Alaska Timber Industry Needs Increased Tongass Harvest

Federal policies and politics have abolished large scale logging and manufacturing

Alaska’s timber industry varies greatly by region within the state and there is great potential for growth of the industry. There are roughly 126 million forested acres in Alaska, but only about 14 million acres support fast-growing commercial timber. This is about the same acreage of commercial timberland in Florida, Louisiana, and Tennessee. However, those similar size forests support thirty-six thousand, twenty-three thousand, and forty thousand jobs respectively, according to the 2002 American Forest & Paper Association State Economic Brochures. Alaska’s commercial forest currently supports only about one thousand jobs statewide.

Interior Region

The Interior region has millions of acres of both hardwood and softwood timber, but much of the timber is isolated and costly to access. There are a number of small, stable sawmills in the region and there is a significant amount of timber cut for fuelwood. There is also a facility manufacturing wood pellets and compressed fuel logs in Fairbanks, but due to low oil prices, the pellet side of the operation is currently idle due to a large inventory of pellets. Residential space heating customers can switch back and forth between their pellet stove and oil furnaces and do so regularly based on the price per BTU; they go with the cheapest fuel option. Despite low oil prices biomass energy is still a good choice for many, especially remote communities. There are numerous communities heating public buildings, such as schools. These commercial scale biomass units use wood chips or solid wood as their fuel source.

The Tok region continues to make investments in manufacturing infrastructure. For instance, Young’s Timber Inc. has recently installed a new sawmill and is in the process of adding both a compressed log line and a wood pellet mill. This project is being done in phases, but it is one of the few areas in the state where private financing is upgrading or building new wood manufacturing facilities. In part, this is because of the stable wood supply from the surrounding Tanana Valley State Forest and longer term timber sale contracts between the company and the Division of Forestry. The Interior forest products industry is modest, but individual companies and entrepreneurs continue to find markets and grow their forest-based businesses.

Southcentral Region

The Southcentral region has better access to its timberlands than the Interior region and the coastal areas have high volumes of fast growing softwoods. These coastal areas support a significant log export business, and the inland areas have a number of small sawmills operating.

The nation’s second largest national forest, the Chugach, is in this region, and the commercial timberland in the Chugach National Forest could support up to 16 million board feet of harvest annually. Since 2002 there has been almost no timber harvesting from this forest, but recently the agency has resumed selling a few small timber sales. These timber sales are a welcome addition to the Southcentral regional timber supply.

There is a mixed land ownership pattern within the rural areas around the Mat-Su Borough. This creates the potential for conflict between residents and logging operations. The lack of access to a reliable supply of larger sawlogs in this region has kept the sawmill industry from flourishing; however, there may be an opportunity for a much better timber supply if the state timber resources in the Susitna and other areas can be accessed. An effort to establish a new state forest in this region stalled out in the 2013/14 Legislature despite widespread support from the industry and communities. A secure and stable land base is necessary for the industry to grow in this region and we are hopeful that this initiative and other efforts to improve the timber supply in Southcentral will be revisited in the near future.

Southeast Region

About 90 percent of the commercial timber in the Southeast region is managed by the federal government; however, the amount of timber available to the industry from the Tongass National Forest has steadily declined over the last twenty-five years. The timber industry, which was once the largest employer in the state, has declined along with the timber supply and now represents less than 4 percent of the employment in the Southeast region. The state and private landowners manage only about 10 percent of the timberland in this region, but they are providing two-thirds of the timber supply. Currently there is only a single mid-size sawmill still operating in the Southeast region along with a handful of much smaller sawmills.

Large scale logging and manufacturing on the Tongass began in 1954. Prior to that date, the timber industry in the region was limited to a few small family owned sawmills that produced lumber primarily for local markets-canneries, docks, etc. From 1954 until 1997 there were two pulp mills in the region that utilized low-grade logs and chips from local sawmills to manufacture dissolving pulp which was shipped to over thirty countries around the world. By 2000, the decline in federal timber sales resulted in the closure of the pulp mills and several sawmills in the region. As the decline in federal timber sales continued, the last of the Ketchikan sawmills and veneer plant closed as did a large sawmill in Wrangell.

Uncertain Future for the Timber Industry in Southeast Alaska

Congress has set aside about half of the commercial timberland within the Tongass National Forest for wilderness, national monuments, and other non-development uses. The half that Congress did not lock up would, according to the US Forest Service, sustain about 2 billion board feet of timber harvest annually. The timber industry needs less than 20 percent of that 2 billion board feet (roughly 300 million to 350 million board feet annually) to restore a viable, fully integrated manufacturing industry, but bureaucrats in Washington, DC, have directed the federal agency to limit the timber supply in Alaska for the next ten to fifteen years to less than 3 percent of the 2 billion board foot potential.

In addition to further restricting the volume of timber from the Tongass National Forest, the Forest Service has been directed to implement a Transition Framework that would prematurely limit most future timber harvesting to young growth stands. If this early transition mandate is not rescinded, it will force the closure of most of the remaining sawmills in Southeast because the oldest young growth timber in the region is only about sixty years old and will not be mature for at least another thirty years. At the current age, the trees are too small for the manufacture of anything other than the lowest value lumber.

Since Southeast Alaska sawmills must barge their lumber some eight hundred miles to the Pacific Northwest, the mills would be at a significant economic disadvantage to much larger sawmills located within the Pacific Northwest that produce the same low value lumber. Currently, in order to compensate for the higher cost of shipping lumber from Alaska, the local mills produce higher value lumber products like piano and guitar stock from spruce logs; doors, windows, and molding from hemlock logs; and gazebo stock and other finished wood for Cape Cod-style homes from cedar logs. These are high-value products, but they cannot be sawn from small diameter, young growth logs.

In addition to the small diameter of the current young growth timber, the volume of timber per acre in the older young growth stands is currently less than half of what it will be a maturity. Harvesting these small trees now will result in exacerbating the industry’s competitive disadvantage—the Southeast Alaska sawmills would have to harvest more than double the acres of land to get the same volume of timber as their competitors in the Pacific Northwest.

The lack of a sufficient economy of scale is yet another major disadvantage for the timber industry in any of Alaska’s regions. In Southeast Alaska the industry was once comprised of pulp mills and sawmills and even a veneer plant that we hoped would develop into a plywood facility. Sawing lumber from round logs results in a lot of chips, sawdust, planer shavings, and bark. These residuals represent as much as 40 percent of the fiber in the logs. In the Pacific Northwest, all these sawmill residuals are utilized in pulp mills, fiberboard plants, and other integrated facilities. The current small amount of timber harvest in Southeast Alaska will not generate sufficient residuals to support these integrated manufacturing facilities. The only way to restore a viable timber manufacturing industry in Southeast Alaska is to increase the supply of timber from a portion of the Tongass National Forest because the state and private landowners are already managing their lands to maximize their sustainable timber supply.

State Timber Task Force

In 2011, the State of Alaska assembled a Timber Task Force to recommend actions state government could take to revitalize the timber industry. In 2012 the Task Force completed its work.

Task Force Findings:

The downward spiral of the Southeast timber industry has adversely affected communities, schools, and local economies.

Federal policies and management practices fail to provide sufficient timber supply for Southeast’s timber industry.

The current US Department of Agriculture “Transition Framework” and associated “Investment Strategy” being implemented across the Tongass National Forest abandons traditional timber sales in favor of young growth harvest and restoration activities, which is to date, a failed alternative for sustaining Southeast communities.

Environmental groups have exerted undue influence over US Forest Service policy and direction related to forest management on national forests in Alaska.

Task Force Recommendations:

• Increased access and expansion of legislatively-designated state forests.
• Review the State of Alaska timber harvesting statutes and regulations to insure these regulations are effective but do not unnecessarily constrain resource development.
• Pursue withdrawal of 2 million acres from the Tongass National Forest from federal management and/or ownership to support an integrated timber industry.
• Work jointly with other states/entities seeking change in the management of federal lands. Possible changes include the concepts of “trust” or state management of federal lands, the transfer of federal lands into state ownership, adjustments to the Alaska Statehood Act by Congress, and measures to force the agencies, primarily the US Forest Service, to increase timber harvest.
• Support finalization of Sealaska’s outstanding land entitlements, Alaska Mental Health Trust’s administrative land exchange with the US Forest Service, and settlement of land entitlements for the unrecognized Southeast Alaska Native Communities.
• Assist with timber demand and supply analyses.
• Assist with additional wood products development.

Bottom Line

The timber supply in the northern regions of the state has been increasing slowly, but the ongoing reduction in timber supply from the Tongass National Forest has forced the closure of most of the timber businesses in Southeast Alaska and the political decision to limit future timber sales to immature young growth trees will worsen the situation. The transition to young growth harvesting has always been the plan for the Alaska timber industry, but it cannot happen until there is sufficient, mature young growth timber to sustain a viable manufacturing industry. The timberland harvested in the 1950s will be mature and large enough to be sawn into high value products in about thirty years. That is when the transition should begin and the transition will not be complete until there is sufficient young growth acreage to support an economy of scale adequate to sustain a viable, fully integrated timber manufacturing industry.

OWEN J. GRAHAM HAS BEEN THE EXECUTIVE DIRECTOR OF ALASKA FOREST ASSOCIATION SINCE JUNE OF 2001. THE ALASKA FOREST ASSOCIATION IS A TRADE ASSOCIATION THAT WAS FORMED IN 1957. ALASKA FOREST ASSOCIATION’S ACTIVITIES ARE DIRECTLY RELATED TO THE VIABILITY OF THE FOREST PRODUCTS INDUSTRY IN ALASKA. ITS RESOURCES ARE COMMITTED TO ADVANCING THE RESTORATION, PROMOTION, AND MAINTENANCE OF A HEALTHY, VIABLE FOREST PRODUCTS INDUSTRY IN ALASKA. THE ASSOCIATION ALSO MAINTAINS A HEALTH INSURANCE PLAN AND A PENSION PLAN FOR ITS MEMBERS AND THE ASSOCIATION SPONSORS THE SUSTAINABLE FORESTRY INITIATIVE PROGRAM FOR ALASKA. GRAHAM HAS A DEGREE IN FOREST MANAGEMENT FROM THE UNIVERSITY OF WASHINGTON. PRIOR TO HIS EMPLOYMENT WITH THE ALASKA FOREST ASSOCIATION, GRAHAM WAS THE TIMBER DIVISION MANAGER FOR KETCHIKAN PULP COMPANY FOR FIFTEEN YEARS. PRIOR TO 1986, HE WORKED FOR THIRTEEN YEARS AS A FORESTER AND LOGGING ENGINEER IN ALASKA AND WASHINGTON STATE. GRAHAM’S EXPERIENCE INCLUDES SUPERVISING THE HARVESTING, PURCHASING, AND SELLING OF TIMBER AS WELL AS MANAGING LOGGING AND ROAD CONSTRUCTION ACTIVITIES. EARLY IN HIS CAREER, HIS DUTIES INCLUDED LOGGING ROAD SURVEY AND DESIGN, ROAD CONSTRUCTION FOREMAN, TIMBER CRUISER, AND LAND SURVEYOR.