Session 27 ic2011 skog


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Session 27 ic2011 skog

  1. 1. The Potential Impact of Increasing Wood Energy Use on the U.S. Forest Products Industry – 50 year projections Kenneth E. Skog1, Peter J. Ince1, Andrew D. Kramp2, Henry N. Spelter (ret.)1, David N. Wear1 1US Forest Service 2Univ. of WI-Madison FOREST PRODUCTS SOCIETY 65TH INTERNATIONAL CONVENTION JUNE 19-21, 2011
  2. 2. Forest Service provides50-year projections of forest resource trendsevery five years: Recent Reports (2002, 2007) RPA FOREST ASSESSMENT
  3. 3. Concerns W• Decrease in U.S. timber harvest since the 1980s• Harvest in 2009 was lower than any time since 1960s (30% lower than mid-80’s peak)• Global trends drive forest economics & management• World oil production will not keep pace with demand requiring heavy use of alternate fuels including biomass
  4. 4. Models we used:U.S. Forest Products Module (USFPM), 3 U.S. sub-regions, expanded market detail, built within . . .The Global Forest Products Model (GFPM) (dynamic spatial market equilibrium, 180 countries, PELPS modeling system)
  5. 5. Three global scenarios:From IPCC SRES*, varied assumptions abouteconomic growth, energy production andclimate change . . . *Intergovernmental Panel on Climate Change (IPCC). 2000. Special Report on Emissions Scenarios (SRES) []
  6. 6. Three global scenarios . . .A1B – Globalization, Convergence & High Economic Growth  Global convergence to common consumption per capita  Most competitive advantage for U.S. (highest exports)  Highest U.S. and global biomass energy demand from forestsA2 – Regionalism & Self Reliance (Less Convergence)  Highest U.S. population growth, weaker economic growth  Least competitive advantage for U.S. (highest imports)  Lowest global biomass energy demand from forestsB2 – Localized Solutions & More Sustainable Development  Lowest U.S. population and lowest U.S. GDP growth  Lowest U.S. consumption but increasing trade advantage  Lowest U.S. biomass energy demand from forests
  7. 7. Basic Scenario Assumptions for USA . . . U.S. Real GDP ($2006 -- Trillions)U.S. Real GDP $35 A1B $30 Convergence A2 $25 B2 $20 Sustainable Development $15 Less Convergence $10 $5 2006 2020 2030 2040 2050 2060 U.S. Population (million people) 600 U.S. Population A1B A2 Less Convergence 500 B2 400 Convergence 300 Sustainable Development 200 2006 2020 2030 2040 2050 2060
  8. 8. U.S. single-family housing starts – a key driver ofdemands for lumber and wood panels . . . 2.5 Historical Data NAHB Forecast A2 Millions of SF starts per year 2.0 A1B B2 1.5 Convergence 1.0 0.5 Housing starts projections are based on population projections by scenario, and demographic analysis of derived housing needs. 0.0 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060
  9. 9. USFPM/GFPM Projections:Projected U.S. Wood fuel feedstock consumption: All forms of wood/bark used for thermal energy or biofuels (excludes black liquor which is part of pulpwood demand)
  10. 10. Wood Fuel Feedstock Production by source (MM cu. m.):In A1B -- 16-fold increaseNeeds require Pulpwoodalong with logging residueand mill residues A1BIn B2, 4-fold increaseNeeds met by logging residueand some mill fiber residues . B2Very little pulpwood use forenergy
  11. 11. Wood Energy Demand &Trade Advantage for the U.S.:U.S. gains export advantage when we incur lower costs(than other countries) for producing the same product.Rising wood fuel feedstock price can drive up pulpwoodprice or – at the global level – roundwood priceU.S. gains export advantage in scenarios where •Global wood prices (for energy/ products) increase more than U.S. wood prices (for energy/ products)
  12. 12. Wood prices increases differ by global region– U.S. GainsCompetitive advantages when global wood price increases morethan U.S. wood price. World Average Fuelwood Price U.S. Fuel Feedstock Price Outside of USA ($/cu. m.) ($/cu. m.) Convergence Convergence Sustainable development Sustainable development
  13. 13. In A1B and B2, the U.S. gains competitive advantage –U.S. wood prices increase much less than the world average: World Average Fuelwood Price U.S. Fuel Feedstock Price Outside of USA ($/cu. m.) ($/cu. m.) Convergence Convergence Sustainable development Sustainable development
  14. 14. In A2 increase in U.S. wood price is higher than world average,= no gain in U.S. competitive advantage: World Average Fuelwood Price U.S. Fuel Feedstock Price Outside of USA ($/cu. m.) ($/cu. m.) Convergence Convergence Sustainable development Sustainable development
  15. 15. U.S. net exports are high in A1B and B2, because of U.S.competitive advantages . . . Convergence Sustainable Development Less Convergence
  16. 16. U.S. production of paper and board is higher(with higher net exports) in A1B and B2: Paper & Paperboard Production (MM metric tons) Sustainable Development Convergence Less Convergence
  17. 17. U.S. lumber production: net export is highest in A1B and B2, due togains in U.S. competitive advantage in wood costs: Production Convergence (MM cu. m.) Sustainable Development Less Convergence Net Export (MM cu. m.)
  18. 18. Structural panels: output is highest in A1B, due to gains of advantages in wood costs: Production (MM cu. m.) Convergence Less Convergence Sustainable Development Net Export (MM cu. m.)
  19. 19. Total U.S. timber harvest (MM cu. m.) Convergence Less Convergence Sustainable Development Note: Volumes shown on this chart include growing stock and non-growing stock harvest but not logging residue volumes.
  20. 20. General Findings:• Increase in wood energy consumption can lead todiffering impacts on U.S. production and exports• With Sustainable Development (B2) and a 4 X increase by 2060, logging residues can supply most wood fuel feedstock , U.S. real timber prices remain flat to declining Net exports increase 1.5X increase in timber harvest• With Global Convergence (A1B) and a 16 X increase Pulpwood is used heavily for energy; Real wood prices soar, more globally than in the US Net exports increase 3.1X increase in timber harvest•U.S. paper & board consumption is projected to decline,•However, U.S. production level and trade will depend on globalwood price increases vs U.S. wood price increases
  21. 21. Questions/Comments?