Here we go, again green house gas C02 is not a threat. Poor science fed by scientists and universities including UNBC to gather government grants. The science is biased and corrupted.

The U.S. is a dying economy. This tax credit the mills in the US are getting is taxpayer money. This money is adding to their hudge debt. This is part of a cap and trade they want to enter into which will add to their existing debt immensely. Germany and other countries in Europe tried this cap and trade and are backing out because of the huge costs.

The world is entering a 30 year cooling cycle after the last warming cycle. The world stopped warming in 98 and since about 03 has been on a cooling trend. Chasing C02 is taking money away from other environmental concerns and will cost our economy big time.

Al Gore is part of a cap and trade company and is making millions off his C02 scam. A little bias here maybe.






























s.

Do we need to turn our backs on the United States? Seems to me that THEY are always the ones who comes out on top. FREE TRADE? Free for the US maybe.

"The canadian govt has been sympathetic, but it's not certain about what can be done"?????
What is going on here? Have they never heard of lobbying? Has the Canadian Govt no cards at all to play in Washington.
No, the real problem is that they consider the woods business to be a sunset industry in Canada --- all helped along by " as there are many companies in Canada which have U.S. affliates or U.S. head offices".
You would think that Harris, Hill, Bell, Bond, and Rustad would all get together on this and do some squacking --considering that they all represent Govts in power surely their voices would carry some weight.
Oh well, I guess we can all eventually move to the US for jobs ---- what, can't get a green card?

"The canadian govt has been sympathetic, but it's not certain about what can be done"?????
What is going on here? Have they never heard of lobbying? Has the Canadian Govt no cards at all to play in Washington.
No, the real problem is that they consider the woods business to be a sunset industry in Canada --- all helped along by " as there are many companies in Canada which have U.S. affliates or U.S. head offices".
You would think that Harris, Hill, Bell, Bond, and Rustad would all get together on this and do some squacking --considering that they all represent Govts in power surely their voices would carry some weight.
Oh well, I guess we can all eventually move to the US for jobs ---- what, can't get a green card?

To me this shows the ingenuity of administrators of a very costly and volatile industry when it comes to making what appear to be new, quickly conceived government incentives work for them. At first glance, it certainly appears that this is not changing the mix of fossil fuel versus alternate fuels one bit since it has no effect on the total externally derived energy a mill will use as a result.

The US pulp, paper, and paperboard mills consumed 12% of the total manufacturing energy use in the US in the mid 1990s. Achieving better energy efficiency has been part of the key drivers to changing the manufacturing processes so that mills could stay competitive.

According to the linked site below, in the mid 1990s the cost among material inputs to the pulp and paper industry was 21% of total material and energy costs for wood, 17% for energy, 15% for wood pulp, and 6% for chemicals. The energy cost is only for the externally bought energy since more than half of the energy is self-generated.
http://www.aceee.org/pubs/ie962.htm

Since then, mills have made additional improvements to reduce that energy use.

I think the question of who is getting subsidized and who is not is much more difficult than appears from this one current issue that has just once more cast an eye on the complexity of so called free trade, the rights of nations to tweak their own programs and industries for a variety of legitimate reasons, currency fluctuations based on internationally propped up values, international trade agreements, etc. etc.

Sure, this looks like it is going to adjust the balance once more. As I understand it, more and more countries have made major inroads into the USA pulp and paper markets over at least the last decade. For all I know, this may be a way the US government has found to “subsidize” the industry to not loose any further ground, by seemingly providing an incentive to meet national and global objectives to wean the country off fossil fuels..
http://www.answers.com/topic/pulp-mill

BTW, I have read the material on both of the linked sites. I have included them because I thought they were relatively good background information on the issues involved in the pulp and paper manufacturing business from a national industrial as well as a company perspective.

It goes without saying, it is not intended for those who are already well versed in that.

Simple solution, Canfor and WestFraser starts buying up US Forestry companies. Or have they already started this process.

So what part of burning diesel, the green initiative?

Here's an idea......
How bout Jay Hill and Invisible Dick get the ball rolling and give the guys some kind of green credit for burning black liquor in the mills? An amount equal to the States bogus subsidy under the same bogus "green" facade. Although it will hit government revenue a bit, it won't be as bad as losing the industry altogether. If it's the same as the States plan they can't attack it under NAFTA, or can they?

It is the quickest way to get back to get back to equity govsux .....

Then start working on a real free trade agreement which would cause a joint panel to look at trade implications of enacting such regulation changes, if that does not already exist.

Maybe it does, and takes a page of how we deal with First Nations, we consult and then do what we want to anyway ........

your right Govsux, that is a good plan. This way we keep the goose.

Pulp is not a growth industry in Canada.

From 1996 to 2006 there was virtually no change in the $6.4 billion gross revenues.

There was a 32.7% drop in production staff and 46.8% drop in administrative staff.

There was a cost saving of 19.4% on the production staff side and 30.3% on the administrative side.

Over that same time period there was a 55% increase in the gross manufacturing income per employee while the cost per employee went up by 27.5%.

While some of the reductions in workers came due to mill shut downs, I think I am correct in assuming that much of it occurred due to investments in production machinery and process changes.

As I keep saying, it is time to get ready for at least one of the 3 local mills closing its doors permanently. I assume one of these days we will get a new mill, with the others shutting down within several years of the new mill coming on stream.

If people in the industry are not already planning for that scenario, I do not know what they are smoking.

Well if government controlled stumpage amounts to a subsidy, then a tax rebate like this should qualify also. Take them to court.

Over a similar 10 year life span from 1998 to 2007 the Professional, Scientific and Technical Services sector increased from from $38.1 billion to $57.3 billion

So, while Pulp gross sales stayed level, the gross sales in the technical services fields increased by 50% ....

Would this be a direction we might want to put a major investment into? Labour productivity, btw, did not change much over that time. Thus, since labour is a major cost in that industry, we are looking primarily an employment increase.

Also, much of that output is value added. Whereas the value added component of pulp manufacturing is about 1/3rd of the gross sales.

And all those smoking brains cause little pollution to boot.

There are several key costs a pul[p manufacturer has.

Stumpage deals with the cost of the main feedstock. In Canada, as everywhere else, it is controlled by the owner of the feedstock. In Canada, as in many countries, it is owned by the government. In the USA only a small portion is owned by the government.

Some energy utilities in both Canada and the USA are state and municipally owned, and most certainly state or municipally controlled.

I suspect we are looking at a poorly drafted funding regulation. It would be much simpler if the USA were simply going to give funds towards cost avoidance of purchasing either private or public energy which uses fossil fuels as its source.

If one wants to wean a country off the use of fossil fuels and promote solar, wind, geothermal and biomass fuels, then rewarding any manufacturers that set up a system whereby they convert their own byprodcuts not derived from fossil fuels to energy would fit in with that direction.

F
R
E
E

T
R
A
D
E

Seamutt: "The world is entering a 30 year cooling cycle after the last warming cycle."

After the 30 years are over will the heating take over again?

". The tax credit would be granted if fossil fuel was mixed with “alternate” fuel. The idea was to reduce the use of fossil fuel."

How is the use of fossil fuel reduced when a company starts using fossil fuel (regular diesel) when its process was entirely *fossil fuel use free* before it started doing this?

If Dick Cheney was still in office I would credit him with dreaming up such a sly machiavellian scheme!

Let's hope that crude oil will become so ridiculously expensive one day soon that burning it just to collect tax credits won't be profitable!

Free trade always has been a bit of a joke when it comes top dealing with the U.S.
Do they give a damn about Canada?
No, they don't,but unfortunately our government has always been far too complacent when it comes dealings with the U.S. whenever we get the short end of the stick.
We are easy to push around and the U.S. knows that.
Unfortunately,nice guy's finish last.
Our government in all it's wisdom needs to get off it's sorry a** and give some concessions to OUR pulp industry to level the playing field as much as is financially possible.
And gus has a point...it does show some ingenuity on the part of the american adminstrators!
You have to wonder what those guys who stuck their unemployed necks out and bought Harmac pulp mill in Nanaimo are thinking right now!

What has the subsidy have to do with the production of pulp???

You might lose some business to US Pulp Mills during a down market, however when the market for pulp is up, every mill is producing at capacity to fill the demand.

Are you people trying to convince me that the US has enough pulp mills to supply all the demand on a yearly basis?? Of course they cant.

The cost of pulp is usually set by what the market can bear. Just because a pulp mill gets a subsidy doesnt mean that they will lower the price of pulp. They might just put the money in the bank.

In any event, in order for them to cause any serious harm to the Canadian Industry they would have to build more pulp mills to increase their production, and this of course would require more timber, woodchips, etc; which they probably dont have easy access to.

BC Pulp Mills have reduced their production costs by installing co-generation plants, and working with BC Hydro for cheaper electricity.

This whole story sounds to me like a whole lot of to do about nothing.

The sky is falling; The sky is falling;

I was always under the impression that our three mills in town were relatively up to date, and was not a total antiquated plant like some of the plants out east. It has been ten years since I have been in a pulpmill, thus a bit out of the loop. The mills have spent a lot of money to become efficient in every aspect. investing when times are good so that they can be competitive during tough times.

Maybe we need to become better friends with the rest of the world, Maybe we need to reduce our dependence to the American economy. Maybe we need ti start selling more to Europe. We can sell them cheap lumber, Oil at world market. Hell, I would even subsidize the Oil to Europe. Maybe our pipeline needs to head east, instead of south.

'The cost of pulp is usually set by what the market can bear. Just because a pulp mill gets a subsidy doesnt mean that they will lower the price of pulp. They might just put the money in the bank.'

So, they are receiving a subsidy of more than $200/tonne, and this won't effect the price they sell at? One of CPLP's competitors canceled orders this week. Why buy ours at free market price to supply your paper mills. Last quarter of 2008 this Company - Verso recieved $29.7 million.

Compete with that.

Excellent piece in The Nation on this subject here.
http://www.thenation.com/doc/20090420/hayes

All this is going to do is speed the death of the industry. Unions are killing this industry exactly the same way that the CAW has KILLED the auto industry. Its very hard to debate that the unskilled labor in the pulp mills is overpaid. They make considerably more than sawmill workers. Why? Who knows. Its the exact same formula as the auto industry. Union gets out of control and kills industry. Mark my words. Its just a matter of time.

The Canfor mills are relatively up to date and the cogen at PG is a big help for them. They are 60s plants. Westfraser has some 70s plants. Alberta has more recent plants. Castlegar might be newer, Domtar Kamloops is likely a 70s plant.

Not even the Americans like the tax credit and they know its not the spirit of the rule. It will likely be repealed in the case of the Pulp mills, but who knows. In the long run it wont matter anyway.

Brett Robinson, Vice President Operations for CPLP, is quoted in the article.

“There are environmental groups that are interested, because the U.S. law was intended to reduce the use of fossil fuels, and now Pulp companies in the States are turning that law on its ear. Really what we have here is a law of unintended consequences.”

I think he is right on the money as is Born in BC when writing "It will likely be repealed in the case of the Pulp mills".

As I said in my original post: "To me this shows the ingenuity of administrators".

This anomaly is a result of the US Congress passing legislation without looking as the possible consequences.

The situation is apparently being looked at by Congress and the IRS. There is a good chance that they will make some changes before the end of the year to ensure that the practice in discontinued. If not the present legislation that allows for the rebates expire at the end of 2009, and it is highly unlikely that they would ever be extended in their present form.

As one person in the article stated. **Imagine if you poured some gasoline in the toilet every time you went, and you got a rebate of so much a gallon, people would be going to the bathroom all the time.**

This will become a non-issue in very short order, as it is nothing more than a scheme by pulp and paper producers to take advantage of a loophole in the legislation.

Who knows maybe the IRS will rule that it was never intended to apply to the Paper Industry, as it was a Transportation Bill, and they might demand their money back.

I think there has been lots of Lobbying but Canadian governments and companies and from the Forest Product Assoc. of Canada (FPAC), as well. The problem with the Americans is (asd it always is) that they have all the power because they are doing the buying from us so we cannot impose any levies or tariffs as they did on softwood lumber. We can take them to court and win (as we did with softwood lumber) but they don't seem to be ethical enough to respond to legalities when there is money in it for them. Unfortunately, we still need them to buy our products and the customer is always right.