In The News
Potlatch Sells Tree Farm
In April, the Potlatch Corp. announced the upcoming sale of its 17,000-acre hybrid Poplar tree farm in Boardman, Ore., to a private equity tree farm investment fund for $65 million. The sale is expected to close in the second quarter of 2007.
Senate Extends Timber Payments On March 28, the Senate voted to make a five-year, $2.8 billion plan to extend federal timber payments to counties as part of an emergency spending bill.
The plan was added to the $122 billion spending bill to fund the war in Iraq and Afghanistan, as well as other domestic programs. The payments would phase out over the five-year period, giving rural counties time to adjust to the cutbacks in federal logging.
Also included in the plan is an additional $1.90 billion for a program to compensate states for lost tax revenue from federal lands from 2008 to 2012. “Congress has forged a bipartisan solution that will help keep schools open, roads safe, and county workers on the job,” said Senator Gordon Smith, R-Ore., who was one of the sponsors of the plan.
Cracking Down on Illegal Timber Trade
According to the U.S. International Trade Commission, as much as 30 percent of U.S. hardwood imports are from suspicious and/or illegal sources. Most of the wood comes from Honduras, Indonesia, or Peru and is imported to China, where it is processed and then exported to the U.S.
The AF&PA (American Forest and Paper Association) says that the illegal logging costs U.S. companies as much as $1 billion a year in lost export and lower prices in timber products. Illegal logging costs the State of Oregon $150 million annually.
In March, a bipartisan group of congressmen introduced a bill to help stop the illegal trade. “I can’t stress enough how pervasive this problem is,” says Earl Blumenauer, D-Ore, at a Capital news conference. “It’s destabilizing the environment, destabilizing trade opportunities, and literally robbing national governments” of millions of dollars in lost taxes.
In March, Sierra Pacific Industries, headquartered in Redding, Calif., announced its intention to purchase Centralia Sawmill Co., a green Fir stud mill located in Centralia, Wash. “The opportunity to acquire an existing mill at this location makes good business sense, as it complements our current sawmill operations in Aberdeen and Burlington (Wash.),” said Sierra Pacific’s president A. A. Emmerson. Also in March, the Campbell Group, a Portland-based timber investment firm, announced plans to acquire Menasha Forest Products Corp. Menasha said its stockholders will receive cash payment for their outstanding shares, and the Campbell Group will assume the company debt. With the closing the deal, the Campbell Group will acquire 135,000 acres of timberland in Oregon and Washington.
New Rules for Renewable Fuel
The Wall Street Journal reported that the Bush administration completed rules in April to require refiners to use more renewable fuels such as ethanol in the nation’s motor-fuel supply. The congressionally mandated Renewable Fuels Standard will require refiners to use at least 7.5 billion gallons of renewable fuel in the nation’s gasoline by 2012. It is estimated that the new standard could cut oil use by 3.9 billion gallons, and reduce greenhouse gas emissions by as much as 13.1 million metric tons by 2012.
Fire Damage to Mill
On March 20, the log sorter at Yakama Forest Products’ small log mill in White Swan, Wash., was damaged in a fire. The small log sawmill will be down at least through May while repairs are made. But the planer at the small log mill, and the large log sawmill and planer will continue to operate on a normal schedule.
New Mill in Lakeview
There will be a new small log mill in Lakeview, Ore. The Collins Companies, headquartered in Portland, have announced that they are going to build the $6.6 million project on their Lakeview property. The project is scheduled to begin this fall. The small logs will come from the company’s 80,000-acre certified forest, as well as from other timber owners and the U.S. Forest Service. The company will use a single pass machine manufactured by Coe Newnes McGehee out of Tigard. Also, expect to see a new biomass plant built in Lakeview alongside Collins Pine’s Fremont Sawmill. DG Energy plans to have its wood-fired power plant operational in 2008. The 13-megawatt plant will come with a $20 million price tag, and will burn hogg fuel and fiber, chipped from thinning overstocked national forests and private timberlands. The plant will employ 15, and it’s estimated 70 more individuals will be needed to supply the fuel.
Upset in Alder Verdict
The Supreme Court threw out Ross- Simmons’ $79 million verdict against Weyerhaeuser. It now has people wondering if the judgment could affect the similar case between Weyerhaeuser and Mount Vernon-based Washington Alder (a $5.3 million judgment which would triple under the Sherman Antitrust Act).
The Ross-Simmons case has been sent back to the 9th U.S. Circuit Court of Appeal, where the court will also hear Weyerhaeuser’s appeal with Washington Alder.
Weyerhaeuser and Chevron Join Forces
Weyerhaeuser and Chevron recently entered the biofuel arena. The two companies announced in April that were teaming up to investigate the possibilities of turning wood and wood byproducts into clean-burning biofuel that you could purchase at your local gas station.
The venture would combine Chevron’s expertise in the fuel technology and Weyerhaeuser’s ability to generate cellulose.
“Chevron is investing in ‘cellulosic’ biofuels because we believe they will play a role in meeting future energy growth,” Dave O’Reilly, chairman and CEO of Chevron, said in a new release. This project will look at what sources of cellulose will work best for vehicle fuel and how to produce them the most economically. At the moment corn ethanol is more economical to produce, but biofuel based on wood cellulose offers great net energy than gasoline. Some in the industry believe that the Weyerhaeuser/ Chevron team are working at finding technology that will make wood cellulose more feasible to produce. Neither Chevron nor Weyerhaeuser have disclosed how much they are going to invest in the project.
Trucks Sit Idle
This Spring, Washington’s Gray’s Harbor logging truck drivers and independent haulers took a stand. Upset that there have been no raises in their base pay to offset rising fuel costs, they refused to drive, and beginning on March 29 their logging trucks sat idle. Don Entus, owner of Don Entus Trucking in South Aberdeen had all 22 of his trucks parked and estimated three-fourths of all log trucks in Grays Harbor were also parked.
Log truckers in the harbor area haven’t received a raise in their base rate since the mid-80’s. The truckers are looking for a “12 percent cost of living raise,” says Entus. He adds that other areas of the state have secured raises. “The other areas have organized. Up until now, we have not been an organized group.”
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