Forest Policy Update: Congress, ODF Budget, ESA, More

Update on Current Policy News Affecting Forest Business & Timber Supply
by Rex Storm, Forest Policy Manger
Associated Oregon Loggers,

Industry Exec Encourages Foresters: Allyn Ford, CEO of Roseburg Forest Products, addressed the Oregon Society of American Foresters annual conference April 29th in Canyonville.  Ford said that because the forest industry and world are changing dramatically, the best thing to do is to adapt.  To deal with the industry’s worst recession since the 1930s, forestry “has to be the best of the best.”  He believes we are up to the challenge.  “This is a time of great opportunity. The forest is good. The wood is good. We have a tremendous future. We’re not a dying industry. We’re a growing industry. Foresters now need to take more of a leadership role.”

Markets & Log Supply Impact Boise Mills: When Boise Cascade cut back to one shift at its Elgin stud mill and shut its LaGrande sawmill this spring, its decisions were driven by more than the current poor market conditions.  Inland Region Manager Tom Insko expressed concern over future availability of federal logs to supply the firm’s four mills in Union County.  “Without significant change in forest management activities on our local national forests, we’ll be hard-pressed to resume normal operations.”

Awful Regulations & Markets Shut Cal Mills: Sierra Pacific Industries announced permanent closure of four California mills, scheduled for May-July.  S-P cited a toxic hit from costly state regulations, a meager federal timber supply, low prices for lumber & power, and no outlook for improvement on any front.  Closures will layoff 460 millworkers and 500 woods-workers at sawmills in Camino, Sonora, Quincy, and a Sonora biomass power plant.  California’s timber industry has long been hemorrhaging under the nation’s worst government burden.

ODF Programs Face Budget Cuts: As Oregon’s economy continues to deteriorate, the OR Legislature has a forecasted $3.5 billion revenue shortfall for the 2009-2011 budget period.  Oregon Dept. of Forestry (ODF) will reduce spending for the next biennium, beginning July 1.  Although the ’09 Legislature’s budget wrangling over state agencies won’t conclude until late-June, the Joint Ways & Means Committee on May 15th proposed an $11.1 million General Fund reduction for ODF—or a loss of 108 jobs.  Combined with lost matching funds, the proposed budget would cut 65% from ODF’s private forest program, and 19% from fire protection.  AOL and industry allies are lobbying to seek greater funding for these necessary forestry programs.

State Forests Issue Layoff Notices: Because State Forest timber sale revenue has declined by 20% in the current biennium, and another 40% decline in the next two years, ODF will exhaust the forest development fund’s savings balance without prompt action.  ODF issued layoff notices to 40 State Forest employees May 20th, to be effective June 30.  The total reduction is actually 50 permanent and 30 seasonal positions working on State Forest management (10 positions vacant).  ODF will improve State Forest efficiencies, yet plans to reduce current timber sale levels somewhat.

Forest Service Boss Appointed: Homer Lee Wilkes was named Agriculture Undersecretary for Nat. Resources—the job that oversees the embattled US Forest Service.  Wilkes is currently Mississippi State Conservationist, and former 28-year veteran of USDA’s Natural Resources Conservation Service (NRCS).  Jay Jensen was also appointed as Deputy Undersecretary for Wilkes.  Jensen is supported by the forest industry for his experience, as director for Council of Western State Foresters and Western Forestry Leadership Coalition.  These Obama administration nominees will be watched closely by the forest industry.

AOL Tells Senator Bill a Loser: AOL joined several other Oregon forest organizations to inform US Senator Ron Wyden (D-OR) that his proposed ‘Oregon Restoration & Old Growth Protection Act’ would severely harm federal forests, the forest industry and the state’s economy.  Although he claims the bill aims to protect old growth and forest health, it would actually dictate just another defacto prohibition on federal harvesting.  Existing USFS timber sale contracts would be subject to contract termination within 120 days, and planned BLM harvest would drop by 400 million bf/yr.

ESA Rule Revoked: Interior Secretary Ken Salazar and Commerce Secretary Gary Locke announced that the improved Endangered Species Act consultation rule would be revoked.  This ESA upgrade was finalized by the Bush administration in December, and intended to allow the USFS and BLM timber sales to avoid costly species consultation with the USFWS and NMFS agencies.  President Obama had dictated that the Bush regulations be “reviewed”.  Interior and Commerce will conduct a joint review of the regulations to determine future revisions.

Fire and Climate Change: A report published in Science found that forest fires generate about half the world’s carbon dioxide. Wildfire’s smoke pollution role in climate change has been grossly underestimated, according to the report.  The report’s 22 authors from around the globe call for recognition of wildfire smoke in future models and reports.

True Cost of Wildfire: Western Forestry Leadership Coalition issued a report, ‘The True Cost of Wildfire in the Western US’, which demonstrates that firefighting costs amount to only 3% of total costs of forest fires.  The report examined the cost of major western fires, including firefighting, lost resources, business interruption and pollution.  The report encouraged greater investment in treating forests to reduce fire hazard, improve forest health, and improve the environment and economy.

FS Cuts Minimum Bid Price: Due to terrible lumber markets, the US Forest Service nationally reduced by 50% its minimum timber sale bid rate.  Minimum rates are now set at $5/hundred cubic feet(CCF), excepting $3/CCF for medium value species, and $1/CCF for low value species.  The BLM has not taken similar measures, which in the last few months has led to many no-bid BLM sales failing to find a buyer. Industry is working to convince the BLM to also reduce its minimum rates, because this barrier helps cause no-bid sales.

Merkley Wants Another Study: Oregon’s newest US Senator Jeff Merkley (D) introduced a bill, the ‘Sustainable Revenue for Oregon Counties Act’, which would create a 15-member task force to study and suggest fiscal solutions for Oregon’s federal timber-dependent counties.  Likely to be stacked with left-leaning anti-business folks, the committee would develop its politically-correct proposals for stable, long-term revenue for Oregon’s counties.  Currently-authorized county entitlement payments from the Federal Treasury end in 2011.

Enviro Zealots Block Green Zeal: In an unusual twist, a battle for the most politically-correct has begun over Central Oregon alternative energy proposals.  Harney County wind power and biomass electricity proposals on private land are already threatened by environmental groups.  Although the enviros readily encourage “alternative green energy”, green is alright only if a tree is never cut.  The power line needed to connect such a wind farm or biomass plant would cross federal BLM lands—and they oppose cutting 180 acres of juniper trees in the utility corridor.
Economy Above the Environment:  A March poll found that for the first time in 25 years Americans are more concerned about economic growth than the environment.  The results of the Gallup poll data could influence policy priorities for elected officials in the coming months, as Americans ranked economic growth far above environmental protection.

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