Calif. regs killing lumber manufacturers

July 31, 2012

By Katy Grimes

California’s private forest lands are some of the most productive in the world. But state regulation of timber harvesting practices have become so overbearing and complex that the industry is losing lumber manufacturers by the droves, production has been drastically reduced and nearly 10,000 jobs have been lost.

California’s forest land permit fees are 10 times more expensive than the permits of  land owners in neighboring states.

California is not only producing a fraction of the wood products consumed by the state. But the timber industry was forced into a compromise by the state and is actually asking for a 1 percent assessment to pay for a review of the process and to provide funds to help reduce the cost of forest restoration and fire protection.

What are the problems?

California Forestry Association President Dave Bischel said that the number one problem facing forest land owners is wildfire liability. A recent liability case was decided where the government handed a private land owner a bill for $791 million for 500,000 acres of fire damage. But according to the forestry association, that fire actually burned was 65,000 acres.

The Moonlight Fire ignited on Labor Day in 2007.  The federal government lawyers said it was “a result of logging operations by industry giant Sierra Pacific Industries and its contractor.” But William Warne, the attorney for Sierra Pacific Industries, said SPI should not have been blamed for the fire because it didn’t start on SPI land, wasn’t started by any of its employees and its contractor’s workers weren’t even involved.

“The government’s lawyers were at the same depositions that we were; they saw the same investigative mistakes, the same hidden photographs and diagrams and the same buried or altered witness statements, so when the government tries to say today that Sierra Pacific’s operations started the fire, I am not sure what fire they are referring to,” Warne told the Record Searchlight.

“SPI apparently agreed to settle the case because U.S. District Court Judge Kimberly J. Mueller had ruled that SPI could be held liable for damages, even though the company was not responsible for starting the fire,” the Searchlight reported.

At issue is private land that butts up against government forest land–when a fire occurs, whether the private land owner caused it or not, Bischel said the fire becomes the liability of the private land owner if it damages any of the federal or state land. However, if a fire starts on the government-owned land, the government claims sovereign immunity, says that it’s not their fault and tells the private land owner that he is responsible for the damage to his own land.

“It’s a public trust issue, and why the public should be involved,” Bischel said. He also said that many of his members are being forced to seriously consider not allowing any more public access to their privately owned lands because of the position the government has taken on liability issues.

Bischel explained that, because California law is unclear, the federal government abandoned its traditional methods of assessing damaged land. It now seeks damages that are often seven times the fair market value of the forest land when a fire starts on private land and jumps to federal lands. It’s become a big money-making scheme for the government.

However, because the federal government doesn’t maintain its forest lands in anticipation of the fire season the way it requires private land owners to do, when a fire does threaten, the federal forest goes up in flames like a book of matches, Bischel said.

Bischel said that some of the laws have been on the books for more than 100 years and need to be reassessed. “All of California’s ecosystems are fire-adapted systems,” he said. “It’s a huge issue to maintain and manage lands with legal liability. It will lead to a lack of access if this continues.”

Bischel said that the other liability issue has been obtaining fire insurance. “Premiums have doubled and tripled in cost,”  he said.

Regulatory burden

Bischel said that California now imports 70 percent of the lumber used by residents because of California’s impossible regulations. And, the cost structure for forest land owners because of the stringent environmental protections and heavy regulatory burden has rendered local lumber manufacturers non-competitive in California. This has caused more than 40 percent of the lumber manufacturers in California to close their doors in just 10 years.

Because of California’s efficient lumber-harvesting practices, the state’s private forest lands are some of the most productive in the world, and are growing more wood than is being cut, according to Bischel.

But the regulatory burden and often impossible environmental protections for forest land owners have grown exponentially. Twenty-seven lumber manufacturers have closed in the last 10 years, leaving only 36 manufacturers remaining.

Bischel said that regulation of timber harvesting practices, harvesting plans, non-industrial timber management plans, exemptions, and emergency notices for landowners have become so tedious and expensive, that the results have been disastrous and are killing off the state’s manufacturers.

Regulatory costs are measured per 1,000 board feet: California’s cost is $60 per 1,000 board foot; Oregon’s cost is $8 and Washington State’s is $9.

Environmental protections and harms

California landowners have some of the strictest and often nuttiest environmental protections foisted on them in the entire country. Forest land owners are the favored target of environmental protections and regulatory costs, now causing the state’s lumber to cost ten times more than that in neighboring states and counties.

Bischel said that the California Department of Finance and state regulatory agencies continue to seek more and more forest land owner fees from the state’s privately owned forest owners. Regulatory and legal uncertainty has led California forest land owners to often find other uses for their land, and close down timber harvesting businesses. Every manufacturing closure causes an increase in the price of lumber in California.

An example of the cost of California’s regulatory climate and burdens on the state’s manufacturers is the pencil industry. Once California produced 40 percent of the world’s pencils. But the last pencil manufacturer in California closed down in 1999 due to regulatory burdens, which caused skyrocketing costs.

California could easily produce one-half of the wood used in California, according to Bischel, if the regulations on forest land owners and manufacturers were not so many or costly.

Clean forest = clean air

One of the frustrating areas for Bischel is the push in the state for cleaner air. Bischel said that forests create carbon sequestration and are of great importance in the lowering of carbon emissions.

Terrestrial carbon sequestration is the process through which carbon dioxide from the atmosphere is absorbed by trees, plants and crops through photosynthesis, and stored as carbon in biomass (tree trunks, branches, foliage and roots) and soils, according to an explanation by the Environmental Protection Agency.

Bischel said that most of the forest and timber regulatory agencies in the state ignore this positive aspect of forest land. While the California Air Resources Board has acknowledged this important aspect of lowering carbon emissions, it seems that even the almighty CARB is unable to help California forest land owners out.

With the Legislature pushing more and more regulatory bills, Bischel worries that the once thriving California lumber industry will be forced to close down as most other California manufacturing has.

Three quarters of California’s privately owned forests are small landowners and small businesses. Without a streamlining process or even a regulatory reprieve, California’s remaining forest industry jobs will be pushed out-of-state.

8 comments

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  1. CalWatchdog
    CalWatchdog Author 31 July, 2012, 08:37

    Remember this destruction of an entire industry, and its tax base, whenever Gov. Brown starts jabbering about the need to raise taxes.

    — John Seiler

    Reply this comment
  2. Dave Boz
    Dave Boz 31 July, 2012, 09:22

    You see this as a problem, but the state of California views it as a goal: getting rid of any and all extractive and manufacturing industries. This has been California’s focus for several decades, and the folks who govern the state see this loss of industry as one more success. California – at least the people who run it – wants only three industries inside its borders: software, entertainment and government.

    Reply this comment
  3. Hondo
    Hondo 31 July, 2012, 14:10

    As a former forest service employee, I worked in both timber management and as a firefighter. California has the largest trees on the planet earth. The redwoods, which run from Santa Cruz to Oregon is the largest biomass on the plant earth. I worked timber in the rocky mountain region and coming back to Cali, I was astounded at the size and quantity of the trees here. But they have almost shut down the timber industry in Eureka, where my family lives. Whatever trees that are cut are sent to china for processing. A couple thoughts on what would help the industry in Cali and in the country.
    One. Grow hemp to make paper goods in this country. You can grow 4 times as much per acre as the Loblolly pines the the southeast. The THC is so low you would have to smoke a pound of it to get kinda high. The process of extracting the fiber from the cellulose in hemp is simply adding water compared to the high temp acid baths of tree. The paper from hemp lasts up to 20 times as long as from trees (see the dead sea scrolls and other ancient codex’s). Hemp is naturally more resistant to bugs. And you have the entire midwest to grow it. It is an annual compared to 30 years to grow the trees. The first crop could be in a couple years from now. In WW2 we had ‘Hemp for victory’. Lets do that again and grow trees for lumber rather than for newspapers and tampons.
    Two. Don’t grow anymore xmas trees. Let them get big and harvest them as timber. As a former firefighter the fire hazard of a dead tree in your house is off the scale. Get some fake plastic trees that last for decades. There is no mention of xmas trees in the bible.
    3. As Katy has said above, reduce regulations that make it impossible to grow, harvest and process here in America and in Kalifornia.
    4. In the Rocky Mt. region the pine bark beetle is causing terrible fire conditions. The best cure is massive thinning. You actually create MORE board feet per acre by thinning and making the forest healthy. The enviornazi’s throw lawsuits at every plan to thin unhealthy stands making it cost innefective to try to thin. The hippies would rather the forest burn down than cut down one tree, and have said so.
    Hondo…….

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  4. CalWatchdog
    CalWatchdog Author 31 July, 2012, 15:26

    Great comments Hondo –

    I did a research project in the early 1990’s on alternatives to woods for paper. In addition to hemp, which is a viable, lower-cost alternative, there is a plant called Kenaf, which is a high yield, rapid growth alternative. Kenaf reaches 12-18 feet in 150 days, while a southern pine for example, grows 14 to 17 years before it can be harvested.

    Timber management on federal lands has become almost a bad joke. And now they’ve figured out a way to get the private land owners to pay for it. Environmentalists have destroyed most of California’s manufacturing whereas conservationists believe that people and nature can live together responsibly.

    Katy

    Reply this comment
  5. NDaily
    NDaily 31 July, 2012, 15:43

    ‘software, entertainment and government’–don’t forget lawyers.

    Reply this comment
  6. jimmydeeoc
    jimmydeeoc 1 August, 2012, 09:54

    All great comments. All so unfortunately true.

    And that three-legged economy you described, Dave…… I wonder if the “people who run the state” realize that while their policies are warmly embraced by eco-aware residents of The Peninsula and West LA, the rest of the state is going nowhere fast. See latest Victor Davis Hanson (probably no stranger to readers of this blog) for another very sad but oh-so-true chronicle of The Central Valley circa 2012.

    http://pjmedia.com/victordavishanson/california-the-road-warrior-is-here/

    Reply this comment
  7. Chris
    Chris 25 March, 2014, 23:45

    Though this thread is very old, I couldn’t help but to comment. What a total load of crap you people are spewing. We had a cabin in Calaveras County in the central Sierra since 1967 and I have never seen such massive clear cutting in the region since we bought the place. Just take a look at the Google earth images and all you see is a patchwork quilt of logged trees. There is no true contiguous forest left, just a block of trees alternating with blocks of totally stripped earth. If this is called restrictive logging, than I would hate to see what you would like done.

    Chris

    Reply this comment
  8. joe
    joe 10 January, 2015, 00:02

    Anyone who has studied the decline of the timber industry academically understands that large corporations becoming more mechanized and outsourcing their labor to East Asia and Mexico has caused the great decline in timber jobs. If these tycoons hand’t been so greedy, millions of californians could enjoy the worlds greatest forests, massive salmon runs, and timber jobs but they had to cut nearly all the worlds most impressive trees in about 150 years. environmentalists, extractive workers, hunters, fishermen, everybody is not too different in their overall goals: to have a working environment that benefits them and to keep it around for future generations

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