December 1997

The timber industry in Alaska's Interior, long a small but stable element in the local economy, has shown new vigor in recent months. The largest mill in Fairbanks is now producing grade stamped lumber — a first for the region. Two other manufacturers, located in opposite ends of the Tanana Valley, have invested significantly in new equipment over the past year.

In the west, Nenana Lumber has gone from a single small bandsaw to a circle saw headrig with an edger and resaws in a new building, and has plans to add a planer operation. Owner Mike Holz has developed a new product line for custom cabins that has a number of retailers excited and potential cabin builders standing in line. At the other end of the valley, Bill Chapman of Granite Mountain Lumber has also been adding new equipment to his mill outside Delta Junction. Bill and his wife Vonda, together with their sons, are sawing dimension lumber for sale to local markets.

Unfortunately, these mills and others in the Tanana Valley share a problem common to mills in Southeast Alaska and other timber producing regions of the United States; limited availability of good timber for purchase. A Nenana manufacturer was recently forced to forgo a large order for log cabins due to a shortage of acceptable timber. It's not that the Interior lacks trees. In fact, there are some very fine, very high grade white spruce stands growing on state, BLM and private lands in the greater Fairbanks area. The state' s inventory on its land indicates 3.4 billion board feet of standing volume, which should yield an allowable cut of about 57 million board feet (mmbf).

In addition, the region boasts many acres of hardwood forests and mixed stands containing paper birch, aspen and white spruce. The state alone could sustain a cut of 85 mmbf of birch and aspen from its lands. Native corporations own more than 820,000 acres of hardwood and mixed spruce and hardwood forests, according to Chris Maisch, chief forester for the Tanana Chiefs Conference.

At a state timber auction held on December 3 in Fairbanks, four companies were successful bidders. The total offering of white spruce, included in seven sales, was 3.77 mmbf, Scribner scale. Also among the seven sales were two paper birch sales, one of which was purchased by Alaska Birch Works, which operates a band saw mill and dry kiln in the Goldstream Valley. Other purchasers at the auction were Northland Wood Products, Nip & Tuck Logging, and North Pole Wood Products.

One controversial sale was excluded from the December 3 offerings. Known as Tanana West #2, NC-754 was originally an attractive white spruce sale near the town of Minto, and was of interest to a mill in Nenana. In addition to its own merits, the sale was important in that it would have provided access and economies that would likely have led to the sale of some nearby private timber. Unfortunately, it became controversial when environmental groups raised various issues. The sale was pared down by the Division of Forestry, and the offering delayed until December 19. The Division removed the unit on Sawmill Island and, according to one potential bidder, "cut the heart out of the sale," making it uneconomic. Several local experts believe the sale is unlikely to attract a purchaser in its present configuration.

To help solve the supply problem, AFA has been working with the state, encouraging it to utilize all the tools in its kit to meet the needs of the local industry. In addition to regular timber auctions, these include the authority to negotiate small sales (under 500,000 feet) with local purchasers; the authority to negotiate larger sales for a term of up to 25 years if there is a high level of unemployment in an area and underutilized mill capacity and timber resources; and the authority to negotiate sales of up to 10 mmbf per year for up to 10 years for use in the local manufacture of high value added wood products. The Division also has the authority to offer salvage sales of diseased, dead or dying timber without the delays associated with the normal 5-year schedule notification process.

In addition to those operators producing lumber, the Interior forest products industry includes several secondary manufacturing facilities. These include a custom furniture shop, a major wood bowl manufacturer and several companies producing log cabin kits. While there has been considerable interest in some larger manufacturing opportunities, including a veneer facility and possibly an oriented strand board operation, questions about reliable supply remain the major obstacle to such expansion. A very vocal minority continues to oppose expansion of the local harvest to allow for new facilities and new jobs.

The general public tends to support the industry, but AFA, its member companies and other interested parties will have to work harder to inform them of the linkage between increased timber harvests and sustained economic growth. Absent a better display of the true public sentiment, it will be difficult to get the division to expand the utilization of public timber resources sufficiently to enhance the local economy. It's time for those who believe in timber jobs and who want to see growth in Alaska's Interior forest products industry to speak up. Otherwise, the only voice the state hears is that of the nay sayers.