March 25, 1995 in Nation/World

Log Sales Show Taxpayers Get Short End Of Stick Idaho’s Track Record Belies Timber Companies’ Rosy Estimates Of Profits From Salvage Plan

By The Spokesman-Review
 

The timber industry has a deal it says American taxpayers can’t refuse.

Suspend environmental laws and allow logging of sick and burned trees in national forests, and they’ll pump $1 billion into the federal treasury.

The U.S. House has already approved a massive salvage bill that would release 6 billion board feet of timber.

In the process, industry promises to improve forest health and decrease wildfire risks by thinning dense stands.

But environmentalists and budget watchdogs question whether taxpayers will get a windfall or a boondoggle.

They point to recent timber sales in Idaho, where trees were sold for a fraction of their estimated value. Timber companies say the estimates didn’t include the high cost of removing trees by helicopter. Environmentalists say the timber companies are colluding to keep prices low at auction.

Two large sales near McCall in central Idaho couldn’t scare up a single bid - until the Department of Lands slashed the price to nearly one-fifth of its appraised value.

Publicly owned timber - estimated by Congress and industry as being worth $500 per thousand board feet - fetched only $85 last month in the Idaho woods.

Next week, one Idaho fire sale gets even better for industry. The state will sell the timber for $50 per thousand board feet.

Is the market that volatile, or are taxpayers getting the shaft?

“The taxpayer is going to end up subsidizing multibillion-dollar corporations while they destroy our national and state lands,” says Spokane conservationist Barry Rosenberg.

It’s not entirely a mystery why 15.4 million board feet of timber near McCall’s Payette Lake didn’t sell at a January auction.

The trees were burned last September in two lightning-sparked blazes that ravaged 150,000 acres in the Payette National Forest.

Idaho Department of Lands officials moved quickly to sell the charred timber before its value plummeted. They were aided by environmental laws far more lax than federal regulations.

Land managers drafted two timber sales - Blackwell, for 6.1 million board feet; and More Blackwell, for 9.3 million board feet.

The minimum prices, based on averages from the previous year, were $2.9 million for one and $1.9 million for the other.

On Jan. 26, the state held an auction at its McCall office. No one bid.

“They were asking too much money,” says Bob Hitchcock, owner of Evergreen Forest Products, a small mill in New Meadows, Idaho.

Even though the timber market had softened, Idaho uses a formula that takes into account revenues from prior-year timber sales.

In addition, the logging contract required completion within one year and expensive helicopters for twothirds of the sale area.

Helicopters can triple operating costs over conventional tractors and cables, but are necessary to preserve fragile ecosystems, such as the steep slopes that rise over McCall.

Many public salvage sales require helicopter logging because wildfires typically rage in roadless back-county areas.

“It’s become a helicopter’s market,” says Ron Litz, Idaho bureau chief of forest management. “(Helicopter companies are) saying we have all kinds of sales to choose from and we’re only going to take the best and ask exorbitant prices.”

Such companies aren’t plentiful, and many already have been hired by large timber companies anticipating huge offerings of public timber this summer.

On Feb. 26, the state auctioned the McCall sales again - after cutting the minimum price to $600,000 for one and $400,000 for the other.

Boise Cascade Corp. outbid Evergreen on the larger sale by shelling out $790,000.

“They use a formula in the state of Idaho that tends to overprice timber,” says Dave Van De Graaff, Boise Cascade regional timberlands manager.

“We’re working with them right now to make it more flexible,” he says.

Another factor devaluing the Idaho timber is size and type. The sales consist of scrawny fir, spruce and lodgepole pine and not the more lucrative ponderosa and white pine, Van De Graaff says.

On Tuesday, the state will offer the smaller sale a third time, for a minimum of $300,000.

If it doesn’t sell this time, Idaho will invite out-of-state bids.

Stan Hamilton, director of the Idaho Department of Lands, says he is “puzzled” and disappointed over the sales.

“If we don’t sell it, we get nothing and it’s a total loss,” says his lieutenant, Litz. Then the losers are Idaho schoolchildren, for whom state lands are managed.

The Idaho Conservation League says the timber industry is underbidding state sales to drive down costs on the federal offerings expected this summer.

“No one even needs to say collusion on this,” says the league’s John McCarthy. “With a wink and a nod, the timber industry is using the state as a patsy.”

Conservationists and federal budget watchdogs fear lower-thanexpected prices will afflict any massive sell-off of federal timber.

Co-authored by U.S. Reps. Charles Taylor, R-N.C., and Norm Dicks, D-Wash., the bill would force the U.S. Forest Service to sell 6 billion board feet of timber over two years, mostly in the interior West.

Emergency provisions would speed timber harvests through the environmental morass. Estimates of how taxpayers would come out of the deal vary wildly:

The timber industry claims the measure will mean a $1 billion windfall for taxpayers.

The congressmen who wrote the bill peg the profit at $650 million.

The non-partisan Congressional Budget Office estimates a net gain of $100 million, but doesn’t consider potential environmental damages that will have to be repaired later.

The Congressional Research Service, using average salvage sale data since 1983, predicts a $200 million deficit.

Environmental groups and their experts say the logging could cost taxpayers $1 billion.

The disparities are traced to special-interest agendas and too many unknowns. No one yet knows where the timber would be logged or how close it would be to sawmills. The other variables are market conditions, whether helicopters or other costly methods would be required, whether expensive roads would be built, and what percentage of the sales would consist of higher-valued live trees.

“There’s an awful lot of speculation and guesswork,” says Ross Gorte, a natural resources policy specialist with the Congressional Research Service.

The U.S. Forest Service’s own data indicate that only 20 of 156 national forests consistently generate net revenues for the treasury.

The rest are losers.


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