N.W.T. uses 20,000 tonnes of wood pellets per year. Here's why they aren't made locally

The N.W.T. has a lot of trees – so why are wood pellets used for heating all hauled up from northern Alberta? 

That question was central to a discussion that unfolded Thursday at the territory's Legislative Assembly. 

Robert Sexton, the territory's energy director, told the standing committee on economic development and environment that roughly 14,500 cords of wood used to heat homes in the territory every year all come from within the N.W.T. 

But the 20,000 tonnes of wood pellets used annually? All those are coming from the south. 

"We're relying … on really one cluster of main producers in southern Canada, in northern Alberta," said Sexton.

That means there's a risk the supply chain could be interrupted, he said, and it's already becoming "somewhat more difficult" to get wood pellets because they're being exported to Europe. 

The territory often boasts of being a leader in biomass heating — Sexton said in the last 12 years, biomass heating has doubled in N.W.T. government buildings — and it has long been pushing wood and wood pellets as an alternative to burning fossil fuels which, globally, is the biggest contributor to the changing climate. 

In his opening presentation on Thursday, Sexton said the territory did a biomass supply chain study in 2023 that showed a secure supply of wood product would be needed to increase the number of people using it as a source of heat in homes and buildings. 

Further research showed shipping wood pellets by barge to communities on or near the Mackenzie River could also be a "cost effective" alternative to the use of heating fuel in most of those places, he said. 

'A lot of potential,' says MLA

Several MLAs who make up the standing committee asked about developing a local supply of wood pellets or chips. 

"Virtually every community in the N.W.T. outside of the Arctic communities have abundant biomass surrounding them, so there's a lot of potential in the N.W.T.," said Julian Morse, the MLA for Frame Lake. 

"It would be preferable to not even have to worry about the shipping aspect of things if we can get supply chains working in communities," he said, before asking what the barriers to that supply chain would be. 

Sexton said the territory would "love" to encourage the development of a local supply. The challenge, he said, is that harvesting trees and turning them into wood chips or wood pellets requires a lot of labour and a lot of fuel. 

Not only do you need to chop trees down, but you also have to dry and process the wood. 

Sexton said the N.W.T.'s current supply of wood pellets is made from material at sawmills that's already dry.

"It's hard to compete with those economics," he said.

There was once a plan to create a wood pellet plant in Enterprise, N.W.T. The project was led by former Hay River Mayor Brad Mapes, but it appears to have stalled.

According to Sexton's presentation, the 2023 biomass supply chain study also found that the challenges of using more biomass in remote communities include lack of supply options and storage, as well as climate change, which can hamper the reliability of barges in the N.W.T. as it has over the last two years. 

Shauna Morgan, the MLA for Yellowknife North, asked on Thursday if the territory could play a "stronger role" developing the supply chain by finding other sources of wood chips or pellets and finding ways to store them in communities as well. 

"The [Government of the Northwest Territories] has taken a substantial role in securing petroleum supply chain products through the petroleum products division, and sort of realizing this is an essential fuel and service," she pointed out. 

Steve Louttit, the deputy minister of the Department of Infrastructure, said the territory wouldn't compete with private retailers or wholesalers in bigger N.W.T. communities. He did say, however, that the territory should be looking at how it would support shipping and storing wood pellets in communities that aren't already getting wood pellets or chips, as those programs expand.