The policies, which have been discussed at meetings between government, industry and provincially owned B.C. Hydro in recent months, are part of an emerging bio-energy strategy that should be in place by mid-January, says provincial Forests Minister Rich Coleman.
A key part of that plan is tapping the power potential of wood left behind by logging operations - a pile that's only going to get bigger as the province's record pine beetle infestation runs its course. Over time, beetle-killed trees warp, dry and split, making them less valuable or useless as lumber.
"We're looking at whether we need to form a new tenure on the land base that would allow us to go ahead and (issue) up to a 20-year minimum tenure for wood waste because you need the security of supply in order to go ahead and make the investment in a power plant," Mr. Coleman said in a recent interview.
Currently, such debris or "slash" - left behind by logging companies because it would cost more to process it than they would get from selling it - is burned or left to rot. Would-be users can't just go collect it, as it typically is piled up on Crown land.
"In B.C.'s forest sector, the drive to create another line of business hasn't been there," Mr. Coleman said. "There are jurisdictions that use the waste; in B.C., we burn it in the forest in the off-season, and we shouldn't be doing that."
B.C.'s push to tap its forests to help keep the lights on dates back at least to February, when the province unveiled an energy plan that requires all new electricity projects to have zero net greenhouse gas emissions. The plan also calls for energy self-sufficiency for the province, and flagged the potential to use beetle-killed wood as fuel for electricity plants.
Biomass energy is considered greenhouse-gas neutral, based on the theory that if the biomass comes from a renewable source such as a well-managed forest, the carbon dioxide produced in combustion will be absorbed as new trees grow.
In March, B.C. Hydro's request for expressions of interest in bio-energy projects that would use residual wood - including sawmill waste, beetle-killed wood and logging debris - drew more than 80 responses. The utility is now working on a bio-energy call that would seek new generation projects from such sources.
But the concept alarmed B.C.'s pulp and paper producers, who worried such a program would drive up the price of wood chips they use as raw material.
Pulp producers also argued the plan overlooked their sector's existing contributions to B.C.'s goal of slashing greenhouse gas emissions, pointing out that numerous plants in the province use wood waste to fuel part of their operations.
Currently, there is no financial incentive for pulp producers to invest in such systems, said David Gandossi, chair of the B.C. Pulp and Paper Industry Task Force.
A new pricing system that would allow pulp producers to sell such energy back to the provincial grid at premium "green" rates would encourage investment in co-generation systems and help drive a market for wood waste, Mr. Gandossi said.
"If you're anywhere else in the world other than here, when [pulp producers] sell that energy created from wood waste, they sell it at a green rate, which makes it affordable and covers the cost of doing that," Mr. Gandossi said. "That doesn't happen in B.C."
The province is considering such changes, Mr. Coleman confirmed.
B.C. is trying to revamp forest policies to encompass an emerging power sector in the midst of a crushing downturn in the lumber side of the business.
That crisis, stemming from the collapse of the U.S. housing market, has resulting in dozens of mill closings in B.C.
It's also hampering the progress of Mackenzie Green Energy Centre, a $150-million plant that would generate steam for a Pope & Talbot Inc. pulp mill in Mackenzie in northern B.C. and also get part of its fibre supply from a Pope & Talbot sawmill in the region.
Pope and Talbot, however, is in bankruptcy and auctioning off its assets, putting the Mackenzie Green Energy project on hold until it's known whether a new owner will sign on to the proposal.
If the mill's new owner chooses not to participate, the project can be reconfigured without significantly affecting costs or design, said Jeffry Myers, president of Calgary-based Pristine Power Inc., one of the partners in the Mackenzie project.
In the meantime, however, nailing down supplies for the Mackenzie Green Energy and other wood-based electricity projects is a challenge, he said.
"We are convinced there is ample fuel supply out there. But the forestry industry is in such chaos right now, particularly because of the lumber situation in North America, that it's been difficult to move any contracting process forward for fuel."