Legislature(2019 - 2020)BARNES 124
03/01/2019 01:00 PM House RESOURCES
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| Presentation(s): State Forestry and Timber Industry Update | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
March 1, 2019
1:02 p.m.
MEMBERS PRESENT
Representative John Lincoln, Co-Chair
Representative Geran Tarr, Co-Chair
Representative Grier Hopkins, Vice Chair
Representative Sara Hannan
Representative Ivy Spohnholz
Representative Dave Talerico
Representative George Rauscher
MEMBERS ABSENT
Representative Chris Tuck
Representative Sara Rasmussen
COMMITTEE CALENDAR
PRESENTATION(S): STATE FORESTRY AND TIMBER INDUSTRY UPDATE
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
JOHN "CHRIS" MAISCH, Director and State Forester
Division of Forestry
Department of Natural Resources
Fairbanks, Alaska
POSITION STATEMENT: Provided a PowerPoint presentation
entitled, "Forestry Update," dated 3/1/19, and answered
questions.
OWEN GRAHAM, Executive Director
Alaska Forest Association
Ketchikan, Alaska
POSITION STATEMENT: Provided a PowerPoint presentation
entitled, "Timber Industry Update," dated 3/1/19, and answered
questions.
JAELEEN KOOKESH, Vice President, General Counsel and Corporate
Secretary
Sealaska Corporation
Juneau, Alaska
POSITION STATEMENT: Provided a PowerPoint presentation
entitled, "Values in Action," dated 3/1/19, and answered
questions.
ACTION NARRATIVE
1:02:17 PM
CO-CHAIR JOHN LINCOLN called the House Resources Standing
Committee meeting to order at 1:02 p.m. Representatives Hannan,
Spohnholz, Hopkins, Tarr, and Lincoln were present at the call
to order. Representatives Talerico and Rauscher arrived as the
meeting was in progress.
^PRESENTATION(S): STATE FORESTRY AND TIMBER INDUSTRY UPDATE
PRESENTATION(S): STATE FORESTRY AND TIMBER INDUSTRY UPDATE
1:02:38 PM
CO-CHAIR LINCOLN announced that the only order of business would
be presentations by the Division of Forestry, Department of
Natural Resources, and by representatives of the timber
industry.
1:03:28 PM
JOHN "CHRIS" MAISCH, Director and State Forester, Division of
Forestry, Department of Natural Resources (DNR), informed the
committee his presentation would be updates on the status of the
forestry industry across the state and on the bark beetle
epidemic. Slide 2 illustrated the percent of the Alaska forest
owned by the federal government, the U.S. Forest Service (USFS),
Department of Agriculture, the state, local government, and
private landowners. Conditions that maintain or grow the forest
products industry in Alaska include (slide 3):
• a stable land base - that is also a mix of state, private,
trust and federal lands - allows companies to invest in
facilities to produce forest products
• access for forest products to markets inside Alaska, on the
U.S. West Coast, and abroad
• timber sale options, including those of 10 years or more
• Good Neighbor Authority (GNA) allows states to conduct work
on national forest land; two projects are underway in
Southeast Alaska
• access to resources through the rulemaking process to
[amend the Forest Service 2001 Roadless Area Conservation
Rule (Roadless Rule)]
• a trained workforce
1:07:55 PM
REPRESENTATIVE SPOHNHOLZ asked for clarification of "UTL" land
held in trust.
1:08:19 PM
MR. MAISCH said [some land available to the forest industry] is
[federal and state land granted to the University of Alaska (UA)
and held in trust to generate income], University Trust Land
(UTL)].
1:08:31 PM
REPRESENTATIVE HANNAN asked for more information on the
aforementioned ongoing GNA projects in Southeast Alaska.
MR. MAISCH said one is a sale of approximately 30 million feet
of young-growth timber located on Kosciusko Island; the other is
a sale of approximately 13 million feet of state timber and
approximately 3 million feet of young-growth timber in the
national forest on Gravina Island. In addition, a project on
Heceta Island is upcoming.
REPRESENTATIVE HOPKINS asked for information on the sale of UTL
in Haines.
MR. MAISCH explained the Haines land sale is a combination of
UTL, Alaska Mental Health Trust [created by the Mental Health
Trust Enabling Act of 1956], and DOF forest lands; UTL is the
lead agency and majority owner. The sale is of approximately
150 million feet of timber; he said he was unsure of the current
status of the sale.
REPRESENTATIVE HOPKINS questioned why the forest industry has a
problem maintaining a trained and motivated workforce.
MR. MAISCH advised few individuals are pursuing professions in
natural resources, which has created a nationwide shortage of
foresters, miners, and loggers; in fact, DOF recruiting efforts
have failed to fill open positions in Ketchikan.
1:14:28 PM
CO-CHAIR TARR asked how old- and young-growth harvests differ.
MR. MAISCH informed the committee the USFS definition of old-
growth timber is older than 150 years of age; the aforementioned
young-growth trees on Kosciusko Island are about 65 years old
and are the oldest young-growth in Southeast Alaska, having
grown after large-scale logging in Southeast began in the 1950s.
Typically, in the best growing sites, there are young-growth
trees up to 65 years of age that are economic to harvest;
however, waiting another 20 years would yield the maximum
harvest per acre. Currently, DOF struggles to find sufficient
volume to harvest thus a mix of old- and young-growth is
harvested to support the mill at Viking Lumber Company located
on Prince of Wales Island. Because there is no mill in
Southeast, young-growth timber in round log form is marketed to
China. Most of the Alaska state forest is old-growth, which
goes to the Viking Lumber Company mill.
CO-CHAIR LINCOLN inquired as to the features of old- and young-
growth timber that affect marketing.
MR. MAISCH said there are different characteristics of wood
quality because old-growth trees are larger and have grown
slowly. Some products like musical instruments require high
quality wood from special old-growth trees, and other
commodities can use young-growth trees that are smaller in
diameter. In the Interior, the forest is "basically sawtimber-
sized material."
MR. MAISCH continued to slide 4 and informed the committee the
Alaska Forest Resources and Practices Act has been in effect in
Alaska since 1989 and has been updated three to four times. The
Act seeks to protect water quality and fish habitat on private
land, state land, and other public land in Alaska and regulates
commercial forestry practices. Furthermore, DOF is the primary
agency that oversees the Act, in coordination with the Alaska
Department of Fish and Game and the Department of Environmental
Conservation. Slide 5 was a map of forest practices regions in
the state: Region Three has boreal forest of white spruce,
birch, aspen, and cottonwood; Region Two has a transitional
forest between boreal forest and temperate forest; Region One
has a temperate rainforest of Sitka spruce, hemlock, yellow
cedar, and western red cedar. Because the regions cover
different types of forest, there are different rules to govern
commercial practices and protect fish habitat and water quality.
Slide 6 began a statewide overview of forest products including
manufacturing, exports, and products. Slide 7 was a map of
forest products business locations; Mr. Maisch pointed out there
are lumber mills along the Railbelt and in areas in Southeast
with good access. The largest mill is the Viking Lumber Company
sawmill, located in Craig, which processes approximately 20
million to 30 million feet of sawn product per year for export
to markets in Asia, the U.S. West Coast, and Canada (slide 8).
1:19:57 PM
MR. MAISCH explained slide 9 pictured manufacturing facilities
including a head rig cutting an old-growth log, and equipment
processing chips and sawdust for compressed wood logs and pulp.
He further described two Southeast log export operations that
were pictured on slide 10. Mr. Maisch restated the primary
market for young-growth logs is China; China has five ports with
phytosanitary inspection fumigation facilities provided by the
Division of Agriculture, DNR, to certify that logs are pest-
free. The logs are fumigated onboard ship or at port
facilities. He advised the log value last year was $74.3
million in exports and for the last ten years the log value was
over $1.1 billion; logs are exported primarily to Japan and
China, and also to Korea. Slides 12 and 13 pictured operations
at the Superior Pellet mill in [North Pole]; manufactured
pellets are sold for commercial and residential space heating in
bulk or in bags.
CO-CHAIR LINCOLN returned attention to exports and surmised the
market value of exported logs has declined. He asked Mr. Maisch
to provide a graph of the market value for each of the last ten
years.
MR. MAISCH said additional data would be forthcoming from the
"Anchorage Customs District." He suggested the value has
declined because prices for wood have slumped; also, prices and
the volume of the wood shipped fluctuate from year to year.
CO-CHAIR TARR questioned how many Alaska households use pellets
for residential heating and whether special installation is
required for fireplaces.
1:24:59 PM
MR. MAISCH advised pellets are generally burned in a special
stove that automatically feeds pellets into a burning chamber.
Commercial boilers also have automatic feed systems. He said he
was unsure of the number of pellet stoves in residential use;
however, there are about 20 commercial operations. Mr. Maisch
directed attention to slide 14 that pictured log mills producing
logs for cabin and home construction and lumber. Slide 15
pictured custom downhill skis and splitboards made from Sitka
spruce and birch by Fairweather Ski works in Haines. Slide 16
pictured the Great Alaska Bowl Company that manufactures nested
bowls from white birch. Slide 17 pictured the Kahiltna
Birchworks that makes birch syrup and candies, which are non-
timber forest products. Birch syrup is used for baking and
cooking. Slide 18 illustrated examples of biomass fuels used
primarily for space heating, such as pellets, wood chips, and
solid wood. He noted a school facility in Tok is equipped to
use wood to generate electricity and heat. Slide 19 illustrated
locations of biomass energy projects underway and under
development in Alaska. He pointed out 14 percent of projects
funded by the Renewable Energy Fund, Alaska Energy Authority,
Department of Commerce, Community and Economic Development, are
wood biomass projects. Slide 20 pictured the commercial pellet
boiler for space heating at the Ketchikan International Airport.
Slide 21 pictured the project at the Tok boiler that uses wood
chips; there are similar boilers at schools in Craig, Tok, Delta
and Galena.
1:33:02 PM
MR. MAISCH continued to slide 22 which pictured a chip storage
facility in Galena and the harvesting of cottonwood chips
purchased from DOF and Native corporation land. Slide 23
pictured Garn boilers in Tanana that use solid wood to produce
hot water heating without heat loss. Slide 24 pictured Tanana
residents at work. Slides 25-27 illustrated a potential product
that can be manufactured out of wood primarily from Southeast:
cross laminated timber (CLT). Panels are produced from CLT and
can be used for buildings up to 15 stories tall in the U.S.; the
panels are a high value-added product, are esthetically
pleasing, and store carbon thus are environmentally friendly.
Some building codes related to fire codes in Canada and the U.S.
need to be changed to allow panel construction, however, a
multi-story CLT construction building passed seismic tests that
simulated a 7.2 magnitude earthquake.
1:38:02 PM
REPRESENTATIVE SPOHNHOLZ asked about the risk of fire associated
with CLT technology.
MR. MAISCH explained as wood burns the char on the exterior
surface insulates the interior of the panel; the panels are
currently being tested for fire, structural, seismic, and blast
building code requirements. Further, panel construction is
approximately one-third cheaper than steel or concrete
construction. In further response to Representative Spohnholz,
he confirmed the insulating properties of wood protect against
full combustion, and he gave an example.
REPRESENTATIVE HANNAN inquired as to factors of scale required
to make CLT manufacturing a sustainable economic opportunity for
Alaska.
MR. MAISCH acknowledged CLT manufacturing is an opportunity for
the distant future because there is not enough young-growth
timber; however, he urged [the state] to research the few
manufacturing facilities that are operating because this is a
new technology and an opportunity for North America to market a
new product in Asia. He opined the scale of manufacturing would
be less than for a plant competing in the lumber market. In
response to Co-Chair Lincoln, he said further information could
be obtained from the International Mass Timber Conference in
Oregon.
1:44:33 PM
A video was played from 1:44 p.m. to 1:45 p.m.
MR. MAISCH said the [CLT] building technology passed seismic
testing from an engineering standpoint. He turned attention to
the spruce bark beetle outbreak that began in 2016. Slide 28
pictured spruce bark beetles that kill trees by laying eggs in
tree bark - which hatch to grubs and girdle the tree -
preventing water and food from nourishing the tree. Slide 29
pictured a Lindgren funnel trap that is used to obtain beetle
population counts; slide 30 was a graph indicating beetle
populations were found in Houston in 2017 and in Houston, Denali
State Park, Eagle River, and Homer in 2018. Slide 31 was a
cumulative map of beetle activity from 2016-2018 indicating
there are approximately one million acres of dead white spruce
timber. Slide 32 listed actions to address the impacts of the
outbreak, such as public education workshops and presentations
by DOF staff on how to protect residential trees and reduce
wildland fire risk from dead trees. He said dead and dying
trees are creating safety hazards at public facilities and a
$300,000 grant will allow DOF to treat some parkland in
Soldotna; an additional $1.1 million is needed to treat state
parks. On a regional scale, DOF seeks a commercial operation to
salvage the wood and produce wood chips for export to Japan out
of Port MacKenzie.
1:52:13 PM
REPRESENTATIVE HOPKINS asked for a description of the bark
beetle treatment process.
MR. MAISCH advised bark beetles are not susceptible to
insecticides or pesticides because much of the beetle's
lifecycle transpires under the tree bark. To keep a tree
healthy, it must be well watered and fertilized, and in May one
can spray against emerging adult beetles. Also, expensive
systemic methods are available, and commercial use of the dead
trees will attenuate the spread of bark beetles.
REPRESENTATIVE HOPKINS surmised the grant and additional funding
are needed to purchase insecticide.
MR. MAISCH said no, the funds would be used for DOF fire crews
to fell and dispose of dead infected trees. In further response
to Representative Hopkins, he advised insecticide treatments are
for individual highly-valued residential trees; there is no
broad-forest treatment to prevent the spread of bark beetles.
1:55:54 PM
REPRESENTATIVE RAUSCHER asked whether the insecticide treatment
is dangerous to children.
MR. MAISCH said any application of pesticide must follow
labelled directions and be applied by a certified applicator.
In further response to Representative Rauscher, he said he would
refer his request for additional information to an entomologist.
REPRESENTATIVE SPOHNHOLZ asked for a description of the beetle
lifecycle.
MR. MAISCH explained adult beetles die after lying eggs; after
the eggs hatch, they grow to grubs, pupate to an adult, and fly
to a new host tree in April or May.
1:58:30 PM
REPRESENTATIVE SPOHNHOLZ asked whether there is a relationship
between the bark beetle outbreak and climate change.
MR. MAISCH recalled the first large recorded outbreak was in the
Kenai Peninsula in the late '90s and the outbreaks have moved
further north. He said there is not a direct scientific link to
climate change, but anecdotal evidence suggests climate is
playing a role in the severity of insect outbreaks in North
America, for example, the mountain pine beetle outbreak found in
Canada and parts of the U.S. In further response to
Representative Spohnholz, he explained the beetles are always
present at an endemic level. Large outbreaks occur in
conditions of over-mature trees and drought; in fact -
historically - fire frequently acted to protect against over-
mature trees. Also, in a warming climate, DOF expects to see
more and larger outbreaks of defoliating insects.
2:01:13 PM
OWEN GRAHAM, Executive Director, Alaska Forest Association,
provided a PowerPoint presentation entitled, "Timber Industry
Update." He informed the committee the primary problem facing
the timber industry in Alaska is timber supply; slide 2 was a
graph of the 2005 timber harvest by state which indicated Alaska
has a small timber harvest in comparison with other states.
Slide 3 pictured young-growth timber near Fairbanks; the state
five-year timber sale program for the Fairbanks area averages
approximately 2,000 acres per year, which is well below the
potential timber supply. Mr. Graham advised this amount is
sufficient to supply the current demand of industry; however,
expansion of the industry in this area is challenged, even
though there are the advantages of low harvest cost and
extremely low moisture content in the wood. He said cross
laminated timber (CLT) manufacturing would be a good choice for
softwood timber in this region and would increase year-round
jobs. In Southeast Alaska, the federal government provided 50-
year timber sale contracts and industry built and operated
[logging] facilities until the timber supply dwindled; at one
time, manufacturing and logging provided 3,000 year-round jobs.
Slide 4 pictured the Seward Forest Products mill that operated
for one year. In the Seward area the state five-year timber
sale program seeks to supply approximately 1,000 acres of timber
per year, focused primarily on sanitation and salvaged logging
due to the beetle infestation; however, Mr. Graham cautioned
industry has difficulty profiting on beetle-kill timber. The
Alaska Forest Association may ask the governor to establish a
temporary timber task force to examine potential timber supply
and thereby stabilize manufacturing in the Seward region. He
recalled a previous task force in 2011 generated improvements to
statutes by adding flexibility to the timber sale program,
expanding the woody biomass program, and adding a forest road
program.
2:06:24 PM
MR. GRAHAM continued to slide 5 which pictured operations of the
Wrangell Lumber Sawmill in 1990; the mill processed
approximately 80 million to 100 million board feet per year.
The state five-year timber sale program in the Wrangell area is
limited by the shortage of forested state land, and although
state timber sales have kept the mills alive, "without federal
timber those mills [are going] to perish ...." Mr. Graham said
the ongoing national forest timber supply shortage has starved
out of existence all the larger mills but the Viking Lumber
Company sawmill; he recalled 25 years ago there were five large
mills, a veneer plant, and two pulp mills providing 3,000 direct
year-round jobs, and private land logging was providing 2,000
jobs (slide 6). He opined USFS is working to correct its land
management plan which will take several years, thus the state
needs to provide longer term timber sales to support the
industry until federal timber becomes available. Mr. Graham
urged for an expansion of efforts by the state to aid the
industry, activities through the Good Neighbor Authority to
facilitate federal timber sales, and additional regulatory
changes to increase DOF efficiency. Slide 7 listed land
ownership distribution in Southeast Alaska: of 17 million
acres, less than 2 percent is state land and of that,
approximately 20 percent is state forest, which cannot provide
sufficient timber supply for the region. Mr. Graham directed
attention to a briefing paper found in the committee packet
addressed to Undersecretary of Agriculture James Hubbard, dated
10/3/18, related to the failure of the timber sale program in
Alaska, and remedies thereof. Slide 8 illustrated Tongass
commercial timberland is about 5.5 million acres and action by
the federal government has limited to 42,479 acres of mature
timber use by the lumber industry in Southeast; further, the
timber available is hard to reach and of poor quality. Mr.
Graham pointed out changes are necessary to support a forest
products manufacturing industry in Southeast; for example, a
facility like a pulp mill would use low grade timber such as
utility logs and provide year-round employment. Once the
Roadless Rule is revised, USFS can fully implement its timber
sale plan and restore manufacturing. Revisions will also have
to be made to the "Wildlife Conservation Strategy" and the land
use designations in the national forest; strong support from the
state is needed to facilitate these changes.
2:15:41 PM
MR. GRAHAM turned attention to slide 9 which pictured timber in
the state timber sale in Ketchikan: the stand of timber is
over-mature, and the quality is declining to about 15,000 board
feet per acre; a forest of higher quality yields about 50,000
board feet per acre with no defects in the trees. In the last
50 years, USFS has harvested approximately 430,000 acres of
young-growth trees, so the forest needs to grow to maturity at
around 90 years of age. He advised timber at age 65 yields logs
too small for sawmills and thus are not economical to harvest.
In fact, influencing changes to the federal land plan is the
most important action the industry needs from the state. Slide
10 illustrated land selection for a state forest that was
proposed by the state in 2013; the proposal was for 2 million
acres - out of 17 million acres of national forest - which
would provide all the timber the industry would need for
commercial harvest in Southeast. He concluded restoring the
timber supply in Southeast Alaska will require the state
government to strongly support changes in regulations.
REPRESENTATIVE HOPKINS asked whether Mr. Graham had received a
response from Undersecretary Hubbard.
MR. GRAHAM said no. He added he also expressed his concern that
the revisions of the Roadless Rule and the "forest plan" would
take four to four and one-half years, and the earliest that
gradual increases to the timber supply would start would be June
2020.
2:20:40 PM
JAELEEN KOOKESH, Vice President, General Counsel and Corporate
Secretary, Sealaska Corporation, provided a PowerPoint
presentation entitled, "Values in Action." Ms. Kookesh informed
the committee Sealaska Corporation (Sealaska) is the Alaska
Native Regional Corporation for Southeast Alaska created under
the Alaska Native Claims Settlement Act, and headquartered in
Juneau. Sealaska has over 23,000 shareholders - of which 16,000
are original shareholders - although its land base is smaller
than other regional corporations at 362,000 acres within
Southeast Alaska, which represents 1.6 percent of the 20-
million-acre region. Nevertheless, Sealaska is engaged with
state and federal governments on all land resources issues.
Sealaska's activities are guided by its values, and its purpose
is to strengthen people, culture, and homelands through its
values in action (slide 2). Ms. Kookesh disclosed she is a
member of the Alaska Board of Forestry, DOF, DNR. She directed
attention to slide 3 which listed Sealaska Values in Action.
Although Sealaska is often regarded as a timber company
harvesting trees without concern about impact to the land, the
corporation's decisions are guided by four values: 1. HAA AANI,
which is a recognition of the importance of Sealaska's land and
resources; 2. HAA SHUKA, which recognizes the importance of
decisions that are mindful of our past, present, and future
generations; 3. HAA LARSEEN, which is strength and leadership
that represents the importance of education to adjust and
persevere; 4. WOOCH.YAX, which is balance, reciprocity, respect,
and a desire to collaborate with others. She noted the
aforementioned values are important to the corporation's
decisions and involvement in drafting and enactment of the
Alaska Forest Resources and Practices Act as a private landowner
(slide 3). Overall, Sealaska's three primary platforms are
natural resources, government services, and seafoods and natural
foods; with its new focus, Sealaska is experiencing
unprecedented growth and income, and seeks to create further
economic development for its shareholders and region (slide 4).
2:26:38 PM
MS. KOOKESH continued to slide 5 and expressed Sealaska's desire
to use its land base in a balanced way. She discounted reports
that Sealaska clearcuts all its forest; in fact, of 362,000
acres, 35 percent is managed as a working forest by helicopter
and clearcut logging and post-harvest activities and the
remaining 65 percent will be held in its natural state to
develop other economic opportunities. Ms. Kookesh acknowledged
for many years Sealaska implemented large harvest levels;
however, after acquiring its final land base, Sealaska has
developed a more sustainable goal to perpetuate its timber
activities and averages a harvest of 55 million to 65 million
board feet per year. In 2018, Sealaska produced 59 million
board feet from its small land base. For 2019, harvest areas
are on Prince of Wales Island; in addition, a stumpage sale near
Yakutat will produce an additional 18 million to 20 million
board feet per year in 2019-2020. The land yields young-growth
harvest, including round logs exported to China, Japan, and
Korea, and timber for pulp exported to Washington State and
Canada. Ms. Kookesh spoke of attempts to make domestic
manufacturing markets compete with the export market that have
failed due to the cost of manufacturing and transportation. In
addition, prior domestic sales have resulted in a lawsuit
against Sealaska because its timber activities are subject to
Alaska Native Claims Settlement Act (ANCSA) revenue sharing
provisions, and lower profits do not maximize the value of its
timber. She pointed out the present tariff with China at 5
percent to 10 percent is currently manageable, but the
forthcoming increase to 25 percent may significantly impact the
stumpage sale at Icy Bay and subsequently the economic
opportunities for Yakutat. Sealaska does provide timber to
local mills on Prince of Wales Island and to local craftsmen,
firewood to shareholders, and monumental art logs to carvers.
2:33:34 PM
REPRESENTATIVE SPOHNHOLZ asked for the meaning of stumpage.
MS. KOOKESH explained stumpage is the term used when Sealaska
purchases and harvests trees on state or federal land for
resale.
CO-CHAIR TARR inquired as to the background of the
aforementioned lawsuit based "on the premise that you didn't
maximize the value of that resource ...."
MS. KOOKESH said ANCSA Sections 7(i) and 7(j) are the revenue
sharing requirements of the Act: Sealaska and all the regional
corporations must share 70 percent of their natural resource
revenue, which is distributed to sister corporations and village
corporations. She remarked:
So, imagine we have a tree ... that instead of selling
it for the full dollar, and in order to feed into a
local domestic mill, we sell it for fifty cents
instead. Now we're going to share 70 percent of that
fifty cents, instead of 70 percent of that dollar, and
other corporations were not happy with that idea of
not maximizing the value and getting their full share
even though we were creating value by providing jobs
and, a, domestic processing locally. ... There were
other benefits to doing so - there weren't other
benefits that the other regions could see.
CO-CHAIR TARR inquired as to whether - through litigation - a
benchmark to establish a sale price was determined.
MS. KOOKESH answered [the benchmark is] market value. In
further response to Co-Chair Tarr, she explained the domestic
processing value can be as low as one-fourth of export value,
depending on current markets.
REPRESENTATIVE HANNAN surmised Sealaska has received its full
land selection from the federal government.
MS. KOOKESH said Sealaska has received its full economic
development land; however, cultural sites are still being
processed by the Bureau of Indian Affairs and the Bureau of Land
Management, U.S. Department of the Interior.
2:37:39 PM
REPRESENTATIVE HANNAN questioned the accuracy of [slide 10 of
the PowerPoint presentation entitled, "Alaska Forest
Association, Timber Industry Update," dated 3/1/19].
MS. KOOKESH opined the information presented on the
aforementioned slide is focused on actual timber land - as
opposed to land owned by Sealaska - because there is not
marketable timber on all of the 362,000 acres owned by Sealaska.
Further, Sealaska has chosen not to harvest some land at the
request of nearby communities that wish to protect watershed
and/or viewshed; instead Sealaska will seek value from certain
land by "other ways, such as the carbon program."
REPRESENTATIVE HANNAN asked for the source of the pellets used
at the Sealaska Corporation headquarters building.
MS. KOOKESH said the pellets used by the Sealaska building and
at the Sealaska Heritage Institute are acquired from a facility
in the Fairbanks area; Sealaska considered manufacturing pellets
in Southeast but it is difficult to get the pellets compacted
and dry, adding additional cost to the manufacturing process.
She continued to slide 7 and explained silviculture activities
include precommercial thinning. After one or two trees are cut,
the regrowth is thicker than the original forest and the new
trees will be crowded and skinny; therefore, when the trees are
15-20 years old it is necessary to thin the forest and allow
certain trees to grow large. Sealaska performs precommercial
thinning on about 4,000 acres per year on Sealaska and village
corporation land, which along with harvesting and land
management activities, provides about 340-350 jobs per year.
Income from timber activities also provides benefits to
shareholders such as a $15-million-dollar scholarship program,
bereavement benefits, and public policy advocacy for all the
region.
2:43:04 PM
MS. KOOKESH highlighted some areas of concern for the timber
industry: tariff increase to 25 percent; loss of contractors
and new investment in the industry due to a lack of timber
supply; ensure there is an available workforce through programs
such as the Training Rural Alaskan Youth Leaders and Students
(TRAYLS) summer program; ensure consistent operations at USFS
and the state; impact of the application of the [2001 Roadless
Rule] that may put timber now available for harvest in
protective status; ensure sufficient funding to provide for
state permitting and regulatory functions that are critical to
the timber industry (slide 8).
MS. KOOKESH directed attention to Sealaska's carbon offset
project. Sealaska pursues activities other than timber
harvesting to provide value from its land; for example, Sealaska
placed 165,000 acres into a project managed by the California
Air Resources Board, California Environmental Protection Agency,
by committing to maintaining a certain level of carbon value for
100 years on said land. She acknowledged this is a commitment
on the land base; however, the project also provides jobs,
monitoring activities, and allows for continued use of the land
by subsistence activities, limited development, and some timber
harvest. Ms. Kookesh characterized the program as successful
in that Sealaska will meet local community and global
environmental concerns, and the project may spread to village
corporations (slide 9). Furthermore, as the 165,000 acres of
forest grows, carbon value is added, thus Sealaska can harvest
new trees or sell carbon credits based on growth. She stressed
there are still opportunities for land held for carbon storage
credits such as tourism, mineral extraction, and road
construction (slide 10).
CO-CHAIR TARR asked for further information on the previously
discussed litigation.
2:51:43 PM
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 2:51 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Alaska Forest Association Presentation March 2019.pdf |
HRES 3/1/2019 1:00:00 PM |
Forestry |
| Alaska Forest Association Memo March 2019.pdf |
HRES 3/1/2019 1:00:00 PM |
Forestry |
| House Resources Committee-Sealaska 2019 Land Management update.pdf |
HRES 3/1/2019 1:00:00 PM |
Forestry |
| HRES Committee Forest Industry Talk 2019.pdf |
HRES 3/1/2019 1:00:00 PM |
Forestry |