Legislature(2019 - 2020)BUTROVICH 205
02/15/2019 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): Timber Industry Update: Alaska Division of Forestry | |
| Presentation(s): Timber Industry Update: U.s. Forest Service-alaska Division | |
| Presentation(s): Timber Industry Update: Sealaska Corporation | |
| Presentation(s): Timber Industry Update: Alaska Forest Association | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
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
activities.
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
Forest.
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
Forestry
PRESENTATION: Timber Industry Update: Alaska Division of
Forestry
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
sector.
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
follows:
• 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
underway.
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
hazard.
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
spreading.
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
seasonally.
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
construction.
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
Division
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
processes.
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
Rule.
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
timber.
• 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
harvest.
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
follows:
• 66.34 MBF of timber currently under contract:
o Approximately half of this volume is old-growth
timber.
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
decision.
o Meet multiple resource objectives, including the
timber.
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
phase.
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
meeting.
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
follows:
• 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
follows:
• 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
land.
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
follows:
• 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
Canada.
• 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
market.
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
activities.
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
follows:
• 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
requirements:
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
follows:
• 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
harvesting:
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
benefit.
• 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
follows:
• Limited loss of development rights, while assuring emission
reductions.
• 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
Association
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
innovative.
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
follows:
• 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
strategy.
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
utilize.
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
Alaska.
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 |