Big Timber's Last Stand. PL vs. Water Board

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http://www1.pressdemocrat.com/apps/pbcs.dll/article?AID=/20050313/NEWS/503130302/1033/NEWS01

Big Timber's Last Stand
The Latest Tree War Pits Pacific Lumber's Logging Plan Against an
Agency
Aiming To Protect Streams From Runoff

Sunday, March 13, 2005

By MIKE GENIELLA
THE PRESS DEMOCRAT

For two decades, the North Coast timber wars have been waged by
protesters
chanting in the streets and staging symbolic sit-ins atop towering
redwoods.

This week, the fight moves to an anonymous Santa Rosa hearing room,
where
the fate of the North Coast's last surviving big-timber corporation is
in
the hands of state regulators charged with protecting streams, not
trees.

The showdown reflects how the environmental battleground has shifted
from
demonstrations outside company gates in the "Redwood Summer" of 1990
and the
nationally publicized tree-sit of Julia "Butterfly" Hill.

Over the past 15 years, timber production has tumbled more than 60
percent.
Two major timber companies have departed, a huge mill that once
employed 500
people in Fort Bragg has been shuttered and most of the large trees the
industry once relied on have either been cut down or set aside for
preservation.

Now, the issue centers on protecting downstream landowners as the
timber
industry shifts to cutting younger trees growing on land already logged
at
least once, and sometimes two or three times in the past 150 years.

The stakes are receiving statewide attention. Pacific Lumber Co., which
has
been logging on the North Coast for 136 years, claims that constraints
imposed on its logging plans could force it to file bankruptcy and even
close. Although its employment has plummeted by 50 percent from a high
of
1,600, Pacific Lumber remains the single largest private employer and
taxpayer in Humboldt County.

To many in both the environmental and logging community, the company's
appeal Wednesday to the North Coast Regional Water Quality Control
Board
could be the last stand for large-scale corporate timber operations on
the
North Coast.

"Things have changed. We have no choice but to consider health and
safety
concerns of residents who live adjacent to logging operations," said
Catherine Kuhlman, the water board's executive director.

Her order cut in half Pacific Lumber's proposal to move ahead with
logging
second-growth redwoods about 60 years old on a dozen sites in southern
Humboldt County. That plan reflects the changing nature of timber
cutting -
and the new environmental obstacles.

The logs would be taken to a new, $30 million mill in Scotia, a
state-of-the-art complex designed to take younger, thinner trees and
cut
them up into a variety of wood products. The company opened the mill
last
November, anticipating it would be able to feed logs to it from the
timber-cutting operations.

The logging plans in question cover about 550 acres in the Elk River
and
Freshwater Creek watersheds, and could generate $27 million or more in
revenue for the company.

Pacific Lumber President Robert Manne said the revenue is critical to
the
company's financial stability.

Manne said Pacific Lumber has lost $389 million in the past six years,
largely because of regulatory restraints and expenses associated with
required environmental studies. Now, he claims the company teeters on
the
brink of financial insolvency because of Kuhlman's decision.

"It is foolhardy to punish the one timber company in the state that is
harvesting in the safest, most environmentally conscious manner," Manne
said.

He is taking the company's case to the water board's nine members, four
of
them appointed in February by Gov. Arnold Schwarzenegger.

For the timber industry, water quality and the independent authority of
the
state's nine regional water boards have become today's version of the
spotted owl and marbled murrelet, two endangered species used to slow
or
halt logging operations in the 1990s.

Kuhlman ruled three weeks ago that Pacific Lumber may cut only half of
the
timber it planned to log, citing water-quality concerns by neighbors.

At the root of her decision, she said fouled water supplies and
increased
flooding are as important as the endangered species protected under a
1999
state-federal agreement with Pacific Lumber to acquire Headwaters
Forest.

Under that $480 million deal, Pacific Lumber agreed to sell the largest
tract of ancient redwoods left in private ownership in return for cash
and
government assurances of a steady level of annual timber-harvest rates.
In
return, Pacific Lumber agreed to place its 220,000 acres of timberlands
under the strictest logging regulations ever imposed on a timber
company.

At the time of the Headwaters agreement, the focus was on wildlife and
fishery concerns, Kuhlman said. But it did not address issues raised
before
the Headwaters negotiations by about 200 residents worried about
increased
sediment and flooding in the Elk River and Freshwater Creek watersheds.

"In hindsight, that was a mistake," said Kuhlman.

The water board is mandated by law to consider those concerns. "Our
role is
different than the other state and federal agencies," said Kuhlman.

The showdown has attracted the attention of Sacramento lawmakers and
the
Schwarzenegger administration, who see it as a classic conflict between
economic development and environmental protection.

While the Bush administration is proposing to ease federal
timber-harvest
regulations on government-owned timberlands, California still has in
place
the toughest logging rules in the nation for private timber operators.

About 60 percent of Pacific Lumber's 220,000 acres of timberlands
already
have been set aside for wildlife and fisheries protections under terms
of
the Headwaters pact.

The water board's stand is applauded by neighboring landowners, who say
it's
about time Pacific Lumber logging operations were reined in.

"There was a time in the 1990s when I could look out my kitchen window
and
count the loaded logging trucks coming down from earlier Elk River
operations," recalled Ralph Kraus, a resident since 1958.

Kraus, a local junior high school science teacher, said at the peak a
logging truck came by every three minutes.

"That ought to tell you something," he said.

Kraus said he fears if all of the disputed plans are approved, the
logging
trucks will rumble like before.

Kraus and his neighbors aren't against logging, he said. "But we want
timber
harvesting done at a reasonable pace. We've seen tremendous degradation
of
our streams."

Pacific Lumber maintains the environmental problems from its logging
have
declined dramatically since Headwaters.

"We have invested $65 million in scientific studies to upgrade our
harvesting practices," Manne said, noting the company has expanded its
staff
of scientists from eight to 52. "It has led to improvements in road use
and
construction, fewer landslides, and more stream protections."

The water board's decision could reshape the future for logging on the
North
Coast.

If Pacific Lumber falters financially and is forced to sell off some of
its
assets, it could create a bigger role for institutional investors who
manage
timberlands for long-term profits rather than seeking the quarterly
return
demanded by stockholders in publicly held companies, according to
industry
analysts.

More than 550,000 acres of cut-over Mendocino County timberlands are
now
under the ownership of two such investment companies, following sales
in the
past decade by Georgia-Pacific Corp. and Louisiana-Pacific Corp.

While the slower pace of logging under these ownerships is applauded in
the
environmental community, it means fewer timber jobs and reduced tax
dollars
in rural communities already struggling to find a new economic balance.

Some timber industry leaders like Mendocino County's Art Harwood
embrace the
emergence of long-term investors in place of corporate timber
companies.

"Trees are growing back on these lands, and at a vigorous rate. If
someone
can afford to wait, the forests will replenish themselves. And that
means
there will be a lot of money to be made, and jobs to be created in the
future," said Harwood.



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