RIVERSIDE FOREST PRODUCTS LTD.,

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RIVERSIDE FOREST PRODUCTS LTD., Powered By Docstoc
					                                                        November 25, 1999




Mr. Peter H. Cooke, Chair,
CIPEC Executive Board,
580 Booth Street 18th Floor,
Ottawa, Ontario K1A 0E4

Dear Sir:

Attached please find our Progress Report on Energy Efficiency Improvements
Report for Riverside Forest Products Ltd. Armstrong Division as per your
letter of August 5, 1999 File EN8311-R7.

As this is the first of annual reports, we would appreciate feedback as to the
style and content of the report at your earliest convenience.

                                   Yours truly,

                                   RIVERSIDE FOREST PRODUCTS LTD.,



                                   Gary Zecchel,
                                   Manager Armstrong Division

GZ/eb
Attachment
                       PROGRESS REPORT

                ENERGY EFFICIENCY IMPROVEMENTS




Prepared for:   Canadian Industry Program for Energy Conservation
                580 Booth Street, 18th Floor
                Ottawa, Ontario K1A 0E4
       Submitted by:   Riverside Forest Products Limited
                       Armstrong Division
                       Bag Service 5000
                       Armstrong, BC V0E 1B0




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                                                 TABLE OF CONTENTS



1.0        INTRODUCTION .......................................................................................................................1

2.0        ORGANIZATION PROFILE ....................................................................................................1
           2.1 Primary Function ..............................................................................................................1
           2.2 Organization Size .............................................................................................................1
           2.3 Environmental Impact ...................................................................................................... 2

3.0        SENIOR MANAGEMENT SUPPORT .....................................................................................4
           3.1  Signed Statement of Endorsement....................................................................................4

4.0        ENERGY SYSTEMS AND ENERGY EFFICIENCY IMPROVEMENTS...........................5
           4.1  Electricity General............................................................................................................5
           4.2  Energy Systems Used at Armstrong.................................................................................5
                4.2.1      Hydraulic Power Systems ................................................................................5
                4.2.2 Pneumatic Power Systems...................................................................................6
                4.2.3 Pneumatic Conveying and Air Movement Systems ............................................6
                4.2.4 Motors and Power Transmission Systems...........................................................7
                4.2.5 Heating Systems ..................................................................................................7
           4.3  Energy Efficiency Improvements .....................................................................................8
                4.3.1 Power Factor........................................................................................................8
                4.3.2 Pneumatic Conveying Systems and Veneer Dryers ............................................8

5.0        FUTURE PLANS.........................................................................................................................9




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1.0        INTRODUCTION

In November 1998, the Armstrong Division of Riverside Forest Products Limited (Riverside) joined
Natural Resources Canada’s (NRCan’s) Industrial Energy Innovator Program and also registered with
Canada’s Climate Change Voluntary Challenge and Registry initiative.

This report provides an outline of the Riverside organization, a statement of management support, a
description of current energy systems and a summary of the progress made during the past year to achieve
improvements in energy efficiency at the Armstrong Division's plywood plant.




2.0        ORGANIZATION PROFILE
2.1        Primary Function

Riverside Forest Products Limited is engaged in the business of harvesting timber and producing lumber,
plywood, veneer and wood chips. The Company has a broad market for its products, which are sold in
Canada, the United States, Japan and numerous countries in the European Economic Community. Solid
wood products and wood chips are produced at Riverside’s five stud lumber sawmills, one dimension
lumber mill, two plywood plants and one veneer plant. In addition, the Company operates a
remanufacturing facility, a wood preservation plant, a seedling nursery and a seed orchard.



2.2        Organization Size

Riverside operates eleven manufacturing facilities at six separate locations in British Columbia. These
include a studmill and plywood plant at Armstrong, a studmill and plywood plant at Kelowna, a
remanufacturing facility at Winfield, a studmill and veneer plant at Lumby, a dimension lumber sawmill
and two studmills at Williams Lake and a wood preservation plant at Ashcroft.

For the fiscal year ended September 30, 1998, the volumes of the various products manufactured by the
above facilities were as follows:

            Lumber  stud                  444 million board feet (mmfbm)
            Lumber  dimension             173 million board feet (mmfbm)
            Plywood                        322 million square feet (mmsf)
            Veneer                         144 million square feet (mmsf)
            Chips                          544 thousand bone dry units (mbdu)
The volume of logs processed to manufacture the above products was 3,170,000 cubic metres (m3). As
British Columbia’s eighth largest timber tenure licensee, Riverside is able to supply approximately 75




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percent of its log volume requirement from the Allowable Annual Cut (AAC) of the licenses that it holds.
The balance of 25 percent is purchased from private landowners and small businesses under the BC
Ministry of Forests’ Small Business Forest Enterprise Program.

Riverside’s Armstrong Division consists of a plywood mill with an annual production capacity of 225
mmsf of select, sheathing, specialty Douglas fir and Canadian softwood plywood products and a lumber
mill with an annual capacity of 115 mmfbm of precision trimmed studs.

For the fiscal year ended September 30, 1998, Riverside’s total sales to third party customers of all
products produced by all manufacturing facilities were as follows:

                                                         $ 000               %
                   Lumber  stud                        183,223              40.6
                   Lumber  dimension                    72,612              16.1
                   Plywood                              106,737              23.7
                   Veneer                                17,308               3.8
                   Wood chips and fibre                  45,122              10.0
                   Remanufactured products                7,203               1.6
                   Treated products                      18,737               4.2
                   Total                                450,942             100.0

Riverside’s employment base is relatively stable with only slight variations due to seasonal factors such
as weather conditions and market demand. At September 30, 1998 the Company had 2,067 active
employees, comprising 1,737 hourly and 330 salaried individuals. The Armstrong Division is the largest
employer within Riverside with 652 employees, comprising 587 hourly and 65 salaried individuals.

In addition to the human resource base defined above, Riverside provides employment for approximately
another 1,000 people via arrangements with independent contractors who are responsible for most of the
Company’s logging, site preparation and tree planting.



2.3        Environmental Impact

Riverside’s mill and forestry operations are regulated by federal and provincial environmental legislation
which includes the Waste Management Act (British Columbia), the Forest Practices Code of British
Columbia Act (British Columbia), the Fisheries Act (Canada) and the Canadian Environmental Protection
Act (Canada). The Company has all major environmental permits necessary to conduct its operations.
All operations are in substantial compliance with all environmental legislation.




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In the areas of forest planning, timber harvesting, road construction and maintenance, Riverside is
subjected to major audits by the Forest Practices Board of British Columbia. To date, these audits have
not identified any significant non-compliance issues. In addition, Riverside conducts internal woodlands
audits to evaluate its own environmental performance, using Forest Practices Board protocol. The results
of these audits have not revealed any significant examples of non-compliance.

Riverside’s manufacturing facilities are subject to regulation of air emissions, hazardous materials
handling and disposal, and water quality, with permit levels assigned in some cases.

Air emissions are monitored and reported to government on a monthly basis, while the other aspects of
environmental performance are monitored by a Company audit team assisted by an environmental
consultant. These audits identify situations requiring corrective action and thus initiate the development
of action plans for each facility.

In addition to the audit procedures described above, Riverside also participates in a Pollution Prevention
Committee in the Okanagan region of British Columbia. This committee includes members of the
community, environmental groups, BC Ministry of Environment staff and Riverside employees. These
committee members work together to identify and investigate pressing pollution concerns and help
Riverside to prioritize funding for environmental projects.




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3.0        SENIOR MANAGEMENT SUPPORT
3.1        Signed Statement of Endorsement

           “Riverside Forest Products Limited, Armstrong Division (Riverside) supports
           economically sound, voluntary industry initiatives which are designed to assist the
           Canadian Government with its international commitment to reduce greenhouse gas
           (GHG) emissions. As a result, we endorse Voluntary Challenge and Registry Inc.’s
           (VCR Inc.’s) efforts to encourage organizations from all sectors of the economy to
           accept greater accountability for GHG generation.

           Furthermore, we support the work that VCR Inc. does to promote, assess and
           recognize the effectiveness of a voluntary approach to meeting Canada’s climate
           change objectives. We are pleased to participate in this initiative and hereby commit
           to report the results of our energy efficiency activities to the Canadian Industry
           Program for Energy Conservation, on an annual basis.”

                                               Riverside Forest Products Limited

                                               Darrell Embley
                                               Regional Manager
                                               Manufacturing Operations
                                               Okanagan Region




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4.0        ENERGY SYSTEMS AND ENERGY EFFICIENCY IMPROVEMENTS

In this, our first year of participation in the Canadian Industry Program for Energy Conservation, we have
concentrated on the following initiatives:

• increased generation of electricity from wood residues in order to achieve self-sufficiency in electrical
  energy;

• identification of energy efficiency opportunities; and

• exploration of innovative ways of implementing energy efficiency projects.



4.1        Electricity Generation

In order to reduce our electrical energy costs and achieve more efficient utilizations of the residues
produced by our manufacturing operations, we are evaluating the feasibility of expanding our existing
generating plant so that we can supply all the electrical energy needs of the Armstrong stud mill and
plywood plant. The new generating plant will have a capacity of 20 MW and will use the wood residues
produced by both our Armstrong and Lumby Divisions. This initiative will eliminate the need for landfill
disposal of residues and further reduce our air emissions by allowing the closure of the beehive burner at
the Lumby site.

We are still determining the economic feasibility of the project and are currently evaluating various types
of equipment prior to finalizing the engineering design of the plant.



4.2        Energy Systems Used at Armstrong

Energy sources used by the Armstrong plant include electricity, natural gas, wood residues and liquid
petroleum fuels. These sources of energy are used in a variety of systems as follows.



4.2.1      Hydraulic Power Systems

Hydraulic power transmission is used extensively in the wood products industry because it works well in
applications where controlled force and speed must be maintained under cyclic, variable and shock loads.

Many operations in our manufacturing processes are characterized by abrupt loading, frequent stops and
starts, reversing and speed variations that cause sharp peak, cyclic and fluctuating power demands. At the




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same time, precise control of force, speed and positioning is often required. These operations pose acute
demands on many electro-mechanical drive systems and cause electric motor burn-outs and premature
mechanical failures unless the drive is grossly oversized. Therefore electric drives have been increasingly
replaced with hydraulic systems.



4.2.2      Pneumatic Power Systems

Compressed air power transmission is used extensively in the wood products industry because it is easily
accessible, convenient to use, responsive to sudden load changes, quick in action and in many cases, less
costly than other alternatives. It works well in applications where controlled force and high speed must
be maintained under cyclic, variable and shock loads.

Many operations in our manufacturing systems are characterized by abrupt loading, frequent starts and
stops, reversing and speed variations that cause sharp peak, cyclic and fluctuating power demands. At the
same time, precise control of force, speed and positioning is often required.

Many linear motions and linear positioning operations are done with singular and compound stacked air
cylinders of discrete increments. Likewise, compressed air cylinders are used in heavy load applications
where considerable forces are required to kick, sweep or rotate large logs, for example. However, there
are practical limitations to the required diameters of air cylinders and there are circumstances where
hydraulics are a better choice. Hydraulic cylinders are also better suited for cold temperature operation
where air cylinders may freeze-up.



4.2.3      Pneumatic Conveying and Air Movement Systems

Air conveying is used extensively in the wood products industry. Large mills may have as many as five
air conveying systems in place. Other air movement operations include air circulation in lumber dry
kilns, veneer dryers and air supply for boilers and furnaces.

In our operations, large axial fans are used to move air and water vapour in kilns and dryers and
centrifugal fans and blowers are used in a variety of applications, as follows:

•   high and low pressure conveying systems;
•   dust removal systems;
•   veneer dryers;
•   negative draft for veneer stackers;
•   induced draft on boilers and furnaces;
•   induced draft of electrostatic precipitators and filter beds; and




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• automatic bag-house bag cleaning.

We use low-pressure air conveying systems to extract manufacturing residues, such as sawdust, planer
shavings and sander dust from processing machines and convey them to truck bins, fuel storage silos
and/or incinerators.

High pressure systems are used to convey sawdust, planer shavings, sander dust, pulp chips and hog fuel
to different areas of the plant.

Pneumatic conveying systems are high energy users. The fans and blowers use power to not only convey
the material, but also to move great quantities of air. In fact, more power is used to move the air than to
convey the material. As a result, pneumatic conveying systems, fans and blowers offer by far the biggest
opportunity for energy savings in our industry.



4.2.4      Motors and Power Transmission Systems

Electrical motors are the prime movers in the wood products industry. They are used to power all
processing machines, pumps, compressors, fans, blowers, conveyors, lifts, etc. Alternating current (AC)
motors are used almost exclusively. Single-phase AC motors are used in applications requiring power of
less than 1kW, while three-phase AC motors are used where more than 1kW of power is required.

There are several types of AC motors but in general, only three types are used in the wood products
industry: synchronous, non-synchronous induction squirrel cage and non-synchronous induction wound
rotor motors. Most motors used in the wood products industry are over-sized for various reasons, the
most common being the need to handle peak power demands, insurance against motor failure and the
ability to increase production as required.



4.2.5      Heating Systems

At Armstrong, we have systems for both space heating and process heating. Space heating includes the
offices and the enclosed plant areas, while process heating includes manufacturing operations such as:




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• heat conditioning of logs prior to conversion into veneer;
• drying of veneer; and
• drying of lumber.

The main sources of heat are wood residues, and/or natural gas, and/or liquid petroleum fuels.



4.3        Energy Efficiency Improvements

Preliminary assessment of the energy systems described in Section 4.2 revealed that the most promising
opportunities for improving energy efficiency were in our plywood manufacturing facility. These
opportunities were:

•     a low power factor resulting in a high kilovolt-ampere (kV.A) demand; and
•     various inefficiencies in four pneumatic conveying systems and four veneer dryers.



4.3.1      Power Factor

Riverside buys electricity from BC Hydro according to Schedule 1200, General Services (35 kW and
over) and Schedule 1821, Transmission Service (5000 kV.A and over).

On Schedule 1200, Riverside purchased 1,084,340 kWh of electricity in 1998 at a cost of $50,388.81.
The power factor ranged between 92 percent and 100 percent and thus there was no power factor charge
on Schedule 1200 in 1998.

On Schedule 1821, Riverside purchased 52,127,041 kWh of electricity in 1998 at a cost of $1,354,781.80.
The kV.A demand charge was $581,581.53 and the total cost of electrical service was $1,936,363.33.
Due to a low power factor of 85.6 percent on average in 1998, Riverside had a relatively high kV.A
demand, which resulted in an additional demand charge of $83,834.73.

To eliminate this surcharge, we consulted with BC Hydro who then conducted a special audit of our plant
and prepared a plan for the installation of synchronous motors and capacitors to correct the power factor.
This project is in the final stages and will be completed by the end of 1999.



4.3.2      Pneumatic Conveying Systems and Veneer Dryers

In order to assess the opportunity in this area, we participated in a study jointly funded by BC Hydro and
Natural Resources Canada. The objective of the study was to conduct an energy efficiency analysis of a




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typical wood products manufacturing facility in order to define a pilot project to demonstrate the concept
of Energy Performance Contracting for the wood products industry.

The energy efficiency analysis of four pneumatic conveying systems and four veneer dryers in our
plywood plant was completed by an independent consultant. The results showed that replacement of the
fans in the conveying systems, installation of fans in the dead air zones of all dryers and modification of
the return air plenum of Dryer No. 4 will reduce the annual consumption of electricity in our plywood
manufacturing operations by 4 percent.

As we recognized that the proposed modification of the return air plenum of Dryer No. 4 will not only
reduce energy costs but also increase our drying productivity by 14 percent, we were able to secure
internal funds to implement the consultant’s proposal. This project ,which has involved upgrading and
relocating the gas burners in the return air plenum, is now complete.

We are currently collaborating with NRCan in the evaluation of an innovative financing mechanism,
based on Energy Performance Contracting principles, which will allow us to implement the remainder of
the energy efficiency improvements identified by the consultant.




5.0        FUTURE PLANS

Our future plans are to address the following areas identified in the VCR Inc. Registration Guide 1999:

•     base year quantification;
•     projection;
•     target setting;
•     measures to achieve targets;
•     results achieved; and
•     education, training and awareness.




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