Index:

–British Columbia: 1) Beetle kill estimates as related to investing advice,
–Canada: 2) Government & loggers plan a future free of eco-concerns, 3) Oil Sands protests in Calgary, 4) ESA a disaster? 5) Logger’s only problem is government, 6) Gov rep says ESA not a disaster because it won’t protect anything,

British Columbia:

1) It is estimated that 68 million to 78 million cubic meters of timber are being lost per year in the B.C. interior as a result of the mountain pine beetle. Those yearly numbers are eventually expected to decline, with current data pointing toward an end to the outbreak by 2018/2019. To put it in context, the average annual harvest in the region has been around 53.5 million cubic meters. So what does this all mean for the average investor? Basically, too much supply hitting the market now, and – quite possibly – too little in future years when the U.S. housing market may have fully recovered from the U.S. subprime mortgage meltdown. The forest industry is trying to salvage as much of that dead timber as they can, despite the current environment of low demand and prices. The dead trees will only be salvageable as usable lumber for a few years before they become too cracked. That’s been pushing already-depressed prices lower. The United States certainly hasn’t been anxious to take all that extra wood, and the recent gains in the Canadian currency against the greenback have made Canadian lumber even less attractive. Lumber exports from the B.C. interior to the U.S. during the first five months of 2008 are down 36% from the previous year, according to David Elstone, a forestry industry analyst with Equity Research Associates, in Gibsons, B.C. http://www.istockanalyst.com/article/viewarticle+articleid_2289922~zoneid_Home~title_Tiny-Bee
tles-Create.html

Canada:

2) Representatives from the association, companies and government departments will meet at the Hugh John Flemming Forestry Centre and Fredericton to look at the way they build forest management plans mandated by the Crown Lands and Forests Act. Madeline Lamonthe, Dan Laplain and Gerald Lamonthe with the Toronto company Alignment Strategies will facilitate the exercise, examining every aspect of the relationship between the companies and the government as they formulate forest management plans for specific Crown leases. “It’s a systematic approach on how you do things “¦ does it actually add value, or does it add cost?” Arsenault said in an interview from Fredericton. “We’re excited about it.” “The goal is to have a suitably managed forest at the end “¦ a better management plan that costs less to build.” Madeline Lamonthe, who will spend this week in Saint John at J. D. Irving, Limited, describes the event next month as a “LeanSigma Kaizen.” Toyota coined the Japanese term “Kaizen” in the early 1960s. “Kai” means improvement and “zen” long term. In English, it means to bring people together work on process improvement. Companies like Toyota and Texas Instruments developed “Lean Management” techniques in the 1950s and 1960s to remove waste from their systems. Motorola trademarked the term “Six Sigma” in the 1980s for an approach to remove “variation” from a process. As an example, a customer who orders a book online and gets it in two days might wonder why it took six days the next time, Lamonthe said. Motorola saved $650 million over four to five years, she said. Arsenault describes the exercise next month as taking the province’s red tape initiative to a new level. The industry group and the government will share the cost. If it works as well as the parties hope, they intend to apply it to other aspects of the interface between forest companies and the Department of Natural Resources – building roads and bridges, for example. http://nbbusinessjournal.canadaeast.com/journal/article/328179

3) Oilsands protesters challenged investors at a Calgary petroleum conference on Monday to drink from bottles of murky water from Lake Athabasca, which sits near Alberta’s major oilsands developments. Environmentalists joined residents from the Fort Chipewyan area in northern Alberta at the annual symposium of the Canadian Association of Petroleum Producers to ask the oil and gas industry to slow down development long enough to fully study the water supply downstream from oilsands projects. The protesters also wanted to attract the attention of hundreds of investors at the symposium. “Our kids, my children, they swim in that water. They drink that water every day. They drink it and we drink it out of our taps, so if it’s safe, they should be able to take a drink of it too,” Lionel Lepine, a member of the 1,500-member Athabasca Fort Chipewyan First Nation, told CBC News outside the downtown meeting. Ross Levin, an investment analyst from New York, spoke to the protesters about their water challenge but declined to take a sip. “I think that there are always environmental costs to any type of, sort of, natural-resource extraction, whether you’re cutting down a tree or pulling oil out of the tarsands, and there’s always going to be some kind of balance struck. We may argue about where the proper line ought to be drawn,” he said. http://www.cbc.ca/money/story/2008/06/16/capp-protest.html

4) The new Ontario Endangered Species Act (ESA), if allowed to create into a court-driven permit system, could spell disaster for the forest industry across the North, says the Ontario Forestry Coalition. The issue is how the new ESA will be enforced. When the Act was being developed in 2006-07, both Premier Dalton McGuinty and then-Minister of Natural Resources David Ramsay assured the forest industry that its operations would continue to be covered under the Ontario Forest Sustainability Act, which provides clear and detailed regulation for species and habitat protection. But as the deadline for the new ESA loomed (it becomes law June 30), the province refused to recognize the Forest Sustainability Act as part of ESA regulations, and left the door open for creating a new ESA permit system. Last month, it announced it wanted more time to work out the new ESA regulations, and gave forestry operations a one-year exemption from the Act. The OFC believes this means the province is committed to introducing a new ESA permit system, that would, at a minimum, add another layer of bureaucracy (9,000 new permits a year), and at worse effectively remove some 20 million acres of Northern forests from the industry’s wood basket. To press its case, the OFC launched a region-wide ‘Endangered Communities’ tour, in a bid to alert the Northwest about the possible impacts of the new ESA. The OFC includes reps from industry, municipal, labour, business and First Nations. At Monday’s session here – the first of a series across the Northwest – Mayor Dennis Brown was joined by Jamie Lim (CEO) and Scott Jackson (manager of forest policy) of the Ontario Forest Industry Assoc., and Rene Lindquist of the Communications Energy and Paperworkers union. http://www.atikokanprogress.ca/articles/1805/1/Industry-could-lose-millions-of-hectares-of-pro
ductive-forests/Page1.html

5) Judy Skidmore, guest speaker at the North Bay Rotary Club’s luncheon Monday, said the biggest problem facing Northern Ontario’s lumber industry is government. When (government) owns the land you operate on and is also the landlord, you have a double problem when it doesn’t recognize the good jobs and revenue you create,” Skidmore said. The provincial and federal governments are swimming” in tax revenue, she said, but are unwilling to co-operate with the forest industry and others. Skidmore said the automotive industry — which has received much government funding — is the largest in Ontario, while forestry is the second largest. Forestry has a stronger constant than the automotive industry and it doesn’t have to import half of what it exports,” she said. The government is catering to the popular vote but in the meantime is undermining everyone else’s future.” But Skidmore, who spoke at the North Bay Legion, is optimistic about the industry’s future. http://www.nugget.ca/ArticleDisplay.aspx?e=1076180

6) MPP Mauro, reached at the Legislature Tuesday, was emphatic in his rejection of the dire picture of the Endangered Species Act being painted by the Ontario Forestry Coalition. “No decision has been made on the final format [of the ESA regulations], and to suggest there is a definitive outcome is misleading,” he said. He went on to note that even within the forest industry many are not interpreting the government’s actions the way the OFC is. “There are some major companies that are not expressing concern about this…” He declined to elaborate on that latter point. All the major forest companies operating in Ontario – Abitibi-Bowater, TemBec, Weyerhaeuser, Domtar, etc., – are members of the Ontario Forest Industries Assoc., which is part of the OFC. “The Minister intends to work with all the forest companies over the next year [on the ESA regulations], and recognizes that forestry is a big part of the economy of Ontario, and especially Northern Ontario,” he said. MPP Mauro’s comments are consistent with the government’s statements in the Environmental Registry review of the ESA regulation (“The Ontario government is committed to working with the forestry sector to harmonize its existing processes within the new Act.”), and with Minister of Natural Resources Donna Cansfield’s comments in the Legisltaure. “It is the first time in 30 years [the Endangered Species Act] has been revamped,” she said in response to questions from the Opposition on the issue Tuesday. “It even provides more flexibility than ever before to be able to work with industry, such as the forest industry, to incorporate the Endangered Species Act into the forest management plan. The Premier was very clear that it’s exactly what we’re going to do. The difference is that we’ll do it together with the industry.” http://www.atikokanprogress.ca/articles/1804/1/Nothing-has-been-decided-province-will-work-wit
h-forest-companies/Page1.html