Turbulence in the Northwest Timber Industry since the 1990’s

• Federal Timberlands have been a battleground since the 1960’s

• Environmental Organizations seized the Endangered Species Act to seek protection for lands not administratively or Congressionally classified in the late 1980’s (petitioned in 1987)

• The Fish & Wildlife Service denied the petition

• After appeal to federal courts, FWS was ordered to reconsider, and then it concluded that biological data supported listing the Northern Spotted Owl

Congressional, Agency, and Court Responses in 1990

• Congress tries to maintain USFS timber harvests at mid- 1980’s levels - under NFMA forest plans (sec.318)• Congress orders formation of an Interagency Scientific Committee “to develop a scientifically credible conservation strategy for the northern spotted owl.” The report (the Thomas report) was issued in 1990, and it recommended cutting logging in half, due to reservation of 5.8 million acres of federal land not previously reserved for habitat.• The FWS lists the owl as threatened, but did not identify land needed to provide critical habitat• Environmental groups appeal

Judge Dwyer’s Ruling• After sec.318 expires, and appeal was made under NFMA so that: “fish and wildlife shall be managed to maintain viable populations of existing native and desired nonnative vertebrate species in the planning area of a national

forest” (36 CFR 219.19)

• Due to complexities of monitoring all species, an indicator species for the ecosystem was selected - The Northern Spotted Owl

•In May 1991 Judge Dwyer issued an injunction ordering enforcement of this provision - leading to chaos and predictions of economic disaster

Dwyer’s Rebuke of the Administration

“More is involved here than a simple failure by an agency to comply with its governing statute. The most recent violation of [the NFMA] exemplifies a deliberate and systematic refusal by the Forest Service and the [FWS] to comply with the laws protecting wildlife. This is not the doing of scientists, foresters, rangers, and others at the working levels of these agencies. It reflects decisions made by higher authorities in the executive branch of government.”

Congress orders another study: the Scientific Panel on Late-

Successional Forest Ecosystems

• Study ordered in 1991 after Dwyer’s ruling

• They concluded that continued logging in old growth damaged not just spotted owls, but salmon, and the overall integrity of old-growth ecosystems. Argued for managing the forests as ecosystems

• This study precipitated a culture-change in the USFS, giving scientists a far larger role in forest plans

Clinton steps in: The Northwest Forest Plan

• In early 1993 - Northwest Forest Summit

• Forest Ecosystem Management Assessment Team produces by 1994 the Northwest Forest Plan, which Judge Dwyer approves, lifting his injunction on timber sales.

• USFS timber harvests could be as much as 1.1 bbf, versus the average of 4.5 bbf in the 1980’s.

• Forecasts were made of community economic collapse due to harvest reductions

The Clintonadministration’sattempt toresolve managementconflicts inNorthwestNational Forests

-Partially implemented-Still controversial

Timber Harvests Mid 1980’s vs. 1996

1983-1987 Average 1996Federal Harvest

Total Harvest Federal %

Federal Harvest

Total Harvest

Federal %

Western OR & WA 3,787 11,212 33.8% 478 6379 7.5%Pacific Northwest 5,558 14,304 38.9% 871 8289 10.5%Oregon 4,316 8,015 53.8% 690 3922 17.6%Westside OR 2,927 6,091 48.1% 444 3,091 14.3%Eastside OR 1,389 1,924 72.2% 246 831 29.6%Washington 1,242 6,289 19.8% 181 4,366 4.2%Westside WA 860 5,121 16.8% 34 3,288 1.0%Eastside WA 382 1,168 32.7% 147 1,078 13.7%Source: table 2.1 The Sky Did Not Fall, ECONorthwest.

0

5

10

15

20

25

1972 1977 1982 1987 1992 1997

0

500

1000

1500

2000

2500

3000

3500

4000

Location QuotientsWood Products

Location QuotientsPaper Products

Employment WoodProducts

Employment PaperProducts

Oregon Timber Harvests 1962-2010

Washington State Timber Harvests

No data onIndian landsafter 2006

Gifford Pinchot National Forest Harvest History

NegligibleHarvest Until WW-II

Other National Forests Probably Mirror This History

A Sampling of Timber-Related Job Loss Forecasts

Johnson et.al, Oct. 1991 11 to 61 thousand

Rasmussen et.al, 1990 109 thousand

Inst. of Forest Resources, 1990 48 thousand

Olson et.al 1990 147 thousand

FW Forest Resource C. 1989 131 thousand

Waters et.al 1990 37 thousand

USFS 1990 25 thousand

Source: ECONorthwest, The Sky Did not Fall, Table 2.5

Mitigation Programs in Northwest Forest Plan - NWEAI

1994 1995 1996 1997 TotalCalifornia 26 54 51 47 179Oregon 59 94 104 122 379Washington 37 69 61 62 229Total 122 218 216 232 787

SBA 164 163 169 136 632

NWEAI AND SBA EXPENDITURES ($ MILLIONS)

1994 1995 1996 1997Workers and families 7 9 6 6Business and industry 31 23 29 28Community and infrastructure 37 53 50 53Ecosystem investment 25 15 15 13 Total 100% 100% 100% 100%

NWEAI Funds by Category

Source: USFS PNW Research Station, PNW-GTR-465

Federal AgencyOrganizational ChartNorthwest ForestAdjustmentInitiative

What has actually happened to community economies?

Chg Harvest%

Chg Timber Jobs %

Chg Total jobs %

Whatcom County -48.9% 11.1% 17.4%Skagit County -47.7% -31.5% 22.0%Clallam County -28.1% -35.6% 3.9%Mason County -37.2% -1.4% 18.7%Skamania County -84.7% -62.0% 0.9%Douglas Oregon -55.5% -27.6% 3.3%

Data are for the 1990-1996 time period.

Source: ECONorthwest, The Sky Has Not Fallen, Table 3.4

Douglas County, Oregon

0

5

10

15

20

25

30

35

40

1972 1977 1982 1987 1992 1997

Lo

cati

on

Qu

oti

en

ts

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

Em

plo

yme

nt

Location Quotient -Wood Products

Location Quotient -Paper Products

Employment WoodProducts

Employment Paper

*

* 2005 estimate jobs# 2007 estimate jobs$ 2010 estimate jobs

#$

Jefferson-Clallam

0

5

10

15

20

25

1972 1977 1982 1987 1992 1997

0

500

1000

1500

2000

2500

3000

3500

4000

Location QuotientsWood Products

Location QuotientsPaper Products

Employment WoodProducts

Employment PaperProducts

*

*#

* - 2005 data jobsW # - 2010 data jobs

w

Douglas County - Change in the Composition of Personal Income

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1970 1980 1990 2000 2011

Transfer Payments

Dividends, Interest, and Rent

Proprietors Income

Wage & Salary Income

Jefferson-Clallam Counties Change in the Composition of Personal Income

0%

20%

40%

60%

80%

100%

1970 1980 1990 2000 2011

Transfer Payments

Dividends, Interest, and Rent

Proprietors Income

Wage & Salary Income

Douglas County Employment

0

10000

20000

30000

40000

50000

60000

70000

1970 1980 1990 1995 2000 2007

Government

Services

Finance, Insurance, RealEstate

Retail & Wholesale Trade

Transport, Communications &Utilities

Other Manufacturing

Wood & Paper Mfg.

Construction

Ag Services, Forestry,Fishing, Mining

Farming

2013 49,357 jobs

Alternative Estimate55,013

Clallam-Jefferson Employment

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

55000

1970 1980 1990 1995 2000 2007

Government

Services

FIRE

Trade

TCU

Other Mfg.

Wood & Paper Mfg.

Construction

Ag Services, For, Fish, mInes

Farm

2011 – Total =48,792

Reconciling Trends with Forecasts of Economic Decline

ECONorthwest The Sky Did Not Fall argues:

• Forests are more than trees; they also produce myriad goods & services, clean water, habitat. There is competition from these other users, and nontimber values

have risen over time.• Actions like the Dwyer decision precipitate chains of response in interest groups & the economy• The position of timber declined in the face of the diversifying regional economy.

Northwest Forest Plan & the NWEAIUSFS Assessment - Lessons Learned• Emphasize community interests & needs• It is difficult to balance long-term economic development objectives with short-term needs• There are varying community abilities to respond to economic development opportunities• There is a need to reach out to highly impacted communities• Job retraining is highly important• Trust must be built between federal agencies and communities• Need frameworks for evaluating program effectiveness

Required by the Record ofDecision forthe NorthwestForest Plan

Coos Bay Districtis part of DouglasCounty

Olympic NationalForest is partlylocated in Clallamand Jeffersoncounties

Key Findings Socioeconomic Monitoring (1)

• Are predictable levels of timber and nontimber resources available and being produced? Timber: No, mixed results

Special Forest Products: Unknown

Grazing: No, but due to other forces (ESA)

Minerals: Change not related to plan

Recreation: Data problems, but mixed evidence, some categories up, some down

Overall: Mixed Results

Key Findings Socioeconomic Monitoring (2)• Are local communities and economies

experiencing positive or negative changes that may be associated with federal forest management?

Using Census data they found population is growing, educational attainment and household income are increasing, poverty is decreasing. However, it is difficult to tie these changes to the Plan

Economies: 11,800 of 30,000 jobs lost in forest products due to reduced federal timber cut. Other changes are not addressed, and forces are acknowledged to be beyond the scope of the Plan

Key Findings Socioeconomic Monitoring (3)• “Consequently, the concept of community stability

has come to be replaced by the concept of community resiliency-the ability of communities to respond and adapt to change in positive, constructive ways to mitigate the effects of change on the community.”

• Agency jobs, budgets, and procurement has dropped

• Long-term economic development & diversification: NWEAI-short-run: too little to late; long-run: too soon to tell. County payments in limbo. Public support continues for an eco-system approach to Forest management. Monitoring needs to be continued, and Plan goals are found to be still relevant.

Recent Issues

• The Healthy Forest Initiative– Roading and clearing of fire materials

• The Clinton Roadless Rule– Bush Administration challenges– Court Decisions– Obama affirms the Clinton Roadless Rule

• Private Forest Land Conversion to Non-Forestry Uses – recent UW study

• Industrial Forest Land Conversion to Real Estate Investment Trusts (REIT’s)

The Imbalance in Age Distributions of Federal and non-Federal Forest Lands

Washington State Timber Harvests by Owner 1950-2000

0

1000000

2000000

3000000

4000000

5000000

6000000

700000019

50

1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

Th

ou

san

d B

oar

d F

eet

Other

Native American

National Forest

State

Private

State & Private

RemarkablyStable

The NationalForest’s BurstOf Production