Thursday, April 02, 2009

Domtar and Prince Albert Pulp Mill: Briefing note says reopening of plant “is unlikely at present”; Energy and Resources withholding information

Energy and Resources Minister Bill Boyd said in the legislature on Mar. 30 that “discussions with Domtar continue on redevelopment” of the Prince Albert pulp mill.

“Vice-president of Domtar, Patrick Loulou said this morning, “We will continue to work together with the government to investigate a number of options for redevelopment of the site, some including the pulp production, some not,”” Boyd said.

Boyd’s comments are rather meaningless and shed little light on the situation.

In its 2008 annual report Domtar states on page 50 that, “In 2005, we announced the indefinite closure of our Prince Albert pulp mill, effective in the second quarter of 2006. We have not determined whether this currently idled facility will be reopened, sold or closed.”

In general there appears to be three things that the two parties can be talking about: reopening, selling or closing the plant.

The company notes on page 27 that Weyerhaeuser has already submitted a “preliminary decommissioning and reclamation plan” for the pulp mill to the Saskatchewan government. The “generalized estimate of costs” range from CDN$20 to CDN$25 million. Domtar states that it “has not undertaken an in depth review of Weyerhaeuser’s estimate and the net decommissioning and reclamation costs could exceed Weyerhaeuser’s estimate.” The report does not say, however, when the plan was submitted to the government.

In February, an access to information request was submitted to the Ministry of Energy and Resources for “copies of any briefing notes or memorandums, including attachments, from Aug. 1, 2008 to Feb. 19, 2009 regarding Domtar or the Prince Albert pulp mill.”

The ministry’s Mar. 24 response provided copies of three heavily censored briefing notes totaling six pages. The ministry also advised that some records “have been withheld from release in full” pursuant to the following sections of The Freedom of Information and Protection of Privacy Act: Advice from officials (Sec. 17), economic and other interests (Sec. 18) and third party information (Sec. 19).

A Sept. 30, 2008, briefing note states that the government “is committed to working with Domtar and other potential investors to facilitate a reopening and redevelopment of the Prince Albert Pulp Mill and associated assets.”

The government is “working with Domtar to identify options to get the facilities reopened, particularly in the areas of infrastructure and co-generation.”

“Should Domtar not wish to restart the mill under such conditions, Provincial officials will work with Domtar in an effort to sell the facilities to other users, and to develop a process for reallocation of the wood supply,” the note states.

A Jan. 12, 2009, briefing note entitled Assignment of the Prince Albert Forest Management Agreement states that “reopening of the Prince Albert pulp mill is unlikely at present and the Big River and Wapawekka sawmills are for sale.”

This does not sound very promising.

On Mar. 27, the Prince Albert Daily Herald reported that the MLA for Prince Albert Carlton, Darryl Hickie, said the chances of reopening the mill are almost nil.

“We won’t see an active pulp mill out of that site, given what Domtar has told us,” he said.

Domtar is discussing other uses for the site with the provincial and federal governments, he said.

“The issue isn’t completely dead. We know that Domtar wants that site utilized.”

According to the Herald, Hickie did not speculate on what those uses may be. [Pulp mill almost dead, says MLA (P.A. Herald, Mar. 27, 2009)]

That’s the rub. No one is saying what specific options are being discussed and which one is most likely to be the outcome.

On Mar. 28, the Herald issued a clarification stating that Hickie’s “declaration regarding the future of the pulp mill failed to clearly state that the mill reopening would not likely take place in the current world economic conditions.”

The Jan. 12 briefing note says nothing about ‘the world economic conditions’ but then again most the document was blacked out.

In a Mar. 30 news release Boyd said, “We remain optimistic that redevelopment at the mill site can be achieved, and we continue to work with Domtar toward that objective.”

The government has been peddling that line since Nov. 30, 2007, when Boyd announced the new Saskatchewan Party government would not proceed with the Memorandum of Understanding (MOU) signed on September 12, 2007, between Domtar and the former NDP government.

On Feb. 29, 2008, the StarPhoenix reported that the government presented a proposal to Domtar to get the mill up and operating again. Boyd said the proposal involved the previously discussed areas of infrastructure and power co-generation, but would provide no details to reporters at the legislature. [Province makes offer to Domtar on reopening P.A. mill (StarPhoenix, Feb 29, 2008)]

On May 12, 2008, Boyd told StarPhoenix reporter James Wood that the government and Domtar were still talking.

“There are ongoing discussions,” he said in a telephone interview after the NDP raised the issue in question period. [Gov’t, Domtar still talking: Boyd (StarPhoenix, May 13, 2008)]

On July 9, 2008, Boyd met with Domtar officials in Regina, including, for the first time face to face, Domtar president and CEO Raymond Royer.

“All of the issues that are important to both sides have been discussed and clarified and . . . we’re at the point now where both sides need to make decisions,” Boyd said in an interview with James Wood. [Domtar, province meet face to face (StarPhoenix, July 10, 2008)]

Then silence.

On Sept. 12, 2008, Boyd described continuing discussions with Domtar as “productive.” [Talks with Domtar ‘productive’: Boyd (StarPhoenix, Sept. 13, 2008)]

Then silence again – until now.

During the 2007 provincial election Saskatchewan Party candidate for Prince Albert Carlton, Darryl Hickie, told voters that “a vote for Darryl is a vote for the mill open and people working.” [Pulp mill situation debated (P.A. Herald, Dec. 12, 2007)]

In a question and answer session published by the Herald on Nov. 3, 2007, Hickie said Saskatchewan Party Leader Brad Wall spoke at the opening of his Committee Rooms two weeks earlier said, “we will move heaven and earth to open the Mill.” [Learn more about candidates running in the Prince Albert area (P.A. Herald, Nov. 3, 2007)]

Seventeen months later the mill remains closed and the best Boyd can do is say that talks are continuing, meanwhile, ministry officials withhold critical information contained in briefing notes that might help the public understand what is really happening.


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