Legislature(2011 - 2012)BUTROVICH 205
02/07/2011 03:30 PM RESOURCES
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SB 44-SOUTHEAST STATE FOREST 4:14:28 PM CO-CHAIR WAGONER announced the consideration of SB 44 and asked for a motion to bring the bill before the committee. SENATOR STEDMAN moved to bring SB 44 before the committee for discussion purposes. There were no objections. 4:15:34 PM CHRIS MAISCH, State Forester and Director, Division of Forestry, Department of Natural Resources, supported SB 44. He stated that SB 44 is an effort to ensure that local timber processing continues to be part of the economy in Southeast Alaska. The majority of timber in southern Southeast is on federal land, but because federal timber sales have declined dramatically, local mills now depend heavily on state timber for survival. Demand for Southeast timber to supply wood energy is also increasing, further raising the importance of securing a timber base in this region. For example, Sealaska Corporation recently installed a wood pellet boiler at their headquarters in Juneau. He explained that last year the legislature passed SCSHB 162(RES) that established the 25,291-acre Southeast State Forest that will be managed as an integrated unit and according to state forest management plans. SB 44 would add an additional 23,181 acres of state lands to the Southeast State Forest from state lands currently available for timber harvest. The Division of Forestry would then be able to manage 48,472 acres of Southeast State Forest lands for a long-term timber supply and retain these lands in state ownership for multiple uses. The 2009 forest inventory supports this request. MR. MAISCH said that the Department of Natural Resources (DNR) manages over 159,000 acres of uplands in southern Southeast. Timber management is allowed on about one-third of this land and it is actively managed to supply wood to local processors. The remaining land is designated primarily for other uses - including land sales, recreation, water resources, and fish and wildlife habitat. Over 25,000 acres is legislatively designated as state parks, refuges, and public use areas. Much of the state-owned timber in Southeast is second growth timber that, if actively managed, can provide more volume per acre on shorter rotations and can result in improved deer browse. Thinning is a long-term investment and is only justified if the land will continue to be available for forest management activities. The proposed 23-parcel addition to the State Forest includes general use lands totaling approximately 23,100 acres on Prince of Wales, Tuxekan, Gravina, Kosciusko, Revilla, Wrangell, Suemez, Mitkof, Kuiu, Dall, and Zarembo Islands. Six of these parcels are adjacent to or near existing state forest parcels. The Division of Forestry worked with the Division of Mining, Land, and Water (DML&W) to identify and exclude lands that are priorities for the state land disposal program. Consultation was also initiated with the University of Alaska Office of Statewide Land Management and senior University officials. A key difference between a state forest designation and a transfer of lands as proposed by previous legislation is the continued long-term public ownership of these lands as opposed to other development uses. MR. MAISCH said the division also consulted with the Alaska Department of Fish and Game (ADF&G) to ensure there was internal alignment on the list of proposed parcels - and there is. Fish habitat and water quality are key components of the Forest Resources and Practices Act (FRPA), he said, which have a suite of regulations that would apply to managements of these parcels. There is a no-cut 100-foot minimum width on both anadromous and high-value resident fish streams. The next 100-300 foot zone allows timber harvest if it maintains important fish and wildlife habitat. In addition, area plans also provide for 300- 500 foot coastal buffers with additional recommendations for specific parcels. When the Forest Management Plan was developed, Mr. Maisch explained, a key consideration for the Neets Bay parcel was to maintain water quality and quantity for the fish hatchery at the head of the bay. Dialog with the Southern Southeast Regional Aquaculture Association (SSRAA) is ongoing concerning this bill. The Southeast State Forest would be managed as part of the State Forest System set forth in AS 41.17.200-.230. Subsection 41.17.200(a) reads in part: The primary purpose in the establishment of state forests is timber management that provides for the production, utilization, and replenishment of timber resources while allowing for other beneficial uses of public land and resources. MR. MAISCH said in addition to timber management, State Forests are open to multiple uses including wildlife habitat and harvest, mining, transportation, recreation, and tourism. State Forest lands would be managed consistent with the management intent under the current Prince of Wales Island and Central Southeast area plans, which have both been recently updated. Changes in management intent would require public and interagency review through adoption of a state forest management plan under AS 41.17.230. He said one of the other demands on state land in southern Southeast is to fulfill land entitlements for new municipalities. To avoid conflict with the Wrangell Borough entitlement, the bill specifies that the new Wrangell Borough may select state forest land from within the borough boundary. This boundary encompasses three parcels in the existing state forest - Crittenden Creek, Bradfield Canal East and West, and four parcels in the proposed additions - the Eastern Passage, Pat Creek, Pat Creek Uplands and Earl West Cove. If additional municipalities are incorporated before June 30, 2019, land that was vacant, unappropriated, or unreserved before the state forest was established would be included in the calculation of the municipal entitlement acreage, but may not be selected. So, there is one key difference between the Wrangell exception and others: Wrangell can select from lands within the State Forest and others cannot, but it wouldn't affect their total calculation for entitlement. MR. MAISCH said DNR has briefed many statewide groups including the Board of Forestry, Southeast Conference, local governments and the diverse groups participating in the Tongass Futures Round Table process, and these discussions will continue. To date the City of Coffman Cove, the Resource Development Council, the Alaska Forest Association, and the Alaska Chapter of the Society of American Foresters have sent letters of support, and the Southeast Conference passed a supporting resolution. 4:25:06 PM SENATOR WIELECHOWSKI asked if he foresees additional requests. MR. MAISCH replied that he believes this 23,000 acres will be the last increment, mainly because this would add-in the lands that have been identified through the area planning process as "GUNs" and have forest management intent as their key purpose. SENATOR WIELECHOWSKI noted that AS 41.17.210 says the governor "must include a report and recommendations that include, among other things, an estimate of the full cost of implementation of an operational forest inventory and management plan." He said none of this was in the legislation creating the State Forest last year. The Governor's transmittal letter said that this will enable management to "increase long-term timber supply...to provide near-term jobs and pre-commercial thinning." So it sounds like there will be some need for money and the fiscal note doesn't say that. MR. MAISCH replied because of the area planning process, these lands have been identified for forest management for many years, so the division has already been managing these lands for that purpose. They updated the forest inventory in 2009 that establishes the allowable cut for these lands and actually had to reduce it based on better inventory information. That particular inventory was funded with a CIP to the Division of Forestry. The fiscal note is zero, he said, because their ongoing work is already funded to do forest management planning activities; the division already has a forest planner and staff that would do the work. They already have funding for some pre- commercial thinning activity and for running the timber management programs they already have in place in Southeast. The key difference is this bill allows them to do aggressive pre- commercial thinning on young growth stands so that production will be doubled on the same acreage of land in the future. Right now the allowable cut is 8.5 million board feet. 4:28:35 PM SENATOR WIELECHOWSKI asked if the plan is to work on the young growth, why are 52 percent of the selected acres old growth forest. Will you harvest that? MR. MAISCH answered yes; the old growth will be harvested over time as part of the allowable calculation. SENATOR WIELECHOWSKI asked how much of the old growth is planned to be harvested. MR. MAISCH answered that some will depend on the location of the stands and economic conditions. Their current 8.5-million foot allowable cut is managed on a "decadal" basis. In any given year they can be below or above that 10-year average, but over the 10 year period they have to be at the same level of harvest. For example, when USFS sales were cut drastically a few years ago, he started a "bridge timber program" consisting of trees that hadn't been cut to the maximum each year. Klawock's Viking Saw Mill continued to operate on this basis. Over time, a good percentage of the old growth timber will be harvested on the State Forest land. 4:30:48 PM SENATOR WIELECHOWSKI said Hook Arm is 595 acres, 590 of which are old growth; and Rowan Bay has 402 acres, 390 of which are old growth and 12 are muskeg. It looks like that is all old growth that will be harvested. MR. MAISCH replied yes; but they won't know what the final harvest acreage will be until a site-specific plan is done. Their planning process requires having sales on a five-year schedule, which is reviewed by both the industry and the public. Then they have to write a forest land use plan that is a site specific plan for the timber sale. That is when they look at economics, roading, and access in a much more detailed manner. So, he didn't know for sure if the full acreage would be harvested of those two, but more than likely a full percentage will be. SENATOR WIELECHOWSKI asked if he knew what mill this old growth timber on Hook Arm and Rowan Bay would be going to. Does DNR anticipate selling this old growth only as a negotiated sale for local manufacture or could it be sold to the highest bidder and exported in the round? MR. MAISCH replied that more than likely it would go to an exporter because of the location of the sales. He explained that the southern Southeast timber industry has two components; one is local manufacture with mills both mid-size and very small, and the other is round-log export. He explained that the two work together. The export log is two to three times the value of a domestic log. He said it has long been the policy of the State of Alaska to try and support domestic manufacture. The state cannot actually restrict round log export or have a primary-manufacture rule on the books (which was tried in the late 70s and went all the way to the Supreme Court resulting in a decision that the state cannot regulate interstate trade). Instead, policies were put in place that encourage high value-added manufacturing whenever possible. But when the purchaser purchases these logs for these small businesses, it helps their cash flow to be able to market the log to its highest and best use. So, sometimes some of the logs they purchase will be sold as round logs and go to the marketplace which could be the US West Coast, China or Japan. They get charged for an export price if they do that, but the domestic price is much lower. He said another Southeast company primarily does round log export, but they trade some of their logs to domestic manufacturers, so "there's very much a give and take going on in the log market." 4:34:55 PM CO-CHAIR PASKVAN noted the letter from the Southeast Alaska Conservation Council (SEACC) expressing concern with the bill and offering what they think is a more balanced approach. MR. MAISCH responded that he had seen the letter and is aware of most of the issues it raises. He tried to address some of those in his testimony. He explained that the state is a very small land owner in Southeast Alaska; it's 98 percent federal ownership. The federal government has set aside large amounts of land in wilderness areas, parks and other reserves that allow very little other types of multiple uses for resource development. The state is trying to keep the timber industry alive in Southeast with a limited amount of resources. CO-CHAIR WAGONER asked how many acres the US government holds title to in Southeast Alaska that is harvestable forest lands. MR. MAISCH replied the 2009 Tongass Land Management Plan allows commercial development to take place on under 1-million acres. The Tongass is 98 percent of southern Southeast and the allowable cut is 260 million feet. The plan has three phases; the state is in phase 1 now, and that should allow up to 100 million feet to be harvested annually. The feds sold under 12 million feet in their worst year. He remarked that the state sold more than they did off of less than 2 percent of the land base. SENATOR WAGONER asked how old most of the second growth timber is. MR. MAISCH replied it varies, 25-30 years, which is still a ways from being mature enough to harvest. Pre-commercial activity can be done by the time timber reaches 15-20 years old. The rotation ages for the timber right now are 100 years and that can be shortened to 60 years on very good sites, but 80 years is probably a more accurate number to use for second growth in the future. CO-CHAIR WAGONER asked if anyone is putting in a pellet mill in Southeast. MR. MAISCH answered no; some people have discussed the concept, but the biggest issue is a stable timber supply and until that changes, it's unlikely anyone would make the investment that would need to be made to build a new wood production facility in Southeast. 4:39:27 PM SENATOR STEDMAN stated that in Southeast it's also a demand issue, and the transportation corridor is rather difficult because of the water and mountains. He asked Mr. Maisch to explain the allowable cut going into perpetuity. MR. MAISCH replied that currently the allowable cut is about 8.5 million feet. Prior to the inventory update, it was about 13 million feet. As they convert over to a young growth management on these lands, the volume will approximately double or triple depending on the site. At some point in the future the allowable cut will be 60 million feet off the same acreage. That timeframe is 30-40 years out, and will depend on how fast the old growth is converted to young growth. SENATOR STEDMAN recalled that Viking is about 35 million board feet a year. MR. MAISCH replied that Viking Lumber runs about 20 million board feet a ship, so they can run up to a 3-ship basis. They haven't done that for many years because of supply. Viking is the mill they helped supply bridge timber to. 4:41:04 PM SENATOR STEDMAN said that's the only mill left in Southeast. MR. MAISCH agreed. SENATOR STEDMAN stated in the scheme of things, this is a very small land expansion and the amount of fiber that can be produced off it is miniscule. And in particular, if the federal forest continues to be shut down, this amount of volume off the State Forest will keep extremely small mills running, but that's all. 4:42:26 PM MR. MAISCH agreed; it would be difficult to support a mill like Viking just off of state land. SENATOR STEDMAN asked him to expand on the impact to really small mills if they decide to enlarge the state forest. 4:43:26 PM MR. MAISCH answered that right now small mills can be supplied volumes in various places in southern and northern Southeast Alaska. Some of the small mills don't need a lot, maybe a couple dozen trees. The US Forest Service actually has a good small log program where they can actually provide small amounts of volume to small saw mills, too. Some of these are very specially oriented mills that use high-grade spruce or cedar for other value-added products like sound boards for pianos and guitar stock. Small mills produce locally-used products that are typically not exported. The best example is Icy Straits that produces very high-quality log cabins out of cedar. The cost of transportation is the largest impediment. 4:46:29 PM CO-CHAIR WAGONER announced that SB 44 would be held in committee. There being no further business to come before the committee, Co-Chair Wagoner adjourned the meeting at 4:46 p.m.