Dargon Point Timber Sale - Local Wood, Local Benefits?

The Dargon point Timber sale was offered on May 10, 2014. Prospective bidders are given 30 days to respond in a sealed bid process. The estimated value, as appraised by the USFS appraisal system, for the 4,520 mbf* of young-growth timber offered was $440,035.85. The official sale and opening of the bids was held on June 10, 2014 with four bids received as follows:

    • Frontier Inc. $ 797,915.00
    • Good Faith Lumber $ 682,800.00
    • SEALASKA Corp. $ 626,236.00
    • Dahlstrom Lumber $ 470,000.00
*This bid was for 309 MBF Hemlock and 4,211 MBF Sitka Spruce young-growth.

So what's the big deal? To understand the issues, let's start form the beginning. The Dargon Point timber sale is a young-growth timber harvest involving 57.7 acres on Prince of Wales Island in Southeast Alaska. This sale presents a unique, new economic opportunity and is one of the first of its kind in SE Alaska. The sale provides large expanses of valuable and viable young-growth timber accessible by road, a characteristic uncommon in remote Alaska.

This is the Good Faith Mill in operation on Prince of Wales Island. Small mills provide stable jobs and economic diversification to our region. Supporting these valuable operations so that they can realistically compete for timber sales requires changes to the timber sale program and the US Forest Service appraisal system.

Dargon Point and the Transition Framework

The Dargon Point sale is significant because of the opportunity to stimulate the Tongass Transition and promote resilient, sustainable and economically diverse Southeast Alaskan communities by catalyzing in-region business development, in-region manufacture of value-added products, and more value-per-board-foot. However, the same threat still exists, the exportation of the long-term benefits, along with jobs and profits, overseas. The size, logistical ease and value of the sale has attracted the attention of large-scale lumber exporters, primarily in Asian markets.

Dargon Point represents a real opportunity to stimulate economic diversification in the region. The Tongass Transition Framework was put forward by the US Department of Agriculture in 2010 with the support of communities, tribes, and entities throughout the region. The framework was initiated to stimulate job creation, address the dwindling supply of old-growth timber, and transition Southeast Alaska into a sustainable, economically diverse region with a healthy young-growth timber industry.

A large component of the Tongass transition involves moving the region out of old-growth timber harvest and into young-growth management. The outcome of the Dargon Point sale can set a promising precedent for the future of young-growth sales and stimulate a successful integrated transition.
Outdated Policy and Practices:
In 2012, during the NEPA scoping process, Forest Supervisor Forrest Cole promised expansive regional benefits
"The project will be pretty wide-ranging in its impacts, from improving forest health and wildlife habitat to providing sawlogs to mills and job opportunities for local contractors…If approved, the young-growth volume will diversify the current Southeast Alaska timber industry".
However, these "wide-ranging" local impacts are unlikely to be realized if Cole, the US Forest Service and the region fail to address shortcomings in the current timber appraisal system. The existing appraisal system virtually eliminates local businesses by making it near impossible for small-scale miller operations to realistically compete with timber exporters. Timber sale layouts, offerings, harvest timing, and size, could be carried out in a responsible manner that encourages business investment, job growth, and value-added manufacturing in Alaska. As it stands, the appraisal system does not fully capture the value that young-growth timber offers our region, nor does it catalyze local development.

This system needs to be reformed or amended to realistically support the values and goals of the Tongass Transition and value local processors for a young-growth industry. Alaska Region 10 is undoubtedly unique and has logistical, cultural and historical differences that need to be reflected in the governance of its natural resources. The system needs to encourage business investment and business development.

Second-growth lumber being prepared for processing at a small manufacturing mill on Prince of Wales Island.

In the last decade, the USFS has fore fronted the need to collaborate with partners as it realizes its mission across the United States. Many regional entities have been collaborating effectively with the USFS, local mills, schools, contractors, and businesses to ensure an efficient young-growth process that supports job creation, capacity building, economic diversification and a healthy future for our young-growth industry. For instance, the Nature Conservancy's retooling loan fund intends to aid regional mills in building infrastructure for processing young growth. The Sitka Conservation Society has worked with partners to build young-growth community assets, test business plans and understand the best-use of young-growth wood.

All of these activities are in line with the USDA's Strikeforce initiative, a "commitment to growing economies, increasing investments and creating opportunities in poverty-stricken rural communities". While Strikeforce and the Transition Framework support economic growth and a smaller scale timber industry suitable for SE Alaska, there is a marked disconnect between these initiatives and the sales being planned and offered. The success of the transition and the full, long-term benefits of our combined work cannot be realized without legitimate access to young-growth timber for local mills and businesses. The next major collaboration may be one that explores and evaluates the timber appraisal system and the goals of the US Forest Service. Do they want to develop and support a timber sale program that is appropriate to the scale and needs of Region 10? Or will it remain business as usual with our resources exported for others to profit from them.

Dargon Point: The Bottom Line:
All of these issues are evident when reviewing the bids put forth for the Dargon Point sale. In addition to the notable variety of bid amounts, one thing is evident; multiple buyers all see a value in young-growth timber. However, this is likely due to the export market value. The USFS needs to follow suit and start valuing timber resources in a way that affords SE Alaska a future in young-growth timber. According to Keith Rush, Forester with The Nature Conservancy
"Alaska uses about 80 million board feet of lumber every year. Almost all of this is young-growth lumber shipped up from the lower 48. Some of this could and should be processed locally."
If the appraisal calculator were reflective of actual regional needs and the value of local resources, we would already be doing just that. In-region processing must be represented in the appraisal system, if not promoted over export. Young-growth is a forest resource that is valuable and we should be moving the transition forward by investing in young-growth opportunities.
The solution is two-fold, first the USFS should design and offer young-growth sales that are scaled to benefit local processing rather than attract export companies. This means sales of less than 1 MMBF. Secondly, designing and offering young-growth sales located on the existing road systems for local processing only will enable smaller outfits to be competitive in the bidding process.

 

 

 


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