Invermere Timber Supply Area

Southern Interior Beetle Action Coalition Forest Sector Trend Analysis Fact Sheet A project submitted by: Contacts: In conjunction with: Forest Ecosystem Solutions Ltd. #227 998 Harbourside Dr. North Vancouver BC V7P 3T2 tel. 604 998 2222 fax: 604 986 0361 Chris Niziolomski, R.P.F. email: chris_niz@forestecosystem.ca Jonathan Armstrong, R.P.F. email: jarmstrong@forestecosystem.ca DE Gyton and Associates Submitted to: Southern Interior Beetle Action Coalition

Introduction This fact sheet has been compiled as a part of the Forest Sector Trend Analysis project, completed for the Southern Interior Beetle Action Coalition (SIBAC). The intent of this document is to provide a comprehensive yet compelling summary of the impacts of the Mountain Pine beetle (MPB) epidemic thus far on timber supply, log flow, and industrial milling capacity in the (TSA). An accompanying wall map Invermere Timber Supply Area Forest Sector Trends Analysis and the Mountain Pine Beetle has been produced that provides visual detail on the estimated impacts of the MPB in the Invermere TSA. Information in this fact sheet is organized into the following sections: Historical Timber Supply Reviews / Allowable Annual Cut levels, Projected volume loss associated with the Mountain pine beetle epidemic, Milling capacity in the TSA, Actual vs. planned harvest, and Summary of fibre movement in and out of the TSA. Timber Supply Review / Allowable Annual Cut Allowable Annual Cut (AAC) determinations are required to be conducted every 5 years although the normal schedule is often altered when events that have a significant impact on timber supply occur, such as large fires, insect infestations, windthrow events or if new data becomes available. AACs are determined by the Chief Forester and are based largely on the results of the timber supply review analysis process (TSR). The TSR schedule for the Invermere TSA is shown in Table 1 below. Table 1 Timber supply review milestones for the Invermere TSA Timber Supply Milestone Date Timber Supply Review 1 Analysis Report April 1995 Timber Supply Review 1 AAC Determination March 1996 Timber Supply Review 2 Analysis Report October 2000 Timber Supply Review 2 AAC Determination September 2001 Timber Supply Review 3 Analysis Report May 2004 Timber Supply Review 3 AAC Determination November 2005 Error! Reference source not found. and Table 2 illustrate the changes in AAC in the Invermere TSA over the last 27years. Starting with pre TSR 1, the results of each subsequent AAC determination are illustrated. In 1986 a temporary AAC increase of 926,190 m3/yr was applied to allow for salvage of fire damaged timber. Another increase in With the expectation of a 150,000 m3 /yr temporary increase to salvage MPB killed wood in the early 1980 s, the AAC in the Invermere TSA has remained virtually unchanged. Between TSR 1 and TSR 2, a reporting change was made, excluding woodlot volume from the AAC. Page 2 of 12

Year Fire Salvage MPB Salvage Partition Regular Total AAC Details 1981 670,000 670,000 1985 926,190 670,000 1,596,190 Temporary fire salvage increase of 1.8 M over 2 years 1986 696,190 696,190 Area transfer from Cranbrook to Invermere TSA 1989 40,000 696,140 736,140 Temporary increase for harvest of small pine 1990 40,000 657,264 697,264 Area shift to HRPP and TFL 14 1994 657,624 657,624 Reduction due to lack on interest in small pine 1996 591,500 591,500 10% Reduction in AAC 2001 581,570 581,570 Reduction in AAC woodlot volume removed 2005 12,000 5,000 581,570 598,570 5000 m3 for Ecosystem restoration (not partition) Table 2 AAC History of the Invermere TSA Figure 1 AAC History in the Invermere TSA The species profile for Invermere TSA has been adapted from the TSR 3 analysis report and is summarized in Table 3. Approximately 41% of the Invermere THLB is comprised of stands dominated by lodgepole pine. The other major species covering approximately 28% of the THLB is Douglas fir. Spruce, larch, balsam and other species comprise a minor component of the THLB in the Invermere TSA. Page 3 of 12

Table 3 Species profile for the Invermere TSA Species Estimated % of THLB THLB Area (ha) Balsam 4.1% 9,778 Cedar 0.2% 458 Deciduous 0.3% 755 Fir 28.0% 65,931 Hemlock 0.0% Larch 6.9% 16,326 Other 7.6% 17,868 Pine 40.9% 96,491 Spruce 11.9% 28,026 Timber supply review analysis reports generally include a basecase harvest forecast, which provides an estimate of the sustainable harvest using the best available data at the time and a number of sensitivity analysis scenarios. The sensitivity analysis scenarios test the impact that changes in assumptions will have on the timber supply over short (0 20 years), medium (20 100 years) and long (100 250 years) time periods. Scenarios are designed to examine areas of uncertainty. Figure 2 shows the Basecase harvest scenarios from each of the 3 timber supply analysis reports completed for the Invermere TSA as well as a March 2006, timber supply summary study commissioned by the Council of Forest Industries (COFI) which covered 18 interior TSAs affected or at risk due to the MPB. 700,000 600,000 Annual Harvest Volume (m3/yr) 500,000 400,000 300,000 200,000 100,000 TSR1 TSR 2 TSR 3 COFI 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Decades from initial projection date Figure 2 Invermere TSA timber supply analysis basecase harvest forecasts. Page 4 of 12

*COFI analysis was not completed to the same standard as the TSR analysis. Results from this project can be compared with TSR, but should not be viewed as an indepth analysis. The COFI analysis scenario shown above assume no restrictions on harvesting. As illustrated in Figure 2, long term timber supply projections in the Invermere TSA have ranged from, 360,000 m 3 /yr per year in TSR 1, to 621,570 m 3 /yr per year in the most recent timber supply review (TSR 3), an increase of approximately 42 %. The harvest forecasts in all three TSR analysis begin with approximately the same initial harvest level of 580,000 m 3 /yr. A general trend of increasing mid term and long term volume forecasts is shown from TSR 1 to TSR 2 and TSR 3. Timber Supply Review 1 (1996 2001) The TSR 1 basecase scenario produced an initial harvest level of 568,000 m 3 /yr, which was lower than the AAC at this time (650,564 m 3 /yr). In his determination the Chief Forester found that there was a need to lower the current AAC in the Invermere TSA. The CF determined that in order to avoid future declines in timber supply, the current harvesting rate would have to be lowered to reflect the availability of volume in the TSA. Some of the key factors the CF identified as contributing to this reduction were; use of natural regeneration instead of planting and the impacts of integrated resource management constraints such as wildlife habitat and old growth. Timber Supply Review 2 (2002 2005) Harvest forecasts in TSR 2 were more optimistic in the medium term than those in TSR 1. The CF determined the AAC to be 581,570 m3/yr, slightly higher than the AAC determined in TSR 1. The CF felt that the timber supply situation was for the most part stable in the short term in the Invermere TSA. The CF did note that he felt that Site Index for old growth stands was underestimated but difficult to quantify. One of the key factors in determining the timber supply for this determination were the inclusion of the Kootenay Boundary Higher Level plan, which included timber supply constraints related to landscape level biodiversity, wildlife habitat and old growth management. TSR 3 (2005 current) The Ministry of Forests and Range contracted a consultant to conduct the TSR 3 analysis. This analysis showed a long term basecase harvest level of 621,570 m 3 /yr. The initial harvest level was 581,570 m 3 /yr which then drops by approximately 10 % to the mid term level of 542,570 m 3 /yr, 30 years from the present. The TSR 3 analysis was significantly more optimistic in terms of timber supply than the TSR 2 Analysis. Some of the key differences in the newest analysis were; application of full mature seral goals in specific LU BEC combinations as required by the HLPO, use of select seed in managed stand yield curves, improved estimates of site productivity for managed stands, and changes to the modeling of partial harvesting. Immediately following the completion of the Timber supply analysis, the CF implemented a short term increase in harvest levels of 70,000 m 3 /yr to salvage timber lost during the 2003 fire season. COFI MPB Analysis The COFI MPB analysis assumed that all susceptible stands were attacked by the MPB at the beginning of the second five year period. Simple shelf life assumptions were then applied to the pine volume based on the climate zones found within the TSA. The shelf life assumption used in this analysis was: 5 years for wet climates, 10 years in moist climates and 15 years in dry climates. Four scenarios were completed in this analysis including: a baseline, baseline with pine harvest priority, harvest all pine, and harvest all pine with reduced constraints. The most aggressive salvage option (harvest all pine with reduced constraints) is presented in Figure 2. Initial harvest levels as high as 777,000 m3/yr were tested. This aggressive salvage option also resulted in the lowest long term harvest level (368,5000 m 3 /yr) which was 10,000 m3/yr lower than the long term harvest levels forecast used less aggressive salvage options. Page 5 of 12

MOF MPB Analysis (2007) The provincial MPB analysis completed by the MOFR in 2007 provided a province wide context for the MPB outbreak. This analysis used some broad analysis assumptions for each TSA to generate a short term forecast and test the impact of two different priority rules; 1. Focus all harvest on the pine dominated stands. 2. Avoid harvesting in pine dominated stands with MPB mortality. Results were presented in terms of % impact on the medium term harvest level. The two scenarios were compared and classes of % impacted were reported. The results for the Invermere TSA showed that when the harvest focus is shifted from infested, pine dominated stands to stands that have not been infested, the mid term timber supply impact shifts from the 21 30% category to the 41 72% category. This result indicates that with focused, appropriate salvage harvest scheduling, the MPB AAC impacts can be significantly mitigated. More detailed results were not provided for this analysis. Range of harvest forecast levels (Pre and Post MPB outbreak) Timber supply analysis results are often presented in the form of a basecase (describes the best estimates of current reality) and sensitivity analysis (designed to quantify the impact that a specific area of uncertainty will have on the result). Figure 3 presents two harvest forecasts for the Invermere TSA, along with the upper and lower bounds of the scenario results. The harvest forecasts were selected to represent the TSA before the MPB outbreak (TSR 1) and the most recent accepted analysis (TSR 3). In TSR 1, there was a wide variation between the minimum and maximum short term harvest forecasts. This range of variation can be attributed to a higher degree of uncertainty in the assumptions. Between TSR 1 and TSR 3 the harvest forecast remained relatively unchanged. Some variation in the length of time the current AAC can be maintained was modeled. Page 6 of 12

900,000 Annual Harvest Volume (m3/yr) 800,000 700,000 600,000 500,000 400,000 300,000 200,000 Pre MPB Basecase Pre MPB Low Pre MPB High TSR 3 Basecase TSR3 Low TSR 3 High 100,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Decades from initial projection date Figure 3 Range of harvest levels (pre and post MPB outbreak) Predicted Growing Stock Loss to Mountain Pine Beetle Predicted losses in pine volume due to the MPB are illustrated in Figure 4 and Table 4. The volume loss information as summarized is based solely on the predicted spread of the MPB (BCMPB Year 4) and associated shelf life curves. Volume loss estimates shown below are in the absence of harvest. With an AAC of nearly 3 million cubic metres per year, a significant portion of the pine volume in the TSA can be salvaged. The spread estimates and shelf life decay curves are produced by the MOFR as a part of the ongoing MPB analysis projects. These estimates are the most comprehensive predictions of future MPB epidemic for the BC interior. They are however estimates and the reviewers should recognize that they represent a single view of the progression of the epidemic. Volume loss prediction was modeled by applying the shelf life to the pine portion of each stand that is deteriorating annually. These estimates are generated using provincial growth and yield models to derive the volume by forest stand. Once the initial, pre attack volume has been calculated for each year following the initial MPB attack, the decay of commercially viable fibre is calculated based on shelf life decay curves. The results are summarized below in the form of losses in pine growing stock. Growing stock is an estimation of the amount of live wood fibre (all ages) in the timber harvesting land base component of the TSA. This analysis indicates a total potential growing stock loss of approximately 26 million cubic metres (67% of the pine growing stock in the TSA). 12 million cubic metres of the volume loss is predicted to occur in the next five years. As mentioned above, with an AAC of approximately 635,900 cubic metres a year (total cut of 6.35 million m3 over a ten year period) a significant portion of the lost volume cannot be salvaged within the TSA under the current AAC. The actual harvestable volume and subsequently how much of the affected volume is salvaged depends on the operability Page 7 of 12

(potential return, given the state of decay minus the cost to harvest and manufacture salable products) of the stands along with the AAC. Pine Growing Stock (m3) 45,000,000 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 1 2 3 4 5 6 7 8 9 5,000,000 1999 2003 2008 2013 2018 2023 Reference Year Figure 4 Predicted pine growing stock losses by age class due to MPB Table 4 Predicted pine growing stock losses in the Invermere TSA Age Class Pine Growing Stock (m3) 1999 2003 2008 2013 2023 2033 9 655,116 655,008 639,127 452,037 242,846 217,451 8 14,175,608 14,159,893 13,742,779 9,800,408 5,252,964 4,660,503 7 6,985,595 6,977,227 6,731,459 4,668,223 2,457,368 2,220,645 6 10,221,151 10,211,556 9,831,807 6,757,195 3,504,212 3,116,469 5 4,406,405 4,401,169 4,248,703 2,996,663 1,615,745 1,435,327 4 1,807,601 1,806,868 1,769,521 1,313,448 694,259 600,901 3 500,486 500,322 496,498 435,742 324,594 290,681 2 49,552 49,537 49,349 47,507 44,960 44,721 1 460,626 456,895 431,846 347,774 285,613 277,118 In the table a significant portion of age class 1 and 2 volume is lost. This loss reflects the assumptions used in the recent MOFR MPB analysis that the MPB is affecting all pine stands, not just those of merchantable size. Page 8 of 12

Mountain Pine Beetle Assumptions The early TSR analysis reports did not specify what, if any assumptions were made around the Mountain pine beetle. Assumptions from the COFI report and the MOFR 2007 analysis are given in the table below. Table 5 MPB assumptions summary Analysis Project Shelf life Regeneration Forest Cover constraints TSR 1 Not specified Not specified Not specified TSR 2 Not specified Not specified Not specified TSR 3* Not specified Not specified Not specified COFI Separate shelf life values for wet, moist and dry climates (5,10, 15 years) Unsalvaged sites considered notstocked for 15 years then regenerated to 80% of natural volume. MPB affected stands contribute to VQO, watershed and green up targets. MOFR 2007 Stands loss volume by 50 % a year, down to 0% at year 4. Unsalvaged sites considered not stocked for 30 years then regenerate naturally MPB affected stands contribute to VQO, watershed and green up targets. *Sensitivity analysis was conducted. MPB assumptions were not included in the basecase. Summary of Timber Supply Analysis in the Invermere TSA Since the first Timber Supply Review of the Invermere TSA, the projections of medium and long term timber supply volume have remained steady. The increased harvest projections are a result of: 1. Temporary harvest level increases intended to salvage the pine impacted by the MPB outbreak. 2. Maintenance of growing stock since the actual harvested volume has decreased to less that half of the AAC. Comparison of Actual vs Planned Harvest Actual harvest volumes by species are compiled based on the MOFR actual scale records (taken from harvest billing system) in Figure 5 and Table 6. Planned harvest volumes are an approximate calculation based on current species distribution in the TSA. To estimate planned harvest profiles, the AAC s in place during the reference years were compared with merchantable species distributions within the TSA. Since 1996, the actual harvest in the Invermere TSA has dropped from 98% of planned, to 76% in 2000, 52% in 2003 and most recently 40% of AAC volume in 2006. Page 9 of 12

Scaled Harvest Volume (m3) Thousands 700 600 500 400 300 200 Spruce Pine Other Fir Deciduous Balsam 100 1996 1996 2000 2000 2003 2003 2006 2006 Actual Planned Actual Planned Actual Planned Actual Planned Reference Year Figure 5 Actual vs planned harvest volumes Table 6 Actual vs. planned harvest volumes percentages (actual / planned volume) Species 1996 2000 2003 2006 Balsam 256% 205% 47% 18% Deciduous 46% 5% 14% 8% Fir 54% 60% 47% 50% Other 40% 23% 6% 0% Pine 87% 54% 46% 34% Spruce 235% 159% 128% 59% Summary of Fibre Movement The Invermere TSA licensees substantially undercut their AAC by an average of 215,000 m3 (only 66 percent) during the four study years, registering the worst performance within SIBAC in this regard. The TSA was a moderate net exporter of logs within BC (total 263,400 m3) predominately to 100 Mile House, the Okanagan, the Fraser and the Merritt TSAs. Substantial volumes flowed into Invermere from 100 Mile House and Kamloops. Production of logs from private lands was quite low (total 26,300 m3), though the production of logs from Indian Reserves was the highest of any SIBAC TSA (total 17,600 m3). Significant net SB4 volumes flowed into Invermere from the Soo, 100 Mile House and Kamloops TSAs. Page 10 of 12

Invermere exported a total of 4,100 m3 logs during the study term, split about evenly between the USA and offshore. The data contains no records of log imports, nor movements of chips. The following table and chart summarize the log flow data for the Invermere TSA and include all tenures, exports and imports for the four sample years. Chip exports and imports have been excluded. For further detail, the reader is urged to reference to the detailed spreadsheets. The pivot table showing the movement of volumes into the major mill yards by TSA source may also be of interest. Table 7 Summary of log volume flow in and out of the Invermere TSA Destination / Source TSA Volume Movement in and out of the Invermere TSA 1996 2000 2003 2006 In Out In Out In Out In Out Arrow (2,060) 255 (17,463) (135) Boundary (1) (10,498) Cranbrook 392,210 (15,727) 117,942 (16,416) 141,693 (9,706) 277,844 (7,031) Golden 14,580 (13,602) 163,281 (158,449) 146,513 (75,993) 231,201 Kamloops (394) (17) 311 Kootenay 108,641 (10,610) 36,376 (3,029) 10,387 (1,533) 42,216 (2,525) Lillooet Merritt 9 Okanagan (562) 8 (739) (68) 2,985 Revelstoke (5,520) 330 (10,652) 353 (1,539) 1,375 (1,149) Northern Other (377) Coast 31 Figure 6 Volume flow in and out of the Invermere TSA Sources of Information Timber Supply Review Invermere TSA Timber Supply Analysis. B.C. Ministry of Forests. December 1993. Page 11 of 12

Rationale for Allowable Annual Cut Determination. B.C. Ministry of Forests. March 1, 1996 Timber Supply Review Analysis Report. B.C. Ministry of Forests. January 2001. Rationale for Allowable Annual Cut Determination. B.C. Ministry of Forests. January 1, 2002.. Timber Supply Review # 3. Cam Brown RPF. Forsite Consultants Ltd. March31, 2005. Rationale for Allowable Annual Cut Determination. B.C. Ministry of Forests. January 8, 2004 Log Movement Alberta Ministry of Sustainable Resource Development Log Volumes Exported to British Columbia, 1999 to 2006, internal query Ministry of Forests and Range Harvest Billing System (HBS), internal queries of Original Scale Volumes, SB4 Log Load Movements and Scale site listings Ministry of Forests and Range Harvest Billing System (HBS), timber mark queries http://apps15.for.gov.bc.ca/hbs/opq/p480.jsp Ministry of Forests and Range Economics & Trade Branch Export Management System (EMS) log export database internal queries Ministry of Forests and Range Economics & Trade Branch chip movement internal working data Provincial Level Projections of the Current Mountain Pine Beetle Outbreak, Year 4. http://www.for.gov.bc.ca/hre/bcmpb/ Statistics Canada International Trade Division Exports for Specified HS Codes to the United States, Cleared Through British Columbia Ports, 1996, 2000, 2003, 2006 Statistics Canada International Trade Division Imports for Specified HS Codes from the United States, Cleared Through British Columbia Ports, 1996, 2000, 2003, 2006 Page 12 of 12