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. Forest Service provides
50-year projections of forest resource trends
every five years:
Recent Reports
(2002, 2007)
RPA FOREST ASSESSMENT
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. 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. Three global scenarios:
From IPCC SRES*, varied assumptions about
economic growth, energy production and
climate change . . .
*Intergovernmental Panel on Climate Change (IPCC). 2000.
Special Report on Emissions Scenarios (SRES)
[http://www.grida.no/publications/other/ipcc_sr/?src=/climate/ipcc/emission/]
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 forests
A2 – 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 forests
B2 – 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. 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
$5
2006 2020 2030 2040 2050 2060
U.S. Population (million people)
600 U.S. Population
A1B
A2 Less Convergence
500
B2
400
Convergence
300 Sustainable
Development
200
2006 2020 2030 2040 2050 2060
8. U.S. single-family housing starts – a key driver of
demands for lumber and wood panels . . .
2.5 Historical Data
NAHB Forecast
A2
Millions of SF starts per year
2.0 A1B
B2
1.5 Convergence
1.0
0.5
Housing starts projections are based on population projections by
scenario, and demographic analysis of derived housing needs.
0.0
1960
1970
1980
1990
2000
2010
2020
2030
2040
2050
2060
9. USFPM/GFPM Projections:
Projected U.S. Wood fuel feedstock consumption:
All forms of wood/bark used
for thermal energy or biofuels
(excludes black liquor which is
part of pulpwood demand)
10. Wood Fuel Feedstock Production by source (MM cu. m.):
In A1B -- 16-fold increase
Needs require Pulpwood
along with logging residue
and mill residues A1B
In B2, 4-fold increase
Needs met by logging residue
and some mill fiber residues .
B2
Very little pulpwood use for
energy
11. Wood Energy Demand &Trade Advantage for the U.S.:
U.S. gains export advantage when we incur lower costs
(than other countries) for producing the same product.
Rising wood fuel feedstock price can drive up pulpwood
price or – at the global level – roundwood price
U.S. gains export advantage in scenarios where
•Global wood prices (for energy/ products) increase
more than U.S. wood prices (for energy/ products)
12. Wood prices increases differ by global region– U.S. Gains
Competitive advantages when global wood price increases more
than U.S. wood price.
World Average Fuelwood Price U.S. Fuel Feedstock Price
Outside of USA ($/cu. m.) ($/cu. m.)
Convergence
Convergence
Sustainable
development
Sustainable development
13. In A1B and B2, the U.S. gains competitive advantage –
U.S. wood prices increase much less than the world average:
World Average Fuelwood Price U.S. Fuel Feedstock Price
Outside of USA ($/cu. m.) ($/cu. m.)
Convergence
Convergence
Sustainable
development
Sustainable development
14. In A2 increase in U.S. wood price is higher than world average,
= no gain in U.S. competitive advantage:
World Average Fuelwood Price U.S. Fuel Feedstock Price
Outside of USA ($/cu. m.) ($/cu. m.)
Convergence
Convergence
Sustainable
development
Sustainable development
15. U.S. net exports are high in A1B and B2, because of U.S.
competitive advantages . . .
Convergence
Sustainable
Development
Less Convergence
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. U.S. lumber production: net export is highest in A1B and B2, due to
gains in U.S. competitive advantage in wood costs:
Production
Convergence
(MM cu. m.)
Sustainable Development
Less Convergence
Net Export
(MM cu. m.)
18. Structural panels: output is highest in A1B, due to gains of U.S.
trade advantages in wood costs:
Production
(MM cu. m.)
Convergence
Less Convergence
Sustainable Development
Net Export
(MM cu. m.)
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. General Findings:
• Increase in wood energy consumption can lead to
differing 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 global
wood price increases vs U.S. wood price increases
