Hello everyone – below is a weekend Oregonian article regarding the timber industry situation in Oregon and environmental groups response to current situation.  It is worth noting that there are currently only four operating sawmills in eastern Oregon (Grant County had that many mills less than 10 years ago).  Also below are the comments from readers posted regarding the story.  The story and the comments (or to post a comment yourself) can also be found at the following link.   

Fall in wood products market redirects environmentalist strategy

Joe Brugger, The Oregonian 12/20/08

You might guess environmental groups would be glad timber prices have collapsed to where loggers' chain saws have fallen silent and sawmills are shutting down.

Instead, they're nervous. If logging doesn't pay, the same timber companies some environmentalists have blamed for ruining the forest may get rid of the forest -- selling off their prime real estate. Then subdivisions could grow instead of trees, absent the wildlife, clean water and other benefits forests typically present.

Oregon Forest Ownership (map does not show federal wilderness withdrawn from harvest) 

A rising number of environmental groups now want to help the timber industry stay in business by providing funds or other support. The question is whether they can save timber companies and mills reeling from the collapse of housing and construction.

"It's a new day -- it's a new landscape," said Guido Rahr, president of the Wild Salmon Center in Portland. "We have to realize private-land timber companies are our friend. Once land gets broken up into smaller pieces, our ability to protect it is eliminated."

Though some logging practices can harm fish, he said, the loss of forests altogether is much worse. That's even more true as trees are increasingly counted on to soak up greenhouse gases that contribute to global warming.

Some land conservation groups such as Ecotrust, The Nature Conservancy, The Conservation Fund and Pacific Forest Trust have for years tried to protect prime forest by buying it or purchasing easements that limit development. But they cannot alone safeguard enough land.

"We do not at this point have the capital to be meaningful players," said Lawrence Selzer, president of The Conservation Fund, which is based in Arlington, Va. He said the solution is to work with large forestland owners to help them profit from their forests so they do not sell the land off.

An estimated 1.5 million acres of forestland is lost in the United States each year, said Constance Best, co-founder of the Pacific Forest Trust. So far, Oregon has not seen as much loss as many other states. Trees grow so well in Oregon it often makes more financial sense to hold onto the land.

But as population grows and expands into rural areas, the real estate value of land may increasingly outweigh its value as forest.

Radical rethinking

Holding onto working forests is the single largest conservation challenge facing the country, Selzer said. But some environmental groups have focused so much on trying to block activities such as logging, he said, they have a hard time shifting their sights to support continued cutting.

"The environmental community has spent 40 years perfecting the art of saying no and has almost no ability to say yes," Selzer said.

However, Doug Heiken of Oregon Wild does not see a high risk of forest sell-offs in Oregon, as long as land-use laws keep it under control. He said it's more important to reform clear-cutting and road-building practices, and warned about promoting the business prospects of timber companies.

"I'm a bit hesitant to make forestry a highly profitable enterprise, because it means there's going to be more logging," he said.

The financial argument for maintaining private forests has steadily weakened for years, as wood that grows quickly in far-flung places like Brazil filled the world market and pushed timber prices down. That's good for consumers, but not for forest owners hoping to profit from long-term forestry.

In pure dollar terms, with forests, "you're almost always better off selling it versus holding it," said Matthew Donegan, co-president of Forest Capital Partners, a Portland investment firm that owns and manages more than 2.5 million acres of forest around the country.

Forest Lands: Harvest vs. Selling – Lumber Value 

In Idaho, the company calculates that selling forest outright would bring in 6.5 times more money than holding and harvesting it over the long term. In western Oregon, the payoff is not as great -- selling brings in only 1.5 times more than holding the land.

That's because Oregon's land use controls make real estate development less lucrative and because trees grow well on the wetter west side of the state, Donegan said. Forestland loss has been minimal in western Oregon.

The picture is different in northeast Oregon, though. Trees grow more slowly and sawmills have shut down, so it's more difficult to make logging pay. There, selling forestland generates almost three times as much revenue as holding it over the long term.

Support industries fade

That illustrates the importance of holding onto logging infrastructure, including sawmills and a work force, in rural areas. In eastern Oregon, public lands are the main source of timber, but logging levels have dropped.

"Where are we going to get our loggers, where are we going to take our logs?" Donegan said. "Sure enough, those lands get developed because there's no other economic opportunities."

Traditional timber companies such as International Paper have sold much of their land to investment companies known as Timberland Investment Management Organizations and Real Estate Investment Trusts. Often the choicest parcels -- where new homes could be built -- are separated and sold on their own.

Though some of the investment companies aim to hold forestland for the long term, others may be more focused on generating revenues for investors.

"They are not generally long-term owners or long-term stewards of the land," Selzer said.

The reason some forest owners maintain working forests is mainly because it diversifies their investments -- and because they like owning forests, Donegan said.

"Most forest owners want to own forest and want to hold it and are looking for an excuse to hold it," Donegan said. "And yet, if a piece of land is worth 10 times more selling it than holding it in the long term, how can I handle my fiduciary responsibility if I'm blind to that?"

He has identified four main strategies to close the gap in revenue between selling and holding forestland:

• Boost the profitability of timber by growing it faster or more efficiently.

• Generate more revenue beyond the timber. Forest owners might be paid for the greenhouse gases soaked up by their trees, for instance.

• Sell development rights to the land. For example, conservation groups may buy easements that provides forest owners revenue while they give up the right to develop the land.

• Restrict development through zoning, so it's not as profitable.

Some form of all the strategies are in play around the country. For example, Minnesota pays Forest Capital Partners $7 per acre of forestland per year in exchange for the company's commitment to manage the land sustainably and allow public access for recreation.

He said such land conservation moves have become a major source of pride for the company.

In 2001, the Pacific Forest Trust protected 7,200 acres of Douglas fir and hemlock forest in Lincoln County, known as the Van Eck Forest, with a conservation easement that prevents development but promotes sustainable forestry.

Additional logging regulations could make forests less profitable and lead to more land sales, said Ray Wilkeson of the Oregon Forest Industries Council. It could also resurrect a version of Measure 37, which was supported by timber companies, opening the door to more development.

He said his group will ask the Legislature next year to give forest owners more protection from regulations by allowing them to make claims for lost revenue caused by any new regulations in the future.

Polling by the forest industries council over the past 10 years shows that Oregonians did not support bans on clear-cutting -- a profitable logging practice -- if it means the land could be sold for development.

"They may not like the looks of it, but they understand that subdivisions affect their quality of life," Wilkeson said.

Donegan said collaboration between timber companies and the conservation community represents new and welcome opportunities.

"It's something where we can work constructively with the conservation community," he said. "There's a lot of fatigue in the industry from the timber wars, and this is moving past that."

Michael Milstein

michaelmilstein@news.oregonian.com

Comments From Readers Posted on The Oregonian Website

rogeregon says...

LOL! Environazis, this shows "beware what you wish for"!

They've killed off so much of the timber business in Oregon, which has killed off so many small towns, but the environazis didn't care because they all live in Portland, Salem and Eugene, but now they see their garbage can backfire on them! The weasels!

Posted on 12/20/08 at 12:50PM

hilaryclinto says...

The shame of it all is the institutional memory of how to do and what to do are being lost. And it is being lost in the agencies that manage land, as well as by those companies that own land. Reinventing wheels can be seen in some production methods now being hailed as new and a breakthrough.

As to old growth (some say that is a tree of 30" or more diameter outside the bark breast high) logs have very few homes now. There are less than a dozen mills in Oregon that now can cut a large diameter log. The preponderance of those that could have been reduced to scrap and sold to make your newest widget from China or India. You could cut a billion board feet of old growth forest, and not find a home for half the logs.

And, the housing construction methods have changed to use small dimension lumber made from small diameter, fast growth logs. So the big, boxy McMansions look the way they do, are designed the way they are, because Interstate bridges and highway width and height limits the size of pre-fab truss you can haul to the job. Short run trusses, and you have many pitches in a roof. There are few mills cutting the long dimension wide boards that were used to construct a stick framed ranch home. So now your house is built from engineered wood (veneer chips glued in a press to make 4"x12" for beams and headers. And studs, drywall, chip board, plywood, and faux about anything. There is no market for Old Growth wood products except a limited amount of natural wood trim.

Then, you do have to know that nobody builds large log handling equipment today. No old growth, and no machinery to log it. So you have little machinery to log with, no mills to send the wood to, and not much of a market for the products. The old growth forest issue is much ado about nothing. Or it is an Environmentalist feint to misdirect public opinion and views of needed forestry management tools and options. This story does give you the united Oregon environmental position from Oregon Wild, and that is they want no more logging. Period. A candid answer. So subdivide it will be. The Forest Capital Partners guy did not divulge how much land in the northwest Willamette Valley lowlands and hills they have sold to vineyard and subdivision promoters. It is a bunch. They are limited in how many acres they can sell in any five year period by the management contract and the tax man. But they focused on that market in the near past. Next it will be coast real estate with ocean views. All the old Longview Fiber lands, and Oregon Pulp lands. I don't blame them one bit. I hope they do put some land on the coast into subdivision hands. I know the dirty secret that NO Oregon county bordering the Pacific Ocean has more than 10% of its land in ownerships of under 1000 acres. Between government and industrial timberlands, those coastal counties are just a tiny little band of small ownerships along 101 and up some of the river bottoms. In places, the private land ownership band is a half mile wide or less. That is why the Tillamook Burn counties are counting on their logging money from State lands they put in State management trust, and now claimed as recreation lands by Portlanders. There is little to develop and little to tax to provide for schools and infrastructure. Without lumber and logging, with no fishing to speak of, taking tourist dollars like a gypsy is all they have left. The old days it was old Indian women selling baskets on the street of resort towns on the Oregon Coast. Now it white people selling sno-cones, Chinese widgets, and African baskets. The land is all owned by government and timber companies.

Posted on 12/20/08 at 4:22PM

aphasia says...

"rogeregon" - Good call!! This is a new paradigm and anyone that cares only needs to look over in Montana where farmers are seling 6,000+ acres to developers because it no longer pays to farm - cows, hay or trees, does not matter.

"hilaryclinto" - Brevity goes a lot farther than long windedness and your point is/was in two sentences or less is/was.....

Posted on 12/20/08 at 5:52PM

schmuck283 says...

"rogeregon" You forget that the environmental lobby still controls the LCDC. They're not going to approve any development anywhere near an environmentalist's country estate. And they're got them everywhere.

As for the private timber owners? Well sooner or later they're going to give up and sell to whoever will pay them. The environmentalists had enough funds to purchase the Salem government so they ought to have enough money to buy the land.

Another thought, in these hard times, is that the organizations that buy land and keep it from being developed often get tax breaks for doing it. We can't afford that anymore. If they want to withhold the land from development, that is their prerogative as owners. But they should pay taxes on that land at the same valuation as it would have were it available for development.

Posted on 12/20/08 at 6:43PM

JohnBall says...

Rewarding private timber owners for keeping their land as forest seems like a good idea to me.

The comment from Oregon Wild about making forestry unprofitable is ridiculous (though the guy is right that lots of forest roads need improvement, especially the old legacy roads.)

The idea that the environmental lobby controls Salem is a joke. Try to find an environmental leader on the Board of Forestry -- and yet there are a couple big folks who own mills or big tracts of timber on the Board. That's fine, they should be on there. But how about an ecologist or someone with a strong leadership background in conservation? Nope.

And remember, the low log prices don't have anything to do with environmental restrictions. The housing bubble has popped, and we are awash in cheap logs. It's a simple supply and demand issue.

hilaryclinto -- great post -- I learned a lot. But you are just wrong on the "county trust" issue with the state lands. The state paid the lions share of the cost of reforestation and management for decades -- so while the counties deserve consideration, the Tillamook is state forest and belongs to everyone in Oregon. There is no trust relationship.

Posted on 12/20/08 at 7:21PM

john1945 says...

Hello people, spotted owls and salmon are only tokens to these radical envirn. terrorists, Great gov stupid Ted included. The radical terrorist do control the LCDC and the state gov. and it is the fault of the idiots that really have no idea that the real consevationist are farmers, loggers and fisheries people. Even the idiots should understand why would these people destroy what they need to make their livings. Get gov. and radical terrorist out of so called management and see how Oregon can prosper. It is all about money and power not saving anything. Wake up people.

Posted on 12/21/08 at 8:21AM

wes44 says...

Interesting article. There is a balance to be found here. It is not with the no-cut groups (of which Oregon Wild is not one), it's not with the cut-it-all interests, and it is certainly not with people who call their opposition nazis, terrorists, and whackos.

It hinges on that often hijacked word -- sustainability. After decades of fire supression and bad logging practices (promoted by the timber industry for short term profits), there is plenty of wood to be taken out in the name of conservation that will bring in plenty of money and create a sustainable industry and truly healthy forests.

There is no need to shut down the timber industry, there is also no need to clear-cut or chop down the old growth (which sadly, the mills would need very little retooling to start processing again), or open up roadless areas to logging.

It's not an all or nothing approach. It will take some serious adult discussions. One in which people who call names as though they are back on the playground are rightfully not a part.

Posted on 12/21/08 at 10:34AM

dtroutma says...

The sound judgment of Teddy Roosevelt in establishing the National Forest preserves foresaw nearly a century ago what we see today. Private forests AND public forests across the nation, not just in the west, are important reserves to be managed for sustainable yield. It is the sawyers and forest workers who have noted over the past three decades that clear cuts and over-logging, not conservation and sustainable resource extraction, that cost their jobs. As we lose more to human populations expanding their construction into forest lands we both lose resources, and increase the costs and dangers of managing wild fire, and wildlife.

The screeching "anti-environmental" folks obviously don't eat, breath, or use water, but follow the idiocy of the phony prophets for profits for over-production and waste that bleed both the forests, and the economy dry for short term gain.

Legitimacy is long-term logic in planning, development, conservation AND harvest of resources that assure production, and survival, 300 years down the road, not three.

Posted on 12/21/08 at 11:13AM

rudyfernande says...

Well, well, well.

After jumping up and down on the coffin of the timber industry and all of the towns, mills and individuals they buried 6 feet under, the socialist "keepers of the land" are now going to try and dig up all the graves, open the coffins and give some MOUTH TO MOUTH.

How nice of them.

Thrilled with the number of kills they have under their belt they now realize they need those poor bastards alive to keep them from selling their land so the land owners can actually live another year and pay their bills. The communists were so effective they forgot to see the long-term effects of killing off all their enemies.

I for one ask the question where are they going to get this new money to help their poor victims? They must have very deep pockets to now want to help out the vermin lowlifes in the timber industry that they so coldly and calculatedly destroyed.

I for one hope that they sell all their lands to developers and give the middle finger of fellowship to the environmental "keepers of the land" who were having such a wonderful life destroying others livelihood.

I hope the state of Oregon and our Gov go bankrupt with all they have given to these people. It would serve him right to have to be held accountable for destroying a Statewide Industry that has been one of the great resources this State has ever seen. Oh and guess what, it grows back and produces MORE OXIGEN with the younger trees.

Oregonians have been targeted by these vultures for too long and now.....in the words of their favorite Pastor Jeremiah Wright....."Their Chickens are coming home to ROOST!!!!!

Just say NO to the ECO-MAFIA!!!

Posted on 12/21/08 at 11:21AM

hardtimes78 says...

Hilary, where did you get the notion that a tree 30 inches in diameter is "old-growth? I know you qualified it with "...some say." Some old-growth trees are "large" but not all large trees are old-growth. Douglas fir can get to 30 inches in dbh in 60 years on a productive growing site.

What you said about the lack of processing facilities is correct. There are fewer places you can take large diameter logs, but if the supply were to increase, and the supply were viewed as reliable, the industry would respond.

The article was a hoot -- no spotted owl pun intended. After decades of working against the timber industry, environmental groups suddenly realize that the industry might just decide that selling land is an option -- and an attractive one, in normal times, but especially in tough times.

Heiken is quoted as being "hesitant" about making the industry too profitable. I guess that is in keeping with the outlook of environmental groups who support legislation like banning clearcutting, which would have reduced profitability. Maybe Heiken can tell us what level of profitablity he thinks is OK.

Land sales by the timber industry are a fact of life and people should get used to it. It is a matter of supply and demand and a natural outcome in a capitalist system where private individuals can accumulate wealth and then they decide they want to own some land.

And to schmuck283: If you want MORE land sold for development, by all means, do away with the tax break that timberland owners receive for keeping their land in timber production.

Posted on 12/21/08 at 11:50AM

knurly says...

Yeah, and the enviro-maniacs will be backpedaling with the wolf deal too, when one of those beast comes into a California transplant's backyard and drags away a little kid.

Posted on 12/21/08 at 11:53AM

kevin1006 says...

Ever notice how hillbilly America never has anything of substance to say, that they just toss around idiotic expressions like, "Environazis", or other such meaningless rubbish?

They also show not a single creative impulse with an outlook that is sooo rooted in the past they cannot even fathom for a few seconds the concept that human society changes. They're also so devoid of broad thinking that they can't seem to understand that houses and other such buildings can be made out of materials other than wood! I lived in Australia where very few building were made out of wood but instead were constructed with materials like brick and stone, which, by the way, will last far longer than a wood home. I once had a British girlfriend that lived in a stone building in the south of England that was 600 years old and still running strong she said. But nooo, hillbilly America can't seem to think past the 19th century, that social values change and most of the time for the better. There are other ways of achieving the same goals but you'd never know it by listening to the hillbillies among us.

In a capitalistic system nobody is OWED the job they've always done or want to do. Being a logger is not owed to anyone by anyone. If this was the case we'd still be riding around in horse drawn buggies because we would not want to put wagon makers and blacksmiths out of jobs. Get over it already hillbilly America! Join the 21st century already and realize change happens. You can be a part of that change or sit around and whine and feel sorry for yourself... you decide, but the rest of us are not going to wait around for you while you decide if you want to be a 21st century citizen or not.

These private lands could easily be bought up with public money and added to the national or state forests systems for future generations if the will was there. This makes even more sense in light of the fact that more and more people are using the outdoors, making the woods more and more crowded. Now is the time to start adding to our forest lands so that people will have plenty of wilderness to enjoy and the wildlife that calls our woods home have plenty of habitat to thrive in. Do we pay to bail out rich bankers and fight nonsense wars or do we do something positive for the future? Right now we seem, as a society, hell bent on wasting trillions on corruption.

Posted on 12/21/08 at 12:25PM

kevin1006 says...

knurly...... Name just one case in the past 150 years that a wolf has killed a child! The ignorance is so profound among the hillbillies that it scares the s*** out of me. Pick up a book! Do some research before you spout off with such brain dead nonsense!!

You do, however, shine a bright light on why our country got stuck with Bush for 8 years... thanks a lot for that, by the way.

Posted on 12/21/08 at 12:30PM

rudyfernande says...

Hey Kevin1006,

You say "These private lands could easily be bought up with public money "

You mean TAXES don't you????? Of course you do. But if you haven't heard our wonderful Democrat Gov has said we are Way over on our current budget and out of money.

He is now wondering how to pay for all his great ideas and programs.

How will he find this "NEW PUBLIC MONEY" Can he tax the crap out of you and your friends??? I am sure you wouldn't mind since your probably single and ride a bike to work.

I am sure he will try since that is the only idea the Dems ever have.....TAX them until they have nothing left of their crummy little paychecks.

We politicians on the other hand will vote us in a new raise evey session and have the best benifit package availible.

Oh but wait......if we can't steal their land outright we can tax them to death and then use their own money to buy their land that we wanted to steal in the first place.

Makes sense to me.

Government isn't very bright....Republican OR Democrat....they are all the same...just different talking points.

Posted on 12/21/08 at 12:55PM

hardtimes78 says...

Kevin1006: People build houses out of the materials they have on hand, using the skills they have on hand. Stone is plentiful in England and labor was cheap 600 years ago. BTW, how much radon was your girlfriend exposed to, living in that stone building?

I too have been to Australia, and homes were built out of what was available, so what's your point? Here in the US, wood is preferred because it is plentiful, and it is relatively inexpensive to put up a house on site. If you're a fan of carbon storage, then you should be banging the drum for wood construction -- its a great way to store carbon.

Now, if you would, please, look at a map of the Northwest, one showing the areas already in public ownership. These include the National Forests, the National Parks, the land managed by the Bureau of Land Management, the state parks and the state forests. After you have looked at this map, tell us in your most convincing way, why it is necessary to buy up "these private lands ... with public money" as you put it.

Where does "public money" come from, Kevin? It comes taxes paid to the government by private enterprise. Do you seriously think that a program like this should ever get off the ground? If these lands should be "bought up" why haven't they been bought as they have come up for sale?

Could it be that THERE IS NO MONEY AVAILABLE FOR IT, KEVIN? Could it be that people realize that when private land goes into the public ownership IT GOES OFF THE COUNTY TAX ROLLS and this hurts local economies. Could it be that most people in the Northwest approve of the way private companies manage their lands and appreciate the contribution these lands make to the overall economy?

Tell us, Kevin, what is the name of the economic system in which the government owns the means of production?

Posted on 12/21/08 at 1:32PM

rudyfernande says...

Kevin is SILENT!!!!!!!

He must be on his favorite greenie web site looking for help and another way to blame George Bush for all of his current problems.

Listen Kevin, if you and all your greenie friends will let the government tax you 75% of your paychecks to fund your PUBLIC MONEY scheme, then we can talk some more.

Please don't tax me though...I have two teenagers and a lovely wife to support on my private sector salary. My kids like to eat a fair amount of food and I need some gas to get to work. I cannot afford to be taxed any more than I currently am.

Kevin......you still there??? Kevin?????

###

Colby Marshall
Eastern Oregon Office Director 
Congressman Greg Walden (OR-02)
1211 Washington Avenue
La Grande, OR 97850  
541-624-2400 (phone)
541-624-2402 (fax)
colby.marshall@mail.house.gov
www.walden.house.gov