Wind gusts freely through the skeleton of the old Acorn sawmill. The southern wall is but a ribcage, its frame bare. Treacherous holes gape in the floor of the second storey, patched with unnailed, ill-fitted planks.
During the 1970s, the mill opened and closed in the span of about five years. Since then successive scavengers have pried wood from the carcass.
It’s hard to think of a better place to contemplate the past and future of Yukon’s troubled timber industry. Many other mills in the territory have followed the same path as the Acorn mill: a brief rise followed by a plunge into bankruptcy.
Ron Johnson has thought about all this plenty here. He and his brother, Bern, own the empty building and are slowly renovating it into office space.
They’re among the few Yukoners today who earn a living from working with wood — although Johnson prefers to say he’s in the energy industry.
He sells firewood.
Their small but growing operation — they employ about 10 workers — may be a model of the type of timber company that could succeed where past milling operations in the Yukon failed.
Johnson sums up his vision of the future with three words: “small is beautiful.”
“We’re not after the large-scale guys who think a million-cubic metres a season is what you should be harvesting. Maybe 5,000 cubic metres is quite appropriate. We’re talking very, very small scale,” he says.
“We’re speaking of something that is totally and completely different from the norm, in BC or elsewhere.”
The first step is to learn where others failed. Nearly every shuttered mill in the Yukon made the mistake of trying to compete in the global commodities market. All failed.
Yukoners may be blessed with slowly-growing trees that produce beautiful, dense wood. But our remoteness from southern markets makes transportation costs prohibitively expensive. And Yukon mills are simply too small to compete with the enormous milling operations of British Columbia, which may produce as many board feet of lumber in a single shift that Dawson City’s mill can spit out in an entire year.
“The economics just forbid it,” says Johnson.
Lesson one: sell local. Yet a territory of 30,000 residents is a small market. A company here will only survive if it has carved out a niche market.
Five years ago, Johnson’s proposition began as a simple one.
“People do like to stay warm in the winter,” he says. “This is not a market that’s being well served.”
His chief competition are “guys with four-by-fours and chainsaws.” Johnson figured he could out-do these one-man operations by taking an industrial approach. He hired workers to specialize in each link of the supply chain, from stump to customer.
One guy cuts trees with a feller-buncher. Others drag wood with skidders and loaders to a self-loading logging truck. The driver hauls three loads a day to Johnson’s yard, where the wood is sawed and split to fit stoves of all sizes.
Is his business profitable? Not yet. Johnson has $1 million in heavy equipment to pay off.
“We’re operating a charity,” Johnson says with a laugh. “We’re helping to subsidize the heating of homes.”
He’s far from alone.
“Do you know anyone in the timber industry who is earning a profit?” asks Bill Bowie, operator of Yukon’s oldest mill, Arctic Inland Resource of Dawson City. Like Johnson, Bowie has sunk a lot of money into new equipment recently.
But both men expect their companies to earn profits in time. And both have one big idea of how to make the Yukon’s timber industry grow.
The proposition is counter-intuitive. They argue the best way for Yukoner’s to battle climate change is to burn more trees.
Not as firewood — as chips and pellets.
Much wood presently goes to waste in both men’s operations. Johnson says half the wood his men fell goes unused. Bowie estimates only 60 per cent of most logs he uses becomes lumber.
Such practices would likely land someone in prison in Sweden, says Johnson. There, so much as damaging an unfelled tree warrants a fine. And nothing gets wasted.
In BC, this waste is often sold to a company that will pack it into wood pellets that are used to heat special stoves. From BC, the product is frequently shipped to Holland and other European countries, where pellet stoves are common-place.
Not so in North America. Indeed, it appears Johnson’s biggest challenge will be to persuade Yukoners to think like Europeans.
Rather than haul trucks full of heating oil down the Alaska Highway, Johnson dreams of the day when many Yukoners will heat their homes with locally-produced pellets.
Yukoners, known for their stubborn self-reliance, will likely wonder why they should invest in stoves dependent on a proprietary technology, such as pellets, when they can collect firewood felled by wind for free?
Johnson’s answer: think green.
Pellets burn at high temperatures and put out few of the nasty smoke particles produced by conventional wood stoves. The carbon they put into the atmosphere, Johnson argues, is balanced by the carbon absorbed by new trees. And pellets cost half as much as their equivalent in heating oil.
He’s not alone in boosting pellets: the United Nations endorses them as an eco-friendly means of curbing climate change.
But pellets could be produced from more than just wood waste. Johnson has in mind the vast stands of spruce killed by pine beetle near Haines Junction, where he currently harvests his firewood.
That wood will either be put to good use or left to rot.
“You may as well use it for heat to keep yourself warm. Because if you don’t, it’s still going to produce the exact same amount of carbon back into the atmosphere. And it’s going to come back as a new tree. There’s no net-gain,” he says.
Another objection could be that Yukon ought to heat homes primarily through hydro power. Yet Yukon Energy is presently stretched to provide enough power to its customers. Proposed upgrades likely won’t cover the demand created by a new mine.
Connecting to the BC grid will be costly. So will flooding more valleys to support new hydro dams.
Johnson would like to see a Yukon pellet mill. But it’s an expensive proposition — a pellet mill capable of producing 25,000 tons annually would cost about $12 million to build, Johnson estimates. To happen, it would require the support of the Yukon government, which is in a position to support a fledgling pellet industry by installing pellet burners in its buildings.
Some government buildings, such as Elijah Smith School, already has a furnace designed to burn both oil and wood chips. But the chip burner was only used for a short period of time before being abandoned. It kept clogging because the chip producer fed the stove fuel produced from demolition waste, littered with debris, says Johnson.
Some residents tried pellets when the technology was introduced in the 1990s. Few were impressed. Stoves with automatic pellet feeds proved buggy and unreliable. But new stoves have worked such kinks out, he says.
What does the territorial government think of this grand plan? Johnson recently sat down with Resources Minister Brad Cathers to pitch his scheme. Johnson says the talk went well, but he won’t disclose details.
The plan does mesh well with two government commitments: to support the growth of a local timber industry and to help lower fossil fuel emissions.
Whether the territory ends up going along with Johnson’s big plan likely depends on whether Cathers and his cabinet colleagues can be persuaded to think less like Yukoners, and a little more like Europeans.
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