Legislature(2019 - 2020)BUTROVICH 205

02/15/2019 03:30 PM Senate RESOURCES

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03:30:10 PM Start
03:30:48 PM Presentation(s): Timber Industry Update: Alaska Division of Forestry
03:57:31 PM Presentation(s): Timber Industry Update: U.s. Forest Service-alaska Division
04:16:46 PM Presentation(s): Timber Industry Update: Sealaska Corporation
04:40:39 PM Presentation(s): Timber Industry Update: Alaska Forest Association
05:03:37 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Timber Industry Update by:
- Chris Maisch, State Forester, Alaska Division
of Forestry
- David Schmid, Regional Forester, US Forest
Service - Alaska Region
- Jaeleen Kookesh, Vice President, Sealaska
- Owen Graham, Executive Director, Alaska Forest
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                       February 15, 2019                                                                                        
                           3:30 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Chris Birch, Chair                                                                                                      
Senator Cathy Giessel                                                                                                           
Senator Lora Reinbold                                                                                                           
Senator Click Bishop                                                                                                            
Senator Scott Kawasaki                                                                                                          
MEMBERS ABSENT                                                                                                                
Senator John Coghill, Vice Chair                                                                                                
Senator Jesse Kiehl                                                                                                             
COMMITTEE CALENDAR                                                                                                            
PRESENTATIONS: TIMBER INDUSTRY UPDATE:                                                                                          
     - ALASKA DIVISION OF FORESTRY                                                                                              
     - U.S. FOREST SERVICE-ALASKA DIVISION                                                                                      
     - SEALASKA CORPORATION                                                                                                     
     - ALASKA FOREST ASSOCIATION                                                                                                
     - HEARD                                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
No previous action to record                                                                                                    
WITNESS REGISTER                                                                                                              
CHRIS MAISCH, Director and State Forester                                                                                       
Alaska Division of Forestry                                                                                                     
Alaska Department of Natural Resources                                                                                          
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Provided a state forestry update.                                                                         
DAVID SCHMID, Regional Forester                                                                                                 
U.S. Forest Service-Alaska Division                                                                                             
U.S. Department of Agriculture                                                                                                  
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:  Provided  an  update  of  the  U.S.  Forest                                                             
Service's timber program in Alaska.                                                                                             
JAELEEN KOOKESH, Vice President of Policy and Legal Affairs                                                                     
Sealaska Corporation                                                                                                            
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT: Provided  an overview  of Sealaska's  timber                                                             
OWEN GRAHAM, Executive Director                                                                                                 
Alaska Forest Association                                                                                                       
Ketchikan, Alaska                                                                                                               
POSITION  STATEMENT:  Provided  and  update  on  Alaska's  timber                                                             
industry,  primarily  on  activities   in  the  Tongass  National                                                               
ACTION NARRATIVE                                                                                                              
3:30:10 PM                                                                                                                    
CHAIR CHRIS BIRCH called the  Senate Resources Standing Committee                                                             
meeting to order  at 3:30 p.m. Present at the  call to order were                                                               
Senators Giessel, Reinbold, Kawasaki, Bishop, and Chair Birch.                                                                  
^PRESENTATION(S):  Timber  Industry  Update: Alaska  Division  of                                                               
    PRESENTATION: Timber Industry Update: Alaska Division of                                                                
3:30:48 PM                                                                                                                    
CHAIR BIRCH  announced that the  committee will hear  an overview                                                               
and  update  on the  Alaska  timber  industry. Alaska  holds  129                                                               
million acres  of forested  land including  the boreal  forest of                                                               
the Interior, the mixed forests  of Southcentral, and the coastal                                                               
rainforests of  Southeast Alaska.  However, only a  small portion                                                               
of that supports commercially viable  timber and is available for                                                               
timber sales and harvest.                                                                                                       
He said the  committee will hear from leaders  in state forestry,                                                               
the  U.S.  Forest Service  (USFS),  one  of the  regional  Native                                                               
corporations, and a timber industry  trade group about efforts to                                                               
improve  Alaska's  timber availability,  and  about  some of  the                                                               
opportunities  and challenges  faced  by  the important  forestry                                                               
He provided background information  on Mr. Maisch's experience in                                                               
forestry.  Mr.  Maisch  has  been with  the  Alaska  Division  of                                                               
Forestry since  1999 and  previously spent  15 years  with Tanana                                                               
Chiefs  Conference Forestry  Program.  Mr. Maisch  has worked  in                                                               
both forest and  wildland fire management during  his career. Mr.                                                               
Maisch  is  a certified  forester  via  the Society  of  American                                                               
Foresters and  holds a  B.S. in Forestry  from the  University of                                                               
Michigan. Mr. Maisch  is also a former president  of the National                                                               
Association of State Foresters.                                                                                                 
3:32:28 PM                                                                                                                    
CHRIS  MAISCH, Director  and State  Forester, Alaska  Division of                                                               
Forestry,  Alaska  Department  of Natural  Resources,  Anchorage,                                                               
Alaska, referenced  "What conditions maintain or  grow the forest                                                               
products sector  in Alaska" in  his presentation and  detailed as                                                               
   • Stable land base for forest management that produces a                                                                     
     consistent offering of timber sales.                                                                                       
        o Planning and capital investments are not possible                                                                     
          without a stable land base.                                                                                           
   • A mix of private, state, trust (Alaska Mental Health Trust                                                                 
     (MHT) and University Titled Land (UTL)), and federal land.                                                                 
   • Access to markets both domestic and foreign.                                                                               
   • A range of timber sale options, including longer-term                                                                      
     commitments of supply from 10 to 20 years.                                                                                 
   • Use of Good Neighbor Authority (GNA) to partner with the                                                                   
     USFS to conduct work on national forest lands.                                                                             
        o GNA allows states to work with the USFS to conduct                                                                    
          work on national forest system lands, usually a                                                                       
          combination of restoration work and timber sales.                                                                     
        o Alaska has done two GNA sales to date including a                                                                     
          recent sale.                                                                                                          
   • Access to resources and the current state specific Roadless                                                                
     Rule effort between the state and the U.S. Department of                                                                   
     Agriculture (USDA).                                                                                                        
        o Previous governor had petitioned the Secretary of the                                                                 
          USDA to undertake a rulemaking process is currently                                                                   
        o The division met with the USFS to begin looking at                                                                    
          analysis work that has been done on alternatives being                                                                
          considered for the Roadless Rule.                                                                                     
        o The goal is to return more acreage in the Tongass                                                                     
          Forest to the timber base.                                                                                            
He  referenced "Forest  Resources  and Practices  Act and  forest                                                               
types across the state" as follows:                                                                                             
   • Region Three:                                                                                                              
        o Boreal forest,                                                                                                        
        o Interior spruce/hardwood,                                                                                             
        o North and west of the Alaska Range.                                                                                   
   • Region Two:                                                                                                                
        o Transitional forest,                                                                                                  
        o Interior spruce/hardwood,                                                                                             
        o South of Alaska Range,                                                                                                
        o Mix of both coastal and Interior species.                                                                             
   • Region One:                                                                                                                
        o Temperate rainforest,                                                                                                 
        o Coastal Sitka spruce/hemlock.                                                                                         
MR.  MAISCH  explained  that  the  Alaska  Forest  Resources  and                                                               
Practices  Act  affects  private landowners  that  do  commercial                                                               
forest activities in  the state. The Alaska  Forest Resources and                                                               
Practices Act also protects water  quality and fish habitat, both                                                               
are key components,  which includes buffers on  streams and other                                                               
best  practices  to  ensure that  commercial  harvest  activities                                                               
exist and can coexist with other  resources and not cause harm to                                                               
those resources.                                                                                                                
3:36:30 PM                                                                                                                    
He addressed Region  2 regarding the "Division  of Forestry (DOF)                                                               
Forest  Health  Program"  pertaining   to  a  large  bark  beetle                                                               
outbreak that is currently going on  in and north of Anchorage up                                                               
to the southern parts of the Alaska Range.                                                                                      
He called attention  to a map that shows the  impacted areas from                                                               
Spruce beetle  activity from 2016-2018,  resulting in  nearly one                                                               
million acres  of dead  spruce trees  as a  result of  the Spruce                                                               
beetle infestation. The Kenai Peninsula  had a big infestation in                                                               
the 1990s, primarily in the southern end.                                                                                       
MR. MAISCH said the spruce  beetle infestation is a serious issue                                                               
because  of  the   potential  increase  in  fire   risk  that  is                                                               
associated  with  the  dead  tree material.  As  the  trees  die,                                                               
grasses  come in  underneath  the  dead trees  due  to the  extra                                                               
sunlight which creates a "flash"  fuel that increases risk in the                                                               
spring fire season.                                                                                                             
He said the  DOF is working very diligently to  try and undertake                                                               
some  commercial salvage-harvest  activities,  but a  lot of  the                                                               
issues  pertains to  access. Two  companies  have expressed  some                                                               
interest and DOF  is working through some due  diligence with the                                                               
companies to try and see if a project can be put together.                                                                      
SENATOR  BISHOP asked  him to  address  spruce beetle  mitigation                                                               
efforts by DOF.                                                                                                                 
MR. MAISCH explained that mitigation  efforts on beetles are very                                                               
difficult because the insect lives  inside of trees. The only way                                                               
to  really try  and control  the beetle  is through  insecticides                                                               
where the  outside of the tree  must be sprayed during  the right                                                               
time of  the year before  the beetles emerge and  start attacking                                                               
trees. Applying  insecticides is  very expensive  and application                                                               
is  probably  only  done  for high  value  residential  trees  or                                                               
perhaps in campgrounds or around public areas.                                                                                  
He disclosed  that there is  some being  work done on  a systemic                                                               
insecticide  that is  injected  into the  tree  where the  beetle                                                               
ingests  the  insecticide  when   it  attacks  a  tree.  Systemic                                                               
insecticide  is not  a  simple or  inexpensive  process and  will                                                               
probably be used for the highest value trees.                                                                                   
He  said unfortunately  there  is  not much  DOF  can  do from  a                                                               
prevention  perspective except  have  a healthy  forest to  start                                                               
with.  The  infested forest  is  older,  more decadent,  and  the                                                               
beetle populations  are always present  in small number,  but the                                                               
conditions were right for the population to explode.                                                                            
3:39:33 PM                                                                                                                    
He addressed  a bar graph  showing "DOF spruce  beetle population                                                               
monitoring for:  Houston (2017-2018),  Denali State  Park (2018),                                                               
Eagle   River  (2018),   Homer   (2018)."  He   said  the   graph                                                               
dramatically  demonstrates population  increases  in Houston  and                                                               
Denali State  Park. The key point  will be salvage and  trying to                                                               
mitigate fire  risk with  fuel breaks  and other  activities. DOF                                                               
has held  22 meetings with the  public to talk about  "fire wise"                                                               
and  things that  can be  done to  homes and  businesses to  help                                                               
reduce  the  risk and  increase  the  likelihood of  surviving  a                                                               
wildland fire. DOF is ramping up a comprehensive response.                                                                      
SENATOR REINBOLD asked  if DOF is working with  federal and state                                                               
agencies. She  inquired if  there is  a cost/benefit  analysis in                                                               
saving  trees versus  allowing trees  to die  and causing  a fire                                                               
MR. MAISCH answered that the  insecticide treatments are strictly                                                               
going to  be a homeowner's  decision. The state does  not provide                                                               
insecticide services, but private companies  do. DOF's role is to                                                               
provide education  and technical assistance  to try and  help the                                                               
local governments  formulate a  plan of  attack. DOF  has applied                                                               
for competitive  funding, in  the western  states the  process is                                                               
called Wildland-Urban  Interface (WUI) funds to  help reduce fire                                                               
risk by  treating "fuels;" i.e.,  dead trees. DOF  was successful                                                               
in  attracting  $2.1  million for  various  projects  around  the                                                               
state,  two  projects  are  in  the  Susitna  Valley  focused  on                                                               
individual-hazard trees  in campgrounds and public  spaces around                                                               
schools  and   other  public  buildings  that   are  hazards  for                                                               
physically blowing  over. The "fire  piece" is a  tougher problem                                                               
because the area is very  large where significant resources would                                                               
be  required  to  do  something.   DOF  has  talked  to  Alaska's                                                               
delegation  in Washington,  D.C. about  additional resources  for                                                               
the issue.                                                                                                                      
3:42:18 PM                                                                                                                    
SENATOR REINBOLD asked if harvesting  the trees would help and is                                                               
there  anything that  can be  done to  stop the  infestation from                                                               
MR. MAISCH  answered that there  is not much  DOF can do  to stop                                                               
the  infestation   from  spreading.   DOF  monitors   the  beetle                                                               
population,  but   there  is  no  practical   opportunity  to  do                                                               
something  to prevent  the beetles  from spreading.  A good  cold                                                               
winter  might help  to  keep the  beetle  population somewhat  in                                                               
check;  however, Alaska  has been  having milder  winters in  the                                                               
last decade or so.                                                                                                              
He addressed  salvage and explained  that harvesting is  a viable                                                               
way to  get some utilization from  the trees to reduce  the risk;                                                               
however, the economics  of salvage is very hard  to "pencil out."                                                               
He noted that  one issue is the port at  Point MacKenzie that was                                                               
damaged from the earthquake, a  key place that any material would                                                               
have  to be  shipped out  of.  DOF is  doing some  work with  the                                                               
Matanuska-Susitna Borough regarding Point MacKenzie.                                                                            
He  addressed a  chart  that shows  "Who  owns commercial  forest                                                               
lands"  encompassing 126  million  acres, the  majority owned  by                                                               
federal, USFS, and the state.                                                                                                   
He referenced "Statewide overview  of the forest products sector"                                                               
as follows:                                                                                                                     
   • Regional differences in scale, markets, products and type                                                                  
     of facilities;                                                                                                             
   • Primary Manufacturing:                                                                                                     
        o First mill that breaks down a log from a round form                                                                   
          into a board or some product;                                                                                         
   • Log Export;                                                                                                                
   • Secondary Manufacturing:                                                                                                   
        o Make higher value products;                                                                                           
   • Non-Timber Forest Products:                                                                                                
        o Includes mushrooms;                                                                                                   
   • Woody Biomass Projects:                                                                                                    
        o Scale and types of fuels;                                                                                             
        o Energy production.                                                                                                    
MR.  MAISCH  addressed  "Primary  manufacturing  facilities"  and                                                               
noted a photo  of the Viking Sawmill in Craig  on Prince of Wales                                                               
Island,  the  largest  sawmill still  operating  in  Alaska.  The                                                               
Viking Sawmill  annually does 25-30  million board feet  (MBF) of                                                               
old  growth  timber.  Sawdust  and  chips  are  produced  in  the                                                               
manufacturing  process, the  chips are  mainly shipped  to Canada                                                               
and Pacific  Northwest for use in  pulp mills or the  biomass use                                                               
in-state. Most  of the  materials that  are produced  are various                                                               
grades of lumber for different manufacturing.                                                                                   
3:44:50 PM                                                                                                                    
He addressed "Primary manufacturing log  export" and noted that a                                                               
lot of Alaska's logs goes  overseas in round-log form. Logs noted                                                               
in a  photo were  young-growth material,  young growth  are trees                                                               
that have  come back  after the  first harvest.  Southeast Alaska                                                               
saw its first large-scale harvest in  the 1950s and some of those                                                               
trees are now  becoming available for use as a  log in a process.                                                               
The  only market  for  the  material is  China.  The log  tariffs                                                               
currently in  place with China  are causing some  difficulties in                                                               
the  industry,  the tariff  is  10  percent  on Sitka  spruce,  5                                                               
percent  on  western  hemlock.  If  the U.S.  and  China  do  not                                                               
successfully reach  a trade agreement  the tariffs  are scheduled                                                               
to  increase  to  25  percent which  will  effectively  stop  any                                                               
ability to sell the logs in the China market.                                                                                   
He addressed  "Log exports and phytosanitary  inspection" for the                                                               
ports in China as follows:                                                                                                      
   • Agriculture program staff provides inspection service and                                                                  
     third-party fumigation inspections on-board ship in Korea                                                                  
     for logs heading to China ports without onshore facilities.                                                                
   • Industry pays travel costs.                                                                                                
   • On shore fumigation is now available in six ports.                                                                         
   • Value last year: $74.3 million in exports.                                                                                 
   • Value over a ten-year period: $1.2 billion in exports.                                                                     
   • Log tariff issue.                                                                                                          
He addressed  "Primary manufacturing  facilities: pellet  mill in                                                               
North Pole." The Superior Pellet  Mill is the largest pellet mill                                                               
in Alaska. Due to competition with  lower oil prices, the mill is                                                               
only  operating at  10-percent capacity.  The mill  also produces                                                               
compressed logs. The  pellets are used in  residential heating or                                                               
larger-scale heating like the Sealaska building in Juneau.                                                                      
3:47:12 PM                                                                                                                    
MR.  MAISCH addressed  "Primary manufacturing  facilities smaller                                                               
scale" and noted  photos of a log turning mill  for log homes and                                                               
cabin  kits, and  a Wood-Mizer  portable sawmill.  The operations                                                               
are one or  two-person operations that are  common throughout the                                                               
state.  The  smaller-scale   facilities  are  typically  operated                                                               
He addressed  "Secondary manufacturing facilities" and  noted the                                                               
Fairweather Ski  Works located  in Haines. The  skis are  a high-                                                               
value product that uses Sitka spruce and spalted birch.                                                                         
He addressed "Secondary  manufacturing facilities" and referenced                                                               
the Great  Alaska Bowl Company  in Fairbanks. White birch  is the                                                               
primary species used.                                                                                                           
He   addressed    "Non-timber   forest    product   manufacturing                                                               
facilities"  and noted  the Kahiltna  Birch Works  which produces                                                               
birch syrup in  the Susitna Valley. Seventy gallons  of birch sap                                                               
is required to make one gallon of birch syrup.                                                                                  
He addressed "Woody biomass and energy" as follows:                                                                             
   • Types of wood fuels used:                                                                                                  
        o Wood chips,                                                                                                           
        o Solid wood,                                                                                                           
        o Pellets.                                                                                                              
   • Scale of operations from commercial to residential.                                                                        
   • Space heating:                                                                                                             
        o Most common in Alaska.                                                                                                
   • Electrical generation:                                                                                                     
        o Tentative steps.                                                                                                      
   • Combined heat and power:                                                                                                   
        o Larger scale.                                                                                                         
3:49:21 PM                                                                                                                    
He addressed a state map  that noted "Locations of biomass energy                                                               
projects."  He noted  viable biomass  energy projects  throughout                                                               
the state that includes:                                                                                                        
   • Ketchikan airport's pellet fuel heating project:                                                                           
        o Heats the airport.                                                                                                    
   • Galena woody biomass heating project:                                                                                      
        o Wood-chip boiler:                                                                                                     
             square4 Galena,                                                                                                    
             square4 Tok,                                                                                                       
             square4 Craig.                                                                                                     
   • Tanana solid wood fuel heating project:                                                                                    
        o System is fed by hand twice a day in cold weather,                                                                    
        o Burned as hot as possible and the energy is stored in                                                                 
          a water jacket around the boiler systems,                                                                             
        o Clean way to produce heat and energy,                                                                                 
        o Creates local jobs.                                                                                                   
3:52:06 PM                                                                                                                    
MR. MAISCH addressed "Cross Laminated Timber (CLT)" as follows:                                                                 
   • Possible future manufacture product for Alaska.                                                                            
   • Young growth timber in Southeast Alaska.                                                                                   
   • Finished buildings in Asian market.                                                                                        
He said CLT is relatively new  in North America and has come into                                                               
its own  over the past  five years. CLT  has been used  in Europe                                                               
for a longer period. CLT is  used to manufacture mid to high-rise                                                               
buildings completely  with wood. He  explained that CLT  is cross                                                               
laminated with  different layers  of wood  up to  13-layers thick                                                               
where a  very large product  is possible. CLT dimensions  is only                                                               
limited  by  the press-size.  CLT  is  structurally very  strong,                                                               
buildings using  CLT go up  very quickly.  CLT panels noted  in a                                                               
photo are  built in  a factory,  shipped in  a truck,  and lifted                                                               
into place  so the labor  savings are significant over  steel and                                                               
concrete  construction,   over  a  third  less   in  cost.  CLT's                                                               
environmental  footprint   is  much  friendlier,   especially  if                                                               
climate   change  and   CO2  is   a   consideration.  CLT's   CO2                                                               
sequestration works well where the  carbon is stored in place and                                                               
new trees grow where the trees used for CLT are harvested.                                                                      
He noted that the Canadian  architect from Vancouver that brought                                                               
CLT  into North  America explained  that he  had built  a lot  of                                                               
buildings with steel and concrete  and none of his customers ever                                                               
came inside and  hugged one of the main pilings  of the building.                                                               
He said  people like wood,  like to  live in buildings  made from                                                               
wood,  wood is  esthetically  pleasing, and  people for  whatever                                                               
reason bonds with wood.                                                                                                         
3:54:13 PM                                                                                                                    
MR.  MAISCH addressed  CLT seismic  testing and  showed a  seven-                                                               
story-building  mockup that  was tested  on a  "shaker table"  in                                                               
Japan that  simulated a 7.2  earthquake. He disclosed that  a lot                                                               
of urban  areas in the U.S.  would have to adjust  their codes to                                                               
allow  CLT construction  due  to wood  buildings  that burned  in                                                               
cities in the 1800s and  1900s where restrictions were imposed to                                                               
limit wood buildings to 3 stories.                                                                                              
He showed a  video that demonstrated CLT seismic  testing and the                                                               
material's  impressive reaction  to  shaking  from an  earthquake                                                               
simulation. CLT gives  more than steel and  concrete. CLT testing                                                               
continues for fire and engineering  purposes. Buildings using CLT                                                               
will become key pieces in U.S. cities.                                                                                          
CHAIR BIRCH  thanked Mr.  Maisch for  his presentation.  He noted                                                               
that he was not aware of  the permissibility of wood buildings to                                                               
only three stories.                                                                                                             
MR. MAISCH noted that there  is a 15-story building in Vancouver,                                                               
Seattle  and   Portland  both   have  15-story   buildings  under                                                               
3:56:43 PM                                                                                                                    
At ease.                                                                                                                        
^PRESENTATION(S):  Timber Industry  Update: U.S.  Forest Service-                                                               
Alaska Division                                                                                                                 
 PRESENTATION: Timber Industry Update: U.S. Forest Service-Alaska                                                           
3:57:31 PM                                                                                                                    
CHAIR  BIRCH called  the  committee back  to  order. He  provided                                                               
background information  on Mr.  Schmid's experience  in forestry.                                                               
He noted that  Mr. Schmid oversees management of  over 22 million                                                               
acres  of national  forest lands  in  Southcentral and  Southeast                                                               
Alaska  where   he  works  closely  with   the  region's  diverse                                                               
stakeholders on  issues related to  forest restoration  and rural                                                               
community health.                                                                                                               
3:58:18 PM                                                                                                                    
DAVID  SCHMID,  Regional  Forester,  U.S.  Forest  Service-Alaska                                                               
Division,  U.S.   Department  of  Agriculture,   Juneau,  Alaska,                                                               
disclosed that he  previously worked in Alaska  and returned last                                                               
year  to be  the  regional forester.  He noted  that  one of  the                                                               
things that  changed since he  left Alaska  13 years ago  is that                                                               
there are about  half the number of employees now  working at the                                                               
U.S. Forest  Service-Alaska Division. He  said the USFS  tries to                                                               
figure out how to use  their limited capacity by prioritizing its                                                               
work within the region.                                                                                                         
MR. SCHMID referenced the "Strategic priorities for fiscal years                                                                
2019-2020" as follows:                                                                                                          
   • Active Management:                                                                                                         
        o Delivering on timber  commitment, ensuring a continuous                                                               
         and reliable supply of timber into the future.                                                                         
   • Shared Stewardship:                                                                                                        
        o Partnering  and  working  across  boundaries  with  the                                                               
          State of Alaska, Tribes, Alaska Native Corporations,                                                                  
          communities, and non-governmental organizations.                                                                      
   • Customer Service:                                                                                                          
        o Finding  ways  to  get  to  "yes"  by  identifying  new                                                               
          opportunities for partnerships, working with local                                                                    
          service providers, and streamlining and improving our                                                                 
4:01:52 PM                                                                                                                    
He referenced the "Alaska Roadless Rulemaking" as follows:                                                                      
   • Focused on the Tongass National Forest:                                                                                    
        o Rulemaking in response to a  petition from the State of                                                               
          Alaska for full-exemption.                                                                                            
   • An Alaska Roadless Rule will:                                                                                              
        o Amend  the  2001  National Roadless  Area  Conservation                                                               
       o Address local economic and development concerns.                                                                       
       o Conserve roadless areas for generations to come.                                                                       
        o Determine  which  currently designated  roadless  areas                                                               
          would have a different management designation that may                                                                
          allow  for timber  harvest  and  road construction  and                                                               
          reconstruction in areas where it currently prohibited.                                                                
   • Committed to transparent rule-making process:                                                                              
        o Cooperating agency engagement with  State of Alaska and                                                               
          six Tribal governments.                                                                                               
        o Government-to-government    consultation    with    all                                                               
          federally recognized Tribes.                                                                                          
        o Government-to-corporation   consultation  with   Alaska                                                               
          Native Corporations.                                                                                                  
        o Public   engagement   through  National   Environmental                                                               
          Policy Act (NEPA) processes and other outreach.                                                                       
   • Timeline:                                                                                                                  
        o Ongoing:  project review  and  decisions on  activities                                                               
          allowed under the 2001 Roadless Rule (i.e., mining,                                                                   
          hydropower, interties, etc.).                                                                                         
        o Mid-summer 2019:                                                                                                      
             square4 Draft Environmental Impact Statement released;                                                             
               formal public comment open.                                                                                      
             square4 June 2020: anticipated decision.                                                                           
4:03:59 PM                                                                                                                    
MR. SCHMID referenced the "Tongass transition" as follows:                                                                      
   • 2016 Tongass Forest Plan  Timber Program:                                                                                  
        o Contributing to  the continued viability of  the timber                                                               
          industry, an economically and socially significant                                                                    
          part of Southeast Alaska.                                                                                             
        o Implementing  a  transition to  primarily  young-growth                                                               
          timber program:                                                                                                       
             square4 Approximately 400,000 acres was   previously                                                               
               harvested in the national forest.                                                                                
             square4 The earliest young-growth timber is available.                                                             
        o Continuing to  provide old-growth "bridge"  timber sale                                                               
          opportunities during the transition to young-growth                                                                   
   • Young-growth inventory and suitability analysis:                                                                           
        o Partnership  with State  of  Alaska includes  inventory                                                               
          and workforce development.                                                                                            
        o Inventoried young-growth stands  on 30,000 acres across                                                               
          7 Ranger Districts.                                                                                                   
        o Completed   stream   surveys   on   roughly   have   of                                                               
          inventoried acres.                                                                                                    
        o In process:                                                                                                           
             square4 Suitability analysis to determine amount of acres                                                          
               and volume of young-growth available for harvest.                                                                
        o Report expected later in 2019.                                                                                        
   • Thinning treatments in previously harvested areas:                                                                         
        o Promote  better  growth  of  trees  for  future  timber                                                               
        o Improve wildlife habitat.                                                                                             
        o Goal:                                                                                                                 
             square4 To treat 9,000 acres annually.                                                                             
   • Alaska Mental Health Trust Land Exchange to provide old-                                                                   
     growth timber:                                                                                                             
        o Phase I:                                                                                                              
             square4 January 2019, the Forest Service and the Trust                                                             
               closed on Phase I of the federally legislated                                                                    
               land exchange.                                                                                                   
        o Phase I:                                                                                                              
             square4 Approximately 2,400 federal acres near Naukati                                                             
               (POW) exchanged for approximately 2,500 acres of                                                                 
               Trust land near Ketchikan.                                                                                       
        o Phase I:                                                                                                              
             square4 Federal lands exchanged include old-growth,                                                                
               potentially merchantable timber.                                                                                 
        o Phase II:                                                                                                             
             square4 In process.                                                                                                
             square4 Will include the remainder of the approximately                                                            
               18,600 federal acres and 15,500 non-federal acres                                                                
               to be exchanged.                                                                                                 
4:06:49 PM                                                                                                                    
MR. SCHMID referenced the "Status: Tongass Timber Program" as                                                                   
   • 66.34 MBF of timber currently under contract:                                                                              
        o Approximately half of this volume is old-growth                                                                       
        o Nearly half of the volume is young-growth, via a Good                                                                 
          Neighbor Agreement sale through the State of Alaska.                                                                  
        o Prior year (FY2018) no-bid sales remain available for                                                                 
          off-the-shelf purchase.                                                                                               
   • Industry Challenges:                                                                                                       
        o Unique to Alaska.                                                                                                     
        o High costs of goods and materials.                                                                                    
        o High transportation costs from Alaska to the                                                                          
          contiguous 48 states.                                                                                                 
        o Sparsely developed infrastructure facilities.                                                                         
        o Variable and unpredictable market conditions.                                                                         
   • Work to Support Industry Opportunity:                                                                                      
        o All Landowners Group:                                                                                                 
             square4 Coordinate operations,                                                                                     
             square4 Find efficiencies,                                                                                         
             square4 Share infrastructure.                                                                                      
        o Using   the    Good   Neighbor   Authority    to   work                                                               
          cooperatively to with the State of Alaska to implement                                                                
          timber projects on National Forest System lands.                                                                      
        o Identifying opportunity to:                                                                                           
         square4 Use expanded Good Neighbor Authority,                                                                          
             square4 Allow for partnerships with Tribes and Alaska                                                              
               Native Corporations.                                                                                             
        o Updating annual targets.                                                                                              
4:09:26 PM                                                                                                                    
He referenced the "Landscape Level Projects" as follows:                                                                        
   • Comprehensive and efficient analysis:                                                                                      
        o Plan on a  large spatial scale and  increase the number                                                               
          of activities authorized in a single NEPA analysis and                                                                
        o Meet  multiple   resource  objectives,   including  the                                                               
        o NEPA-clear projects for a 10-15-year period.                                                                          
   • Prince of Wales Landscape Level Analysis:                                                                                  
        o Approximately 1.8  million acres  within the  Craig and                                                               
          Thorne Bay Ranger Districts.                                                                                          
        o Final Environmental  Impact Statement (FEIS)  and draft                                                               
          Record of Decision was released in November 2018.                                                                     
        o Selected     alternative    closely     followed    the                                                               
          recommendations made by the Prince of Wales Landscape                                                                 
          Assessment Team (POW-LAT), an independently formed                                                                    
          collaborative group.                                                                                                  
        o Currently  in  the   objection  review  and  resolution                                                               
        o First  on-the-ground projects  focused on  timber stand                                                               
         improvement (thinning) and stream restoration.                                                                         
   • Central Tongass Project:                                                                                                   
        o Approximately 3.7  million acres within  the Petersburg                                                               
          and Wrangell Ranger Districts.                                                                                        
        o Early Summer 2019:                                                                                                    
             square4 Draft Environmental Impact Statement anticipated                                                           
               to be released for public comment and public                                                                     
        o Background:                                                                                                           
             square4 Public meetings and a public comment period were                                                           
               conducted in August-September 2018 on the project                                                                
               notice of intent.                                                                                                
4:12:20 PM                                                                                                                    
MR. SCHMID  addressed the Chugiak  National Forest and  noted the                                                               
Alaska Division's  focus on customer  service and  access, noting                                                               
that the  6-million-acre forest  has 90 miles  of roads.  USFS is                                                               
working to improve its response  and help facilitate special uses                                                               
like heli-skiing,  year-round recreation,  and looking  at cabins                                                               
along the forest's road system.                                                                                                 
He referenced the "State and Private Forestry Program" as                                                                       
   • Technical and financial assistance:                                                                                        
        o FY2018: $6.3 million assistance provided to the State                                                                 
          of Alaska, rural communities, and other partners                                                                      
          through S&PF programs.                                                                                                
        o Four-year cumulative investment of $24 million in                                                                     
          cooperative fire, cooperative forestry, forest health,                                                                
          and all lands initiatives.                                                                                            
        o Investments   have   supported   priorities   including                                                               
          Tongass transition for young growth inventory,                                                                        
          workforce development,  Good Neighbor  Authority timber                                                               
          projects, and coordination of an All Landowners Group.                                                                
   • Highlighted Program Investment:                                                                                            
        o Cooperative Fire Assistance:                                                                                          
             square4 FY2018: $2.2 million.                                                                                      
             square4 Grants to Alaska to supplement fire and fuels                                                              
               protection  programs  for  rural  communities  and                                                               
               rural  lands,  and  provide  financial,  technical                                                               
               assistance for State Fire and Fuels Programs.                                                                    
        o Forest Health Protection:                                                                                             
             square4 FY2018: $1 million.                                                                                        
             square4 Activities related to forest insects, forest                                                               
               diseases,  forest  health  monitoring,  pesticides                                                               
               and pesticide use, and  invasive plants on private                                                               
               and public lands.                                                                                                
        o Forest Stewardship:                                                                                                   
             square4 FY2018: $325,000.                                                                                          
             square4 Provides landowners with professional planning                                                             
               and  technical   assistance  to   keep  forestland                                                               
               productive and healthy.                                                                                          
        o Woody Biomass and Wood Innovation:                                                                                    
             square4 FY2018: $340,000.                                                                                          
             square4 Substantially expands and accelerates wood energy                                                          
               and  wood  products  markets  on  National  Forest                                                               
               System and other forest lands.                                                                                   
             square4 Using wood fuel is home-grown, keeps money in the                                                          
               community,  creates local  jobs  and bolsters  the                                                               
               local economy.                                                                                                   
MR. SCHMID summarized  that he had worked on the  economic use of                                                               
biomass  at his  previous assignment  in  the Lower  48. He  said                                                               
biomass can  work in Alaska  and there are opportunities  he will                                                               
continue to explore.                                                                                                            
4:16:08 PM                                                                                                                    
At ease.                                                                                                                        
^PRESENTATION(S):  Timber Industry Update: Sealaska Corporation                                                                 
   PRESENTATION: Timber Industry Update: Sealaska Corporation                                                               
4:16:46 PM                                                                                                                    
CHAIR  BIRCH called  the committee  back  to order.  He said  the                                                               
committee will next hear from  Jaeleen Kookesh, vice president of                                                               
Sealaska  Corporation. He  explained that  Sealaska is  an Alaska                                                               
Native corporation  formed pursuant  to the Alaska  Native Claims                                                               
Settlement  Act  (ANCSA)  and  is   owned  by  more  than  22,000                                                               
shareholders, primarily of Tlingit,  Haida, and Tsimshian decent.                                                               
Ms.  Kookesh's  experience  is driving  the  corporation's  legal                                                               
activities in  public policy priorities which  include developing                                                               
legislation and  regulations to  advance Alaska  Native interests                                                               
and addressing Alaska Native shareholder issues.                                                                                
4:17:26 PM                                                                                                                    
JAELEEN  KOOKESH, Vice  President  of Policy  and Legal  Affairs,                                                               
Sealaska  Corporation, Juneau,  Alaska,  provided her  background                                                               
information. She noted that she  serves on the Board of Forestry.                                                               
She detailed that  she works a lot in timber  policy and the area                                                               
of management area.                                                                                                             
She  said Sealaska  Corporation  runs its  company  based on  the                                                               
values of  the Tlingit, Haida,  and Tsimshian  groups. Sealaska's                                                               
homeland  is Southeast  Alaska,  approximately  20 million  acres                                                               
within the  region; however,  Sealaska only  owns 1.6  percent of                                                               
the region,  approximately 362,000 acres that  were retained from                                                               
ANCSA. While  Sealaska only owns  a portion of land  in Southeast                                                               
Alaska,  Sealaska cares  about  all of  it.  Southeast Alaska  is                                                               
Sealaska's homeland  and the Native  corporation is  engaged with                                                               
other landowners  including the  USFS, the  State of  Alaska, and                                                               
the University of Alaska. Sealaska's  goal is to, "Strengthen our                                                               
people, culture, and homelands through Values in Action."                                                                       
4:19:43 PM                                                                                                                    
She addressed "Sealaska values and  actions" in managing its land                                                               
and guided as follows:                                                                                                          
   • Alaska Native values:                                                                                                      
        o Haa Aan:                                                                                                              
             square4 Our land;                                                                                                  
             square4 Recognizing the importance of Sealaska's land and                                                          
               waters to its people;                                                                                            
             square4 Value of utilizing Sealaska's land.                                                                        
        o Haa Shuk?:                                                                                                            
             square4 Our past, present, future;                                                                                 
             square4 Defines the importance of Sealaska's past,                                                                 
               present, and future generations;                                                                                 
             square4 Making decisions that are mindful of all                                                                   
               generations and not just the current one.                                                                        
        o Haa Latseen:                                                                                                          
             square4 Our strength, leadership;                                                                                  
             square4 Recognizes the importance   of    Sealaska's                                                               
               leadership and collective identity, adaptability,                                                                
               and perseverance.                                                                                                
        o Wooch.Yax:                                                                                                          
             square4 Balance, reciprocity, and respect;                                                                         
             square4 Utilizing partnerships, being respectful to other                                                          
               groups, and working together.                                                                                    
   • Operating goals.                                                                                                           
   • Sealaska purpose.                                                                                                          
   • Sealaska vision.                                                                                                           
MS. KOOKESH  said Sealaska's values,  goals, purpose,  and vision                                                               
guides the  corporation in its  operations and  purpose. Sealaska                                                               
looks  at   many  more  values   and  considerations   than  just                                                               
profitability; however,  the corporation  wants to  be profitable                                                               
for the  benefit of  its shareholders.  Sealaska's values  is why                                                               
the corporation is very involved  in the development of the State                                                               
Forest Practices Act. She said  there were others in the industry                                                               
that  were  not as  keen  on  significant regulation  and  timber                                                               
industry management,  but Sealaska  understands as  Native people                                                               
the  value of  having  good regulation  and  management of  their                                                               
forest practices.                                                                                                               
4:21:45 PM                                                                                                                    
She addressed "Sealaska's businesses" as follows:                                                                               
   • Sealaska's three primary platforms:                                                                                        
        1. Natural Resources:                                                                                                   
             square4 Balanced land management.                                                                                  
        2. Sealaska Government Services:                                                                                        
             square4 Environmental monitoring marine and water focus.                                                           
        3. Seafood and Natural Foods:                                                                                           
             square4 High quality, sustainable products that tie to                                                             
               our values and culture;                                                                                          
             square4 Seafood processing companies in Washington state:                                                          
                  • Hope to   bring    seafood   platform   and                                                                 
                    investments to Alaska.                                                                                      
   • Sealaska is experiencing unprecedented growth and income,                                                                  
     supported by thriving businesses that have a common                                                                        
     purpose, connected by a shared goal of working toward                                                                      
    healthier oceans and enhancing the natural environment.                                                                     
4:22:40 PM                                                                                                                    
She addressed "Haa Aan?: Sealaska's balanced land management" as                                                                
   • 362,000 acres (1.6 percent of Southeast Alaska):                                                                           
        o 35-percent-working forest:                                                                                            
             square4 Maintain strong habitats for wildlife and have no                                                          
              negative effects on salmon streams;                                                                               
             square4 Southeast economic development:                                                                            
                  • 400 to 600 jobs;                                                                                            
                  • $17 million in wages.                                                                                       
             square4 Community partnerships:                                                                                    
                  • Workforce development,                                                                                      
                  • Road building and other contracts.                                                                          
        o 65-percent-mature forest:                                                                                             
             square4 Light and selective harvest;                                                                               
             square4 Carbon sequestration;                                                                                      
             square4 Wetland mitigation;                                                                                        
             square4 Tourism;                                                                                                   
             square4 Community and cultural use;                                                                                
             square4 Non-timber products:                                                                                       
                  • Blueberries;                                                                                                
                  • Spruce tips.                                                                                                
        o Balanced land management with strong stewardship                                                                      
          allows for current economic benefit, while maintaining                                                                
          opportunities for future generations (Haa Shuk?).                                                                     
   • Land ownership of traditional homelands:                                                                                   
        o Percentage of land owned: 23 million acres total;                                                                     
        o Tongass National Forest:                                                                                              
             square4 72.7 percent.                                                                                              
        o Glacier Bay and Wrangell St. Elias National Parks East                                                                
          of 141st Meridian:                                                                                                    
             square4 23.0 percent.                                                                                              
        o Sealaska:                                                                                                             
             square4 1.6 percent.                                                                                               
        o Other Native corporations:                                                                                            
             square4 1.2 percent.                                                                                               
        o State of Alaska and others:                                                                                           
             square4 1.1 percent.                                                                                               
        o Annette Island Reservation:                                                                                           
             square4 0.4 percent.                                                                                               
   • Potential jobs:                                                                                                            
        o Administration,                                                                                                       
        o Land technician,                                                                                                      
        o Marketing,                                                                                                            
        o Finance,                                                                                                              
        o Management,                                                                                                           
        o Engineering,                                                                                                          
        o Operations,                                                                                                           
        o Construction,                                                                                                         
        o Stevedoring,                                                                                                          
        o Mechanic.                                                                                                             
   • The Haa Aani team's mission is to create the greatest                                                                      
     financial, cultural, and community benefit from Sealaska's                                                                 
MS. KOOKESH  noted that  while Sealaska  owns 362,000  acres, the                                                               
corporation  gets  a bad  rap  for  timber clearcutting  and  not                                                               
managing its  lands well.  Sealaska only  utilizes 35  percent of                                                               
its land  base as  a working forest  for both  helicopter logging                                                               
and clearcutting, also  known as "even age"  management. She said                                                               
the rest of  Sealaska's forest will remain  mature and untouched.                                                               
Sealaska  takes  the management  of  its  forest very  seriously.                                                               
Sealaska does  not harvest the  35 percent  of its land  and just                                                               
leaves  it.  Sealaska  takes   very  seriously  its  silviculture                                                               
activities  by   staying  on  top  of   pre-commercial  thinning,                                                               
pruning, and  planting if  necessary. She noted  that being  in a                                                               
rain forest,  the forest grows  back very quickly,  sometimes too                                                               
quickly and too  thick which then requires thinning  to make sure                                                               
the  trees have  a chance  of  being very  large again.  Sealaska                                                               
continues to look at many  opportunities for getting value out of                                                               
its lands, not just harvesting.                                                                                                 
4:24:12 PM                                                                                                                    
She  addressed  "Land  management   update:  harvest  update"  as                                                               
   • Sealaska intends to harvest 55-65 MBF per year from its                                                                    
     timber base on Prince of Wales Island:                                                                                     
        o 2018 production ended up at 59 MBF.                                                                                   
        o Harvest is no where near what Sealaska had harvested,                                                                 
          but the current harvest amounts are sustainable.                                                                      
        o Sealaska secured its final ANCSA land entitlement in                                                                  
          2015 and the corporation knows what land it owns in                                                                   
          perpetuity and can have a more sustainable management                                                                 
          planning process for land utilization.                                                                                
        o Sealaska's harvest is a bit more than what the USFS is                                                                
          managing to get from its 17 million acres:                                                                            
             square4 Sealaska operates under the   State   Forest                                                               
               Practices Act;                                                                                                   
             square4 State agencies and the USFS has more public input                                                          
               that they must wade through;                                                                                     
             square4 Sealaska has been successful in maintaining a                                                              
              more successful harvesting program.                                                                               
   • Harvest Areas for 2019 are at Keete Inlet and McKenzie Bay                                                                 
     on Prince of Wales.                                                                                                        
   • Icy Bay stumpage over the next two years will add another                                                                  
     18-20 MBF per year.                                                                                                        
   • Young growth harvest will be 5-10 MBF per year.                                                                            
   • Sealaska primarily exports its logs to China, Japan, and                                                                   
     Korea, with its pulp and cedar going to Washington and                                                                     
   • The China Tariff, as proposed, will significantly impact                                                                   
    the completion of its Icy Bay stumpage sale obligation:                                                                     
        o Currently at 10 percent but could increase to 25                                                                      
          percent if no agreement by March 2, 2019.                                                                             
        o 50/50 split has been accepted by customers for 10                                                                     
          percent tariff.                                                                                                       
   • Sealaska does some small sales to local mills:                                                                             
        o Sealaska does not do a significant amount because                                                                     
          exporting round-logs is the highest value Sealaska can                                                                
          get for its logs.                                                                                                     
        o Sealaska gets a lot of requests and criticisms for not                                                                
          doing   more    domestic   manufacture    but   selling                                                               
          domestically is significantly less than the export                                                                    
        o Sealaska as a Native corporation has Section 7(i)                                                                     
          obligations per ANCSA for sharing 70 percent of what                                                                  
          the   corporation   makes    from   timber   harvesting                                                               
             square4 Other regional corporations in the past have                                                               
               challenged   Sealaska's   log    sales   for   not                                                               
               maximizing value.                                                                                                
4:28:02 PM                                                                                                                    
SENATOR  BISHOP inquired  if it  is a  combination of  not enough                                                               
board  feet to  do  the value-added  piece,  including the  ANCSA                                                               
Section  7(i)  distribution.  There   is  not  enough  timber  to                                                               
amortize the investment over the life of the capital cost.                                                                      
MS. KOOKESH  answered that  there are  many factors,  foremost is                                                               
the cost  to do business  within the region. Sealaska  has looked                                                               
at many  ways to do  value-added activities in Southeast  but the                                                               
cost is prohibitive versus export  logging. She added that "7(i)"                                                               
sharing is also a consideration.                                                                                                
She  noted  that Sealaska  tries  to  provide opportunities  from                                                               
Prince of Wales  Island to local wood users  that produce musical                                                               
instruments,  wood  shingles,  and  other  things.  Sealaska  has                                                               
firewood programs in  its communities to help  defray high energy                                                               
costs. Sealaska deems the importance  in providing monumental art                                                               
logs to its  carvers for canoes and totem poles,  as well as wood                                                               
for clan houses and schools.  Sealaska continues to push the USFS                                                               
and  the  state to  provide  monumental  art logs  when  feasible                                                               
because there are only so many monumental logs available.                                                                       
4:30:46 PM                                                                                                                    
MS. KOOKESH  addressed "Land management update:  silviculture" as                                                               
   • Silviculture activities will include 4,000 acres per year                                                                  
     of pre-commercial thinning on Sealaska and Village                                                                         
     Corporation lands, with some basal pruning and 100 acres                                                                   
     per year of tree planting:                                                                                                 
        o 1,600 acres of village corporation lands.                                                                             
        o 2,400 Acres of Sealaska lands.                                                                                        
   • With all these harvesting and land management activities,                                                                  
     Haa Aan? supports approximately 340-350 jobs per year.                                                                     
   • Sealaska is involved in the All Landowners Group, and                                                                      
     maintain regular Communication with the USFS, the State of                                                                 
     Alaska, and other landowners on our land management and                                                                    
     harvesting activities.                                                                                                     
She  noted  that  Sealaska's  operations   in  total  allows  the                                                               
corporation  to provide  other  benefits  to their  shareholders.                                                               
Sealaska in  2018 contributed  an additional  $10 million  to its                                                               
scholarship endowment and  stood up a $6  million bereavement for                                                               
shareholders. Sealaska also provides  for its internship programs                                                               
and to do public advocacy  for land management, the Alaska Marine                                                               
Highway  System,  funding,  and  other  important  customary  and                                                               
traditional needs for its communities.                                                                                          
4:33:19 PM                                                                                                                    
She addressed "Areas of concern for timber program" as follows:                                                                 
   • Tariffs:                                                                                                                   
        o An increase to 25 percent for some species will likely                                                                
          stop sales to China.                                                                                                  
   • Contractors:                                                                                                               
        o New contractor from the Lower 48;                                                                                     
        o Others not investing to stay;                                                                                         
        o Helicopter logging company has departed.                                                                              
   • Workforce development:                                                                                                     
        o Worked  with the  Sustainable Southeast  Partnership to                                                               
          focus on the region's local economy.                                                                                  
        o Working  with partners  on  the  Training Rural  Alaska                                                               
          Youth Leaders and Students (TRAYLS) program for                                                                       
          training youth for forest or timber related jobs in                                                                   
          the region:                                                                                                           
             square4 Successful program;                                                                                        
             square4 Resulted in new employees for Sealaska and other                                                           
               landowners in the region.                                                                                        
   • Consistent operations at USFS and the State of Alaska:                                                                     
        o Sealaska considers  itself as  one of  the legs  on the                                                               
          stool and if one leg goes away in terms of the timber                                                                 
          industry, the other legs will have difficulty                                                                         
          continuing to have a timber program.                                                                                  
   • Roadless Rule:                                                                                                             
        o Sealaska has  been very engaged  with the USFS  and the                                                               
          State of Alaska on the issue.                                                                                         
   • State staffing/funding for permitting and regulatory                                                                       
        o Concerns  with staffing  due  to  proposed budget  cuts                                                               
          within the state.                                                                                                     
4:35:37 PM                                                                                                                    
MS. KOOKESH addressed "Sealaska's carbon offset project:                                                                        
improved forest management" from the California Carbon Market as                                                                
   • Sealaska receives saleable offset credits that represent                                                                   
     verified greenhouse gas (GHG) emission reductions from                                                                     
     165,000 acres:                                                                                                             
        o Sealaska   has  looked   at   offset   credits  as   an                                                               
          opportunity to capitalize on its land base.                                                                           
        o Sealaska  has  areas  in  its  land  base  where  local                                                               
          communities and local interest did not want timber                                                                    
             square4 Even though there were areas that had very                                                                 
               valuable timber such as the Hydaburg watershed;                                                                  
             square4 There was concern about water supply impact.                                                               
        o Carbon offset  credits allows Sealaska to  allows trees                                                               
          to remain standing but still provide financial benefit                                                                
          to shareholders.                                                                                                      
   • Forest projects are required to monitor, report and verify                                                                 
     offset project data for duration of project life, 100                                                                      
     years, to assure the net climate benefits of activities                                                                    
     that sequester carbon on forestland.                                                                                       
   • Sealaska maintains ownership of carbon offset lands, with                                                                  
     no access restrictions, allowing continued customary and                                                                   
     traditional gathering.                                                                                                     
   • Limited loss of development rights, while assuring emission                                                                
     reductions or net climate benefit.                                                                                         
   • The project is a tremendous success for Sealaska,                                                                          
     representing our commitment to addressing the environmental                                                                
     effects of climate change, while providing financial                                                                       
   • Sealaska is helping village corporations who have carbon                                                                   
     project opportunities.                                                                                                     
MS.  KOOKESH  summarized  that receiving  carbon  offset  credits                                                               
takes  a significant  commitment to  manage the  project and  the                                                               
lands over  the set  time period.  Sealaska did  not go  into the                                                               
program without making sure the  corporation fully understood its                                                               
commitment in  terms of  land management  and ensuring  a certain                                                               
level of carbon sequestration was attained within the region.                                                                   
4:37:37 PM                                                                                                                    
She  addressed "Growth  credits help  limit opportunity  cost" as                                                               
   • Limited loss of development rights, while assuring emission                                                                
   • Sealaska is still able to:                                                                                                 
        o Harvest,                                                                                                              
        o Pursue tourism and land development opportunities,                                                                    
        o Pursue mineral extraction,                                                                                            
        o Build roads and other forms of development.                                                                           
She  summarized that  Sealaska can  annually harvest  some carbon                                                               
offset  lands while  maintain a  certain level  of carbon  offset                                                               
because the corporation is allowed  to harvest a forest's growth.                                                               
She noted  that the  carbon offset program  is only  available to                                                               
private landowners  and some state ownership,  it's not available                                                               
to  federal  landownership  but   the  program  is  a  tremendous                                                               
opportunity for some of Southeast Alaska's land base.                                                                           
CHAIR BIRCH commented that he  had not heard details about carbon                                                               
offset having value in a program.                                                                                               
MS.   KOOKESH  noted   Sealaska's   carbon  market   involvement,                                                               
detailing  that  Sealaska was  the  first  large carbon  sale  in                                                               
Alaska. Alaska  was only permitted  to be part of  the California                                                               
Carbon  Market approximately  two years  ago. Other  regional and                                                               
village corporations  are coming  behind Sealaska  to be  part of                                                               
the offset carbon program.                                                                                                      
4:40:00 PM                                                                                                                    
At ease.                                                                                                                        
^PRESENTATION(S):     Timber   Industry  Update:   Alaska  Forest                                                               
PRESENTATION: Timber Industry Update: Alaska Forest Association                                                             
4:40:39 PM                                                                                                                    
CHAIR BIRCH called the committee back to order.                                                                                 
4:41:38 PM                                                                                                                    
OWEN  GRAHAM,  Executive  Director,  Alaska  Forest  Association,                                                               
Ketchikan,  Alaska, asserted  that  timber supply  is the  timber                                                               
industry's  primary  issue  and  agreed with  Ms.  Kookesh  about                                                               
keeping   every  part   of  the   industry   alive,  noting   the                                                               
interdependencies surrounding the industry.                                                                                     
He summarized state timber sales as follows:                                                                                    
   • Fairbanks:                                                                                                                 
        o Five-year schedule;                                                                                                   
        o 2,000 acres per year;                                                                                                 
        o Sales seems to be keeping up with the region's demand.                                                                
   • Mat-Su/Kenai:                                                                                                              
        o Smaller program;                                                                                                      
        o 1,000 acres per year;                                                                                                 
        o More problems in the area for the state to manage, not                                                                
          just access but mixed ownership as well;                                                                              
        o Region's focus is on sanitation and salvage logging                                                                   
          due to mixed ownership and the beetle infestation;                                                                    
        o Local mills are struggling because they need more                                                                     
          green timber sales.                                                                                                   
   • Southeast Alaska:                                                                                                          
        o State program has been invaluable to keep what little                                                                 
          is left of the region's manufacturing alive;                                                                          
        o The federal timber program has mostly fallen apart for                                                                
          the last 20 years.                                                                                                    
He  said the  timber industry  is grateful  that Mr.  Schmid with                                                               
USFS  is involved,  but the  industry has  very little  timber to                                                               
keep  the mills  alive. Some  operators have  asked the  state to                                                               
consider  some  longer-term  contracts   so  that  they  are  not                                                               
continuously in  a position  of wondering  where their  timber is                                                               
coming from.                                                                                                                    
4:44:16 PM                                                                                                                    
He  referenced  the  "Land ownership  distribution  in  Southeast                                                               
Alaska" as follows:                                                                                                             
   • Federal/ USFS: 16,774,000 acres;                                                                                           
   • State of Alaska: 360,000 acres;                                                                                            
   • Local Governments: 44,000 acres;                                                                                           
   • Native Regional Corporations: 293,000 acres;                                                                               
   • Native Village Corporations: 287,000 acres;                                                                                
   • Small Private Owners: 183,000;                                                                                             
   • Total: 17,867,000 acres.                                                                                                   
MR.  GRAHAM  pointed out  that  the  USFS  has  the bulk  of  the                                                               
timberland and  consequently the Alaska timber  industry must get                                                               
the  bulk  of its  timber  supply  from  them and  currently  the                                                               
federal program is not working.                                                                                                 
He detailed  the breakdown from  the total 17.9 million  acres in                                                               
Southeast Alaska as follows:                                                                                                    
   • 5.5 million acres is commercial timberland;                                                                                
   • A third is non-commercial timberland that is slow growing,                                                                 
     hard to reforest, hard to harvest, and the timber is not                                                                   
     that good;                                                                                                                 
   • A third is non-timberland that is muskegs, lakes, mountain                                                                 
     tops, etc.                                                                                                                 
He  addressed  the  Roadless  Rule  and  opined  that  the  State                                                               
Roadless Committee has  come up with alternatives.  He said other                                                               
than releasing  all the area  from the Roadless Rule,  the Alaska                                                               
Forest  Association  has  chosen  "Alternative  D"  as  the  best                                                               
alternative  for timber  supply, a  quantity that  is a  bit less                                                               
than the  2008 Land Management  Plan, a  plan that was  in effect                                                               
when three  quarters of the  timber industry was "starved  out of                                                               
existence." He  said he  was "ringing his  hands" about  how much                                                               
timber can  really be  made available out  of "Alternative  D" if                                                               
the alternative is chosen. He noted  that Mr. Schmid from USFS is                                                               
doing some  "quick economic  analysis" to provide  a guess  as to                                                               
how much  timber might be  available. He emphasized  that however                                                               
much timber is  released from the Roadless Rule,  USFS will still                                                               
have to go  back and adjust the current  standards and guidelines                                                               
in the  forest plan  because they prevent  timber harvest  on the                                                               
exact same lands in most cases as the Roadless Rule does.                                                                       
He addressed  state staffing and  regulations and noted  that the                                                               
state  has lost  some of  its  more experienced  staff in  recent                                                               
years. To  compensate, the  state had  implemented in  large sale                                                               
the  allowance  for  the  industry  to  "mark  its  own"  cutting                                                               
boundaries,  a  process that  seemed  to  work well.  The  timber                                                               
industry  is  hopeful   that  the  state  will   continue  to  be                                                               
MR. GRAHAM said the state has  also been working with the USFS on                                                               
its  Good Neighbor  Authority  work where  USFS  is allowing  the                                                               
state to do  a lot of the  field work and the  contracting of the                                                               
timber sales and  administration; that seemed to  be working well                                                               
and the timber industry hopes that the program will be expanded.                                                                
He  noted that  suggestions  were made  to  the state  regulatory                                                               
program  to  reduce paperwork  so  that  the  few people  in  the                                                               
forestry  division can  be  more productive  getting  out in  the                                                               
field so that  they can do something productive  rather than just                                                               
writing reports and management plans.                                                                                           
4:48:38 PM                                                                                                                    
He  detailed  the  "Commercial  timberland  on  the  Tongass"  as                                                               
   • Mature timber set aside by Congress:                                                                                       
        o 2,332,121 acres;                                                                                                      
        o Set aside in perpetuity;                                                                                              
        o Wilderness areas and national monuments.                                                                              
   • Mature timber set-aside by TLMP and the Roadless Rule:                                                                     
        o 1,318,183 acres.                                                                                                      
   • Mature timber set-aside by the Roadless Rule:                                                                              
        o 1,567,746 acres.                                                                                                      
   • Young-growth timber not set-aside:                                                                                         
        o 284,144 acres.                                                                                                        
   • Mature timber not set-aside:                                                                                               
        o 42,479 acres.                                                                                                         
   • Total commercial timber acres on the Tongass:                                                                              
        o 5,544,673 acres.                                                                                                      
He noted that  most of the commercial timberland,  outside of the                                                               
mature   timber   set   aside   by   Congress,   is   set   aside                                                               
"administratively."  Currently  there  is slightly  over  300,000                                                               
acres,  most  of which  is  young  growth  that's 30  years  from                                                               
maturity and  that's what has  caused the timber  starvation that                                                               
has wiped  out all, but  one mid-sized  sawmill, a mill  that has                                                               
less  than a  year of  timber  supply ahead  of it.  The mill  is                                                               
hoping  that they  will get  some relief  from the  Mental Health                                                               
Trust  lands that  Mr. Schmid  from USFS  mentioned. He  said the                                                               
timber industry  in Southeast  Alaska cannot  survive on  a small                                                               
timber  base.  Either changes  are  made,  or the  industry  will                                                               
parish. The first thing that must  be done is remove the Roadless                                                               
Rule, but  the standards and  guidelines must be changed  so that                                                               
the mills have access to more timber.                                                                                           
MR.  GRAHAM  addressed a  question  posed  to Ms.  Kookesh  about                                                               
timber   manufacturing.   He   admitted   that   putting   in   a                                                               
manufacturing facility is not possible  due to economies of scale                                                               
when compared to operations outside of Alaska.                                                                                  
4:52:49 PM                                                                                                                    
He addressed "Percentage of national  forestland that is roadless                                                               
and  or wilderness  within each  state" juxtaposed  to the  "2005                                                               
timber  harvest   for  all  states."   Alaska  has   the  highest                                                               
percentage of national forest that  is roadless, over 90 percent,                                                               
but only 5,000 acres of  timber is harvested annually. Georgia is                                                               
number-one  in  annual timber  harvested  with  350,000 acres  of                                                               
timber  annually harvested,  employing  several hundred  thousand                                                               
people in their timber industry;  Alaska will never get that kind                                                               
of timber program  with the industry currently hanging  on by its                                                               
fingernails to get  its timber supply up, the  industry will need                                                               
help from the state.                                                                                                            
He addressed  "Positive Value  VCUs" map and  noted areas  in the                                                               
southern Tongass region that has  the most potential for economic                                                               
timber supply. He  conceded that less than a third  of the timber                                                               
in  the marked  areas  on  the map  will  be  economic under  the                                                               
current standards  and guidelines. Standards and  guidelines will                                                               
have to  be changed after the  Roadless Rule is removed  in order                                                               
to have  a timber  supply. The  primary standards  and guidelines                                                               
that  are   causing  problems  are  the   "Wildlife  Conservation                                                               
Strategy"  and the  "Land Use  Designations Primarily  for Scenic                                                               
Use,"  and  those  are  going  to  have  to  change.  A  wildlife                                                               
conservation  strategy  can  remain,  but the  strategy  must  be                                                               
something different  or there will  be no timber industry  in the                                                               
Tongass. The  State Division of  Forestry has always tried  to be                                                               
"middle of the road" and  compromise, but the timber industry has                                                               
nothing to  compromise on.  Alaska Fish and  Game has  helped the                                                               
timber industry  in some cases,  like with the "wolf  issue," but                                                               
the department has not been very  helpful in other cases. For the                                                               
timber industry to  survive in the Tongass, both  the Division of                                                               
Forestry and  the Department of Fish  and Game must pull  as hard                                                               
as they  can to  come up with  a different  wildlife conservation                                                               
4:57:00 PM                                                                                                                    
He addressed  "Possible state  management" and  noted a  map that                                                               
showed  areas that  the Division  of Forestry  selected as  lands                                                               
that  the   state  could  manage   or  own.  The   Alaska  Forest                                                               
Association  would prefer  that the  state own  the land  so they                                                               
could manage  the land under  the State Forest Practice  Act, but                                                               
the state  could also manage the  land for the USFS  that results                                                               
in a  better, more  consistent timber supply.  He said  the noted                                                               
land on the map is the same land  for the most case that the USFS                                                               
map indicates as being the  most economical lands, lands that are                                                               
the most  developed with  most already  accessed with  roads. The                                                               
lands noted on  the map is the kind of  timberland base needed to                                                               
restore  the manufacturing  industry and  allow the  mills to  be                                                               
able to  offer Sealaska more money  than they are getting  in the                                                               
export market. The  noted land on the map is  a great opportunity                                                               
that would not  take a big portion of  the Tongass, approximately                                                               
8-10  percent  of the  entire  Tongass  would  be wrapped  up  in                                                               
providing timber in perpetuity.                                                                                                 
4:59:08 PM                                                                                                                    
MR. GRAHAM  referenced Mr.  Schmid's overview  and noted  that he                                                               
said  there was  66 MBF  of timber  currently under  contract, of                                                               
that timber  30 MBF is young  growth that is 30  years from being                                                               
fully  mature.   The  young  growth  harvest   is  earmarked  for                                                               
customers  in China  and Korea.  He said  he was  not happy  with                                                               
cutting trees  30 years  before maturity  because of  the reduced                                                               
yield,  the volume  per  acre is  15,000-20,000  per acre  versus                                                               
50,000 per acre in 30 years.                                                                                                    
He  conceded that  the young  growth harvest  provides jobs.  The                                                               
mills  in   Alaska  cannot  use   smaller  logs  due   to  volume                                                               
inefficiencies  where mills  in the  Lower 48  can because  their                                                               
average  timber utilization  per  mill is  200-300  MBF. All  the                                                               
acres that the  USFS has is 400,000 acres, even  when it's mature                                                               
it's never going to be enough to supply one mill.                                                                               
He  said  the  timber  industry  in the  Tongass  needs  to  keep                                                               
harvesting mature timber and more  acreage of young growth timber                                                               
needs  to  be  created  until   there's  enough  volume  that  is                                                               
sustainable,  kind  of the  same  problem  that Sealaska  had  in                                                               
trying to get  enough acres locked in for  sustainability. The 36                                                               
MBF  of timber  that is  old growth  that's under  contract right                                                               
now, half of that is going  to China, Korean, and Japan as export                                                               
because  it's  mostly  low-grade  logs that  the  sawmills  can't                                                               
He noted that there is  one mid-sized sawmill surviving that uses                                                               
20-25 MBF  per year, but  of the 66  MBF that is  currently under                                                               
contract, only 18 MBF of timber  is available, less than a year's                                                               
work  of timber.  The  timber industry  in the  Tongass  is in  a                                                               
desperate situation,  Mr. Schmid is  working hard to fix  it, but                                                               
the industry needs  the state to step up and  help Mr. Schmid get                                                               
the changes made that need to be made in the forest plan.                                                                       
CHAIR  BIRCH provided  background information  on Mr.  Graham. He                                                               
detailed that  Mr. Graham  has been  with the  Forest Association                                                               
since 2001, was a timber  division manager for the Ketchikan Pulp                                                               
Company, worked as  a logging engineer in  Alaska and Washington,                                                               
and  has a  Master  of  Forestry Degree  from  the University  of                                                               
Washington.  He said  the Alaska  Forest Association  is a  trade                                                               
group   committed  to   advancing  the   restoration,  promotion,                                                               
maintenance  of  healthy,  viable  forest  products  industry  in                                                               
5:03:37 PM                                                                                                                    
There being  no further  business to  come before  the committee,                                                               
Chair  Birch adjourned  the Senate  Resources Standing  Committee                                                               
meeting at 5:03 p.m.                                                                                                            

Document Name Date/Time Subjects
US Forest Service Timber Program Update 2.15.19.pdf SRES 2/15/2019 3:30:00 PM
Sealaska Land Management Update 2.15.19.pdf SRES 2/15/2019 3:30:00 PM
Division of Forestry Update 2.15.19.pdf SRES 2/15/2019 3:30:00 PM
Alaska Forest Association Update 2.15.19.pdf SRES 2/15/2019 3:30:00 PM
Alaska Forest Association Letter to USDA 10.3.18.pdf SRES 2/15/2019 3:30:00 PM
Alaska Forest Association Remarks 2.15.19.pdf SRES 2/15/2019 3:30:00 PM