Wednesday, February 4, 2015

Easy road to nowhere

February 4, The Tyee published an article by Torrance Coste: Raw Log Exports: A Made-in-BC Problem that's Only Getting Worse.

Work here that relied on reports from BC Stats helped Torrance create his article and that's fair because part of my writing was inspired by an Op-Ed he co-wrote, published in the Times Colonist before Christmas.

This subject deserves attention. You can start by scrolling through earlier Northern Insight articles about log exports.

The forest industry is a vital part of British Columbia's foundations. Until the 21st century, provincial governments recognized its importance. It was not just the loggers of Goat Lake, the sawyers of Tatloyoka, coastal tug deckhands or tens of thousands of others directly working in forestry. It was also the people employed indirectly - machine fabricators, sawmakers, cable and chain manufacturers, log and lumber traders, railroaders, truckers, mechanics, welders, researchers, administrators, etc. - that gave our province a wealthy middle class.

Globalization changed the economy we once knew. Financial Times columnist Edward Luce wrote,
The middle-skilled jobs that once formed the ballast of the world’s wealthiest middle class are disappearing. They are being supplanted by relatively low-skilled (and low-paid) jobs that cannot be replaced either by new technology or by offshoring – such as home nursing and landscape gardening. Jobs are also being created for the highly skilled, notably in science, engineering and management.
Had Luce's eyes been focused on British Columbia he would have added logging to the category of jobs that cannot be moved offshore. However, this thriving segment of industry delivers much of its raw product to tidewater for export. We can easily understand the reasons:
  • Sawmills and manufacturing facilities require significant investments in property, plant and people. The shortest route to immediate profit is export of raw logs. It’s what I call “the tyranny of quarterly reports.” Managers are concerned with immediate results rather than creation of a strong business that will prosper over time.
  • Various factors mean that mills have high fixed costs while logging has low fixed costs. Investors can ramp up a large logging operation for a few million dollars and do it within a year. Mill owners need permanent, serviced land and tens of millions of dollars. The time for plans, permits and construction will be years. As a result, the easy road for timber rights holders is log exports.
  • Highly automated mills are capital intensive. The BC industry has underinvested and is less efficient than it could be. This condition then “justifies” exports. Industry claims that BC cannot compete in manufacturing finished lumber products so the only choice is to ship logs elsewhere.
Today's government believes that serving the multinational corporate agenda is Job One. There is no political vision for the future, no desire for British Columbians to be more than hewers of wood and drawers of water. If it were different, government would decide to promote value-added efforts. However, that would displease influential people who profit from the present system. Again, the easy road is to export unprocessed resources.

The tough choice, although the right one for the long term, would be to ensure substantially more value-added activity in BC. Liberals are particularly devoid of vision because their only real expertise is selling. Like prostitutes and drug dealers, they aim for quick scores. Their disregard for wood industries and their thoughtless embrace of LNG fantasies prove this true.


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7 comments:

  1. In March, 2006 a man delivered a very emotional speech promoting the prohibition of the export of raw timber. "If we continue chewing snot from one year to another we change nothing," he said. "We must take all steps to stimulate wood processing and stop simply sending logs abroad. They hustle here and there in great numbers, and nothing's been done. I understand why this is happening," he paused, "and you understand," he paused again, "these lobbyists... they think of their own interests. But you must think of the people's interests. Since 1999 various projects are being considered, and not a damn thing's been done. I know these blathers, and every year we have the same." The man was Vladimir Putin, and he followed up with punitive tariffs on raw log exports.

    One of the consequences of this action was that China focused elsewhere for cheaper supply. But their import of Russian lumber has increased.

    Is there a lesson there for British Columbia, Oregon and Washington where expansion of raw log export to China and a decline in mill production and jobs is now a controversial reality in all three jurisdictions?

    ReplyDelete
  2. How does the forest sector contribute to the economy?

    Forestry contributes less to the GDP than other resource sectors do, the forest sector is still a leading contributor to the Canadian economy. Compared with the minerals and metals sector and the energy sector, for example, the forest sector creates more jobs and exports for every dollar of value added.

    And the BC Liberals answer is to ship raw logs and promote Murray Edwards Mount Polley Mine and Kinder Morgan/Enbridge LNG

    ReplyDelete
  3. Up in the Interior if your driving up the North Thompson on any given day you will see truck loads of logs being taken to destinations unknown. In half an hour from Kamloops to Barriere one might see about 7 to 10 truck loads. If you average this out to a 10 hour day its comes to about a hundred loads a day.
    Its a big grab and run sale going on now and the people of BC are being screwed royally. WE get almost nothing for this rape and pillage of our most important renewable resource.

    ReplyDelete
  4. Quick Facts:
    •Natural gas is a by-product of decaying plant and animal matter left deep underground millions of years ago.
    •Natural gas turns into a liquid when chilled to -160° Celsius.
    •In liquid form, natural gas compresses, taking up 1/600th less space.
    •Once compressed, LNG can be securely stored on a ship and safety transported overseas to markets.
    •B.C. has an enormous supply of natural gas - an estimated 2,933 trillion cubic feet. This is enough natural gas to support energy needs in Canada and around the world for more than 150 years.
    •The LNG industry is a new and unique opportunity to grow the economy and create jobs in the province. British Columbia is poised to have Canada’s first-ever LNG export operation.
    •By 2022, B.C. is expecting one million job openings in B.C created by retirements and our growing economy.
    •More than 78% of jobs will require some form of post-secondary education, and 43% will needs skilled trades and technical workers.
    •In total, the LNG industry could create 100,000 jobs for British Columbians.

    From the BC Government's news release about its BC LNG School Propaganda Tour:

    http://www.newsroom.gov.bc.ca/2014/10/liquefied-natural-gas-lng-seminars-showcase-science.html

    ReplyDelete
  5. Reply to Hugh. are you reading Christy's election BS word for word? and I am surprised you didn't say ONE TRILLION DOLLARS with your pinkie at the corner of your mouth!

    ReplyDelete
  6. "British Columbia spends approximately $2.4 billion on interest to service the total provincial debt" and Finance Minister Mike de Jong has the gall to claim that his Budget is balanced, $444 million to the good.

    The quick facts don't mention the Prosperity fund of $100 billion, nor the 2013 election promise "One Trillion Dollar windfall"

    2,933 trillion cubic feet??? and consumers are charged in gigajoules which is about 25.5 cubic metres (Fortis info). Typical Metro Van home for November 8.4 GJ @ $103

    1 trillion cubic Metres of royalty dollars will go to the BC Government over the 150 years of Natural Gas until supplies are depleted

    2,932 trillion cubic metres of Profit will go to resource companies.

    Start-up expenses and credits given by BC for 22 years to resource companies exploration. 128 years of bare minimum maintenance costs.

    Meanwhile Fracking destroys ground water; the Caribou, Wolves and Grizzly are wiped out

    ReplyDelete

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