Stimulus Package Flash!!!
While it has not made the headlines, The American Recovery and Reinvestment Act does include forest projects for job creation. Nationwide, the stimulus plan calls for $500 million of expenditures by the BLM, and $1.15 billion by the US Forest Service to create jobs and improve forest health through hazardous fuel reduction, biomass grants, road construction, reconstruction, and decommissioning, bridges and trails.
Included in the Forest Service package is $250 million for expenditure on State and
Private lands for hazardous fuels reduction, forest health and ecosystem improvement
Activities. Up to $50 million can be spent on wood-to-energy grants for biomass
In addition to the Forest Service and BLM monies, there is an estimated $65 million for
Watershed Rehabilitation (construction) through the Natural Resources Conservation
Service (formerly the Soil Conservation Service), which may or may not be applicable
To projects on Douglas County.
How much of these $1.7 billion are spent in Oregon will depend on the timely application
With shovel-ready projects for these funds by watershed councils, state agencies, the
extension service, soil and water conservation districts, the National Forests, and BLM
districts, and private landowners.
Economic Picture…. The chart below is not a pretty site.
Studs made a small rebound of $10 per MBF, smaller than usual bump between December and January, which was $20 in 2006. This slight gain, is overshadowed by the dramatic increase in unsold home inventory which zoomed to 19 months in Portland (and 30 months in Douglas County!). These increases do reflect a typical increase of listings in January. More disturbing, the number of housing starts, which usually bumps up in January compared to December, decreased about 20% this year to 466,000 units, yet another new 50-year low. Finally, logs are still in a steep freefall that began in October of 2008. With the current product prices, mills are still struggling with log prices. Fortunately, the mills are in this business for the long haul.
BLM Timber Supply
Looking to the future for some positive news, the BLM’s newly Revised Western Oregon Forest Plans could be an exciting development for wood manufacturing and the counties of Western Oregon. Over 4 ½ years in the making, these are the most sophisticated forest management plans ever developed in the Northwest. While on the one hand they address issues of Fire, long term carbon storage, fish and wildlife habitat, and water quality, they more than double timber harvest and restore county timber harvest revenues.
The log production target for the 6 BLM districts in Western Oregon is a total of 588 Million Board Feet — enough timber to supply 6 sawmills year-round. A lot of this could come to mills in Southwest Oregon, from Eugene and south, because this substantial manufacturing capacity now resides. Mill operating costs are lowered when log supplies are available nearby, rather than hauling logs from Washington and elsewhere, which was so prevalent in the last 15 years during the strong economy, when mills were at capacity. The BLM has budgeted for, and begun the due diligence process of preparing environmental documents for timber sales.
What is the current status of the BLM District Plans? The Records of Decision have been signed and the BLM is currently operating under the new Resource Management Plans. The Northwest Forest Plan no longer applies to the BLM lands in Western Oregon. This is potentially a bit management improvement.
But, there are three current impediments to full implementation for timber harvest.
- First, there are currently 4 lawsuits are pending on the Records of Decision themselves, raising the question of whether and how long it will take for timber sales under the plan to be awarded. The current safety net that supplements harvest receipts for Oregon O&C counties runs out in 2011.
- Governor Kulongoski has also filed an administrative appeal, recommending that the Obama administration review the Records of Decision under the presumption that this would shorten the legal process. Past history suggests that no matter what the final plan, there will be a lengthy litigation process, and the Governor’s proposal would likely have the unintended consequence of slowing the implementation process down even further. The Governor’s administrative appeal awaits a decision by the Department of Interior. Under the Governor’s direction, ten (yes, 10!) state agencies were directly involved in the development of the new BLM plans. Some have questioned why that level of involvement was insufficient to satisfy the Governor that Oregon’s best interests are served by these plans.
- A final hurdle, as part of environmental due diligence, under the requirements of the Endangered Species Act, will be consultation with the US Fish and Wildlife Service on a sale-by-sale basis. According to Jay Carlson, District Manager of the Roseburg BLM, a major issue is the interpretation of what constitutes 40% suitable spotted owl habitat, which is a requirement within a full 2-mile circle around either existing or “presumptive” (suitable habitat for possible) owl nests. Since 57% of the BLM Roseburg District of 423,000 acres is already withdrawn completely from harvest management, the FWS will hopefully accept the BLM recommendations for habitat management of the owl circles in Timber Management areas. These recommendations were prepared with a multi-disciplinary team that includes owl and many other resource biologists.
Just how much timber do these BLM Plans produce? For perspective, industrial forest landowners, managing under Oregon’s rules for forest management (the Oregon Forest Practices Act), typically harvest over 3, and sometimes even 4, times as much timber volume as the new BLM plans, from equivalent acreage over time. This contrast results from the demands of resource allocations and the level of management efficiency on BLM lands today. Unfortunately, the US Forest Service has even greater resource allocation demands and is even further behind the BLM in management efficiency for timber production.
If the BLM plan does not get sidetracked in the courts, timber harvest and county harvest revenues from sales designed under the new Management Plans would start flowing from the BLM lands by 2010. This will be of great benefit to the economy of rural Western Oregon.
Data reports used with permission of:
1) Random Lengths. 2”x4”x8’ precision end treated hem-fir studs from southern Oregon mills. Price reported is Dollars per Thousand Board Feet for the most recent week.
One “board foot” measures 12 inches by 12 inches by one inch of product.
2) RISI, Log Lines. Douglas-fir #2 Sawmill Log Average Region 5 price. Current report is for the prior month. Dollars per Thousand Board Feet are reported by standard log measurements using the “Scribner log table.”
3 )Dept. of Commerce, US Census Bureau. New Residential Housing Starts and New Residential Construction Permits, annually adjusted. Current report is for the prior month. Recent reports are often revised in bold from the prior month.
4) Regional Multiple Listing Service RMLSTM data, courtesy of Janet Johnston, Prudential Real Estate Broker. Inventory of Unsold Homes (Ratio of Active Listings to Closed Sales) in Portland Oregon, for most recent month available.
© Copyright Rick Sohn, #2-2 Umpqua Coquille LLC. Email [email protected]
Disclaimer: Articles featured on Oregon Report are the creation, responsibility and opinion of the authoring individual or organization which is featured at the top of every article.