WOODLESS PAPER INTEREST GROWS

Alberta's pulping sector is kick-starting a new trend that could see local
farmers plant crops for paper production instead of food.

Interest in using crops such as flax and hemp as alternatives to wood in
papermaking is high as rising global demand for paper clashes with limited
forestry resources, said Wade Chute, manager of the pulp and paper division
of the Alberta Research Council Inc.

"If I look at the total market pulp capacity of the people who have
contacted me about this, I've got three of the top 10 players in the
world," Chute said.

"These aren't small interests here."

Alberta-Pacific Forest Industries Inc. is experimenting with replacing a
portion of its wood pulp with non-wood fibres grown in Alberta, the first
Canadian pulp company to do so.

Al-Pac president Bill Hunter is so fired up about the use of non-wood
fibres that he's considering changing the company name to Alberta-Pacific
Cellulose Industries.

"I truly feel that's what our destiny will be," he said.

"Preliminary indications say that from a paper characteristic, these fibres
are going to do just fine," Hunter said.

Non-wood fibres from linen flax, hemp and cereal straws produce
high-quality papers suitable for use as currency, security papers, and even
cigarette papers.

Under Al-Pac's preliminary plan, non-wood fibres would be processed into
pulp and exported for papermaking, either as a stand-alone product or
blended in with the company's aspen and poplar pulps. Farmers would be
contracted to grow the crops.

Tapping into new export markets in densely populated, paper-hungry places
such as India and China is part of the push toward non-wood fibres.

Urban sprawl and public perception are the real drivers, however.

Hunter anticipates that as more people move to cities, the public attitude
toward natural forests will change, resulting in a clawback of those
resources to wildlife preserves and recreation areas. This will further
tighten already limited forest resources, creating the need for alternate
sources of fibre.

This also explains why Hunter is not flinching at the estimated $40 million
to $100 million in costs to build a specialized pulping mill -- a decision
he'll make in two years' time pending the outcome of some technological
problems that need to be worked out.

The ARC is working on solving the technical issues, which mainly have to do
with managing effluent, Chute said.

While Al-Pac's international customer base appears to be receptive to
experimenting with non-wood fibre, Alberta farmers will have to be equally
co-operative to make it a go.

Given that overproduction of traditional crops is agriculture's biggest
problem, getting paid to switch to fibre crops would be wonderful, said
farmer George Friesen.

The issue will be getting paid enough, and that means more than what the
land makes currently producing livestock and crops, he said.

"It has to be worthwhile," he said.

Chute said non-wood fibres have the potential to be worthwhile, in terms of
capacity, anyway. He anticipates two major projects will be announced in
Alberta in the next five years. Early numbers being tossed around are in
the range of 1,000 tonnes of raw material daily -- for a single mill. Most
mills operate seven days a week, he added.

To put it in perspective, the average yield for Alberta's 2003 tame hay
crop was one tonne per acre. There are 50 million acres of farmland in Alberta.

David Spiess, a resource data engineer with Alberta Agriculture, said the
province can handle the capacity in terms of acres.

What will be an issue, he said, is balancing the needs of industry with
other traditional agricultural uses of straw.

Cattle feed and bedding requirements are estimated to account for
approximately 3.5 million tonnes, or about 23 per cent, of cereal straw
available for all potential uses in an average year, he said.

John Christensen, manager of BioProducts Alberta, argues opportunities
presented by non-wood fibres will help diversify and sustain rural economies.

"Agriculture in Alberta and Western Canada has really been built around
food and feed production," he said.

"Companies like Al-Pac know they have limited resources in the forests, and
if they are going to continue to run their mills full-time, they are going
to need agricultural fibre."

The other bonus for farmers is that the crops are easily grown. Linen flax
grows basically the same as poor quality hay, requiring less care and
attention than higher value cereal grains, he said.

Weathering, which ruins the value of traditional food crops, is beneficial
to fibre crops. But time is the biggest bonus of using non-wood fibres,
said Chute.

It takes 25 years to replace an Alberta poplar. This equates to 25 crop
seasons, which is plenty of time for producers to determine which varieties
yield the best fibre and, thus, make the best paper.

"It takes 25 years to figure that out with trees," he said.