Snow covered logs are seen outside the Babine Forest Products mill in Burns Lake, B.C. , Jan. 22, 2012.Jonathan Hayward/The Canadian Press
An explosion that destroyed a Prince George sawmill comes as a body blow to a community already grappling with uncertain market conditions and a record-breaking pine beetle infestation.
But Prince George has a broader economic base than Burns Lake, which has had a cloud of economic gloom and uncertainty hanging over it since a January mill explosion, and conditions could favour rebuilding.
"It's like the saying of 'location, location, location' in real estate," Harry Nelson, an assistant professor at the University of British Columbia's Department of Forest Resources Management, said Tuesday. "Except in this case, it's 'timber supply, timber supply, timber supply.'"
Forests around Burns Lake and Prince George have both been hit by the pine beetle infestation. Over the past decade, the province boosted the amount of timber that could be cut each year in a bid to harvest the wood while it still had economic value.
Now, that pattern is moving the other way, putting the squeeze on timber supply and making it tough to justify rebuilding in Burns Lake. But Prince George has one of the biggest timber baskets in the province, and although the annual allowable cut is expected to decrease in coming years, it could be robust enough to justify rebuilding the mill, Prof. Nelson said.
"There's a good chance of rebuilding," Prof. Nelson said.
Officials at the mill's owner, Sinclar Group Forest Products Ltd., say that decision has yet to be made.
"We're really focused on making sure we can provide the families with the services that they need, and making sure that the employees have been dealt with appropriately," Sinclar president Greg Stewart said on Wednesday in Prince George. "That is a decision that will come later. At this point, we don't have a plan around when that will happen."
With the mill destroyed, the four contractors that supplied its logs will have to look for new customers, said Roy Nagel of the Central Interior Logging Association.
The contractors will be hard hit but could wind up supplying other Sinclar Group mills, Mr. Nagel said.
"The biggest risk is that if that doesn't happen, and they're not able to log this summer, they're going to lose their most valuable and most skilled employees," Mr. Nagel said.
In the short term, the mill explosion in Prince George means the loss of nearly 200 jobs and about $12-million to $15-million in wages they represent, said Paul Bowles, a professor of economics at the University of Northern B.C. in Prince George.
Those losses come on top of others over the past decade. Seven mills closed in Prince George between 2000 and 2009, according to the United Steelworkers. A mill that burned in 2008 has not been rebuilt. Along the way, the percentage of jobs accounted for by the forest industry has slipped to 11.5 per cent in 2010 from 19 per cent in 2000, the union says.
"There have been any number of hits over the last few years – and this is another one we just don't need," Prof. Bowles said.
The Lakeland Mills complex where the explosion took place produced lumber as well as wood chips and hog fuel as byproducts.
Hog fuel from the company supplied a biomass gasification system at UNBC. The $15-million project, financed by the provincial and federal governments, went into operation last year and was the first university-owned biomass system in the country.
The plant has enough fuel for two or three days, a university spokesman said on Wednesday. Once it is used, the campus can switch to natural gas to supplement or override the biomass system. It's expected that different sources of hog fuel can be found.
With a report from Sunny Dhillon in Prince George
Wendy Stueck