Archive for December, 2011

If there was ever a time for the timber industry to be closely watching Congress, it is now. Lawmakers are considering legislation that would have massive importance on two issues of paramount concern to the industry: the Ninth Circuit decision on logging roads and the end of federal payments to timber-dependent counties in Oregon and Washington.

Early word is encouraging on one of the issues and much less certain on the other. President Obama just signed an omnibus spending bill that includes a one-year delay in the implementation of the Ninth Circuit decision. The delay became law just days after the U.S. Supreme Court signaled it may take the case and while a permanent repeal of the Ninth Circuit decision is still being considered by Congress.

Northwest timber leaders lauded passage of the one-year delay in a press release from Rep. Jaime Herrera Beutler (R-Wash.), who helped get the delay passed.

“This development is a step in the right direction and should open the door for a process leading to permanent resolution,” said Steve Stinson, Managing Partner of the Cowlitz Ridge Tree Farm in Toledo, WA.  “Our family forest business produces green, family wage jobs in our rural economy that must already comply with the most stringent forest practices rules in the nation.  This legislation will prevent a costly and redundant regulatory burden.

Meanwhile, the effort to get timber payments restored to timber-dependent counties is still very much up in the air. The counties in Oregon met with Gov. John Kitzhaber this week. The state government, dealing with its own budget shortfalls, won’t be able to help the counties financially but will help try to get a renewal of the payments passed in Congress, Kitzhaber said.

Until that happens, several counties could go bankrupt, unable to provide even basic services like police or fire or marriage licenses, as early as next year. An op-ed this week from Reps. Peter DeFazio, Greg Walden and Kurt Schrader (Ore.) describes the problem in more detail.

A recent Oregon State University study found that without county payments, Oregon’s rural counties will shed between 3,000 and 4,000 jobs. Oregon business sales will drop by an estimated $385 million to $400 million. Counties will lose $250 million to $300 million in revenues.

Counties already near the financial cliff and facing depression­like unemployment soon may call for a public safety emergency and will be forced to eliminate most state-mandated services — including services that help the neediest citizens in our communities.

Failing counties will have consequences for the entire state. Those counties will continue to release offenders and close jail beds. Potholed roads and structurally deficient bridges will be neglected. And already-underfunded rural schools will be devastated.

Curry County, on the Oregon Coast, could shut down as early as this summer. The Oregonian traveled there and this week published a devastating look at the county’s well-being and forecast for the future. Not only are county government and local businesses already stretched to the brink, but efforts in Congress to revew the timber payments are uncertain at best.

Oregon Sen. Ron Wyden sponsored a bill to restore federal funding four more years, at reduced amounts. The bill has a chance in the Senate, but not in the House, (says Jeff Griffin from Gov. Kitzhaber’s office).

Meanwhile, a bill in the House to restructure federal resource land management and designate land for harvests might pass the House, Griffin says, but not the Senate. Even if either passed, counties wouldn’t immediately see more money.

The U.S. and Canada haven’t been exactly buddy-buddy in recent years when it comes the lumber market. Certainly the economic downturn hasn’t helped matters, since there has been less market share to go around. But there could be some brighter days ahead.

Both countries are likely to extend their softwood lumber trade agreement from 2013 until 2015, according to U.S. and Canadian media. Of course, this doesn’t mean that either country is happy. The U.S., rightfully so, has repeatedly accused the Canada government of violating the agreement by providing new subsidies to its timber, while Canada would love to be able to sell to U.S. buyers without any limitations.

(Zoltan van Heyningen, spokesman for the U.S. Lumber Coalition) said the U.S. industry wants to keep the status quo for another couple of years in the hopes that by 2015 mills on both sides of the border will be on sounder financial footing.

That is also largely the view of Canada’s lumber sector, said Avrim Lazar, president of the Forest Products Association of Canada.

“Neither side really likes the agreement, but both sides accept that it’s a lot better than not having it,” Lazar said.

The tension stems from the fact that Canada can heavily subsidize its timber because it’s grown on government land, which puts pressure on privately owned American mills.

The vast majority of Canadian timber is grown on government-owned lands, which U.S. lumber companies say gives Canada an unfair advantage. In 2002, the trade war reached a heated peak when the United States slapped a 27 percent duty fee on imported Canadian lumber, which led to the two sides coming to the 2006 agreement.

(Reid Carter, managing partner of Brookfield Timberlands) said a number of factors, from the mountain pine beetle that has killed 15 to 20 per cent of the timber supply for construction lumber, to growing demand from China and new markets like India, will lead to what some analysts are referring to as a “super-cycle” for forest products. The sector has been bouncing along the bottom of a downturn for the last five years.

“It’s going to result in a pretty big supply shock,” he said. “That economic opportunity is really going to become evident in the 2014-2018 period. It’s not evident today because U.S. housing demand is so low, overall North American lumber demand is so low, and salvage activity is so high that it hasn’t had this price impact yet.

“But as the U.S. housing market recovers and as Chinese, and likely Indian, lumber demand and log export demand increases, we believe it will result in meaningfully higher prices for both lumber and timber.

“We think it will create a meaningful tightness on the softwood structural sawlog market on both sides of the Pacific.”

The U.S. Supreme Court today signaled it may hear a Ninth Circuit Court of Appeals case that claims logging roads should be treated as industrial sites. The Ninth Circuit decision (which we last wrote about here) said that every stream culvert and drainage ditch on hundreds of thousands of miles of logging roads should require a permit. This would require not just hundreds of thousands of permits, taking a decade for the U.S. Forest Service to approve, but it would open the timber industry to thousands of lawsuits from environmental groups.

The Supreme Court today asked the Obama administration for its views on the issue, which legal experts say is a sign the highest court in the land will take up the case. While legislation is currently in Congress to overturn the Ninth Circuit decision, opponents — including the timber industry as well as 26 states — also were hoping the Supreme Court would hear the case.

“This is enormous. There are zillions of miles of roads and zillions of miles of culverts. How do you administer that?” said Richard Zabel, executive director of the Western Forestry and Conservation Association.

The (Supreme Court’s) request is a hopeful sign for the timber industry, which hopes the Supreme Court will review a prior ruling by the 9th U.S. Circuit Court of Appeals that would expand the Clean Water Act’s scope.

“It significantly increases the chances,” said Greg Corbin, an attorney representing timber companies in the case.

In anticipation of the Supreme Court weighing in, the Wall Street Journal and Washington Times both recently wrote about the case. The Journal’s editorial board said that environmental groups’ goal in the case is “to create enough delay and bureaucracy that timber harvesting will cease to be profitable.”

As a legal matter, the Ninth Circuit’s decision was a particularly blatant power grab in the kind of matter traditionally left to an agency with specific judgment and knowledge. In deciding environmental complaint cases, courts are supposed to defer to the Environmental Protection Agency, as long as the agency has acted reasonably.

Jim Petersen, the co-founder of Oregon’s Evergreen Foundation, wrote in the Times that the Ninth Circuit decision would “put federal courts into the business of managing every acre of privately owned timberland in America.”

Americans who love to hike will find it hard to believe that when they are out walking amid the splendor of their favorite forest they are, in fact, strolling through toxic industrial sites. In effect, that is what the 9th Circuit has said, and that is why the nation’s forest landowners are hoping the Supreme Court will rescue them from this new and astonishing display of legal revisionism and regulatory zeal.

As momentum builds across the West for an increased timber harvest to better manage forests, a new term has emerged: “chain-saw environmentalism.” The Salt Lake Tribune, in an in-depth story, says the movement is picking up steam nationally, as well as locally in an attempt to save aspen groves in Colorado.

Too late to head off a wave of climate-fueled beetles that have altered the evergreen landscape for generations — if not forever — foresters still believe they can rejuvenate this resort town’s namesake. They say the white bark and fluttering yellow heart-shaped leaves that announce fall in the Rocky Mountains are due for a pruning.

It’s chain-saw environmentalism, and some of the West’s most ardent wilderness lovers have signed on. They face strong opposition from groups that believe Mother Nature can best repair her own, and their struggle over how best to legally protect untrammeled wild lands will profoundly shape the future of these hills.

“It’s no longer as easy as just saying wilderness is good and everything else is bad,” said John Bennett, a former Aspen mayor and current executive director of the advocacy group For the Forest.

Many of the environmental groups that would have typically opposed such a move have now changed their mind.

Others who love wilderness, and indeed moved here to live among it, point to the bark-beetle infestation — which stripped more than 6 million acres of Colorado evergreens — as evidence such hard-line protections are outdated.

“I’m a total wilderness advocate,” said Tom Cardamone, who moved here to work on a student-led wilderness campaign in 1972 and now directs the Aspen Center for Environmental Studies [ACES]. “Also, I recognize the increasing importance of hands-on forest management.”

Even advocates of the increased harvest do not claim to have all the answers. But it’s clear that new solutions — without the hard-lines limitations of the past — are necessary to save the Colorado forests.