Truck taxes up 100%, Diesel up 17% and other bad news

by Rex Storm, Forest Policy Manager
Associated Oregon Loggers

Truckers & Loggers Swallow Oregon Tax Hikes: Effective Jan. 1, 2011, logging and trucking businesses across Oregon began paying the “phase 3” transportation tax increase, which was passed by the Democrat super-majority 2009 Legislature. This “phase 3” tax adds another 25% to statewide fuel & gasoline taxes, raising both taxes about 7 cents/gallon at the pump. Previously on 1/1/10, the ”phase 1” truck registration fee rose 104%, equivalent to about $500 per year increase for an 80k lb truck. Then on 10/1/10, the “phase 2” increase raised the weight-mile tax by 25%, about a 3.2 cents/mile increase for an 80k GVW truck. Additionally, truck flat fees jumped 25%, or about $1,192/year increase for an 80k truck. These taxes inflate the cost of hauling wood products from forest to market.

Diesel Price Shoots-Up: The average price of Oregon diesel fuel jumped 6 cents per gallon in the last month to $3.37 per gallon, according to AAA’s Fuel Gauge Report (12/17/10). This rate is 17% above diesel prices at this time last year. Oregon’s diesel fuel price at the pump ranks the 16th highest in the US, compared to the nationwide average of $3.26/gal. Oregon truckers and forest contractors will also be hit by new state fuel tax increases on Jan. 1st, which immediately pushed pump prices about 7 cents higher for highway fuel. Daily fuel & gas prices are reported online at:

New Biomass Plants: Two biomass cogeneration plants are under construction in Oregon. The 27-megawatt Lakeview Cogeneration Plant began construction in Nov., located next to the Collins Pine’s Fremont Sawmill. And the 19-megawatt Seneca Sustainable Energy plant began construction October 2009, located next to the Seneca Sawmill in Eugene. Operable in 2011 & 2012 respectively, both plants will consume primarily mill residues and purchased hogg fuel from mills & harvest slash—burning it to produce mill electricity, heat for lumber dry kilns, and power sold to utilities.

BLM Forest Pilot Projects: Representatives of Oregon’s timber industry, environmentalists, academics, and westside timber counties met Dec. 8th in Washington, DC. The meeting, with Interior Secretary Salazar and Bureau of Land Management officials, discussed how to develop two pilot harvest projects in Oregon BLM forestlands—Roseburg District near Canyonville and Medford District near Ruch. The projects would test partial cutting methods in old growth forests, which would somehow satisfy environmentalists, ecologists and politicians alike. The participants also debated principles for re-writing the BLM’s Western Oregon forest plan. It remains to be seen whether the lofty ideals of participating academics and environmentalists can be translated into two actual timber sales within the promised 18-months.

Business Summit Urges Changes: Oregon is headed for an even greater fiscal catastrophe than its present dilemma, unless policymakers execute dramatic changes in government spending, services, and policies—business leaders told state officials at the annual Oregon Business Summit, held in December. “Oregon is no longer a special place. The state is in decline,” said Pat Reiten, Oregon Business Plan chair and Pacific Power president. Governor-elect Kitzhaber agreed, saying he would work with business to boost the economy and make state government more efficient.

Business Summit Plan: A statewide business plan circulated at the OR Business Summit calls for creating 25,000 jobs/year for 10 years, and for raising Oregon’s sub-par per capita income above the national average by 2020. To get there, the plan says, the state must change many policies necessary to offer a more business-friendly atmosphere. The plan recommended taking actions such as cutting capital gains taxes that hinder business growth, and changing land use prohibitions that limit investment expansion. For information about the plan online:

Oregon’s Rural-Urban Divide: A post-election poll shows deep rural, urban divide in Oregon. November’s election was more about a rejection of Democrats and their policies than an endorsement of Republicans—according to a poll released in December by Oregon Public Broadcasting and Fox 12. The poll also found deep political differences between voters in cities and people living in the rural parts of the state. OPB reports that there was some agreement among Oregonians as to what the 2011 Oregon Legislature might do to address state finance deficits: cut spending.

2011 Oregon Legislature to Cut Spending: The state economist announced Nov. 19th that state revenue forecast is down $1.05 billion from income taxes and lottery, since the close of the 2009 legislative session. Revenue projections for 2011-13 also declined by another $272 million. This revenue forecast shows that state government must cut spending in the coming years. Past Democrat-majority legislatures had repeatedly increased spending through higher fees & taxes, borrowing, and one-time federal funds. The 2011 legislative session must cut spending and reform its budgets.

D.R. Johnson: November 25th Oregon lost a timber icon, when Don R. Johnson passed away in Roseburg, at age 83. Over several decades, he built a statewide sawmilling outfit, which includes D.R. Johnson Lumber, Riddle Laminators and Umpqua Lumber in Riddle, Prairie City Wood Prod., Grant Western Lumber in John Day, biomass co-gen plants in Riddle & Prairie City, and the former Wallowa FP and N. Powder Lumber. He also owned timberlands and cattle ranches for over forty years. His companies are sponsors of many local community activities.

Institute Gets New Board Members: Jennifer Beathe and David Schmidt have been appointed to the 13-person board of directors of the Oregon Forest Resources Institute. They replace retiring board members Pete Sikora and Sara Leiman. Beathe is a forest engineer at Starker Forests in Corvallis. Schmidt is a tree farmer, forester and past Linn County commissioner. Ray Jones and Bill Kluting were appointed to second terms. OFRI is the agency dedicated to forestry education, which is funded by a portion of the timber harvest tax. Learn more about OFRI online at:

Biomass with Sawlog Harvest: Woody biomass power is a value-added energy source, when paired with sawlog harvest and forest product manufacturing. While biomass power boilers have been common at Oregon timber mills for decades, fewer than 10 “cogen” biomass plants at timber mills sell excess power to utilities. To be cost-efficient, biomass production must be matched with high-value wood manufacture, transportation sharing, and renewable energy subsidy. Feasible biomass sources are timber mill residue, easily-accessible harvest slash, and wood construction waste.

Federal BCAP Biomass Funds: Created by the 2008 Farm Bill, the Biomass Crop Assistance Program (BCAP) is expanded in 2011 to include $196 million nationwide to stimulate renewable forest biomass utilization. BCAP provides equal matching payments to a material owner—of up to $45 per bone dry ton—delivered to a qualified biomass conversion facility. Eligible biomass must be pre-certified as harvested under an approved conservation plan. BCAP requires a sizable paperwork commitment, which is administered by the USDA Farm Service Agency in each state. The BCAP website is at: A fact sheet is online at:

Why Biomass? Biomass power is proven technology and a renewable energy resource grown in trees. Wood waste is an abundant, cost-competitive, and environmentally friendly biomass fuel. Wood biomass power helps with America’s energy independence, contributes to Oregon’s renewable energy portfolio requirement, creates jobs and improves feasibility to thin overcrowded small-diameter forests. As might be expected, many so-called environmental organizations wrongly oppose biomass power, as they complain of alleged air pollution, old growth loss and habitat impacts.

States Industries Restructures: To emerge from Chapter 11 bankruptcy, States Industries Inc., in Eugene, has been acquired by States Industries LLC, a subsidiary of Renovo Capital and Rosewood Private Investments. States continues to manufacture hardwood paneling using softwood inner veneer plies.

Wood Lab Innovation: On its 100th anniversary, the Forest Products Laboratory (FPL) in Madison, WI just opened a new 90,000 sqft research facility, adding to its capabilities. The shining star of the US Forest Service, the FPL is known for innovating or advancing wood products and uses, including railroad tie preserving, wood aircraft parts in World War II, plywood, wood drying, pre-fabricated housing, paper packaging, improved sawmilling methods, engineered products such as glu-lam and composites, biomass uses, and many other wood-based technologies.

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