Type 4 Strategy Update Winter SISCO What’s done and what have we learned…. 1 February 25, 2014...
-
Upload
bailey-ashby -
Category
Documents
-
view
217 -
download
2
Transcript of Type 4 Strategy Update Winter SISCO What’s done and what have we learned…. 1 February 25, 2014...
Type 4 Strategy UpdateWinter SISCOWhat’s done and what have we learned….
1
Febr
uary
25,
201
4W
inte
r SIS
CO -
Kam
loop
s. B
C
Update 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
2
Augu
st 1
6, 2
013
Web
Mee
ting
For More Info:
http://www.for.gov.bc.ca/ HFP/silstrat/index.htm
What Have We Learned:
Ideas Fall into Three Broad Themes1. Technical Analysis / Solutions2. Planning Process3. Information Gaps
See abstract for details – lets dig into just one of them here:
Fertilization vs Rehabilitation Treatments – which one?
Augu
st 1
6, 2
013
Web
Mee
ting
3
Quesnel and Williams Lake TSAs
• Prioritize Rehab Treatments in short term because Fert Treatments can wait (but do both).
Preferred Strategy Expenditures (Williams Lake)
Augu
st 1
6, 2
013
Web
Mee
ting
4
Why Rehab over Fert?
• 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.
Augu
st 1
6, 2
013
Web
Mee
ting
5
Why is Fert Lower Priority?
• 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
Augu
st 1
6, 2
013
Web
Mee
ting
6
Fertilization vs Rehabilitation
Fertilization
• +15m3/ha in 10 yrs • Cost is $450/ha
Rehabilitation
• Re-establish stands rendered uneconomic by MPB related mortality – with
• + ~30m3/ha now?• +100m3/ha in 60 yrs• Cost is $1000-2000/ha
Augu
st 1
6, 2
013
Web
Mee
ting
7
Base Case Review
8
Augu
st 1
6, 2
013
Web
Mee
ting
Short term: 3.2 MMidterm: 1.8 MLong term: 3.6 M
Midterm: Yrs10-5091% Pl in Yrs 1-5
Lowest Point of Available Growing Stock is in Years 30-50.
Base Case Review
9
Augu
st 1
6, 2
013
Web
Mee
ting
Salvage in first two periods.
Small but important role for IDF.
Transition to managed stands starts in 20 yrs.
Heavily reliant by 40 yrs.
Base Case Review
10
Augu
st 1
6, 2
013
Web
Mee
ting
Most >60% dead stands salvaged – leaving lesser impacted stands for Midterm
Youngest stand profile (smallest timber) harvested between 30-50 yrs
Base Case Review
11
Augu
st 1
6, 2
013
Web
Mee
ting
• 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.
BASE CASE SENSITIVITIES
Harvest FlowsMin Harvest Volumes Shelf LifeMin Harvest Ages
Augu
st 1
6, 2
013
Web
Mee
ting
12
Alternative Base Case Harvest Flows
Augu
st 1
6, 2
013
Web
Mee
ting
13
• 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.
Sensitivity: Revised Min Harvest Criteria
Augu
st 1
6, 2
013
Web
Mee
ting
14
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
Sensitivity: Revised Shelf-Life
Augu
st 1
6, 2
013
Web
Mee
ting
15
Sensitivity: Revised Shelf-Life
Augu
st 1
6, 2
013
Web
Mee
ting
16
• Short (+15%)• Mid (~)• Rise (+23%)• Long (+5%)
Sensitivity: Longer MHAs (Quesnel Ex)
Augu
st 1
6, 2
013
Web
Mee
ting
17
Sensitivity: Longer MHAs
Augu
st 1
6, 2
013
Web
Mee
ting
18
Sensitivity: Deciduous
• Currently very little utilization of deciduous material• Estimate opportunity• Deemed lower priority
Augu
st 1
6, 2
013
Web
Mee
ting
19
Sensitivity: Limit the Harvest of Small Pine
• Harvesting small pine becomes less economic with longer haul distances
• Deemed lower priority – not completed
Augu
st 1
6, 2
013
Web
Mee
ting
20
Key Points: Base Case and Sensitivities
• 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)
Augu
st 1
6, 2
013
Web
Mee
ting
21
SILVICULTURE STRATEGIES
Augu
st 1
6, 2
013
Web
Mee
ting
22
Strategy: Fertilization
Augu
st 1
6, 2
013
Web
Mee
ting
23
Incremental volumes achieved after 10 yrs (single or multiple treatments) Pl @ 12m³/haFd @ 15m³/haSx @ 15m³/ha (Mulitple Sx fertilization done every 5 yrs, with larger gains)
Area Treated Over Time
Strategy: Fertilization
Augu
st 1
6, 2
013
Web
Mee
ting
24
• 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).
Strategy: Fertilization
Augu
st 1
6, 2
013
Web
Mee
ting
25
• Short (~)• Mid (0-10%) (little to no ACE effect occurs) • Rise (+5%)• Long (+8%)
Strategy: PCT and Fertilize
Augu
st 1
6, 2
013
Web
Mee
ting
26
• 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
Strategy: Spacing Dry-Belt Fd(Thinning young thickets in NonUWR stands 10% volume increase at harvest
Augu
st 1
6, 2
013
Web
Mee
ting
27
AreaTreated
$’s Spent
Strategy: Spacing Dry-Belt Fd
Augu
st 1
6, 2
013
Web
Mee
ting
28
• Short (~)• Mid (+3%)• Rise (+1%)• Long (not investigated)
Delayed response as have towait 30 yrs after treatment toharvest.
Strategy: Rehabilitation Reforest MPB impacted stands that are non-merch (<80m3/ha)
Augu
st 1
6, 2
013
Web
Mee
ting
29
AreaTreated
$’s Spent
Extensive opportunity, full budget spent (~1,500 ha/yr).
Strategy: Rehabilitation
Augu
st 1
6, 2
013
Web
Mee
ting
30
• 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 stands brought back into production
Strategy: Partial Cut in Constrained AreasHarvest of 1/3 volume in constrained areas, no impact to non timber values
Augu
st 1
6, 2
013
Web
Mee
ting
31
AreaTreated
$’s Spent
Strategy: Partial Cut in Constrained Areas
Augu
st 1
6, 2
013
Web
Mee
ting
32
• 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.
Strategy: Enhanced Basic ReforestationImproved well-spaced densities, fewer gaps (OAF1), more planting / class A seed
Augu
st 1
6, 2
013
Web
Mee
ting
33
AreaTreated
$’s Spent
Budget max reached in several periods, about 70% of stands logged in midterm get enhanced reforestation.
Strategy: Enhanced Basic Reforestation
Augu
st 1
6, 2
013
Web
Mee
ting
34
• 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.
Optimized Mix – $3 Million/yr Budget
Augu
st 1
6, 2
013
Web
Mee
ting
35
Area Treated $’s Spent
• 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 drybelt Fd is a focus in early periods.
Optimized Mix – $3 Million/yr Budget
Augu
st 1
6, 2
013
Web
Mee
ting
36
• Short (~)• Mid (+22%)• Rise (+2%)• Long (+11%)
Midterm increased as priority over longterm.
Optimized Mix – $5 Million/yr Budget
Augu
st 1
6, 2
013
Web
Mee
ting
37
• 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
Area Treated $’s Spent
Strategy: Composite Mix @ $5M/yr
Augu
st 1
6, 2
013
Web
Mee
ting
38
• Short (~)• Mid (+28%)• Rise (+10%)• Long (+17%)
Midterm increased as priority over longterm.
ECONOMIC ASSESSMENT
Augu
st 1
6, 2
013
Web
Mee
ting
39
Stand-Level Economics - Assumptions
Augu
st 1
6, 2
013
Web
Mee
ting
40
• 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).
Stand-Level Economics - Results
Augu
st 1
6, 2
013
Web
Mee
ting
41Multi Spruce Fert (3-5) most attractive fert option.Rehab, Partial Cut, and Enhanced Basic have positive return at 2%.
Web
Mee
ting
Forest-Level Economics
Augu
st 1
6, 2
013
42
$3M Budget NPV = $122 M$5M Budget NPV = $182 M
Forest-Level Economics
Augu
st 1
6, 2
013
Web
Mee
ting
43
Key Points: Silviculture Strategies
• 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).
Augu
st 1
6, 2
013
Web
Mee
ting
44
PREFERRED STRATEGY
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?
Augu
st 1
6, 2
013
Web
Mee
ting
45
Optimize $5 M Budget?
Augu
st 1
6, 2
013
46
Web
Mee
ting
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
Augu
st 1
6, 2
013
47
Web
Mee
ting
48
THANKS FOR YOUR INPUT Augu
st 1
6, 2
013
Web
Mee
ting
Harvest Flow Differences
Augu
st 1
6, 2
013
Web
Mee
ting
49
Sample
Base Case 2762000 1767000 2793000 3578000Change relative to Base Case (m³/yr)
Scenario Short-Term Mid-Term Rise to Long-Term Long-Term
Fertilization of Sx, Pl, Fd 2,000 0% 42,000 2% 138,000 5% 297,000 8%
Spacing dry-belt Fd (4,000) 0% 50,000 3%
15,000 1%
- 0%
Rehabilitation (3,000) 0% 147,000 8% 353,000 13% 463,000 13%
Enhanced Basic Reforestation (4,000) 0% 83,000 5%
69,000 2% 433,000 12%
Partial cut in constrained areas (4,000) 241,000 14%
(8,000) 0% (2,000) 0%
Combined Silviculture ($3 M/yr) (4,000) 0% 140,000 8% 202,000 7% 595,000 17%
Combined Silviculture ($5 M/yr) (4,000) 0% 237,000 13% 290,000 10% 865,000 24%