Timber Industry and Labor Union Challenge Spotted Owl Recovery Plan

The American Forest Resources Council, AFRC,  and the Carpenters Industrial Council have filed a federal lawsuit under the Federal Advisory Committee Act, FACA.  Thanks to AFRC for the excerpt from their January 28, 2011 newsletter.


In 1994, a predecessor of AFRC successfully challenged the so-called "Gang of Four", the forest scientists that crafted the NW Forest Plan for not complying with FACA.  Northeast Oregon Elk Biologist Jack Ward Thomas, who later became Chief of the Forest Service under President Clinton, kept his meetings closed to the public in violation of FACA.  During a deposition in the case, Thomas stated that he shredded garbage bags full of the scientists' work product each evening.  


Thomas was concerned that preliminary information regarding the Gang of Four's plans for the Northwest's National Forests might impact the nation's financial markets.  Although destroying the documents was illegal, Thomas was correct that his forest plan which decimated dozens of rural communities and timber industry firms and workers, did impact financial markets.  

AFRC NEWS                                                                               January 28, 2011

On January 25, AFRC and the Carpenters Industrial Council (CIC), a labor group representing lumber and plywood workers, filed a lawsuit in federal district court in Washington, DC challenging the US Fish and Wildlife Service’s (FWS) failure to follow the requirements of the Federal Advisory Committee Act (FACA) in the work being done to revise the 2008 spotted owl recovery plan and critical habitat designation.

FACA requires advisory committees, that are not composed entirely of federal employees, to be “fairly balanced” in their membership; that they conduct their business in open meetings; and that written records be kept and open to public inspection. There are specific procedures that an agency must go through before an advisory committee can begin to meet.

The FWS has been using two groups that AFRC believes should be placed under FACA: a Primary Modeling Team and a Modeling Advisory Group. These groups have been working since 2009.

On November 10, 2010, AFRC and CIC sent a letter to Ken Salazar, Secretary of Interior, asking that FWS remedy the problem and not use the advisory groups in the meantime. At year’s end, AFRC received a response from the FWS Oregon office stating their belief that the groups come under an exemption for “recovery teams” in the Endangered Species Act (ESA).

The Draft Revised Recovery Plan proposes for the first time going outside federal land for habitat to preserve the owl, but presents no scientific basis to believe this is necessary or will result in increased owl numbers. The modeling being done by these advisory groups has not been shared with other groups, including the timber industry and environmental organizations. There has been no review or critique of the modeling results to date, and because of this AFRC believes it is vital that light be shed on how FWS and these groups are going about their work.

The FWS announced that they intend to release the Final Recovery Plan in mid-February. It is uncertain how much focus will be placed on the impact of the barred owl on spotted owl populations and the risks of catastrophic wildfire and windthrow. These two factors were shown to be the greatest threat to the spotted owl in the 2008 recovery plan.

The lawsuit asks the court the block the FWS from citing or using any of the recommendations made by the two advisory committees. /Ann Forest Burns

"Give Clyvia the Benefit of the Doubt"

On the brink of the release of Governor Kitzhaber's budget and the re-opening of the 2011 legislature, the Governor and his companion share center stage.

Normally acerbic Oregonian Columnist Steve Duin calls for giving Cylvia Hayes the benefit of the doubt in the investigation of Department of Energy's direction to the out of state successful bidder for a renewable energy contract to subcontract with Hayes for $60,000.

The O's front page feature's Kitzhaber's companion, but don't call her his girlfriend.

The coal boom: Burning ambitions What is good news for miners is bad news for the environment

IN RICH countries, where people worry about air quality and debate ways of pricing carbon emissions, coal is deeply unfashionable. Elsewhere demand for the dirty rocks has never been stronger. The International Energy Agency (IEA) reckons world consumption will increase by a fifth over the next 25 years, assuming governments stick to their current climate-change policies. A new age of coal is upon us.

The IEA estimates that China, which generates more than 70% of its electricity with coal, will build 600 gigawatts (GW) of coal-fired power capacity in the next quarter-century—as much as is currently generated with coal in America, Japan and the European Union put together. Nomura, a Japanese bank, thinks that may be an underestimate. It reckons China will add some 500GW of coal-fired power by as early as 2015, and will more than double its current generating capacity by 2020. It expects Indian coal-fired power generation to grow too—though more slowly.

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Even developing countries with vast quantities of coal under home soil will find themselves unable to dig it out quickly enough to meet demand. China, the world’s biggest coal producer by some distance, has turned to foreign suppliers over the past couple of years and is likely to rely on them even more in future. Its voracious appetite for energy and steel means it will need at least 5-7% more coal each year. Citigroup reckons China will import 233m tonnes in 2011. As Daniel Brebner of Deutsche Bank points out, that is considerably more than the annual capacity of Richards Bay in South Africa or Newcastle in Australia, the world’s biggest coal ports.

Domestic supply has failed to keep up with demand for several reasons. China’s coal is located in the north and west of the country, far from the coastal cities where energy demand is growing strongly. And China’s mines are old. The coal is deep underground and expensive to extract. Congested railways and roads mean domestic deliveries can be less reliable and pricier than the imported sort. Production has also been hit by government attempts to close inefficient (and dangerous) smaller mines and encourage consolidation.

China’s efforts to improve coal supplies include the building of a new east-west passenger railway line, set to open in 2013, which should free existing tracks for coal transport. New high-speed and light railways across the country may alleviate bottlenecks further. But for the foreseeable future the country will depend on ships laden with foreign coal.

India is even less capable of increasing coal production. Much of its impressive reserves sit under protected forests or land set aside for ethnic minorities. The country’s creaking railways make it hard to move the stuff, as does the absence of a mechanism to negotiate bulk rail contracts. And Indian coal is generally of poor quality, which makes it unsuited to newer, more efficient, coal–fired power stations. India could become the world’s biggest thermal coal importer by 2015. It is already largely dependent on imports of coking coal, used to make steel.

All this is good news for the mining industry. Nomura reckons that thermal coal will hit a peak price of $170 a tonne in 2012 compared with $110 now. Asian firms will benefit most. Indonesia is now the biggest source of imports to China because of its proximity to the country and the high quality of its coal (see article). Indonesia has few proven reserves, but high prices may well spur further exploration. Mongolia, which is also handily close to China, and Mozambique could join Australia, South Africa and Colombia as big exporters.

The coal boom has spurred a sackful of deals. The industry produced a record number of mergers and acquisitions last year, with a value of $52 billion, according to Dealogic, a financial-information firm. Rio Tinto, a global mining giant, has offered A$3.9 billion for Riversdale, which has mines in Mozambique. Chinese state-backed firms are also investing abroad. Yanzhou’s $3.5 billion purchase of Australia’s Felix Resources in 2009 is the biggest such deal so far.

Two potential giants may yet weigh in. America, the world’s second-biggest coal producer after China, has mammoth reserves and a power industry that is turning against coal (currently responsible for almost half of domestic electricity generation). Environmental regulations and cheap shale gas will leave miners looking for new markets overseas. Russia, with vast coal reserves thousands of miles from the nearest port, might yet build the infrastructure needed to send its coal to the world market.

This boon for miners bodes ill for the environment. The power stations frantically being built in China to feed the country’s new electricity grid will be relatively efficient and thus less polluting than older coal plants around the world. But that is a rather low bar. Coal is the filthiest fossil fuel and is cheap only because its dirtiness isn’t included in the bill.

Indeed, the coal boom blows yet another hole in the effort to restrain greenhouse-gas emissions. The Kyoto protocol makes countries responsible only for their own direct emissions. As environmentalists point out, rich countries that spurn coal-fired power while exporting the rocks to countries with less ambitious emissions targets are merely shifting the problem around the globe. Even China’s modest hopes of bringing its share of coal-fired power down to 63% by 2015 sit ill with its growing dependence on coal. Alongside coal-fired power stations and coal exports, a coal conundrum is growing.

Suggested by Linc Cannon, OFIC

Media coverage of new State Forester

Salem Statesman Journal

The Oregonian

Daily Astorian

Also, this is a test to see if the email notifications from Google Groups are working...

New State Forester

Oregon's Board of Forestry selected Doug Decker as State Forester.

Oregon forests from a global perspective

By Paul Barnum, OFRI Executive Director

As part of the United Nations-declared “2011 International Year of Forests,” this year’s Starker Lectures will examine “Oregon’s Place in World Forests and Forestry.” Unless you have regular contact with imports or exports, or travel frequently outside the United States, it’s easy to forget that Oregon is vitally connected to the global community.

Why look at Oregon’s forests from a global perspective? Doug Maguire, the Giustina Professor of Forest Management at the OSU College of Forestry, offers these observations:

• The Douglas-fir region is one of the most productive forest regions in the world.
• Unlike other areas in the United States or Europe, a significant amount of primary forest cover still exists in the region.
• Oregon is at the forefront of developing silvicultural systems that conserve native biodiversity and more generally provide a balance of ecosystem services, including timber production, conservation, water quality, carbon sequestration, and enhanced economic and social health.
• Oregon forest products companies compete in a world market, both for buying and selling logs as an industrial raw material, and for marketing manufactured products.
• Oregon has the will and potential to lead a sustainable balance among consumption of wood products, the growing and harvesting of timber, and providing critical levels of ecosystem services.

To this list, I would add that Oregon leads in talent, with the OSU College of Forestry providing a long line of well-educated, qualified forestry professionals and researchers. Plus, the contributions of the U.S. Forest Service Forest Sciences Laboratory and the work of scientists in both the public and private sectors have made us a global leader in advancing scientific forest management.

As newer sectors such as high-tech, clean energy and sportswear have come to the fore, forestry and wood products have had to share the limelight. That’s a good thing, because just as diversity is essential to a forest ecosystem, it’s also necessary for a healthy state economy.

The International Year of Forests is a good time to celebrate the global importance of Oregon forests. Regardless of what sector you hail from, we all can take pride in Oregon forests, enlightened forest management that seeks to conserve and protect the values we love, robust public discussion about how best to accomplish the goal, and the legacy we hope to leave for future generations.

Excerpted from the Oregon Forest Resources Institute's 2011 Winter Outlook.

ETO - Keep it or toss it? That is a question that needs an answer. The BB hits another home run.

Your pain is the Energy Trust’s gain

Bend Bulletin

Published: January 26. 2011 4:00AM PST

Pacific Power customers scrambling to work this year’s double-digit rate increase into their electricity budgets should be sure to set aside a little extra for the tax man, better known as the Energy Trust of Oregon. Their pain is the Energy Trust’s gain.

Most people know the Energy Trust as the government-created nonprofit that conducts free home-energy audits. Of course, nothing the Energy Trust does is really free. But many of the people footing the bill know little about the trust or, we suspect, its claim on their hard-earned money. So here’s a little history.

Back in 1999, the Legislature told the state’s two big utilities (Portland General Electric and PacifiCorp, which operates in Oregon as Pacific Power) to apply a 3 percent charge to all retail electricity sales. This charge is merely a tax by another name, and the money it generates is used for a variety of purposes. Some goes to education service districts to make schools more energy-efficient. Some pays to weatherize low-income housing. But most, almost 75 percent, of the so-called “public purpose charge” goes to the Energy Trust, which uses the electricity tax revenue to fund energy conservation programs and subsidize renewable energy projects.

The tax revenue that flows through the Energy Trust’s hands is significant. During the 18-month period from January 2009 through June 2010, the trust’s portion of the electricity tax amounted to nearly $86 million, or roughly $57 million per year. Among the projects subsidized with that money, according to a December 2010 Energy Trust report, are numerous wind generation facilities, solar installations and, last but not least, a project that collects methane percolating through the Douglas County landfill.

The trust’s funding mechanism ensures that Oregonians will continue to pay for more of the same — lots more. When you receive a fixed percentage of an ever-rising number, as the trust and its electricity-tax partners do, you collect more and more money whether you need it or not. Thus, while Pacific Power had to make a case to the Public Utility Commission for the rate increases that kicked in last month, the Energy Trust automatically capitalizes on Pacific Power’s work. You know, kind of like a parasite.

PUC spokesman Bob Valdez acknowledges that “as retail bills go up, the share that goes to the Energy Trust for energy conservation ... goes up as well.” But he says the “Legislature did that so it would keep track with inflation and also accommodate a growing number of customers and ... be there for any emerging technology that might come up.”

Maybe so. But it’s hard to believe lawmakers back in 1999 supported the weirdness at work today. One of the justifications for Pacific Power’s recent hikes is the cost of “green” power, which Oregon’s renewable portfolio standards require utilities to provide. Thus is the high cost of Oregon’s renewable energy mandate forcing Oregonians to pay more money to a nonprofit that subsidizes ... renewable energy.

But it gets crazier still. Last September, the PUC allowed Pacific Power to apply a 1.7 percent surcharge to electricity bills in order to pay for the removal of several dams. The electricity tax applies to that portion of Oregonians’ electricity bills, too, says the PUC’s Valdez. Thus, must Oregonians pay the Trust more simply because they have to cough up money to help fish. One environmental tax begets another.

Fortunately, the burden imposed by Oregon’s electricity tax can also be a great opportunity. It all depends on the willingness of lawmakers to help taxpayers despite the certain objections of environmentalists and organizations that feed on electricity tax revenue. Lawmakers who do respect taxpayers should ask, first, whether the Energy Trust has become obsolete. It seems to us that the proliferation of subsidies and mandates supporting efficiency and renewable energy are quickly making it so.

Moreover, the trust’s funding mechanism forces Oregonians to pay an environmental tax on other environmental taxes. They must pay twice, for instance, for the state’s renewable portfolio standard. They pay once in the form of higher electricity costs and once again in the form of increased electricity-tax contributions.

Well, here’s an opportunity for lawmakers to prove that they can cut expensive programs that have outlived their usefulness. Better yet, by doing so they can pat themselves on the back — with justification — for doing something to moderate electricity costs that their own policies are driving skyward.

Cylviagate, Part Next

The investigation of Governor John Kitzhaber's companion Cylvia Hayes and the Department of Energy continues.

Rain on Snow Event

Sandy River Flood.

U.S. wins trade case, Canada must stop subsidizing lumber mills

Published: Friday, January 21, 2011, 6:02 PM     Updated: Friday, January 21, 2011, 6:09 PM

 By Richard Read, The Oregonian 
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Ontario and Quebec must stop subsidizing lumber manufacturers or levy nearly $60 million in tariffs on Canadian exports to level the playing field for U.S. producers, a trade tribunal ruled Friday. 

Steve Swanson, chairman of the U.S. Coalition for Fair Lumber Imports, welcomed the ruling. "By providing new subsidies, Canada knowingly violated the terms of the lumber trade agreement to provide an unfair advantage to Canadian producers in this very challenging market," said Swanson, president of Swanson Group mills in Glendale. 

The tribunal of the London Court of International Arbitration found that the provincial subsidies violated a U.S.-Canada softwood lumber trade agreement reached in 2006. Under the agreement -- effective for seven years -- Canada collects export taxes on shipments of softwood lumber to the United States when lumber prices fall below certain levels. The agreement prohibits Canadian federal and provincial governments from circumventing these tariffs by increasing subsidies beyond those in effect in 2006. 

The U.S. coalition began dispute proceedings in 2008, citing plans by Quebec and Ontario to provide hundreds of millions of dollars in grants, subsidized loans and loan guarantees. The decision issued Friday requires Canada to end the illegal subsidies or levy additional tariffs. If Canada doesn't act within 30 days, the United States can slap import duties on Canadian lumber. 

U.S. Trade Representative Ron Kirk applauded the ruling, saying the result is "important for U.S. workers, firms and our softwood lumber industry." 

Peter Van Loan, Canada's international trade minister, said the ruling could have been much worse for Canada. He noted the tribunal dismissed 97 percent of the initial U.S. claim of $1.86 billion. 

The decision is the second consecutive win for the U.S. at an arbitration tribunal. The court previously ruled against Canada over the calculation of export quotas in 2007. 

Canada's lumber industry faces a bigger threat from a third U.S. case, filed Tuesday. The United States claims British Columbia has been misgrading and underpricing publicly owned timber in the province's interior region, hurting U.S. producers. Canada denies the allegations, saying trees damaged by a mountain pine beetle infestation are being graded and sold correctly. 

If the United States wins the next case, Canada's bill could reach nearly $500 million. 



--Richard Read 

Oregon’s Legislature and Governor Working Together—United We Stand

Rep. Richardson's Newsletter
January 21, 2011

Oregon’s evenly divided House (30 D’s & 30 R’s) has begun its 2011 Legislative Session with a co-governance model—Co- Speakers, Co-Committee Chairs and equal numbers on every committee.
The most crucial issue facing this Legislature will be balancing the State Budget. We are in a financial vise--a time when revenues have dropped more than $1 Billion since the end of the 2009 session and expenses are skyrocketing. To help solve Oregon’s budget crisis, I have been chosen as one of the House Co-Chairs of the Ways & Means Committee and Rep. Peter Buckley (D-Ashland) is my counter-part. Peter and I have worked together over the years and we are both committed to taking the necessary steps to deal with declining revenues in the most even-handed and responsible way we can.
Earlier this week, I had the opportunity with Rep. Buckley to give a budget update to a group of human service providers in Medford. To see the budgetary and economic status update I gave, (Click here.) To see Rep. Buckley’s remarks, (Click here.). And, to see the Q. and A. session following our remarks, (Click here.)
Oregon waits anxiously for Governor Kitzhaber’s first “Governor’s Recommended Budget”, to be unveiled on February 1st. In recent weeks there have been multiple, unprecedented meetings between our Legislative leaders and Governor Kitzhaber. Such collaboration is both appreciated and beneficial in doing the people’s work. For the first time since I joined the legislature in 2003, there is a feeling of unity between the Executive and Legislative branches of government. Such cooperation will be vital if we are to address Oregon’s economic challenges in a timely, effectively and professional manner.
The Governor has released the following general budget guidelines for his 2011-13 State Budget:

- Achieving Our Vision for Oregon. The focus of how we invest our limited resources in the next two years must be on building the foundation for a better future rather than on simply perpetuating the past.- Managing within Available Resources. I have reviewed each agency and program and established a funding floor set at the level of General Fund and Lottery Fund resources the state currently has to spend assuming no additional federal funds will be made available. I then allocated the resources from the expected revenue growth over the next biennium to help transform service delivery rather than simply accepting the spending practices of the past.
- Changing the Way Public Services are Delivered. It is clear that in order to maintain important public services over the next two years - especially education and health care - we must change the way those services are delivered.
- Prioritizing Early Childhood Services. To secure Oregon's future we must recognize that the foundation of academic, social and economic success lies in the early childhood years. Therefore, the single most important action we can take to shift our pattern of investment from addressing problems after they have developed to preventing them in the first place is a sustained investment in early childhood. (For complete article, Click here.)

Governor appears to be focusing on a reality-based-budgeting process for the future, which will be a logical strategy in consideration of our previous Governor’s Reset Cabinet findings. (Click here.)

The challenge for Governor Kitzhaber will be to stay strong in the face of stormy opposition. History has shown, “reform” is frequently discussed, yet rarely implemented as a result of the powerful coalitions that unite against it.
Disappointment results when hope for reform fails to contemplate the reality of power.
Nevertheless, this truly is time to, as the Governor has stated, “break decisively from the past.”


NATURAL RESOURCES
As a legislator from a rural Oregon district, I can say from experience that rural Oregonians care deeply about the environment, and they would like to have it managed, not placed off-limits. Once again, I come from a viewpoint that it is private enterprise that creates prosperity; government does not.
My suggestions to create private jobs in rural Oregon is to recognize that for more than 100 years, rural Oregon had a vibrant, natural resource based economy, and with the change in attitudes toward logging, mining, fishing, etc., has been in an economic recession for nearly 30 years.
To stimulate jobs in rural Oregon, while recognizing the need to protect the environment, it is time for a move to middle ground. Suggestions to do so might include:
--Create/restore Oregon’s 100-year forest management plan. Consider the rationale for viewing timber as Oregon’s renewable resource/crop. It has been said that historically, timber is to Oregon what corn is to Iowa. (I know this is dicey, but I still am placing in on the table—especially since rural counties, such as Curry and Josephine may well go bankrupt after the four-year federal timber-money payment extension terminates in 2012. What can we learn from the decade of high Oregon unemployment and decrease in Oregon’s per capita incomes when compared with the rest of the nation? Something must change if we are to break the rural-recessionary cycle.)
--Remove barriers to generating bio-electricity with forest products—slash and downed timber that has turned Oregon forests into tender-boxes waiting for the next conflagration. (Bio-mass generated electricity would also help Oregon to be less dependent foreign sources of power and fuel.) With Oregon’s emphasis on electric vehicles, we will need large amounts of low-cost electricity to recharge them, and bio-mass could provide it.
--Remove barriers to and promote research for converting forest products into ethanol. (Legislating the 10% ethanol requirement for Oregon gasoline has been a great boon for corn-producing states, but may have been premature for Oregon.) Forest product/bio-mass ethanol would be a great boon for Oregon. It would create thousands of rural Oregon jobs, help generate inexpensive electrical power and could save many jobs at Boardman.
The 2011 legislative session is one of both crisis and opportunity. It will require a joint effort by the Governor and the Legislature to rise to the occasion. I believe both are ready, willing and able to do so. United we stand…
Sincerely,

Revitalize the Forest Cluster?

What is the “Forest Cluster” and what will it take to revitalize it?  The forest cluster is private firms and public organizations that “support production of and benefits from primary and secondary wood products.”  In other words, an Economic Development Strategy for the forest/timber community.

The notion of clusters was introduced at the Oregon Business Plan Summit in 2006.  The Forest Cluster Work Group has been meeting since 2007. Here is a memo on the status of the Forest Cluster as of 12-1-2010  Recently, the Forest Cluster group has expanded to include private forestry and timber representatives in an effort to develop action items for the Board of Forestry and the Oregon legislature. 

As a critical response to the economic and employment problems Oregon faces, the BOF and the Oregon Business Plan are using the “cluster” concept “to make things happen.”  Stay tuned.

United States picks international trade fight with Canada over softwood lumber

Published: Tuesday, January 18, 2011, 8:11 PM     Updated: Tuesday, January 18, 2011, 8:11 PM

 By Richard Read, The Oregonian 

Randy L. Rasmussen, The OregonianThe United States contends Canadian timber policies violate a 2006 agreement and harm Pacific Northwest mills like Seneca Sawmill Co. in Eugene, which processes Douglas fir into lumber.

 The United States aims to take Canada to the woodshed over what trade officials contend is under-priced British Columbia timber that unfairly competes with U.S. lumber companies and workers. 

U.S. Trade Representative Ron Kirksaid Tuesday the Justice Department would file for arbitration under a softwood lumber agreement signed in 2006 after years of disputes. Kirk said British Columbia was selling timber harvested from public lands for prices below amounts set by the agreement, undercutting mills in the Pacific Northwest and other regions. 

"This type of benefit harms U.S. workers and firms in the lumber industry and is inconsistent with Canada's obligations," Kirk said. "Canada is in breach of its commitments." 

Canadian government and industry officials rebutted the claims. 

"There's no substance to this," said Pat Bell, British Columbia's minister of forests, mines and lands. "We should be working on developing other markets together, like Korea, like China, like India." 

Disputes over U.S.-Canadian lumber trade are as old as the hills. But in this round, the United States contends British Columbia resorts to a new tactic, improperly grading timber as beetle-killed salvage material and selling it for pennies per cubic meter to Canadian mills. The mills turn the timber into lumber sold cheap in America, hurting U.S. businesses and workers, said Steve Swanson, an Oregon lumber producer who chairs the U.S. Coalition for Fair Lumber Imports. 

Swanson, chief executive of Glendale-based Swanson Group, said British Columbia should reverse its practices, charge proper timber fees and levy export taxes to even the playing field. 

"North American lumber producers have curtailed production, closed mills and been forced to let go thousands of workers," Swanson said. 

The Justice Department is requesting a judgment by a tribunal of the London Court of International Arbitration. 

John Allan, president of the BC Lumber Trade Council, said U.S. officials brought the latest action in response to political pressure. 

"It seems to be an attack on how we manage our forests with respect to the mountain pine beetle," Allan said. "They're basically saying, 'You should have left those trees to die on the stump.'" 

Bell, the forests minister, said British Columbia grades timber just as it did before the 2006 agreement. Lumber prices are higher than expected, proving the agreement works, he said. China is also buying lumber, he said, due in part to Canadian marketing. 

Chinese purchases also helped sustain a Swanson mill in Glendale that would have closed as unfair Canadian competition intensified, said Zoltan van Heyningen, the U.S. lumber coalition's executive director in Washington, D.C. 

"Hopefully this case will help enable it to keep open," van Heyningen said. 

--Richard Read