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Home / Focus / Environment June 2012 / Knock on Wood

Knock on Wood

(AP Photo)

Environmentalists, the U.S. Forest Service and politicians thought they finally had a plan for thinning the state’s forests after years of disagreement.

The Four Forest Restoration Initiative (4FRI), the largest thinning project ever, would not only be a step toward averting massive wildfires like Rodeo-Chediski of 2002 and the 2011 Wallow Fire, but it would create jobs and generate tax revenue.

However, much of the optimism and solidarity turned sour as the Forest Service awarded the bid to clear 300,000 Arizona acres to a contractor from Montana that plans on using the timber on what critics say is an experimental product and for products in a declining furniture industry.

And now disappointed supporters want answers from the Forest Service and the winning bidder, Pioneer Associates, and they’re keeping their fingers crossed for the company’s success.

“We cannot afford to have this fail,” said Navajo County Supervisor David Tenney.

Members of the Entiat Hotshots, based out of central Washington State, work on a spot still burning near Reserve, N.M., June 7. (AP Photo/U.S. Forest Service, Brandon R. Oberhardt)

The Four Forest project began in 2006, emerging from the devastation of the Rodeo-Chediski Fire, which scorched 465,000 acres, and from the success of the White Mountain Stewardship Project, a smaller-scale effort that relies on similar principles as Four Forest.

Wildfires have grown unnaturally large during recent decades as the forests have become overgrown with smaller trees. The project is designed to restore the landscape to a more natural state in the Kaibab, Tonto, Apache-Sitgreaves and Coconino National forests.

Four Forests will use private contractors during the next 20 years to eventually clear 2.4 million acres of small-diameter trees, which have overgrown the forests and provide the fuel for the catastrophic wildfires.

The project attracted four bidders, including an Arizona company called Arizona Forest Restoration Products. The Arizona company proposed to use the trees it cut for making oriented strand board, a type of plywood. It would have been the only maker of the product in the western United States and the company was a favorite of many of the project’s stakeholders, including the Center for Biological Diversity (CBD).

The environmental group had long been a nemesis of the Forest Service and logging industry. The center fought the logging of older, bigger trees, and in the 1990s filed a series of lawsuits that halted almost every forest-thinning project in the state. One of those lawsuits involved the Apache-Sitgreaves National Forest and was pending as the Rodeo-Chediski burned.

(Click to enlarge)

The winning bidder is proposing to build a mill in Winslow that will employ 500 to 600 workers and another 300 in the forest, said Herman Hauck, Pioneer’s CEO and president.

The company will manufacture several product lines for use in the furniture industry and use the waste, such as limbs, tree tops and stumps, for conversion to biodiesel fuel, Hauck said.

Project’s bitter bidder

But the May 18 announcement of the Forest Service’s choice brought harsh objections from some of the project’s most ardent supporters and stakeholders like Tenney, Gila County Supervisor Tommie Cline Martin, the Grand Canyon Trust and CBD.

“A lot of us, myself included, have legitimate questions about whether these folks can be successful,” Tenney said.

They questioned Pioneer’s business plan and alleged cronyism since an executive of the company used to be a high-ranking official with the Forest Service. They also complained that the Forest Service gave up nearly $9 million. Pioneer offered $6.3 million for the timber while the Arizona company offered $15 million.

Tenney, whose family used to be in the logging business, said that from what he can tell, Pioneer’s proposal to turn the logging waste into biofuels is a process that is still experimental.

Tenney said it was also important to choose a company that had the blessing of the environmentalists, which the Arizona Forest Restoration Products had. CBD favored the Arizona company because it pledged not to go after large trees and it proposed to make a proven product.

“Over the years, it’s the environmental community that’s proven not only the willingness, but the capability to shut down timber contracts if they don’t agree with how things are going,” Tenney said.

Taylor McKinnon, CBD public lands campaign director, said he knows of no company that has successfully been able to turn the forest waste into biofuel at the same scale Pioneer proposes. He pointed to the 2012 closure of a large-scale Georgia operation that cost U.S. taxpayers an estimated $64 million and Georgia taxpayers an additional $5 million.

And while Pioneer plans to use much of the logs for furniture manufacturing,

McKinnon pointed to the Forest Service’s own research from 2009 that showed the domestic furniture industry is in serious decline and can’t keep up with manufacturers in China, Vietnam and South America.

“The success of the effort depends upon the viability of the economic engine to get it done, and we don’t think that the economic engine that the Forest Service has selected is viable,” McKinnon said.

Pioneer CEO Hauck, 83, who was in the furniture and cabinetry industry, has spent the past 16 years of his semi-retirement trying to organize or land forest restoration projects in Canada, his home state of Montana and New Mexico. He said he was always amazed at the amount of waste at sawmills, and from his travels through Europe he said he found there are ways to get more out of a log.

Hauck said his analysis has shown there is a need and market for the products he is going to make.

“We have a way of getting the best value out of the logs,” Hauck said.

He said he is going on a tour next week of northern Arizona towns to meet with stakeholders and answer any questions of doubters.

One of the questions will likely be his relationship with Marlin Johnson, a former top forester in the Southwest Region of the Forest Service. Johnson retired in 2008 and went to work for Pioneer.

Hauck said his relationship with Johnson goes back before the existence of the Four Forest project and that they worked together in an unsuccessful attempt in getting a timber contract in New Mexico.

Henry Provencio, the Forest Service team leader on the project, said any allegations of cronyism are unfounded because Johnson retired from the agency long before any requests for information or requests for proposal were developed.

Provencio said Pioneer was chosen because it offers a diverse product line, which mitigates the inherent risks in the wood industry.

“Their business model wasn’t based on just one item, it was multiple items, which we felt was going to give us, the government, the best opportunity to ensure the longevity of (the project), the best chance of getting the job done,” Provencio said.

Tenney said he wants an explanation from the Forest Service on why the agency went with Pioneer’s $6.3 million bid and “left $9 million on the table” by rejecting the Arizona company’s larger bid.

Provencio said the “best value process” was used in evaluating the bidders, which allows the government to accept less money for a higher technically rated proposal.

Diane Vosick, director of policy and partnerships with the Ecological Restoration Institute at Northern Arizona University and co-chair of the Four Forest project, said there are about 40 stakeholders, most of which are excited with the selection of Pioneer.

She said it is risky to build a business around harvesting public land because there are many ways to disrupt the supply, from lawsuits by environmentalists to the Forest Service closing the land due to drought and fire risk.

“The disappointment that’s been expressed is unfortunate, but the process for awarding the bid is over and now people need to buck up,” Vosick said. “We’re going to do this and we all know we need to do this because we’ve got big fires burning right now in New Mexico and, knock on wood, we’ve been lucky in Arizona so far this year.”

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