Forestry Investment Blog

Big news on the US forestry front, International Paper and MeadWestvaco are in talks to transform forestry plantations in the south-eastern US by replacing native pine with genetically engineered eucalyptus, a rapid growing Australian tree that already dominates the tropical timber industry.

The practice of splicing foreign DNA into food crops has become a common sight in corn and soy but until now researchers and companies haven’t dared attempt genetically engineering a crop that is a cornerstone of the US economy.

This hasn’t daunted ArborGen LLC as they look set to overcome the obstacles which have stopped other companies in the past. Of which the biggest one was to control the tree’s fertility and stop it from invading native forests. ArborGen believe they have this solved as they bank on a controversial gene splice that restricts the tree’s ability to reproduce. If this fertility control technology is proven effective it could pave the way for more varieties of wild plants to be genetically engineered for use as biofuels without fear of invasiveness. The only fear with this technology is that seed firms will exploit it to the detriment of farmers.

The American government’s Energy Department has collaborated with ArborGen on this project as they can see the attraction of growing perennial plants on marginal land. Unlike annual farm crops the plants (which include various grasses) can live and grow for many years and be harvested when needed. As mentioned previously there is a fear among scientists about the effectiveness of the fertility system used, which has never been carefully studied over a number of years to test that it can control plant spread. In a report they say that more research is needed before this system can be relied upon.

Regardless of the criticism ArborGen is going ahead with seeking government deregulation of its eucalyptus, which was genetically modified to resist freezing temperatures in 2008. If given approval, ArborGen have said that they would transform the timber industry by becoming the first company to produce bioengineered trees on a massive scale.

The ideal scenario for ArborGen would be a huge jump in productivity from growers buying their seeds and becoming the preferred tree stock for a new generation of bioenergy refineries. Timber would take over from coal as the primary export and this is already in the pipeline as it is whispered that the German utility RWEAG is going to build the world’s largest wood-pellet plant in Georgia to supplement its coal habits.

Its catch up time for the US, as countries such as, Brazil already have vast forestry plantations and have moved from net wood importers to exporters. According to ArborGen pine cannot compete with eucalyptus for sheer growth rate.

“The United States is behind the game on this,” said Les Pearson, ArborGen’s director of regulatory affairs. “Lots of countries around the world have been growing eucalyptus for many decades.”

It is because of the increase in competition from South America that demand for traditional pine has declined.  According to corporate estimates this troubled industry could allow up to 10 million acres in the US Southeast to be used for fast growing eucalyptus plantations.

Curtis Seltzer, a timber consultant who has studied ArborGen and calls its trees a ‘game changer’ said it still remains doubtful if the emerging bioenergy industry will be enough to challenge the Brazilian plantations.

“It’s not clear to me that biomass will pick up the slack for the traditional markets (as they) ebb,” Seltzer said. “But it could.”

But, as mentioned twice before, the bottom line with this project is that ArborGen must satisfy the concern from environmental groups and regulators that its modified trees will not spread untamed through forests. If it does then not even government incentives and a price on carbon will get this project off the ground.

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This entry was posted on Wednesday, February 17th, 2010 at 11:47 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.