Should Nova Scotia burn trees for power generation? Hearings begin today

Hearings begin today by the Nova Scotia regulatory agency over a biomass-fueled power generation proposal.

NewPage Port Hawkesbury Corp. and Nova Scotia Power (a subsidiary of Emera Inc.) have a proposal on the table that would see them burning 650,000 tonnes of wood a year to fire a steam generator to produce about 3% of the province's electricity needs.

The project is estimated at $200 million and comes with the promise of 150 new forestry jobs and will help NewPage keep 550 jobs at its mill.

NewPage has expressed concern lately over the viability of its mill in Nova Scotia. In a recent filing to the American government, NewPage said it will be tough for the facility to compete if the US dollar weakens significantly.

“Our business includes a mill in Port Hawkesbury, Nova Scotia, and management of woodlands in Canada. Our operations in Canada are subject to Canadian laws and regulations, as well as foreign currency risk,” stated mill representatives in the prospectus.

“The value of the Canadian dollar versus the US dollar has fluctuated dramatically over the last two years. A significantly weaker US dollar makes imports to the United States of paper products made in our Port Hawkesbury, Nova Scotia, mill unprofitable. We cannot assure you we will be able to manage our Canadian operations profitably.”

The company stated they incurred net losses in each of the five years ended December 31, 2009 and for the three months ending March 31, 2010. As of March 31, 2010, they stated the accumulated deficit was $697 million.

“If we are unable to generate net income in satisfactory amounts or at all, this may adversely affect our business,” stated the release.

Woodlot owners and environmentalists are against the proposal to burn wood at the mill for power generation, with many doubting its sustainability. NewPage has previously said that only ‘stem wood’ will be used in the project’s biomass energy generation. Tree stumps, tops and branches will not be removed from the forest floor as they are necessary in restoring nutrients in the soil so new trees can grow.

NewPage’s current papermaking operations in Nova Scotia require 250,000-300,000 tonnes of wood a year. The proposed power generating facility would require 600,000-700,000 tonnes of biomass a year.

Sources:

N.S. regulator opens hearing on proposal to burn wood for power generation (Canadian Press)

US Dollar worries NewPage (Port Hawkesbury Reporter)

Nova Scotia Power and NewPage propose renewable co-generation project (ForestTalk)