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Governor's Advisory Committee on Chip Mills
Draft Final Report
G. CHIP MILL EXPERIENCES IN OTHER STATES
In Missouri, high capacity chip mills had been operating for a short time when concerns about the possible short- and long-term effects of the mills' operations on the viability of Missouri forests began to surface. This, in effect, led to the crystallization of what has been termed the ‘chip mill issue' in Missouri. In response to the growing controversy, Governor Mel Carnahan created an Advisory Committee on Chip Mills in November of 1998.
Missouri, however, is not the only state in which the operations of chip mills and their potential impacts on the forest resource has been the subject of controversy. In Tennessee, Arkansas, North Carolina and Virginia, concerns about possible environmental effects of chip mills have led to either the creation of a body with functions similar to those of the Governor's Advisory committee in Missouri; the completion of a full-fledged environmental impact statement; or in the case of Arkansas, research focusing on the possible effects of chip mills on the practices of private forestland owners. In other states, e.g., Alabama, chip mills have comprised one element of broader controversies focused on potential impacts of forest practices in the state, but have not themselves been the focus of the kinds of activities described above.
It is worthwhile, therefore, to review briefly the experiences other states have had with the ‘chip mill issue,' in the process placing Missouri's experience in a broader regional context as well as providing an opportunity to learn from how these states have addressed or are approaching the issue. This section contains brief descriptions of how the issue has been or is being addressed in the states of Tennessee, Arkansas, North Carolina, and Virginia are presented. The discussion begins with Tennessee, as it is there that issues directly related to the potential impacts of chip mills on the state's forest resources has been the focus of attention for the longest period of time.
Tennessee. In 1989, the Tennessee Valley Authority (TVA) and the U.S. Army Corps of Engineers (USACE) approved a chip mill barge terminal on the Kentucky Reservoir. Commenting agencies such as the U.S. Environmental Protection Agency (EPA) and the U.S. Fish and Wildlife Service (USFWS), as well as numerous groups representing environmental and other interests, voiced concerns about the possible effects of timber harvesting patterns that might be stimulated by the terminal. A year later TVA and USACE received chip mill barge terminal applications from four companies (Boise Cascade, Canal Industries, Donghae Pulp, and Parker Towing) seeking to build large terminals for chip mills within a twelve-mile reach of the Tennessee River in Tennessee and Alabama. Two of the applicants subsequently combined their application, leaving three applicants. The agencies initially prepared individual environmental assessments (EAs) for two of the applicants.
Significant opposition to the proposals surfaced in 1991 following public hearing on the Parker Towing and Donghae Pulp applications. Letters were received from the EPA and USFWS requesting that an environmental impact statement (EIS) be prepared. TVA and USACE decided to prepare an EIS, which was to include cumulative effects of locating one or more chip mills within the same forest procurement area. TVA assumed the role of lead agency in compiling the EIS, with USACE and USFWS acting as cooperators. A draft EIS was released in 1992. No preferred alternative was stated, but TVA stated that it was "inclined to deny" the applications and invited those commenting on the EIS to recommend ways to address concerns that had been identified with respect to adverse environmental effects of timber harvesting.
The Final EIS was released by TVA in 1993 (Tennessee Valley Authority et al 1993). TVA's preferred alternative was to deny all requests. In May of that year, TVA published its Record of Decision in the Federal Register, denying all requests associated with the three chip mill applications. The Alabama-Tennessee Forest Resources Limited Partnership, Boise Cascade Corporation, and the American Forest and Paper Association filed suit challenging the permit denials shortly thereafter, alleging that TVA had exceeded its statutory authority when it considered "remote sourcing area impacts which are only tenuously related to the subject of the requests for approval." In 1995, the U.S. District Court for the Northern District of Alabama dismissed the industry lawsuit, stating that TVA did not exceed its authority in denying a permit to Boise Cascade, while also stating that the agency may consider private land impacts when regulating activities on the river.
In 1997, these and other concerns -- including a 1996 lawsuit filed by four environmental groups against TVA and USACE alleging violations of the National Environmental Policy Act and Endangered Species Act in permitting docks for log loading along the Tennessee and Cumberland Rivers23 -- led the Tennessee Legislature to adopt a joint resolution, approved by the Governor as well, establishing the Tennessee Forest Management Advisory Panel. The panel was charged with evaluating and recommending appropriate policies and programs that promoted sustainability of all Tennessee forest lands. Thirty-four representatives were appointed to the Panel, but only 29 actually actively participated in the voting process. Their task was to assess the management and guidelines for state-administered forests; consider policies for forest management practices; evaluate objectives, programs, and services available for private forestland owners; and consider alternative funding strategies to accomplish sustainable forest management in the state.
Beginning in November of 1997, the Panel held eleven monthly two-day meetings. The meetings ranged from educational field trips to facilitated discussions on Tennessee forestry issues. In December of 1998, the Panel issued a final report that contained 28 majority recommendations (and 24 minority recommendations) that resulted from its work (Tennessee Forest Management Advisory Panel 1998). The majority recommendations were grouped within four broad categories : 1) Increasing education; 2) Research; 3) Partnerships; and 4) Promoting incentives. Education actives recommended included enhancing and expanding education in best management practices for landowners and professionals, as well as establishing a registration program for professional foresters. Recommended research foci included implementation of the Southern Annual Forestry Inventory System, assessing the causes of and developing potential actions to reduce forest fragmentation, and enabling the State Forestry Division to incorporate all forest-based fauna and flora within its planning and management efforts for state-administered forestlands. In the area of partnerships, the Panel recommended establishing timely and effective mechanisms for public participation in state forest planning and management, as well as establishing a variety of partnerships between state agencies and nonprofit organizations, forest industry, and other local and federal agencies with the goal of promoting sustainable management of Tennessee forests. Finally, the Panel recommended continued emphasis on providing forestland owners with incentives to practice good forestry; it continued to support BMP compliance through voluntary practices; and it encouraged state agencies to strengthen and enforce disincentives for loggers who violate water quality laws.
In its final set of majority recommendations, the Panel did not specifically address the question of chip mills and their potential economic and environmental impacts on Tennessee's forests and economy. There was, however, some level of disagreement about the chip mills, and a moderate number of panel members expressed concerns about such things as overcutting of the forest resource, negative impacts on water quality, favoring pine plantations over native hardwood species following harvests, and potential decrease in biological diversity. The disagreement over the existence and/or severity of such phenomena was manifest in unusual fashion: it was expressed in two separate and contradictory minority recommendations regarding the need for a statewide study of the potential impacts of chip mills in Tennessee. (A ‘minority' recommendation was one which garnered less than fifteen votes from among 29 panel members with active voting status). Fourteen panel members voted for a recommendation that there should not be a statewide chip mill impact study; while ten panelists voted for a separate recommendation that there should be a statewide chip mill impact study. This is suggestive of the depth of feelings that surrounded the question of chip mills in Tennessee. In terms of the Panel's majority recommendations, the absence of reference to chip mills reflected members' views that there was a lack of empirical evidence demonstrating that chip mills promote native forest replacement with pine plantations or that they are exclusively harmful to the local sawmill industry.
Arkansas. A recent study in Arkansas examined a small segment of a much larger chip mill industry in the state -- hardwood chip export mills (Guldin 1999; Gray and Guldin 1997). Since this study has been cited frequently in the report, it is summarized quite briefly here. It has been of particular interest to the Governor's Advisory Committee, because it is one of the few studies to date that has focused primarily on the impacts of demand for chips on the harvesting practices of landowners who supply timber to meet that demand. In addition, the study focused on hardwood chip markets, in contrast the chipping of softwoods which comprises much of the overall chip market in Arkansas; and in so doing it directly considered the oak-hickory forests characteristic of much of Missouri.
Hardwood chip export mills represent a very minor segment of the Arkansas wood industry that was established in 1995. Hardwoods are chipped and sent in bulk to the Pacific rim, primarily Japan, where chips are used for paper production. Currently chip export mills in Arkansas annually use about 500 thousand tons of wood drawn from a 37-county area, some of which borders Missouri. This represents a 25% increase in hardwood pulpwood production in Arkansas since 1994, a 7% increase in total hardwood harvest, and a 15% increase in total hardwood harvest within the 37-county source area. These increases have led to some controversy in the state about the potential effects of these mills on the long-term sustainability of Arkansas forests.
The Arkansas study looked at a number of questions similar to those addressed by the Governor's Advisory Committee in the context of Missouri forests. The contribution of the hardwood chip export mills to the Arkansas economy was found to be relatively small, but this was not entirely unexpected due to the small size of this industry segment. The study concluded that the new market created by the export chip mills was not likely to drive small sawmills out of business, given the structure and volatility of this segment of the industry over the past decade. The authors were unable to determine whether harvesting to supply export chip mills would hurt the tourism in Arkansas, noting that site specific locations of harvests may have as much to do with tourism impacts as regional trends. As to the question of whether soil and water resources would be protected in the wake of harvesting patterns to meet chip demands, the authors believed that the jury was still out in terms of a definitive answer. While noting that harvests were occurring without the use of BMPs in some cases, they believed that the chip mills were convinced that use of BMPs was important.
The study also concluded that harvesting for chip export mills was not likely to lead to a major loss of hardwood forests in Arkansas; slightly less than a 2% reduction in supply was forecast to occur in the 37-county source area. In addressing the broader question of whether there was any danger of running out of hardwood timber in the state (or equivalently, enter a situation in which removals exceed growth), the authors did not see this as likely to happen given current market demand. They did note, however, that if one or more additional chip mills were to enter the picture in Arkansas, removals would likely exceed growth by as soon as the year 2005.
Among the more interesting findings of the study pertained to the kind of hardwood markets actually created by the chip export mills, and the practices used by private forestland owners in supplying timber to meet mill demands. It was concluded that the chip export mills created a market that falls short of what would be considered ideal for hardwood timber. Hickory is not taken, although the mills do provide a market for rough and rotten trees. Moreover, the segment of the ideal market that would provide the greatest potential for using sound forest management practices to improve the quality of Arkansas hardwood stands -- i.e., the removal of pulpwood and tops from sawtimber thinnings, as well as other hardwood-puplwood thinnings -- did not appear to be developing in response to demands for wood by the mills. A major reason for the above was revealed in the kinds of practices being used by landowners in responding to timber demands from the mills. It was found that more than nine-tenths of all harvests involved removal of all trees from the site and either : a) simply letting the stand grow back naturally, with no guidance from management; or b) converting what had been forestland to pasture or some other non-forest use. The authors concluded, therefore, that the kind of harvesting that was occurring to supply wood for chip export mills in Arkansas was, for the most part, not good forestry.
North Carolina. In 1996, Governor James Hunt received a report of the Governor's Task Force on Forest Sustainability. In response to concerns about increased logging pressure on the state's forests, the following year the Governor ordered the state Department of Environment and Natural Resources (DENR) to report on technical issues relating to chip mills. In 1998, the DENR awarded $250,000 in funding for a study to the Southern Center for Sustainable Forests, a cooperative center among Duke University, North Carolina State University, and the DENR Division of Forest Resources. The study began in May of 1998 and a final report is expected in March 2000.
The purpose of the study is to evaluate the ecological and economic effects associated with current and future wood chip production in North Carolina. The principal questions being addressed by the study concern whether expansion of chip mill technology in the state will result in: a) changes in competition for materials among forest product sectors; b) land use incompatibilities between forest products and tourism sectors; and c) undesirable long-run ecological consequences. An overview of the major components of the study may be found in Table 19.
| Table 19. Economic and Ecological Components of the North
Carolina Wood Chip Study (Source : Southern Center for Sustainable Forests 1998) Economic Components (1) Impacts of wood chip production on timber supply Ecological Components (1) How wood chip production alters ecology of forest management
practices in North Carolina |
The two central components of the study involve an economic assessment and an ecological assessment. Each component is relying on a mix of on-site surveys, literature reviews, and modeling techniques to examine the impacts of chip mills in the state. The principal foci of the economic assessment include: a) current status of the forest resource; b) forest products industry trends; c) timber and tourism tradeoffs; d) local community impacts; and e) nonmarket values.
In assessing the current status of forests in North Carolina, attention is focusing on area, inventory (volume and species), timber growth and removals (stocks) and timber availability (supply) as related to net growth and landowner objectives. An important related focus is the relationship between forestland ownership and timber availability. About three-fourths of the forest lands in North Carolina are controlled by some 700,000 nonindustrial private forestland owners, and another 12% of the state's forests are owned by forest industry. Chip mill issues related to private forestland owners that are being addressed in the study include revenue opportunities, stand improvement opportunities, and changes in procurement strategies.
A second focus of the economic component of the study is concerned with identifying the structure of and trends in the state's forest products industry. Topics being considered include changes in technology and materials merchandising, and purchaser trends, both domestic and foreign. A major point of interest is the relationship of such trends to the demand for chip mill products.
In investigating current and potential tradeoffs off timber versus tourism, the study is focusing upon effects on state and county revenues, infrastructure, and amenities associated with forest lands. The analysis is spatially explicit, based on demarcations of areas of intensive recreational use, areas or substantial timber procurement, and geographical overlaps between the two. Local community impacts are being analyzed in terms of state and local policies, infrastructure (especially roads and traffic), health and safety, and community opinions on such things as noise and aesthetics. Finally, nonmarket values are being addressed through efforts to identify positive and negative off-site environmental effects of timber harvesting. Foci here include water quality and quantity, wildlife values (game and nongame), forest structure, and amenity values.
A variety of available models and data sets are being utilized in the study. The primary timber data is from the 1990 forest inventory and analysis (FIA). Timber products output updates are also being used. Available industry data and tax revenue data constitute other relevant sources of information. Inventory projections are being accomplished with the aid of a subregional timber supply (STRS) projection methodology. Regional economic and social impacts for timber and tourism industries, and tradeoffs between them, are being analyzed with the aid of a regional input-out model (IMPLAN) employed by the U.S. Forest Service. The study is applying financial models to assess impacts for forest landowners in terms of economic benefits and costs of alternative timber harvesting projection scenarios, as well as impacts of potential strategies for forest management available to owners.
The ecological assessment -- the second primary component of the overall study -- is addressing three basic areas : a) the historical context of forest lands in the state, with ample recognition given to North Carolina's agricultural legacy; b) stand level effects related to timber harvest, including regeneration, water quality and wildlife effects; and c) cumulative effects.
At the stand level, the study is investigating the potential impacts of chip mill harvesting on such variables as biomass removal; changes in average rotational age; and water quality, with emphasis on temperature, sediment, and the generation and impacts of nonpoint source pollution from timber harvesting practices; as well as the effects such practices on site productivity. The status of wildilfe in terms of game species, nongame species, and threatened and endangered species is also an important concern at the stand level. Aquatics and storm water runoff are two additional ecological foci of the study. Finally, cumulative ecological effects are being assessed in terms of aggregate measures of water quality, landscape fragmentation, and the connectivity of genetic resources, e.g., corridor analysis.
Just as with the economic component, the ecological assessment component of the study relies on a variety of methods. In addition to the use of prior published research and the collection of field data, the assessment is employing computerized wildlife distribution models and landscape ecology models. A major emphasis of these approaches is to allow analysis of the chip mills as they are situated within, and by their actions affect, a landscape context. In this way the impact of the mills may be more directly linked to such phenomena as shifting patterns of timber harvesting, land use, and population density.
In summary, achieving the overall objective of the North Carolina Wood Chip Study depends upon the integration of economic and ecological components. The intent is to conduct an integrated analysis at both small scale (stand, local community) and large scale (state, region, landscape) levels, and to seek to uncover linkages between the two. The investigators believe that this is the most realistic and effective way to assess the long term impacts of chip mills and associated harvesting patterns on both the people and the forest resources of North Carolina.
A number of individual elements within the overall Study have been completed, including a historical background of North Carolina forests (Burleson and Cubbage 1999); most of the research on the regional economic impacts of timber and tourism in the state; estimates of impacts of increased timber harvests and prices on market returns received by private forestland owners; and the social and community impact analysis field work. The entire North Carolina Wood Chip Study is slated for completion in March of 2000.
Virginia. A process has recently been initiated in the state of Virginia that perhaps more closely resembles the history of the Governor's Advisory Committee in Missouri than do the other three chronologies described thus far. In July of 1999, the Virginia Legislature established a Chip Mill Study Committee to investigate the potential economic and environmental impacts of satellite chip mills in Virginia. A satellite mill is one which is directly associated with a manufacturing plant. There are currently four such mills operating in Virginia, and as with the chip export market in Arkansas, they comprise a relatively small sector of the state's chip industry.
The Committee is made up of fifteen members, including six state legislators, thye state Forester, representatives of the solid wood and chip industries, and representative of three environmental organizations. In contrast to Missouri and North Carolina, the primary impetus for this process originated with the state legislature, as opposed to the governor of the state. The Governor of Virginia has, however, endorsed the function of the Chip Mill Study Committee. The legislature allocated $12 thousand to help the Committee conduct its activities, which will extend over a period of two years.
Since its formation in July, the Committee had held two meetings, with a third scheduled for December. The first was primarily informational in nature and included five presentations. The Department of Forestry informed the Committee about its overall mission and activities in the state; a private forestland owner discussed the importance of forest industry to people like himself; and three representatives of environmental groups voiced their concerns about a variety of potential effects that might result from the operations of satellite chip mills in the state. At the second meeting, five additional perspectives were presented to the group. It received overviews of the North Carolina Study and the Southeast Forest Resource Assessment Project currently underway, and a summary of forest industry trends in Virginia from 1940 to 1992. Economists representing both forest industry and environmental groups also spoke to the Committee regarding their views of what constitutes resource sustainability. As noted above, the next Committee meeting will occur in December.
At this early stage of the process, the Committee is struggling to define the issue and establish the parameters of the debate. It has been suggested that an ‘environmental negotiator' be employed to facilitate future discussions. Some Committee members support this idea, while others think it might be too early in the process for such a move. In short, the Chip Mill Study Committee in Virginia is going through many of the same kinds of "growing" or "identity pains" experienced by the Governor's Advisory Committee in Missouri as it began its task; and time will tell how successfully it addresses the difficult challenges ahead.
* * * * *
The capsule overviews presented above involve different states with differing forestland resources; different mechanisms to address the ‘chip mill issue' (e.g., a deliberative body vs. a research project); and different levels of financial resources with which to work. They do, however, along with the Governor's Advisory Committee in Missouri, embody a common purpose : they are expressions of a public commitment to ensure the long-term sustainability of both the forestlands that are a vital part of these states' natural heritage and the economic and social livelihoods of the people who depend on those forests for a living and/or simply value them for what they are. The extent to which any or all of these efforts are successful will ultimately depend on the willingness of everyone involved to recognize these processes as opportunities for learning and enhanced understanding of not only the forested landscapes in which they live, but also of themselves as citizens of communities defined by both forests and people.
