Governor's Advisory Committee on Chip Mills

Final Report
August 1, 2000

I. INTRODUCTION

Forests are an important part of Missouri's natural landscape. Almost one-third of the state is covered by forest land, and two-thirds of the Eastern Ozark region of the state is forested. Forests are valued by Missourians for many reasons, including as a source of timber for wood products, as reservoirs for wildlife and sources of clean water, as destinations for tourists and settings for other recreational activities, as well as places for solitude and aesthetic appreciation. In a variety of ways, therefore, the forests of Missouri are an important resource for all citizens of the state.

Many people value forests as a source of raw materials to be made into a variety of products. Trees yield timber for products such as lumber and wood chips, which in turn may be made into an array of products such as furniture, flooring and paneling from lumber or pulp and paper from wood chips. Other wood products come from forest trees not ordinarily prized for timber production. These include such valued items as wood for carvings, baskets, novelties, and so on. Moreover, forests yield a variety of outputs in addition to wood products, including medicines from trees and plants, edibles in the form of mushrooms, wild berries, etc. In all of these ways, Missouri forests are valued for the direct uses that can be made of the raw materials they produce.

Missourians value their forestlands not only as a source of raw materials for products, but also in terms of the experiences they have in the course of interacting with the forest environment. Missouri's forests are home to a variety of mammals, fish, reptiles and amphibians, and plants, which people enjoy in many ways. Hunting and fishing for 'game' species provide countless hours of recreational enjoyment. At the same time, many Missourians enjoy 'non-consumptive' activities such as birdwatching, hiking and camping, canoeing, and the like, all of which reflect an underlying appreciation of the aesthetic value of the forest environment as an element of human experience. Even those who seldom if ever visit forestlands in the state may value the knowledge that they exist and are there to experience, not only for themselves or even all others alive today, but hopefully for their descendants as future citizens of the state as well. Finally, all of these ways in which the people of Missouri value their forest lands -- both as an environment within which to experience numerous amenities which make life interesting and as a source from which to gather materials useful for a wide range of products -- are becoming even more appreciated as we gradually come to better understand the unique place and functions our forests play within the complex ecological system of living and nonliving entities and processes that for generations we have experienced as the 'natural environment,' or more simply, 'Mother Nature.'

A few years ago a survey was conducted to try and better understand the attitudes of Missouri citizens towards the forest lands and resources of the state (Constance and Rikoon 1997). It was found that about nine in ten Missourians thought that careful harvesting of trees could actually be good for the forest in the long run. At the same time, a 1997 'Conservation Monitor' survey by the Gallup organization found that slightly more than one-half of Missourians approved of cutting trees to make lumber, furniture, and other wood products (Cited in Missouri Department of Conservation 1999a). In the former survey, almost two in five respondents indicated they had noticed activities in the forests which had concerned them. Moreover, while a similar percentage of respondents (39%) thought that forest management activities on private lands should be regulated by the state, slightly more (44%) thought that in general private forestlands in Missouri were being 'wisely managed.' Finally, only about 15% of private forestland owners indicated that they had received help from a professional forester in managing their lands. All of the above suggests a certain ambivalence among Missourians with respect to the management of, in particular, private forestlands in Missouri. This led the Missouri Department of Conservation (MDC) to conclude that with respect to the practice of forestry on nonindustrial private forestlands in the state, a dilemma existed -- i.e., a lack of willingness to address the problem of limited management guidance from a regulatory perspective and a lack of willingness by private forestland owners to ask for or accept management assistance from a professional forester (MDC 1999a).

It is within such a context that the 'chip mill issue' in Missouri emerged in the late 1990's. The following pages contain a variety of information relevant to different facets of this issue, as well as the conclusions and recommendations which resulted from extensive discussions by the Governor's Advisory Committee on Chip Mills.

The Issue of High Capacity Chip Mills in Missouri

Within the last few years Missouri has witnessed the arrival of two high-capacity chip mills in the southeastern part of the state.1 Willamette Industries, located in Wayne County near Mill Spring, Missouri, and Canal Wood Corporation, situated within Scott County in Scott City, Missouri, are currently producing hardwood chips; and their combined expected output from normal operations (i.e., one shift) will be more than one-half million tons of chips per year. These firms expect to procure wood from within sixty to eighty miles of their mill sites. Timberlands account for about three-fifths of the land base within the area around Mill Spring and one-third of the area around Scott City, although not all of the latter area is within Missouri. A third chip mill is also operating in the state, although it is not a high capacity processing plant. Ozark Chip Company has been operating for some time in southwest Missouri, producing less than 100 thousand tons of chips per year from sawmill residue. It should also be noted that Westvaco Corporation does purchase approximately 200 thousand tons of wood per year in Missouri, three-quarters of which is chips purchased from sawmills.

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1Missouri has traditionally been home to a wood products industry comprised of many small mills producing lumber and a variety of related products. As noted by the Missouri Department of Conservation (1999a) a chip mill producing 300 thousand tons of chips per year provides a sharp contrast to a typical Missouri lumber-producing sawmill capable of producing in the vicinity of 24 to 32 thousand tons per year. The concept of "high capacity" is, however, a relative one. In some eastern states, for example, a chip mill producing the above volume of chips would not be viewed in these terms. Nonetheless, the chip mills that have located in Missouri undoubtedly provided a stark contrast to the levels of wood processing volumes traditionally seen in the state. To reflect this historical context, we may define a high capacity chip mill as a chip mill that produces more than 150,000 tons of wood chips per year as its principal output.

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On a statewide basis, almost 85 per cent of Missouri forest lands are controlled by more than 300 thousand nonindustrial private forestland owners. Moreover, between 70 and 80 percent of lands within the aforementioned source areas surrounding the two high capacity chip mills are privately owned. Thus it is evident that the majority of wood that will be procured by these mills will come from nonindustrial private forestlands.

Pulpwood harvested for a chip mill can be generated in several ways. Pulpwood has generally been regarded as low quality material that in the past has either been left behind in the woods because loggers had no incentive to remove it or harvested and sent to pallet or blocking mills. In this light, some view chip mills as an opportunity to market low quality trees and ultimately provide space in the forest for growing high quality trees in the future. Others, however, are concerned that demands generated by chip mills will encourage irresponsible harvesting or liquidation of stands for short-term financial gain to the detriment of long-term sustainable forest management and, depending on how practices are conducted, ecological sustainability. These latter concerns are enhanced by current estimates that at present only 10-15% of all private forestland owners in the state have been seeking any professional advice or assistance when harvesting timber from their lands.

All of the above suggests an intricate relationship between demands for chips generated by the mills and practices conducted on nonindustrial private forestlands. The ultimate impacts of high capacity chip mills on long-term ecological and economic sustainability of Missouri forests depend in large part on the quality of forest management they encourage (or discourage) by forestland owners in the state. In this sense, the chip mill 'issue' is closely linked to the broader issue of the management of Missouri's nonindustrial private forestlands in general.

Governor's Advisory Committee on Chip Mills

In response to uncertainty regarding the potential short- and long-term impacts of high capacity chip mills on the ecological and economic sustainability of Missouri forests, Governor Mel Carnahan issued an Executive Order on September 18,1998 which, among other things, established an Advisory Committee on Chip Mills. The Order is comprised of a justification for the Executive action, the establishment of the Advisory Committee, and a description and its purposes and specific charges.

Such orders generally begin with a series of 'whereas' clauses justifying the Governor's taking this action. For this order, such clauses include :

  1. a definition of a chip mill as the central focus of the order; and several reasons for its promulgation, including statements that:
  2. Forest resources are vital to Missouri citizens.
  3. The state supports forest-based economic enterprises.
  4. Best management practices on Missouri forests are in the public interest.
  5. There have been concerns voiced in other states about adverse environmental impacts from chip mills.
  6. Chip mills in Missouri have led to citizen concerns.

In light of the above, the order established a Governor's Advisory Committee on Chip Mills to be comprised of the following members:

  1. Four state departmental directors or their designees : Department of Conservation; Department of Natural Resources; Department of Agriculture; Department of Economic Development;
  2. Four state legislators appointed by leadership of the respective chambers :
      2 state senators and 2 state representatives;
  3. Two forest products representatives;
  4. Two representatives from citizen conservation groups;
  5. One representative from an organization representing private property owners; and
  6. A forest landowner.

The Committee was to operate on a very modest budget of approximately $25,000 pooled from among the participating agencies.

The Executive Order also mandated that the Advisory Committee undertake a study to identify the impact of chip mills and associated harvest practices on the ecological and economic sustainability of Missouri forest resources. The study was to include, but not be limited to, an analysis of the experiences of other regions of the country with chip mills and related harvesting practices; as well as the economic, social, and environmental impacts of existing and new chip mills in Missouri and neighboring states -- including potential environmental impacts related to soil erosion, sedimentation, water quality and watershed protection, habitat loss, biodiversity, and outdoor recreation and tourism. Other required foci of the study included the sustainability of Missouri's forest resources under current timber production levels and the capacity of those resources to sustain increased chip mill production levels, as well as a consideration of the impact of chip mills on value added industries and high-value forest products. Finally, the study was to include an analysis of the long term profitability of private forests and it was to address alternative forest resource management and protection standards.

On November 24, 1999, the Governor issued Executive Order 99-11, extending the expiration date for the Advisory Committee on Chip Mills to February 1, 2000. This would ensure adequate time for public review of the Committee's Draft Final Report. On January 20, 2000, the Governor issued Executive Order 00-01, which extended the life of the Advisory Committee for however long it took to complete its work. Included in this third mandate were instructions for the Committee to review and incorporate in their analysis an internal report on the chip mill issue in Missouri that had been completed by the staff of the Missouri Department of Conservation in December, 1998.

Overall Process and Groups Involved

In carrying out its mandate, the Advisory Committee held a series of monthly hearings beginning in November 1998 and extending through July 2000. From November '98 to August '99 the Committee focused on gathering facts pertinent to the issue. The Committee heard 21 formal presentations during that time from a variety of sources. Each meeting also included an extensive period allotted to public comments. The June '99 meeting was conducted in conjunction with a field trip to Southeast Missouri on which the Committee visited several sites exemplifying different kinds and qualities of forest management practices.

Field trip (June 1999). The field trip was a learning experience for all who participated. The Committee looked at several examples of both even-aged and uneven-aged management. With respect to the former, it visited a 45 acre site that had been harvested by Westvaco Corporation as part of its cooperative forest management program with private landowners. The site had been characterized by three age classes of oaks in a fully stocked stand with low tree quality and a slow growth rate. Committee members saw how such a stand can be regenerated by cutting all trees down to a 2" diameter, where all regeneration comes from seedling sprouts and stump sprouts. In this case, even-aged management was utilized to generate a faster growing stand of high quality, with approximately the same species composition, yielding approximately the same size sawtimber as the current stand, but in 60 to 65, as opposed to 75-90 years.

The Committee visited a second tract owned by a private landowner on which a timber sale had been conducted as part of a Forestry Stewardship Plan that was prepared by the Missouri Department of Conservation (MDC). The landowner wished to generate income, improve the diversity of wildlife habitat, and create favorable conditions for increasing the amount of pine in the future forest. The sale consisted of 81 acres divided among six stands. A regeneration cut was applied, meaning that all merchantable trees were cut and removed and all the remaining trees were cut and left on the ground. When the sale had first been put out for bid in 1997, before a viable market for pulpwood had existed in the area, the high bid had been about $8500, well below the MDC estimate of the value of the timber. In March, 1998, with the opportunity to generate pulpwood as additional production, the high bid received was $26,970. This provided another example where even-aged management was being used to meet a variety of landowner objectives, including revenue generation, while the use of best management practices and other activities (e.g., reserving riparian corridors) were employed to further other objectives related to maintaining environmental sustainability.

The Committee also visited another 300 acre tract owned by an individual who lived in St. Louis and had contracted with one of the two high capacity chip mills to have the tract logged for chips. Severe rutting from the skidder used by the loggers was evident. Dwyer (1999) later described other aspects of the condition of the site at that time. Since the roads had been wet during part of the operation, much of the soil that was on the roadbed had been pushed up onto the landscape. Some small draws and ravines had been used to skid logs down, as opposed to pulling logs out of these areas via yarding or cabling. Adequate skid trails and log landings were lacking, and the latter had been located too close to the creek. Logs had been left on the site that were cut and not skidded. In short, there was little evidence that best management practices (BMP's) had been employed in the harvesting of this site, and the resultant potential for future problems, especially in terms of water runoff, was evident. The absentee landowner also currently owns several other tracts totaling about 800 acres, which he plans to harvest and then sell. The 300-acre site visited by the Committee is also up for sale.

Finally, the Committee also visited two sites on which uneven-aged management had been utilized as the primary timber management regime. The first was a 160-acre tract owned by Emily Firebaugh, a member of the Governor's Committee. It had been under professional management for many years. Here group selection was being practiced -- the goal being to harvest big trees, but also to take out some 12-14" trees immediately surrounding prime harvest trees. In 1982, the owner had cut 167 thousand board feet of timber, removing almost 2000 growing stock trees and an equal number of culls, yielding a profit of $49 per acre of stumpage. Six years later, the owner cut 61 thousand board feet of timber, removing 390 growing stock trees and 27 culls, and realizing a profit of $180 per acre of stumpage. It was evident that uneven-aged management had the potential to be profitable for the owner, while maintaining the forest canopy contributed to the realization of other nontimber forest benefits as well.

A second example of uneven-aged management was viewed by the Committee at its final stop at a tract being managed by Pioneer Forest. The goal of uneven-aged management as practiced by Pioneer is to utilize selective harvesting to create openings, grow high quality hardwoods, and as openings close up, come back in to the stand in 18- 25 years and harvest again. Pioneer removes about 1/3 of standing volume and 30% of trees in a given harvesting operation. In so doing, it can in principle take a stand in poor condition, go through with improvement cuttings, harvest in 25 years and then in another 25 years, and have created an uneven-aged stand of four age classes.

Pioneer's strategy focuses on the relationship between a given species and the site on which it is growing. It prefers to take out between one-quarter and one-third of annual growth through an uneven-aged management regime which, on the site visited by the Committee, amounted to a net after-harvest of 135 board feet per acre per year. Another objective is to manage irregular natural gaps in the forest to lead to more than enough natural regeneration to perpetuate the system.

The field trip was a rewarding experience for Committee members and others who participated. It provided a concrete reference for on-the-ground forest management activities to which members could relate during the subsequent weeks of discussion regarding the variety of facets involved in the 'chip mill issue' in Missouri.

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Part of the Committee meetings in July and August of 1999 were devoted to beginning the decision process described below. In September, the Committee began its discussion and debate of various potential actions it might take in carrying out its assigned tasks. These discussions continued over the next six months. The public comment periods were continued throughout this entire process. In April, 2000, votes were taken on approximately 70 different potential options for actions in addressing the chip mill issue.

Input to the Committee was obtained from a variety of individuals and group representatives. These included actors involved in the central process of wood flows from private forest lands to the chip
mills -- i.e., private forest landowners, loggers, and representatives of the chip mills and other wood
products firms. In addition, those indirectly involved in this central process -- i.e, professional foresters, natural resource (and other) agency representatives, and scientists and technology transfer
professionals -- also provided input to the Committee. Finally, representatives from groups that had particular economic, environmental, and political interests in the key issues involved were also important sources of information for the Committee. The Committee heard testimony -- both in formal presentations and via the public comment process -- from all of these actors.

Committee Decision Process

The process through which the Committee moved towards decisions in response to its tasks as spelled out in the Governor's Executive Order began in earnest during the July and August meetings in 1999. As a first step, the Committee was asked to envision the kind of outcomes it would like to see have resulted from its work when viewed twenty years from now -- i.e., in the year 2019. Members of the Committee identified 24 possible outcomes that, if viewed in retrospect twenty years from now, they would like to see have resulted from the Committee's work in 1999.

The group was then asked to organize those 24 outcomes, several of which were interrelated and/or
overlapped to varying degrees, into a smaller number of themes or thematic areas. Seven themes were identified through this process : landowner education and logger training; professional management; sustainably managed resources; increased timberland resource base; sustainable social and economic impacts; environmental sustainability; and landowner rights and responsibilities.

These thematic areas then served as a basis for the generation of proposals and/or possible courses
of action by Committee members that would address its required tasks. Subsequent discussion and
debates centered on ideas generated from this conceptual format. Part II of the report contains a compilation of background information on each of these areas. The conclusions and recommendations of the Governor's Advisory Committee on Chip Mills are presented in Part III.