NW Timber Blog

Final chapter written for the Elliott

2022-12-14T15:40:00.000-08:00

The State Land Board, SLB, on December 13, 2022, formally put an end to the once great Elliott State Forest. Now the Elliott formally becomes the Elliott State Research Forest, ESRF, co-owned by a new government entity and Oregon State University.

Governor Kate Brown, Treasurer Tobias Read and Secretary of State Shemia Fagan, who make up the current SLB, officially decoupled the Elliott from its 90-year obligation to the Common School Fund. No longer will there be a mandate on managing the Elliott for schools with the payment of $221 million from Oregon taxpayers to compensate the CSF.

This ends a long and sordid history of the Elliott that was prompted by environmentalists’ lawsuits challenging timber sales that were purported to be in habitat of Marbled Murrelets. The seabird can fly from the ocean inland for 60 miles to find an appropriate nest tree. However, advocates deemed that flying over a small timber harvest would doom the bird to extinction.

Rather than challenge the legal and factual basis of the suit, the State of Oregon, under the direction from Attorney General Ellen Rosenblum, surrendered all future management opportunity for the Elliott and paid the plaintiffs nearly $400,000 in attorneys’ fees.

This lack of a strong legal defense led to several proposals for the future of the Elliott, including selling the 80,000-acre forest to a local forest management company. Governor Brown and Treasurer Read wilted in the face of the outcry from preservationists so the sale was pulled, and new options were sought.

It was Read’s idea to give the Elliott to OSU. OSU balked at that idea when they realized the potential liability involved in owning a large block of forest land. A large stakeholder’s group and the Division of State Lands developed the notion of turning the Elliott into a research forest.

The 2022 legislature adopted laws that created the Elliott State Research Forest and created an entity to manage it in conjunction with OSU. They also appropriated $121 million to pay the balance owed the CSL.

The new statutes led to the SLB’s actions on December 13, 2022, thereby ending any requirement to manage the forest, although the new ESRF plans to sell limited timber sales to keep the forest afloat without the continual need for subsidies.

Don’t be surprised to see the preservationists throw a fit over any proposed timber harvesting. In other words, you haven’t heard the last of the Elliott…

Hope you didn’t think the Private Forest Accord would be enough…

2022-10-25T11:37:00.000-07:00

Earlier this year large and small forest landowners collaborated with 13 environmental organizations under the auspices of Governor Brown to develop the unprecedented Private Forest Accord. As previously posted legislators and the media view the PFA as ending the Timber Wars.

Not surprisingly, environmental activists Oregon Wild, a signatory to the PFA, is already announcing that the landmark agreement for changes to Oregon’s Forest Practices Act are just the beginning of changes they want.

In a message to supporters Oregon Wild states “while the PFA is critically important for endangered wildlife - it is not a comprehensive solution to some of the other consequences of industrial forestry.” The activists wanted their supporters to tell the Board of Forest at an October meeting that “there are plenty of steps left to go to protect communities and the climate and to push Oregon toward a truly sustainable timber industry.”

Longtime observers of environmental activists’ insatiable appetite to destroy the Timber Industry aren’t the least bit surprised by Oregon Wild’s position, instead it is another example of their inability to accept yes for an answer…

Will the Private Forest Accord end the Timber Wars???

2022-03-30T14:17:00.000-07:00

Will the Private Forest Accord end the Timber Wars???

Oregon’s legislature recently adopted Senate Bill 1501, legislation that formally enacts the Private Forest Accord, an unprecedented agreement for a dozen large and small forest landowners and 13 environmental organizations to lay down their swords. Two years of hard work were required to reach the framework of the PFA. Now there is an intense scramble of rulemaking, mapping, analysis, and Adaptive Management to implement the PFA and make it a continually updated program. All forest industry foresters, engineers and attorneys have embraced an all-hands-on deck philosophy to staff numerous committees and rule-making processes.

Listening to the legislative floor speeches or reading the media coverage of the PFA enactment could lead one to conclude that the so-called Timber Wars are over. While that would be a welcome outcome, it won’t happen. Recent action from environmentalists shows that the Timber Wars will continue the over 16 million acres of forest land that is publicly owned. Environmental activists are still protesting and litigating over state-of-the-art scientific forest management on State and Federal Forest lands, even challenging the removal of dead burned trees along State Highways that provide access for forest recreation, amongst other things. The PFA only covers approximately 10 million acres of private forest land.

Forestland ownership is confusing for legislators, media representatives and the public. In Oregon 60% of the forest land is owned by the Federal Government while 3% is owned by the State. Don’t be surprised to see political turmoil continue over management of forest land in Oregon. These acres will be the exclusive territory for the Timber Wars in the 2020s. Stay tuned.

Oregon timber industry, environmental groups collaborate on new state laws to protect habitat

Oregon’s Private Forest Accord – Your questions answered

Major change coming for the 90-year-old Elliott State Forest

2022-02-02T10:42:00.000-08:00

The Oregon legislature, on the first day of the 35-day short session, heard testimony on Senate Bill 1546-1 a bill to convert the Elliott State Forest into the Elliott State Research Forest. The ESRF would be managed by a new state entity, with ties to Oregon State University. OSU previously turned down the offer from the State Land Board to own the ESF

The ESRF would also be de-coupled with the Common School Fund that was supported by timber revenues since the ESF was established in in 1930 as Oregon’s first State Forest. Governor Kate Brown has designated $127 million to compensate the CSF. Fortunately, Oregon is flush with billions of dollars from federal pandemic relief and unexpected tax revenue due to Oregon’s strong economy.

The new ESRF Board of Directors and Executive Director will oversee the 84,000-acre forest that will be, by far, the world’s largest research forest. SB 1546 will need to move rapidly through the legislative process due to the tight timelines for the session. A public hearing on the bill will be held virtually on February 3^rd.

The long sordid history for the ESF is entering a new phase. The ESF was once the quintessential multiple use managed forest producing upwards of 50 Million Board Feet per year while providing a verdant scenic and recreational spot amongst the most productive Douglas fir forestland in the world.

Now, after a new Forest Management Plan and Federally approved Habitat Conservation Plan, the ESRF is expected to produce timber harvests of 17 MMBF/year. The multi-party committee that developed the concept to turn the ESF into a research forest anticipated limited timber harvests as part of the research. It will be interesting to see if these science-based timber harvests are challenged by folks who can’t accept that proper forest management requires periodic harvests.

Here are links to supporting documents from the legislative hearing on February 1, 2022:

State Land Board Letter

ESRF Advisory Committee Letter

OSU’s ESRF Proposal

Now the hard work begins for the Private Forest Accord

2021-11-04T14:51:00.000-07:00

Now the hard work begins for the Private Forest Accord

Last weekend Governor Brown announced that following 10 months of intense negotiations agreement was reached between large and small forest landowners and over a dozen environmental groups. The clock not only approached midnight on the deadline day for an agreement it went into overtime at the Governor’s urging. The Private Forest Accord, PFA, is the result of a truce called in 2020 over the filing of competing initiatives dealing with forest management, herbicides application and the Board of Forestry.

Rather than fight it out at the ballot box, the warring parties passed legislation, SB 1602, in 2020’s first special session. The bill immediately established new herbicide spray buffers around homes and schools and set off a facilitated process that examined potential changes to Oregon’s Forest Practices Act, FPA, and hopefully will result in an Endangered Species Act Habitat Conservation Plan, HCP. An HCP for private forest land will provide ESA protection through an Incidental Take Permit for forest management activities in compliance with the FPA.

The Oregon Department of Forestry, will develop the HCP in coordination with the National Marine Fisheries Administration and the US Fish and Wildlife Service. This will involve a full-blown National Environmental Policy Act process for an Environmental Impact Statement.

Meanwhile, signatories to the PFA are developing legislative concepts to implement the FPA changes for the 2022 legislative session for stream buffers, steep slopes, forest roads, and an adaptive management process for adjustments to forest management in the future. Some of the changes will be handled by rulemaking rather than new legislation and will be subject to existing requirements for science-based and cost-effective changes to forest rules and regulations.

After spending untold hours negotiating, the parties are still working on the details and prescriptions of the PFA. The PFA established an ongoing process for resolving forestry disputes to avoid lawsuits and ballot box fights.

Here is some of the media coverage of the PFA

Oregon forest deal promises 'new era' of protections, economic growth on 10M private acres

Deal sets course for overhaul of private forest management in Oregon

Timber and conservation groups reach deal to update forest management rules for 10 million acres of private land

Oregon timber accord: More restrictions, less uncertainty

Agreement is a bright spot in state forest policy

Editorial: Bridging the gap between conservation and industry

Negotiations and Threats Produce Forest Deal

Oregon names Calvin Mukumoto next state forester

2021-10-29T13:09:00.004-07:00

From OPB:

The longtime forester and former legislative candidate would enter the role as the first permanent forester since Peter Daugherty’s resignation in May.

The Oregon Board of Forestry has nominated Calvin Mukumoto of Coos Bay to become the next state forester.

The board unanimously approved Mukumoto’s nomination to the position at a special board meeting on Friday, held via Zoom.

“I’m honored at this point and almost speechless,” Mukumoto told the board.

Mukumoto began work as a forester in the late 1970s and most recently ran as a Democrat for a seat in the Oregon House of Representatives, which he lost to Rep. Boomer Wright, R-Coos Bay. Mukumoto has also vice-chaired the Board of Forestry and chaired the Oregon Parks and Recreation Commission.

In his application, Mukumoto emphasized his work on behalf of Native American tribes, including Warm Springs Forest Products Industries.

Mukumoto will replace Nancy Hirsch, who served as acting state forester since May when embattled agency head Peter Daugherty left the post. Daugherty was a lightning rod for criticism.

For example, OPB reported in 2017 that Daugherty strongly rejected the science and purpose behind a report from the Oregon Department of Environmental Quality linking water quality issues to logging. His tenure was also marked by significant financial woes at the Department of Forestry.

Board chair Jim Kelly thanked Hirsch for her “tremendous leadership” over the past several months.

“It’s just been pretty incredible to see her step in and get things done in this department,” Kelly said. “She has not been a person who’s just kinda held things together. She’s really moved the department along, made a lot of significant changes and really prepared for this next transition.”

Kelly and other members of the board also thanked finalists Therese O’Rourke and Jim Paul.

OPB has reached out to Mukumoto and the board for further comment.

This is a developing story.

Meteorologist explains 2020 explosive wildfires

2021-10-28T14:26:00.000-07:00

Meteorologist explains 2020 explosive wildfires

Dr. Cliff Mass, a meteorologist and Atmospheric Sciences Professor at the University of Washington, recently spoke at the Annual Conference of the Oregon Forest & Industries Council. Dr. Mass, who’s presentation slides can be found here, concluded that the intense east winds that drove the fires were a remarkable event, unseen before and unlikely to occur again.

The historically high unprecedented east winds were caused by differences in temperature between a massive cold air mass merging with summertime hot air. Dr. Mass speculates that warming conditions caused by Climate Change could reduce the possibility of such a vast difference between summer cold air masses and warm air.

Overall, Dr. Mass feels it is unclear how Climate Change will impact fire seasons. This view contradicts with the often expressed fears from everyone beginning with President Joe Biden, that climate change will mean the 2020 fires are likely to reoccur.

Additionally, Dr. Mass examined the Heat Dome that brought record breaking temperatures to the Pacific Northwest in June 2021. That was also an anomalous event and unlikely to occur again for decades, if not longer.

Oregon Board of Forestry Getting Closer to choosing new State Forester

2021-10-26T12:15:00.000-07:00

The Board of Forestry has narrowed their search for a State Forester down to three names,Cal Mukumoto, Teri O’Rourke, and Jim Paul. Their applications can be found at the links on their names.

The BOF is holding a special meeting at 9:00 on October 29, 2021. All BOF meetings can be streamed on the Department of Forestry’s YouTube channel. The BOF held a preliminary public meeting for the three candidates on October 20^th where they answered questions from six public participants. Surprisingly, none of the three mentioned righting the Department of Forestry from their difficulties with Fire Costs accounting that ultimately led to the dismissal of previous State Forester Peter Daughter.

Governor John Kitzhaber on The Future of Forest Policy in Oregon

2021-10-19T13:08:00.000-07:00

Sustainable Northwest worked with former Governor John Kitzhaber to interview several timber executives across the range of ownerships along with several conservation leaders. These informal conversations were designed to collectively identify and understand the longer-term opportunities and challenges facing timber businesses and conservation organizations. Gov. Kitzhaber is highly regarded as a systemic thinker deeply concerned with finding enduring solutions to our natural resource challenges. Having been elected Governor four times, no one is better qualified to assess the political and policy

opportunities to secure a future in Oregon with thriving and robust timber businesses while also enhancing ecological outcomes from our mighty forests.

His thoughtful observations will be shared widely as we consider areas of mutual interest where both conservation and timber interests could benefit from fiscal, policy and private initiatives constructed on a foundation of respect, stability, and shared interest. We invite you to review his findings and think about how you might help us envision the future of forest policy in Oregon. At Sustainable Northwest, we expect that the outcomes highlighted in this report will help to inform and prioritize our work in the coming months and years.

Greg Block Sustainable Northwest

The Future of Forest Policy in Oregon Summary of Findings

June 2021

Governor John Kitzhaber ______

Below is the summary of my findings after interviewing over two dozen people from the conservation community and the forest products industry around the future of forest policy in Oregon. The people I talked with represented a range of environmental organizations and perspectives, as well as diverse forest products stakeholders from TIMOs to integrated forest products companies to small forest land owners

While there remains a troubling lack of trust between many forest products industry stakeholders and the environmental community, there is also a genuine desire to find a way to bridge past differences and to create a new, more collaborative path forward.

This summary is not intended to be a consensus document, but rather a synthesis of the views and perspectives I encountered during my interviews, and some conclusions of my own regarding the challenges and opportunities involved in finding the common ground from which to build a shared future. It is my hope that this paper can serve as the basis for a larger and more productive conversation.

John Kitzhaber June 2021

Introduction

The current complexity of the forest products industry in Oregon, and its intersection with listed species, carbon policies and wildfire, creates both challenges and opportunities in terms of developing the framework for an economically, environmentally, socially and politically sustainable forest policy.

Our current forest management policies (e.g. the Oregon Forest Practice Act on private land) do not fully recognize this complexity or the changing nature of the industry itself. Furthermore, we continue to rely on governance tools (e.g. the Board of Forestry, established in 1911) and trade associations (e.g. the Oregon Forest Industries Council)

We cannot solve our problems with the same thinking we used when we created them.

Albert Einstein

John A. Kitzhaber, MD

The Future of Forest Policy in Oregon Summary of Findings

that increasingly lack the capacity to manage the conflict that has resulted from the growing complexity within the industry and growing pressures from without.

It is also important to recognize that Oregon’s forests exist within the context of global trends and disruptive technologies which have led to a change in land ownership and investment patterns, a divergence of business models and management practices, across a landscape that reflects very different characteristics in terms of temperature, moisture and topography, all of which impact forest growth and resiliency. This is taking place as the urgency to address global climate change and increasing wildfire risk is intensifying.

To get a better sense for the contours of the solution space—and with the recognition that the solution may well be multifaceted—it will be useful to begin with a better understanding of the complexity itself. First, however, let me say a word about a uniquely Oregon asset on which we can build: our land use planning system and the impact that has had on the stability of the forest land base.

Stability of Forest Land Base

We should not underestimate the importance that our land use planning system has played in maintaining a stable forest land base. Oregon has the most stable forest land base in the country—and a stable land base is the foundation of forestry. Ninety-seven percent of the land designated for forest harvest in 1974 remained in forest use in 2014. Over that forty-year period, about 240,000 acres were lost, mostly to low density housing and commercial development. In short, our land use planning system is a tool, not available to most other states—a tool that could play a valuable role in crafting a solution. Ironically, however, the biggest advocates for land use planning today are urban constituencies, not the natural resource industries, something that will hopefully change.

A frequent refrain among landowners is that land use laws and forestry regulations should be viewed as a package, with a shared goal to promote the stewardship of working forests. To the extent forestry regulations are amended, with negative economic impacts to landowners, we should expect renewed and expanded calls from landowners to loosen land use laws to allow development to offset lost timber values.

Governance
By governance, I mean both the structures, institutions and processes through which we seek to resolve conflicts between legitimate values, and the way in which these conflicts are currently framed. I believe that governance is a central part of the problem, a factor which has been largely overlooked, yet which interferes with our ability to find shared solutions.

Governance Tools
In his book Gravity’s Rainbow, novelist Thomas Pynchon wrote, “If they can get you asking the wrong questions they don’t have to worry about the answers.” The right question is, “What’s a forest for?” The problem is that the answer has changed over the decades. Fifty years ago, there was general (though certainly not unanimous) consensus that the answer to the question “what’s a forest for?” was to produce commercial

John A. Kitzhaber, MD

The Future of Forest Policy in Oregon Summary of Findings

products that create jobs, industries and communities. Today, the answer has expanded to include other values such as habitat for terrestrial and aquatic biodiversity, carbon sequestration, clean water, and recreation.

Unfortunately, as these values have evolved, the institutions through which this change must be managed have not evolved and kept pace. Furthermore, as the state has urbanized, so has its legislature and executive branch. Many elected officials have little familiarity with the issues facing rural communities or our natural resources industries. Furthermore, few of Oregon’s “citizen legislators” fully understand the growing complexity of this issue and, therefore get much of the information on which their decisions are based from natural resource industry trade associations or from environmental organizations. This lends to the polarization of the debate and narrows the solution space.

This dynamic is reflected in, and exacerbated by, the Board of Forestry, which operates in this highly politicized environment. Unlike many other state boards and commissions, which emphasize generalist skills and critical thinking, the BOF seeks natural resource industry/conservation expertise. This redundancy with staff expertise, predictably, invites board members into non-strategic decision-making and, often, outright advocacy.

Appointments to the Board of Forestry are not judged on whether they will bring to the board a thoughtful view of how best to balance competing values to arrive at sustainable solutions, but rather through the lens of whether they will support the timber industry position or the conservation agenda. For example, with the recent confirmation of new appointees to the BOF, the board will now be widely viewed as being “evenly split” between members who have close ties to the timber industry and those who do not.

This can be viewed as a form of “Panarchy,” the conceptual framework that tries to describe the behavior and interactions of complex systems—both social and biological— and the inherent tension between stability and change. Complex systems seek stability, but stability gets in the way of evolution and the ability to adapt to changing circumstances. And change is the byword for the forces converging on forest policy in Oregon: changes in land ownership, changing business models, climate change, and a change in wildfire risk. The pace and magnitude of these changes are undermining the institutional capacity to manage the change in a constructive way, simply moving the conflict among competing values from one venue to the next: from the legislature to the bureaucracy to the courts to the ballot measure—without ever dealing effectively with the issue itself.

Framing
For decades, the debate over forest policy (as well the debate over many other issues) has been framed within the constraints of a “war” metaphor: who wins, and who loses, whose side are you on, what jersey are you wearing. Reducing the complexity of this long-standing conflict to a binary choice between entrenched stakeholder positions at the opposite poles of a two-dimensional, zero-sum continuum between economic and environmental values, almost by definition frustrates the development of a sustainable

John A. Kitzhaber, MD

The Future of Forest Policy in Oregon Summary of Findings

solution. On the contrary, this frame fosters an “us versus them” mentality—a sense of separateness and a politics of scarcity, which inevitably creates winners and losers, but does not resolve the underlying problem. Without evolving our governance structures to match the changes taking place around us, and without rethinking the way in which the debate is being framed, it will be difficult, if not impossible, to arrive at a shared future for forest policy in Oregon.

Global Trends / Disruptive Technologies

The impact of automation

In 1978, the timber industry employed 136,000 people in Oregon and Washington. Four years later, that number declined to 95,000. Due to automation, the number of workers needed to produce the same amount of lumber fell by about 20 percent between 1982 and 1991. This trend has continued and, of course, is not unique to the wood products industry. Because of automation, the increased price of timber, and constraints on log supply, there has been a thinning out of our mill infrastructure with the closure of more inefficient mills, particularly in NE Oregon. This makes it more difficult to maintain the capacity needed to improve forest health in that part of the state.

The shift to tree farms using an agricultural model

Most of the world’s wood today is grown on tree farms in an agricultural model, as opposed to natural forests. At the same time, milling technology allows greater yield from smaller, less expensive trees, including the production of “engineered wood products” such as mass timber. The combination of plantation forestry and mill technology has resulted in smaller trees, shortened rotation cycles, the ability to produce more wood from a smaller footprint and a lower demand for larger trees, and wood harvested from natural forests.1 This kind of intensive forestry cannot be undertaken everywhere and is concentrated in the Southeastern U.S., Brazil, Southeast Asia and Oceania.

Here in Oregon, the impact of these trends on the landscape can be seen in smaller trees and shorter rotations. Within a given watershed, the percentage of recently harvested,

or relatively young, forests have visibly increased, which can generate a negative response from some communities.

Shift in Ownership Patterns

REITs and TIMOs

The wood products industry globally has generally moved away from an integrated business model to a “specialty” model with the different parts of the value chain—the land and trees, mills, wholesale and retail— owned and operated by separate entities. As

1 From an environmental perspective, plantation forestry allows the same amount of wood to be produced from a smaller footprint, and potentially allows natural forests to be managed for a broader array of ecosystem services.

John A. Kitzhaber, MD

The Future of Forest Policy in Oregon Summary of Findings

a consequence, forest ownership, globally and in the Pacific Northwest, has gravitated towards Real Estate Investment Trust (REITs) and Timber Investment Management Organizations (TIMOs), both of which are “forest specialists,” albeit with different

investment models.

REITs are publicly traded “operating companies” that own the forestland itself. They pay no corporate taxes, thus making them attractive investment vehicles. Investors can buy and sell shares, creating liquidity, without selling the forest itself, which creates more stability in the ownership of the land. The first timber REIT in the country was established by Plum Creek in 1999, following a change in tax laws encouraging timberland ownership for portfolio diversification. Weyerhaeuser formed a REIT in 2009 and merged with Plum Creek in 2016, becoming the largest private landowner in the United States. At this point, there are only three major REITs operating in the United States (Weyerhaeuser, Rayonier and Potlatch) with only Weyerhaeuser and Rayonier operating in Oregon (Weyerhaeuser is Oregon’s largest private landowner).

By contrast, there are a couple dozen TIMOs operating across the U.S., with several here in Oregon (including Greenwood Resources, and Hancock, which is Oregon’s second- largest private landowner). TIMOs are not operating companies. They do not own the forestland, but manage it on behalf of investors like pension funds, university endowments and foundation, most of whom impart environmental restrictions on TIMOs including forest certification requirements and audits, and /or ESG (Environmental, Social and Governance) standards and reporting requirements.

TIMOs manage private investments and, as such, do not face pressures to generate quarterly earnings the way that publicly-traded companies do. That means that foresters can defer harvest during down markets and resume harvest when the market recovers— a significant advantage financially, and a major benefit from an environmental perspective. However, TIMOs generally have shorter ownership horizons; 10 to 15 years is typical.

Performance Metrics for REITs and TIMOs

Understanding the performance metrics of these two business models is important—

particularly as it relates to the length of rotation cycles. Both REITs and TIMOs

generally seek to maximize “Net Present Value” (NPV), the standard metric in the

investment world. NPV, in turn, requires investments to generate a “hurdle rate” (i.e., a

minimum return-on-investment, e.g., 5% net of inflation). This is important to forest

policy because rotations depend heavily on this hurdle rate. Sophisticated forest models

calculate whether holding a forest stand, and allowing it to grow, generates this hurdle

rate (again, for example, if the forest will increase in value by 5% annually). If the

answer is yes, the model indicates the forest should continue to grow. If the answer is

no, however, the model signals harvest. This typically occurs as the forest matures, and

its annual % growth rate slows. On west-side forests, models typically indicate 35-45-

year rotations, and on east-side forests, models typically indicate 55-65-year rotations.

This description illustrates the importance of hurdle rate: the lower the hurdle rate, the

longer the rotation length. By removing a layer of tax, both REIT and TIMO structures

John A. Kitzhaber, MD

The Future of Forest Policy in Oregon Summary of Findings

lower the hurdle rate, and encourage longer rotations, all else held equal. However, all

else is not equal.

Countervailing the lower cost of capital, is the advent of the disruptive technologies

mentioned earlier (small-diameter manufacturing, agricultural forestry). Landowners

are rewarded for shortening rotations, replanting forest plantations, and continuing this

process on a perpetual basis. Rotations can be extended, through carbon and other non-

timber values as discussed later, but it is very difficult for these economic values to

compete with the advantages yielded by technological advancements in milling and

forestry technology. For example, to extend a rotation by just 10 years, even with a

fairly low cost of capital of 5%, a forest owner would need to see a 50-60% increase in

combined timber and non-timber values, in order to simply break even.

To summarize, both REITs and TIMOs generally employ a “Net Present Value”

performance metric, but REITs must also generate quarterly earnings, sometimes at the

sacrifice of NPV. This, in large part, explains why TIMOs have grown more rapidly than

REITs—the “patient capital” employed by TIMOs provides a better fit for forest land

ownership. This advantage, however, is somewhat offset by the shorter term of

ownership for TIMOs versus REITs. With respect to forestry practices and rotation

lengths, the tax benefits of both REITs and TIMOs lower the hurdle rate of the NVC

calculation, with the general affect that rotation cycles are allowed to lengthen. Having

said this, the advent of small diameter manufacturing and agricultural forestry combine

to drive shorter rotations across the globe, including here in Oregon.

Other Industrial Forests

Although there has been a significant shift in land ownership toward “specialty”

business models like REITs and TIMOs, Oregon has retained important integrated

forest products companies, some of which have been here for a very long time. Stimson

Lumber Company began acquiring forest land in the Northwest in 1889. Roseburg

Forest Products was established in 1936 and Hampton Lumber in 1942. Most of these

companies have added inventory to their ownerships for decades, because their business

model depends on growing more volume than they are harvesting—and on having a

sustainable and predictable volume of logs coming into their mills. Because integrated

firms often own forests as “standing inventory” for their mills, their forest modeling

exercises generally favor steady harvest volumes, which provides less flexibility to

managed for non-timber values, including carbon or other goals that compete with

timber volume.

Given the longevity of many of these firms, compared to the newcomers and out-of-state

landowners, and the substantial jobs they provide through their manufacturing

many understandably believe that their important community and economic contributions are undervalued. Furthermore, many of them

feel that their efforts to manage their land on a sustainable basis, have never been completely recognized for the long-term ecologic benefits they provide. A number of factors may contribute to this perception. First, unlike pure forest owners, integrated firms remain active in public timber sales, from both state and federal forests, some of which are opposed by environmental groups. In addition, their focus on timber may

facilities, compared to TIMOs,

John A. Kitzhaber, MD

The Future of Forest Policy in Oregon Summary of Findings

place mills in an adversarial position regarding carbon offsets and other policies that may threaten timber supply.

It is also important to recognize that, because these companies depend on a stable and predictable flow of timber, state lands play an outsized role within specific geographies, and for specific manufacturers. As we will discuss later, although state owned forests comprise only about ten percent of our overall forested landscape, they are disproportionally important to the economies of specific counties and towns. In the coastal forests of Northwest Oregon, for example, a number of companies have made significant capital investments on assumptions of steady timber supply, some of it from state forests. These same forests, however, possess important non-timber values (e.g. salmon habitat) which has contributed to the tension between the forest products industry and the environmental community.

million acres—or about 36% of Oregon’s private forest land, are held by some 140,000 small nonindustrial landowners. This critical forest landowner group holds great diversity of views and approaches about how they view their land. Some are “land rich but cash poor” and, in many cases, are counting on harvest from their land to help them with their retirement. Others place great value on the aesthetic and ecological features of their forest land.

Often their children don’t want to manage the forests. Fewer than half of them actually have a succession plan in place and the trend is for them to sell to the highest bidder. Current land use planning designation and favorable tax treatment are very important for these individuals to maintain their property as forestland. Furthermore, these lands have many low-gradient streams which provide important Coho habitat that would be damaged of this acreage were to be developed or intensively harvested.

Tribal Forests

Family Owned Forests

In addition to forest land owned by REITs, TIMOs and integrated forest products

companies, 3.7

Although less than 2% of Oregon’s forest land is managed by tribal governments, these sovereign entities have a legal standing when it comes to harvest activities taking place on “ceded” lands, where the tribes hold “reserved rights.” Ceded lands, are those on

which the tribes traditionally conducted hunting, fishing and gathering activities, but which were “ceded” or relinquished to the United States at a treaty signing or when a reservation was established. In many cases, the treaties guaranteed or reserved the right of Native Americans to continue to hunt, fish and gather in their traditional hunting and fishing locations, even if those areas are outside the reservations. These rights are referred to as “reserved rights.”

In Oregon, these ceded lands encompass the vast majority of federal forest land. For example, while the Reservation of the Confederated Tribes of Warm Springs encompasses 640,000 acres, they have 10 million acres of ceded lands in seven different national forests. Sovereign tribal governments must be consulted when management activities on these lands could potentially interfere with or adversely impact tribal reserved rights. Because Oregon’s nine federal recognized tribes were the original

John A. Kitzhaber, MD

The Future of Forest Policy in Oregon Summary of Findings

stewards of our forests, because of their status as sovereigns, because of their legal standing as it relates to their reserved rights, and because of their unique knowledge, experiences and worldviews, a discussion of the future of forest policy would not be complete without the intentional inclusion of Oregon’s sovereign tribal governments in that conversation.

Other Impacted Parties

One of the shortcomings that flows from the way the current forest policy debate is framed, is that the voices and perspectives of some parties who will be impacted by forest policy decisions, are not represented at most tables—which are generally dominated by those with political power. I have already mentioned sovereign tribal governments, as well as the diverse owners of family forests which alone account for 36% of Oregon’s private forest land. To these impacted parties, I would add a wide range of Oregonians, including many who are marginalized, and at higher than average risk linked to the pandemic and its economic impacts, and who do essential forest-related work. Therefore, as we explore how to reframe the debate in a way that moves beyond

the zero-sum, binary war metaphor, we should consider setting a table that also includes the voices of those who may not have “power,” but have valuable perspectives and will be impacted by forest policy decisions (see “Summary” and “Next Steps,” pages 12 and 13).

Land Management Practices / Divergent Business Models

Land Management

The total forestland base in Oregon is 29,656,000 acres.2 Of that, 60% is owned and managed by the federal government, 22% is managed by private industrial landowners, another 12% is managed by private non-industrial landowners (family forests), 4% is owned and managed by state and local governments and 2% is owned and managed by tribal governments. (See Interactive Oregon Land Ownership Map.)

Public forestlands in Oregon are primarily managed by three different agencies under three different management protocols. Federal lands are managed by the USFS, which falls under the jurisdiction of the U.S. Department of Agriculture, the BLM, which comes under the jurisdiction of the Department of the Interior. These departments—and indeed the agencies within them—have different legislative mandates; different constituencies and answer to two separate Cabinet Secretaries. In addition, there are the O&C lands, which are also managed by the BLM, but under the 1937 O&C Act. State lands, on the other hand, come under the jurisdiction of the Oregon Department of Forestry, have their own legislative mandate (the Greatest Permanent Value rule), are constitutionally required to generate revenue for the Common School Fund, and answer to the State Board of Forestry.

Diverging Business Models

Private forestlands, all of which come under the regulatory framework of the Oregon Forest Practices Act, are managed using three different business models, which in some

2 https://oregonforests.org/sites/default/files/2021-01/OFRI_2021ForestFacts_WEB3.pdf John A. Kitzhaber, MD

The Future of Forest Policy in Oregon Summary of Findings

respects, are not compatible. Both REITs and TIMOs, as forest specialists, seek to monetize all forest values – not just timber harvest, but ecosystem services, carbon sequestration, and “highest best use” (HBU) strategies, which may result in a land use change from forestry to development. This is a fundamentally different business model than the one on which integrated forest companies are built. Their economic viability depends on a steady, predictable flow of timber and, therefore, they understandably view their forests as “standing inventory.” In addition to these two dominant business models, there are the 3.7 million acres of family owned nonindustrial forests that are managed in a variety of ways.

Timber Politics

The collision of the two dominant business models is particularly apparent in issues addressing climate change, including bioenergy and carbon credits. Paper mills fight bioenergy policies that increase competition for small timber, while millowners fight carbon credit policies that motivate landowners to reduce harvests. At the national level, these issues have forced landowners to form their own trade association apart from mills. At the state level, neither mills nor landowners have the critical mass to sustain their own trade associations so they have both traditionally relied on the Oregon Forest Industries Council (OFIC) as their common trade association.

Over the past few years, particularly around the climate legislation (HB 2020), OFIC was unable to reconcile the divergent interests, which resulted in some members leaving the association. The answer is not to create two separate trade associations, which further fragments and polarizes the effort to develop a sustainable forest policy, but rather to seek ways to enlarge the solution space.

Forest ownership and Annual Timber Production

Total Forest Land in Oregon = 29,656,000 acres3

Ownership Federal
State & Local Private Industrial Family Forests

Percent Land Base 60%

4% 22% 12%

Percent Timber Production4 14%

10% 65% 11%

The vast majority of annual timber production (75%) comes from private land. Furthermore, while at a level much less than private industrial lands, our state lands are producing a significant volume of timber when compared to federal lands. The 1,129,000 acres of state and local forest land is producing 10% of annual timber volume; while the 17,858,000 acres of federal forestland are producing only 14%. These realities

3 https://oregonforests.org/sites/default/files/2021-01/OFRI_2021ForestFacts_WEB3.pdf 4 Does not include harvest on tribal forestlands.

John A. Kitzhaber, MD

The Future of Forest Policy in Oregon Summary of Findings

on private and state lands have caused some to look to federal public lands as the de facto conservation-base – they perceive these federal lands as the portion of the landscape that produces the habitat needs for fish and wildlife.

This attitude towards federal lands increases pressure for harvest on both state and private lands, and it masks the unique habitat needs on state and private lands as well as the efforts that have been made—and that could still be made—by landowners and managers to address this. Our current private, federal and state management framework results in a de facto zoning of Oregon’s forested landscape that does not necessarily correlate with species needs, with forest health, or with economic and local community values.

Characteristics of Oregon’s Forest Land Base

Oregon Coast and Western foothills of the Cascades (See Western Oregon Private Land Ownership Map) Over 80% of the annual timber harvest comes from this region, over half of it from the coast range itself. These forests mostly site 1 and site 2 on the forest site (productivity) index. The predominate business models are TIMOs, REITs and family forest operations. These forests have a much broader range of alternative values that can be monetized (carbon sequestration, ecosystem services) than do the forests in Southwest and Eastern Oregon. This makes coastal forests especially attractive to the “specialty” land owner business model. Listed species in Western Oregon include both fish species and birds (e.g., spotted owl, marbled murrelet).

Southwest Oregon

Inland from the coast, and south from southern Douglas County, the forests are much drier and less productive, mostly site 3. Much of the O & C land lies in this area, which is subject to a variety of disturbances, including drought, fire and insect infestations.

Eastern Oregon

Except for the upper elevations of the Blue Mountains, most of the Eastern Oregon forests are site 3 and site 4 — very slow growing and, in many cases overstocked with stands of younger fir and pine, the loss of older fire-resilient forest structure; a road system that has disconnected healthy hydrologic function, a reduction in watershed health, and a high risk of catastrophic fire. Most of the listed species in Eastern Oregon are fish species.

The Intersection of Land Ownership, Management, and Endangered Species

Managing the intersection between listed species and forest practices across the landscape is complicated by the fact that critical habitat does not necessarily align with patterns of forestland ownership and management. Let’s use salmonids as an example. When we compare the map of forestland ownership (See Interactive Oregon Land Ownership Map, page 3) to a sub basin map of Oregon’s watersheds each of which

John A. Kitzhaber, MD

The Future of Forest Policy in Oregon Summary of Findings

represents an ecosystem. What becomes clear is that none of these watersheds align with the patterns of land ownership.

Sub basin map of Oregon’s watersheds

This misalignment becomes even more obvious when we look at a map showing Oregon’s critical salmon habitat. These fish don’t care who owns the land they are swimming through; or what political jurisdiction they are in; or which agency or statute guides how the lands are managed. All that matters to them is the quality of the watershed and of the aquatic environment.

Map of Oregon’s critical salmon habitat

John A. Kitzhaber, MD

The Future of Forest Policy in Oregon Summary of Findings

What we can also see from this map, in terms of threatened and endangered salmon, is that this is not primarily a federal lands issue anymore and, to a large extent, is not just a forest issue. The fact that harvest on federal land dropped from almost 12 billion board feet per year when the Spotted Owl was listed, to about 2.5 billion board feet per year today,5 and that the number of listed salmon species has gone from one in 1995, to 22 listed today, suggests that we cannot fix this problem on federal land alone.

While the focus of salmonid protection has shifted to private industrial forestland and state forestland, we cannot ignore that much of the best habitat is in lower gradient streams, many of which are in the 3.7 million acres of forestland held by small nonindustrial landowners and in coastal floodplains—primarily agricultural land 6 and non-forest county and state land.

Summary

Our traditional approaches to forest management policy, and the way in which the debate is being framed, do not fully recognize the complexity and the changing nature of the industry itself, or the intersection of this complexity with listed species, climate change and the increasing risk of wildfire. Oregon’s forests also exist within the context of powerful global trends and disruptive technologies, which have led to a change in land ownership patterns, a divergence of business models and management practices, across a landscape that reflects very different physical and climatic characteristics.

In short, our current private, federal and state management framework does not correlate with species needs, with forest health, or with economic, social and local community values—nor does it fully recognize or reflect the additional risks and challenges posed by an era of climate change and the suppression costs associated with mega wildfires. These are the central reasons why we have failed to reach a steady-state solution to the longstanding conflict between the forest products industry and the environmental community.

This mismatch between our current forest policy and management framework—and the increased complexity and external pressures that were not present at the time these policies and governance structures were put into place—is reflected in growing conflict, divisiveness, confrontation, acrimony and dysfunction in our efforts to manage a valuable resource which for decades has helped to define our state.

We can see the symptoms of this polarization and dysfunction in:

The billion-dollar lawsuit filed by counties against the state over timber

management on state lands.
The contention and delayed budget approvals for the Oregon Department of Forest due to conflicting visions and priorities regarding mission, forest stewardship and wildfire prevention.

5 http://ecowest.org/2013/05/28/timber-harvest-falls-in-national-forests/
6 Ecological Forest Management, Norman Johnson, Jerry Franklin, Deborah Johnson, page 219

John A. Kitzhaber, MD

The Future of Forest Policy in Oregon Summary of Findings

The longstanding controversy and repeated rejection of and/or delays in the confirmation of appointments to the Board of Forestry.
The highly partisan and politicized environment in Salem, replete with walk-outs and recent acrimony specific to segments of the timber industry over proposed climate policy.
And most recently, in the resignation of the State Forester and growing calls within the legislature to diminish the role of the BOF, to make the State Forester a gubernatorial appointment with senate confirmation, or to abolish the Board of Forestry itself.

As mentioned in the section on “Governance” (page 2), our institutional capacity to manage change in a constructive way has lagged behind the pace of change that is overtaking us. Our current approach simply moves the conflict for one venue to the next— from the bureaucracy to the legislature to the courts to the ballot measure. While I fully understand and appreciate the frustration within the legislature about the current state of affairs, simply changing who appoints the State Forester, or eliminating the board of forestry altogether, would seem to be a continuation of what we’ve been doing for the past few decades.

Some of these steps may eventually be justified, but I believe it would be a mistake to proceed without first gaining more clarity—and hopefully consensus—around the mission that will guide the future of forest policy in Oregon, the values we want to be reflected in that mission, and the outcomes we seek to achieve.

Next Steps

Form follows function. Architect Louis Sullivan

To arrive at a potential solution set will require three separate but converging efforts: (1) reframing the debate in a way that moves beyond the binary war metaphor, and recognizes complexity and nuanced nature of the issues involved, (2) breaking down the complexity in which the policy debate is taking place, as a prelude to arriving at a shared vison for the future of forests and forest policy in Oregon, and (3) rethinking and redesigning our current governance structures in a way that supports a path to actually arrive at that future.

Reframing the Debate

The challenge here is to move beyond the two-dimensional choice between economic and environmental values, and to add the relative importance other legitimate values and voices to the mix — other “vectors,” if you will, running through a multi- dimensional “universe.”7 For example, other possible dimensions might include:

7 This concept comes from an essay by Peter Hayes, Metaphors Matter. John A. Kitzhaber, MD

The Future of Forest Policy in Oregon Summary of Findings

The relative priority of the well-being of, and opportunities for, people in rural, forest-dependent communities
The relative commitment to intellectual honesty regarding the use of objective science
The relative commitment to seeking and celebrating the common ground needed for diverse interests to live compatibly in any place

This may not be the right “universe” of values or dimensions, but it serves to illustrate one way in which we might move beyond the zero-sum nature of the current debate and begin to constructively change the frame, and perhaps the metaphor in which that debate is now taking place.

Breaking Down the Complexity

Successfully building a shared future, also requires breaking down the complexity described in this paper. We need a more granular understanding of forest land ownership in Oregon, the divergent business models, investment vehicles and economic incentives involved, the range of forest management/harvest practices (and the constraints on those practices) being employed on public, private and tribal lands, the policy goals and regulatory framework currently in play on federal, state, tribal and private forestland, the intersection of listed species with this forested landscape, and the impact and implications of climate change and wildfire on forest policy.

This will take some additional research, and then setting a strategically selected “larger table” to conduct a political analysis that looks at the landscape through new eyes that are open to a suite of new, non-traditional solutions.

A larger table might be set around some agreements that could help define a potential solution space from which all stakeholders might begin to envision the transition to a

John A. Kitzhaber, MD

The Future of Forest Policy in Oregon Summary of Findings

shared future for forests and forest policy in Oregon. Some of those agreements might include:

The need for a new conversation and a new management, regulatory and policy paradigm, given the complexity and the changing nature of the industry, and the intersection of this complexity with listed species, climate and wildfire.
The need to rethink governance structures.
The need for certainty.
The need for objective science.
The need to find solutions across the entire forested landscape.
The importance of land-use planning/tax policy.
The need to look outside Oregon and the Northwest for solutions.

Rethinking and Redesigning Governance Structures

The State’s primary avenues for shaping and implementing forest policy are the Oregon Department of Forestry, the Board of Forestry and the legislature.

As discussed in the “Summary” (page 10), there are a number of current indicators that reflect the polarization, dysfunction and mission ambiguity in our current governance and management structures that highlight the need for a reset and modernization.

Fiscal Challenges
The Department of Forestry is faced with a very real threat to its solvency due to heightened wildfire activity, cash outlays, and record receivables and reimbursement periods. This raises a number of central questions:

How do we put the agency back on a sound fiscal footing?
Who should pay for fire suppression: landowners, the general fund, other

innovative revenue sources, or a combination?
How will Oregon pay for the “wildfire debt” that has accumulated through climate change and fuel accumulation, given the chronic underfunding of the Department of Forestry, and other natural resource agencies?

John A. Kitzhaber, MD

The Future of Forest Policy in Oregon Summary of Findings

• It is abundantly clear that we need a much more robust overall investment in forests and forestry, and we need to quantify the magnitude of the investment required.8 Where will the funding come from?

Coordination and Integration Challenges

In era of climate change and megafires—and given Oregon’s land ownership

patterns—there is a pressing need to rethink and redesign a better and more permanent coordination and integration between federal and state agencies, and the way this new arrangement will interface with the private sector and local communities.
The impact of, and response to, climate and wildfire is not limited to forestry and the Department of Forestry. This highlights the need to develop integrated solutions across natural resource agencies and beyond, including health, energy, land use, environmental justice, etc.
Is there value in revisiting the concept of a coordinated “Department of Natural Resources,” as opposed to a constellation of separate, autonomous natural resources agencies, all of which have their own constituencies?9

A New Social Compact
There is value in looking at more explicitly defining and updating the “social compact” between forest businesses, forest communities and the greater state population.

Scope
As a next step, a scoping process might be warranted. This would include, at the very least, (a) a review of relevant statutes and Administrative Rules and policies pertaining to the Department of Forestry and other agencies; (b) a brief benchmarking of approaches taken by other states; and (c) building off this paper, continue outreach with a specific focus on governance.

_______

The recommendations in this paper are not intended to replace or in any duplicate the promising work being done through the ongoing habitat conservation plan (HCP) processes for aquatic species on private forest land. If successful, the HCP process could help relieve longstanding tension, bring much-needed certainty for all parties, and provide a template for conflict resolution in the future.

8 The magnitude of the investment will depend on the mission, values and outcomes reflected in our forest policy framework.
9 We looked at this framework in the 1990s as we were putting together the Oregon Plan for Salmon and Watersheds, which required multi-agency coordination. While I think it is worth another look, we should not underestimate the complexity involved or the degree of agency “institutional resistance” to losing autonomy, even if such autonomy undermines the effectiveness of the agency in achieving its mission.

John A. Kitzhaber, MD

A timber supporter for Oregon Governor???

2021-10-18T11:42:00.000-07:00

A timber supporter for Oregon Governor???

State Senator Betsy Johnson, D-Scappoose, recently announced she will run for Governor as a non-affiliatedcandidate for Oregon’s open Gubernatorial race in 2022. Johnson is leaving the Democratic Party which she claims is too liberal and won’t join the Republican Party that her father was a member of because of too many Trump apologists.

Betsy Johnson has been a longtime supporter of Natural Resource businesses including #TimberUnity. A pragmatic legislator who was always willing to listen to all sides of an issue.

She has invigorated the Natural Resource Community and expect her to receive support from loggers, forest contractors, millworkers, farmers, nursery operators and all blue-collar workers. Once her message gets out, all business owners will flock to her independent campaign.

The Governor’s race promises to be an interesting pursuit with several Democratic and Republican Candidates already announcing their intentions. These include House Speaker Tina Kotek, D-Portland, Treasurer Tobias Read, D-Beaverton, Salem Oncologist and 2018 Candidate Bud Pearce, and Sandy Mayor Stan Pulliam. New York times Columnist and Oregonian, Nicholas Kristoff, left his job at the newspaper to consider a run for Governor. More candidates are likely to file. Stay tuned.

OSU Dean Weighs in on Elliott State Research Forest

2021-10-18T10:51:00.004-07:00

Oregon State University School of Forestry Dean Tom DeLuca recently weighed in on the Elliott State Forest with and opinion piece in The Oregonian.

Elliott Saga Continues

2021-10-13T11:39:00.001-07:00

Elliott Saga Continues

State Treasurer Tobias Read’s 2019 idea to turn the Elliott State Forest over to Oregon State University for a research forest has hit numerous roadblocks, none bigger than OSU deciding that the risks of ownership due to expected legal challenges over any timber harvests are too great. Read is now running for Governor and would like to see his idea go forward.

A Department of State Lands Advisory Committee, made up of stakeholders, OSU and DSL representatives has been overseeing a process that would keep the ESRF in public hands. The Committee is now developing Legislative Concepts for the February 2022 short legislative session. Legislation is needed to create an entity that governs the Elliott State Research Forest, where OSU will conduct the research on the massive 84,000 acre forest.

Still to be determined is where or how the $121 million will come from to decouple the ESRF from its Constitutional tie to the Common School Fund. Also, the Committee decided a new appraisal would be timely. Since timber values have increased dramatically since the Pandemic it’s likely the price tag will increase.

DSL is overseeing the development of an Endangered Species ACT Habitat Conservation Plan for the Elliott that will determine the allowable timber sale quantity. Previous attempts by the Department of Forestry to develop an HCP failed to get Federal Agency buy-in during both Republican and Democratic Administrations. Good luck this time.

The ESRF will need to generate funds for research projects, road maintenance and fire protection. Not to mention maintaining public access to the forest.

Likely next steps include approval of legislative concepts for creating the ESRF and a governing body for this new public entity. Just as important is securing $121 million. Stay tuned.

The Elliott State Forest is a step closer to becoming an 80,000-acre research forest after the State Land Board voted in favor of Oregon State University’s proposal.

Controversial forestry experiment will be largest-ever in United States

“Smokescreen: How Timber Unity has mainstreamed militia groups, Alt Right, and conspiracy theories in Oregon politics”

2021-02-01T11:11:00.002-08:00

Smokescreen

Disappointing piece on the ties between #TimberUnity and Alt-Right groups.

Counties Win Big

2019-11-22T11:27:00.000-08:00

Counties Win Big

Elliott State Forest-The Long and Sordid History

2019-07-23T15:48:00.000-07:00

Elliott State Forest-The Long and Sordid History

The Elliott State Forest in Southwestern Oregon is an unbelievable example of poor public policy affecting forest management. The NW Timber Blog has reported on some of the trials and tribulations of this once proud bastion of forest management that benefited Oregon's Common School Fund and overseen by the State Land Board made up of the Governor, Secretary of State and Treasurer

The Elliott, once a great example of Multiple-Use Forestry that provided recreation, fish and wildlife habitat spectacular scenic beauty and millions of dollars in revenues for schools, is now a financial drag on the Common School Fund.

Chronology

The State Land Board, SLB, Governor John Kitzhaber, Secretary of State Kate Brown and Treasurer Ted Wheeler increased the sustained yield timber harvest to 40 million board feet per year, significantly less than the 75 mmbf annual growth on the Elliott. The harvests benefit the Common School Fund, CSF.

· Environmental groups protest the action and occupy offices of the Governor, Secretary of State and the Treasurer. Their attorneys file a lawsuit charging Endangered Species Act violations involving the Marbled Murrelet.

· The State surrenders without challenging the case, stops all forest management and pays the litigants $400,000 for their attorney fees.

· Without timber harvests, the Elliott was costing the Common School Fund $3 million/year in management costs including road maintenance and fire protection fees.

· Kitzhaber, Brown and Wheeler decide that the only viable option to stem the loses to the CSF is to sell the Elliott.

· After Kitzhaber resigns Brown is elevated to Governor. Brown and Wheeler maintain the process to sell the Elliott. Only one bid for $220.7million is submitted by a coalition of Indian Tribes and Lone Rock Timber Management Company in Roseburg.

· SLB meetings are flooded with protests over the Elliott sale proposal. After two such meetings, Brown, Wheeler and SOS Jeanne Atkins change course and cancel the sale.

· Kate Brown is reelected Governor, Ted Wheeler leaves to become Mayor of Portland and Dennis Richardson and Tobias Read replace them on the SLB.

· After canceling the sale, Brown convinces the legislature to provide $100 million in bonds as partial repayment to the CSF, essentially to buy a forest Oregon already owns.

· Treasurer Read’s plan to turn the Elliott over to the School of Forestry at Oregon State

University as a 84,000 acre research forest still needs $120.7 million to make the CSF whole.

· Today, the SLB staff and OSU are conducting public meetings in preparation for finalizing a plan to present to the SLB in December 2019.

Meanwhile Dr. Bob Zybach has been working with longtime Elliott Managing Forester Jerry Phillips and Southwestern Oregon Community College to develop an educational/recreation plan for the Elliott. The proposal is here.

More Elliott information:

Let’s Talk Timber, Madame Governor!!!

Two bills plot starkly different courses for Elliott State Forest

State Officials hoping for magic

Land Board Bails on Elliott Solution

New Members Overrule Governor

Cap and Trade or Cap and Cause Problems???

2018-12-20T09:46:00.002-08:00

Oregon’s Forest Products Industry is possibly headed for a very uncomfortable debate in the upcoming 2019 session of the legislature. Senate President Peter Courtney, D-Salem, previously reluctant to adopt Carbon Cap and Trade legislation, has stated his intention to pass such a bill in 2019.

To demonstrate his commitment, Sen. Courtney has joined Speaker Tina Kotek, D-Portland, in chairing the Joint Committee on Carbon Reduction. The Committee has been meeting in preparation for Carbon legislation adoption in 2019 since the adjournment of the 2018 Short Session in March.

Carbon legislation means different things for the various sectors of the Forest Products Industry. Forest landowners see the opportunity for additional revenue from selling carbon allowances for growing forests to carbon dioxide emitters in Oregon and throughout North America. The allowances can mitigate the Carbon dioxide emissions from forest product manufacturing.

Forest product manufacturers may be taxed for their carbon dioxide emissions. To avoid the fees they may be forced to curtail their operations to reduce emissions. One option is for manufacturers to purchase emission allowances from forestland owners who agree to restrict harvests on their own forestland.

Forest operators, like loggers, see the impending Cap and Trade legislation as more restrictions and increased taxes on diesel which is a critical component for converting forests to logs for mills. Expect to see manufacturers, loggers and forestland owners all seeking Cap and Trade specifications that protect their forestry interests.

The forestry interests could lead to different stances on the Cap and Trade legislation. Landowners may choose to increase the harvest age of their forests to generate carbon credits. Recently much of Oregon’s private forestland has been transferred to Timber Investment Management Organizations and Real Estate Investment Trusts. These new landowners have investors with different financial objectives then Oregon’s traditional large forest landowners.

Most Oregon wood processing plants have adapted to the drastic curtailment of large logs from Federal Forest land since the 1990s. The small log processing mills can’t use large logs that would come from older trees which have carbon credits as their objective. Landowners must weigh the revenue from Carbon credits against the lower prices for their large logs.

Debates over the price of Carbon credits and the limits forest product manufacturers may be the theme of the negotiations over 2019 Cap and Trade legislation.

A vibrant wood products market is good for Oregon and the climate

2018-05-06T09:27:00.000-07:00

A vibrant wood products market is good for Oregon and the climate

The Oregonian

By Kristina McNitt

In his April 21 op-ed "Our forests can make Oregon the first carbon-neutral state," Dominick DellaSala proposes that the state can achieve this feat by disincentivizing wood production from our forestlands. He believes that Oregon's forests have the potential to be a large carbon sink, and that they should be managed to more aggressively offset emissions from other sectors. We are confident that his proposals would not actually decrease global carbon emissions and would come at great cost to Oregonians.

DellaSala alludes to the fact that Oregon's forests are already sequestering huge amounts of carbon. What he doesn't tell you is that this is true across all ownership classes. Federal forestlands, state forestlands and private industrial forestlands are all growing more trees every year than are harvested or lost to wildfire or mortality. In fact, the 30 million acres of forestland across the state are sequestering approximately half of all of Oregon's carbon emissions every year.

But rather than praise Oregon forest landowners for being part of the climate change solution, DellaSala proposes that they bear ever more of the burden. By taxing industrial landowners and paying others to stop cutting trees, he believes that even more carbon emissions from other sectors can be stored on Oregon forestlands. Putting aside the fundamental inequity of making forestland owners solve a problem caused by others, curtailing harvest means curtailing the forest products industry and all of the otherwise carbon-neutral employment in rural communities those industries support.

But the real punchline is this: Domestic development and redevelopment will not stop. New houses are built every day in Oregon and across the United States. By reducing the state's wood production, we only ensure that developers turn to wood from other jurisdictions with more lenient environmental protections than we have here. Or worse, that they use less-climate-friendly alternatives to wood. For this reason, DellaSala's proposals would not actually decrease global carbon emissions and, in fact, could increase net emissions depending on what products are substituted for wood.

We hope that reasonable people see DellaSala's op-ed for what it is: A thinly-veiled anti-logging agenda. In most mainstream circles working on climate change issues, including the International Panel on Climate Change, use of wood products is strongly encouraged. The panel concluded that in "the long term, a sustainable forest management strategy aimed at maintaining or increasing forest carbon stocks, while producing an annual sustained yield of timber, fiber or energy from the forest, will generate the largest sustained mitigation benefit."

Of course, wood products come from trees. And there's no better place in the world to grow (and re-grow) trees than Oregon. In light of its positive contribution to climate change, we look forward to working with state lawmakers on finding ways to encourage the use of more Oregon wood, not less.

Kristina McNitt is president of the Oregon Forest & Industries Council, which is based in Salem.

Elliott State Forest – Who would believe this???

2017-08-07T14:21:00.000-07:00

Elliott State Forest – Who would believe this???

The Elliott State Forest in Southwestern Oregon is a sad reminder of how far off center public forest management has become. The Elliott, once the quintessential managed forest boasting spectacular, rugged scenery and home to a world class Douglas fir forest, is now destined to be mired in bureaucratic gridlock as elected officials have punted on a rational solution to this unique forest.

Previously, the Elliott provided millions of dollars to Oregon’s Common School Fund while generating a once reliable supply of timber for local forest product manufacturers and loggers. This resulted in thousands of family-wage local jobs.

The Perfect Storm of environmentalist litigation, bureaucratic incompetence and timid elected officials led to the current situation that has the State of Oregon selling $100 million in bonds to pay for half the value of the Elliott to the Common School Fund.

Meanwhile, the State Land Board, the Constitutional manager of the Elliott, has retained the Department of Forestry, ODF, to negotiate a Habitat Conservation Plan, HCP, with the US Fish & Wildlife Service and the National Marine Fisheries Service. Wait, isn’t that how we got here?

ODF spent ten years in a failed try to negotiate an HCP with the Federal agencies. The futile effort led the SLB of John Kitzhaber, Kate Brown and Ted Wheeler to give up on the effort and adopt a modified Endangered Species Act strategy which led to litigation. The Department of Justice surrendered without a fight and paid the environmental non-profits $400,000.

The lack of timber revenue led to a failed attempt to sell the Elliott in order to meet their responsibilities to the CSF by the Kitzhaber-Brown-Wheeler SLB. Governor Kate Brown and new Treasurer Tobias Read flipped flopped over and over enough to torpedo the sale to Lone Rock Resources the only bidder for the $220.8 million Elliott.

Now we have Oregon spending twice as much in bonds to pay the CSF for half of the Elliott, all the while for a forest it already owns. It is only believable if own has witnessed the decades of twists and turns over the Elliott.

Let’s not forget that the Oregon State University School of Forestry is trying to raise $120 million to pay for the balance of the Elliott. Forestry Dean Thomas Maness wants to turn the once hard-working Elliott into a research/experimental forest to explore forest management and endangered species relationships.

Meanwhile, the CSF is on the hook for the forest and road management costs and fire protection assessments as ODF again tries to negotiate and implement an HCP. As we have seen for the past 25 years, nothing with the Elliott happens quickly. Stay tuned.

State Land Board's decision on Elliott Forest a disappointment

It's unanimous: Elliott State Forest will remain publicly owned

Oregon School Boards Threaten Lawsuit Over Elliott State Forest Revenue

Timber company sues state agency over Elliott State Forest deal

Lawmakers back $100 million for Elliott State Forest, $50 million for UO campus

Oregon State Land Board: Elliott State Forest to stay public

State Land Board: Delaying the inevitable?

2017-03-19T19:31:00.002-07:00

Delaying the inevitable?

The State Land Board has delayed their decision on the proposed sale of the Elliott State Forest to Lone Rock Resources and two American Indian Tribes from April to May. The delay allows Governor Kate Brown who was outvoted when new State Treasurer Tobias Read proposed amending the pending sale agreement to buy back $25 million worth of special recreational or environmental acres. New Secretary of State Dennis Richardson joined Read in supporting the sale.

Brown is trying to use $100 million in bonds to pay the Common School Fund for the Elliot, which Oregon already owns. That is less than half of the $220.8 million Lone Rock is willing to pay. The legislature would have to approve both Brown’s $100 million and Read’s $25 million. This is problematic since there is currently a $1.6 billion hole in the budget.

The Governor has enlisted the help of the Department of Forestry, ODF, to develop an option for the state to maintain the Elliott. ODF has managed the Elliott on behalf of the SLB since the Elliott became Oregon’s first State Forest in the 1930s. Funding for ODF’s management of the Elliott runs out on June 30^th of this year.

In anticipation of not having the sale finalized and needing someone to care for the Elliott, the Department of State lands has issued a Request For Proposal for an interim manager of the forest. Yet another strange twist in the Elliott saga…

If the Governor is successful in rounding up $100 million, she still needs one more vote from the three-member board. Read has been under tremendous pressure from shocked environmentalists to change his position. Old time environmental advocates have come in from the hinter lands and have been seen in the Capitol Lobbying Read.

Read has proclaimed his responsibility is to Oregon’s school children to protect the value of the Common School Fund asset. John Charles, longtime follower of the Elliott, and President and CEO of Cascade Policy Institute also calls for selling the Elliott in a recent OpEd. Charles pegged the value of the Elliott at $850 million in 1995. The current appraised value of $220.8 million reflects the restrictions the SLB has placed on the Elliott.

New Members Overrule Governor

2017-02-15T11:05:00.001-08:00

New Members Overrule Governor

The two new members of the State Land Board voted to move forward with the sale of the Elliott State Forest in SW Oregon. Secretary of State Dennis Richardson and State Treasurer Tobias Read Outvoted Governor Kate Brown in accepting Read’s motion to proceed forward with three amendments. Brown, clearly upset, directed the Department of State Lands to prepare an alternative to keep the Elliott in state ownership.

The SLB decision means that the $220.8 million sale to Lone Rock Timber Management Co., the Cow Creek Band of Umpqua Indians and the Confederated Tribes of the Coos, Lower Umpqua and Siskiyou Indians will proceed with the new conditions proposed by Treasurer Read.

The 84,000 acre Elliott State Forest has been the center of controversy following the adoption of a new land management plan in 2012. The SLB decided to sell the Elliott when it began costing the Common School Fund millions of dollars to maintain ownership of the forest. School interests, including school administrators and teachers. support selling the forest.

Fifty entities expressed interest in buying the Elliott. However, in 2016 Lone Rock and the two tribes were the only bidders. Read called for using $25 million in bonding to buy back special conservation and recreation areas of the Elliott, adopting Forest Stewardship Council management prescriptions for parts of the Elliott with 250-year-old trees and allowing five Indian Tribes the first right of refusal should Lone Rock decide to sell any part of the Elliott.

What happens next is unclear. The SLB meets again in April. The legislature needs to approve the $25 million in bonding. Lone Rock needs to decide if the amendments that Read proposed are acceptable to them to move forward. Governor Brown will spend the next couple of months trying to undo the SLB action and keep the Elliott in state ownership.

Stay tuned.

Oregon takes big step toward privatizing Elliott State Forest

Land board votes to sell Elliott State Forest, but decision not final

State Land Board votes to move forward on sale of Elliott State Forest

State Land Board approves sale of Elliott State Forest

Will we see BIG changes in Forestry from the Trump Administration?

2017-01-19T10:54:00.002-08:00

Will we see BIG changes in Forestry from the Trump Administration?

The inauguration of Donald Trump as President has many questions and expectations for the forest community. Will the new Administration harken big changes for our National Forests and Bureau of Land Management lands? What about private forests? The Environmental Protection Agency has been seeking changes to Oregon’s Forest Practices Act for over a decade. The OFPA prescribes rules and regulations for state and private forests. Will the EPA back off?

The speculation may soon be coming to an end. President-Elect Trump’s team will take over on January 20^th. The Departments of Agriculture, Interior, Commerce and EPA will have a more significant impact on the forestry community in Oregon than most initiatives from President Trump.

Trump’s Cabinet officials have a big role to play, however the Federal Agencies that run the country have civil servants that will continue policies of the Obama Administration. The new leaders will eventually have an impact on the agencies, but it takes time.

Federal government watchers have observed that the government is like a large ocean liner. The President and his Cabinet may turn the rudder of the ship, but it will be many nautical miles before the government heads in a new direction. The slow movement was most likely the design of the Founding Fathers to ensure that changes come about following thoughtful analysis.

However, the new Administration can have a prompt impact in a few ways that can help Oregon. Increasing the pace and scale of National Forest restoration projects and adopting a management strategy for the O & C lands that respects the timber dominate nature of the 2 million acres in Western Oregon would quickly revitalize rural communities throughout Oregon.

It would be good to get away from the rhetoric of the 2016 election and undertake a few changes to federal forest management that will pay untoward dividends,

Forest policy requires a balanced approach

2017-01-09T10:04:00.000-08:00

GUEST VIEWPOINT

Forest policy requires a balanced approach

By Jim Geisinger

For The Register-Guard

JAN. 9, 2017

As the 40-year timber veteran cited in Andy Kerr’s Jan. 3 guest viewpoint, I am cautiously optimistic the next two years will offer new opportunities to bring balance to federal forest management.

With better management and proactive policy changes, our leaders have the ability to create and support family-wage jobs, conserve natural resources, maintain access to public lands, restore forest health and protect our drinking water. We believe it’s better to actively manage our forests for the future, for multiple uses and benefits, rather than locking them up and walking away.

Far from being “Big Timber,” Oregon logging companies are predominately small, family-owned businesses. We are trained in the latest, science-based forestry practices and continually invest in cutting-edge equipment and technology.

In fact, a large majority of Oregon’s municipal drinking water comes from actively-managed watersheds that utilize modern timber harvest and resource-protection methods.

As loggers we are proud of what we do, and proud to work in an industry with an average annual wage of $49,200, compared to $45,000 for all Oregon employment. We’ll continue to provide the renewable and sustainable materials that support our communities and make civilization possible.

Yet Kerr is eager to re-ignite the timber wars. After all, that is good business for the environmental conflict industry, and useful for soliciting contributions from anonymous benefactors.

But replaying the 1990s will not fix the socio-economic problems in rural Oregon.

It will not help rural counties that are on the brink of fiscal insolvency, nor will it meet the needs of our public lands. Oregon loggers do not cut more trees than what grows naturally. We don’t even cut “old growth” on federal lands, so maybe it’s time to leave Kerr and his tired rhetoric behind.

I am cautiously optimistic because our political leaders can no longer ignore the costs of hands-off forest management. The current approach has failed our citizens, forests and wildlife. Our federally owned forests have become overgrown and vulnerable to high tree mortality, which contributes to unnaturally severe wildfire, disease and insect infestations. Last October the Oregon Forest Resources Institute reported there are more than 350 million standing dead trees across 14 million acres of federally-owned forests within the state.

According to OFRI’s data, forests in the National Forest system have a timber harvest rate of just 8 percent of total growth, but have a mortality rate of about 55 percent.

Meanwhile, private and Native American forestlands, which have the highest timber harvest rate at 71 percent of total growth, have only 9 percent mortality.

More than 70 percent of the standing dead timber on federal lands is on non-reserved lands open to harvest. If Kerr chooses to sit in a tree to “protect” it, there’s a good chance that tree is already dead. And if the forest burns, the wildfire can emit up to 100 tons of greenhouse gasses, aerosols and particulates per acre. Most of Oregon’s forest sector companies, from logging to primary and secondary manufacturing, do not operate at capacity. The reason is not lack of demand. It now takes one tree every year for every man, woman and child to meet their needs for paper, packaging, fiber compounds, lumber and panel products.

Rather, it is because most companies cannot secure a long-term source of wood fiber. The real legacy of Kerr’s forest policy is to outsource timber jobs and products to other countries, rather than having locally sourced timber responsibly harvested and manufactured here at home.

A modest increase in timber harvests on federal land will enable companies to add shifts, invest more in equipment and technology, and create more opportunities for the scores of businesses that service the industry. A reliable fiber supply would also secure Oregon’s position as a leader in the development of advanced wood products.

For example, cross laminated timber, sourced from small- and medium-diameter trees, helps reduce greenhouse gas emissions by storing carbon and requiring significantly less energy to produce than concrete or steel.

We need modern federal forest policies that are responsive to the needs of our ever-changing economy and environment. The Bureau of Land Management and Forest Service need the policies and resources to better manage our public lands, support wildlife populations and adapt our forests to drought and changing climate conditions.

Bringing balance to federal forest management will also create family-wage jobs where they’re desperately needed in rural Oregon, and generate revenues to support basic public services such as law enforcement and health care. Kerr can continue to look to the past, but it’s time for our leaders to look forward with policies that recognize 21st century forest management.

Jim Geisinger is executive vice president of Associated Oregon Loggers in Salem.

Land Board Bails on Elliott Solution

2016-12-15T12:19:00.000-08:00

Land Board Bails on Elliott Solution

The long-running saga of the Elliott State Forest in Southwestern Oregon has just been extended for an unknowable length by the State Land Board. The SLB, made up of Governor Kate Brown, State Treasurer Ted Wheeler and Secretary of State Jeanne Atkins, rejected a comprehensive plan from Lone Rock Timber Management Partners, the Cow Creek Band of the Umpqua Tribe of Indians and the Confederated Tribes of the Coos, Lower Umpqua and Siuslaw Indians.

At a packed hearing on December 13^th, school boards, school administrators and teachers all testified in support of the sale to Lone Rock and the Oregon Tribes. Evidently, the Governor and Treasurer were moved by the 80 people that demonstrated, begged and threatened the SLB to reject the sale and decouple the Elliott from the revenue mandate of the Common School Fund.

Previously, the SLB called for selling the Elliott to an entity that would protect the oldest forests, provide wide stream buffers, keep the forest open for recreation and produce 40 jobs. The August 2015 decision to sell came after failing to produce revenue and in fact costing the Common School Fund millions of dollars rather than producing revenue as it had since 1930.

Following prior SLB action to increase timber production from the Elliott, environmentalists sued to stop timber management in Marbled Murrelet habitat. Rather than fight the suit and continue to offer timber sales outside of Marble Murrelet habitat, the State surrendered without a trial and paid $400,000 in attorney fees.

Fifty entities had expressed interest in purchasing the Elliott. However, after the SLB set the no-bid purchase price at $220.8 million only Lone Rock and the Oregon Tribes were interested. Prior to the restrictions, the SLB placed on the future owner of the Elliott, experts estimated the Elliott’s value at more than $400 million.

Changes ahead for State Forests

2016-10-19T11:44:00.000-07:00

Elliott State Forest

Bids are due next month for Southwestern Oregon’s Elliott State Forest (ESF). The Common School Fund forest will be given to a new entity for $220.8 million and promises to keep the forest open for recreation, provide wide stream buffers, preserve the oldest forests and provide 40 jobs per year.

The unique process was set in place by the State Land Board (SLB) over two years ago following millions of dollars in losses the State incurred trying to manage the ESF in the face of a lawsuit over protection for the Marbled Murrelet. John Charles, president and CEO of the Portland-based Cascade Policy Institute, has maintained for over a decade that the ESF should be sold to the highest bidder.

The price for the ESF is set in stone after the SLB spent over $1 million on determining the value of the ESF. Timber experts were shocked at the low $220.8 million value. Others had previously pegged the ESF’s value at over $800 million.

NW Oregon Forests

Things may not be any better for the State Forests in Northwest Oregon. Linn County has filed a $1.4 billion lawsuit against Oregon for breach of contract after timber revenues have dwindled over the past 15 years. The Class Action suit heads to trial in 2017.

In the 1930s the Counties deeded the forests to the State following massive tax delinquencies. In exchange, the State was to share the revenue from the management of the very productive forests.

The arrangement worked well until the Department of Forestry came up with new plans that reduced timber revenues for the Counties. The combination of declining receipts from federal and state forests have put rural counties in an economic crisis. Linn County felt they had no choice but to turn to the courts. The timber industry, troubled by declining timber sales, has provided early funding for Linn County’s suit.

Proposals are due for the Elliott State Forest by November 15^th, the State Land Board will choose a successful owner in December. However, it will be sometime in 2017 before there is certainty over the future for the NW Oregon State Forests.

Eisenhower Was Right! Government Science is Killing Our Forests

2016-10-03T17:23:00.000-07:00

Eisenhower Was Right!
Government Science is Killing Our Forests By Bob Zybach PhD

Eisenhower Was Right! Government Science is Killing Our Forests