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“the logical alternative” November 2013 Symbiosis and Fibre Management W PAC Presentation
Transcript of Symbiosis and Fibre W PAC Presentation - Pellet€¦ · Microsoft PowerPoint - Don Steele - PacBio...
“the logical alternative”
November 2013
Symbiosis and Fibre Management
W PAC Presentation
“the logical alternative”
Symbiosis
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“the logical alternative”
The World We Live In
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Vancouver
THE “COMMON” WEALTH‐ TAXES, EMPLOYMENT, STEWARDSHIP AND VALUE
BIOMASSINDUSTRY
TraditionalSawmill‐PulpIndustry
“TENANT’S”
BC FORESTS‐ TFL’s‐ RFL’s‐ NRFL’s‐ Other
BC Government
“95% Owner”
Waste
Residuals
“the logical alternative”
Biomass ‐ Perceived as a Free Rider
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“the logical alternative”
Biomass is Value Add
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Case Study• Prince George• Pacific BioEnergy• 1994 ‐ 2013
Prince GeorgeForestIndustry
PBEC3.0 MM Tonnes“Residuals”
Waste Heat + CO2(e)
Air, Water, Land, Pollution
$5 – $10 MM Cost(negative revenue)
Health, Quality of life costs
500 Trillion Pellets(guesstimate)
$500 MM Revenue
600,000 – 700,000 Man Years Employment
$80 ‐ $100 MM Capital Investments
International Reputation
Entirely New Community Skillset
“the logical alternative”
Synergy Motivation Score Card
PERCEIVED INCENTIVES IMPACT
• Regulatory negligible
• Open Market Economics low
• Public license – relations non‐existent to low
• Enlightened self interest low
• “Quick buck” high
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“the logical alternative”
The Asset
• 75 MM cubic meters per annum sustainable harvest (107 MM bbl oil energy equivalent)
• 10 – 15 MM TPA Biomass Potential – “Waste” or “Feedstock”?
• 95% Crown owned (guesstimate)
• 75% license and long‐term tenure (majors)
• 25% B.C.T.S.
• 5% other
• World leadership in governance, sustainability, custody and competitive economics
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“the logical alternative”
What‘s the Issue
“(This industry is like) the oil refinery industry without open market access to crude oil reserves…..” J.P.G.
• Profitability being suppressed by “regulated” monopolies (fibre access and transportation)
• Growth constrained after “Proof of Concept” delivered
• Initially competitive new industry becoming uncompetitive (internationally)
• Ability to supply “waste management services” forestry and sawmill industry a disposal problem that is accelerating
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“the logical alternative”
The Solution
What: Economic driven re‐direction of the “waste stream” by the owner/regulator
How: license tenure made available to the biomass industry to create trading leverage for B2B accommodation/synergy
OR
$15 CO2(e)/Tonne carbon tax on an incremental value basis applied to “wasted residuals”
• Forest Residuals
• Sawmill Residuals
• Power Stream Residuals (market differential test)
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“the logical alternative”
These Are Precedents
• “Forestry Ownership/Management” is a dynamic legislative activity reflecting the needs of changing times
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1778 First European forest harvest (Captain Cook/Nootka Sound)
1865 Land Ordinance Act ‐ tenures
1884 Timber Act ‐ stumpage
1888 Transferable licences
1901 Pulp licences
1919 “Resin” lincences *
1937/38 Slash disposal regulations
1945 Department of Forestry
1958 Anti collusion/bidding
1980’s Category II licences
1994 Forest Practices Code Act
2002 Forest Revitalization Plan
Timber HarvestingFire Control
Social Issues
Colonization
Community Building
Economic Expansion
*Resin licences? – biochemical industry
“the logical alternative”
1913 or 2013?
Prince George Citizen Article – November 28, 1998
“From 1915…..Prince George (was) interested in establishing a pulp mill”
“To accommodate those plans (for a pulp mill in 1916) the provincial government set aside
timber stands for the pulp mill’s potential use”
“By 1927 those stands were in dispute. Six area sawmills believed their timber supply would
be exhausted within five years and they would be forced to close down”
“(Minister) Pattullo declared….I see no reason why this (pulp timber licence supply) cannot be
accomplished without injury to local milling interests….(which he saw as) a squatter’s rights
attitude”
“Pattulo’s assessment was prudent because the sawmills carried on and (the) establishment
of a pulp industry came four decades later”
(Excerpted from an article by Valerie Giles published in the Prince George Citizen November 13, 2013)
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“the logical alternative”
Decision “Tree”
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The Decision
• 5.0 MM TPA pellet• $600 MM + Capex• $850 MM – 1 B Revenue “Sunrise” Industry• “Sunrise Industry”• Waste Residuals optimization• 2000+ new jobs
• 1.0 – 2.0 MM TPA pellets• $150 MM ‐ $300 MM Revenue Industry• Limited Capex• No significant new jobs• Mountains of waste• “Mom & Pop” industry
2016/2020
Balance theEquation
Don’t Balancethe Equation
2013
S
S
S(not)
S(not)
“the logical alternative”
Synergy Can Be Fun
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“the logical alternative”
Synergy is Always Confusing
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“the logical alternative”
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But….It’s Always Exciting
