on a leadership role in the Wood Pellet As-sociation of Canada), to pioneer the stan-dards for bulk fuel supply from Western Canada to Europe,” explains Reitsma. The company was also the beneficiary of operating within a well-developed for-est industry in British Columbia where many of the certification standards were already part of the province’s forest practice codes. This is enabling Pinnacle to lead in sustainability requirements. “We are very fortunate to have well-developed and en-trenched sustainability practices built into the forest industry in B.C.,” says Reitsma. In fact, Reitsma is confident that the beneficial situation relative to other juris-dictions, where there isn’t the same level of forest stewardship planning and sustainabil-ity management, will allow the company to adapt its practices to be in alignment with pending European legislation objectives. What Reitsma believes wood pellet pro-ducers will face in terms of new legislation from Europe will come in the form of creat-ing a better chain of custody. This will pose challenges, specifically at port facilities, where producers aggregate with other suppliers. “In the future, I can see the continuance of port access being contingent on the substantiation of sustain-ability requirements,” comments Reitsma. In the early days of the industry, he says, there were different standards from different European power companies – each with its own version of what sustainability meant. With a common standard, certain Euro-pean ports may require that all pellets on a ship be certified under one sustainability requirement, which means all producers will have to meet the standard in order to acquire voyage on a particular ship. “When we look outside of B.C., we can see jurisdictions where highly diverse land ownership will create chain of custody challenges for producers,” says Reitsma. “Once that export market is ready and available, I think you’ll see quite an increase in gas prices again.” ASIAN ExPORTS modity that has sufficient market liquid-ity to support a trading approach to the acquisition of product. However, because the production side of this business is in its early stages of coming into being, there’s not really an ability to get large volumes without a longer-term relationship between the producer and the consumer.” The mindset in Asia is still a coal and oil-buying one and the shift to a non-com-modity purchasing transaction hasn’t yet taken place. “I think we’ll find a balance between the two schools of thought, but there certainly needs to be some adjustments in the pro-cess before it can really start to advance,” says Reitsma. GAS EFFECTS While Europe continues to be the biggest export market for Pinnacle, Reitsma pre-dicts considerable growth in Asia, particu-larly from Japan and South Korea, as their energy strategies focus more on the future versus the immediate term. However, it’s a market that Reitsma says needs to mature, especially in the area of how transactions are done. “Some [Asian buyers] are viewing the wood pellet market as an emerging com-Air System Experts Biomass N Boardplants Power generation N Pulp & Paper Sawmills N Materials handling N Mining Allied brings 35+ years experience in industrial air systems. Allied’s combination of design, supply, installation & maintenance services provides lower project cost, on-time completion, smoother start-up and less downtime – adding value and safety to your operation. Safety Quality Value Domestically, Reitsma sees a pair of opportu-nities for Pinnacle, both involving natural gas. “There are opportunities for us in mar-kets where people are not on the natural gas grid today where we can offset diesel con-sumption or some other higher-cost fuel.” Reitsma also believes one outcome of proposed pipelines being developed to ex-port natural gas that isn’t widely discussed, is that it’s going to have a long-term domes-tic price escalation effect. “Once that export market is ready and available, I think you’ll see quite an increase in gas prices again,” he says. “And that’s going to spur on the ability to sell more [pellets] here in B.C. as an offset to escalating natural gas costs, much as we did four years ago, be-fore the advent of shale gas technology.” Regardless, the export market is still Pinnacle’s focus, even more so with the im-provements the company has made on the logistics side. As for the overall focus of the company, it has changed little over the years. Reitsma says it’s still about making a good product and getting it to where it needs to go. “What makes this business viable, for us in particular, is the fact that we have a great forest resource, people that are excit-ed about growing a successful business and a very good market. Once we understood how we could make a product out of our fibre resources, we’ve turned our attention over the past few years to optimizing the lo-gistics of getting this product to market.” • For more information on pellets go to www.canadianbiomassmagazine.ca. MarCh/april 2013 Surrey,BC N Vernon,BC N WilliamsLake,BC N Edmonton,Alberta N Prince Albert, Sask www.alliedblower.com N Phone: 800-576-3611 22 Canadian BIOMASS
Canadian Biomass March/April 2013: Page 22
