, • Dry forest/grassland ingrowth and encroachment, • Municipal landfills, • Agricultural waste.

22. Building “Programs” • Fire and fuel management programs are dependent on access to consistent funding, • Revenue from biomass operations provides funding to fire management program, • With consistent funding local government can hire staff (foresters with appropriate fire skills) and develop long-term plans, • Local contractors carry out biomass harvest operations as well as fuels work, • Energy industry more recession-proof than traditional forest industry.

23. Silviculture Contractor Opportunities Feedstock procurement: • Small-scale harvest operations (in-woods), • Grinding/chipping and hauling chips, • Storage of whole logs for future chip supply, • Agroforestry: • Planting deciduous, • Fencing, • Irrigation systems Fuels management: • Slashing, piling and pile burning, • Firebreak and fuelbreak construction, • Broadcast burning, • Mastication, • Plantation thinning/spacing, • Pruning.

24. Resolving Critical Issues: The WUI Reserve Private Land Hazards Forest Policy Solving the WUI Wildfire Hazard Issue Small Wood Economics Licensee Involvement Fuel Mgmt Programs

25. East Kootenay’s Case Study

26. Three-Phase Approach to a Solution to the WUI Issue • Inventory analysis – suspect that the current forest inventory significantly underestimates the volume of unmerchantable material, • Biomass-energy business model – generic model used to perform spatial optimization of energy facility location and economic analysis, • Apply inventory analysis and business model to WUI landscape around Cranbrook, Kimberley, and St. Mary’s Indian Reserve.

27. Forest Inventory Prediction • High variability in stand structure combined with low overall value requires a predictive model vs an actual inventory, • Breakdown in volume/ha by species and diameter class, • Volume and characteristics of sawlog component, • Volume and characteristics of unmerchantable component.

28. Biomass-Energy Business Model • Inventory existing public buildings that could benefit from a conversion to biomass heat, • Analyze economic feasibility of carrying out conversions, • Analyze potential for district heating opportunities, • Investigate potential future thermal heating opportunities (i.e., subdivisions, new schools, etc.), • Inventory infrastructure for industrial-scale heating product manufacture.

29. Case Study Analysis Simple problem: Community has 50,000 ha of hazardous fuels: • Approximate chip volume is 42 bdt/ha = 2,115,000 bdt, • Community would like to see WUI hazard reduced in 2 decades (2,115,000 bdt/20 years = 106,000 bdt/year). • Conduct comparison analysis: • Economic implications of the current provincial approach, • Economic implications of the proposed solution.

30. Analysis focuses on providing answers to the following questions: • How many facilities (thermal heating systems, densified wood manufacture, CHP, etc.) will it take to meet this goal? • Where will future supply of feedstock come from? • What is the volume and value of chip material that can come off the area long-term as part of hazard maintenance? • What is the volume and value of sawtimber coming off the area? • What is the net value of sawtimber/chip harvest/year (this profit funds the fire/fuels management program)? • How many fulltime and part-time jobs are created by the program? • What is the overhead cost savings to the community by converting to biomass heating systems? • What is the net profit to the community from the sale of power, heat, and chips? • What is the value of carbon credits sold to the Pacific Carbon Trust (profit for the community)? • What is the net value of provincial tax receipts under this approach vs under the current subsidized approach?

31. Thank You

32. Treatment Costs Under Provincial Approach Example: 100 ha stand • Machine mastication @ $2500/ha = $250,000, $62,500 of which has to be provided by local government, • Machine thin and grind @ $4500/ha = $450,000, $112,500 of which has to be provided by local government, • Manual slash/pile/burn @ $5,000+/ha = $500,000, $125,000 of which has to be provided by local government, • Broadcast burning in the WUI @ $1,000/ha = $100,000, $25,000 of which has to be provided by local government. • Mastication and machine tactics should be followed by broadcast burning; combined treatment costs range between $350,000 and $600,000 - $87,500 to $137,500 of which has to be provided by local government.