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Fed Plan Good News Says Canfor Pulp Production Manager

By 250 News

Wednesday, June 17, 2009 02:56 PM

Prince George, B.C.- The Production Manager for Prince George Pulp and Intercon Pulp is happy with the plan outlined by the federal Government to help level the playing field with their American counterparts, “We don’t have a lot of details yet, but from what I have seen, this is a good deal for Canfor Pulp and the industry” says Chuck Walls.
American pulp producers are eligible for a 50-cent per gallon tax credit by adding small amounts of diesel to the black liquor, qualifying it as an alternative fuel according to the American legislation.   Some U.S. mills are now making more money through the tax credit than they would for pulp production.
Under the new $1 billion dollar “Green Transformation” Canadian program, Canadian mills may be eligible for 16 cents per litre of black liquor produced. The funds will have to be used in the  next three years on capital expenditures that make improvements to energy efficiency or environmental performance.
“We have a number of projects on the books that we would like to proceed with” says Walls. Those projects include an odour reduction program and a particulate emission reduction plan that is linked to the energy production project approved by BC Hydro.
If Canfor Pulp qualifies for the .16 cents a litre, that could amount about $250 thousand dollars a day for the Prince George operations. The Federal Government’s offering is for one year.
“I think what is really important, is that the Government listened to what the industry was saying and came forward with a positive program” says Walls. “This is not a subsidy, this is an environmental program, whereas the U.S. scenario is a subsidy thinly veiled as an environmental project.”

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Comments

Again, just after an increase in our local water rates, I see the Feds are investing more of my tax dollars. I can't afford to think about taxes anymore. I'm in denial until I get my next tax bill.
Lets hope they use the money to get rid of the stink and stuff that is choking our lungs! Not just to line some shareholders pockets!
$250 thousand per day works out to approx. 90 million in a year. That gives enough money for only 11 pulp mills to benefit, or all the mills in the country for 1 month.
It is good for Canfor but certainly not good for the pulp industry as a whole.
In fact it puts a nail in the coffin of many pulp mills across the country as zero money goes to mechanical pulp mills.

For these mills they not only have issues with competition from US mills but now the CDN. Govt. has put them at a huge disadvantage vs. CDN mills as well.
The mechanical pulp mills certainly are in trouble and this plan does nothing to help them, true. However, the subsidy in the US is not for mechanical mills there either, so, from that perspective, the playing field is even. There is some competition between hardwood Kraft and BCTMP but my understanding is that it is only when the market is very good as the Kraft is a superior strength pulp and therefore preferred by papermakers.

Also, the $ figure quoted in the article is accurate if you take the billion dollars and divide it by the number of pulp mills (I think 27). If you calculate the amount based on Litres of black liquor burned, CPLP is eligible for about $320 million(about 1/3 of the total available)! We aren't sure yet if there will be a limit per mill or if it will be first come first serve, so I opted for the lesser amount.

Further information based on one the above commenters statements - there seems to be a misconception that the smell of the pulp mills is directly linked to the particulate emissions - not true. The odour poses no health concerns, however objectionable it might be. The fine particulate matter emitted, as I understand it, is the greatest concern for health. So removing the stink would not protect your health and lowering particulate will not necessarily have any effect on the smell. Hopefully, this government program will help us address both issues (in terms of emissions) and hopefully the air shed will benefit. Unfortunately, the mills are not the only contributor to air quality problems and previous significant reductions from the mills have not resulted in significantly lower particulate matter concentrations at the various measurement locations around town.
Seems to me that the American and Canadian Pulp Mills are getting their hands on a hell of a lot of taxpayers money.

At the end of the day if the Americans get money, and the Canadians get money, and the playing field in even, then it logically follows that the Companies just got a big bundle of tax dollars for nothing.

These mills have always burned black liquor. Now we are giving them money to upgrade their mills. Pretty nice deal, I would say.