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Type 4 Strategy Update Winter SISCO

Type 4 Strategy Update Winter SISCO. What’s done and what have we learned…. Update . For More Info: http://www.for.gov.bc.ca / HFP/ silstrat /index.htm. Complete or Near Complete : Quesnel Williams Lake Lakes Okanagan Morice 100 Mile Prince George Just Started Kamloops

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Type 4 Strategy Update Winter SISCO

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  1. Type 4 Strategy UpdateWinter SISCO Winter SISCO - Kamloops. BC What’s done and what have we learned….

  2. Update For More Info: http://www.for.gov.bc.ca/ HFP/silstrat/index.htm Web Meeting Complete or Near Complete: • Quesnel • Williams Lake • Lakes • Okanagan • Morice • 100 Mile • Prince George • Just Started • Kamloops • On Radar for 2014 • Invermere, Cranbrook, Strathcona, Arrow

  3. What Have We Learned: Web Meeting Ideas Fall into Three Broad Themes Technical Analysis / Solutions Planning Process Information Gaps See abstract for details – lets dig into just one of them here: Fertilization vs Rehabilitation Treatments – which one?

  4. Quesnel and Williams Lake TSAs Web Meeting Prioritize Rehab Treatments in short term because Fert Treatments can wait (but do both). Preferred Strategy Expenditures (Williams Lake)

  5. Why Rehab over Fert? Web Meeting Rehab has potential to provide merchantable volume for mills at the time of treatment AND increase the effective landbase in the long term. Example – a dead Pl stand with 35m3/ha of green spruce scattered throughout is currently uneconomic and not expected to amount to much in next 80 years. If rehabbed now (FLTC or ITSL) it provides 35 m3/ha of merch volume into the timber supply + capture the sites potential with a new managed stand. Costs to treat are offset by realized merch volume.

  6. Why is Fert Lower Priority? Web Meeting Limited number of currently suitable stands. Risk of loss reduced and ROI increased when fert done closer to harvest. Still plenty of time to treat stands prior when they will be harvested (midterm). Example – in fires t

  7. Fertilization vs Rehabilitation Fertilization Rehabilitation Re-establish stands rendered uneconomic by MPB related mortality – with + ~30m3/ha now? +100m3/ha in 60 yrs Cost is $1000-2000/ha • +15m3/ha in 10 yrs • Cost is $450/ha Web Meeting

  8. Base Case Review Short term: 3.2 M Midterm: 1.8 M Long term: 3.6 M Midterm: Yrs10-50 91% Pl in Yrs 1-5 Web Meeting Lowest Point of Available Growing Stock is in Years 30-50.

  9. Base Case Review Salvage in first two periods. Small but important role for IDF. Transition to managed stands starts in 20 yrs. Heavily reliant by 40 yrs. Web Meeting

  10. Base Case Review Most >60% dead stands salvaged – leaving lesser impacted stands for Midterm Youngest stand profile (smallest timber) harvested between 30-50 yrs Web Meeting

  11. Base Case Review Web Meeting • Average harvest volume in short term is 100m3/ha and then improves. • Average harvest age is ~90 years in the long term but gets a low as 68 in year 50. • Harvest area is very high during salvage period (30,000 ha/yr) but reaches a long term average of 15,000 ha/yr.

  12. Harvest Flows Min Harvest Volumes Shelf Life Min Harvest Ages Web Meeting Base Case Sensitivities

  13. Alternative Base Case Harvest Flows Web Meeting Alternative approaches to short term harvesting can yield different outcomes in the midterm. Avoiding the harvest of stands that remain viable in the midterm – improves the midterm but foregoes the economic value of the pine lost.

  14. Sensitivity: Revised Min Harvest Criteria Web Meeting • Always @80m³/ha • Short (+12%) • Mid (+21%) • Rise (+13%) • Long (+5%) • Always @110m³/ha • Short (-4%) • Mid (-9%) • Rise (-1%) • Long (-6%) Base Case: 80 m³/ha for salvage, 110 m³/ha for second growth

  15. Sensitivity: Revised Shelf-Life Web Meeting

  16. Sensitivity: Revised Shelf-Life Web Meeting • Short (+15%) • Mid (~) • Rise (+23%) • Long (+5%)

  17. Sensitivity: Longer MHAs (Quesnel Ex) Web Meeting

  18. Sensitivity: Longer MHAs Web Meeting

  19. Sensitivity: Deciduous Web Meeting Currently very little utilization of deciduous material Estimate opportunity Deemed lower priority

  20. Sensitivity: Limit the Harvest of Small Pine Web Meeting Harvesting small pine becomes less economic with longer haul distances Deemed lower priority – not completed

  21. Key Points: Base Case and Sensitivities Web Meeting • WL TSA is heading towards a low in available volume after the 4th decade (29.3 MM m³) • Harvest forecasts are very sensitive to: • Salvage effort and stand types salvaged • Shelf-life • Minimum harvest criteria (MHA)

  22. Web Meeting Silviculture strategies

  23. Strategy: Fertilization Incremental volumes achieved after 10 yrs (single or multiple treatments) Pl @ 12m³/ha Fd @ 15m³/ha Sx@ 15m³/ha (MulitpleSx fertilization done every 5 yrs, with larger gains) Area Treated Over Time Web Meeting

  24. Strategy: Fertilization Web Meeting • Budget maximized after 15 years • The model harvests all stands that are treated and does not treat stands that are not harvested. • Half of volume harvested in midterm is comes from natural stands. • Multiple Sx fertilization is prioritized (most cost efficient).

  25. Strategy: Fertilization Web Meeting • Short (~) • Mid (0-10%) (little to no ACE effect occurs) • Rise (+5%) • Long (+8%)

  26. Strategy: PCT and Fertilize Web Meeting Relatively little area eligible (6,800 ha) Lower priority than to fertilize existing stands with appropriate density – higher cost and gain is similar. Low priority – dropped

  27. Strategy: Spacing Dry-Belt Fd(Thinning young thickets in NonUWR stands  10% volume increase at harvest Area Treated $’s Spent Web Meeting

  28. Strategy: Spacing Dry-Belt Fd Web Meeting • Short (~) • Mid (+3%) • Rise (+1%) • Long (not investigated) Delayed response as have to wait 30 yrs after treatment to harvest.

  29. Strategy: Rehabilitation Reforest MPB impacted stands that are non-merch (<80m3/ha) Area Treated $’s Spent Web Meeting Extensive opportunity, full budget spent (~1,500 ha/yr).

  30. Strategy: Rehabilitation Web Meeting • Short (~) • Mid (+8%) - volume at time of treatment + some THLB back in • Rise (+13%) – Non merch stands brought back into production • Long (+13%) – Non merch standsbrought back into production

  31. Strategy: Partial Cut in Constrained AreasHarvest of 1/3 volume in constrained areas, no impact to non timber values Area Treated $’s Spent Web Meeting

  32. Strategy: Partial Cut in Constrained Areas Web Meeting • Short (~) • Mid (+14) • Rise (no attempt to improve) • Long (no attempt to improve) Significant improvement in midterm due to accessing stands that would otherwise not be available.

  33. Strategy: Enhanced Basic ReforestationImproved well-spaced densities, fewer gaps (OAF1), more planting / class A seed Area Treated $’s Spent Web Meeting Budget max reached in several periods, about 70% of stands logged in midterm get enhanced reforestation.

  34. Strategy: Enhanced Basic Reforestation Web Meeting • Short (~) • Mid (+5%) • Rise (+2%) • Long (+12%) First stands are ready in 35-45 years as min harvest volumes are reached sooner. Mid and long term benefit from enhanced yields. Little to no ACE effect.

  35. Optimized Mix – $3 Million/yr Budget Area Treated $’s Spent Web Meeting • Budget max reached every year • Rehab and Enhanced Basic are dominant initially (first 5 yrs) • Fertilization ramps up over time (almost all eligible stands treated before harvest) • Majority of the budget spent on Rehab in all time periods • Partial cutting is key to improving early midterm. • Spacing of drybeltFd is a focus in early periods.

  36. Optimized Mix – $3 Million/yr Budget Web Meeting • Short (~) • Mid (+22%) • Rise (+2%) • Long (+11%) Midterm increased as priority over longterm.

  37. Optimized Mix – $5 Million/yr Budget Area Treated $’s Spent Web Meeting • Budget max reached every year (5 Million) • Treatment decisions very similar to 3 million budget. • Heavy spending on rehab • Ramp up of fertilization • Steady spending on enhanced reforestation • Partial cutting to help the front end of the midterm. • Most thinning of Drybelt fir in early periods

  38. Strategy: Composite Mix @ $5M/yr Web Meeting • Short (~) • Mid (+28%) • Rise (+10%) • Long (+17%) Midterm increased as priority over longterm.

  39. Web Meeting Economic Assessment

  40. Stand-Level Economics - Assumptions Web Meeting 2% discount rate Net economic benefit of $25/m3 on the additional volume realized (net benefit to crown from additional cubic meter harvested and moving through the economy).

  41. Stand-Level Economics - Results Web Meeting Multi Spruce Fert (3-5) most attractive fert option. Rehab, Partial Cut, and Enhanced Basic have positive return at 2%.

  42. Forest-Level Economics $3M Budget NPV = $122 M $5M Budget NPV = $182 M Web Meeting

  43. Forest-Level Economics Web Meeting

  44. Key Points: Silviculture Strategies Web Meeting Rehab appears to be the largest opportunity and warrants significant investment. It buys wood in the short term from stands that will never be eligible, plus adds to the long term harvest by putting them into production. Partial harvesting in constrained areas is the only strategy to help fill in the front of the midterm. It borrows volume from later in the forecast (i.e., no extra volume) Fertilization is important but not as time sensitive as other treatments. There are several decades before any of these stands will be harvested so time exists to treat them. Both Composite Scenarios (3M and 5M budgets) are similar in treatment selections/proportions and have positive NPV at the forest level (2% discount rate).

  45. Based on the finding shown here and general knowledge of the TSA and its options – what is the preferred strategy for the next 5-10 yrs? Web Meeting Preferred Strategy

  46. Optimize $5 M Budget? Web Meeting

  47. Next Steps and Timing Modelling and Analysis Report Distribute for review - end of August Silviculture Strategy Report Distribute for review – end of August Tactical Plan Deferred Web Meeting

  48. Thanks for your input Web Meeting

  49. Harvest Flow Differences Sample Web Meeting

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