+-----------------------------------+-----------------------------------+
| **Key Points**                    | **RESPONSE**                      |
|                                   |                                   |
| **ANALYSIS OF THE MANAGEMENT      | \_\_                              |
| SITUATION -- 29**                 | \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\ |
|                                   | _\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ |
| **\_\_                            |                                   |
| \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\ | BLM is erring in focusing on      |
| _\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_** | timber harvest. The number of     |
|                                   | pages devoted to timber in this   |
| -   Lower timber harvests on BLM  | chapter, the short shrift given   |
|     lands have reduced BLM's      | to other benefits from O&C lands  |
|     contribution to community     | and the lack of any information   |
|     economic conditions in the    | on the social and economic harm   |
|     form of:                      | caused by timber harvests bears   |
|                                   | this out. BLM would do more for   |
| ```{=html}                        | community stability/resiliency by |
| <!-- -->                          | helping communities diversify     |
| ```                               | their economies than by feeding   |
| -   less than expected            | the boom and bust cycle of a      |
|     lumber/wood-related jobs      | mature timber industry that has   |
|                                   | exhausted most of the raw         |
| -   less than expected personal   | materials it needs to exist.      |
|     earnings                      |                                   |
|                                   | "Federal and state forest         |
|                                   | managers emphasize the production |
|                                   | of logs, forage, minerals, and    |
|                                   | other commodities without fully   |
|                                   | accounting for adverse impacts on |
|                                   | services, such as recreation,     |
|                                   | provision of clean water in       |
|                                   | streams, sequestration of carbon, |
|                                   | and the existence of roadless     |
|                                   | lands. These actions reduce the   |
|                                   | overall value of good and         |
|                                   | services derived from public      |
|                                   | forests...                        |
|                                   |                                   |
|                                   | The economy is harmed when        |
|                                   | activities are allowed to proceed |
|                                   | even though their economic costs  |
|                                   | outweigh their benefits.          |
|                                   |                                   |
|                                   | The cost---to individual workers, |
|                                   | families, firms, communities, and |
|                                   | the economy as a whole---of the   |
|                                   | changing relationship between the |
|                                   | economy and the environment are   |
|                                   | worsened by federal, state, and   |
|                                   | local actions that promote        |
|                                   | misunderstanding and divisiveness |
|                                   | rather than cooperative           |
|                                   | problem-solving. Especially       |
|                                   | divisive and costly are proposals |
|                                   | and decisions that presume the    |
|                                   | economic benefits of an increase  |
|                                   | in an extractive, agricultural,   |
|                                   | or development activity           |
|                                   | necessarily exceed the costs,     |
|                                   | even when the evidence indicates  |
|                                   | otherwise."                       |
|                                   |                                   |
|                                   | A Letter from Economists to       |
|                                   | President Bush and Governors of   |
|                                   | Eleven Western States Regarding   |
|                                   | the Economic Importance of the    |
|                                   | West's Natural Environment. p.4   |
|                                   | &5.                               |
|                                   |                                   |
|                                   | "Public officials can best        |
|                                   | promote long- run economic        |
|                                   | prosperity in the West by         |
|                                   | encouraging efficient transitions |
|                                   | away from harmful activities      |
|                                   | toward those beneficial to both   |
|                                   | the environment and the economy." |
|                                   |                                   |
|                                   | A Letter from Economists to       |
|                                   | President Bush and Governors of   |
|                                   | Eleven Western States Regarding   |
|                                   | the Economic Importance of the    |
|                                   | West's Natural Environment, p.7.  |
|                                   |                                   |
|                                   | **"**Finding direct connections   |
|                                   | between changes in forest         |
|                                   | management policy and             |
|                                   | socioeconomic change is           |
|                                   | difficult."                       |
|                                   |                                   |
|                                   | Socioeconomic Monitoring          |
|                                   | Results\--Volume III: Rural       |
|                                   | Communities and Economies. Susan  |
|                                   | Charnley, Ellen M. Donoghue,      |
|                                   | Claudia Stuart, Candace           |
|                                   | Dillingham, Lita P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan, the First  |
|                                   | 10 Years (1994-2003), p.155.      |
|                                   |                                   |
|                                   | "...the monitoring methods tested |
|                                   | presented significant             |
|                                   | limitations. Foremost were the    |
|                                   | lack of a proven basis for        |
|                                   | relating local economic change to |
|                                   | change in regional federal forest |
|                                   | management policy, and relating   |
|                                   | local economic change to local    |
|                                   | social change."                   |
|                                   |                                   |
|                                   | Socioeconomic Monitoring          |
|                                   | Results\--Volume VI: Program      |
|                                   | Development and Future            |
|                                   | Directions. Susan Charnley and    |
|                                   | Claudia Stuart. Northwest Forest  |
|                                   | Plan, The First 10 Years          |
|                                   | (1994-2003), p.5.                 |
|                                   |                                   |
|                                   | "...federal forest managers       |
|                                   | cannot override the forces of     |
|                                   | demand by simply providing a      |
|                                   | steady stream of wood fiber to    |
|                                   | the market."                      |
|                                   |                                   |
|                                   | Public Timber Supply, Market      |
|                                   | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
|                                   | Northwest Forest Plan. Thomas     |
|                                   | Michael Power. Conservation       |
|                                   | Biology Volume 20, No. 2, p.344.  |
|                                   |                                   |
|                                   | "Because the Northwest Forest     |
|                                   | Plan was developed in the face of |
|                                   | a dramatic decline in flow of     |
|                                   | wood fiber from federal lands, it |
|                                   | focused on reestablishing and     |
|                                   | stabilizing the federal timber    |
|                                   | supply. **That focus primarily on |
|                                   | raw material supply, however, was |
|                                   | a serious economic error**        |
|                                   | \[emphasis added\] in that the    |
|                                   | other half of the economic forces |
|                                   | that drive almost all markets and |
|                                   | industries, the demand for wood   |
|                                   | fiber, was ignored.               |
|                                   |                                   |
|                                   | **A nearly exclusive focus on     |
|                                   | timber supply was inappropriate** |
|                                   | \[emphasis added\] because in     |
|                                   | previous decades it was widely    |
|                                   | recognized that cyclical          |
|                                   | fluctuations in the demand for    |
|                                   | forest products were the most     |
|                                   | likely source of layoffs and mill |
|                                   | closures."                        |
|                                   |                                   |
|                                   | Public Timber Supply, Market      |
|                                   | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
|                                   | Northwest Forest Plan. Thomas     |
|                                   | Michael Power. Conservation       |
|                                   | Biology Volume 20, No. 2, p.343.  |
|                                   |                                   |
|                                   | "As a result, part of the         |
|                                   | increased federal harvest will be |
|                                   | offset by declines from other     |
|                                   | sources of supply. A steady flow  |
|                                   | of federal supply into the        |
|                                   | wood-fiber market regardless of   |
|                                   | economic conditions will further  |
|                                   | destabilize prices, driving them  |
|                                   | down during periods of weak       |
|                                   | demand and driving them up during |
|                                   | periods of peak demand. These     |
|                                   | destabilized prices are not what  |
|                                   | would result if federal timber    |
|                                   | managers behaved in a             |
|                                   | market-oriented manner. Other     |
|                                   | landowners' reactions to these    |
|                                   | more volatile prices may, in      |
|                                   | turn, destabilize harvest levels, |
|                                   | the opposite of what federal land |
|                                   | managers intend."                 |
|                                   |                                   |
|                                   | Public Timber Supply, Market      |
|                                   | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
|                                   | Northwest Forest Plan. Thomas     |
|                                   | Michael Power. Conservation       |
|                                   | Biology Volume 20, No. 2, 344     |
|                                   |                                   |
|                                   | "...contemporary economic         |
|                                   | analysis indicates that the       |
|                                   | economic links between natural    |
|                                   | forests and local communities are |
|                                   | much broader than simply the flow |
|                                   | of commercially valuable logs to  |
|                                   | manufacturing facilities."        |
|                                   |                                   |
|                                   | Public Timber Supply, Market      |
|                                   | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
|                                   | Northwest Forest Plan. Thomas     |
|                                   | Michael Power. Conservation       |
|                                   | Biology Volume 20, No. 2, p.341.  |
|                                   |                                   |
|                                   | "Although stable timber supplies  |
|                                   | may contribute to economic        |
|                                   | stability, they do not ensure it. |
|                                   | This finding is consistent with   |
|                                   | research undertaken in the 1990s  |
|                                   | that shows how assuming community |
|                                   | stability depends on              |
|                                   | nondeclining, even flows of       |
|                                   | timber from federal forests can   |
|                                   | be misleading (see sources cited  |
|                                   | in Kusel 1996, Richardson 1996).  |
|                                   | Many factors can influence the    |
|                                   | stability of forest- based        |
|                                   | communities (USDA FS 2000:        |
|                                   | 3-326--3-329). Demand for wood    |
|                                   | and commodity prices fluctuates;  |
|                                   | alternative sources of supply are |
|                                   | available; some firms prefer      |
|                                   | locating close to large labor     |
|                                   | markets rather than in            |
|                                   | geographically isolated areas;    |
|                                   | mills compete for timber supply;  |
|                                   | communities compete for jobs;     |
|                                   | wood products manufacturing       |
|                                   | technology changes; and other     |
|                                   | federal and state policies        |
|                                   | affecting the business climate    |
|                                   | change. All of these forces can   |
|                                   | affect jobs in the timber         |
|                                   | industry, and neither agencies    |
|                                   | nor communities have much         |
|                                   | influence over them.              |
|                                   | Consequently, the concept of      |
|                                   | community stability has come to   |
|                                   | be replaced by the concept of     |
|                                   | community resiliency---the        |
|                                   | ability of communities to respond |
|                                   | and adapt to change in positive,  |
|                                   | constructive ways to mitigate the |
|                                   | effects of change on the          |
|                                   | community."                       |
|                                   |                                   |
|                                   | Socioeconomic Monitoring Results  |
|                                   | Volume I: Key Findings. Susan     |
|                                   | Charnley Ellen M. Donoghue,       |
|                                   | Claudia Stuart, Candace           |
|                                   | Dillingham, Lisa P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan---the First |
|                                   | 10 Years (1994-2003), p.13        |
|                                   |                                   |
|                                   | ". . .the Northwest Forest Plan   |
|                                   | in the Pacific Northwest sought   |
|                                   | to stabilize local economies,     |
|                                   | including local employment and    |
|                                   | income, by stabilizing the flow   |
|                                   | of wood fiber from public         |
|                                   | forests. This is also a common    |
|                                   | forest management objective in    |
|                                   | other regions and countries.      |
|                                   | **Because this economic strategy  |
|                                   | ignores basic market adjustments, |
|                                   | it is likely to fail and to       |
|                                   | unnecessarily damage forest       |
|                                   | ecosystems.** \[emphasis added\]  |
|                                   | Application of basic economic     |
|                                   | principles on how markets operate |
|                                   | significantly changes the         |
|                                   | apparent efficacy of efforts to   |
|                                   | manage local economies by         |
|                                   | managing timber supply. The       |
|                                   | emphasis on timber supply tends   |
|                                   | to ignore the dominant role that  |
|                                   | the demand for wood fiber and     |
|                                   | wood products, rather than        |
|                                   | wood-fiber supply, plays in       |
|                                   | determining levels of harvest and |
|                                   | production. Contemporary          |
|                                   | economics indicates that markets  |
|                                   | tend to operate to offset         |
|                                   | reductions in wood-fiber supply.  |
|                                   | This significantly moderates the  |
|                                   | economic cost of reducing         |
|                                   | commercial timber harvest in the  |
|                                   | pursuit of environmental          |
|                                   | objectives. \[emphasis added\] In |
|                                   | addition, contemporary economic   |
|                                   | analysis indicates that the       |
|                                   | economic links between natural    |
|                                   | forests and local communities are |
|                                   | much broader than simply the low  |
|                                   | of commercially valuable logs to  |
|                                   | manufacturing facilities."        |
|                                   |                                   |
|                                   | Public Timber Supply, Market      |
|                                   | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
|                                   | Northwest Forest Plan. Thomas     |
|                                   | Michael Power. Conservation       |
|                                   | Biology Volume 20, No. 2, p.341.  |
|                                   |                                   |
|                                   | "The belief that local economies  |
|                                   | could be managed by managing      |
|                                   | federal timber supply was based   |
|                                   | on an unnecessarily narrow view   |
|                                   | of the relationship between       |
|                                   | forests, communities, and the     |
|                                   | \[PNW\] regional economy."        |
|                                   |                                   |
|                                   | Public Timber Supply, Market      |
|                                   | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
|                                   | Northwest Forest Plan. Thomas     |
|                                   | Michael Power. Conservation       |
|                                   | Biology Volume 20, No. 2, p.342.  |
|                                   |                                   |
|                                   | "Moreover, it is difficult to     |
|                                   | measure the extent to which       |
|                                   | federal forest management policy, |
|                                   | versus other variables,           |
|                                   | contributes to positive or        |
|                                   | negative change in communities."  |
|                                   |                                   |
|                                   | Socioeconomic Monitoring          |
|                                   | Results\--Volume VI: Program      |
|                                   | Development and Future            |
|                                   | Directions. Susan Charnley and    |
|                                   | Claudia Stuart. Northwest Forest  |
|                                   | Plan, The First 10 Years          |
|                                   | (1994-2003), p.11-12.             |
|                                   |                                   |
|                                   | "Concurrent with discussions      |
|                                   | about social assessments and      |
|                                   | socioeconomic monitoring is an    |
|                                   | evolving body of literature on    |
|                                   | understanding the relation        |
|                                   | between resource management       |
|                                   | actions and community             |
|                                   | socioeconomic well-being. . .     |
|                                   |                                   |
|                                   | This has also led to recognition  |
|                                   | of the difficulty in attributing  |
|                                   | causal relations between federal  |
|                                   | resource management and           |
|                                   | socioeconomic conditions."        |
|                                   |                                   |
|                                   | Delimiting communities in the     |
|                                   | Pacific Northwest. Ellen M.       |
|                                   | Donoghue, p.4.                    |
|                                   |                                   |
|                                   | **"Misleading price signals slow  |
|                                   | economic growth.** \[emphasis in  |
|                                   | original\] Inefficient pricing of |
|                                   | many natural resources encourages |
|                                   | waste and diminishes economic     |
|                                   | productivity by allocating        |
|                                   | resources to low-value uses,      |
|                                   | while higher-value uses languish. |
|                                   | Subsidies to irrigation, logging, |
|                                   | public-land ranching, and mining  |
|                                   | prop up activities that would not |
|                                   | take place under efficient,       |
|                                   | market conditions. Underpricing   |
|                                   | of urban roads,                   |
|                                   | municipal-industrial water, and   |
|                                   | pollution emissions sends false   |
|                                   | signals regarding the true cost   |
|                                   | of urban sprawl, and the true     |
|                                   | value of free-flowing streams,    |
|                                   | and clean air and water.          |
|                                   |                                   |
|                                   | \-\-\-\-\-\-\-\-\-                |
|                                   | \-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-- |
|                                   |                                   |
|                                   | As these and related changes      |
|                                   | evolve, the economic health of    |
|                                   | western communities increasingly  |
|                                   | will depend on the health of the  |
|                                   | environment. Long-run prosperity  |
|                                   | will derive from efficient,       |
|                                   | effective efforts to conserve     |
|                                   | increasingly scarce environmental |
|                                   | resources, protect high-quality   |
|                                   | natural environments, reverse     |
|                                   | past environmental degradation,   |
|                                   | and manage congestion in both     |
|                                   | urban areas and on public lands   |
|                                   | with high recreational use.       |
|                                   | Resource-management policies and  |
|                                   | economic-development activities   |
|                                   | that significantly compromise the |
|                                   | environment will likely do more   |
|                                   | economic harm than good."         |
|                                   |                                   |
|                                   | A Letter from Economists to       |
|                                   | President Bush and Governors of   |
|                                   | Eleven Western States Regarding   |
|                                   | the Economic Importance of the    |
|                                   | West's Natural Environment, p.3.  |
|                                   |                                   |
|                                   | "Instead of collapsing, the       |
|                                   | region's economy expanded. The    |
|                                   | PNW weathered virtually unscathed |
|                                   | the national economic recession   |
|                                   | that occurred at about the same   |
|                                   | time as Judge Dwyer's ruling, and |
|                                   | both Oregon and Washington have   |
|                                   | consistently outperformed the     |
|                                   | national economy throughout the   |
|                                   | 1990s. While timber harvests fell |
|                                   | 86 percent on federal lands and   |
|                                   | 47 percent overall from their     |
|                                   | peak in 1988 to 1996, employment  |
|                                   | in the lumber-and wood-products   |
|                                   | industry, which constitutes the   |
|                                   | bulk of the timber industry in    |
|                                   | the PNW, fell 22 percent. In      |
|                                   | contrast, total employment rose   |
|                                   | 27 percent.                       |
|                                   |                                   |
|                                   | The Sky Did NOT Fall: The Pacific |
|                                   | Northwest's Response to Logging   |
|                                   | Reductions. Ernie Niemi, Ed       |
|                                   | Whitelaw, and Andrew Johnston.    |
|                                   | ECONwest, p.i.                    |
|                                   |                                   |
|                                   | "An increase in supply of BLM     |
|                                   | timber could lead to decreased    |
|                                   | stumpage prices and in turn to    |
|                                   | decreased supply by other         |
|                                   | ownerships."                      |
|                                   |                                   |
|                                   | Western Oregon Plan Revisions:    |
|                                   | Proposed Planning Criteria and    |
|                                   | State Director, p.48.             |
|                                   |                                   |
|                                   | "In the rural west, it turns out  |
|                                   | there is an inverse relationship  |
|                                   | between resource dependence and   |
|                                   | economic growth; the more         |
|                                   | dependent a state's economy is on |
|                                   | personal income earned from       |
|                                   | people who work in the resource   |
|                                   | extractive industries, the slower |
|                                   | the growth rate of the economy as |
|                                   | a whole."                         |
|                                   |                                   |
|                                   | Prosperity in the 21st Century    |
|                                   | West: The Role of Protected       |
|                                   | Public Lands. Ray Rasker, Ben     |
|                                   | Alexander, Jeff van den Noort,    |
|                                   | and Rebecca Carter. Sonoran       |
|                                   | Institute, p.10.                  |
|                                   |                                   |
|                                   | Contrary to BLM's assertions,     |
|                                   | lower harvests on BLM lands may   |
|                                   | have increased BLM's contribution |
|                                   | to community economic conditions. |
|                                   |                                   |
|                                   | **The following quote shows that  |
|                                   | during the timber boom years of   |
|                                   | the 1980s, median household       |
|                                   | income declined, timber cities    |
|                                   | experienced no growth and higher  |
|                                   | unemployment and poverty rates.** |
|                                   |                                   |
|                                   | "All the indicators used in this  |
|                                   | publication to characterize the   |
|                                   | growth and economic health of     |
|                                   | timber-dependent cities reveal    |
|                                   | that they lag behind cities that  |
|                                   | are not timber-ependent. Located  |
|                                   | primarily in rural parts of       |
|                                   | Oregon, the average               |
|                                   | timber-dependent city             |
|                                   |                                   |
|                                   | experienced no population growth  |
|                                   | between 1980 and 1990. Median     |
|                                   | household income, already below   |
|                                   | that of non-timber-dependent      |
|                                   | cities in 1979, declined during   |
|                                   | the 1980s. In 1990, the average   |
|                                   | timber-dependent city had higher  |
|                                   | unemploy-ment and poverty rates,  |
|                                   | lower educational attainment, and |
|                                   | fewer workers in professional and |
|                                   | managerial                        |
|                                   |                                   |
|                                   | occupations than did the average  |
|                                   | city that was not                 |
|                                   | timber-dependent."                |
|                                   |                                   |
|                                   | Delimiting Communities in the     |
|                                   | Pacific Northwest. Ellen M.       |
|                                   | Donoghue, p.4.                    |
+-----------------------------------+-----------------------------------+
| -   Over the last three decades   | But real average earnings,        |
|     real average earnings per job | according to BLM figure 15, in    |
|     have decreased in several     | most O&C counties increased, and  |
|     western Oregon Counties, many | in 5 O&C counties they increased  |
|     of which also experienced     | significantly above average.      |
|     decreased employment for the  |                                   |
|     manufacturing industry        | "Excluding 1990, real wages       |
|     (including timber jobs).      | increased by 21 percent in        |
|                                   | primary wood-products during the  |
|                                   | decade."                          |
|                                   |                                   |
|                                   | Socioeconomic Monitoring          |
|                                   | Results\--Volume III: Rural       |
|                                   | Communities and Economies. Susan  |
|                                   | Charnley, Ellen M. Donoghue,      |
|                                   | Claudia Stuart, Candace           |
|                                   | Dillingham, Lita P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan, the First  |
|                                   | 10 Years (1994-2003), p.42.       |
|                                   |                                   |
|                                   | "Despite failures to stabilize    |
|                                   | federal timber harvests or        |
|                                   | forest-products employment, the   |
|                                   | \[NW Forest\] plan area and most  |
|                                   | communities located within it did |
|                                   | not fare badly. In fact, the      |
|                                   | regional economy experienced an   |
|                                   | unprecedented boom during the     |
|                                   | 1990s in which three-quarters of  |
|                                   | local communities either          |
|                                   | maintained their level of         |
|                                   | community well-being or improved  |
|                                   | it."                              |
|                                   |                                   |
|                                   | Public Timber Supply, Market      |
|                                   | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
|                                   | Northwest Forest Plan. Thomas     |
|                                   | Michael Power. Conservation       |
|                                   | Biology Volume 20, No. 2, p.343.  |
|                                   |                                   |
|                                   | "What were the effects of this    |
|                                   | declining flow of socioeconomic   |
|                                   | benefits from federal forests on  |
|                                   | rural communities and economies?  |
|                                   | Our analysis of U.S. census       |
|                                   | indicators showed that 40 percent |
|                                   | of the communities within 5 miles |
|                                   | of federal forest lands decreased |
|                                   | in socioeconomic well-being       |
|                                   | between 1990 and 2000, 37 percent |
|                                   | increased, and 23 percent showed  |
|                                   | little change."                   |
|                                   |                                   |
|                                   | Socioeconomic Monitoring          |
|                                   | Results\--Volume III: Rural       |
|                                   | Communities and Economies. Susan  |
|                                   | Charnley, Ellen M. Donoghue,      |
|                                   | Claudia Stuart, Candace           |
|                                   | Dillingham, Lita P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan, the First  |
|                                   | 10 Years (1994-2003), p.159       |
+-----------------------------------+-----------------------------------+
| -   BLM has contributed to        |                                   |
|     community economic conditions |                                   |
|     other than timber harvest by  |                                   |
|     providing recreation          |                                   |
|     opportunities and spending    |                                   |
|     funds on:                     |                                   |
|                                   |                                   |
| ```{=html}                        |                                   |
| <!-- -->                          |                                   |
| ```                               |                                   |
| -   sivilcultural activities      |                                   |
|                                   |                                   |
| -   fire and fuels program        |                                   |
|     efforts                       |                                   |
|                                   |                                   |
| -   habitat and watershed         |                                   |
|     restoration                   |                                   |
|                                   |                                   |
| -   harvests of special forest    |                                   |
|     products                      |                                   |
+-----------------------------------+-----------------------------------+
| -   Between 1990 and 2000         | "In general, federal forest       |
|     softwood log exports dropped  | managers are required to sell     |
|     by 2 billion board feet while | federal trees to the highest      |
|     imports increased at a lower  | bidder. The federal timber that   |
|     magnitude of approximately    | is harvested at one location can  |
|     240 million board feet. There | be shipped hundreds of            |
|     is some mill capacity or      | kilometers, out of state, and     |
|     demand for log volume in the  | through displacement, even        |
|     region that is not being met  | overseas, especially when prices  |
|     with locally produced logs.   | of wood fiber are high. Because   |
|                                   | of this, a small mill town        |
|                                   | located adjacent to federal       |
|                                   | timber land may well not receive  |
|                                   | logs from harvests in the         |
|                                   | immediate vicinity and have to    |
|                                   | import logs from outside the      |
|                                   | area. These complex and           |
|                                   | long-distance log flows make it   |
|                                   | difficult for local forest        |
|                                   | managers to influence the         |
|                                   | economies of local communities.   |
|                                   | Put slightly differently,         |
|                                   | increased local harvests do not   |
|                                   | necessarily mean increased        |
|                                   | production at local mills or vice |
|                                   | versa."                           |
|                                   |                                   |
|                                   | Public Timber Supply, Market      |
|                                   | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
|                                   | Northwest Forest Plan. Thomas     |
|                                   | Michael Power. Conservation       |
|                                   | Biology Volume 20, No. 2, p.345.  |
|                                   |                                   |
|                                   | "The ability to transport logs    |
|                                   | long distances was an important   |
|                                   | factor in changing the timber     |
|                                   | industry. It means that mill jobs |
|                                   | are no longer as reliant on local |
|                                   | harvest as in the past."          |
|                                   |                                   |
|                                   | Western Oregon Land Revisions:    |
|                                   | Analysis of the Management        |
|                                   | Situation. BLM 2005, p.36.        |
+-----------------------------------+-----------------------------------+
| **ANALYSIS OF THE MANAGEMENT      | **"The structure of the western   |
| SITUATION -- 31**                 | economy has changed.** \[emphasis |
|                                   | in the original\] Though still    |
| **Current Conditions and          | important, extractive industries  |
| Context**                         | (logging, mining, and commercial  |
|                                   | fishing) and agriculture now play |
| Complex social and economic       | a smaller economic role because   |
| changes have occurred in the      | their ability to generate new     |
| Pacific Northwest over the last   | jobs and higher incomes has       |
| three decades. High rates of      | declined. Across most of the      |
| population growth in the region,  | West, a community's ability to    |
| especially in the urban areas     | retain and attract workers and    |
| along the I-5 corridor, have      | firms now drives its prosperity.  |
| brought new people to the Pacific | But if a community's natural      |
| Northwest who have different      | environment is degraded, it has   |
| values about the appropriate uses | greater difficulty retaining and  |
| of federal lands.                 | attracting workers and firms."    |
|                                   |                                   |
|                                   | A Letter from Economists to       |
|                                   | President Bush and Governors of   |
|                                   | Eleven Western States Regarding   |
|                                   | the Economic Importance of the    |
|                                   | West's Natural Environment, p.2.  |
|                                   |                                   |
|                                   | "The average median household     |
|                                   | income (within the NW Forest Plan |
|                                   | area) (adjusted for inflation to  |
|                                   | 2000 dollars) for communities in  |
|                                   | the region went up 20.3 percent,  |
|                                   | from \$35,214 to \$42,351. This   |
|                                   | change is higher than the change  |
|                                   | in national median household      |
|                                   | income that was \$37,300 in 1990  |
|                                   | and \$41,994 in 2000, an increase |
|                                   | of 12.6 percent. Average          |
|                                   | unemployment for communities was  |
|                                   | about the same in 1990 as in      |
|                                   | 2000. . . The percentage of the   |
|                                   | population in a community living  |
|                                   | in poverty decreased from 12.9    |
|                                   | percent in 1990 to 11.8 percent   |
|                                   | in 2000, a decrease of 8.5        |
|                                   | percent."                         |
|                                   |                                   |
|                                   | Socioeconomic Monitoring          |
|                                   | Results\--Volume III: Rural       |
|                                   | Communities and Economies. Susan  |
|                                   | Charnley, Ellen M. Donoghue,      |
|                                   | Claudia Stuart, Candace           |
|                                   | Dillingham, Lita P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan, the First  |
|                                   | 10 Years (1994-2003), p.18.       |
|                                   |                                   |
|                                   | "The past two decades have seen   |
|                                   | an evolution of terms used to     |
|                                   | depict communities that have      |
|                                   | distinct connections to forest    |
|                                   | resources: community stability,   |
|                                   | forest dependence, forest based,  |
|                                   | community capacity, community     |
|                                   | resiliency, and the recent        |
|                                   | emphasis on sustainable forest    |
|                                   | management (Montréal Process      |
|                                   | Working Group 1998), community    |
|                                   | viability and adaptability. This  |
|                                   | evolution of terms shows a        |
|                                   | growing emphasis on the complex,  |
|                                   | dynamic, and interrelated         |
|                                   |                                   |
|                                   | aspects of rural communities and  |
|                                   | the natural resources that        |
|                                   | surround them. The earliest terms |
|                                   | dealt with the limits between     |
|                                   | forest management and stable      |
|                                   | communities achieved through      |
|                                   | stable employment in the forest   |
|                                   | sector. By the late 1980s,        |
|                                   | however, the notion of community  |
|                                   | stability as reflecting           |
|                                   | sustained-yield timber management |
|                                   | was being called into question    |
|                                   | (Lee 1990, Schallau 1989).        |
|                                   | Although the use of the term      |
|                                   | "stability" continued to endure   |
|                                   | in policy debates, concern was    |
|                                   | raised about the lack of a clear  |
|                                   | definition of stability and how   |
|                                   | it might be measured (Fortmann et |
|                                   | al. 1989, Lee 1989, Machlis and   |
|                                   | Force 1988, Richardson 1996).     |
|                                   | Some researchers began looking    |
|                                   | beyond employment indicators to   |
|                                   | other aspects of community life   |
|                                   | to assess community well-being    |
|                                   | (Doak and Kusel 1996, Kusel and   |
|                                   | Fortmann 1991). In addition to    |
|                                   | economic measures, indicators for |
|                                   | poverty, education, crime, and    |
|                                   | other sociodemographic measures   |
|                                   | have been used to assess          |
|                                   | conditions in communities.        |
|                                   |                                   |
|                                   | Concurrent with discussions about |
|                                   | stability and community           |
|                                   | well-being were discussions about |
|                                   | the term "forest dependence."     |
|                                   | Forest and timber dependence were |
|                                   | initially defined in terms of     |
|                                   | commodity production as well.     |
|                                   | Research has suggested, however,  |
|                                   | that communities are more complex |
|                                   | than traditional measures of      |
|                                   | timber dependency would imply     |
|                                   | (Haynes et al. 1996). Most        |
|                                   | communities have mixed economies, |
|                                   | and their vitality is often       |
|                                   | linked to other factors besides   |
|                                   | commodity production. Some        |
|                                   | communities thought of as timber  |
|                                   | dependent have been confronted    |
|                                   | with economically significant     |
|                                   | challenges, such as mill          |
|                                   | closures, and displayed resilient |
|                                   | behavior as they have dealt with  |
|                                   | change. The term "forest          |
|                                   | dependence" has since evolved in  |
|                                   | recognition that some economic    |
|                                   | ties that communities have to     |
|                                   | forests are not wood-product,     |
|                                   | based, but result from recreation |
|                                   | and other amenities (FEMAT 1993,  |
|                                   | Kusel 1996). And the term has     |
|                                   | also evolved to reflect the       |
|                                   | noneconomic connections to        |
|                                   | forests, such as the symbolic     |
|                                   | living traditions that people     |
|                                   | have with the forested places in  |
|                                   | which they live---the sense of    |
|                                   | place (Hiss 1990, Kusel 1996,     |
|                                   | Stedman 2003, Tuan 1993).         |
|                                   |                                   |
|                                   | \-\-\-                            |
|                                   | \-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-- |
|                                   |                                   |
|                                   | Thus, the term "forest-based"     |
|                                   | community is increasingly being   |
|                                   | accepted as reflecting the        |
|                                   | complex, multidimensional, and    |
|                                   | multidirectional connections      |
|                                   | between communities and forests.  |
|                                   | A community may be forest based,  |
|                                   | but will have social and economic |
|                                   | links to geographic scales larger |
|                                   | than the community. "             |
|                                   |                                   |
|                                   | Socioeconomic Monitoring          |
|                                   | Results\--Volume III: Rural       |
|                                   | Communities and Economies. Susan  |
|                                   | Charnley, Ellen M. Donoghue,      |
|                                   | Claudia Stuart, Candace           |
|                                   | Dillingham, Lita P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan, the First  |
|                                   | 10 Years (1994-2003), p.28        |
+-----------------------------------+-----------------------------------+
| -   Federal forests are highly    | "Rural communities and economies  |
|     valued for recreation, visual | underwent both positive and       |
|     quality, and the protection   | negative changes during the first |
|     of water, wildlife and fish   | decade of the \[NW Forest\] Plan. |
|     in addition to timber         | The Plan contributed to negative  |
|     resources.                    | changes in some communities,      |
|                                   | primarily because of reduced      |
| -   Agriculture and industries    | federal timber harvests and the   |
|     based on the extraction of    | loss of associated jobs and       |
|     forest products have shown    | income, substantial decreases in  |
|     little growth.                | the number of agency jobs, and    |
|                                   | declines in procurement contract  |
| -   The percentage of people in   | spending. The Plan may have       |
|     the region whose livelihood   | contributed to positive changes   |
|     is based on the extraction of | in some communities by enhancing  |
|     goods and services from       | natural amenity values on federal |
|     federal lands has declined.   | forest lands such as              |
|                                   | natural-looking landscapes,       |
|                                   | recreation opportunities, older   |
|                                   | forest habitat, fish, and clean   |
|                                   | water. Natural amenities attract  |
|                                   | tourists, new residents, and      |
|                                   | businesses that stimulate local   |
|                                   | economic development. . . .       |
|                                   | Interview results indicated that  |
|                                   | recreation and amenity values     |
|                                   | played a role in drawing new      |
|                                   | residents to communities around   |
|                                   | federal forests that lost timber  |
|                                   | workers and FS employees in the   |
|                                   | 1990s. Recreation and tourism     |
|                                   | also played an important and      |
|                                   | evolving role in contributing to  |
|                                   | the economies of some             |
|                                   | communities."                     |
|                                   |                                   |
|                                   | Socioeconomic Monitoring Results  |
|                                   | Volume I: Key Findings. Susan     |
|                                   | Charnley, Ellen M. Donoghue,      |
|                                   | Claudia Stuart, Candace           |
|                                   | Dillingham, Lisa P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan---the First |
|                                   | 10 Years (1994-2003), p.18-19.    |
|                                   |                                   |
|                                   | "Our analysis of the census data  |
|                                   | found that communities in the     |
|                                   | \[NW Forest\] Plan area are       |
|                                   | changing. The population is       |
|                                   | growing, educational attainment   |
|                                   | and household income are          |
|                                   | increasing, and poverty is        |
|                                   | decreasing. At the same time, the |
|                                   | manufacturing sector of the       |
|                                   | economy is declining in many      |
|                                   | communities. Socioeconomic        |
|                                   | well-being increased for more     |
|                                   | than a third of the communities   |
|                                   | in the region, and decreased for  |
|                                   | about the same number between     |
|                                   | 1990 and 2000."                   |
|                                   |                                   |
|                                   | Socioeconomic Monitoring Results  |
|                                   | Volume I: Key Findings. Susan     |
|                                   | Charnley, Ellen M. Donoghue,      |
|                                   | Claudia Stuart, Candace           |
|                                   | Dillingham, Lisa P. Buttolph,     |
|                                   | William, p.12.                    |
|                                   |                                   |
|                                   | **"The economic benefits of       |
|                                   | protecting and restoring          |
|                                   | environmental quality are large   |
|                                   | and increasing.** \[emphasis in   |
|                                   | original\] As the West's          |
|                                   | population increases, the West    |
|                                   | enjoys greater economic benefits  |
|                                   | by avoiding exposure to hazardous |
|                                   | pollution, maintaining scenic     |
|                                   | natural vistas, extending the     |
|                                   | availability of recreational      |
|                                   | opportunities in clean            |
|                                   | environments and on public lands, |
|                                   | and sustaining the existence of   |
|                                   | undeveloped lands and healthy     |
|                                   | ecosystems."                      |
|                                   |                                   |
|                                   | A Letter from Economists to       |
|                                   | President Bush and Governors of   |
|                                   | Eleven Western States Regarding   |
|                                   | the Economic Importance of the    |
|                                   | West's Natural Environment, p.3.  |
|                                   |                                   |
|                                   | "In the rural west, it turns out  |
|                                   | there is an inverse relationship  |
|                                   | between resource dependence and   |
|                                   | economic growth; the more         |
|                                   | dependent a state's economy is on |
|                                   | personal income earned from       |
|                                   | people who work in the resource   |
|                                   | extractive industries, the slower |
|                                   | the growth rate of the economy as |
|                                   | a whole."                         |
|                                   |                                   |
|                                   | Prosperity in the 21st Century    |
|                                   | West: The Role of Protected       |
|                                   | Public Lands. Ray Rasker, Ben     |
|                                   | Alexander, Jeff van den Noort,    |
|                                   | and Rebecca Carter. Sonoran       |
|                                   | Institute, p.10                   |
+-----------------------------------+-----------------------------------+
| -   New business and employment   | "Unemployment for the entire      |
|     opportunities fueled by the   | region is at its lowest in two    |
|     needs of the expanding        | decades."                         |
|     population have been          |                                   |
|     primarily in the trade and    | The Northwest Forest Plan: A      |
|     services sectors.             | Report to the President and       |
|                                   | Congress. E. Thomas Tuchmann,     |
| Oregon's economy is diverse. As   | Kent P. Connaughton, Lisa E.      |
| of the 2000 census Oregon's total | Freedman and Clarence B.          |
| population was 3.4 million, an    | Moriwaki. USDA, p.4.              |
| increase of 63 percent from 1970. |                                   |
| Table 2 and Figures 13, 14, and   | "Since 1970, regional employment  |
| 15 show the percent changes for   | has grown at a 2.8% annual rate,  |
| population, employment and        | which exceeds the national rate   |
| average earnings from 1970 to     | of 1.85. Today, regional          |
| 2000 and later in some cases.     | employment stands at almost 4.4   |
|                                   | million workers, almost twice     |
|                                   | what it was in 1970. The region   |
|                                   | as a whole is experiencing a      |
|                                   | historically low unemployment     |
|                                   | rate. Industries in and around    |
|                                   | major urban centers have led the  |
|                                   | region's expansion with an        |
|                                   | employment growth rate of 2.9%    |
|                                   | per year, but employment in       |
|                                   | nonmetropolitan counties, which   |
|                                   | has been increasing at 2.3% per   |
|                                   | year, has also exceeded the       |
|                                   | nation's rate (figure 10). Some   |
|                                   | timber-dependent counties are     |
|                                   | exceptions, such as Coos County   |
|                                   | in Oregon and Humboldt County in  |
|                                   | California, where employment      |
|                                   | growth has been well below        |
|                                   | national regional trends.         |
|                                   | Personal income (adjusted for     |
|                                   | inflation) also grew at rates     |
|                                   | that exceeded the nation's over   |
|                                   | the same period, with             |
|                                   | metropolitan income more than     |
|                                   | doubling and nonmetropolitan      |
|                                   | income doubling, while the        |
|                                   | nation's total personal income    |
|                                   | grew 83%. . . .Other measures of  |
|                                   | economic prosperity and social    |
|                                   | development describe the region,  |
|                                   | particularly its nonmetropolitan  |
|                                   | counties, less favorable. Though  |
|                                   | per capita personal income        |
|                                   | (adjusted for the effects of      |
|                                   | inflation) for the region was     |
|                                   | equivalent to per capita income   |
|                                   | in the nation in both 1970 and    |
|                                   | 1993, per capita income for       |
|                                   | nonmetropolitan areas, which were |
|                                   | at 90% of national per capita     |
|                                   | income in 1970, had fallen to 83% |
|                                   | by 1993. Much of the divergence   |
|                                   | happened in the early 1980s       |
|                                   | recession, and the affected areas |
|                                   | never caught up with metropolitan |
|                                   | areas and the nation as the       |
|                                   | domestic economy improved."       |
|                                   |                                   |
|                                   | The Northwest Forest Plan: A      |
|                                   | Report to the President and       |
|                                   | Congress. E. Thomas Tuchmann,     |
|                                   | Kent P. Connaughton, Lisa E.      |
|                                   | Freedman and Clarence B.          |
|                                   | Moriwaki. USDA, p.144.            |
+-----------------------------------+-----------------------------------+
| **ANALYSIS OF THE MANAGEMENT      | "In the rural west, it turns out  |
| SITUATION -- 32**                 | there is an inverse relationship  |
|                                   | between resource dependence and   |
| -   Of the total population,      | economic growth; the more         |
|     88-percent live in the 18     | dependent a state's economy is on |
|     western Oregon counties that  | personal income earned from       |
|     make up the planning area.    | people who work in the resource   |
|                                   | extractive industries, the slower |
| -   In several cases, population  | the growth rate of the economy as |
|     growth was slow and steady    | a whole."                         |
|     while in others there were    |                                   |
|     greater changes surrounding   | Prosperity in the 21st Century    |
|     economic recession periods.   | West: The Role of Protected       |
|                                   | Public Lands. Ray Rasker, Ben     |
| -   The counties with the fastest | Alexander, Jeff van den Noort,    |
|     growing populations are in    | and Rebecca Carter. Sonoran       |
|     the Salem and Medford         | Institute, p.10.                  |
|     districts (Figure 13).        |                                   |
|                                   |                                   |
| -   The county with the least     |                                   |
|     amount of population growth   |                                   |
|     is Coos County in the Coos    |                                   |
|     Bay district.                 |                                   |
+-----------------------------------+-----------------------------------+
| -   Employment increased for all  | "The average median household     |
|     18 western Oregon counties in | income (within the NW Forest Plan |
|     the planning area. Growth was | area) (adjusted for inflation to  |
|     above the state average for   | 2000 dollars) for communities in  |
|     counties located in the Salem | the region went up 20.3 percent,  |
|     and Medford districts (Figure | from \$35,214 to \$42,351.        |
|     14).                          |                                   |
|                                   | This change is higher than the    |
|                                   | change in national median         |
|                                   | household income that was         |
|                                   | \$37,300 in 1990 and \$41,994 in  |
|                                   | 2000, an increase of 12.6         |
|                                   | percent. Average unemployment for |
|                                   | communities was about the same in |
|                                   | 1990 as in 2000. . . The          |
|                                   | percentage of the population in a |
|                                   | community living in poverty       |
|                                   | decreased from 12.9 percent in    |
|                                   | 1990 to 11.8 percent in 2000, a   |
|                                   | decrease of 8.5 percent."         |
|                                   |                                   |
|                                   | Socioeconomic Monitoring          |
|                                   | Results\--Volume III: Rural       |
|                                   | Communities and Economies. Susan  |
|                                   | Charnley, Ellen M. Donoghue,      |
|                                   | Claudia Stuart, Candace           |
|                                   | Dillingham, Lita P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan, the First  |
|                                   | 10 Years (1994-2003), p.18.       |
+-----------------------------------+-----------------------------------+
| As shown in Table 2 and Figures   | "In the rural west, it turns out  |
| 16 and 17, the "Services and      | there is an inverse relationship  |
| Professional" employment category | between resource dependence and   |
| experienced significant growth in | economic growth; the more         |
| all of western Oregon for the     | dependent a state's economy is on |
| counties where data was           | personal income earned from       |
| available. However:               | people who work in the resource   |
|                                   | extractive industries, the slower |
| -   Despite increased employment  | the growth rate of the economy as |
|     opportunities, the            | a whole."                         |
|     manufacturing industry which  |                                   |
|     includes forest products and  | Prosperity in the 21st Century    |
|     encompasses paper, lumber,    | West: The Role of Protected       |
|     and wood products             | Public Lands. Ray Rasker, Ben     |
|     manufacturing, has declined   | Alexander, Jeff van den Noort,    |
|     for several western Oregon    | and Rebecca Carter. Sonoran       |
|     counties.                     | Institute, p.10.                  |
|                                   |                                   |
| -   The employment shift from     | "Excluding 1990, real wages       |
|     manufacturing to services was | increased by 21 percent in        |
|     consistent with nationwide    | primary wood-products during the  |
|     shifts." (Northwest Forest    | decade."                          |
|     Plan: the first ten years.    |                                   |
|     Rural communities and         | Socioeconomic Monitoring          |
|     economics).                   | Results\--Volume III: Rural       |
|                                   | Communities and Economies. Susan  |
| -   The districts with counties   | Charnley, Ellen M. Donoghue,      |
|     showing declines in           | Claudia Stuart, Candace           |
|     manufacturing are: Salem,     | Dillingham, Lita P. Buttolph,     |
|     Coos Bay, Roseburg, and the   | William Kay, Rebecca J. McLain,   |
|     Klamath Falls field office.   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
| The relative importance of forest | Northwest Forest Plan, the First  |
| base resource-relalted employment | 10 Years (1994-2003), p.42.       |
| and income in the plan area's     |                                   |
| economy has changed over time, as | "Despite failures to stabilize    |
| has the contribution of forest    | federal timber harvests or        |
| products from the BLM lands to    | forest-products employment, the   |
| this mix." (Northwest Forest      | \[NW Forest\] plan area and most  |
| Plan: the first ten years.        | communities located within it did |
|                                   | not fare badly. In fact, the      |
| Rural Communities and Economics). | regional economy experienced an   |
|                                   | unprecedented boom during the     |
| -   Contrary to the tremendous    | 1990s in which three-quarters of  |
|     population growth and         | local communities either          |
|     employment growth that        | maintained their level of         |
|     occurred over the last three  | community well-being or improved  |
|     decades, average earnings     | it."                              |
|     have increased minimally in   |                                   |
|     cases where an increase       | Public Timber Supply, Market      |
|     occurred at all (Figure 15).  | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
| -   In several of the western     | Northwest Forest Plan. Thomas     |
|     Oregon counties, average      | Michael Power. Conservation       |
|     earnings actually declined.   | Biology Volume 20, No. 2, p.343.  |
|                                   |                                   |
| -   As expected, the same         | "Since 1970, regional employment  |
|     counties that experienced     | has grown at a 2.8% annual rate,  |
|     decreased employment in the   | which exceeds the national rate   |
|     manufacturing industry also   | of 1.85. Today, regional          |
|     experienced a decrease in     | employment stands at almost 4.4   |
|     average earnings per job as   | million workers, almost twice     |
|     shown in Table 2.             | what it was in 1970. The region   |
|                                   | as a whole is experiencing a      |
| -   Where the average earnings    | historically low unemployment     |
|     are higher, there are more    | rate. Industries in and around    |
|     full-time jobs that pay       | major urban centers have led the  |
|     higher.                       | region's expansion with an        |
|                                   | employment growth rate of 2.9%    |
|                                   | per year, but employment in       |
|                                   | nonmetropolitan counties, which   |
|                                   | has been increasing at 2.3% per   |
|                                   | year, has also exceeded the       |
|                                   | nation's rate (figure 10). Some   |
|                                   | timber-dependent counties are     |
|                                   | exceptions, such as Coos County   |
|                                   | in Oregon and Humboldt County in  |
|                                   | California, where employment      |
|                                   | growth has been well below        |
|                                   | national regional trends.         |
|                                   | Personal income (adjusted for     |
|                                   | inflation) also grew at rates     |
|                                   | that exceeded the nation's over   |
|                                   | the same period, with             |
|                                   | metropolitan income more than     |
|                                   | doubling and nonmetropolitan      |
|                                   | income doubling, while the        |
|                                   | nation's total personal income    |
|                                   | grew 83%. . . .Other measures of  |
|                                   | economic prosperity and social    |
|                                   | development describe the region,  |
|                                   | particularly its nonmetropolitan  |
|                                   | counties, less favorable. Though  |
|                                   | per capita personal income        |
|                                   | (adjusted for the effects of      |
|                                   | inflation) for the region was     |
|                                   | equivalent to per capita income   |
|                                   | in the nation in both 1970 and    |
|                                   | 1993, per capita income for       |
|                                   | nonmetropolitan areas, which were |
|                                   | at 90% of national per capita     |
|                                   | income in 1970, had fallen to 83% |
|                                   | by 1993. Much of the divergence   |
|                                   | happened in the early 1980s       |
|                                   | recession, and the affected areas |
|                                   | never caught up with metropolitan |
|                                   | areas and the nation as the       |
|                                   | domestic economy improved."       |
|                                   |                                   |
|                                   | The Northwest Forest Plan: A      |
|                                   | Report to the President and       |
|                                   | Congress. E. Thomas Tuchmann,     |
|                                   | Kent P. Connaughton, Lisa E.      |
|                                   | Freedman and Clarence B.          |
|                                   | Moriwaki. USDA, p.144.            |
|                                   |                                   |
|                                   | "Historically, employment in      |
|                                   | solid-wood products manufacturing |
|                                   | (SIC 24) has been volatile. . .   |
|                                   | .From the high of 136,000 jobs in |
|                                   | 1978 \[in Oregon and              |
|                                   | California\], employment dropped  |
|                                   | to 95,000 jobs 4 years later, a   |
|                                   | loss of 41,000 jobs or 30         |
|                                   | percent."                         |
|                                   |                                   |
|                                   | Socioeconomic Monitoring          |
|                                   | Results\--Volume III: Rural       |
|                                   | Communities and Economies. Susan  |
|                                   | Charnley, Ellen M. Donoghue,      |
|                                   | Claudia Stuart, Candace           |
|                                   | Dillingham, Lita P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan, the First  |
|                                   | 10 Years (1994-2003), p.40.       |
|                                   |                                   |
|                                   | "In the West -- defined in this   |
|                                   | study as the 11 western mainland  |
|                                   | states of Arizona, California,    |
|                                   | Colorado, Idaho, Montana, Nevada, |
|                                   | New Mexico, Oregon, Utah,         |
|                                   | Washington, and Wyoming --        |
|                                   | mining, logging, and oil and gas  |
|                                   | development . . . provide few     |
|                                   | jobs. . . . **They have not been  |
|                                   | a significant source of new jobs  |
|                                   | or personal income in the last    |
|                                   | three decades**." \[emphasis      |
|                                   | added\]                           |
|                                   |                                   |
|                                   | Prosperity in the 21st Century    |
|                                   | West: The Role of Protected       |
|                                   | Public Lands. Ray Rasker, Ben     |
|                                   | Alexander, Jeff van den Noort,    |
|                                   | and Rebecca Carter. Sonoran       |
|                                   | Institute, p.7.                   |
+-----------------------------------+-----------------------------------+
| **ANALYSIS OF THE MANAGEMENT      | "The distinguishing feature of    |
| SITUATION -- 33**                 | the Mountain West economy over    |
|                                   | the past quarter-century was a    |
| -   Where the average earnings    | decline in natural resource       |
|     are lower, there are a larger | production and processing.        |
|     number of jobs with a lower   | Contrary to dire predictions,     |
|     wage or jobs are part-time or | these changes in the industrial   |
|     seasonal.                     | structure of the Mountain West    |
|                                   | did not lead to economic          |
|                                   | collapse.                         |
|                                   |                                   |
|                                   | Rather, during the period in      |
|                                   | which natural resource industries |
|                                   | were contracting sharply, the     |
|                                   | region showed impressive economic |
|                                   | vitality, leading the rest of the |
|                                   | nation in population and job      |
|                                   | growth.                           |
|                                   |                                   |
|                                   | \-\-\-\-\-\-\-\-\-\-\-\--         |
|                                   |                                   |
|                                   | By 1998, there appeared to be a   |
|                                   | looming gap in both pay and       |
|                                   | income between the region and the |
|                                   | rest of the country. But this gap |
|                                   | largely disappears under closer   |
|                                   | examination.                      |
|                                   |                                   |
|                                   | We looked closely at which        |
|                                   | workers suffered the most from    |
|                                   | the pay gap. Focusing on Montana  |
|                                   | workers, we found that it was     |
|                                   | upper-income and more highly      |
|                                   | educated workers who had the      |
|                                   | largest pay gap relative to the   |
|                                   | rest of the nation.               |
|                                   |                                   |
|                                   | Lower-income and less-educated    |
|                                   | workers, although their pay was   |
|                                   | low, were being paid about as     |
|                                   | much as they could earn elsewhere |
|                                   | in the nation.                    |
|                                   |                                   |
|                                   | Nationally, pay levels reflect    |
|                                   | community size; high in the       |
|                                   | biggest cities and low in smaller |
|                                   | cities, towns and rural areas.    |
|                                   | This means that in calculating    |
|                                   | and comparing average pay for the |
|                                   | Mountain West and the nation as a |
|                                   | whole, it is important to take    |
|                                   | into account where people live.   |
|                                   |                                   |
|                                   | Residents of the Mountain West,   |
|                                   | on average, live in much smaller  |
|                                   | places than other Americans, and  |
|                                   | it is this difference that        |
|                                   | accounts for the entire gap in    |
|                                   | pay between the region and the    |
|                                   | nation.                           |
|                                   |                                   |
|                                   | When the pay received by          |
|                                   | residents of the Mountain West's  |
|                                   | cities and rural areas is         |
|                                   | compared to that of residents in  |
|                                   | cities of similar size and other  |
|                                   | rural areas across the country,   |
|                                   | there is no gap.                  |
|                                   |                                   |
|                                   | Residents of the Mountain West    |
|                                   | earn relatively low incomes       |
|                                   | because, disproportionately, they |
|                                   | live in small communities. But    |
|                                   | this does not mean that they, and |
|                                   | the millions of other Americans   |
|                                   | living in communities much like   |
|                                   | theirs, are economically          |
|                                   | deprived. On the contrary, as do  |
|                                   | other Americans, they find life   |
|                                   | outside the nation's large        |
|                                   | metropolitan areas offers         |
|                                   | important compensations for low   |
|                                   | earnings and income."             |
|                                   |                                   |
|                                   | Dispelling the Myths of a         |
|                                   | Declining Economy and a Deprived  |
|                                   | Citizenry in the Mountain West.   |
|                                   | Thomas Power, and Richard Barret. |
|                                   | Headwater News.                   |
|                                   |                                   |
|                                   | "The average median household     |
|                                   | income (within the NW Forest Plan |
|                                   | area) (adjusted for inflation to  |
|                                   | 2000 dollars) for communities in  |
|                                   | the region went up 20.3 percent,  |
|                                   | from \$35,214 to \$42,351.        |
|                                   |                                   |
|                                   | This change is higher than the    |
|                                   | change in national median         |
|                                   | household income that was         |
|                                   | \$37,300 in 1990 and \$41,994 in  |
|                                   | 2000, an increase of 12.6         |
|                                   | percent. Average unemployment for |
|                                   | communities was about the same in |
|                                   | 1990 as in 2000. . . The          |
|                                   | percentage of the population in a |
|                                   | community living in poverty       |
|                                   | decreased from 12.9 percent in    |
|                                   | 1990 to 11.8 percent in 2000, a   |
|                                   | decrease of 8.5 percent."         |
|                                   |                                   |
|                                   | Socioeconomic Monitoring          |
|                                   | Results\--Volume III: Rural       |
|                                   | Communities and Economies. Susan  |
|                                   | Charnley, Ellen M. Donoghue,      |
|                                   | Claudia Stuart, Candace           |
|                                   | Dillingham, Lita P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan, the First  |
|                                   | 10 Years (1994-2003), p.18.       |
|                                   |                                   |
|                                   | "Unemployment for the entire      |
|                                   | region is at its lowest in two    |
|                                   | decades."                         |
|                                   |                                   |
|                                   | The Northwest Forest Plan: A      |
|                                   | Report to the President and       |
|                                   | Congress. E. Thomas Tuchmann,     |
|                                   | Kent P. Connaughton, Lisa E.      |
|                                   | Freedman and Clarence B.          |
|                                   | Moriwaki. USDA, p.4.              |
+-----------------------------------+-----------------------------------+
| **Timber**                        | "Personal income from             |
|                                   | agriculture, the wood products    |
| The timber industry has evolved   | industry and mining in the rural  |
| over the last several decades due | west compared to the rest of the  |
| to changes in timber supply,      | economy, 2000.                    |
| technology, and product demand:   |                                   |
|                                   | . . . Wood Products (incl. paper  |
| -   Fewer mills in Oregon.        | products) 1.8%."                  |
|                                   |                                   |
| -   Greater diversification.      | Prosperity in the 21st Century    |
|                                   | West: The Role of Protected       |
| -   A wider range of products.    | Public Lands. Ray Rasker, Ben     |
|                                   | Alexander, Jeff van den Noort,    |
| -   More efficient use of the     | and Rebecca Carter. Sonoran       |
|     timber resource.              | Institute, p.8.                   |
|                                   |                                   |
|                                   | "Oregon\'s wood products industry |
|                                   | has seen significant changes in   |
|                                   | demand and supply over the past   |
|                                   | 30 years. Once the mainstay of    |
|                                   | Oregon\'s manufacturing sector    |
|                                   | and still the primary driver for  |
|                                   | many rural areas of the state,    |
|                                   | the industry has been reduced in  |
|                                   | total and relative terms.         |
|                                   |                                   |
|                                   | The lumber and wood products      |
|                                   | industry in Oregon, propelled by  |
|                                   | a strong national housing market  |
|                                   | and steady supply of logs from    |
|                                   | public lands, hit its all-time    |
|                                   | peak employment level of 81,400   |
|                                   | in 1978. . . . At that time, the  |
|                                   | industry accounted for 49 percent |
|                                   | of the state\'s manufacturing     |
|                                   | employment.                       |
|                                   |                                   |
|                                   | By the early 1980s, a severe      |
|                                   | downturn in the nation\'s economy |
|                                   | and housing market led to a       |
|                                   | dramatic drop in industry         |
|                                   | production and employment levels. |
|                                   | Between 1978 and 1982, nearly     |
|                                   | 26,000, or 32 percent of          |
|                                   | Oregon\'s lumber and wood         |
|                                   | products manufacturing jobs, were |
|                                   | lost."                            |
|                                   |                                   |
|                                   | The Lumber and Wood Products      |
|                                   | Industry: Recent Trends. Rob      |
|                                   | Abbott, and Brian Rooney. Oregon  |
|                                   | Employment Department website.    |
|                                   |                                   |
|                                   | "Much of what happens to          |
|                                   | Oregon\'s wood products industry  |
|                                   | will depend on housing starts.    |
|                                   | ... Demand from new housing       |
|                                   | starts, however, is expected to   |
|                                   | drop from historic highs as       |
|                                   | interest rates creep up."         |
|                                   |                                   |
|                                   | The Future of Oregon's Lumber and |
|                                   | Wood Products Industry. Rob       |
|                                   | Abbott, and Brian Rooney. Oregon  |
|                                   | Employment Department website.    |
|                                   |                                   |
|                                   | "The Swanson Group's stud mill in |
|                                   | Glide, Ore., will curtail during  |
|                                   | May due to "high Douglas fir log  |
|                                   | prices and low sales returns on   |
|                                   | green Fir studs," according to    |
|                                   | Jim Hunt, Swanson's vice          |
|                                   | president for sales and           |
|                                   | marketing. Hunt said the mill     |
|                                   | will run 14 shifts out of 44 that |
|                                   | would normally be scheduled. The  |
|                                   | company's Wilbur reload facility  |
|                                   | also will be closed from May 8    |
|                                   | until May 22."                    |
|                                   |                                   |
|                                   | Random Lengths Daily              |
|                                   | WoodWire---April 26, 2006         |
|                                   |                                   |
|                                   | "Stimson Lumber\'s stud mill in   |
|                                   | St. Helens, Ore., will cut one of |
|                                   | its two shifts due to market      |
|                                   | conditions, effective Monday, May |
|                                   | 22."                              |
|                                   |                                   |
|                                   | Random Lengths Daily              |
|                                   | WoodWire---May 18, 2006.          |
|                                   |                                   |
|                                   | "A recovery in the national       |
|                                   | economy and housing market in the |
|                                   | early \'80s led to a quick        |
|                                   | rebound in industry activity, but |
|                                   | a widespread drive to increase    |
|                                   | production efficiencies through   |
|                                   | investment in capital equipment,  |
|                                   | and a gradual shift to less       |
|                                   | labor-intensive processes,        |
|                                   | limited job gains. Even though    |
|                                   | output at Oregon sawmills         |
|                                   | recovered to greater than         |
|                                   | pre-recession levels, employment  |
|                                   | peaked in 1988 at only 69,500     |
|                                   | jobs -- nearly 12,000 less than   |
|                                   | the previous peak in 1978.        |
|                                   |                                   |
|                                   | A second, milder recession in the |
|                                   | early \'90s, combined with timber |
|                                   | supply constraints brought about  |
|                                   | by environmental concerns,        |
|                                   | produced a second pronounced      |
|                                   | downturn in the industry. Faced   |
|                                   | with a severe shortage of raw     |
|                                   | material and increased            |
|                                   | competition from abroad, many     |
|                                   | firms were forced to close.       |
|                                   | Between 1989 and 2001, there was  |
|                                   | a decline of 707 reporting units  |
|                                   | to Oregon\'s unemployment         |
|                                   | insurance program in wood         |
|                                   | products. These reporting units   |
|                                   | loosely define worksites. Over    |
|                                   | the same period, employment       |
|                                   | dropped by 32 percent. . . . The  |
|                                   | downward trend continues with the |
|                                   | new definition, however. Between  |
|                                   | 2002 and 2003, wood products      |
|                                   | manufacturing lost 1,280 jobs to  |
|                                   | reach 31,100."                    |
|                                   |                                   |
|                                   | The Lumber and Wood Products      |
|                                   | Industry: Recent Trends. Rob      |
|                                   | Abbott, and Brian Rooney. Oregon  |
|                                   | Employment Department website.    |
|                                   |                                   |
|                                   | "Forest-products manufacturing is |
|                                   | a mature industry serving very    |
|                                   | specific markets for building and |
|                                   | paper products. As such one can   |
|                                   | expect technological change to    |
|                                   | continue to boost worker          |
|                                   | productivity as **capital and     |
|                                   | energy are substituted for        |
|                                   | labor**. \[emphasis added\]. . .  |
|                                   | Total output has risen, whereas   |
|                                   | employment and labor income have  |
|                                   | declined (Howard 2003). . . . The |
|                                   | impact of this automation on      |
|                                   | employment can be seen in the     |
|                                   | Pacific Northwest where wood      |
|                                   | products output was higher in     |
|                                   | 1988 than it was in 1978, but the |
|                                   | jobs associated with that output  |
|                                   | had fallen by 35,000 or 20%. . .  |
|                                   | . For instance, after 1994, log   |
|                                   | supply in the plan area actually  |
|                                   | increased modestly as a result of |
|                                   | some of the market adjustments    |
|                                   | discussed above. This increased   |
|                                   | log supply did not lead to        |
|                                   | stabilization or increase in      |
|                                   | primary forest-products-industry  |
|                                   | employment. Instead,              |
|                                   | forest-products employment        |
|                                   | continued to decline, losing      |
|                                   | 11,000 jobs between 1994 and      |
|                                   | 2000. Because federal timber      |
|                                   | harvests during this time period  |
|                                   | declined only modestly, USFS      |
|                                   | researchers estimated that only   |
|                                   | 400 of these 11,000 lost          |
|                                   | forest-products jobs were         |
|                                   | associated with reduced federal   |
|                                   | timber harvest."                  |
|                                   |                                   |
|                                   | Public Timber Supply, Market      |
|                                   | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
|                                   | Northwest Forest Plan. Thomas     |
|                                   | Michael Power. Conservation       |
|                                   | Biology Volume 20, No. 2, p.341.  |
|                                   |                                   |
|                                   | "Primary wood-products processing |
|                                   | accounted for 2 percent of all    |
|                                   | jobs in the PNW Plan area in 1990 |
|                                   | and dropped to 1 percent by       |
|                                   | 2000."                            |
|                                   |                                   |
|                                   | Socioeconomic Monitoring          |
|                                   | Results\--Volume III: Rural       |
|                                   | Communities and Economies. Susan  |
|                                   | Charnley, Ellen M. Donoghue,      |
|                                   | Claudia Stuart, Candace           |
|                                   | Dillingham, Lita P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan, the First  |
|                                   | 10 Years (1994-2003), p.41.       |
|                                   |                                   |
|                                   | "Over the period 1990 to 2000,    |
|                                   | primary-wood-products employment  |
|                                   | (SIC 24 and SIC 26) decreased by  |
|                                   | 30,000 jobs. About 11,000 of      |
|                                   | these jobs were lost since 1994.  |
|                                   | A loss in timber industry         |
|                                   | employment during a period of     |
|                                   | increasing log volume to timber   |
|                                   | processing industries indicates   |
|                                   | additional industry restructuring |
|                                   | and technological change."        |
|                                   |                                   |
|                                   | Socioeconomic Monitoring          |
|                                   | Results\--Volume III: Rural       |
|                                   | Communities and Economies. Susan  |
|                                   | Charnley, Ellen M. Donoghue,      |
|                                   | Claudia Stuart, Candace           |
|                                   | Dillingham, Lita P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan, the First  |
|                                   | 10 Years (1994-2003), p.45.       |
|                                   |                                   |
|                                   | "The fixed lower supply of timber |
|                                   | forced the timber industry to     |
|                                   | make permanent adjustments, but   |
|                                   | many of the jobs losses occurring |
|                                   | after Plan implementation were    |
|                                   | set in motion by earlier declines |
|                                   | in timber harvest."               |
|                                   |                                   |
|                                   | Socioeconomic Monitoring          |
|                                   | Results\--Volume III: Rural       |
|                                   | Communities and Economies. Susan  |
|                                   | Charnley, Ellen M. Donoghue,      |
|                                   | Claudia Stuart, Candace           |
|                                   | Dillingham, Lita P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan, the First  |
|                                   | 10 Years (1994-2003), p.47.       |
+-----------------------------------+-----------------------------------+
| As shown in Figure 18 and 19,     | Of the many changes in the        |
| western Oregon harvest levels     | industry, automation and          |
| declined in the early 1980's due  | technological change or           |
| to economic downturns and         | "modernization and increased      |
| experienced further declines on   | efficiencies" as BLM call them on |
| federal lands starting in 1990    | page 33 are responsible for many  |
| due to Endangered Species Act     | of the lost jobs and personal     |
| concerns.                         | income from the timber industry.  |
|                                   |                                   |
|                                   | "About 400 of the 22,000 jobs     |
|                                   | lost since \[in the NW Forest     |
|                                   | Plan area\] 1994 can be           |
|                                   | attributed to a net reduction in  |
|                                   | federal timber harvesting. The    |
|                                   | remaining 10,600 job losses       |
|                                   | occurred during a period of       |
|                                   | increased log availability to     |
|                                   | local mills, and are the result   |
|                                   | of less efficient mills closing,  |
|                                   | and mills continuing to invest in |
|                                   | labor-saving technologies."       |
|                                   |                                   |
|                                   | Socioeconomic Monitoring Results  |
|                                   | Volume I: Key Findings. Susan     |
|                                   | Charnley, Ellen M. Donoghue,      |
|                                   | Claudia Stuart, Candace           |
|                                   | Dillingham, Lisa P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan---the First |
|                                   | 10 Years (1994-2003), p.13.       |
|                                   |                                   |
|                                   | "Improved transportation and      |
|                                   | communications, proximity to      |
|                                   | urban centers, and an enviable    |
|                                   | quality of life have helped some  |
|                                   | rural areas grow and further      |
|                                   | diversify. As a result of this    |
|                                   | growth and diversification, the   |
|                                   | proportional share of the timber  |
|                                   | industry as a source of           |
|                                   | employment in nonmetropolitan     |
|                                   | counties in the region was        |
|                                   | declining even before federal     |
|                                   | harvest reductions began."        |
|                                   |                                   |
|                                   | The Northwest Forest Plan: A      |
|                                   | Report to the President and       |
|                                   | Congress. E. Thomas Tuchmann,     |
|                                   | Kent P. Connaughton, Lisa E.      |
|                                   | Freedman and Clarence B.          |
|                                   | Moriwaki. USDA, p.150.            |
|                                   |                                   |
|                                   | "The reasons for changes in       |
|                                   | timber employment numbers have    |
|                                   | been similar in all three states: |
|                                   | sharp reductions associated with  |
|                                   | changes in aggregate demand       |
|                                   | during domestic recessions; sharp |
|                                   | increases during robust domestic  |
|                                   | economic expansion; a general     |
|                                   | downward trend related to         |
|                                   | investments in labor-saving       |
|                                   | technological improvements;       |
|                                   | reductions from changes in a mix  |
|                                   | of products that require less     |
|                                   | labor; reductions from changes in |
|                                   | timber quality as the percentage  |
|                                   | of old growth available has       |
|                                   | declined; and, most recently,     |
|                                   | changes in timber supply.         |
|                                   |                                   |
|                                   | The downward trend was further    |
|                                   | intensified by the recession in   |
|                                   | the national economy that reached |
|                                   | full force during the early       |
|                                   | 1990s."                           |
|                                   |                                   |
|                                   | The Northwest Forest Plan: A      |
|                                   | Report to the President and       |
|                                   | Congress. E. Thomas Tuchmann,     |
|                                   | Kent P. Connaughton, Lisa E.      |
|                                   | Freedman and Clarence B.          |
|                                   | Moriwaki. USDA, p.148-149.        |
|                                   |                                   |
|                                   | "Because of the dwindling         |
|                                   | availability of raw material --   |
|                                   | particularly large logs -- the    |
|                                   | cost of obtaining timber became   |
|                                   | prohibitive to smaller mills,     |
|                                   | causing many to close. As smaller |
|                                   | mills closed, production shifted  |
|                                   | to larger, more cost-efficient    |
|                                   | mills that could manufacture wood |
|                                   | products at a per-unit price much |
|                                   | below that of the smaller mills.  |
|                                   |                                   |
|                                   | Throughout the Northwest, there   |
|                                   | has been a tremendous change in   |
|                                   | the number of mills operating and |
|                                   | many of them are completely gone  |
|                                   | now due to a reduction in the     |
|                                   | amount of raw material available  |
|                                   | and changes in the manufacturing  |
|                                   | processes,\" said Bob Ragon,      |
|                                   | director of Douglas Timber        |
|                                   | Operators. Graph 2 shows the      |
|                                   | result of the structural change   |
|                                   | is fewer but larger and more      |
|                                   | productive mills.                 |
|                                   |                                   |
|                                   | The reduced supply of large,      |
|                                   | old-growth timber also caused     |
|                                   | many in Oregon\'s wood products   |
|                                   | industry to change production     |
|                                   | methods to better accommodate the |
|                                   | growing number of smaller scale   |
|                                   | logs that were now coming into    |
|                                   | the mills. This ignited an        |
|                                   | explosion of new technology that  |
|                                   | streamlined the processing of raw |
|                                   | materials into finished products  |
|                                   | and even changed the makeup of    |
|                                   | the raw materials themselves.     |
|                                   |                                   |
|                                   | These structural changes in       |
|                                   | Oregon\'s wood products industry  |
|                                   | were necessary to keep the        |
|                                   | industry competitive, but made    |
|                                   | the industry less labor           |
|                                   | intensive. Oregon\'s softwood     |
|                                   | lumber production level remains   |
|                                   | the highest of any state in the   |
|                                   | nation and accounted for 18       |
|                                   | percent of all U.S. production in |
|                                   | 2003. The net result, however, is |
|                                   | that while **production remained  |
|                                   | around 5 to 6 billion board feet  |
|                                   | per year, employment steadily     |
|                                   | dropped through the 1990s into    |
|                                   | 2003.**" \[emphasis added\]       |
|                                   |                                   |
|                                   | Reduced Supply Causes Structural  |
|                                   | Changes in the Industry. Rob      |
|                                   | Abbott, and Brian Rooney. Oregon  |
|                                   | Employment Department website.    |
+-----------------------------------+-----------------------------------+
| Also evident is BLM's decreasing  | "**That focus primarily on raw    |
| contribution to total western     | material supply, however, was a   |
| Oregon timber supply where BLM's  | serious economic error**          |
| contribution declined from 16.03  | \[emphasis added\] in that the    |
| percent in 1973 to 1.41 percent   | other half of the economic forces |
| in 2002.                          | that drive almost all markets and |
|                                   | industries, the demand for wood   |
|                                   | fiber, was ignored.               |
|                                   |                                   |
|                                   | **A nearly exclusive focus on     |
|                                   | timber supply was inappropriate** |
|                                   | \[emphasis added\] because in     |
|                                   | previous decades it was widely    |
|                                   | recognized that cyclical          |
|                                   | fluctuations in the demand for    |
|                                   | forest products were the most     |
|                                   | likely source of layoffs and mill |
|                                   | closures."                        |
|                                   |                                   |
|                                   | Public Timber Supply, Market      |
|                                   | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
|                                   | Northwest Forest Volume 20, No.   |
|                                   | 2, 341-350Plan. Thomas Michael    |
|                                   | Power. Conservation Biology,      |
|                                   | p.343.                            |
+-----------------------------------+-----------------------------------+
| Consumption (demand) of timber in | "All of the case-study            |
| Oregon was severely reduced by    | communities we monitored showed   |
| the depressed national economy at | changes over the last two         |
| the start of the 1980's, however; | decades. Although timber was one  |
| improvements in residential and   | of the major economic sectors in  |
| commercial construction spurred   | all of these communities in the   |
| the beginning of industry         | 1970s and 1980s, the timber       |
| recovery creating increasing      | sector had become minor or        |
| demand until about 1988.          | negligible in many of them by     |
|                                   | 2003. . .                         |
|                                   |                                   |
|                                   | The timber sector in some         |
|                                   | communities\--such as Greater     |
|                                   | Coos Bay---had been declining     |
|                                   | since the early 1980s because of  |
|                                   | an economic recession, domestic   |
|                                   | and international competition,    |
|                                   | changes in market demand for wood |
|                                   | products, industry restructuring, |
|                                   | mechanization and technological   |
|                                   | advances, and environmental       |
|                                   | regulations---and the Plan added  |
|                                   | to these pressures."              |
|                                   |                                   |
|                                   | Socioeconomic Monitoring          |
|                                   | Results\--Volume III: Rural       |
|                                   | Communities and Economies. Susan  |
|                                   | Charnley, Ellen M. Donoghue,      |
|                                   | Claudia Stuart, Candace           |
|                                   | Dillingham, Lita P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan, the First  |
|                                   | 10 Years (1994-2003), p.159.      |
|                                   |                                   |
|                                   | "During the recession of the      |
|                                   | early 1980s, lumber and wood      |
|                                   | products employment dropped by    |
|                                   | around 25,000. In the recession   |
|                                   | of the early \'90s, the industry  |
|                                   | lost about 11,000 jobs. During    |
|                                   | the last recession, wood products |
|                                   | employment dropped by 4,000 from  |
|                                   | about 49,000 in 2000 to about     |
|                                   | 45,000 in 2002."                  |
|                                   |                                   |
|                                   | The Latest Recession. Rob Abbott, |
|                                   | and Brian Rooney. Oregon          |
|                                   | Employment Department website.    |
+-----------------------------------+-----------------------------------+
| Softwood saw log consumption data | "In general, federal forest       |
| in lumber and plywood mills are   | managers are required to sell     |
| shown for western Oregon in       | federal trees to the highest      |
| Figure 20. Consumption for this   | bidder. The federal timber that   |
| sector constitutes the majority   | is harvested at one location can  |
| of demand for log volume is well  | be shipped hundreds of            |
| above harvest with the gap being  | kilometers, out of state, and     |
| filled by log producers from      | through displacement, even        |
| outside the area.                 | overseas, especially when prices  |
|                                   | of wood fiber are high. Because   |
|                                   | of this, a small mill town        |
|                                   | located adjacent to federal       |
|                                   | timber land may well not receive  |
|                                   | logs from harvests in the         |
|                                   | immediate vicinity and have to    |
|                                   | import logs from outside the      |
|                                   | area. These complex and           |
|                                   | long-distance log flows make it   |
|                                   | difficult for local forest        |
|                                   | managers to influence the         |
|                                   | economies of local communities.   |
|                                   | Put slightly differently,         |
|                                   | increased local harvests do not   |
|                                   | necessarily mean increased        |
|                                   | production at local mills or vice |
|                                   | versa."                           |
|                                   |                                   |
|                                   | Public Timber Supply, Market      |
|                                   | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
|                                   | Northwest Forest Plan. Thomas     |
|                                   | Michael Power. Conservation       |
|                                   | Biology Volume 20, No. 2, p.345.  |
|                                   |                                   |
|                                   | "The ability to transport logs    |
|                                   | long distances was an important   |
|                                   | factor in changing the timber     |
|                                   | industry. It means that mill jobs |
|                                   | are no longer as reliant on local |
|                                   | harvest as in the past."          |
|                                   |                                   |
|                                   | Western Oregon Land Revisions:    |
|                                   | Analysis of the Management        |
|                                   | Situation. BLM 2005, p.36.        |
+-----------------------------------+-----------------------------------+
| Increasing recovery is also       | "Forest-products manufacturing is |
| important. While western Oregon   | a mature industry serving very    |
| log consumption by lumber and     | specific markets for building and |
| plywood mills has remained        | paper products. As such one can   |
| relatively stable for 10 years or | expect technological change to    |
| so, lumber production has         | continue to boost worker          |
| increased nearly 30%, likely due  | productivity as **capital and     |
| to modernization and increased    | energy are substituted for        |
| efficiencies in mill processes.   | labor**. \[emphasis added\] . . . |
|                                   |                                   |
|                                   | Total output has risen, whereas   |
|                                   | employment and labor income have  |
|                                   | declined (Howard 2003). . . .     |
|                                   |                                   |
|                                   | The impact of this automation on  |
|                                   | employment can be seen in the     |
|                                   | Pacific Northwest where wood      |
|                                   | products output was higher in     |
|                                   | 1988 than it was in 1978, but the |
|                                   | jobs associated with that output  |
|                                   | had fallen by 35,000 or 20%. . .  |
|                                   | . For instance, after 1994, log   |
|                                   | supply in the plan area actually  |
|                                   | increased modestly as a result of |
|                                   | some of the market adjustments    |
|                                   | discussed above. This increased   |
|                                   | log supply did not lead to        |
|                                   | stabilization or increase in      |
|                                   | primary forest-products-industry  |
|                                   | employment. Instead,              |
|                                   | forest-products employment        |
|                                   | continued to decline, losing      |
|                                   | 11,000 jobs between 1994 and      |
|                                   | 2000. Because federal timber      |
|                                   | harvests during this time period  |
|                                   | declined only modestly, USFS      |
|                                   | researchers estimated that only   |
|                                   | 400 of these 11,000 lost          |
|                                   | forest-products jobs were         |
|                                   | associated with reduced federal   |
|                                   | timber harvest."                  |
|                                   |                                   |
|                                   | Public Timber Supply, Market      |
|                                   | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
|                                   | Northwest Forest Plan. Thomas     |
|                                   | Michael Power. Conservation       |
|                                   | Biology Volume 20, No. 2, p.341.  |
+-----------------------------------+-----------------------------------+
| Quantifying timber harvest in     | "In general, federal forest       |
| terms of demand and supply is     | managers are required to sell     |
| difficult because demand (log     | federal trees to the highest      |
| volume outputs) is not isolated   | bidder. The federal timber that   |
| to the planning area.             | is harvested at one location can  |
|                                   | be shipped hundreds of            |
|                                   | kilometers, out of state, and     |
|                                   | through displacement, even        |
|                                   | overseas, especially when prices  |
|                                   | of wood fiber are high. Because   |
|                                   | of this, a small mill town        |
|                                   | located adjacent to federal       |
|                                   | timber land may well not receive  |
|                                   | logs from harvests in the         |
|                                   | immediate vicinity and have to    |
|                                   | import logs from outside the      |
|                                   | area. These complex and           |
|                                   | long-distance log flows make it   |
|                                   | difficult for local forest        |
|                                   | managers to influence the         |
|                                   | economies of local communities.   |
|                                   | Put slightly differently,         |
|                                   | **increased local harvests do not |
|                                   | necessarily mean increased        |
|                                   | production at local mills or vice |
|                                   | versa.**" \[emphasis added\]      |
|                                   |                                   |
|                                   | Public Timber Supply, Market      |
|                                   | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
|                                   | Northwest Forest Plan. Thomas     |
|                                   | Michael Power. Conservation       |
|                                   | Biology Volume 20, No. 2, p.345.  |
+-----------------------------------+-----------------------------------+
| **ANALYSIS OF THE MANAGEMENT      | "The ability to transport logs    |
| SITUATION -- 35**                 | long distances was an important   |
|                                   | factor in changing the timber     |
| **Exports**                       | industry. It means that mill jobs |
|                                   | are no longer as reliant on local |
| The reduction in timber harvest   | harvest as in the past."          |
| across all ownerships in the      |                                   |
| planning area increased the       | Western Oregon Land Revisions:    |
| prices the local timber industry  | Analysis of the Management        |
| paid for logs. Because fewer logs | Situation. BLM 2005, p.36         |
| were available locally, local     |                                   |
| industry became more competitive  | "The local mills now mostly       |
| in the international market.      | process wood from Washington and  |
| Figure 21 shows that:             | Canada, because little federal    |
|                                   | timber is available, and          |
| -   Softwood log exports dropped  | **private industrial forestland   |
|     from 2.7 billion board feet   | owners generally sell their wood  |
|     in 1990 to 0.7 billion board  | to mills outside the area**."     |
|     feet by 2000,                 | \[emphasis added\]                |
|                                   |                                   |
| Imports increased from about      | Socioeconomic Monitoring          |
| seven million board feet to       | Results\--Volume III: Rural       |
| almost 250 million board feet.\*  | Communities and Economies. Susan  |
|                                   | Charnley, Ellen M. Donoghue,      |
|                                   | Claudia Stuart, Candace           |
|                                   | Dillingham, Lita P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan, the First  |
|                                   | 10 Years (1994-2003), p.142.      |
+-----------------------------------+-----------------------------------+
| This shows that there is still a  | "Because the Northwest Forest     |
| large demand for logs in western  | Plan was developed in the face of |
| Oregon and imports are filling    | a dramatic decline in flow of     |
| the gap. This helped timber       | wood fiber from federal lands, it |
| manufacturing industries, but it  | focused on reestablishing and     |
| negatively impacted the timber    | stabilizing the federal timber    |
| export industry *(Northwest       | supply. **That focus primarily on |
| Forest Plan: the first ten years. | raw material supply, however, was |
| Rural Communities and             | a serious economic error**        |
| Economics)*.                      | \[emphasis added\] in that the    |
|                                   | other half of the economic forces |
|                                   | that drive almost all markets and |
|                                   | industries, the demand for wood   |
|                                   | fiber, was ignored.               |
|                                   |                                   |
|                                   | **A nearly exclusive focus on     |
|                                   | timber supply was inappropriate** |
|                                   | \[emphasis added\] because in     |
|                                   | previous decades it was widely    |
|                                   | recognized that cyclical          |
|                                   | fluctuations in the demand for    |
|                                   | forest products were the most     |
|                                   | likely source of layoffs and mill |
|                                   | closures."                        |
|                                   |                                   |
|                                   | Public Timber Supply, Market      |
|                                   | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
|                                   | Northwest Forest Plan. Thomas     |
|                                   | Michael Power. Conservation       |
|                                   | Biology Volume 20, No. 2, p.343.  |
|                                   |                                   |
|                                   | ". . . **federal forest managers  |
|                                   | cannot override the forces of     |
|                                   | demand by simply providing a      |
|                                   | steady stream of wood fiber to    |
|                                   | the market**. \[emphasis added\]  |
|                                   | . . .As a result, part of the     |
|                                   | increased federal harvest will be |
|                                   | offset by declines from other     |
|                                   | sources of supply. A steady flow  |
|                                   | of federal supply into the        |
|                                   | wood-fiber market regardless of   |
|                                   | economic conditions will further  |
|                                   | destabilize prices, driving them  |
|                                   | down during periods of weak       |
|                                   | demand and driving them up during |
|                                   | periods of peak demand. These     |
|                                   | destabilized prices are not what  |
|                                   | would result if federal timber    |
|                                   | managers behaved in a             |
|                                   | market-oriented manner. Other     |
|                                   | landowners' reactions to these    |
|                                   | more volatile prices may, in      |
|                                   | turn, destabilize harvest levels, |
|                                   | the opposite of what federal land |
|                                   | managers intend."                 |
|                                   |                                   |
|                                   | Public Timber Supply, Market      |
|                                   | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
|                                   | Northwest Forest Plan. Thomas     |
|                                   | Michael Power. Conservation       |
|                                   | Biology Volume 20, No. 2, p.344.  |
+-----------------------------------+-----------------------------------+
| **ANALYSIS OF THE MANAGEMENT      | BLM's allowable sale quantity was |
| SITUATION -- 36**                 | an upper limit and was neither    |
|                                   | promised nor required.            |
| **Allowable Sale Quantity**       |                                   |
|                                   | Another factor that contributed   |
| The allowable sale quantity (ASQ) | to the BLM's inability to meet    |
| of timber for the western Oregon  | the projected allowable sale      |
| BLM districts was set at          | quantity levels was BLM's own     |
| approximately 211 million board   | lack of compliance with federal   |
| feet annually (MMBF) by the 1995  | law. One reason BLM is unable to  |
| western Oregon RMPs. This was     | meet its timber target is because |
| adjusted to 203 MMBF 1999. Actual | it broke the law and continues to |
| sales quantities have not met the | refuse to implement the           |
| levels anticipated in the RMPs.   | conservation requirements of the  |
| As reported in the eighth-year    | Plan. Judge Dwyer said: \"The     |
| RMP evaluation and the Northwest  | record shows that Forest Service  |
| Forest Plan socioeconomic 10-year | and BLM managers uniformly relied |
| monitoring report, several        | on these memoranda in deciding    |
| factors are believed to account   | not to require category two       |
| for the inability of BLM to meet  | surveys before approving the \... |
| the projected allowable sale      | timber sales challenged here,     |
| quantity levels and include:      | even though ground-disturbing     |
|                                   | activities have yet to begin on   |
| -   Lawsuits.                     | any of those sales. These actions |
|                                   | by the federal defendants are     |
| -   Implementation of the Survey  | arbitrary and contrary to the     |
|     and Manage standards and      | plain language of the ROD. \...   |
|     guides.                       | Far from being minor or technical |
|                                   | violations, widespread exemptions |
| Total BLM Timber volume offered   | from the survey requirements      |
| for western Oregon averaged 63    | would undermine the management    |
| percent of planned levels for the | strategy on which the ROD         |
| first eight years of plan         | depends. \...The ROD's category   |
| implementation. The total volume  | two survey requirements are       |
| offered by districts between 1995 | clear, plain, and unmistakable.\" |
| and 2002 was about 1,030 of the   | [ONRC Action v.                   |
| 1,624 MMBF projected. On an       | USFS]{.underline}. Aug 2, 1999.   |
| average annual basis the          |                                   |
| districts offered 129 MMBF as     | Both Survey & Manage and Aquatic  |
| shown in Figure 22.               | Conservation Standards violations |
|                                   | nearly shut the agency\'s timber  |
|                                   | program down.                     |
|                                   |                                   |
|                                   | The General Accounting Office     |
|                                   | noted that the decline in harvest |
|                                   | volumes was itself anticipated:   |
|                                   |                                   |
|                                   | "The drop in probable sale        |
|                                   | quantity bears out the plan's     |
|                                   | observation that changes could    |
|                                   | occur. For example, the plan      |
|                                   | noted that timber sale levels     |
|                                   | could be affected by requirements |
|                                   | for conducting additional         |
|                                   | environmental analysis or setting |
|                                   | aside additional lands to protect |
|                                   | threatened or endangered species  |
|                                   | or by a change in the acreage     |
|                                   | allocated to riparian reserves    |
|                                   | following an analysis and         |
|                                   | inventory of intermittent steams. |
|                                   | Officials told us that the        |
|                                   | probable sale quantity will       |
|                                   | likely change yet again."         |
|                                   |                                   |
|                                   | GAO/RCED-99-64 Ecosystem          |
|                                   | Planning.                         |
|                                   |                                   |
|                                   | "The PSQ levels shown are         |
|                                   | estimates. They represent neither |
|                                   | minimum levels that must be met   |
|                                   | nor maximum levels that cannot be |
|                                   | exceeded. They are rough          |
|                                   | approximations because of the     |
|                                   | difficulty associated with        |
|                                   | predicting actual timber sale     |
|                                   | levels over the next decade,      |
|                                   | given the discretion that agency  |
|                                   | land managers possess in          |
|                                   | administering plans and deciding  |
|                                   | when and where to offer timber    |
|                                   | sales, as well as the complex     |
|                                   | nature of many of the standards   |
|                                   | and guidelines. They represent    |
|                                   | our best assessment of the        |
|                                   | average amount of timber likely   |
|                                   | to be awarded annually in the     |
|                                   | planning area over the next       |
|                                   | decade, following a start-up      |
|                                   | period.                           |
|                                   |                                   |
|                                   | During the first several years,   |
|                                   | it is unlikely that the annual    |
|                                   | PSQ estimates shown in Figure     |
|                                   | ROD-1 will be achieved. Our       |
|                                   | decision represents a new         |
|                                   | strategy that involves new land   |
|                                   | allocations and a new set of      |
|                                   | standards and guidelines. It will |
|                                   | take time for the land management |
|                                   | agencies to develop new timber    |
|                                   | sales that conform with the       |
|                                   | planning amendments effected by   |
|                                   | our decision. In addition, our    |
|                                   | decision contains requirements to |
|                                   | perform various levels of         |
|                                   | analysis or survey work prior to  |
|                                   | awarding timber sales in certain  |
|                                   | areas."                           |
|                                   |                                   |
|                                   | 1994 Northwest Forest Plan Record |
|                                   | of Decision, p.19.                |
|                                   |                                   |
|                                   | In addition, we understand that   |
|                                   | not all offered sales were sold.  |
|                                   |                                   |
|                                   | And we understand that after the  |
|                                   | lawsuits, at least the Coos Bay   |
|                                   | and Roseburg BLM began thinning   |
|                                   | projects in earnest, including in |
|                                   | a lot of LSRs and RRs, none of    |
|                                   | which timber volume contributed   |
|                                   | to the ASQ. Though BLM didn\'t    |
|                                   | meet their ASQ target, a lot of   |
|                                   | timber volume was produced        |
|                                   | outside of the ASQ.               |
|                                   |                                   |
|                                   | In addition to the understanding  |
|                                   | that PSQ was a "rough             |
|                                   | approximation" (USDA, USDI 1994b, |
|                                   | p. 19), the 1994 Final SEIS       |
|                                   | indicated Survey and Manage       |
|                                   | standards and guidelines "add to  |
|                                   | the uncertainty of PSQ            |
|                                   | calculations" (USDA, USDI 1994a,  |
|                                   | p. 3&4-267).                      |
|                                   |                                   |
|                                   | November 2000, Survey and Manage  |
|                                   | FSEIS Volume I, page 88.          |
|                                   |                                   |
|                                   | "PSQ levels are presented as an   |
|                                   | effect, not a goal, of the        |
|                                   | standards and guidelines.         |
|                                   | Therefore, harvests within areas  |
|                                   | specified for habitat protection  |
|                                   | will be greatly curtailed."       |
|                                   |                                   |
|                                   | 1994 Northwest Forest Plan Record |
|                                   | of Decision, p.66.                |
|                                   |                                   |
|                                   | And finally, there are examples   |
|                                   | of sales offered that were not    |
|                                   | bid.                              |
+-----------------------------------+-----------------------------------+
| **Jobs and Income**               | "...as it responded to Judge      |
|                                   | Dwyer's logging ban, the PNW      |
| The forest products industry      | found that it did not have to log |
| contributes significantly to the  | massive acreages to prosper. The  |
| State's economy as the activities | industry, itself, had made        |
| of the industry are translated    | logging less important. After     |
| into jobs, payroll, tax           | slashing jobs and wages in the    |
| contributions, and the purchases  | 1980s, the industry provided only |
| of services and materials.        | a small percentage of the         |
|                                   | region's jobs."                   |
|                                   |                                   |
|                                   | The Sky Did NOT Fall: The Pacific |
|                                   | Northwest's Response to Logging   |
|                                   | Reductions. Ernie Niemi, Ed       |
|                                   | Whitelaw, and Andrew Johnston.    |
|                                   | ECONwest, p.i.                    |
|                                   |                                   |
|                                   | "By 2000, FS and BLM lands        |
|                                   | provided less than 5 percent of   |
|                                   | the total timber supply \[in the  |
|                                   | NW Forest Plan area\]. This also  |
|                                   | means that FS and BLM timber      |
|                                   | harvests supported less than 5    |
|                                   | percent of the 80,500 jobs in the |
|                                   | direct primary-wood-products      |
|                                   | industries (SIC 24 and SIC 26) in |
|                                   | the Plan area."                   |
|                                   |                                   |
|                                   | Socioeconomic Monitoring          |
|                                   | Results\--Volume III: Rural       |
|                                   | Communities and Economies. Susan  |
|                                   | Charnley, Ellen M. Donoghue,      |
|                                   | Claudia Stuart, Candace           |
|                                   | Dillingham, Lita P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan, the First  |
|                                   | 10 Years (1994-2003), p.47.       |
|                                   |                                   |
|                                   | "Lumber-and-wood products         |
|                                   | employment had been steadily      |
|                                   | decreasing in the Pacific         |
|                                   | Northwest long before the listing |
|                                   | of the spotted owl as a           |
|                                   | threatened species and Judge      |
|                                   | Dwyer's injunction. Timber        |
|                                   | employment declined by more than  |
|                                   | 27,000 in the Pacific Northwest   |
|                                   | between 1979 and 1989, the two    |
|                                   | peak years that bound the         |
|                                   | economic cycle of the 1980s, and  |
|                                   | by another 21,000 by 1996. The    |
|                                   | wages paid to timber workers also |
|                                   | decreased rapidly in the 1980s as |
|                                   | payroll per employee fell 18.2    |
|                                   | percent, from \$38,732 in 1979 to |
|                                   | \$31,672 in 1989 (measured in     |
|                                   | 1997 dollars). . . . the          |
|                                   | lumber-and-wood products industry |
|                                   | represented 1.9 percent of total  |
|                                   | employment in 1996. Since 1990,   |
|                                   | the percentage of lumber-and-wood |
|                                   | products employees in Oregon has  |
|                                   | decreased from 4.3 percent to 3.0 |
|                                   | percent**.**"                     |
|                                   |                                   |
|                                   | The Sky Did NOT Fall: The Pacific |
|                                   | Northwest's Response to Logging   |
|                                   | Reductions. Ernie Niemi, Ed       |
|                                   | Whitelaw, and Andrew Johnston.    |
|                                   | ECONwest, p.iii.                  |
|                                   |                                   |
|                                   | Given that BLM would have         |
|                                   | supported only 1.23% of timber    |
|                                   | industry employment, an industry  |
|                                   | that is less than 3% of the       |
|                                   | region's work force, it begs the  |
|                                   | question of why BLM is investing  |
|                                   | so many public resources in the   |
|                                   | RMP revisions.                    |
|                                   |                                   |
|                                   | **"Logging can eliminate jobs**   |
|                                   | \[emphasis in original\]: ...To   |
|                                   | some extent, the region has       |
|                                   | prospered *despite* the logging   |
|                                   | reductions simply because the     |
|                                   | timber industry is such a small   |
|                                   | portion of the regional economy.  |
|                                   | More important, though, the       |
|                                   | mounting evidence indicates the   |
|                                   | region has prospered in part      |
|                                   | *because* of the logging          |
|                                   | reductions, insofar as they       |
|                                   | reduced the subsidies,            |
|                                   | cleaning-up costs, and job losses |
|                                   | that accompany logging."          |
|                                   |                                   |
|                                   | The Sky Did NOT Fall: The Pacific |
|                                   | Northwest's Response to Logging   |
|                                   | Reductions. Ernie Niemi, Ed       |
|                                   | Whitelaw, and Andrew Johnston.    |
|                                   | ECONwest, p.v.                    |
|                                   |                                   |
|                                   | In order to provide full          |
|                                   | disclosure to the public, the     |
|                                   | agency should determine how many  |
|                                   | existing and future jobs will be  |
|                                   | destroyed due to the proposed     |
|                                   | increased logging.                |
+-----------------------------------+-----------------------------------+
| The viability of the industry is  | "In general, however, it does not |
| significant to many small         | make economic sense to analyze a  |
| communities. To some towns, the   | single small community as if it   |
| local mill may be the only        | were a stand-alone economy."      |
| employer other than the service   |                                   |
| industry (Oregon Forest Products  | Public Timber Supply, Market      |
| Industry: 1998).                  | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
| The location of the forest        | Northwest Forest Plan. Thomas     |
| industry in Oregon is closely     | Michael Power. Conservation       |
| related to the geographic         | Biology Volume 20, No. 2, p.347.  |
| distribution of the timber        |                                   |
| resource. Due to proximity, much  | What would the increase in the    |
| of the timber industry employment | number of jobs be if 100% of logs |
| is also in western Oregon. On     | harvested within the area were    |
| average about 59 percent of the   | processed within the area?        |
| logs processed are harvested      |                                   |
| within the area. (Oregon Forest   |                                   |
| Products Industry: 1998)          |                                   |
+-----------------------------------+-----------------------------------+
| -   The ability to transport logs | "The local mills now mostly       |
|     long distances was an         | process wood from Washington and  |
|     important factor in changing  | Canada, because little federal    |
|     the timber industry. It means | timber is available, and          |
|     that mill jobs are no longer  | **private industrial forestland   |
|     as reliant on local harvest   | owners generally sell their wood  |
|     as in the past.               | to mills outside the area.**"     |
|                                   | **\[**emphasis added\]            |
|                                   |                                   |
|                                   | Socioeconomic Monitoring          |
|                                   | Results\--Volume III: Rural       |
|                                   | Communities and Economies. Susan  |
|                                   | Charnley, Ellen M. Donoghue,      |
|                                   | Claudia Stuart, Candace           |
|                                   | Dillingham, Lita P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan, the First  |
|                                   | 10 Years (1994-2003), p.142.      |
|                                   |                                   |
|                                   | "Timber flows are increasingly    |
|                                   | intercounty and even              |
|                                   | interregional."                   |
|                                   |                                   |
|                                   | Community Stability and           |
|                                   | Timber-Dependent Communities.     |
|                                   | Gary E. Machlis and Jo Ellen      |
|                                   | Force, p.224.                     |
|                                   |                                   |
|                                   | "In general, federal forest       |
|                                   | managers are required to sell     |
|                                   | federal trees to the highest      |
|                                   | bidder. The federal timber that   |
|                                   | is harvested at one location can  |
|                                   | be shipped hundreds of            |
|                                   | kilometers, out of state, and     |
|                                   | through displacement, even        |
|                                   | overseas, especially when prices  |
|                                   | of wood fiber are high. Because   |
|                                   | of this, a small mill town        |
|                                   | located adjacent to federal       |
|                                   | timber land may well not receive  |
|                                   | logs from harvests in the         |
|                                   | immediate vicinity and have to    |
|                                   | import logs from outside the      |
|                                   | area. These complex and           |
|                                   | long-distance log flows make it   |
|                                   | difficult for local forest        |
|                                   | managers to influence the         |
|                                   | economies of local communities.   |
|                                   | Put slightly differently,         |
|                                   | **increased local harvests do not |
|                                   | necessarily mean increased        |
|                                   | production at local mills or vice |
|                                   | versa**." \[emphasis added\]      |
|                                   |                                   |
|                                   | Public Timber Supply, Market      |
|                                   | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
|                                   | Northwest Forest Plan. Thomas     |
|                                   | Michael Power. Conservation       |
|                                   | Biology Volume 20, No. 2, p.345.  |
+-----------------------------------+-----------------------------------+
| -   BLM's ability to provide a    | **"...federal forest managers     |
|     sustainable and predictable   | cannot override the forces of     |
|     supply of timber directly and | demand by simply providing a      |
|     indirectly affects jobs and   | steady stream of wood fiber to    |
|     personal earning levels,      | the market." \[emphasis added\]** |
|     particularly in western       |                                   |
|     Oregon. A majority of the top | **\-\-\-\-\-\-\-\--**             |
|     timber harvest counties in    |                                   |
|     the state are in the planning | "As a result, part of the         |
|     area.                         | increased federal harvest will be |
|                                   | offset by declines from other     |
|                                   | sources of supply. A steady flow  |
|                                   | of federal supply into the        |
|                                   | wood-fiber market regardless of   |
|                                   | economic conditions will further  |
|                                   | destabilize prices, driving them  |
|                                   | down during periods of weak       |
|                                   | demand and driving them up during |
|                                   | periods of peak demand. These     |
|                                   | destabilized prices are not what  |
|                                   | would result if federal timber    |
|                                   | managers behaved in a             |
|                                   | market-oriented manner. Other     |
|                                   | landowners' reactions to these    |
|                                   | more volatile prices may, in      |
|                                   | turn, destabilize harvest levels, |
|                                   | the opposite of what federal land |
|                                   | managers intend."                 |
|                                   |                                   |
|                                   | Public Timber Supply, Market      |
|                                   | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
|                                   | Northwest Forest Plan. Thomas     |
|                                   | Michael Power. Conservation       |
|                                   | Biology Volume 20, No. 2, p.344.  |
|                                   |                                   |
|                                   | "**Rather, we are saying that     |
|                                   | nearly all communities in the     |
|                                   | West will find they cannot have a |
|                                   | healthy economy without a healthy |
|                                   | environment.** \[emphasis added\] |
|                                   | Moreover, there exist many        |
|                                   | opportunities in the West to      |
|                                   | improve both the environment and  |
|                                   | the economy, for example, the     |
|                                   | elimination of inefficient        |
|                                   | subsidies would make more money   |
|                                   | available for other public        |
|                                   | services or to reduce debt. The   |
|                                   | longer these opportunities        |
|                                   | languish, the fewer will be the   |
|                                   | West's jobs, the lower its        |
|                                   | incomes, and the poorer its       |
|                                   | communities. Conversely, the      |
|                                   | sooner we seize these             |
|                                   | opportunities, the sooner the     |
|                                   | West will enjoy more mobs, higher |
|                                   | incomes, and greater prosperity.  |
|                                   |                                   |
|                                   | We are saying that the economic   |
|                                   | pressures to arrest and reverse   |
|                                   | environmental degradation will    |
|                                   | increase. Those who promise that  |
|                                   | workers, firms, and communities   |
|                                   | tied to environmentally harmful   |
|                                   | activities can avoid these        |
|                                   | pressures if only the             |
|                                   | environmental laws, such as the   |
|                                   | Endangered Species Act, were set  |
|                                   | aside raise false hope. The       |
|                                   | pressures are independent of      |
|                                   | specific laws. Even if such laws  |
|                                   | are repealed, the costs of        |
|                                   | environmentally harmful           |
|                                   | activities will continue to rise  |
|                                   | and jeopardize the economic       |
|                                   | outlook for affected communities. |
|                                   | Public officials can best promote |
|                                   | long- run economic prosperity in  |
|                                   | the West by encouraging efficient |
|                                   | transitions away from harmful     |
|                                   | activities toward those           |
|                                   | beneficial to both the            |
|                                   | environment and the economy."     |
|                                   |                                   |
|                                   | A Letter from Economists to       |
|                                   | President Bush and Governors of   |
|                                   | Eleven Western States Regarding   |
|                                   | the Economic Importance of the    |
|                                   | West's Natural Environment, p.7   |
|                                   |                                   |
|                                   | "Absolute predictability is       |
|                                   | impossible. Nature, society, and  |
|                                   | human economies are extremely     |
|                                   | complex systems. Cause and effect |
|                                   | relationships follow many         |
|                                   | pathways in each system....while  |
|                                   | predictability is difficult for   |
|                                   | natural systems, the same can be  |
|                                   | said about economic and social    |
|                                   | systems. When economic, social    |
|                                   | and natural systems interact,     |
|                                   | uncertainty dramatically          |
|                                   | increases, making reliable        |
|                                   | prediction of outcomes most       |
|                                   | difficult." \[MacCleery and       |
|                                   | LeMaster 1999: 522\]              |
|                                   |                                   |
|                                   | Socioeconomic Monitoring          |
|                                   | Results\--Volume III: Rural       |
|                                   | Communities and Economies. Susan  |
|                                   | Charnley, Ellen M. Donoghue,      |
|                                   | Claudia Stuart, Candace           |
|                                   | Dillingham, Lita P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan, the First  |
|                                   | 10 Years (1994-2003), p.156.      |
|                                   |                                   |
|                                   | "Because the Northwest Forest     |
|                                   | Plan was developed in the face of |
|                                   | a dramatic decline in flow of     |
|                                   | wood fiber from federal lands, it |
|                                   | focused on reestablishing and     |
|                                   | stabilizing the federal timber    |
|                                   | supply. **That focus primarily on |
|                                   | raw material supply, however, was |
|                                   | a serious economic error**        |
|                                   | \[emphasis added\] in that the    |
|                                   | other half of the economic forces |
|                                   | that drive almost all markets and |
|                                   | industries, the demand for wood   |
|                                   | fiber, was ignored."              |
|                                   |                                   |
|                                   | Public Timber Supply, Market      |
|                                   | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
|                                   | Northwest Forest Plan. Thomas     |
|                                   | Michael Power. Conservation       |
|                                   | Biology Volume 20, No. 2, p.343.  |
|                                   |                                   |
|                                   | **"Logging can eliminate jobs**   |
|                                   | \[emphasis in original\]: ...To   |
|                                   | some extent, the region has       |
|                                   | prospered *despite* the logging   |
|                                   | reductions simply because the     |
|                                   | timber industry is such a small   |
|                                   | portion of the regional economy.  |
|                                   | More important, though, the       |
|                                   | mounting evidence indicates the   |
|                                   | region has prospered in part      |
|                                   | *because* of the logging          |
|                                   | reductions, insofar as they       |
|                                   | reduced the subsidies,            |
|                                   | cleaning-up costs, and job losses |
|                                   | that accompany logging."          |
|                                   |                                   |
|                                   | The Sky Did NOT Fall: The Pacific |
|                                   | Northwest's Response to Logging   |
|                                   | Reductions. Ernie Niemi, Ed       |
|                                   | Whitelaw, and Andrew Johnston.    |
|                                   | ECONwest, p.v.                    |
|                                   |                                   |
|                                   | **A nearly exclusive focus on     |
|                                   | timber supply was inappropriate** |
|                                   | \[emphasis added\] because in     |
|                                   | previous decades it was widely    |
|                                   | recognized that cyclical          |
|                                   | fluctuations in the demand for    |
|                                   | forest products were the most     |
|                                   | likely source of layoffs and mill |
|                                   | closures."                        |
|                                   |                                   |
|                                   | Public Timber Supply, Market      |
|                                   | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
|                                   | Northwest Forest Plan. Thomas     |
|                                   | Michael Power. Conservation       |
|                                   | Biology Volume 20, No. 2, p.343.  |
|                                   |                                   |
|                                   | **"In the early 1970s timber      |
|                                   | industry employment in the Plan   |
|                                   | area (fig.1) stood at about 6     |
|                                   | percent of total employment in    |
|                                   | Washington, almost 12 percent in  |
|                                   | Oregon, and 31 percent in         |
|                                   | California. By the late 1980s,    |
|                                   | the relative importance of timber |
|                                   | employment in each of these       |
|                                   | regions had declined by 50        |
|                                   | percent."**                       |
|                                   |                                   |
|                                   | Socioeconomic Monitoring Results  |
|                                   | Volume I: Key Findings            |
|                                   | Socioeconomic Monitoring:         |
|                                   | Introduction and Report Overview. |
|                                   | Susan Charnley, Ellen M.          |
|                                   | Donoghue, Claudia Stuart, Candace |
|                                   | Dillingham, Lita P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan---the First |
|                                   | 10 Years (1994-2003), p.2         |
+-----------------------------------+-----------------------------------+
| **Lumber and Wood-Related         | What would it have been before    |
| Products Employment**             | "efficiencies" reduced the number |
|                                   | of jobs per MBF?                  |
| -   For every million board feet  |                                   |
|     of timber harvested and       |                                   |
|     processed in Oregon           |                                   |
|     approximately 10.0 jobs are   |                                   |
|     generated, 8.0 in the lumber  |                                   |
|     and plywood industry and 2.0  |                                   |
|     in the logging industry.\*    |                                   |
|                                   |                                   |
| **ANALYSIS OF THE MANAGEMENT      |                                   |
| SITUATION -- 37**                 |                                   |
|                                   |                                   |
| -   For every direct job there is |                                   |
|     an estimated 1.5 indirect and |                                   |
|     induced jobs.\*               |                                   |
|                                   |                                   |
| -   For every dollar of job       |                                   |
|     earnings it is estimated that |                                   |
|     indirect and induced earnings |                                   |
|     are up to an additional       |                                   |
|     \$1.00.\*                     |                                   |
|                                   |                                   |
| \**Note: Above statistics are     |                                   |
| based on calculations provided in |                                   |
| the 2005 report: "Northwest       |                                   |
| Forest Plan: the First ten Years, |                                   |
| Rural Communities and             |                                   |
| Economics".*                      |                                   |
+-----------------------------------+-----------------------------------+
| -   BLM timber harvests supported | Putting this in perspective, the  |
|     about 740 fewer direct jobs   | 740 fewer direct jobs amount to   |
|     annually than would have been | less than 1.25% of an industry    |
|     supported at projected        | that is less than 3% of the       |
|     harvest levels in the 1994    | regional workforce.               |
|     Proposed Resource Management  |                                   |
|     Plan Environmental Impact     | "The contribution of the timber   |
|     Statement.                    | industry to regional employment,  |
|                                   | however, has been gradually       |
| -   BLM western Oregon timber     | declining. More than 19% of the   |
|     harvests contributed to two   | region's workforce, representing  |
|     percent of industry           | 150,000 to 160,000 workers, was   |
|     employment in 2002.           | employed in the industry at the   |
|     (Stevenson 2002, personal     | beginning of the 1970s; by the    |
|     communication)                | beginning of the 1990s, about 3%  |
|                                   | of the region's workforce,        |
|                                   | representing between 120,000 and  |
|                                   | 130,000 workers, were employed in |
|                                   | the industry (figure 12). The     |
|                                   | change is due to reductions in    |
|                                   | the number of workers in the      |
|                                   | timber industry and increases in  |
|                                   | the nontimber economy in both     |
|                                   | metropolitan and nonmetropolitan  |
|                                   | counties.                         |
|                                   |                                   |
|                                   | The size of the timber industry   |
|                                   | varies by state, with slightly    |
|                                   | fewer than 60,000 workers in      |
|                                   | western Oregon."                  |
|                                   |                                   |
|                                   | The Northwest Forest Plan: A      |
|                                   | Report to the President and       |
|                                   | Congress. E. Thomas Tuchmann,     |
|                                   | Kent P. Connaughton, Lisa E.      |
|                                   | Freedman and Clarence B.          |
|                                   | Moriwaki. USDA, p.148.            |
|                                   |                                   |
|                                   | "By 2000 the relative importance  |
|                                   | of primary forest-products        |
|                                   | employment had fallen to about 1% |
|                                   | of total employment in the, *\[NW |
|                                   | Forest\]* plan area."             |
|                                   |                                   |
|                                   | Public Timber Supply, Market      |
|                                   | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
|                                   | Northwest Forest Plan. Thomas     |
|                                   | Michael Power. Conservation       |
|                                   | Biology Volume 20, No. 2, 341-350 |
+-----------------------------------+-----------------------------------+
| **Other Employment**              | "Dispersed and developed          |
|                                   | recreation, commercial fishing,   |
| BLM lands contribute to           | hunting, special forest products, |
| employment and income in          | mining, and grazing all           |
| industries other than those that  | contribute to the region's        |
| are related to lumber and         | economic health, and they are all |
| wood-related products. Dispersed  | effected by changes in federal    |
| and developed recreation,         | forest management.                |
| commercial fishing, hunting,      |                                   |
| special forest products, mining,  | Several other forest-based        |
| grazing, and forestry services    | industries are significant to     |
| all contribute to the region's    | employment in the Pacific         |
| economic health, and they are all | Northwest. These industries and   |
| affected by changes in federal    | their associated employment were  |
| forest management.                | discussed in the FEMAT report     |
|                                   | (1993), and they are addressed    |
| Special forest product output     | here to identify potential trends |
| levels are constrained by two     | that may be associated with Plan  |
| major items:                      | implementation. The FEMAT report  |
|                                   | estimated that the commercial     |
| \(1\) amount of budget available  | fishing industry employed about   |
| to put toward developing,         | 5,000 workers in the region in    |
| implementing, and monitoring the  | the early 1990s. In addition,     |
| program; and                      | more than 18,000 workers were     |
|                                   | employed in mining and minerals   |
| \(2\) destruction of the products | processing statewide in Oregon    |
| when creating other types of jobs | and Washington at that time.      |
| and earnings; such as fuel        | Floral greens, Christmas          |
| management projects,              | ornamentals, and mushroom         |
| pre-commercial thinning projects, | harvesting provided at least      |
| and other silvicultural and/or    | seasonal employment for some      |
| restorative efforts.              | 28,000 to 30,000 workers (FEMAT   |
|                                   | 1993), and the forestry services  |
|                                   | sector, which carries out forest  |
|                                   | management activities like tree   |
|                                   | planting supported about 6,000    |
|                                   | jobs in the region. Substantial   |
|                                   | job opportunities could be        |
|                                   | created in pruning and other      |
|                                   | timber-stand-improvement          |
|                                   | activities, reforestation,        |
|                                   | wildlife inventory and            |
|                                   | monitoring, watershed             |
|                                   | restoration, and technical survey |
|                                   | and assessments on the region's   |
|                                   | federal forest lands (FEMAT       |
|                                   | 1993). Wages, benefits, and       |
|                                   | employment conditions differ      |
|                                   | greatly between and within these  |
|                                   | industries."                      |
|                                   |                                   |
|                                   | Socioeconomic Monitoring          |
|                                   | Results\--Volume III: Rural       |
|                                   | Communities and Economies. Susan  |
|                                   | Charnley, Ellen M. Donoghue,      |
|                                   | Claudia Stuart, Candace           |
|                                   | Dillingham, Lita P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan, the First  |
|                                   | 10 Years (1994-2003), p.48.       |
+-----------------------------------+-----------------------------------+
| Estimating jobs and income        | "12,000/full-time equivalents in  |
| associated with the non lumber    | commercial fishing in Oregon."    |
| and wood-related industries for   |                                   |
| western Oregon is not possible    | Personal communication, Shannon   |
| because of a general lack of data | Davis. The Research Group.        |
| as well as a lack of data for     |                                   |
| correlating jobs to these         | "The commercial fishing sector    |
| specific industries.              | declined by an average annual     |
|                                   | amount of 3 percent."             |
| Since the economic contribution   |                                   |
| of all forest products (including | Socioeconomic Monitoring          |
| lumber and wood-related) to the   | Results\--Volume III: Rural       |
| regional economy of the planning  | Communities and Economies. Susan  |
| area is small, continued          | Charnley, Ellen M. Donoghue,      |
| implementation of the RMPs will   | Claudia Stuart, Candace           |
| not likely change existing        | Dillingham, Lita P. Buttolph,     |
| economic conditions and trends in | William Kay, Rebecca J. McLain,   |
| the planning area overall. But as | Cassandra Moseley, Richard H.     |
| noted earlier, resources and      | Phillips, and Lisa Tobe.          |
| effects of the plan are not       | Northwest Forest Plan, the First  |
| evenly distributed. Subregions,   | 10 Years (1994-2003), p.49        |
| individual businesses, and        |                                   |
| individuals are not affected      | "The commercial fishing industry  |
| equally (Northwest Forest Plan:   | is estimated to employ about      |
| *the First Ten Years, Rural       | 5,000 workers in the region..."   |
| Communities and*                  |                                   |
|                                   | Protect and Enhance the           |
| *Economics*).                     | Environment: A New Era for        |
|                                   | Natural Resource Management. E.   |
|                                   | Thomas Tuchmann, Kent P.          |
|                                   | Connaughton, Lisa E. Freedman and |
|                                   | Clarence B. Moriwaki. The         |
|                                   | Northwest Forest Plan A Report to |
|                                   | the President and Congress,       |
|                                   | p.148.                            |
|                                   |                                   |
|                                   | "The number of people employed in |
|                                   | these activities is not easily    |
|                                   | measured, though Radtke and Davis |
|                                   | (1993) estimate 17,000 to 23,000  |
|                                   | full-time jobs in the coastal     |
|                                   | tourism industry and between      |
|                                   | 50,000 and 80,000 full-time       |
|                                   | equivalents associated with       |
|                                   | recreation on federal forest      |
|                                   | lands in the region (of which     |
|                                   | 4,000 to 5,000 are estimated to   |
|                                   | be associated with fishing)."     |
|                                   |                                   |
|                                   | The Northwest Forest Plan: A      |
|                                   | Report to the President and       |
|                                   | Congress. E. Thomas Tuchmann,     |
|                                   | Kent P. Connaughton, Lisa E.      |
|                                   | Freedman and Clarence B.          |
|                                   | Moriwaki. USDA, p.147.            |
+-----------------------------------+-----------------------------------+
| **Recreation**                    | "The number of people employed in |
|                                   | these activities is not easily    |
| While primary data is not         | measured, though Radtke and Davis |
| available to appropriately        | (1993) estimate 17,000 to 23,000  |
| measure economic benefits of      | full-time jobs in the coastal     |
| recreation opportunities on BLM   | tourism industry and between      |
| it is important to note that both | 50,000 and 80,000 full-time       |
| resident and nonresident tourists | equivalents associated with       |
| contribute to local economies in  | recreation on federal forest      |
| the form of purchases of goods    | lands in the region (of which     |
| and services of accommodations,   | 4,000 to 5,000 are estimated to   |
| transportation, food and          | be associated with fishing)."     |
| beverage, retail, and commercial  |                                   |
| recreation services. Below are    | The Northwest Forest Plan: A      |
| some data on some of these        | Report to the President and       |
| expenditures.                     | Congress. E. Thomas Tuchmann,     |
|                                   | Kent P. Connaughton, Lisa E.      |
|                                   | Freedman and Clarence B.          |
|                                   | Moriwaki. USDA, p.147.            |
|                                   |                                   |
|                                   | "10,000 tourism jobs in coastal   |
|                                   | Oregon and growing recreational   |
|                                   | use."                             |
|                                   |                                   |
|                                   | Personal communication, Shannon   |
|                                   | Davis. The Research Group. July   |
|                                   | 2006.                             |
|                                   |                                   |
|                                   | "Currently, recreation            |
|                                   | opportunities provided by         |
|                                   | national forest lands in the Plan |
|                                   | area support about 17.5 thousand  |
|                                   | direct jobs, and 25.5 thousand    |
|                                   | total jobs. The                   |
|                                   | recreation-use-associated direct  |
|                                   | jobs make up less than 1 percent  |
|                                   | of all employment in the Plan     |
|                                   | area. The wage income generated   |
|                                   | from recreation expenditures was  |
|                                   | \$357.4 million direct, and       |
|                                   | \$629.6 million total." \[Note:   |
|                                   | this does not include BLM lands   |
|                                   |                                   |
|                                   | Socioeconomic Monitoring          |
|                                   | Results\--Volume III: Rural       |
|                                   | Communities and Economies. Susan  |
|                                   | Charnley, Ellen M. Donoghue,      |
|                                   | Claudia Stuart, Candace           |
|                                   | Dillingham, Lita P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan, the First  |
|                                   | 10 Years (1994-2003), p.49.       |
+-----------------------------------+-----------------------------------+
| ANALYSIS OF THE MANAGEMENT        |                                   |
| SITUATION -- 38                   |                                   |
|                                   |                                   |
| -   Outdoor recreation on BLM     |                                   |
|     administered lands in the     |                                   |
|     planning area yielded an      |                                   |
|     estimated 3,953,400 visitor   |                                   |
|     days in 2004, of these an     |                                   |
|     estimated 24% were tourists   |                                   |
|     who resided more than 50      |                                   |
|     miles from the recreation     |                                   |
|     site. Using regional tourism  |                                   |
|     studies for western Oregon in |                                   |
|     combination with national     |                                   |
|     outdoor recreation valuation  |                                   |
|     studies cited by the National |                                   |
|     Park Service and the Bureau   |                                   |
|     of Land Management reduces a  |                                   |
|     conservative estimate of the  |                                   |
|     value of nonresident outdoor  |                                   |
|     recreation spending in the    |                                   |
|     planning area. In 2004,       |                                   |
|     visitors to BLM recreation    |                                   |
|     areas spent over \$68,300,000 |                                   |
|     in local communities to       |                                   |
|     support their visit to the    |                                   |
|     public lands.                 |                                   |
|                                   |                                   |
| -   Resident outdoor recreation   |                                   |
|     visitors also contribute to   |                                   |
|     the regional economy. Studies |                                   |
|     conducted by the U.S. Forest  |                                   |
|     Service in Region 6 show an   |                                   |
|     average expenditure of        |                                   |
|     \$28.81/day for the common    |                                   |
|     activities engaged in within  |                                   |
|     the planning area. Given this |                                   |
|     multiplier, over \$86,500,000 |                                   |
|     was spent within communities  |                                   |
|     in the planning area in       |                                   |
|     support of resident based     |                                   |
|     outdoor recreation activity   |                                   |
|     on BLM administered lands.    |                                   |
|                                   |                                   |
| -   Combining the valuation       |                                   |
|     estimates generated for       |                                   |
|     non-resident visits with      |                                   |
|     resident visits yields over   |                                   |
|     \$154,800,000 contributed to  |                                   |
|     communities in the planning   |                                   |
|     region by outdoor recreation  |                                   |
|     visitors to BLM administered  |                                   |
|     recreation sites.             |                                   |
|                                   |                                   |
| ```{=html}                        |                                   |
| <!-- -->                          |                                   |
| ```                               |                                   |
| -   Not all recreation visitors   |                                   |
|     spend the same amount per     |                                   |
|     day. Outdoor recreation       |                                   |
|     tourists engaged in           |                                   |
|     activities supported by       |                                   |
|     commercial outfitters and     |                                   |
|     guides spend a                |                                   |
|     disproportionately higher     |                                   |
|     amount per day than other     |                                   |
|     outdoor recreation visitors.  |                                   |
|     Studies cited by the National |                                   |
|     Park Service of river         |                                   |
|     outfitters yielded an average |                                   |
|     per day expenditure of        |                                   |
|     \$93.64. Within the western   |                                   |
|     Oregon planning area, 559,250 |                                   |
|     people recreated under the    |                                   |
|     1,415 Special Recreation Use  |                                   |
|     Permits in 2004.              |                                   |
|     Approximately 10% of these    |                                   |
|     were issued to commercial     |                                   |
|     outfitter and guide services  |                                   |
|     offering numerous trips on    |                                   |
|     the public lands. If only 10% |                                   |
|     of the total visits under     |                                   |
|     permit were attributed to     |                                   |
|     commercial guides, this       |                                   |
|     activity alone would add      |                                   |
|     \$5,236,817 to western Oregon |                                   |
|     communities.                  |                                   |
|                                   |                                   |
| ```{=html}                        |                                   |
| <!-- -->                          |                                   |
| ```                               |                                   |
| -   In addition to this spending, |                                   |
|     guide services charge an      |                                   |
|     average rate of \$212/day --  |                                   |
|     generating \$11,856,100/year  |                                   |
|     in guide service revenues     |                                   |
|     within the planning area. A   |                                   |
|     very conservative estimate of |                                   |
|     the total contributions from  |                                   |
|     these 151 commercial          |                                   |
|     outfitter and guide services  |                                   |
|     depending on BLM administered |                                   |
|     lands in the western Oregon   |                                   |
|     would be at least             |                                   |
|     \$17,000,000.                 |                                   |
+-----------------------------------+-----------------------------------+
| **Payments to Counties**          | BLM's statement that these are    |
|                                   | important sources of funds for    |
| Shared revenues generated by the  | local governments is untrue and   |
| sale of timber and other goods    | has not been true for more than a |
| and services from federal lands   | decade, since county payments     |
| are important sources of funds    | were decoupled from the sale of   |
| for local governments.            | timber and other goods and        |
| Historically, 50 percent of BLM   | services from federal lands.      |
| timber receipts for the Oregon    |                                   |
| and California Railroad (O&C)     |                                   |
| lands in the planning area have   |                                   |
| been returned to counties as      |                                   |
| compensation for revenues         |                                   |
| foregone because the lands and    |                                   |
| resources are not in private      |                                   |
| ownership (Northwest Forest Plan: |                                   |
| the First Ten Years, Rural        |                                   |
| Communities and Economics).       |                                   |
|                                   |                                   |
| -   The 18 western Oregon         |                                   |
|     counties in the planning area |                                   |
|     were affected by the drop in  |                                   |
|     federal timber harvest and    |                                   |
|     associated timber.            |                                   |
+-----------------------------------+-----------------------------------+
| -   Safety Net payments, and the  | This statement is also untrue.    |
|     Secure Rural Schools and      |                                   |
|     Community Self Determination  | Neither of these payments were    |
|     Act (P.L. 106-393), both      | devised for O&C counties.         |
|     referred to as "Owl guarantee |                                   |
|     adjusted," were devised to    | The Owl Safety Net payments were  |
|     compensate O&C counties for   | devised for impacted counties in  |
|     lack of timber receipts.      | CA, OR and WA.                    |
|                                   |                                   |
| -   O&C receipts are distributed  | The Secure Rural Schools and      |
|     to the counties by a formula  | Community Self Determination Act  |
|     that is independent of from   | payments were devised for all     |
|     which specific county the     | counties in 41 states with        |
|     timber is actually harvested. | federal forest lands.             |
+-----------------------------------+-----------------------------------+
| Owl Guarantee adjusted payments   | This also means that counties     |
| and unadjusted payments (what     | have been awarded artificially    |
| would have been payments to       | high payment amounts without      |
| county governments based on       | suffering a loss in forest        |
| timber receipts) are shown in     | values.                           |
| Figure 24. It is important to     |                                   |
| note that the Secure Rural        |                                   |
| Schools payments are based on the |                                   |
| highest three years of timber     |                                   |
| receipts, constituting an         |                                   |
| automatically increasing gap of   |                                   |
| payments to counties in years     |                                   |
| where timber harvests are lower.  |                                   |
+-----------------------------------+-----------------------------------+
| It is not known how the owl       | Any county commissioner from an   |
| guarantee adjusted payments have  | O&C county outside of the         |
| affected overall county           | Portland metropolitan area can    |
| financing*.* In the short-term, a | assure the BLM that county        |
| guaranteed amount is likely to    | payments have significantly       |
| have a stabilizing effect. The    | benefited overall county          |
| Secure Rural Schools legislation, | financing in a majority of O&C    |
| however, expires on September 30, | counties.                         |
| 2006. To the extent that the      |                                   |
| actual harvest levels fall below  | **"The safety net makes a         |
| planned allowable sale quantity   | substantial difference over what  |
| levels, federal revenue sharing   | would otherwise be**              |
| would also be reduced beginning   |                                   |
| in fiscal year 2007. The long     | **paid if amounts were based on   |
| term stability of the payments    | federal receipts.** \[emphasis    |
|                                   | added\] Using the National        |
| is uncertain. Without new         | Forests of Oregon and Washington  |
| congressional action, western     | as an example, more than \$101    |
| Oregon counties will need to      | million was paid to counties in   |
| address a projected \$70 to \$100 | 1994 but actual receipts would    |
| million plus in revenue           | have returned slightly more than  |
| shortfall.                        | \$38 million. . . . forests in    |
|                                   | western Oregon managed by the     |
|                                   | Bureau of Land Management would   |
|                                   | have provided \$30 million in     |
|                                   | 1994 if the payments had been     |
|                                   | based exclusively on actual       |
|                                   | receipts; with the safety net,    |
|                                   | however, the total payments       |
|                                   | amounted to \$79 million."        |
|                                   |                                   |
|                                   | The Northwest Forest Plan: A      |
|                                   | Report to the President and       |
|                                   | Congress. E. Thomas Tuchmann,     |
|                                   | Kent P. Connaughton, Lisa E.      |
|                                   | Freedman and Clarence B.          |
|                                   | Moriwaki. USDA, p.207.            |
|                                   |                                   |
|                                   | This also means that counties     |
|                                   | have been awarded artificially    |
|                                   | high payment amounts without      |
|                                   | suffering a loss in forest        |
|                                   | values.                           |
|                                   |                                   |
|                                   | "No direct observations were made |
|                                   | on the effects that \$233 million |
|                                   | in county payments had on job     |
|                                   | retention and creation, but       |
|                                   | estimates that used broad         |
|                                   | averages for public investments   |
|                                   | conservatively suggest that some  |
|                                   | 6,000 jobs would have been        |
|                                   | maintained or created had the     |
|                                   | monies reached the region in      |
|                                   | conventional business and         |
|                                   | community-development programs."  |
|                                   |                                   |
|                                   | The Northwest Forest Plan: A      |
|                                   | Report to the President and       |
|                                   | Congress. E. Thomas Tuchmann,     |
|                                   | Kent P. Connaughton, Lisa E.      |
|                                   | Freedman and Clarence B.          |
|                                   | Moriwaki. USDA, p.249.            |
|                                   |                                   |
|                                   | To the extent that the actual     |
|                                   | harvest levels fall below planned |
|                                   | allowable sale quantity levels,   |
|                                   | federal revenue sharing would     |
|                                   | also be reduced beginning in      |
|                                   | fiscal year 2007 ONLY if the      |
|                                   | legislation is not reauthorized.  |
+-----------------------------------+-----------------------------------+
| BLM data without guarantees were  | This is not true. These payments  |
| only reported until 1995          | do not "supplement" reduced       |
| (Northwest Forest Plan: the First | timber receipts, rather they      |
| Ten Years, Rural Communities and  | supplant them.                    |
| Economics). Owl guarantee         |                                   |
| payments are those payments       |                                   |
| compensated to counties to        |                                   |
| supplement reduced timber         |                                   |
| receipts, and include safety net  |                                   |
| payments, and Secure Rural        |                                   |
| Schools Self Determination Act    |                                   |
| payments.                         |                                   |
|                                   |                                   |
| **ANALYSIS OF THE MANAGEMENT      |                                   |
| SITUATION -- 39**                 |                                   |
|                                   |                                   |
| **Payments in Lieu of Taxes**     |                                   |
|                                   |                                   |
| In addition to receipts from      |                                   |
| timber harvest on O&C lands,      |                                   |
| counties receive payments in lieu |                                   |
| of taxes based on the amount of   |                                   |
| eligible federal land (generally  |                                   |
| public domain lands) in each      |                                   |
| county. Payments in lieu of taxes |                                   |
| have generally not been affected  |                                   |
| by reduced harvest levels because |                                   |
| the owl guarantee legislation and |                                   |
| the Secure Rural Schools Act      |                                   |
| mitigated the loss in timber      |                                   |
| revenues.                         |                                   |
|                                   |                                   |
| The payments in lieu of taxes for |                                   |
| Oregon have averaged between one  |                                   |
| \$1.0 million and \$2.5 million   |                                   |
| over the last 15 years (Northwest |                                   |
| Forest Plan: the First Ten Years, |                                   |
| Rural Communities and Economics). |                                   |
+-----------------------------------+-----------------------------------+
| **Management Opportunities**      | "Other benefits from federal      |
|                                   | forests that contribute to the    |
| BLM can directly influence the    | well-being of local communities   |
| supply levels of natural          | include ecosystem services (such  |
| resources to meet the goal of     | as clean air and water) and       |
| contributing to tribal and        | amenity values (such as scenic    |
| non-tribal community economic,    | quality and wildlife)."           |
| social and environmental          |                                   |
| well-being.                       | Socioeconomic Monitoring Results  |
|                                   | Volume I: Key Findings            |
|                                   | Socioeconomic Monitoring:         |
|                                   | Introduction and Report Overview. |
|                                   | Susan Charnley, Ellen M.          |
|                                   | Donoghue, Claudia Stuart, Candace |
|                                   | Dillingham, Lita P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan---the First |
|                                   | 10 Years (1994-2003), p.8         |
|                                   |                                   |
|                                   | **"Rather, we are saying that     |
|                                   | nearly all communities in the     |
|                                   | West will find they cannot have a |
|                                   | healthy economy without a healthy |
|                                   | environment.** **\[emphasis       |
|                                   | added\]** Moreover, there exist   |
|                                   | many opportunities in the West to |
|                                   | improve both the environment and  |
|                                   | the economy, for example, the     |
|                                   | elimination of inefficient        |
|                                   | subsidies would make more money   |
|                                   | available for other public        |
|                                   | services or to reduce debt. The   |
|                                   | longer these opportunities        |
|                                   | languish, the fewer will be the   |
|                                   | West's jobs, the lower its        |
|                                   | incomes, and the poorer its       |
|                                   | communities. Conversely, the      |
|                                   | sooner we seize these             |
|                                   | opportunities, the sooner the     |
|                                   | West will enjoy more jobs, higher |
|                                   | incomes, and greater prosperity.  |
+-----------------------------------+-----------------------------------+
| Resources/programs include:       | This suggests that these forestry |
|                                   | services are subject to BLM's     |
| -   Forestry services including   | "supply levels" which, as stated  |
|     fuels management, planting,   | above, do not necessarily         |
|     precommercial thinning and    | contribute to well-being. In      |
|     other silvicultural and       | reality, several of these         |
|     restoration efforts that      | resources/programs do contribute  |
|     create jobs and personal      | to "community economic, social    |
|     earnings in local             | and environmental well-being"     |
|     communities.                  | which cannot be said for BLM's    |
|                                   | "supply levels." BLM has          |
| -   Timber Harvest.               | neglected to include benefits     |
|                                   | from wildlife, drinking water,    |
| -   Special forest products       | carbon sequestration as well as   |
|     output levels.                | other benefits.                   |
|                                   |                                   |
| -   Utilization of slash/residue  | Finding direct connections        |
|     from                          | between changes in forest         |
|     silvicultural/range/fuels     | management policy and             |
|     treatments for biomass and    | socioeconomic change is           |
|     energy production wherever    | difficult."                       |
|     appropriate.                  |                                   |
|                                   | Socioeconomic Monitoring          |
| ```{=html}                        | Results\--Volume III: Rural       |
| <!-- -->                          | Communities and Economies. Susan  |
| ```                               | Charnley, Ellen M. Donoghue,      |
| -   Recreation opportunities.     | Claudia Stuart, Candace           |
|                                   | Dillingham, Lita P. Buttolph,     |
|                                   | William Kay, Rebecca J. McLain,   |
|                                   | Cassandra Moseley, Richard H.     |
|                                   | Phillips, and Lisa Tobe.          |
|                                   | Northwest Forest Plan, the First  |
|                                   | 10 Years (1994-2003), p.155.      |
|                                   |                                   |
|                                   | "Moreover, it is difficult to     |
|                                   | measure the extent to which       |
|                                   | federal forest management policy, |
|                                   | versus other variables,           |
|                                   | contributes to positive or        |
|                                   | negative change in communities."  |
|                                   |                                   |
|                                   | Socioeconomic Monitoring          |
|                                   | Results\--Volume VI: Program      |
|                                   | Development and Future            |
|                                   | Directions. Susan Charnley and    |
|                                   | Claudia Stuart. Northwest Forest  |
|                                   | Plan, The First 10 Years          |
|                                   | (1994-2003), p.11-12.             |
+-----------------------------------+-----------------------------------+
| **ANALYSIS OF THE MANAGEMENT      | "We are saying that the economic  |
| SITUATION -- 40**                 | pressures to arrest and reverse   |
|                                   | environmental degradation will    |
| Consider the mix of forest        | increase. Those who promise that  |
| products and resource uses that   | workers, firms, and communities   |
| best meets the needs of the       | tied to environmentally harmful   |
| multiple and diverse communities  | activities can avoid these        |
| in each District. For example,    | pressures if only the             |
| strategic management of           | environmental laws, such as the   |
| silvicultural practices, and      | Endangered Species Act, were set  |
| increased allowable sale quantity | aside raise false hope. The       |
| levels would benefit those        | pressures are independent of      |
| counties with communities that    | specific laws. Even if such laws  |
| have been more adversely affected | are repealed, the costs of        |
| by decreased harvest levels.      | environmentally harmful           |
|                                   | activities will continue to rise  |
|                                   | and jeopardize the economic       |
|                                   | outlook for affected communities. |
|                                   | **Public officials can best       |
|                                   | promote long-run economic         |
|                                   | prosperity in the West by         |
|                                   | encouraging efficient transitions |
|                                   | away from harmful activities      |
|                                   | toward those beneficial to both   |
|                                   | the environment and the           |
|                                   | economy**." \[emphasis added\]    |
|                                   |                                   |
|                                   | A Letter from Economists to       |
|                                   | President Bush and Governors of   |
|                                   | Eleven Western States Regarding   |
|                                   | the Economic Importance of the    |
|                                   | West's Natural Environment, p.7.  |
|                                   |                                   |
|                                   | "In the rural west, it turns out  |
|                                   | there is an inverse relationship  |
|                                   | between resource dependence and   |
|                                   | economic growth; the more         |
|                                   | dependent a state's economy is on |
|                                   | personal income earned from       |
|                                   | people who work in the resource   |
|                                   | extractive industries, the slower |
|                                   | the growth rate of the economy as |
|                                   | a whole."                         |
|                                   |                                   |
|                                   | Prosperity in the 21st Century    |
|                                   | West: The Role of Protected       |
|                                   | Public Lands. Ray Rasker, Ben     |
|                                   | Alexander, Jeff van den Noort,    |
|                                   | and Rebecca Carter. Sonoran       |
|                                   | Institute, p.10.                  |
+-----------------------------------+-----------------------------------+
| -   Increasing timber receipts    | This is not true at the present   |
|     would increase payments to    | time, has not been true for more  |
|     counties facing the potential | than a decade, and would only be  |
|     loss of current safety net    | true if county payments           |
|     payments.                     | legislation is not reauthorized   |
|                                   | [and]{.underline} one is          |
|                                   | comparing what actual receipts    |
|                                   | would be now versus an increased  |
|                                   | cut.                              |
+-----------------------------------+-----------------------------------+
| Increasing harvest levels would   | Increased cut is a minor          |
| influence the job and personal    | short-term economic benefit at    |
| earnings component of local and   | best and a major long-term        |
| regional economics.               | economic and environmental loss.  |
|                                   |                                   |
|                                   | "Forest-products manufacturing is |
|                                   | a mature industry serving very    |
|                                   | specific markets for building and |
|                                   | paper products. As such one can   |
|                                   | expect technological change to    |
|                                   | continue to boost worker          |
|                                   | productivity as **capital and     |
|                                   | energy are substituted for        |
|                                   | labor**. . . \[emphasis added\]   |
|                                   |                                   |
|                                   | Total output has risen, whereas   |
|                                   | employment and labor income have  |
|                                   | declined (Howard 2003)...         |
|                                   |                                   |
|                                   | The impact of this automation on  |
|                                   | employment can be seen in the     |
|                                   | Pacific Northwest where wood      |
|                                   | products output was higher in     |
|                                   | 1988 than it was in 1978, but the |
|                                   | jobs associated with that output  |
|                                   | had fallen by 35,000 or 20%."     |
|                                   |                                   |
|                                   | Public Timber Supply, Market      |
|                                   | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
|                                   | Northwest Forest Plan. Thomas     |
|                                   | Michael Power. Conservation       |
|                                   | Biology Volume 20, No. 2. p.345   |
|                                   |                                   |
|                                   | "For instance, after 1994, log    |
|                                   | supply in the plan area actually  |
|                                   | increased modestly as a result of |
|                                   | some of the market adjustments    |
|                                   | discussed above. This increased   |
|                                   | log supply did not lead to        |
|                                   | stabilization or increase in      |
|                                   | primary forest-products-industry  |
|                                   | employment. Instead,              |
|                                   | forest-products employment        |
|                                   | continued to decline, losing      |
|                                   | 11,000 jobs between 1994 and      |
|                                   | 2000. Because federal timber      |
|                                   | harvests during this time period  |
|                                   | declined only modestly, USFS      |
|                                   | researchers estimated that only   |
|                                   | 400 of these 11,000 lost          |
|                                   | forest-products jobs were         |
|                                   | associated with reduced federal   |
|                                   | timber harvest."                  |
|                                   |                                   |
|                                   | Public Timber Supply, Market      |
|                                   | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
|                                   | Northwest Forest Plan. Thomas     |
|                                   | Michael Power. Conservation       |
|                                   | Biology Volume 20, No. 2, p.341.  |
|                                   |                                   |
|                                   | "As a result, part of the         |
|                                   | increased federal harvest will be |
|                                   | offset by declines from other     |
|                                   | sources of supply. A steady flow  |
|                                   | of federal supply into the        |
|                                   | wood-fiber market regardless of   |
|                                   | economic conditions will further  |
|                                   | destabilize prices, driving them  |
|                                   | down during periods of weak       |
|                                   | demand and driving them up during |
|                                   | periods of peak demand. These     |
|                                   | destabilized prices are not what  |
|                                   | would result if federal timber    |
|                                   | managers behaved in a             |
|                                   | market-oriented manner. Other     |
|                                   | landowners' reactions to these    |
|                                   | more volatile prices may, in      |
|                                   | turn, destabilize harvest levels, |
|                                   | the opposite of what federal land |
|                                   | managers intend."                 |
|                                   |                                   |
|                                   | Public Timber Supply, Market      |
|                                   | Adjustments, and Local Economies: |
|                                   | Economic Assumptions of the       |
|                                   | Northwest Forest Plan. Thomas     |
|                                   | Michael Power. Conservation       |
|                                   | Biology Volume 20, No. 2, p.344.  |
|                                   |                                   |
|                                   | "**Rather, we are saying that     |
|                                   | nearly all communities in the     |
|                                   | West will find they cannot have a |
|                                   | healthy economy without a healthy |
|                                   | environment.** \[emphasis added\] |
|                                   | Moreover, there exist many        |
|                                   | opportunities in the West to      |
|                                   | improve both the environment and  |
|                                   | the economy, for example, the     |
|                                   | elimination of inefficient        |
|                                   | subsidies would make more money   |
|                                   | available for other public        |
|                                   | services or to reduce debt. The   |
|                                   | longer these opportunities        |
|                                   | languish, the fewer will be the   |
|                                   | West's jobs, the lower its        |
|                                   | incomes, and the poorer its       |
|                                   | communities. Conversely, the      |
|                                   | sooner we seize these             |
|                                   | opportunities, the sooner the     |
|                                   | West will enjoy more mobs, higher |
|                                   | incomes, and greater prosperity.  |
|                                   |                                   |
|                                   | We are saying that the economic   |
|                                   | pressures to arrest and reverse   |
|                                   | environmental degradation will    |
|                                   | increase. Those who promise that  |
|                                   | workers, firms, and communities   |
|                                   | tied to environmentally harmful   |
|                                   | activities can avoid these        |
|                                   | pressures if only the             |
|                                   | environmental laws, such as the   |
|                                   | Endangered Species Act, were set  |
|                                   | aside raise false hope. The       |
|                                   | pressures are independent of      |
|                                   | specific laws. Even if such laws  |
|                                   | are repealed, the costs of        |
|                                   | environmentally harmful           |
|                                   | activities will continue to rise  |
|                                   | and jeopardize the economic       |
|                                   | outlook for affected communities. |
|                                   | **Public officials can best       |
|                                   | promote long-run economic         |
|                                   | prosperity in the West by         |
|                                   | encouraging efficient transitions |
|                                   | away from harmful activities      |
|                                   | toward those beneficial to both   |
|                                   | the environment and the           |
|                                   | economy**." \[emphasis added\]    |
|                                   |                                   |
|                                   | A Letter from Economists to       |
|                                   | President Bush and Governors of   |
|                                   | Eleven Western States Regarding   |
|                                   | the Economic Importance of the    |
|                                   | West's Natural Environment, p.7.  |
+-----------------------------------+-----------------------------------+