# Presentation: 061188

## Public Timber Sales and SustainabilityWho Buys; Who Benefits; and Why CROP is a Vital Key

**Presented by**
**Catherine M. Mater**
**President****—****Mater Engineering**
**Senior Fellow – The Pinchot Institute for Conservation**
**Corvallis, Oregon; Washington, DC**
***Tel:  541-753-7335  Fx:  541-752-2952***
***E-mail:  ***_[catherine@mater.com](mailto:catherine@mater.com)_
***www.mater.com***

## Since we’re in Denver  ... 

***Let’s ***_***meditate***_*** on new protocol to ***_***relieve stress***_*** regarding supply issues.***

## Take you through two pathways:

_**Arizona CROP Project**_
**(Mater Engineering)**

## . . . where and why it all began

***To explain ******“***_***investor landscape***_***”,****** ******“***_***levelized***_***”****** and ******“***_***CROP***_***”******, you have to know . . .***

## 

***Greater Forests Flagstaff Partnership***

_***Arizona***_

******

## Foundations of the Partnership

***Restore natural ecosystem functions***** within Flagstaff Urban Interface.**

**Reduce***** *****catastrophic *****wildfire risk*****.**

***Research, test, and demonstrate***** key ecological, economical (**_**ie wood utilization**_**), and social dimensions of restoration*****.***

**Notes:**
The Partnership is guided by two key documents:

First: the Cooperative Agreement.  Originally signed in 1998 and to be renewed every five years, this is the legal documentation binding the Greater Flagstaff Forests Partnership’s non-profit entity--also of the same name--and the US Forest Service for the collaborative endeavor.

And,
Second: the Guide to the Partnership, which outlines the visions, guidelines and policies the Partnership follows in implementing its varied programs.

## For economics – 

**Technology **_**should not**_** drive the wood flow.**
**Restoration/stewardship practices **_**should**_** define the technology choices for investment**

_***reverse the formula***__***!!***_

## Timber Volume Sold by Diameter and YearA-S, Coconino, Kaibab (Williams RD)

## Offered vs. Sold Volume A-S, Coconino, Kaibab NF

**Offered vs. Sold Volume ****A-S, Coconino, Kaibab NF**

##  Flagstaff

********* ******Flagstaff***

_***~200 miles***_

_***Investor Landscape***_

## Slide 11

## Slide 12

## What we see:

_***No coordination***_*** *****between NF systems in regions**
_***No coordination***_*** *****between USFS ranger districts**
_***No coordination***_*** *****with other agencies in region with harvest activity (BLM, state, DOT, etc*****)***

***. . .  *****coupled with biomass-to-energy projects proving***** ***_***not economically viable***_
*** *****. . . unless they’re connected with***** ***_***solid wood manufacturing***_

## What investors see:

***Erratic supply***** at best; no level playing field**

***Uncertainty***** where or when supply will come from in an investment landscape (~200 mile radius)**

***Little information***** on resource characteristics to be supplied**

***No investor risk mitigation***** efforts within the investor landscape (agency coordination targeting risk factors)**

## Key Questions:

**How to***** ***_***invite new investment***_*** *****into the region.**

_***Key Questions***_***:***

## What was clear:

**Change the dynamics of resource offering in an***** ***_***investor landscape***_***  . . .***

***  ******. . . *****where***** ***_***level supply***_** and***** ***_***risk reduction***_*** *****are perhaps more important than increased volume*****.***

## Solution

***. . .****** ******Seed the ******CROP***

*(****C******oordinated ******R******esource**** ****O******ffering**** ****P******rotocol****)*

## CROP (coordinated resource offering protocol)

**Nation’s first benchmark project in investor landscape **_***coordination***_** of projected resource offering:**
***Within agencies***** (ie RD’s within NF system)**
***Between agencies***** (USFS, BLM, state, Counties, Indian nations, etc.)**

## CROP

_***Premise***_**:**

**Focus is on “*****levelized*****” supply between key players, not necessarily adding more supply.**

**“****Levelized” effort must apply to *****volume, diameter*****, and *****species *****in locational context.**

## Why levelized?

## 
USDA FS Southern Research Station
Mater Engineering, Ltd
University of Oregon Ecosystem Workforce Program
Pinchot Institute for Conservation

**USDA FS Southern Research Station**
**Mater Engineering, Ltd**
**University of Oregon Ecosystem Workforce Program**
**Pinchot Institute for Conservation**

**Assessing Community Benefits from Land Management Activities on the National Forests**

_***New research results soon to be released***_***:***

## Demographics, Consistency, Impacts

**Who performs **_***service contracts***_** for the Forest Service?**

***Demographics, Consistency, Impacts***

_***Three simple questions?***_

**3****.****	****Who benefits?**

## Six National Forests Selected:

## Methodology:

***1998 – 2002***** FY timber sale and service contract data analyzed.**

**71 *****timber sale***** purchasers interviewed 71; at least 50% response for each forest.**

**131 *****service contractors***** interviewed; 74% average response rate .**

## Timber

**60-70%**** **_***subcontract***__** **_**work; 65-70% goes to **_***local companies***_***.***
**70-74% primarily **_***purchase***_** supplies from **_***local businesses.***_

**Most work done by **_***distant***_*** contractors.***
**90%***** “rarely” *****or *****“never” ***_**hire locals**_** for contracts.**
**61% pay food and lodging; but lodging mostly described as **_***camping.***_

**Timber**

**Service**

## How do timber purchasers perceive FS programs?  

***Do perceptions match performance?***

## Supply:  total volume

_***Supply:***_***  total volume***

_**78**_**% of timber purchasers noted a **_***decrease in total volume***_** of timber sales offered by the forest service over the last five years.  **

## Lack of levelized, steady offerings may foster perceptions of diminishing sales volumes and may reduce ability to respond to timber sales offerings in absence of long-term harvest planning protocol.  

## Timber purchasers:

_**32**_**% *****reduced wages or employee benefits***

_**54**_**% *****laid off***** employees**

_**14**_**% *****reduced work hours***** or shifts**

_**23**_**% *****reduced hiring of outside contractors***

## Meanwhile, back in Arizona, we began to examine how to . . .

_***Invite investment***_*** *****to the regions focused on small log processing.**

_***Increase the value***_*** *****of resource sales.**

_***Reduce the disparity***_*** *****between offered and sold.**

_***Increase environmental support***_*** *****for long term removal activity.**

## . . . but examine through a CROP lens

_***How much***_** ****is proposed for removal (5-year period)?**

_***How levelized***_** ****is the removal flow over time?**

_***Where***_** and **_***who ***_**will the volume come from?**

## 5 National Forests

***5 National Forests***
***AZ Trust Lands***
***ADOT***
***Department of Defense (Camp Navajo)***
***Indian Nations***

***	******	******Key players in ***_***Arizona investor landscape***_***:***

## ROM #1:    2003-2007:  5” - 12+”

_**ROM #1**_**:    2003-2007:  5” - 12+”**

***11%***

***2%***

***7%***

***11%***

***20%***

***14%***

***20%***

***14%***

***18%***

***6%***

***2%***

***2%***

## ROM #2

**5” –  9”:****	****Where 60% or more of the ****	****NF volume will come from**
***	******5-year (total: 340,677 ccf******)***

_**ROM #2**_

## ROM #3

**9” –  12”:****	****Where 60% or more of the ****	****NF volume will come from**
***	******5-year (total: 188,207 ccf******)***

_**ROM #3**_

## ROM #4

**     ****12+”:****	****Where 60% or more of the ****	****NF volume will come from**
***	******5-year (total: 213,020 ccf)***

_**ROM #4**_

## 	Where 60% or more of the NF volume will come from over 5 years

**	****Where 60% or more of the NF volume will come from over 5 years**
***	***

**=   ****5” – 9” (340,677 ccf total)**
**=   ****9” – 12” (188,207 ccf total)**
**=   >12” (213,020 ccf total)**

_**ROM #5**_

## ROM # 6

**ROM # 6**

## ROM #7

_**Biomass (<5**_**):****	****Where 60% or more of the NF volume will come from**
- 	***5-year (total: 51,440 ccf)***

_**ROM #7**_

## 

***  ******Central Oregon (Bend -***
***Redmond***
***  ******South Central (Hines)***

******

******

_***Oregon***_

## Oregon investor landscapes include:

_***Central Oregon***_**:**
**7 National forests**
**State lands**
**ODOT**
**BLM**
**Indian nations**
**Counties**

_***South-Central Oregon***_**:**
**5 National forests**
**ODOT**
**BLM**
**Counties**

## Ochoco NF:

_**Ochoco NF**_**:**

**Offered vs sold for ’00-’02**

***Same picture****** ******as Arizona***

## 95%

***OR CROP working circle:***_***100-mile radius***_

***95%***

_***03-07***_*** : Lodgepole Pine***

***  ***_***Deschutes NF***_***:  L. Pine***

## Marketing plan for new restoration-based high value-add technologies

***CROP it****** . . . ***_***And they will come***_***!***

## Slide 45

## Potential for CROP as a new supply/investment tool?

***We think excellent potential . . .***