The title of this post might seem rather odd, just a couple of days after the oil price dipped below $100 per barrel for the first time in many months. However most commentators agree that this dip is primarily a result of the present lacklustre prospects for the global economy, and therefore bound to be reversed as soon as growth picks up – which, however feeble prospects in Europe may seem, is likely elsewhere in the world.
More telling was the story last week in the FT entitled ‘More buck, less bang’ which described how despite ever increasing investment, oil exploration was failing to identify enough new reserves to replace what is currently being produced; furthermore, major exploration and production projects are on average running both significantly late and significantly over budget, largely because they are operating in increasingly difficult places. One oil chief is quoted as saying “We have to realise as an industry that the easy oil and easy gas is over”.
Despite recent rubbishing (again) of their model, this is consistent with what ‘Peak Oil’ proponents have been saying for years. Perhaps, then, reports of its demise are premature – in which case the title of this post would indeed be accurate. Though there are different schools of thought about when exactly the consistent shortfall of supply over demand (ie the end of cheap oil) predicted by peak oil will occur, one thing seems certain – it will happen within the rotation of even the fastest growing softwoods.
What has that got to do with forestry, and in particular smaller-scale approaches such as woodland croft management? Indeed, isn’t it a good thing – if energy is more expensive, demand for timber will grow (for both fuel and to replace energy-intensive materials), timber prices will rise and all will be rosy in forestry .
Well maybe, or maybe not. To be honest I am surprised an industry that prides itself on long-term planning isn’t giving this issue more thought. The reality is that the industrial model of forestry we have built is heavily centralized and based, from forest to sawmill, on heavy machinery.
Diesel is the lifeblood of forestry, and for all the ‘efficiency’ of the latest high-tech processing plants, their operation is ultimately sustained by this fuel. For all the advances made in developing renewable alternatives for heat and electricity generation, we have yet to make any meaningful progress on alternative transport fuels. Diesel is still the best we have.
All of which means that even if the timber price rockets, so too will costs, so the picture is more complicated and less positive than it might first appear. I still believe however that forestry can thrive and prosper in such a future scenario – but we have to re-shape our industry accordingly, and given its long-term outlook, start changing things now.
How do we benefit by increased prices, but minimize costs? Largely, I would argue, by minimizing transport. By this I don’t mean ‘modal shift’ (using rail & sea transport, rather than lorries, to serve existing centralized processing plants), I mean minimizing transport, full stop. Green (unprocessed) timber is 60% water by weight and surely it is madness to ship this across the country, whichever mode of transport we use.
This inevitably implies local processing: more, smaller sawmills and other processors distributed across the country, located in the forest-growing areas. Technology is already available or in development to support such a local approach without loss of quality.
A more local focus will also encourage more local, rather than remote, management of forests, bringing improved stewardship of woodland. Local processing will bring rural development benefits – it is one of the ironies of the current set-up that so many jobs supported by forestry are actually located in our major centres of population, rather than in the communities actually hosting the forests.
Such a smaller-scale, local approach will require the development of a forest culture. It will require leadership from both government and the forest industry, to do what is right for the country at large rather than the current restricted range of industry stakeholders. It will however yield a low-carbon industry resilient in the face of future uncertainties, both environmental and financial.
It also fits perfectly with the woodland crofts approach.