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Clinton's forestry plan could drive wood and composite panel prices up.

Furniture and cabinet manufacturers may see a new round of higher prices for particleboard and medium density fiberboard as well as some hardwoods if President Clinton's plan for federal forests in the Pacific Northwest is enacted.

Three months after the historic Apr. 2 timber summit in Portland, Ore., during which time the president promised to end the gridlock and find a solution to America's forestry quagmire, Clinton announced July 2 that he will recommend a federal forestry plan for the Pacific Northwest that would cut harvest levels by 75 percent from the 1980s' record levels and allow for limited logging of old growth forests.

Clinton's Forest Plan for a Sustainable Economy and a Sustainable Environment was immediately criticized by industry for the low harvest levels and by environmentalists for allowing old growth logging at all.

The plan would set harvest levels at an average of 1.2 billion board feet annually over the next 10 years. In the first year, harvests of 2 bbf would be allowed, but of this over 1 billion board feet would come from existing contracts previously sold and awarded. An additional 500 mmbf would be harvested from salvaging operations on the east side of the Cascade Mountains and from Indian reservations, according to the July 6 Summit Alert newsletter prepared by the Northwest Forest Resource Council and the American Forest & Paper Assn.

Clinton's plan was presented to U.S. District Court Judge William Dwyer, who had requested an environmental impact statement by July 16. If Judge Dwyer determines the Clinton plan satisfies environmental laws, he could lift the injunctions he placed in 1989 and 1991 that blocked timber sales in northern spotted owl habitats.

As part of the forest management plan, Clinton announced he had signed a bill sponsored by Sen. Patty Murray (D-Wash.) and Rep. Jolene Unsoeld (D-Wash.) that would restore the ban of raw log exports from state-owned lands. Exports of raw logs from federal lands have already been banned.

Wood products makers to feel the pinch

According to industry and association representatives contacted by WOOD & WOOD PRODUCTS after Clinton announced his plan, lowering harvest levels will push prices for particleboard and MDF up and the ensuing increased demand for wood of all types also will force hardwood prices up. Several association leaders voiced concern over a possible precedent being set that could impact hardwood forest logging.

Bill McCredie, National Particleboard Assn., said an initial harvest level of 2 bbf would be "disastrous" for particleboard and MDF plants in the northwest where half of the panel industry is located. He said as harvest levels fall, the squeeze for mill shavings will intensify, especially as the pulp and paper industry begins to look toward saw mill residue for its needs. As a result, prices of particleboard and MDF used by wood products manufacturers could rise, he said.

Some softer hardwoods, such as poplar, used extensively by moulding and wood window manufacturers, are already being used as a replacement for softwood. Ernest Stebbins, executive manager of the National Hardwood Lumber Assn., said Clinton's plan would continue to drive prices of certain eastern hardwood species of lumber up. "Some species have already found their way into the marketplace on a price competitive basis," he said. "If you take those hardwoods and put them into products such as mouldings and windows then there are fewer supplies available for the furniture industry."

Doug Brackett, executive vice president of the American Furniture Manufacturers Assn., said the plan could set a precedent that could affect forests across the country. "We are very much concerned," he said. "Policy is policy is policy. There isn't any question that any kind of policy that elevates the price of something or restricts the availability of something will have a detrimental effect. I have heard and seen numbers that the price of new homes could go up by $5,000. That is $5,000 out of circulation that would quite probably be spent on something else, like furniture."

A fight over the plan

Will the plan be implemented? The recommended policy purports to balance economic interests with environmental needs, but both sides of this polarized issue are criticizing Clinton's proposal and are vowing to fight it through the courts and lobby for legislation.

In announcing his proposal, Clinton reiterated that a compromise was hard to reach. "The plan is more difficult than I had thought it would be, in terms of the size of the timber cuts, in part because during this process, the amount of timber actually in the forest and available for cutting was revised downward sharply, in no small measure because of years of overcutting, and in a way that provides an annual yield smaller than timber interests had wanted and a plan without some of the protections that environmentalists had sought...."

Shepard Tucker of the AFPA calls the harvest levels "ludicrous" and "simply unacceptable."

"We are no better off than we were before the (Apr. 2 timber) summit," Tucker said. "A 75 percent reduction is not balanced. This is a Tomahawk missile that will destroy communities."

Julia Reitan, Sierra Club associate northwest representative, expressed the sentiment of many in the environmental community. "In general, we are disappointed that President Clinton has not taken the opportunity to provide permanent protection for remaining ancient forests in the Northwest," Reitan said. "We are disappointed that the implementation of the plan will apparently be in the hands of the very agency that has brought ecosystems to the edge of collapse."

While Clinton had hoped to end the legal gridlock, the opposite may hold true. Missing from the president's plan is language that would protect it from courtroom confrontations that have caused a judicial logjam and, for the most part, halted new timber sales from federal lands in the Pacific Northwest. It had been reported in a variety of publications that Clinton's plan would include "sufficiency language" that would protect it from these challenges, but the version released in July does not include this language.

The Clinton Administration is pledging that it will "do everything possible to resolve the legal challenges and lift the injunctions" against timber sales. According to the report, the plan "focuses on management strategies to resolve the long-standing court challenges over management of the spotted owl and old growth forests."

However, Tucker said the first time a sale is attempted, "there will be a lawsuit because there is no sufficiency language, no relief from litigation. Simply saying it is, ain't going to make it come true."

Reitan, while not directly saying that environmentalists will continue to use the courts as a way to halt timber sales, said that whenever her group thinks that the government is failing to meet the law then "yes, we will go to the courts."

Elements of the plan

Under the plan, to be supervised by the Department of the Interior, watersheds would be the fundamental building blocks of national forests rather than "owl circles" and it would designate reserve areas based on these watersheds and what Clinton called the "most valuable" old growth forests. In these areas limited salvage and thinning of trees would be allowed "where the primary objective of that salvage and thinning is to accelerate the development of old growth conditions."

Other elements of the plan include:

* Creating 10 Adaptive Management Areas of 78,000 to 380,000 acres for "ecological experimentation and social innovation."

* Finding ways to strengthen small businesses and secondary wood products makers. This could include increasing the supply of federal timber set aside for small firms and possible preferences for bidders who contract for domestic secondary processing.

* Providing $270 million in new funding for fiscal year 1994 -- a total of $1.2 billion over five years -- to be used in part for retraining, relief and business development for affected communities, and funding watershed maintenance, ecosystem restoration and forest stewardship.

* Emphasizing under the Endangered Species Act an integrated ecosystem approach rather than a single species approach to species survival.

* Providing federal assistance to bring to market backlogged timber from Indian reservations.
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Article Details
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Author:Adams, Larry
Publication:Wood & Wood Products
Date:Jul 1, 1993
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