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July 1998                                                                                                   

Congressional Action Needed to Save
Alaska’s Starving Timber Industry

by Jack E. Phelps

New rhetoric and slogans accompany every change in national administration. Sometimes they bring with them substantive changes in policy. For example, the Reagan Administration brought the phrase “supply side economics” into the vernacular together with the concomitant policy changes.

The Clinton administration also brought new rhetoric and new policies. The new rhetoric included talk about preserving our “national treasures,” such as “national heritage rivers.” This talk has been accompanied by a cultural shift in the agencies responsible for implementing federal land management policy. The new culture (one is tempted to say “cult”) is one of radical preservation, a movement away from two centuries of emphasis on productivity. This cultural reformation is the
bureaucratic equivalent of Senator Dale Bumpers’ old campaign to have federal lands “mine free by ’93.” Now the administration’s goal for the Forest Service apparently is to have the system “timber benign by ’99.” The effect on regional economies and rural communities is apparently of no concern to the White House.


The effects of this trend are evident in the Tongass National Forest timber sale program. From 1980 through 1995, timber offerings from the Tongass averaged 447 million board feet (mmbf) annually, and the harvest during that period averaged 340 mmbf. The averages from 1991 through 1995 were 367.6 mmbf offered and 311 mmbf harvested. In 1995, environmentalists filed legal action that enjoined nearly 300 mmbf of NEPA cleared timber, some of which had already been offered to local operators. After feinting a defense, the government brokered a settlement that made most of that timber unavailable for at least three years.

In 1996, the Forest Service offered only 64% of what it had offered a decade earlier. In 1997, offerings dropped to a miserly 188 mmbf, 57% of what had been offered only 2 years previously, and only 51% of the prior decade’s average. This fiscal year, with a mere 3 months left, the agency has offered only 29.8 mmbf. Unfortunately, 12.8 mmbf of that was in four sales in which the economics were so poor nobody bid on them.

Even with the loss of Alaska’s largest mills, the remaining sawmills in Southeast could process 355 million feet of timber per year, if the supply were available (Capasity Chart). These are primary manufacturing plants which are needed as a foundation for any “value-added” secondary manufacturing which might be desirable and feasible.

Local and national environmental groups have been spreading the lie that the revised forest plan allows “doubling the amount of logging in the Tongass.” This nonsense is based on the new allowable cut being higher than recent harvests, but it really sets a new ceiling that cuts historic levels in half.

To describe this strangling of Alaska’s timber industry, I propose a new phrase, “supply side declinomics.” It denotes a phenomenon in which an artificially constricted supply drives the economies of scale downward into oblivion. The federal government controls the supply of timber needed to operate mills in Southeast Alaska. With “supply side declinomics,” the Forest Service fails to sell sufficient timber to allow mills to operate efficiently. Then when mills close, the
agency claims demand has dropped and reduces its offerings even more. The resulting spiral eventually will ensure that no industrial harvest takes place in the region.


In response to “supply side declinomics,” Senators Stevens and Murkowski have inserted a measure in the Interior Appropriations Bill that will return the Tongass timber sale program to a level that can sustain Alaska’s timber industry. The measure is sure to be controversial because all the old rhetoric will be trotted out about the “need” to protect the environment from logging and to preserve Tongass old growth for future generations. But you will not hear that of the 10 million forested acres in the Tongass, all but 676,000 acres are already permanently protected. Or that 60 percent of the Tongass second growth has now been put into protected status by the new TLMP. Mantras, not facts, will drive the public discussion.

Don’t you wonder about Alaska’s senators being criticized for sticking up for their constituents? What else do we expect of them? Their job is to protect Alaskans from the heavy hand of the King’s men. Alaskans should rally behind their leadership.

Jack E. Phelps is executive director of the Alaska Forest Association in Ketchikan.

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