ALASKA: Southeast's Tongass leads list of
money losers, report says.

By Paula Dobbyn
Anchorage Daily News

(Published March 7, 2001)

The federal government lost $126 million in 1998 from logging on national forests, according to a preliminary report released Tuesday by the Forest Service.

The agency spent $672 million to administer timber sales that generated $546 million in revenue, the report said.

The Tongass National Forest in Southeast Alaska, the country's largest national forest, produced the most red ink, according to the report. Federal logging in the Tongass turned revenue of $6.5 million in 1998. But it cost the Forest Service $35.6 million to run the Tongass timber program that year.

Logging in Alaska's other national forest, the Chugach, brought in zero revenue but cost the Forest Service $4,000 to administer, the report said.

While a national taxpayer rights group in Washington, D.C., says the figures point to a textbook example of "corporate welfare," a timber industry trade group questions the Forest Service's accounting methods and notes that a large cost of running the logging program comes from fighting environmental lawsuits and preparing environmental reviews.

"It's hypocritical of these people for criticizing the Forest Service timber program when they are the very same people who have driven the costs through the roof," said Jack Phelps, executive director of the Alaska Forest Association, referring to environmental groups.

Phelps said the way the Forest Service accounts for road building costs skews the bottom line and makes the losses appear unnecessarily large. He also said that if the cost of following National Environmental Policy Act guidelines in designing timber sales and the legal expense of appeals and litigation were accounted for separately, the losses would be nowhere near as large.

Phelps also noted that a new land management plan for the Tongass was in effect in 1998, which further restricted logging and resulted in poorly designed timber sales that were uneconomical and passed over by the industry.

For Taxpayers for Common Sense, the report shows that public money and natural resources are being squandered. The group plans to push for reform of the timber sale program in Congress this year.

"This free lunch for the timber industry must end," said Jonathan Oppenheimer, the group's forest campaign coordinator.

The Forest Service audits its timber program every year. Oppenheimer said each report is supposed to be prepared by May of the following year, and he criticized the agency for taking so long to release the 1998 figures, the latest year available.

Forest Service officials on the East Coast were unavailable late Tuesday.

The preliminary report, called the "1998 Timber Sale Program Information and Reporting System," was distributed to members of Congress on Tuesday, said Forest Service spokeswoman Pamela Finney in Juneau. Although the report is available on the Internet, none of the Forest Service's field offices had "officially" received it so Finney said she couldn't comment on the figures. The final report is expected out on Friday, she said.

Timber-related employment, revenues and tax receipts have steadily declined over the last decade in response to logging restrictions, changing markets and environmental pressure. From 1991 to 1998, the total income from logging on national forests fell from $5.5 billion to $2.1 billion, a 62 percent decline, the report said.

Logging on federal land in the Tongass has mirrored this pattern. The region saw its two large pulp mills and several sawmills close in the 1990s, in part because the Forest Service lowered the amount of land available for logging. The Southeast timber industry once boasted a workforce of several thousand. In 1998, just 994 people were employed directly or indirectly in the forest products industry, the report said.

While federal logging declined in 1998, cutting on private forests in the U.S. grew and the country continued to import more wood, especially from Canada, the report said.