Testimony to the United States Senate

Committee on Energy and Natural Resources,

Subcommittee on Public Lands and Forests

"*Thinning and Forest Restoration in Oregon and Washington"*

Russell C. Vaagen

Vice President, Vaagen Bros. Lumber Inc.

Vice President, Northeast Washington Forestry Coalition

12/13/2007

My family has been in the forest products industry since the 1920's. Our
company, Vaagen Bros. Lumber, Inc based in Colville, Washington is
focused on maximum and responsible utilization of our forest resources.
We have transformed our company from a traditional sawmill to one
focused on small diameter logs. We produce building products (2x4's to
2x10's) from logs as small as 4 ½" small end diameter. This puts us in a
position to utilize small diameter material from forest thinning and
forest restoration activities. We think there is a critical need to
treat millions of acres of National Forest land that is currently in
poor condition. The following testimony is only a snap shot of the
issues facing our forests and the forest products industry of the
Intermountain West. I want to touch on collaboration, thinning and other
opportunities that can result from better management of our National
Forests.

Collaboration and the United States Forest Service

Something very important is happening in our area and many other areas
throughout the western states. Environmentalists and members of the
timber industry have been coming together to discuss how to solve our
current forest health problems. Things have changed in that the
conservation groups have come to the table to solve problems rather than
trying to fight with the timber industry and the industry has started to
look at the conservation groups as potential allies rather than the evil
opposition. Much of the timber industry has also moved to technology
that allows the mills to use smaller logs. Due to these changes,
conservation and timber management advocates have common interests,
including healthy forests, quality wildlife habitat, and clean water
with safe and stable rural communities.

In our area we have created the Northeast Washington Forestry Coalition.
It is a non-profit organization made up of members of conservation
groups, the local sawmill companies, consulting foresters, other
business leaders and community members. It is open to the public and we
encourage others to attend our meetings and join the coalition if they
have an interest in what we are working on. Specifically we were formed
to work with the Colville National Forest in order to influence and help
the local Forest Service staff manage the just over 1 million acre
National Forest located in the three northeast counties of Washington
state. We have been very successful in that we have not had an appeal or
litigation in four years. We have even been able to secure funding to
launch new forest restoration projects in the Wildland Urban Interface
(WUI). Our agreement on projects is documented and ongoing.

The unfortunate thing is that just because we may agree now doesn't mean
the Forest Service (USFS) is poised to act on it. There are many reasons
the USFS has not been able to respond in a manner consistent with our
urgent forest health needs. The budget is one reason, but more
importantly it is an attitude and a culture that does not readily accept
or respond to change. We need to change the way we have done things in
the past. It takes entirely too long to complete the NEPA documentation
required to move forward on projects. It would be helpful if Congress
would work to ensure that the agency is using the tools it has at its
disposal, such as the Healthy Forest Restoration Act.

The staff also has a real fear of doing things wrong or doing them too
fast. Caution is fine, but when we are talking about areas of critical
need that already has the necessary road system in place and the
conservation groups and the timber industry agree on what needs to take
place, delays are very costly and frustrating. It is my opinion that if
we do not start treating these areas very soon on a large scale, the
fires that we have seen are only going to get larger and more dangerous.

The Forest Service's budget has also seen great changes in recent years.
One change in particular is more than troubling. The amount that is
spent on fire suppression and preparedness is out of control. It has
moved from consuming 13% of their budget to almost half, and is now
squeezing every other non-fire program. This is a disaster of epic
proportions which I believe is a major conflict of interest for the
Agency. The same people that are responsible for the management of our
National Forest lands are the same people who are spending countless
hours training for fires in the off-season and then fighting them in the
summer months. More money and time are being spent on fire suppression
at the expense of non-fire programs. This makes completing the necessary
forest management projects very difficult.

It is clear that the agency is only treating the symptom of the problem
rather than addressing the root cause. Thinning the forest is best way
to prevent massive scale wildfires. This trend needs to be addressed and
reversed. Maybe funding for fire fighting should be handled in another
way, possibly a FEMA-like approach for funding emergencies. It appears
like the system is very wasteful with very little incentive given to
keeping costs under control. Without any action this is going to
continue to spin out of control at the expense of other important needs.
We are wasting more time and money each year and the problem keeps
getting worse. There is a solution. The solution is in restoring forests
to a healthy condition through large scale thinning projects.

Thinning

Thinning and forest restoration projects using the relatively new
stewardship authority is starting to gain a foothold as the primary tool
for forest management in the National Forests of the Intermountain West.
Many private landowners and State forests have been undertaking similar
projects for years with great success. Well designed stewardship
projects can be beneficial to both the forest and the economy. There is
a spectrum of activities that make up thinning. Thinning can be very
intensive with small amounts of commercially valuable material or it can
be done efficiently with high tech machines and create many valuable
forest products. In northeast Washington we have a great market for
small diameter logs for both the production of lumber and chips. This is
critical to the success of thinning. It is very important to have a
fully functional wood use market. There are good markets in our area for
chips, bark, sawdust, and shavings.

Many areas of the Intermountain West do not have that luxury. This
underscores the need to have large projects where the cost of doing the
intensive work with low material value can be offset by larger volumes
of higher value material. Keeping infrastructure in place and healthy is
critical to the restoration treatments needed in our forests.

Many projects that are currently being proposed are too small in size
and they don't include enough areas with marketable material. Projects
need to be large and they need to spread out over years so the mills and
the contractors doing the work on the ground can count on the logs and
the work. With millions of acres in need of thinning, projects that are
small in size and short in duration make very little sense. In many
cases, it would take the same amount of time and funding for the Forest
Service to prepare a larger project. Many communities just like ours
have Community Wildfire Protection Plans in place. Those should be used
as templates for large scale projects. It only makes sense to tie these
Community Wildfire Protection Plans and thinning projects together. In
northeast Washington our three counties, Ferry, Stevens and Pend Oreille
all have completed plans. The USFS should propose and sell a major
project in each county. They need to be between 30,000 and 40,000 acres
each and should be 10 year contracts. This would focus the effort in the
places of the most need in terms of safety and forest health as well as
provide certainty for the local businesses and workforce. By having
larger projects it also expands opportunity to add value to the material
by investing in new uses. We currently use biomass to create green
energy, but we are only scratching the surface of what's possible. There
is so much material in the woods that can be used to create power, heat,
and bio-fuels. Making the material available will spark innovation and
investment while restoring forests and reducing the costs of fighting
fires.

Opportunities and Observations

We have an incredible opportunity to take this real problem and
challenge ourselves to create economic and social benefit for years to
come. It is already being done in other parts of the World. In Europe,
some of the most socially conscious nations are managing their forests
much better than we are. They don't have wildfires and don't use
prescribed fire nearly as much as our National Forest managers do. They
use wood residuals to make power in the place of coal. Their milling
infrastructure is still in place and there no social disconnect between
responsible resource management and conservation, they are nearly one in
the same. Doing a better job of managing our forests is a great way to
reduce the effects of climate change and CO2 emissions. Making a forest
healthier improves its ability to take in Carbon Dioxide and replace it
with Oxygen. When a forest burns it releases much of the CO2 that was
stored as well as the massive release of heat. By making the forests
resilient to fire we are taking steps to improve carbon storage and
reduce carbon emissions.

There is a need for new technologies to be introduced to add value to
the forest residuals. In areas where mills have never or no longer
exist, financial assistance from the government makes sense. The
government should assist private industry in the development of new
technologies or in the use of effective proven technologies. Grant money
is currently being used to assist some businesses, but there is a need
to be cautious. Grant money should be used to stimulate infrastructure
in areas where it is missing and avoid undermining the competitiveness
of any existing infrastructure. Supporting our current wood product
facilities is critical to restoring healthy forests.

Although collaboration is taking place in many areas, not all companies
are taking part in the collaborative process. Collaboration takes time,
energy, and a great deal of effort. Some companies wait for companies
such as ours do the work to get the projects put together, and then show
up at the bid table. These projects should be a best value bid, and
firms that invest heavily in the collaborative process should earn a
competitive edge in the bidding process. We welcome companies to join in
the efforts, but if a company chooses to focus their efforts in other
areas, they should not get the same opportunity to purchase sales or
projects when others worked very hard to bring them to market. It
undermines the entire process and frustrates all who work
collaboratively to help restore our nation's forests.

Closing Remarks

Thank you very much for the opportunity to talk to you today. If you
have any questions today or in the future please do not hesitate to
contact me. The issue of thinning our Nation's Forests is common sense
backed by common ground. Leaders in our communities have the wherewithal
and talent to show the way. Now we need your help in getting the Forest
Service to follow our lead.

Thank You.