20 March, 2012

Forests face the furnace

GRAHAM LLOYD, ENVIRONMENT EDITOR
The Australian,  March 20, 2012

WHEN Neil Bartholomaeus headed south from the Perth suburb of Nedlands to chase trout in the clear mountain streams near Manjimup, he could not have imagined the decades he would spend fighting the destruction of his new-found home.

Neil Bartholomaeus, in a state forest near Manjimup in WA, is worried green energy subsidies will see struggling woodchip companies harvest logs for biofuel. Picture: Vanessa Hunter Source: The Australian 
Just as fashion designer Prue Acton could not have foreseen the battle she has been forced to wage for the forests of southeast NSW.

Bartholomaeus and Acton both timed their escape to the bush as the native forest industry made its transition from selective logging to broadscale clear-felling to feed a global demand for woodchips.

"Every time I drive around the forest it has changed," Bartholomaeus says. "They take everything. Hundreds of thousands of tonnes of old-growth marri and karri has ended up in the chip mill."

Opposition to logging by affluent city refugees has always been a nuisance to those who rely on timber for their livelihood. Jobs in the bush have been few and far between, whether in Eden in NSW or Manjimup in Western Australia.

But despite dramatically increasing the forest take, three decades of exporting woodchips has not been enough to save the industry from falling prices, reduced demand and growing competition from plantation timber.

A preference by builders for softwood pine and heightened consumer resistance to native forest woodchips have combined with a rising Australian dollar to leave the industry struggling for survival.

In WA, giant Karri trees, up to 90m tall and measuring 2m across, are still being clear-felled and sold for firewood or chips for as little as $10 a tonne.

The forest industry says 90 per cent of Australia's timber production occurs in regrowth forests resulting from previous logging. But what it doesn't say is that, at least in WA, evidence of just one cut tree in a hectare of forest is enough to disqualify the forest as old growth and redefine it as regrowth, no matter the quality of what is left. This is why forest giants, hundreds of years old, are still being clear-felled at Manjimup as "waste" for the chip mill.

It has been economics and concerns from buyers that has slowed woodchipping, not good forest management.

Nationally, native forest pulp production has fallen from 7.1 million cubic metres a year in 2000 to 3.6 million cubic metres a year in 2010. It has been substituted by hardwood plantation pulp rising from 0.7 million cubic metres a year to 4.2 million cubic metres a year in the same period.

Sawn timber production from native forest has fallen 35 per cent from 2000 to 2010 while plantation softwood has increased 30 per cent. Sawn timber production from plantation in 2010 was more than three times the volume produced from native forests.

Financial returns to state governments from forest management have been abysmal. Forest campaigners such as Bartholomaeus and Acton had hoped economic reality would eventually see the native forest industry collapse.

But manoeuvrings in federal parliament this week highlight the delicate balance that still exists between protecting timber industry jobs and and saving the centuries-old trees.

Independent MP Rob Oakeshott stunned his Labor and Greens colleagues when he lodged a disallowance motion to unpick the agreed renewable energy package that specifically excluded native forests.

Speaker Peter Slipper used his casting vote yesterday to defeat a motion by Oakeshott that would have seen electricity users paying a subsidy to the timber industry to burn the forest for bio-energy, after the vote on the floor of parliament was tied 70 to 70.

Wilderness Society national campaign director Lyndon Schneiders says defeat of the motion should finally convince the native forest-based timber industry to restructure, rather than looking for quick fixes to long-term decline. "The native forest logging industry has for years kept spruiking this bizarre notion that burning old-growth forests and koala habitat is somehow renewable energy, in a desperate last roll of the dice to find a market," he says. "The defeat of Rob Oakeshott's motion means that government incentives won't drive this destructive, polluting industry."

Oakeshott had said his proposal would not result in one additional tree being cut down, because only forest waste would be eligible. But environment groups say he was being naive at best.

They say the recent surge in biomass advocacy is designed to find a replacement market for native forest woodchips.

Scientists both for and against petitioned federal politicians to influence their vote.

A petition signed by forest industry scientists in favour of the Oakeshott disallowance motion suggested the concerns of environmentalists were misplaced, because only forest waste would be burned for biomass fuel. They say harvesting native forests solely for renewable energy is neither economically attractive nor the best use for the timber. The scientists say sawlogs earn a far greater return for the land manager when used to produce structural or appearance-grade products than if sold as biomass fuel.

The letter, written by Martin Moroni, senior research scientist with Forestry Tasmania, and signed by forestry scientists from across the nation, encouraged Oakeshott to push ahead. It said production of biomass fuel from native forests would likely be associated with the burning of processing residues and some harvest residues to generate heat and electricity in boilers located in rural communities, close to mills.

According to world bio-energy association board member Andrew Lang, even Renewable Energy Certificates would not be sufficient to make biomass from forests a profitable, standalone business.

He says the value of RECs and the wholesale price of electricity combined needed to allow a return on capital for a biomass plant was in excess of $110 a megawatt hour.

At present RECs are trading for about $30 a MW hour and the wholesale price for electricity is between $30 and $40 a MW hour, so the price of RECs would have to almost double before a biomass plant would be viable.

"There is a long way to go before any power company decides to build a large biomass-fuelled plant," Lang says.

But everybody in the renewable energy business expects the REC price to increase sharply if the federal government is to have any hope of meeting its 20 per cent renewable energy target by 2020.

Conservationists say there is little coincidence that the areas most interested in dabbling with bio-energy are the existing export woodchip mills in NSW and WA.

The Eden mill, which takes forest logs from southeast NSW and Victoria, is already experimenting with power generation from wood pellets made from sawdust.

The Manjimup bio-energy plant has permission to burn plantation timber residue, but the project has been relocated to the Diamond native forest mill far away from any plantation resource.

According to the Wilderness Society, rather than easing back on loss-making forestry, the WA and Victorian governments are pursuing a model that draws increasingly large volumes of timber from over-cut forests that are in ecological crisis.

Both governments have identified native forest biomass as a significant, undeveloped market.

"Such an approach will only delay the inevitable industry collapse as markets and yields decline, and leave taxpayers to pay contract compensation," the Wilderness Society says.

Conservation groups do not believe assurances from Oakeshott and the forest industry that it would only burn "waste" product.

They say it is identical to the rationale for export woodchipping, which expanded rapidly from the late 1960s and early 70s, and became the driver of native forest logging.

Waste commonly refers to standing trees that are not useable for other commodity timber products. In many cases, "waste" trees constitute the majority of timber removed from the forest.

For example, the Victorian government at present is offering for sale timber in East Gippsland at the ratio of one sawlog to 7.6 "residual" or "waste" logs that can be used for pulp or biomass. In WA, "waste" logs can be 400-year-old marri trees that are critical habitat for a range of threatened species.

As a percentage of total wood taken from native forests, the sawn timber output represents less than 12 per cent of total wood removals. The reality is the woodchip tail has long been wagging the forest dog.

According to Acton, woodchipping for the Eden mill started in the 70s with a projected 5000 tonnes a year for five years, but is now regularly topping a million tonnes a year, more than 90 per cent of the forest harvest.

With the woodchip market under pressure, Eden woodchip mill general manager Peter Mitchell says he would be quite happy to burn native forests for electricity but the numbers simply don't add up -- at the moment.

"If we start to bring trees in here to chip and turn into electricity we may as well just burn $100," he says. "It costs us about $70 a tonne to get a tree in here, and we can only afford to pay $15 (for it to be financially viable)."

Environmentalists fear RECs could eventually bridge that gap.

Acton says she is not a member of the Greens and does not object to a forest industry based on the use of high-value timber for furniture and building products. She is also sympathetic to arguments about regional employment. In southern NSW, the industry employs about 340 people in sawmills, as contractors and at the Eden chip mill.

Acton says it makes more sense to build tourism and for the state to buy out forest licences and instead sell carbon credits against the avoided deforestation.

Oakeshott's motion has once more shown how Australian forests are at the crossroads. The challenge for conservationists is to make trees more profitable alive than dead. Should they be left standing for posterity, or should they go up in smoke for short-term prosperity?

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