July and August 2006



The New Frontier

Alaska looking for investors and developers for Tanana Valley

By Kurt Glaeseman

Ever wonder where new frontiers exist for the logging and lumber industry? How about looking north…to Alaska? An unusual opportunity for investment in and development of Alaska’s interior forestlands has been made available. Under the auspices of Governor Frank H. Murkowski, the Fairbanks Economic Development Corporation, the Forestry Program Director, and the Regional Forester in Fairbanks, an attractive prospectus has been prepared to encourage investment interest in the forests of the Tanana Valley near Fairbanks.

Board Feet Available

The commercial forests of the area are composed of pure and mixed stands of white spruce, black spruce, paper birch, quaking aspen, and balsam poplar. Currently some white spruce is utilized by local private companies that saw dimensional lumber and twoand three-sided house logs and timbers. Usually the rough-cut lumber is air-dried and sold “green,” while a few regional mills produce graded dimensional lumber. Portable band saw mills produce some hardwood birch lumber. But the majority of the Tanana Valley forests are under-utilized and offer investment potential for companies that can evaluate the resource and coordinate the logistics of processing and transportation.

Tanana Valley offers potential for companies that cannot only evaluate the resource, but coordinate processing logistics and transportation.

The Tanana Valley State Forest extends 265 miles from near the Canadian border to the village of Tanana on the Yukon River. It contains 1.77 million acres of commercial forestlands. The Fairbanks North Star Borough, the University of Alaska Trust Lands, and the Mental Health Trust Lands offer almost 80,000 more acres of forestlands, all within a 50-mile radius of Fairbanks. Private lands are mostly owned and managed by eight individual Alaska Native Corporations. Doyon Limited, the Interior regional native corporation, and local village corporations own and manage a half-million acres of commercial forestland. Lands classified for forest management under the Tanana Basin Area Plan are divided into four management jurisdictions, with a standing commercial volume on these lands estimated at 3,869 mmbf.

Most timber sales are sold by competitive bid, but larger sales can be negotiated to foster economic development. Current schedules, which offer basic information on the volume, location and sale dates of offerings, are designed to meet local needs. At the present time, these account for less than 10 percent of the allowable cut.

Some companies saw dimensional timber and two- and three-sided house logs,while other regional mills produced graded dimensional lumber.

Birch Possibilities

According to Ron Ricketts, who works for the Fairbanks Economic Development Corporation, Japan has shown some interest in spruce logs, but he feels that the birch, measuring from 6 inches to 12 inches dbh, has been largely overlooked. He would like to see a company establish a mill to manufacture birch furniture stock, which could be shipped south for secondary manufacturing. Possibilities with the high-grade birch also include veneer and chip-based engineered wood.

Last June, after a show-and-tell demonstration, a company requested that a selection of birch logs be shipped to their mill in Washington for a processing analysis. Chris Maisch, Regional Forester for the State Division of Forestry, identified stands of birch that met the age and dbh requirements. He hired a local logger to fall the trees, cut them to length, and move them to road access. Once in Fairbanks, the logs were loaded onto flatbed trailers belonging to Totem Ocean Express. The trailers were then loaded on Alaska Railroad flatcars, which took them to the Port of Anchorage, where they were sent by ship to Tacoma and then by highway to the company’s mill site. Evaluation is in process; no official bottom line has been offered to the public, but everyone remains “cautiously optimistic.”

Weather not an Obstacle

One of the logistics that interested investors always inquire about is the weather, but to Alaskans it’s no big deal. They have learned to live with and even embrace the extremes. The climate of the Tanana Basin is one of the coldest and warmest areas of the state. Mean temperature in Fairbanks for July is 62 degrees Fahrenheit and for January is minus 13 degrees. August is the wettest month (1.86 inches), and November and December log the heaviest snowfall (13.1 and 12 inches). Frost-free days are expected from the first of June to the end of August, but daylight hours may be the biggest adaptation: Sunlight hours reach a maximum on June 21 of 21 hours, 13 minutes and reach a minimum on December 21 of 3 hours, 44 minutes.

Logging can be done year-round, but winter work might focus on areas that require winter road and ice bridge infrastructure to access — this would be in river flood plains and areas of permafrost. Upland sites can be accessed by a more traditional forest road system with main line and spur road development.

Ron Ricketts, of the Fairbanks Economic Development Corp., feels the birch (6” to 12” dbh) have been overlooked. Ideally he would like to see a company mill furniture stock.

Gaining Access

Interior Alaska’s road network connects to the seaports of Anchorage (356 miles on the Parks Highway) and to Whittier (48 miles farther on the Seward Highway). Trucks with tandem trailers can run year-round. Both ports are serviced by the Alaska Railroad. The Port of Whittier has modern rollon, roll-off shipping service that travels weekly to Prince Rupert, BC, and to Seattle. Several companies offer weekly container service to Seattle and Bellingham, Wash. Another possibility is the 366-mile Richardson Highway truck route to the Port of Valdez.

With adequate log transportation available, an added inducement to investors is the possibility of taking advantage of the back haul. Many containers now go back south empty, so a mutually attractive two-way transportation arrangement could perhaps be negotiated. According to Ricketts, there is a good labor pool available for logging, and the State of Alaska encourages the interior forest product development.

This could be an exciting possibility for investors interested in exploring a new logging and milling enterprise near Fairbanks. Much of the above information was taken from “New Growth: Prospectus for the Forest Products Industry: Interior Alaska.”

In the Tanana Basin temperatures range from 62 degrees in July to -13 degrees in January and they see around 12” of snow in the winter.

Information, brochures, the prospectus and even tours can be arranged through Ron Ricketts, Forest Products Industry Marketing Director of the Fairbanks Economic Development Corporation. Contact numbers are (907) 457-3412 or e-mail ronbevricketts@yahoo.com or fedc@alaska.com. Chris Maisch, Regional Forester, can be contacted at (907) 451-2666 or e-mail chris_maisch@dnr.state.ak.us.



This page was last updated on Sunday, January 21, 2007