Montana’s forest products industry is staring extinction in the face, Kirk Johnson reports in Tuesday’s New York Times. Johnson describes a scramble "to save the historically important, culturally resonant timber industry — once a pillar of the state’s identity, now under siege as demand for housing and wood products has plummeted in the national economic downturn.”
Welcome to the modern economy, where there’s no chance that in Montana, or any place else, the forest products industry of the future will look anything like the forest products industry of the past. Even before the U.S. economy tanked, traditional forest products companies operating under their traditional names and corporate structures had become as rare in the Northwest woods as the northern spotted owl.
The old forests on which those traditional companies once grew fat are, by now, mostly gone. By the early 1990s, when battles over the northern spotted owl and other old-growth-dependent wildlife shut down logging in the national forests, an estimated 85 percent of the Northwest’s original old growth had already disappeared. Just about all the remaining old growth was already protected in national parks and wilderness areas. The environmental battle focused on the last bit of unprotected old growth that still grew on federal land.
The Northwest Forest Plan, created by the Clinton administration to settle the owl wars, placed almost all of those trees off limits. The Forest Plan was supposed to protect habitat for the owl and a host of other species, including wild salmon, and still permit loggers to cut a billion board feet of timber each year in the national forests. A billion board feet was never realistic, but the Bush Administration has portrayed it as a solemn commitment and has been trying to loosen logging restrictions for the past eight years. So the battles continue. Fourteen years after the Forest Plan went into effect, environmentalists still fight federal agencies over the fate of the owl and its habitat. The upshot has been very little logging in the national forests. The mills built to process old growth logs have shut down. The curtain was coming down on the legendary business of the old Northwest.
But not on the forests themselves, ironically. Once upon a time, environmentalists — and some timber workers — worried that we were logging the forests at an unsustainable rate. At least in the national forests, we were. Now, the trees are growing a lot faster than they’re being cut.
To be sure, on the urban fringe a lot of the old forests keep disappearing, not because of logging but because growing houses is a lot more profitable than growing trees. "A continuation of the converstion of this land to non-forest uses seems inevitable, particularly in the Puget Sound region," states a 2007 report by the UW’s College of Forest Resources on The Future of Washington’s Forests and Forest Industries. “Forestlands are declining by more than 30,000 acres per year. . . . Higher and better uses attract values that are many times larger than forestry use values.”
So the fight over our forests has shifted to a new front: real estate development in the exurbs and in the resort-rich Mountain West. “Objectives of protecting endangered species habitat and fish-bearing streams lack incentives and lead to unintended consequences,” says the report. “Many ecosystem services are being provided by landowners at low cost to consumers, but at great cost to landowners.” That's not likely to keep happening. In exchange for giving up potential profit, land owners get increased regulatory hassle. “Non-industrial owners are . . . in the path of growth and extremely frustrated by some of the rules and regulations,” the report warns. “You can’t log trees as close to a stream as you can build a house.”
At the same time, industrial forest-land owners have felt financial pressure to do nothing but grow trees. And here's where the story becomes not one about spotted owls but about the federal tax code and the Wall Street financial engineers. (If the following story has echoes of the mortgage-derivative frenzy in the housing market, you are not far off.)
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