Burns lake has gone through a horrible time with the destruction of the core of the communities industry. A Fund has been created to collect funds to help people effected by the destruction of the Babine Forest Products mill January 20th this year. The Burns Lake Tragedy Fund has now been formed as a society.
According to an article in the Burns Lake District News, the fund has $303,000 in the fund now, but they think it will get to $375,000.
Hampton, partial owner of the mill, has a website up with resources for people in the community.
Showing posts with label Forestry. Show all posts
Showing posts with label Forestry. Show all posts
Wednesday, March 28, 2012
Tuesday, January 24, 2012
The loss of another mill
The explosion at Babine Forest Products is horrific in the short term for the community. The death of some of the mill workers will hit the community in a way that people in urban centres can not understand, in a town of 3500 people, everyone will have known the guys that died.
People are already considering what will happen to Burns Lake now that the mill has been destroyed.
The Babine Forest Products mill had a capacity of 350 million board feet of lumber per year, this is the largest mill operated by Hampton Associates. Hampton Associates still has a smaller sawmill in Burns Lake, Decker Lake Forest Products, but this mill only has a production level of 85 million board feet per year.
Rebuilding the mill has a several issues that need to be addressed:
In theory there could be a smaller mill built in Burns Lake, but I do not see how this makes much sense for Hampton. The money needed to build a mill of the size and scale of Decker Lake is still more than a community like Burns Lake can afford.
I have no idea how the mill was insured, but there could be an insurance windfall for Hampton from the mill being destroyed.
The loss of the mill is a loss of 250 direct jobs in Burns Lake. There are about 2000 to 2200 people in the work force in the Burns Lake area. The loss of these jobs is about an 11% increase in unemployment all at once. I suspect the unemployment rate in Burns Lake is now around 20%.
To put this in terms of Victoria BC, this is as if 25,000 lost their jobs all on one day.
The impact of the loss of these jobs on the community is more than just the immediate jobs. Anyone that serviced or supplied the mill will have lost most of their work. In the next year the loss of mill worker wages in Burns Lake will amount to something around $7,000,000 - workers should get EI which means this loss will not be as big as it could have been. This may not sound like a lot, but it represents a reduction in the local economy of about 6%.
If we look at the wider economy, the unemployment rate is likely to rise to more than 30% within a few months. The economy is likely to shrink by 15% or more within the year.
Burns Lake is going to see a large out migration in the next year which means the value of houses will fall. People will not be able to pay their mortgages and will end walking away from their homes. Businesses that have bank loans are very likely to going to asked to repay them in full and from that be forced into bankruptcy.
For the Village of Burns Lake this means a loss of property taxes. But their property tax loss does not end there, the mill property is also within the village boundaries. Burns Lake's property tax rate is 6.3 times higher for industrial properties than residential properties. The impact on the loss of the mill will not be felt in 2012, but in 2013 when the assessed value of the property falls dramatically.
People are already considering what will happen to Burns Lake now that the mill has been destroyed.
The Babine Forest Products mill had a capacity of 350 million board feet of lumber per year, this is the largest mill operated by Hampton Associates. Hampton Associates still has a smaller sawmill in Burns Lake, Decker Lake Forest Products, but this mill only has a production level of 85 million board feet per year.
Rebuilding the mill has a several issues that need to be addressed:
- The cost to build a new mill - in this case one should expect to pay over $100,000,000 to build a comparable mill.
- The volume of timber needed to supply the mill. The current mill needs somewhere around 900,000 cubic meters of timber per year to operate. That is a lot of wood. To justify building the mill you would need to have at least 15-20 years of secure timber supply. I have no idea if there is the timber volume available for another mill of this size.
In theory there could be a smaller mill built in Burns Lake, but I do not see how this makes much sense for Hampton. The money needed to build a mill of the size and scale of Decker Lake is still more than a community like Burns Lake can afford.
I have no idea how the mill was insured, but there could be an insurance windfall for Hampton from the mill being destroyed.
The loss of the mill is a loss of 250 direct jobs in Burns Lake. There are about 2000 to 2200 people in the work force in the Burns Lake area. The loss of these jobs is about an 11% increase in unemployment all at once. I suspect the unemployment rate in Burns Lake is now around 20%.
To put this in terms of Victoria BC, this is as if 25,000 lost their jobs all on one day.
The impact of the loss of these jobs on the community is more than just the immediate jobs. Anyone that serviced or supplied the mill will have lost most of their work. In the next year the loss of mill worker wages in Burns Lake will amount to something around $7,000,000 - workers should get EI which means this loss will not be as big as it could have been. This may not sound like a lot, but it represents a reduction in the local economy of about 6%.
If we look at the wider economy, the unemployment rate is likely to rise to more than 30% within a few months. The economy is likely to shrink by 15% or more within the year.
Burns Lake is going to see a large out migration in the next year which means the value of houses will fall. People will not be able to pay their mortgages and will end walking away from their homes. Businesses that have bank loans are very likely to going to asked to repay them in full and from that be forced into bankruptcy.
For the Village of Burns Lake this means a loss of property taxes. But their property tax loss does not end there, the mill property is also within the village boundaries. Burns Lake's property tax rate is 6.3 times higher for industrial properties than residential properties. The impact on the loss of the mill will not be felt in 2012, but in 2013 when the assessed value of the property falls dramatically.
Monday, March 1, 2010
Foerst Industry could be recovering.
Several BC companies recently released their latest results.
West Fraser Timber reported a much better fourth quarter for 2009 than the rest of the year, in fact if you remove one the charges, an assest write down, the company made money in the fourth quarter.
Interfor reports much the same sort of improvement in the fourth quarter.
Canfor meanwhile did not have as good a quarter, though did better with pulp. Things are looking up enough that they are re-opening their Chetwynd sawmill after a two year closure.
The fact these three companies seem to be doing better should improve the market for logs in the interior. Higher prices means better times for First Nation timber harvesting businesses.
West Fraser Timber reported a much better fourth quarter for 2009 than the rest of the year, in fact if you remove one the charges, an assest write down, the company made money in the fourth quarter.
Interfor reports much the same sort of improvement in the fourth quarter.
Canfor meanwhile did not have as good a quarter, though did better with pulp. Things are looking up enough that they are re-opening their Chetwynd sawmill after a two year closure.
The fact these three companies seem to be doing better should improve the market for logs in the interior. Higher prices means better times for First Nation timber harvesting businesses.
Sunday, February 7, 2010
Three Timber Supply Reviews Released
Given the Mountain Pine Beetle infestation, I am very interested to see where the latest timber supply reviews are going. Last week three interesting papers were released:
Kingcome TSA
Kootenay Lake TSA
Prince George TSA
Kingcome TSA - part of the North Island Central Coast Forest District
Kingcome is a coastal TSA that has had an AAC of 1,232,000 cubic metres a year. The new TSR has reduced the AAC to 1,100,000. Not a large reduction from the current AAC and there is more than enough space to make this reduction through the non-replaceable forest licenses. NRFL have had an AAC of 170,000 cubic metres a year, though 47,646 cubic metres has been allocated to First Nation NRFLs.
The drop in AAC will make some impact on employment, but in many years lately the full AAC has not be achieved. The 10% drop in AAC will mean the loss of about 100 to 200 jobs in BC. The AAC is projected to continue to fall by 10% per decade till it reaches 728,400 cubis metres and then rising to about 963,000 for the long term.
Kootenay Lake TSA
This is not a final TSR, but a discussion paper. The latest analysis has a base case for AAC that is about 10% lower than the 2001 TSR base case. The assumption is that the long term sustainable yield will be reached in about 2040 and it will be between 544,000 cubic metres. There is no indication of any dramatic falldown in harvesting levels in the TSA.
I surprised that there is not a larger impact on the AAC from the problems with lodgepole pine. Even in this TSA the lodgepole is the leading species on 28% of the timber harvesting land base.
Prince George TSA
This is in the heart of the beetle kill. It is also the centre of forestry for North America.
In 1996 the AAC was 9.363.661 cubic metres, this rose to 12,244,000 in 2002 to deal with the dead lodgepole pine. That was raised again in 2004 to 14,944,000.
The paper has three scenarios under review, one continues with the current high volume of salvage and the other two drop this to the 2002 volume. In all three scenarios harvest levels remain high for 12-15 years and then quickly falls to 4.2 million in scenario one and 6.1 million in scenario 2A. Scenario 2B drops earlier but less steeply and finishes between one and 2A at the trough.
In 1 and 2A, the long term harvest level will be achieved in 2058 to 2068 and be close to the 1996 harvest level.
The times will be tough from about 2020 to 2048.
What all three analysis's are saying to me is that BC will still have a a large and significant portion of the timber harvest in Canada long into the future. It is not unreasonable to expect a 60,000,000 cubic metre harvest in 2060 in BC.
Kingcome TSA
Kootenay Lake TSA
Prince George TSA
Kingcome TSA - part of the North Island Central Coast Forest District
Kingcome is a coastal TSA that has had an AAC of 1,232,000 cubic metres a year. The new TSR has reduced the AAC to 1,100,000. Not a large reduction from the current AAC and there is more than enough space to make this reduction through the non-replaceable forest licenses. NRFL have had an AAC of 170,000 cubic metres a year, though 47,646 cubic metres has been allocated to First Nation NRFLs.
The drop in AAC will make some impact on employment, but in many years lately the full AAC has not be achieved. The 10% drop in AAC will mean the loss of about 100 to 200 jobs in BC. The AAC is projected to continue to fall by 10% per decade till it reaches 728,400 cubis metres and then rising to about 963,000 for the long term.
Kootenay Lake TSA
This is not a final TSR, but a discussion paper. The latest analysis has a base case for AAC that is about 10% lower than the 2001 TSR base case. The assumption is that the long term sustainable yield will be reached in about 2040 and it will be between 544,000 cubic metres. There is no indication of any dramatic falldown in harvesting levels in the TSA.
I surprised that there is not a larger impact on the AAC from the problems with lodgepole pine. Even in this TSA the lodgepole is the leading species on 28% of the timber harvesting land base.
Prince George TSA
This is in the heart of the beetle kill. It is also the centre of forestry for North America.
In 1996 the AAC was 9.363.661 cubic metres, this rose to 12,244,000 in 2002 to deal with the dead lodgepole pine. That was raised again in 2004 to 14,944,000.
The paper has three scenarios under review, one continues with the current high volume of salvage and the other two drop this to the 2002 volume. In all three scenarios harvest levels remain high for 12-15 years and then quickly falls to 4.2 million in scenario one and 6.1 million in scenario 2A. Scenario 2B drops earlier but less steeply and finishes between one and 2A at the trough.
In 1 and 2A, the long term harvest level will be achieved in 2058 to 2068 and be close to the 1996 harvest level.
The times will be tough from about 2020 to 2048.
What all three analysis's are saying to me is that BC will still have a a large and significant portion of the timber harvest in Canada long into the future. It is not unreasonable to expect a 60,000,000 cubic metre harvest in 2060 in BC.
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