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BC Bugwood Envirochem Services Inc. Wood pellets could achieve sufficient economic returns under certain circumstances, such as the sale to Alberta coal (or other solid fuel) fired power plants if a high enough price can be negotiated and the federal RPPI incentive and carbon credits can be secured. Cellulignin replacing natural gas as a fuel also shows good economic potential if used in BC or Alberta. They can also make economic sense if truck transport distances to users in BC are relatively short or if acceptable sales prices can be achieved in European (e.g. the U.K.) or other foreign markets. Other options, including gasification to produce synthetic natural gas (SNG) or methanol, do not appear to break even unless very high market prices are available and very low harvest costs can be implemented by policies. In addition the technologies required are not yet commercial especially at the smaller scale and short term time frames required for bugwood. Bio-liquid production does not perform well economically under the scenarios developed in this report unless the bugwood is readily available at minimal cost. These insights, which are based on general economic data averages, should be confirmed for a specific plant location and technology. Some strategies are available to the provincial government which could encourage the conversion of bugwood into energy. 6.2.2 Strategies The basic strategies presented below are designed to encourage the development of industries based on the bugwood and other biomass resources in BC, and to use the management of the bugwood resource itself to enable new growth and sustainability of the BC pine forests and the associated forestry industry. 1. Encourage Biomass Technology Development: Within the provincial Alternative Energy and Power Technology Strategy, encourage and support the demonstration of emerging technologies, such as ethanol, cellulignin, and small-scale CHP. Box 4: The Forest Industry Competitiveness Strategy This five-year initiative, led by Natural Resources Canada, was announced in November 2005 and addresses a wide range of issues and opportunities currently facing the Canadian forest industry. This includes diversifying the economies of forest-dependent communities, enhancing skills of forestry workers, investigating new markets for wood products, developing innovative technologies and supporting the domestic industry in the face of the continuing softwood lumber dispute. The strategy provides $581 million to support forest-dependent communities, market diversification and incentives for innovation in the forest industry, including incentives for bioenergy production. In addition, the Government of Canada's November 2005 Economic and Fiscal Update proposes to accelerate the capital cost allowance for forest bioenergy. This would mean the industry would realize up to $110 million in tax savings. The Strategy also sets aside funds to facilitate up to $800 million in loan insurance and provides $100 million for a repayable contribution program for firms affected by the unique circumstances of the softwood lumber dispute. These technologies were shown to have economic potential using bugwood as a feedstock, and could improve the BC Interior’s energy and economic infrastructure while creating a lasting benefit for the province as a whole. Tax benefits for bugwood related technologies, such as those provided for the mining sector, may enable the development of a new industry in BC. This strategy will also help the province to hedge against increasing natural gas prices, as wood may become a competitive fuel if the price of natural gas continues to increase. Investments in bugwood technologies can be used to lever the development of a larger biomass industry in BC. 2. Encourage Biomass Industry Development: The government should support private investment in energy related to the commercial application of new technologies. Using Page 95 Source: NRCan press release, Oct. 24, 2005PDF Image | IDENTIFYING ENVIRONMENTALLY PREFERABLE USES FOR BIOMASS
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