Timber split


0413 TimberSplit 01Efforts to balance logging and environmental issues move forward in eastern Oregon as gridlock continues in the west.

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BY DAN COOK

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Above: The D.R. Johnson Lumber Company closed its Prairie City dimensional lumber mill in 2011, citing a lack of log supply from nearby federal forests.
// Photo by Mike McMurray
Below: Little Beaver Creek Tree Farm, just west of Forest Grove, Washington County, is one of several forest properties owned by Anne and Richard Hanshu.
// Photo by Oregon Forest Resources Institute
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In John Day last August, the Ochoco Lumber Company was looking for allies to help keep its milling operations open. Steve Pedery, conservation director for Oregon Wild, was there to lend his support. Pedery had spent years at odds with timber companies. In eastern Oregon, however, a consensus around forest management has been building among politicians, wood products companies, environmentalists and local communities. Pedery is among those on the conservation side (including the Nature Conservancy) who believe an increased timber harvest on federal lands will lead to healthier forests. So he was happy to ally himself and his organization with the timber company.

But in western Oregon, prospects for such a coalition remain dim. “There will continue to be this knock-down, drag-out fight in western Oregon over the logging of large- diameter trees,” he says.

Most people associated with the attempts to balance logging and environmental concerns in Oregon’s forests agree with Pedery: Progress will be made in the east while gridlock will prevail in the west. That there has been any movement at all toward a consensus can largely be attributed to the efforts of U.S. Sen. Ron Wyden. He has persistently pushed for federal legislation to open up federal forestlands to more timber harvesting.

Now, as chairman of the Senate Committee on Energy and Natural Resources, he has the power to steer a groundbreaking forest-management bill first introduced three years ago through the committee and onto the floor of the Senate. There, chances are good that it will be positively received. If Wyden can drive his plan, called the “Oregon Eastside Forests Restoration, Old Growth Protection, and Jobs Act,” through the legislative process, Oregon may at last have a road map for where the state’s wood products industry is headed. But the likelihood is that the drama will unfold very differently in the two halves of the state.

The efforts of Gov. John Kitzhaber must be recognized as well. Kitzhaber has become the champion of timber interests and rural communities ravaged by the industry’s decline. He has offered a “menu” of actions and policies designed to lead to increased harvesting, especially in the west. But Kitzhaber’s strategy remains more a theoretical range of options than a concrete plan. While it has inspired hope in the hearts of many who advocate for more felled trees, it has yet to take any actionable shape.


To understand why forest management in eastern and western Oregon will probably take different paths, start with some background on the state’s timber industry. First, contrary to what many may believe, many on the industry and environmental sides say the state’s wood products industry is not dead — far from it.

Although many mills have shut down in the last 15 years, between 1995 and 2012 the timber-processing capacity of the remaining large mills increased 25% above the industry’s 1995 levels, according to environmental consultant Andy Kerr, owner of the Larch Company, an Ashland-based conservation group. Numerous mill owners have retooled their operations to be more efficient and to be able to mill smaller-diameter logs, which is where the industry is inevitably headed. And as old markets dwindle, such as plywood and U.S. home building, new ones are emerging, biomass and Chinese home builders among them.

“Housing starts have been extremely low for years,” says Jennifer Phillippi of the family-owned-and-operated Rough & Ready Lumber in Cave Junction. “But family formations continue, which will translate into a pent-up demand for new homes that is bound to explode. So we see a bright future for our industry here, if we can get some of these issues worked out.”

As Phillippi points out, the industry may have stagnated, but there are still lots of trees in Oregon to be harvested under the right conditions. Still, the changes that have washed over the industry have taken a toll on jobs and dollars flowing into rural economies. The industry’s infrastructure has been badly undercut, and key players in the debate over harvests remain dug into their positions. Around the state, the sector has essentially been on hold for years, awaiting some guidelines that would allow it to either proceed or continue to consolidate.

To move forward with harvesting, it may simply be unfeasible to try to satisfy all the parties at the timber table, says Kerr. “There is a bright future for the forest products industry in Oregon,” Kerr says. “But the industry won’t look the same as it did before the spotted owl.”

The industry will also look different in the eastern and western parts of the state. The reasons for those differences are rooted in geography and industry infrastructure capacity.

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Dry-side federal forest after receiving a restoration treatment near Sycan March, Klamath County.
// Photo by Oregon Forest Resources Institute

Eastern Oregon is dominated by ponderosa pine forests where old growth barely exists. These forests are mostly federally owned and managed. They are largely dry and considered unhealthy by environmentalists, who cite an overgrowth of young trees that represents a fire hazard and crowd out the remaining old-growth stock. The infrastructure has also been seriously damaged; with most federal forest closed to logging, the mills disappeared.

In western Oregon, by contrast, state and private ownership of the predominantly Douglas fir forests nearly equals the percentage controlled by the federal government. While considerable old-growth stands remain, there are also plenty of medium-sized trees that could be cut without setting off “old-growth” alarms. These forests are wetter than in the east and are generally seen as healthier.

About that infrastructure: Although most of the mills in the east have closed, some five dozen still operate in western Oregon. The ones that survived the ravages of the spotted owl restrictions in the 1990s and the recession tended to have very deep pockets; many invested in new equipment and the latest technology.

Among the surviving mills are nine of the state’s largest operators — including Rough & Ready — which have been branded “dinosaurs” by Kerr. These operators, longtime timber harvesters like D. R. Johnson, Herbert Lumber and Swanson Brothers, are still geared up to process larger logs. Although there is considerable resistance across the region to these harvesting practices, the “dinosaurs” wield lots of political clout — one reason why gridlock in the west is expected to persist going forward.

Wyden and Kitzhaber’s proposals are unfolding in this bi-state environment. Due to fire danger and the almost complete decimation of the industry in the east, Wyden has enjoyed a fair amount of success brokering a truce among environmentalists and timber companies in that part of the state. The key to the compromise he proposes is the thinning of younger trees in parts of forestland that were clear cut.

By thinning the younger trees and removing the underbrush, known as biomass, the forest becomes healthier for the older trees, fire danger is reduced, and it is a better habitat for wildlife. There’s a market for these younger, smaller-diameter conifers — not as strong a market as exists for bigger logs, but a market that does not face as many of the environmental and regulatory obstacles. Wyden’s bill died in committee the first time around. Now that he chairs the Energy and Natural Resources committee, the bill should at least get out of committee and onto the Senate floor.

The bill “is a peace treaty that will lead to significantly more logging in eastern Oregon,” says Kerr. “At the same time, it calls for astute conservation and restoration of the forest.”

Even without the legislation, more milling is about to take place in the east. The Forest Service is considering a 10-year “stewardship” contract in the Malheur forest region, where a timber company would be assured of access to timber through a thinning and cleanup plan. This contract would be a true test of whether the forest- maintenance strategy can allow timber firms to operate profitably.

Ochoco Lumber is the likely candidate to be awarded the contract. After it threatened to close its last mill in John Day, last summer, Wyden and others encouraged the Forest Service to open up some timberlands to harvesting. Today Ochoco’s president, Bruce Daucsavage, is highly optimistic that his company will be able to turn a profit from the thinned trees and the biomass they would gather. “Frankly, we will not survive without those logs,” he says.

But in the west, a cadre of influential timber industry executives like Jennifer Phillippi takes exception to Wyden’s solution. They argue that without harvesting a certain percentage of larger-diameter trees (not necessarily old-growth trees, Phillippi says), their businesses can’t remain viable.

Phillippi says Rough & Ready’s primary tree supply comes in the 22-to 24-inch diameter range — far short of the 60 inches that defines old-growth trees. But the trees that are generally included in thinning proposals are less than 20 inches. Those trees are unsuitable for many of the lumber markets Oregon’s companies serve, she says.

The many western Oregon rural communities that have been devastated by the wood products industry decline also want to see forests opened up to more large-diameter harvesting. These communities received substantial federal subsidies to offset timber losses, thanks in part to Wyden’s advocacy for the funds. But those have now been eliminated; the small towns are essentially broke.

Timber companies and rural officials in the west were buoyed by the recent proposals floated by Kitzhaber, who has suggested that a return to more aggressive logging, including harvesting more old timber, would revive the timber industry and pump badly needed funds into the rural communities. In the west, Kitzhaber has become the champion of the industry.

For their part, environmentalists have vowed to fight Kitzhaber’s proposal on grounds it would threaten old growth and mature forests. Industry representatives are also poised for confrontation. Jim Geisinger, executive vice president of Associated Oregon Loggers, for one, believes it’s time to mount a serious challenge to the grip environmentalists have held on western Oregon logging policies.

“Natural resources are what run the state’s economy. Federal forests used to provide 60% of our products. Now it’s only 10%, and we’ve got to move that pendulum back a bit,” Geisinger says.


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Warm Springs Forest Products Industries supplies its mill in Jefferson County with logs from both eastern and western Oregon.
// Photo by Oregon Forest Resources Institute

Given the polarization in the west, there is some debate about whether Kitzhaber’s proposal will ever take off. And even in the east, Wyden’s proposed legislation does not satisfy everyone. Many timber officials grumble that Wyden threw the industry a bone; the “stewardship” strategy gave the environmentalists everything they asked for, including protection of larger trees, no clearcutting and other measures to protect watersheds and wildlife.

There are other unknowns, including the U.S. Forest Service and Bureau of Land Management, which control 60% of all Oregon forests and 70% of the forestlands in the east. They would have to agree to increased logging. The Malheur contract would also have to be the first of many to reignite the industry. Loggers and mill workers have retired or moved away, so their ranks would need to be filled once again for the plan to work.

Many of the mills that once finished eastern Oregon trees have closed, and substantial investment dollars would be needed to re-create the infrastructure, adds Charles McKetta, a principal with the Boise-based consulting firm Forest Econ and a co-author of The 2012 Forest Report for the Oregon Forest Resources Institute — a document that goes to great lengths to outline the east-west divide. Mill investors are leery because of the uncertainties surrounding the timber harvesting issue and the viability of thinning strategies as the key to reviving the industry, McKetta says.

Despite these hurdles, many believe stewardship/maintenance is the first step toward a harvest compromise in the east — a first step that has yet to be taken in the west. In the end, it’s hard to escape the irony of that geographic split. In the east, where the industry has been decimated by years of logging restrictions, a clear and undeniable crisis exists. Now a model for reviving that region’s industry is emerging. Environmentalists, timber executives, politicians and community leaders are finding a meeting of the minds and are cautiously moving ahead with a strategy that could — could — create jobs, produce taxes, support communities and restore bone-dry, choked, fire-prone forests to health.

But in the west, where the infrastructure to support tree harvesting and processing remains largely in place, where trees continue to be cut, though in declining numbers, the crisis is not so palpable. The parties are dug into their positions, extremely wary of one another. The industry staunchly defends its right to harvest larger timber, while conservation groups just as steadfastly marshall the forces to thwart them. Meantime, mills run at far below capacity as communities slip further into poverty.

Wyden and Kitzhaber’s proposals both acknowledge that the disparate parties involved in the timber harvest debate share common interests. The environmentalists want healthier forests, the mill owners want trees, and stewardship means removing and processing trees and reinvigorating the forests. But whether a settlement in western Oregon can be negotiated in the absence of a complete industry collapse remains a troubling question. Meanwhile, in the east, the opposing parties seem to have reached an understanding — that a crisis is too good an opportunity to waste.

Dan Cook is a Portland-based freelance writer. He can be reached at [email protected].