Industry: Tongass timber forecast flawed

  • In this May 29, 2015 photo, Kelsey Kennedy works a lumber mill at Tenakee Logging Company Management in Corner Bay as Sterling Chew, son of co-owner Gordon Chew, looks on. The Alaska Forest Association is criticizing a recent U.S. Forest Service demand forecast that its executive director says is too low because of restrictive federal regulations. Photo/Mary Catharine Martin/Capital City Weekly

A U.S. Forest Service study projects growth in Tongass timber harvest over the next 15 years, but leaders of Alaska’s timber industry are saying the forecast is still too low.

The draft Tongass National Forest Timber Demand report calls for a timber harvest increase from fiscal year 2014 of nearly 25 percent by 2030 on Tongass lands. Southeast mills took 39 million board feet of lumber from the national forest in 2014; the 2030 harvest is forecasted to be 51.8 million board feet.

Alaska Forest Association Executive Director Owen Graham argues the demand analysis is based on a restricted timber supply, which artificially limits demand for Alaska forest products.

“The analysis attributes the supply constraints to federal budgets and (National Environmental Policy Act) issues, but fails to acknowledge that its self-imposed standards and guidelines for its timber sale program have greatly increased the cost of harvesting timber sales,” Graham wrote in formal comments about the study. “These high costs are one of the primary reasons the agency has been unable to prepare economic timber sales.”

Agriculture Secretary Tom Vilsack issued a memo in 2013 expressing an intent to transition to young-growth harvest in the Tongass National Forest within 15 years. That transition would be faster than was prescribed in the 2008 Tongass Forest Plan.

Graham has said the industry needs to harvest at least some old-growth trees for about another 30 years to allow young, or second-growth, stands to fully mature, which takes about 90 years for most trees in Southeast Alaska.

Young-growth stands are often more dense and thus hold more board feet of raw lumber. However, Alaska’s downsized timber industry in recent years has survived on high-value, “shop grade” lumber products from large spruce and hemlock trees harvested from the Tongass.

Southeast sawmills will not be able to manufacture that high-value lumber from the 60-year-old, young-growth trees that would be available under an expedited shift away from old-growth harvesting, according to Graham.

“The spruce custom-cut lumber that currently enjoys very high prices in the Pacific Rim markets will no longer be produced. Likewise, since shop grade hemlock lumber requires logs that are at least 16 inches in diameter, this high value lumber will also disappear,” he wrote. “What the (demand forecast) is missing is the most likely outcome of the transition strategy — the end of timber manufacturing in Southeast Alaska.”

Allowing young-growth stands to mature another 30 years to age 90 would roughly double the harvestable volume per acre usable for Alaska mills, Graham said.

Smaller logs can be exported to other markets, but that eliminates the value-added sawmill industry from the logging process, he said.

The study forecasts the total Southeast timber harvest will increase from 120.6 million board feet in 2015 to 155.1 million by 2030. That includes timber sales from state land and Alaska Native corporation property, primarily the area Native regional corporation Sealaska Corp.

Nearly all of the harvest increase will come from logs meant for export — 31 million board feet of the overall Southeast harvest increase of about 35 million board feet is in the form of export saw logs, based on the Forest Service projections.

Sealaska, which gained 68,000 acres of formerly Tongass timberland in a conveyance from the federal government last year, exports nearly all of its timber as raw logs because it cannot process the logs in Alaska economically. Sealaska CEO Anthony Mallott has said the company wants to add timber processing and the new acreage will be an opportunity to study the economics of its entire timber business model.

The study projects harvest from Southeast Alaska Native corporation lands will increase from 61.5 million board feet in 2015 to more than 80 million board feet 15 years later. Graham contends Sealaska is the only major private timberland owner in the region.

According to Sealaska, it can now maintain an average harvest of 45 million board feet for the next 25 years, stretched from earlier projections of 45 million board feet 15 years.

Sealaska is also interested in bidding on up to 20 million board feet per year of harvest from public lands.

Further, Alaska’s Southeast State Forest has a maximum sustainable harvest of about 12 million board feet per year, according to state Forestry Director Chris Maisch. The study projects harvests from State of Alaska lands in the region to grow from 18.2 million board feet to 23.1 million board feet over the 15-year study period.

The Alaska Mental Health Trust Land Office occasionally offers large timber sales upwards of 50 million to 60 million board feet from its Southeast properties. However, Trust Land Office Resource Manager Paul Slenkamp said the large sales are sporadic and none are expected for the next three to four years.

Southeast Alaska’s timber industry is a shell of its former self. Average annual harvest from the Tongass ranged from about 280 million board feet to more than 400 million board feet during the late 1980s and early 1990s. The last year timber harvest from the 17 million-acre national forest exceeded 100 million board feet was 2000, which was the last full year before President Bill Clinton issued the Roadless Rule, restricting access to undeveloped tracts of national forests.

At its peak, the industry supported more than 4,000 jobs in Southeast, today that number is down to about 300, according to Graham.

Study co-author Jean Daniels, a federal research forester, said the demand forecast is a continuation of trends seen in related markets after the global recession in the late 2000s.

The study was also kept independent from the Tongass Land and Resource Management Plan ongoing update process, Daniels said.

“For the most part we tried to stay as separate from what was going on with the (Tongass environmental impact statement) process as possible to try to be as unbiased as possible with the results of the analysis,” she said.

The Alaska Region of the Forest Service released a draft environmental impact statement for the Tongass Management Plan in November. The plan amendment calls for continuing the 15-year transition to young-growth harvest in the Tongass.

Susan Alexander, a manager in the Forest Service’s Pacific Northwest Research Station, also helped pen the demand forecast study and said that Graham is looking at the forecast from the supply side, while the Forest Service attempted to figure out demand for all West Coast timber markets, with Alaska and the Tongass harvest subsets to the larger picture.

“It’s a demand side analysis and I think that is sometimes confusing for people in Alaska who think that the supply equals demand, but it doesn’t, not from a theoretical standpoint,” Alexander said in an interview.

Alexander and Daniels said they viewed Alaska as if timber supply was unconstrained and concluded that the cost of transportation has simply pushed Alaska out of the West Coast market.

Demand is growing for lower value construction-grade lumber, but Alaska mills simply can’t compete with the rest of the Pacific Northwest.

“Washington and Oregon have made all of the industry retooling necessary to be competitive in commodity markets and that’s a dimension lumber market where you’d be a price taker and Alaska has always been more competitive in the high-quality, shop-grade lumber,” Daniels said.

Revamping Alaska sawmills to process dimension, or construction lumber from smaller young-growth trees would require hundreds of millions of dollars of investments and extremely high volumes of timber, Graham says. Additionally, those mills are highly mechanized, mostly eliminating the benefit of jobs in the industry, he argues.

Alaska’s congressional delegation has criticized the Forest Service for pushing a quick transition to young-growth timber in the Tongass without helping Southeast mill operators transition their operations.

 

Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.

Updated: 
01/20/2016 - 1:47pm

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