Creating Forest Sector Solutions for the New Bioeconomy

well let me welcome you to the cal homecoming and also this is the 39th annual SJ Hall lectureship in industrial forestry so thank you for coming out on this rainy day it’s actually kind of a nice nice day for those also like a little bit of rain I’m Greg begging I’m an associate dean for forestry and Cooperative Extension in the College of Natural Resources here at Cal and it’s my pleasure to welcome you as I’ve just said and before we begin what I’d like to do is recognize the hall family and actually the their generosity makes this lectureship possible and the halls are here and i’ll just point out a few of the people we have david hall Dorothy Hall we have their son Kenneth and we have Susan Hall here the Dean of the college Keith Gillis over on the side we have Peter Burke who’s the holder of the SJ Hall chair in enforced economics in the department of agricultural and resource economics and also last year’s distinguished speaker in the hall and the holoship bilberry from itt ranier so what is the SJ Hall lectureship basically it’s a series which began in nineteen sixty-nine then it’s named after the late SJ hall and he helped establish gowalla redwood company perhaps you’ve heard of them up in just up in the north up in Mendocino and Hall became a leader in the industrial management of young growth redwood forest and he established something that’s known as the forest economics foundation and one of the things they wanted to try to do is to make sure that forestry students and colleges both in the US and Canada would really practice sound economic principles as part of their management of forests enterprises so that’s the genesis of this lectureship which we’ve been holding since 69 so now it’s my pleasure to introduce today’s speaker we have a very distinguished speaker here dr. Ian daily rush he holds a Bachelor of Science degree from McGill a master of science degree from the University of Massachusetts and his PhD from the University of Illinois he’s published over 75 articles many in the area of plant genetics physiology and biotechnology he begins professional career in the 70s working as a scientist and then later as a senior research manager with agriculture Canada and during that 20 years of work in agriculture he played a very prominent role in promoting commercialization of new technologies brought about by collaboration between industry government and universities then in 1992 he joined the force sector when he was appointed president of foreign tech Canada Corp in 2004 he assumed the responsibilities of ferric and more recently papri can and I will explain what those are in just a second in September 2006 he was appointed president and CEO FFP innovations this is just to show you their website he brings over 30 years of experience and research strategic planning and creation of partnerships between state and industry to this new Institute FP innovations is comprised of three primary divisions of which are listed up here the pharak foreign tech and pepper can what that those are all acronyms of ferric is the forest Engineering Research Institute of Canada foreign tech is Canada’s national wood products Research Institute and Pat Buchanan’s the pulp and paper Research Institute of Canada and FP innovations also has oversight of the Canadian Forest Service fiber Center so it’s a very interesting and a very comprehensive grouping of divisions that FP innovations has oversight and control of now these four units and staff have approximate that they have approximately 675 staff and an annual operating budget approximately one hundred million dollars and it really makes it the world’s largest private forestry and forest products research institute I want to mention one thing that dr. daily rush has been working on since 1992 and it’s involving academic institutions in

China and Industry and government there and here interestingly he holds an adjunct professorship at two of the best forestry universities in China nanjing forestry university in beijing forestry university and his scientists have been actively engaged in the development of the chinese timber codes for wood construction and they have similar projects of the development and research going on in Taiwan Japan and Korea so please join me in welcoming our distinguished and accomplished guest dr Ian daily rush his talk is entitled Forest Products part of a sustainable future and he’ll be touching on some issues in this such as what will be the world of forests in meeting energy demands and and how will this affect the environment so in Thank You Craig those are incredibly kind words and a little humbled by them i will say that i came down this morning from vancouver and no i didn’t bring the rain with me it had already started I was on the tarmac in Vancouver for about almost two hours because flights weren’t coming into San Francisco so I go I was a little worried that I wasn’t gonna make it on time but fortunately all went well and i am here and it’s particularly great for me to be here on this particular weekend with cal homecoming and i actually I came close to being a student the graduate student here in Berkeley back in the 60s as Craig mentioned I just finished my masters at the University of Massachusetts and I was fortunate enough to have two opportunities one at Berkeley in university of illinois and but that was really my short list as a top choice is to go on for a PhD i finally settled on illinois and i moved from Massachusetts from Northampton area into champaign urbana in the summer of 66 and that was the Summer of Love and all kinds of neat things and not so neat happening around the Berkeley campus at that particular time but here it was in this very I was acting corn breeding as I was out in the field all summer working in a very kind of conservative Midwestern almost uneventful environment and getting the snippets of information by television what have you what was happening here and I can honestly tell you if I’ve questioned anything in my life it’s really why did I come here instead of Illinois I was 0 ever very fortunate to be able to sit on an advisory board at UC Berkeley’s force products lab for 10 years and Frank Beal and a lot of the board is here actually and pleased to see that this gave me the opportunity to come back to Berkeley often two or three times a year and so while I’m not officially an alumnus I do feel a particularly strong attraction to your University hence I’m really overjoyed when Craig called me and said this was an opportunity for me to come down and I just grabbed it right away I’m going to talk to you today about various things in Craig touched upon them but I’m going to leave you with my conclusion right now and I’ll come back to it and hopefully my talk will will reinforce this rather simple message and that message quite simply is that the current rate of consumption of non renewable materials land fresh water air energy are not sustainable in the longer term and this I think is giving us the opportunity to move towards a new Bioeconomy and I believe that this new Bioeconomy will be based on renewable lignocellulose from our forests and this I think is going to do some pretty exciting things it’s going to create a whole array of new product streams new applications but more importantly I think it’s going to allow us as a sector to regain prosperity again my talk will be broken I should be following these slides okay that’s just a statement of what I just said a lot line of my presentation I’ll first take a brief look at the long-term trends as well as talk a bit about the myths that are associated with wood with forest sustainability etc and then I’ll move on to talk a bit about Canada and how we’re trying to address the issue around sustainability of our forests I’ll then introduce FP innovations and how we are attempting to help the sector

re-engineer or transform itself and then I’ll end by presenting you a few examples of the kinds of exciting products and applications that can come out of out of cellulose that really incredible complex molecule let’s look first at the long term we know the impact of globalization is hitting virtually every aspect of life and economies around the world one that I want to focus on is the growing consumer demand i also want to turn to the depletion of the planets non-renewable resources and as a third trend look at the growing impact of human activity on climate change the world’s population has grown since 1950 from to 2.6 billion to six point nine billion today by night by 2050 we can expect to see a population a world population of about nine billion people that phenomenon coupled with what I would say the voracious appetite for consumer goods in rapidly developing countries like China and India is placing enormous pressure on the planet’s natural resources the non-renewable ones in fact when you really look at it today China and India combined represent thirty-eight percent of the world’s population I’ve tried to depict the these shifts more from a macro economics or supply demand curve in terms of natural resources and the ever under undergoing decline over the ages as we’ve seen the increase in population and on the x-axis I’ve tried to show some of the transformative events that have been occurring and the thing I want you to focus on is that in all of these green revolution electronic revolution industrial revolution technology and innovation have played a very critical role and not only that as it’s gone further along the knowledge part has become more and more significant as a component in fact when you look at this in the earlier phases land was replaced by labor labour by capital and capital by knowledge we’re at the tipping point now as a country this growing population this growing demand this decrease in the non-renewable resources have put us at a tipping point and this is where I believe we’re going to see the second Green Revolution an environmentally sustainable one that’s going to drive the new Bioeconomy so there’s a couple of questions we have to ask can we as individuals in North America and the world for that matter recognize the value of where we can go in terms of using renewable resources as our main feedstock to feed to clothe to heat our homes and we’re willing to embrace this as an opportunity and the second thing is human ingenuity and innovation going to again defy the Malthusian arguments or theory that with population growth you automatically create scarcity and as we know from this that that is not necessarily the case what about climate change I was a third trend I wanted to address well I believe as I’m sure all of us in this room do that climate change has really coalesced public concern about the carbon footprint of all and I stress all human activities products and processes the de criteria film eleventh hour mr. gore’s activities etc are just a bellwether I think of a global feeling and movement towards that and we have some challenges in our sector if we look at the primary causes of climate change global warming we see very clearly the deforestation is a major one in fact deforestation and agriculture as you can see amount to a considerable percentage of the co2 emissions into the atmosphere while urbanization is a factor of deforestation the biggest contributor by far is a deforestation of tropical forests for agricultural purposes a large part of this is driven ironically around subsidies or economics valuing the growing of energy crops for

biofuel we can stop deforestation by incenting economic return by not only growing and reforesting new trees but also being allowed to cut them in a sustainable way and to make forest products when we talk about climate change we can’t help but think back with the sad events that occurred with Katrina but there’s equal concern I think about the effect of climate change on increasing the biotic and abiotic stresses on our crops and on our forests mountain pine beetle is a very good example of that we have a situation in Canada in British Columbia where I live where this beetle was kept under control in our forest because the larvae didn’t survive that much as a result of the colder winters with the warming winters that we’re seeing now we’ve seen an explosion in the in the beetle population and this is proved to be a real disaster this is an example of lodgepole pine forests attacked by the mountain pine beetle this little creature here and basically this is within two years year or two that moves fairly quickly in five years to what we call the gray stage that’s dry desiccated timber and the challenge is how do you try to recover some value from that fall down because let’s face it if that’s not harvested and used in into products it’ll it’ll either burn or decay and it will emit co2 but there’s issues around harvesting this kind of material accessing it issues around regeneration and that’s some of the work that my Institute is actually working in engaged in I’m going to move now to what is a I thought is a neat depiction of what has occurred and what will be occurred it’s a computer simulation of what’s going to happen to British Columbia and it’s quite scary when you look at it remember the first sign of attack of the beetle is a red face red stage then goes to the gray and death here it is here in 1999 it started in tweedsmuir Park and grew we weren’t allowed to cut and control at that stage you can see the gray starting now quite extensive moving up and by 1914 this is a 2014 i should say this is the kind of picture you’re going to get very scary in fact when you look at it the loss is going to be about 850 million cubic meters of timberline put in perspective that’s equivalent to harvest the harvesting in Sweden for 10 years 10 years of Swedish harvesting it’s a lot of trees let’s look at another impact of environment and that is on on shelter systems which is a basic human need and a basic activity and if you look at buildings and the impact they have and I want to mention that no matter what system you have or what you bill all of them will have an environmental impact the secret is to try to mitigate that and make the footprint environmental footprint as soft as possible and here’s a case where you take total construction total building around the world it actually consumes forty percent of the energy and materials globally thirty-four percent of the world’s co2 emissions forty percent of the world’s solid waste and seventeen percent of the fresh water consumption and I know we talk about energy today but let’s face it freshwater globally is a really serious issue and the and the loss of that we a few years back developed a methodology software actually to measure life cycle analysis and this permitted us to very objectively compare different systems of construction in terms of their environmental footprint and when we talk about life cycle analysis we’re essentially alluding to the full impact one would have through the whole life cycle of a product or of a system of a house and that includes the extraction of the result the growth of the resource its extraction effect on biodiversity and all of these things have to be

factored if it’s a forest it’s it’s the transportation of that material the processing of it the construction the occupancy the demolition recycling reusing or disposal all of these aspects are considered from an environmental perspective and measured and quantified so let’s take an illustration and this could be typically a house wood frame construction in this case in the middle constructed here in the bay area the other one is in steel and the other one be concrete recognizing that even on the concrete house it would have a wood roof but I’m just saying would be predominantly concrete or masonry construction so if you do a life cycle analysis on those three systems how do they compare which has a softer footprint well here it is here if you take a look at the indices of environmental impact embodied energy co 2 emissions air toxicity water toxicity etc the green is would the blue is steel and the red is concrete and clearly you can see when you compare those three construction systems wood has a softer environmentally foot print but it doesn’t end there there’s a further advantage and that is a roll of wood in fighting climate change we all know that trees take co2 out of the air photosynthesis to make cellulose so you sequester carbon dioxide you’ve stored terms of the biomass of the tree and then if that tree is harvested and you build that house you are actually convert and you were actually retaining that carbon in that house structure and again if you look at it typical house constructed in wood between 18 to 24 hundred square feet you’re talking about sequestering and storing 28 to 32 tons of carbon dioxide that was in the atmosphere that is now being stored so when you look at the carbon cycle you’ve essentially grafted on a piece on that in terms of they are being stored by the life of the of that particular structure which could be 70 80 whatever years and that’s equivalent to put in perspective of seven years from driving your family car the emissions so when you’re thinking of your house and your house is built out of wood you should think of the renewable components in that house as being a carbon credit we’re lucky in north america on both sides of the border I believe we’re world leaders and sustainable forest practices and we have a wood culture and you know that makes us important in the global carbon balance without exaggeration I’d say we’re we’re in some ways offsetting the emissions of others now I don’t want to dwell on this but I want to summarize it because I think it’s a terribly important point because there’s a lot of myths associated with wood and wood products and the point of it is wood has a softer softest environmental footprint is compared to other mainstream building materials it’s renewable which others aren’t it’s grown from solar energy stores carbon dioxide and when you look at it in terms of occupancy etc and maintenance it’s very clear that wood is compared to other materials is a better insulator well let’s turn now to our forest talk a bit about the supply demand issue with our forests and here I’m trying to depict and yellow will be our temperate forests and you can see it stretch across North America Canada United States and you’d be having you’d have a your soft woods of course you boreal up here and across here but also your mixed-species and what have you and then Europe all the way through the Soviet Union Russia into Siberia when we look at that and then down in the south southern hemisphere of course the tropical forest to cut across there when you look at the total area of forest you’re looking at a 3.9 close to 4 million or billion i should say four

billion hectares russia is the highest and i must say that that data was 2000 so you’ve got it that’s the old USSR so it would be smaller now Brazil followed by Brazil tropical then Canon unite States I’d say North America when you look at it in that context it’s probably combined can in the United States as having the well the largest as compared to this would entail a lot of a lot of as I said the former Soviet Union well the question we’re all would wonder is are we running out of wood I’ve been talking up to now about how we could use more wood question is are we running out of it these are the trends in terms of demand there’s a couple of points that one emphasized here the first one is as population has been growing so has a demand for wood but the important thing to note is these are FAO numbers is the huge amount of wood that is used as fuel and not that efficiently this is a deforestation or overuse non-sustainable use in a lot of countries particularly countries that are underdeveloped and it’s used for fuel for cooking and for heating and those processes are generally a very low efficiency so it’s a point to remember that that when people talk about the forests a large amount of that more than half is actually is actually burnt to meet personal needs of people we know that there’s a pull on developing countries like China and others and this is just a snapshot the place I visited once North northern China it’s at the border between Siberia and China and this is there’s a Siberian would spruce coming in beautiful material beautiful material into China and of course the China has become a major major user of wood products and I’ll talk about the plantation context in a minute so major consumers well a question you might be posing is what about the idea of original forests where do we stand on that I showed you the four station and implications there but what about just globally the forest well you can see it varies it’s spotty actually Canada’s probably still got the largest percentage of original forests followed by Norway us sixty percent of the original forests and you get down to Europe of course and it was removed because of urbanization industrialization many years ago it’s on a move to be built up again and then you have the extremes of Mexico that’s a shot in Mexico actually and this is again for agricultural purposes South America and Southeast Asia so there are major challenges in terms of supply there’s no doubt about that but can we do anything about it can we offset this demand can we grow more trees I believe we can I believe it’s important that we do practice strong conservation in certain areas but in areas where we’re going to have a working forest where we’ll be harvesting it’s important to consider it in terms of reforestation and it goes further than that it goes to reclaiming back land that would probably was for us that was deforested to put back in the forest marginal land that is more appropriately available or should be used for forest rather than perhaps grasslands etc and there’s efforts in several countries to try to address that including Canada the other is the for improved force management practices not include genetics and tree improvement and plantations and I’ll say a word about each of those quickly if I look here this is a recent study done by Yann Frick at Scoob forest and they went through and look very carefully at all the aspects of forest management of tree improvement etc and looked at the point if you took the Swedish for us today how much could you increase growth without getting the plantation but using managed force as it exists in Sweden now and the feeling is it’s anywhere between twenty and fifty percent increase in yield just improving and using more effectively practice like pre-commercial thinning commercial thinning what have you and using residues in Canada where we practice extensive force management so it’s not quite the same system but we we calculated it could be twenty to forty percent so there are there are ways of actually growing more trees even in the land that you currently grow trees on

the other thing I haven’t touched i mentioned genetics but there’s the whole area of biotechnology and it’s problematic but if we can live up or can achieve twenty percent of what potential has been promised that could be that could be an exciting possibility what about plantations well we know in China that’s become a state forest administration policy in a very serious way a lot of it being driven by mitigating erosion and and desert vacation and and of course those trees are fast-growing poplar and eucalyptus bamboo et cetera and will be harvested and will be used in wood products the thing that I would like to mention is the difference in growth rates that are that are occurring as a result of intensive plantation management and genetic selection what have you and comparing that to let’s say in Canada boreal forests are mean annual increment in terms of growth rate per year per year is is about two cubic meters per hectare down in southern parts southern South America they’re getting up to 56 cubic metres per per year that’s about a 25 times greater growth rate well let’s talk about about Canada and and and how we’re addressing the sustainability issue which was the the other piece that I wanted to get into exactly it’s actually an interesting place these days because it’s a big country it’s probably got the largest concentration of fresh water in the world up in the North the tar sands here are generating a lot of non are non-renewable fossil fuels because you mungus amount of energy there and there’s all these trees which are a potential source of energy so the fresh water the energy possibilities the land few people are I think are kind of neat and I think it’s an opportunity that more and more will see us by us I mean both sides of the border looking very much as as an entity of North America working together on on recognizing this and and recognizing the value that that this can bring if I look at our land base it’s it’s about a billion hectares if I look at our forest land you can see it’s it’s about half of its half a billion the productive timber areas are the traditional areas that where we would look at harvesting represent 250 million hectares and you can see what we harvest down here 1 million hectares are is harvested which is less than 1% of the of the productive forest about point five this is this is interesting because that 1 million hectares you can put in perspective of what we lose each year from disease and fires in Canada it’s about 15 million so it’s 15 times the annual harvest is lost that goes up as co2 in the air what about conservation that’s to me a key issue because we’re talking about a balanced approach working for us but also also conserving forest for issues around biodiversity and what have you and if I look at that Canada is up to 40 million hectares of forests that are that are that are protected that are not that are not harvested and you can see where the rest fall in well what about the regeneration issue you can see the numbers there in terms of actual replanting regeneration this is where the numbers are and this is Canada as compared to some of the other other countries now you can say yeah but come on you’ve got a lot more forest so what’s the percentage the point is it’s still very high and in fact FAO and their 2007 report acknowledged at Canada’s deforestation deforestation rate was zero and again a lot of it is planted but a lot of his natural region as you’re looking here material it’s in the second general regeneration cycle we’ve got lot that its third regeneration in particular on the coast of BC and so it’s it’s a very vigorous part of what we would call our need to be sustainably managing our forests certification third-party certification is a very important consideration in fact if you want to be a member of the forest product Society of care of course Products Association of Canada sorry you you actually have to

have all your forests certified by a third party that’s either FSC SFI csa the three that are generally used canadian standards association is the last one i’m sure you’re familiar with the other first two that’s a condition of membership in NF pack which is the sister organization to the FN PA here in America and if you look at what’s been certified those numbers are 205 I apologize 207 it’s up to 100 to 135 million hectares that are certified in Canada and it’s growing and why do we want to do that well the feeling is that we feel that as we go forward into the new Bioeconomy it’s going to be important that we’re green the whole length and that for sustainability has to be there and that if we want to achieve an objective that I think we we want to achieve together in North America is that people should look at our forest practices as the most planet-friendly source of forest products there’s an interesting difference that Canada has it’s a bit of an anomaly and makes us a bit unique in terms of our timber ownership a very small amount is owned privately it’s most of it is owned by the crown public and that really creates a different perspective when you look at the forest you’ve got to blend in not only considerations at our economic economic values but you’ve also got to be very conscious of environmental lab values and social values and so what we look at it is as more as a public-private partnership and building this building on this strategy that I was suggesting in terms of environmental friendliness along the value chain I just want to take a minute to talk about that in a little more detail of what i mean by value chain and the optimization of a value chain and of course we’re all familiar with and this is part of of let’s say this strategy and the bases or the rationale for the creation of FP innovations which i’ll talk a little more about in a minute but basically if when you look at this from first of all from an economic perspective it’s clear that what we’re talking about here is a better understanding of what the customer requires in the marketplace the attributes desired by that customer in other words they want solutions and linking that back to the raw material that would quality characteristics and the idea is to try to align those as much as possible and to then use the value chain as a way of either enhancing those attributes are adding new ones and if i look then at the environmental clearly then what we’re talking about is sustainable forestry third-party certification we’re talking about green manufacturing 0 affluence if you’re running a pulp mill or reduce VOCs and what have you soft environmental footprint and then a whole array of green products and i mentioned what products is one of them both recycled paper there’s a whole array of things and I’ll be mentioning a few more in a few minutes that can that that will be new value streams but from an environmental point of view the idea is to have that dream this all along the chain and then when you look at the social obviously there you’re talking about the multi values of the force and that’s very important because they’re public it means first nations have a very strong claim on them there’s a spiritual last effective of the forest that has to be respected there’s a whole biodiversity aspect there’s a whole use of recreation in what have you as well as the economic or harvesting part when you look at it from from from the middle part of the chain clearly there you’re talking about communities and jobs and that’s important too to public-private partnership or do any relationship and then in the last area you’re talking about meeting human needs for clothing for heat for housing etc in an environmentally friendly way so there’s a very strong social thread that pulls across that chain as well as an environmental one as well as a as a as an economic one and that believes me now to FP innovations and I’m depicting here the the value chain all the way from genetics tree improvement through harvesting etc pulp and paper market performance wood products and then an array of new that a new product streams and if you look at the these Institute’s that create mentioned having come together and merged recently in fact it’s only happened April one so it’s six months that we’ve been together as one

we have farik which is a forest engineering that plays along that part of the chain we have foreign tech that is here in terms of market you mentioned China codes and standards this is an important area on the buildings etc but there’s also the appearance type products furniture and what have you and there’s a piece of that that actually is interested in wood quality characterization in other words matching attributes to the marketplace you look at the pulp and paper you’ve got a similar parallel to foreign tech in terms of markets etc and the fiber characterization and there’s a fourth division that’s so those are the three institutes but then there’s a fourth one which is called the fiber Center that’s an interesting one because that’s a government entity that has been pulled together and that entity involves scientists from the Canadian Forest Service that are focusing on the economic aspects of of the upstream it only represents about ten percent of their total research capacity but it’s an important group and compliments very well what we’re trying to do here the the other interesting thing is a unique model because these people still work for the government there are their employees of the crown and but they take their direction for research from the FB innovations board so they’re not the same as these three it’s another tier but they’re also it so it’s part of an integrated program that allows us to approach problems along the whole length of the value chain and the partnerships of course that are important well our employees are a little over seven hundred and the budget is a little over a hundred million and as I say it’s for me quite an exciting opportunity to be involved with this new venture that we’ve gotten into federal government also to sweeten the deal invested over the next three years between 25 and 30 million new dollars on initiatives that are built around what we call three flagship programs that we are the custodian of a lot of the work will be done at FP innovations but also a lot of that will be to invest in universities for partnerships etc but the three that we’re looking at and they’re very much Bioeconomy driven when you look at them new building and living solutions the next generation of solutions for people’s living needs the next generation of pulp and paper specialty pulps and papers and the applications that we can get from that and finally this whole area above buyer if around biorefinery around bioenergy and chemicals and advanced bio products that’s what that’s going to be funding if i look at it in terms of the building and living solutions the focus is to move away from selling being purveyors of producers and purveyors of two-by-fours to providing people with with solutions here’s a solution that we’re looking at obviously is how do we get an uplift from all that disease beetle-killed would and one obvious way is engineered wood products opposites and what have you and that’s just an example of of a structural application of the strand and glue in terms of a oriented strand lumber another example is is is looking at buildings in a different way looking at new design and construction methods optimizing wood using wood where it should be used and not using where it shouldn’t be used and using wood in combination with other materials hybrid construction also looking at opportunities for non-residential applications and doing it very much recognize the important green attribute of wood I call it playing the green card and basically what you see here and this is oval or unsought not Oakville Oakland something that is sustainable from an environmental perspective but also aesthetically very pleasing if I look at the second flagship around the biorefinery energy and chemicals from forest biomass and we see this as a tremendous opportunity there’s this wonderful feedstock that we have that is renewable there’s just some other applications again of cellulose in terms of rayon basic feedstocks how do we produce these well in a bio refinery in fact the first bio refinery was a pub know it meant taking wood making pulp and cellulose conventional processes to make paper subsequently we looked at the waste products the byproducts lignin

recognizably and hemicellulose recognize that we could make other other valuable or useful materials residues like bark and sludge etc energy chemicals and what have you the opportunities are limitless one of the I think quick wins is using waste energy our waste residue is to produce energy as a substitution for fossil fuels on manufacturing sites producing syngas for instance to replace natural gas in kilns for drying lumber or lime kilns at a pulp mill coach in pellets can be used for for heating homes a lot of it is actually exported to to Europe in fact the strategy is to be energy neutral by using residues instead of fossil fuels and most most people are now talking about actually being a net contributor to the energy grid with with what would be a waste residue material there’s major investments all over the world and I don’t pretend to suggest that in these areas that we’re we’re big players in a sense but I cite one example I mean obviously in the u.s. do ii and enroll or major players EU is putting a major investments in this area as well as obviously the the industry and this is I think a great example of one here I think this is neat this guy was up to see us your governor and by the timing was through with gordon campbell or prime minister premiere in british columbia this premier this was a change transform man he’s all of a sudden the greenest guy going i mean it’s just absolutely incredible and I just just blows me away I mean you know this guy really has a personality you really can occupy a room it’s incredible anyway at the point I’d make here and I really appreciated this fact here that part of that money is going to be looking at reducing the impact on environment energy consumption and environment and I was looking at the list of projects that were coming out of this and it’s that that impressed me a lot the point I would flag though is my old alma mater and I think the reason that the linkage was made between berkeley and them as well as the lawrence lab was the fact that they have a very strong AG capacity at illinois and i guess it brings up the other point you could probably sense it in the conversation that i’ve been having is that as an ex corn breeder etc in in corn for many years and I’ve seen the light now that I’ve see trees I I really question whether this is the way to go whether it’s it’s appropriate to use food for fuel and we’ve seen the economic impacts that have happened China’s gone to WTO riots in Mexico City with because of the price of tortillas I mean things like this you know let’s say you had a tiny SUV not a not a big gas guzzler not a Hummer or anything but a tiny SUV and you’re going to replace all that fuel with ethanol you know what take two hectares or five acres of corn to supply it for a year I mean that’s a lot and when you start extrapolating if in America we’re going to take ten percent of our of our fuel for automotive and transportation and have it as ethanol you know you’re talking about forty three percent of the current crop land in America or thirty eight percent of the crop land in Europe that’s a it’s a challenge so what’s the solution in my mind it’s a balance it’s a balance of various options obviously it is an immediate option that we have in as a non renewables but there are opportunities to conserve there are opportunities to increase fossil fuel efficiencies and we’re seeing that now and if I California’s leading the world in terms of trying to try to put that in and from a legislative point of view and there’s also the opportunity to restore working forests and then of course we get to the long term which is lean or zero carbon and that’s fuel cells nuclear tidal hybrid wind power etc other alternatives so I think what we really should be looking at is a bull end of all of these factors a balanced blend I want to turn to some of the other exciting products that I see coming down the pike and this will be

sort of wrapping up my presentation based on cellulose you know the annual production of cellulose cellulosic material is about 1.5 trillion tons per year there’s a lot of material out there it’s a very exciting interesting molecule it’s a straight chain polymer extended rod like confirmation it aggregates into microfibrils held together with hydrogen bonding giving it incredibly our incredible strength properties here’s an example of of one application that might happen it’s not a dream I think it’s possible these are some South Korean scientists that are actually working with NASA there for that piece on the robots etc you can guess what that would be in terms of drones to fly around check for gas etc things like this but this is dissolved pulp a dissolved pulp that’s been formed into a sheet and then coated with a layer of gold to act as an electrode they’re lightweight and when you apply low voltage and you only need low voltage you get very high degree of deflection and these things can can can deflect and return and actually do the process quite rapidly so you can see the applications there as i mentioned robotics chemical sensors visual visual displays even artificial muscles might be a possibility here’s another one Rensselaer Polytechnic composite paper and this is a paper battery or it can function as a lithium battery or as a supercapacitor it uses carbon nanotubes that act as electrodes since it’s infused within the cellulose oh you get the separator and then you got a lithium oxide coating on the other surface the black surface would be the carbon face of the carbon nanotubes and with that you’ve got power and the interesting thing about it because it uses ionic liquid electrolyte that’s soaked into the cellulose it can have this Yuma it’s very robust at temperatures up to 300 Fahrenheit down to a minus 100 so it’s kind of interesting those kinds of things and it leads to another one but I’m really excited about because it involves SP innovations and this is bio reactive papers and the thing about that is that this would be a specialty paper and it’s a paper at the nano level that’s been constructed that can allow you to detect repel and or deactivate pathogens the sars mask is a little bit of a hype thing I mean I think perhaps you could really see the applications in food packaging when it’d be nice to not have to pick up a package and say what’s the expiry date this could visually change so you’d see if it with the food was off so that’s quite exciting and those are some of the applications another one that we’re quite excited about is the whole area of nano crystalline cellulose and papri can before became fb innovations for many years for ten years or more had been working on this and they had developed ways of extracting nano crystalline cellulose not just taking pulp and taking it down further to the nano level so you can you can envisage molecules that at nano size 10 to the minus 9 meters and that’s about equivalent to you can look at as a rectangle of maybe 2000 glucose molecules and we get down to that core that level you get some very interesting properties and we’ve recently been able to in the pilot plant scale us up to kilogram quantities so we’ve been able to to really start looking at its unique properties and to apply it in two different applications I’m going to talk a minute about that one is its intense color much more intense than than the usual dyes that are used today interesting properties on porosity depending on its concentration and its opacity it can be colorless and its strength incredible strength and a lot cheaper than carbon nanotubes some of the applications membranes for fuel cells kidney dialysis protein separation barrier films that are suitable for liquid packaging instead of having tetra plaque you know when you’ve got the sort of plastic in the aluminum and then the paper you could actually coat the paper with this and you would have the barrier that you would need it for liquid packaging you can also make advanced

textiles biomedical devices like heart valves bone replacements skin grafts in cosmetics because of its intense color it can it’s ultra tough lightweight composites or biocomposites that can be made from this and you can see the use on this on automobile parts there’s a move afoot that we’re going to see and there’s a lot of money being put into this what we call the new bio renew the renewable car that has over fifty percent bio-based it’ll be lighter it’ll be strong and of course it’ll it’ll start meeting the environmental demands that are being imposed on the industry and we happen to be involved with the group working out of Oshawa some of the companies looking and tying it in to some of this nano crystalline cellulose so we’re quite excited about that nanotechnology also has other roles of course if you’re looking at structures you can you’re talking fire retardancy you’re talking the issue around durability these are problems when you build in wood and if you can optimize that in terms of performance it’s great coatings etc there’s a whole array of things so in summary I want to go back to the take-home messages and clearly to me that we are moving towards a bio economy and secondly it’s going to be based on lignocellulose we as an industry have the opportunity to lead on that or if we don’t somebody’s going to tell us a step aside and it’s going to be the shells of this world and the bps that are going to lead on the forest and I think we have a lot to offer in partnership with with with the energy sector I think they bring money they’ve got a lot of money and that’s needed capital but they also bring an expertise and knowledge in terms of products that can be produced that are close the distribution etc of products in the marketplace and what we bring is a knowledge a very unique knowledge as foresters on how to handle material how to do it sustainably how to harvest that material how to process it and it to me is a fantastic opportunity for partnerships between two different sectors so if I was going to end I’ll end on this slide and it’s about the future it’s about sustainability it’s about sustainable forests renewable energy low environmental impact manufacturing and a whole slew of environmental friendly Bio Products & construction systems many of you if you’re on forestry probably started your first job in industry on the green chain that is if you don’t know what if some of you haven’t that’s in a sawmill the worst place that’s at the end where the lumber comes off and you’re sort of are picking it up and moving it on and stacking it and stuff like that and if you had that as a summer job and you do that eight hours a day it’s enough to turn you off the industry but I think there’s a new definition of green chain and it’s this new green value chain and I think there’s some real opportunities there so with that thank you very much for your time it’s been a ball thank you thank you very much thanks well we have certainly I think a lot of material that we’re digesting here and a kind of the current and future trends for for us and I think we have some time to entertain some questions and so we have a microphone we can pass around and just me a second will start sir you do you have that hand mic or army I think we’ll have that in a second well that’s okay anyone would thank you then through the engineered wood products or just traditional with products which one I’m sorry on the bar graph with the wood and steel and come up and range of them mostly it would be lumber and it would be panel and it’s based on the idea of a sheer wall so you would always be your plywood as we handling flooring etc you know how else will be constructed rafters trusses etc but there would be in these now of

course would I beams etc then those are considered engineered and like silent floor if I can name a company like warehouse or they’re good people and there’s a list of those things we’re seeing more and more now i would say oriented strand lumber or finger jointed lumber etc so there it is a mixture of both but mostly i would say ninety percent of it would be would be non engineered products the more conventional once yes sir what do you mean by third-party certification it means that the industry a company like where hauser or what have you would not be doing their own certification they would have to have an independent auditor come in and do an evaluation according to prescribed set of expectations and standards and that would be the rating it’s quite elaborate it’s it’s a full-size audit that’s like the revenue people come in in going through everything you’re planning of your forests all the way through to to how you harvest and their on-site and looking at that and the sustainability practices how the remedial action of you know replacing culverts or roads after you’ve logged an area all of those things in some years ago when i was at U of T as a quazy Canadian there was a federal Forest Products laboratory in Canada and a federal one in the US yeah looking at the evolution in Canada in the management of forest products research it’s it’s rather astounding to see that since the one in the u.s. looks like the one that used to be there before when Canada had theirs with very little change so if someone from the federal government here maybe not right now maybe two years from now what would come to you and say what would you recommend we do in the u.s. to create innovation in forest products research what would you tell well that’s a tough question I I will preface what I’m saying is that we have a very close working relationship collaboration with the with the Madison lab in particular and and some of the stations and I see that growing but if you’re asking me what I could suggest and I’d be quite willing to suggest it i would i would first of all say there’s some real advantages of going the route of privatization of of recognizing that your paycheck has to come from your customer but i would say and and that does affect the culture in an organization it does open up by definition a lot of entrepreneurial spirit to try to find ways of getting funding and stuff that because you’re forced to in that position but their downsides to it the way we were privatized was the wrong way it was a very sad event a politician decided that this was a good thing to do it happened to be in the days of pierre trudeau and his minister and the staff heard that they were being terminated as government employees by listening to the budget speech and being announced as a government step in privatization very bad way of doing things the other thing too that has happened over the years the bad the downside thing is that we’ve had to be so focused on the customer because they pay the bills as members and our funding comes from the industry we do a lot of government contracts but most of it comes from the industry it’s forced us into a shorter term mode and and and and that has its limitations what we have done has been very aggressive in building university partnerships and like in the case of foreign tech friends is my division or we have we fund chairs at universities and stuff like that so we recognize that if we’re going to get that creativity on some of the blue sky kinds of things that we can’t afford to do we can leverage it it’s very easy for us to to be as industry to go to government and funding like NSF and here but in serkan canada and and and and get leveraging for that kind of funding so that’s worked very well this new money that’s 25 to 30 million that we’ve got a large part of that will be to enhancer capacity in a house on some of the things but let’s face it we’re an applied I’d say mission oriented kind of research organization but a large chunk of that will be to feed into universities to tie in the Sentinel is an ideal project it’s 10 universities I mean I don’t think the u.s. Forest Products lab or FP innovations could hope to get the talent that’s there that

group that is doing that work there physicists there’s microbiologists there’s chemist I mean this whole thing on this bio reactive paper is covered and and all we’re there is like sort of experts on paper type of thing and knowing that part on the applied sense but it’s awesome and the work that is going on in a speed from these universe 10 universities or networked into this so I I do think I’m talking too long on this point but I wanted to say that it’s not a simple question of privatization there’s different models but the models have to be integrative I mean there’s a tendency to have silos it can be one prof slab versus another or one division versus another if it’s an institute like ours and the point of it is if we can integrate and recognize it’s a heck of a lot of fun when you’re working with other people that you respect and that can help you achieve your objectives and so I think this whole idea of pulling people together and working on in a focused way funded well is a way to go and this is what we’re trying to do yes or talk about the chemistry associated with lignin and sales is quite exciting but one of the slides are several slides that you showed dealt with a mountain by Neil is some of your area until what a way to look at it set and I suspect unless those areas right now are under management that critter for the foreseeable future they’re gonna be managed by the mountain idea and that means that they’re going to be killed by the mountain pine beetle they’re going to be a royal blood fire and did a new generation of large will find whatever the species that you’ve ever there is is going to regenerate and all this is going to happen and produce a substantial our carbon back yet the atmosphere before we catch it again by this generation retrieved so unless a substantial portion of the vegans Morris if you’re talking about others some kind of a management they’re going to be managed by the incident yeah that’s an excellent point in fact one of the early wins for us as an organization it already started before we merged was the fact that when the month excuse me mountain pine beetle occurred we were able to get an infusion of a lot of money we wrote what I was a comprehensive proposal that covered the full stage of the life cycle of products so we we looked at the fall down and the idea was the shelf life and the issue and quality etcetera what kind of products could be made effectively so that you could try to recover some of that loss because of the beetle and the engineered wood product piece came in that the whole idea how do you address in a pulp mill the whole problem around the high with the insect and the stress the pitch that comes in infecting the pollen paper production and all of those kinds of aspects have been and are being worked on and and and so there is an aggressive management scheme it was stopped it could have been controlled I believe at the tweedsmuir National Park a provincial park but environmentalists felt that though that was a park it was conserved area shouldn’t be cut down and as a result the problem got out of control at the border with Alberta it’s crossed over but what’s happened is that they have a very aggressive using a landscape approach etc of controlling it as it’s in the foothills of the Rockies and they’ve been able to contain it this year again they had a colder winter this past year and that helped etc but it definitely is to me one of the classic examples of of whether its climate change or whatever but it’s warmer winters that we’re having in there and that’s the impact so we are we are in a sense managing it but the problem is in another 10 years there is going to be a major shortfall in terms of available fiber for for forest harvesting purposes yes among some of the people that I deal with lately there’s been a good deal of discussion about the use of small wood for biofuels specifically cellulosic ethanol and wood pellets as the means the most promising needs to forest health but you know I haven’t seen that happen yet there’s still we haven’t figured out that the technologies or develop the markets that can afford to get that material out of the woods and processed do you believe that that is the that’s the wave of the future that many people think well there’s a couple of issues that come with that I mean there’s an issue that I think anybody is going to ask is that how much residue can you take out of the forest without damaging its capacity to regenerate its fertility and stuff like that and we don’t really have good numbers on that I mean a lot of it is estimates inferences etc they Swedes have done a lot of work on that area but their forests are managed in a different way and let’s say the extensive Forest Practices we have

but there is an area around that that has to be addressed we believe that we’re leaving over sixty percent of the biomass in the forest and most of that could be removed because you’ve got if you’ve got the litter but you’ve also got roots etc they will stay and enter that process and the problem is and this is a work that our engineering people are doing it’s the whole how can you economic move it from one place to another I concentrated to be able to be able to process it either in ethanol biogas or syngas I should say and various things and and that what we’re looking at now is is is is it possible to be moving in small small units that can generate maybe four kilowatt or something smaller unit that could be tied into communities and stuff like that there’s a couple of companies that are our guys are working with in terms of looking at that so it’s not necessarily having to move it to a large facility and might be to use it locally into staying commune sustain this facility is it exactly exactly now this we used to burn a lot on the roadside as you know I mean there’s a lot of residue as you as you forward out you know your your material and you cut to length on the roadside you leave a lot there and a lot of it was burnt so I mean the point is that that’s not helpful there’s got to be a ways of making better use of it yeah yes could you compare the intricacy complexity or capital intensity of the new cellulose technology compared to what we associate with a pulp mill yeah the one that I had as a picture there you’re talking about maybe 400 500 million for the larger facility but I don’t think one has to go that way that’s a green field I I think some of the opportunities and I’ve seen personally experiences this is you use the concept of a bolt-on you recognize that making pulp is legitimate but you want to have a diversified stream to maximize your streams and a lot of mills are looking at bolting on a capacity to do this or that so you’re you’re actually building it as a cluster around the site one good example about with that would be ten back up into miss coming I mean they’re making biogas they’re making lignin they’re making a whole array if they’re making ethanol second largest ethanol producer from wood in in Canada and they’re doing array of those things and that operation wouldn’t be there if it relied solely on pulp in fact the only thing making money these days is these other things not the Pope side yes yeah yeah I i think the the success story i could look at and petroleum was the tar sands the technology to develop to be able to extract that now they’re using carbon injection or co2 injection is part of the processes so there’s a lot of research the companies like the shells they’re spending a lot of money and I mean that’s the problem on the fourth side as we know companies are not necessarily that amenable to be investing in these kinds of things and that’s a big disadvantage and that’s why I think we’d be better off to partner as much as we can with some of these companies because they they’re going green I mean it’s renewable I mean wind power etc of various various options in terms of renewable a better its shell or whether it’s BP etc they’re heavily investing into these other areas the thing interesting in Canada is it’s publicly owned land and when I talk to people within government there’s also a tendency to say look we’ve tied this land up through ten year etc to certain companies these guys aren’t being as progressive as they should be maybe we should take it back from them and give it to the shells and the others and let them use it to better use which is scary so I mean you know it’s almost like use it or lose a type of thing and I go back to my point I think it’s a gold mine I think what we bring to the table that we could help these shells and these bps is a knowledge base about this this forest and this fiber etc that could be very useful they know boom all about that side of the business and and so there’s a real opportunity so in terms of your question yes a lot of investment is going on on that minerals ah well that’s now force used to be the number one export in terms of Canada it’s dropped to three energies number one and minerals is number two by the way I’m digressing but I can’t help but say it I I believe that you know three years ago the canadian dollar was sixty-two cents and it’s now a dollar to and and you know a lot of people would say is because the US dollar has gone down for various reasons but i believe

the fact that you’ve got this humongous natural resource and the world is crying for it i mean potash shares in potash saskatchewan we’re at about i think twenty five thirty bucks I and then dropped and I got out I had some and it’s gone up to two hundred and and and and I don’t think it’s a bubble like we saw well before that but this is serious stuff in long term and so I really do think that we have to look at it from a global North American perspective I think there’s some things that could be done quite excitingly and hopefully that’s what’s going to happen let’s get some student question yeah great All Right microphone thanks I was just wondering how much that from the UH you had the white powder the nano crystalline cellulose like how much do you get that from a normal tree like how much what’s the what’s the ratio I guess ah well you don’t when you’re processing it your process yep like I don’t have the numbers on the technical side of the pulp but I mean it’s it’s going to be the once you get to the pulp recovery and of course obviously there you’re going to you’re going to have several streams that go out and so you’re going to have a reduced level and I don’t have the number maybe somebody in the room does and what the recovery is from from from let’s say a ton of wood fiber but this is processed down it’s it’s harshly treated as it treated it’s broken down and again the recovery on this and it’s more the optimization to the process but in a day the pilot mill will make a couple of kilograms but I mean you know in terms of the value I mean you’re talking about what you’re talking maybe 50,000 a gram or so i mean you know i mean it’s it’s expensive you know at this stage you know if you can use it for some of the specialty stuff it’s being used now we’re working with with a food company and it’s being used in drinks as a fiber additive because at whatever concentration use it it’s colorless so you add as a five you don’t get turbidity and stuff like that and so people want a drink that has a fiber content it’s that kind of stuff it’s not huge markets somebody somebody said you would run a pulp mill for maybe 30 seconds to get enough to supply something like this so it’s not to move however if you look at it from a composite in terms of auto parts and things like this that would that would be in by oak opposites that would be using a lot more material yes oh sorry sent you from Canada I decided this would be an okay question to ask but i’m interested in industrial hemp and since its high-end lignocellulose and one acre of industrial hemp produces four times the amount of paper then then then trees do do you see having a role in New Bioeconomy yeah i think there’s others there’s a whole array iiii think in whether it’s hemp or whether it’s fiber from lignocellulose from agricultural crops III kept saying forestry but i should be also be saying AG residues it is important in fact it might be used as an energy source but for me lignocellulose as better uses we’ve made what looks like an OSB board using corn stover for instance as alig no cellulose as stover material which has better properties actually Frank stronger than then aspen based OS be from trees it’s an incredibly neat product and this is done with Rob well what at the aarc but research center but and answer your question yeah I think I I think that’s being open to look at a wide array of things and that’s what’s happening I think in the agricultural areas on the prairies for instance in Canada or even in the u.s. Montana and those areas they’re looking at a wide array of energy crops but also fiber crops in terms of inducing applications flax being a notable and yes I’m sorry okay so you mentioned about like extensive management Forest yeah but like I think the forest is not that straightforward like industrial product or just crops so flying there’s a lot of uncertainty for the future management so do you have any idea for that uncertainty yeah and III think that you’re right there’s others there’s a very there’s a very strong dimension that goes on the multi values that I was trying to allude to like biodiversity all of these things we gotta respect there’s no question and some of it is respected by conserving and not touching it at all but there are other areas that I think you can manage for multiple values there’s that there’s there’s integrative force management there’s landscaping approaches to to harvesting there’s various ways to the lead the softest environmental footprint

and respect the fact that it’s being shared whether it’s animals or biodiversity or other people and I think that’s important I think the advantage we have I look at it with the extensive approach is that it’s a much softer footprint much less energy-intensive then perhaps highly managed or or plantation kinds of forest i mean i i’ve been through bamboo forest in china I mean you know you walk so there’s not a lot of biodiversity in there you know and I think that that this becomes an issue yet I’ve been north of beijing and I’ve seen the mix plantings that they’ve done on that to stop the sand dust that comes into Beijing during the wind storms and that’s been quite successful in their mixed forests and stuff and I’m and you’re seeing a lot more biodiversity a lot more healthier a kinds of approaches yep okay Larry yeah is a lot of the stuff that you’re doing is particularly in the nanotechnology and the chemical fields and paper fields is that being publicly reported or is it basically an in-house no it’s sure yeah most of that is being done with universities as public’s being published on the Nano while of the National Sentinel a bioreactor papers actually the guy that’s leading the group is Pelton Bob Pelton out of McMaster and as I said there was ten universities well I want to thank you for sharing his vision it’s quite extensive forward-looking and also the fashion you can see that he has for 3 borders and ages and funny who else would like to stay after maybe chance but at this point when we have a small round of applause for our guests