Forest

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Forest Resource Utilization . . . optimizing
use of forest resources Dr. Chris Risbrudt,
Director, US Forest Products Laboratory
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• Todays Discussion . . .
• Trends and challenges in resource
  utilization
• Popular or community-
• based solutions
• A broader opportunity
• optimizing utilization

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Trends and challenges The use and economic value
of forest resources in Minnesota is linked to
capital-intensive and technologically advanced
sectors, including pulp paper and
OSB. These sectors have faced some tough
challenges . . .
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After peaking in 1999, total U.S. paper output
receded in tandem with annual growth in overall
industrial output, both deeply impacted by a
strong dollar and a flood of goods imports. A
bumpy upturn has been underway since 2001, but
global paper demand remains weak.
Sources AFPA, U.S. Federal Reserve
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U.S. Trade Flows, million tons 2001
Pulp, paper and paperboard (primary products)
19.0
2.6
NORTH
North Central
Northeast
2.5
The U.S. trade deficit for primary pulp, paper
and paperboard products has widened, shown here
by Customs District region in 2001 . . . Most
imports enter ports in the North, while South and
West account for most exports (interstate
shipments occur among regions but data are not
available)
WEST
7.0
South Central
Southeast
Total imports 23.3
Total exports 12.5
SOUTH
1.9
7.7
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Polynomial trendline
Annual U.S. shipments of printing writing paper
(produced heavily in Minnesota) were expanding
relative to GDP until the mid 1990s, but then
declined in recent years, along with declines in
overall manufacturing, advertising and
exports. The recent downturn, more severe than
the temporary decline of the energy crisis in
the 70s, increases competitive pressures on local
industry.
Sources AFPA, Commerce Dept. (2003 data are
preliminary, based on first five months)
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OSB prices and demand were dampened in recent
years by excess capacity and imports, despite a
strong housing market, although prices have
surged in recent months . . .
Sources Crows Weekly Reporter
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• Current context
• Pulpwood markets have suffered
• declines, nationally and locally
• OSB capacity growth slowed and
• shifted to Canada and the South
• MN resource is dominated by
• small timber (pulpwood) with
• relatively high pulpwood
• prices and limited
• capacity growth

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Challenges here are not unlike challenges facing
forests in the U.S. West, where mill capacity has
receded but there is a big surplus of small
timber in need of thinning (for forest health and
fuel treatment).

• Various solutions to the small-timber surplus
  have been advanced in the West . . .

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Popular or community-oriented solutions In the
West, popular or community-based solutions are
being advanced, but so far have had limited
impact on resource use . . . Several
examples . . .
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. . . Mobile electrical cogeneration units
(wood-to-energy) . . . . . . a popular
demonstration project but far from commercially
viable as a source of energy (unless subsidized)
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. . . Round-timber construction technology (used
at Winter Olympic Games in Utah) . . . .
. . another popular idea but likewise not yet
widely adopted commercially
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. . . Community-based enterprises can succeed,
such as highway signs made from juniper and pine
wood fibers with recycled plastic milk
containers . . . Such community enterprise
development requires talent and a high degree of
political and business partnership, but has had
only limited impacts on resource use thus far.
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• A broader opportunity
• optimizing utilization
• Working with existing industry
• Focusing on competitiveness
• and policy considerations
• Building centers of expertise
• Optimizing resource use via competitive
  processes

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• Working with existing industry . . .
• Minnesota already has some big forest industry
  capital investments,
• including the following elements
• Annual Wood Use
• (cubic meters)
• Pulp Paper Mills (9) 5 million
• OSB Panel Mills (6) 2 million
• SW Lumber Mills (9) 1 million

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• Focusing on competitiveness . . .
• Seven of nine Minnesota paper mills produce
  printing
• writing paper. An industry executive recently
  listed four
• keys to improved performance
• An improved general economy
• Lowering costs of production
• Reasserting value of print media
• More focus on customer needs
• Kathy Walters, CEO, Sappi Fine Paper North
  America (mill in Cloquet)
• from interview in July 2003 Pulp Paper
  magazine

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• Similarly, OSB producers are focusing on
  improved production efficiency and expansion into
  higher value markets
• Capacity upgraded at Cook, MN
• Borax termite treatment option introduced for
  OSB products
• Output of new siding product expanded at Two
  Harbors, MN

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• . . . plus there is need to focus
• on policy considerations . . .
• Strong state infrastructure
• (utilities rail, education, etc.)
• Regulatory efficiency
• (efficient permitting process)
• Industrial forest policy
• promoting competitiveness
• (tax policy, trade policy, finance, etc.)
• Public and community support
• for optimal and environmentally
• sustainable use of resources

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• Building centers of expertise . . .
• Some states have initiatives to establish centers
  of expertise on forest industry competitiveness

Center for Sustainable Forestry Business
Wisconsin pilot concept Center for Paper
Business Industry Studies (CPBIS) Georgia Sloan
Foundation
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• Research underway at
• U.S. Forest Products
• Laboratory (FPL) also
• focuses on competitiveness
• in printing writing paper
• Biopulping Oxalic Acid Pulping
• improved strength in groundwood paper
• PCC Fiber Loading increased use of lower
• cost filler in lightweight coated paper
• Polyoxometalate pulping future alternative
• to kraft pulping, eliminating sulfur from
• pulping process (lowering emissions)

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• . . . and FPL research
• activities focus on competitiveness in
• OSB composites
• SoybeanPF face resins for OSB Significant
• lowering of resin adhesive costs in OSB
• Improved durability and related standards
• for OSB technology and ANSI standards
• Testing alternative fiber recipes for OSB and
• wood composites, including mixed use of
• agro fiber (e.g. straw) and poultry
  feathers
• (both abundantly available in Minnesota)
• Some of this work is being done in
  collaboration with Univ. of Minnesota

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• The idea is to engage in . . .
• Optimizing resource use via competitive
  processes . . .
• Recent years have been tough in the forest
  industry, but OSB prices have turned upward and
  paper markets may gradually improve. As always,
  advancing competitive development and growth of
  the forest industry is key to optimizing resource
  use.