Forest reopened for lumber stirs debate

Sale is one of 10 the U.S. government has allowed companies to walk away from

Posted: Tuesday, August 03, 2004

TONGASS NATIONAL FOREST - Old-growth hemlock and spruce trees, enough to build a suburban subdivision with 30 homes, have been clear-cut and left to rot here at the northern end of the nation's largest national forest.

The trees - some of them stripped, stacked beside a new road and awaiting a logging truck that apparently will never come - are the abandoned tail end of a timber sale that, on the front end, earned the U.S. Treasury about $45,000 but cost American taxpayers about $2 million to set up.

That sale is one of 10 that the federal government, in an attempt to keep the timber industry above water, has this year allowed local companies to walk away from.

"It seems crazy to me," said Floyd Peterson, a Hoonah commercial fisherman. "Why do the politicians want this timber cut, when there is no market for it?"

The abandoned sale, known as the Humpback-Gallagher sale, is part of a U.S. Forest Service logging program that, on an annual basis, is costing the federal government between $30 million and $35 million more than it collects in timber sales.

Even with the subsidy, local logging companies are struggling to make a profit in the 17-million-acre Tongass. Republican budget hawks in Congress have begun joining with environmentalists in questioning subsidized road-building and logging in the forest. The House, with bipartisan support for a Republican-sponsored amendment, voted in June to ban federal funding for all new logging roads here. The Senate has yet to vote on the matter.

The conservative National Taxpayers Union said recently that if logging is not viable here under market conditions, "then taxpayers should not be expected to fund operations of these private companies."

Environmental groups have long maintained that large-scale logging in the Tongass, the world's largest intact temperate rain forest, is ecologically destructive and economically nonsensical.

That criticism has angered logging company owners and frustrated Forest Service officials. They say the shrinking timber industry in southeast Alaska is at risk of disappearing altogether, not because it cannot produce lumber at a profit, but because decades of environmental lawsuits and fickle federal rules have made it impossible to manage a business that can adapt to the global market.

Referring to the felled and abandoned logs at the Humpback-Gallagher sale, Forrest Cole, supervisor of the Tongass for the Forest Service, said: "It makes me want to throw up. It makes me sick to see the product left behind, but it also makes me sick to see how we got to this point."

How the Tongass got to this point is a convoluted tale, governed by shifting, sometimes contradictory regulations about how to run a federal rain forest.

The story, too, has been shaped by increasingly cutthroat world competition in the forest products industry and by the rise of the lucrative cruise ship business in southeastern Alaska.

Cheap timber from Russia and South America has conspired to make logging in this forest - always saddled with labor and transport costs that are among the world's highest - even less competitive as a market commodity.

Meanwhile, cruise ships have made the forest an eco-destination for tens of thousands of summertime tourists who don't come to see clear-cuts striped with logging roads.

As one of its final acts, the Clinton administration closed off about 60 million acres of federal forestland to new roads, effectively preventing new logging or mining. That order fenced off 9.4 million acres of the Tongass, depriving the Forest Service of three-quarters of the land it had been managing for logging.

The Forest Service says the changing regulations have played havoc with long-term plans for logging.

"We have gone from a full pipeline of timber sales down to absolutely nothing," Cole said. "We are working frantically to make new sales. How much economical wood do I have to offer now? The answer is less than sufficient to keep the two mills operating."

But if wood is in such short supply, why were felled logs left to rot this year at the abandoned Humpback-Gallagher sale?

Cole and logging company owners say that abandoned sale and the nine others abandoned since January were put together by the Forest Service at a time when the federal government was trying to discourage logging. They said those sales are "uneconomic" because they are on inaccessible terrain with thin tree cover and are too far from sawmills.

"We should never have bid on them," said Steve Seley, president of Pacific Log and Lumber, the largest operator in the Tongass. He canceled a purchase of 17 million board feet of federal timber this year, after concluding it was too far away from his mill to be cut profitably. "We were too optimistic. We wanted to keep our people employed."

Sen. Ted Stevens, R-Alaska, chairman of the Appropriations Committee and a champion of logging in the Tongass, made these contractual escapes possible by attaching a rider to last year's appropriations bill. The Bush administration then endorsed the measure.

The rules of the forest are again changing, thanks to the Bush administration.

The administration exempted the Tongass from Clinton's roadless rule last December - and on July 12 it proposed overturning the rule in all federal forests.

Environmental groups opposed the latest round of rule changes in the Tongass.

"There is more than enough timber available from existing roads to fully supply the timber industry at levels they have been cutting in recent years without building new roads," said Tom Waldo, a staff attorney at Earthjustice, which is suing the Forest Service in federal court in Alaska.

The suit claims that the Forest Service, in part to justify its own large payroll in southeast Alaska (about 500 employees), chronically overstates market demand and wastes money preparing timber sales that are not needed.

Logging company owners and timber industry groups say the market is not glutted and that they have found a profitable specialty market in the Lower 48 states for doors, moldings and windows.

To exploit this market, the industry needs timely access to a million more acres of old-growth timber in the Tongass, much of it in areas that are now without roads, said George Woodbury, president of the Alaska Forest Association, a trade industry group.

"The rest of it can stand untouched," he said.

Environmental groups describe this request for 1 million more acres of land is unnecessary, given world markets and the shrinking local logging industry.



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