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December 6, 2013
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After the kill, Part 2: Beetle epidemic presents challenges for logging industry

This is the second in a three-part series.

The rolling farmland, adobe hills and arroyos of Colorado’s Uncompahgre Valley are largely devoid of trees, and might seem like an unusual site for a sawmill, especially one of the largest in a five-state area.

Still, even after a tumultuous recent past, the Montrose-based sawmill manages to process trees at a greater rate that any other in the immediate area. It currently employs about 90 people, but on a Wednesday afternoon at 3:30 p.m., the facility was quiet. Its saws and planers sat idle, and only a handful of upper management employees were on site. The mill’s supervisors would like to change that, adding another shift, a second set of local jobs, and doubling the amount of lumber it moves through the economy. To do that, they need more supply.

“The amount of dead and dying timber in this state far exceeds what this mill could ever process,” said Norm Birtcher, a resource forester at the Montrose mill. “The supply is there, it’s more than adequate.”

But Birtcher doesn’t expect that timber to be available to the mill anytime soon.

Colorado’s timber industry is inextricably linked to the U.S. Forest Service. Over two-thirds of the state of Colorado is forested or woodland, and most of it lies in the High Country. The U.S. Forest Service manages the bulk. And when it comes to beetle kill in the West, nearly all of the salvageable timber for mills lies in national forests — around 88 percent.

As Colorado’s forests experience mass disturbances, from wildfire to beetle epidemics, mills argue the federal agency must work to make timber available and revive a lumber industry that died out decades ago. It’s useful in the short term by helping to remove hazard trees and unsightly dead stands. Loggers and mill operators contend their industry is also vital in the long term for forest regeneration, reducing wildfire fuels and thinning tree density for healthier stands that fight future bug outbreaks.

Operators like Birtcher know the economic importance of their sawmills, too. The Montrose mill creates nearly 100 jobs and opportunities for workers to provide for their families. The mill contracts local loggers and truckers. Workers spend their wages at businesses in town.

But studies show logging has negative impacts, too, both environmentally and economically. Even in a landscape awash with over 3 million acres of dead pine and an ever-growing number of dead spruce, the question remains whether Colorado can sustainably harvest enough trees and support a timber industry into the future.

SUPPLY AND DEMAND

“I don’t know that I have the answer to that question. Mills come and go,” said Craig Magwire, a district ranger with the U.S. Forest Service. “For us to use the tool of timber sales to do forest management, there has to be a market for it.”

And as Magwire knows, developing those markets in Colorado is a tricky business.

Colorado once had lumber industry, but logging activities dropped decades ago after the public developed distaste for its ecological and visual impact. The U.S. Forest Service tapered off its timber sales in Colorado, and many of the state’s mills closed.

Now, at the very least, foresters in Colorado need to bring down beetle-killed trees in high-traffic areas to prevent falling tree hazards which can injure tourists, trap backcountry travelers, damage power lines and ruin trails. They also bring down dead stands to encourage more rapid forest regeneration, improve views and create firebreaks between forests and private land.

That tree removal costs money. The Rocky Mountain Region spent $32 million in federal funds on bark beetle projects in 2011 alone. To avoid siphoning away tax-funded Forest Service budgets, which are already strapped from wildfire work, the agency also utilizes mills that instead pay to salvage trees.

“The most cost-effective way of doing something is through a timber sale,” Magwire said. “It’s a good deal for the public, and it’s a good deal for jobs.”

Still, those sales aren’t cost-effective or a good public deal until there’s a market. Timber sales haven’t been easy to execute in Colorado during the bark beetle swarm. Because of Colorado’s dwindling timber industry, only a few mills can afford national forest sales compared with decades ago. At the start of the epidemic, many of these mills were located far from the forests needing salvage. Magwire recalls putting up sales early on in his district of the Arapaho-Roosevelt forest, but receiving no bids for the timber.

And then there’s the fickleness of lumber economics. Colorado has only a few mills, unlike other beetle-impacted states with thriving lumber industries, like Idaho and Montana. Last fall, forest researchers working with the U.S. Forest Service ran economic assessment models on potential salvage volumes, costs and revenues in the Western states most impacted by the bark beetle epidemic. While some states could get a boost from the lumber salvage surplus, the outlook for Colorado appears bleak.

The state has some of the largest volumes of salvageable beetle-killed timber, but it doesn’t have the mill capacity to process a large influx of timber. If wood floods the local market, it drives down lumber prices. Then the amount of revenue mills generate can’t cover the costs of buying timber contracts, harvesting trees and transporting wood. Nowhere was this market capriciousness more apparent than with the Montrose mill.

As the epidemic grew in the early 2000s, foresters looked to punch massive holes in the beetle-kill landscape through large timber contracts. And the largest, best-equipped mill was in Montrose.

The sawmill produces dimensional lumber, mostly two-by-fours. At full capacity, it can churn out 300,000 board feet each day, or enough structural lumber for 19 average-sized homes. As the pine beetle outbreak swelled in the Rocky Mountain region, so too did the housing bubble. Things hummed along for a few years, with forest managers doing large-scale timber sales of dead and dying timber, and the Montrose mill churning out structural lumber, shipping studs to subdivisions nationwide.

Then the housing bubble popped. No one was building. Lumber prices plummeted. The Montrose mill all but collapsed. With no market, its owner at the time couldn’t afford the 50 large timber sales they had already contracted with the U.S. Forest Service, and the mill went into receivership.

Meanwhile, the Colorado timber market experienced another shift. Private landowners also looked to remove their dead trees during the epidemic. Big mills like Montrose had no interest in these low-volume sales. Instead, a few small mills sprung up throughout western Colorado to handle the smaller loads. Some started utilizing trees other than those large enough for structural lumber. They made products less tied to the erratic housing market, like biomass pellets for heating buildings.

But private supplies only account for a small fraction of Colorado’s salvageable beetle timber, and those supplies are running out. Even small mills now need the U.S. Forest Service to source them with lumber sales to keep their businesses going. The sales need to be repackaged and smaller so these mills can afford them.

“The local community, in the past, has logged a lot of the private lands,” said Dave Fiala, owner of Colorado Timber Resources LLC, a Parshall-based stud mill that opened last June. “In the next few years, we need the federal land to open up and release timber sales.”

A delicate balance

Economic models show that the answer to Colorado’s timber industry woes may lie in government subsidies. If state or federal lawmakers invested in more mills around the state, transportation and salvage costs could be cut as timber is shipped to new mills located closer to impacted forests. Programs and policies could create more demand and profits for salvage wood in the economy, like incentives for increased use of wood in energy production. The models showed creating more market demand through more sawmills caused revenues for timber salvage to go up in Colorado, by as much as 21 percent.

Colorado’s U.S. Sens. Michael Bennet and Mark Udall toured lumber mills over the summer and listened to timber workers’ concerns. Late last October, they joined other Western lawmakers in urging the U.S. Department of Agriculture to push more partnerships between the U.S. Forest Service and the timber products industry. On Dec. 5, Sen. Udall and a bipartisan group of senators issued a letter urging those partnerships become part of the final Farm Bill. But letters might not be enough to bring the federal changes and assistance the lumber industry needs.

The 2013 sequester took millions from the U.S. Forest Service’s wildfire budget. As the Rocky Mountain region faces more intense and devastating wildfire seasons, the agency will need to pull funds from its other programs — including those that benefit the lumber industry — to pay for fire emergencies.

The federal government shutdown in October also caused major setbacks with the U.S. Forest Service’s management, and had a trickle-down effect on Colorado’s lumber economy. Timber sales and some tree removal contracts halted. Birtcher said it impacted their lumber supply enough that he’ll likely have to lay off workers for a few weeks come spring.

Then there’s the complication of public perception. While loggers, mills and foresters argue their partnership is important to maintain healthy forests, some environmentalists aren’t so sure. Logging causes increased runoff and habitat fragmentation.

One Harvard University study of New England forests found both salvage harvesting and preventative harvesting in forests prone to native pest infestation caused worse damage to the ecosystem than letting nature run its course.

In the study, logging abruptly altered microenvironments, caused introduction of invasive vegetation and disruption of microorganisms on the forest floor. Forests had a hard time rebounding after these impacts.

Harvesting dead trees that pose a hazard to human lives is one thing, but to have a sustainable lumber economy into the future, the industry would need to harvest and thin green stands, too.

Chris Arand, of Conservation Colorado, said environmental groups like his would be guarded about a timber industry looking to move forward by harvesting green trees.

“Grand County and other counties have built their economies on outdoor tourism, recreation and vistas,” he said. “Does the timber industry fit with that? I don’t think it does.”

While many are on board with chopping dangerous and unattractive dead stands, the idea of harvesting green forests may be tough for some to accept. But ironically, the few patches of green that remain in some of Colorado’s lodgepole forests are the young, regrown stands from clear cuts in the 1980s, when the state’s timber industry was still thriving. Boosting the Colorado economy with a timber industry while also protecting its environment and creating sustainable forests will require a precarious balance.

“The main concern is always that we’re going to manage forests to supply business,” said Joe Duda with the Colorado State Forest Service. “There’s a lot of management work that needs to be done. Let’s do it on a consistent basis, and businesses should be able to fill that market opportunity.”

Rethinking management

Management means safer communities along the forest boundaries and economic stimulus through a sustainable timber industry. As more droughts fuel fires and pests, and communities continue to build their homes along the wildland urban interface, leaving nature alone may no longer be an option.

In September 2012, the Montrose mill hummed back to life under new ownership. Freed from its onerous contracts, the new management began rethinking the mill’s strategies and economic future.

While it continues to pursue timber sales in nearby national forests, like the Grand Mesa Uncompahgre, White River and Gunnison, it’s leaving sales in forests farther away — like the Arapaho-Roosevelt — to other mills, at least until there’s a solution to shipping costs.

In the Sulphur Ranger District, Magwire and his staff began repackaging Montrose’s defaulted large timber sales into smaller ones other mills can manage. The first of these sales began receiving bids this fall.

“Hopefully that will attract some of the local mills to bid on them. We want to attract them,” Magwire said. “We need markets to be strong and so we’ll continue to get work done.”

Part three of the beetle aftermath series is about innovative new products being developed from beetle-kill lumber. It will publish on Friday, Dec. 13 in the print edition and on www.skyhidailynews.com.


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The Summit Daily Updated Dec 6, 2013 10:02PM Published Dec 13, 2013 09:24PM Copyright 2013 The Summit Daily. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.