Friday, October 28, 2011

Forests and Wall Street

Ecology is a subject that comes to mind when we think about forests.  The geography, terrain, soil, climate plants and animals interact in complex ways often in fairly long term cycles to produce a unique living forest. We humans tend to leave ourselves out of the ecological equation when it comes to forests. Human ecology or how humans interact with a forest is a major factor that we tend to ignore. We are not just talking about the foresters and loggers who work in a forest, but we have to look farther into the laws and institutions that govern forestry. These in turn are affected by politics, social movements, economic and taxation policy.

Does the present " Occupy Wall Street Movement" have implications for BC's forests? This movement may grow or fizzle out, but it has raised questions about corporate power in society.  Large organisations are needed to run large industrial plants etc., but there is a legitimate concern that corporations have too much influence on the levers that control society. An era of industrial feudalism may await, if we do not find ways to reduce corporate power.

 Are we heading down the wrong road?  If we are headed in the wrong direction, we should not blame it entirely on the corporate villain. Just about everyone needs to follow the piper. What tune has the piper been playing?  At election times we tend to vote for the candidate that promises economic growth and jobs by attracting investment.  Deep down, most of us are aware that a future of unlimited growth, means no future if we exceed the earth's capacity to support us. Attracting investment is a code word for aligning taxation policies to attract international corporate capital. The recipe calls for low rates of corporate taxes, consumption taxes, reduction of progressive income taxes and deregulation. These taxation policies tend to produce poor income distribution in a society and negative effects on the economy. The attraction of fast money is too great.  Governments bail out or assume the losses of financial institutions to maintain the system after some fast buck financial schemes go sour.

How do forests fare in a society with a emphasis on fast money?  A long term investment for a human is perhaps one to three decades at most. Most forests are growing on a much longer cycle of  about a century or more.
 This BC coastal forest was operating on a natural cycle of several hundred years before the fast money idea injected itself into this forest landscape. The virgin forest near the top and over the hill will continue to work on the long term cycle of hundreds of years because it is a park or protected area. The fast money idea has worked its way through most of the valley replacing the virgin forests with young trees in the space of less than three decades.

The fast money idea in BC's public forests goes under a euphemism. We call it forest policy or the forest tenure system. After World War II the BC Government needed fast money to bring infrastructure and economic growth. It looked to forest corporations to turn the forests into fast money. It saw that its interests were best served by establishing an oligopoly of commodity wood products producers. Corporations were allocated harvesting rights to large volumes of public timber under a non-market system of administered prices. This Government and corporate alignment did seem to work well initially. Mowing through the best virgin timber forests to supply ready markets did produce fast money. The main market was the USA. This market was wide open after World War II because US forests were recovering from an earlier mowing than BC. When the US timber supply started to recover toward the end of the 20th Century, US wood producers were more ready to supply their own market. BC wood became vulnerable to discriminatory export tariffs or taxes.  The administered prices for timber allocated to forest corporations was open to criticisms of government subsidy.

The improvident mowing of the best virgin timber led to problems on the BC Coast as the corporate forest industry started to tackle the left-overs. Less accessible timber higher on the mountain was less valuable and more costly to harvest and transport. In the interior Lodge pole pine was regarded as the left-over species and avoided in favor of spruce and other species. Huge areas of pine became old and susceptible to mountain pine beetle attack. A super outbreak of mountain pine beetles, much larger than a natural outbreak wasted tens of billions of dollars worth of timber and left many forest dependent communities with an uncertain future. This waste of public resources and value by the Government and forest corporations was much greater than any financial scandal in BC's history. There have been major public outcry over waste of a few million dollars, but the epidemic has gone under the public's radar. The public got sold the story that the beetles survive better in mild winters and were pointed to climate change. However, this skillful propaganda was only part of the story. The public bought the simple, easy to understand, wrong answer to a complex problem. Governments and corporations are masters at public relations. They did a good job of selling not quite the whole truth.

The central theme of BC's forest policy for over 60 years has been to enable forest corporations to rip the best timber out of BC's public forests. The forest industry, the public forests, and forest dependent communities are now suffering as a result of this improvident stewardship.  There is a lack of interest from BC's mainly urban public in the management of our public forests. The problems of the forest sector are likely to be solved by more and greater enabling of forest corporations. This sounds like a Wall Street bailout where improvident bankers were rewarded by bailouts and bonuses. In the case of BC's public forests it will likely mean strengthened tenure in Public forests by forest corporations. Long term leases will be a convenient ruse for politicians and forest corporations to effect the final stages of stealth privatization of our forests. This arrangement will enable them to claim that our forests are still public as they are handed over to private forest corporations. It is time that the residents of BC said no to this " Rip off to own" scheme that the BC Government and forest corporations have been working on for over 60 years.

Saturday, October 15, 2011

Rethinking forestry on the BC Coast

A prefabricated timber frame kit made with quality wood grown on the BC coast

The forest industry on the BC coast has been experiencing problems for about 20 years.  While there have been ups and downs in the economy, the underlying problem is in the woods. The industry was the main driver of the BC economy when it was harvesting high volume stands of virgin timber. Troubles surfaced when there was a transition to harvesting second growth and the least desirable virgin forest stands.

Most of the timber harvest on the BC coast is mountain logging requiring the use of cable yarding machines to move logs to the road. Road construction and log handling is more expensive than on gentle terrain. High volumes of timber in virgin stands enabled costs to be covered. Although second growth stands have grown rapidly and productively, there is less timber volume per unit area of harvest and this tends to drive costs upward. Actual harvests have been less than allowable harvests because it is too costly to harvest some areas.

Forest management in BC is centralized and fragmented.  The rapid harvest of virgin timber was based on the calculations of foresters in penthouse offices of forest corporations in Vancouver and BC Government offices in Victoria. The statistics supported the rapid harvest of virgin timber since the second growth would grow rapidly to provide replacement harvest in future. The calculations were generally correct, but the specialist foresters that worked with the timber volume figures did not look farther than projected timber volumes. The value of the timber volume and the feasibility and costs of harvest were not considered.

A more provident approach would have been a less rapid schedule for replacing virgin old growth with second growth. This would have provided a longer and more manageable period of transition. The first of the second growth harvested would have been older with greater volume per unit area. This would have reduced unit costs of harvesting second growth and the timber would have been more valuable and suitable for a wider range of uses and markets.

 Present difficult circumstances are pointing toward increasing the length of rotation (time between successive harvests).  45 million cubic meters of timber have been left unharvested since 2005. This means that considerable areas of coastal forests will be left to grow older and more valuable. However, this value can only be realized if there is a more diversified wood products manufacturing industry on the BC coast.  Log exports are another potential solution for some of the unharvested volume. It could provide some  jobs and cash at present. Log exports should be seen as a symptom of our problem. If someone can transport BC logs across the Pacific Ocean at a time of high fuel costs and manufacture them at a profit, they may have the benefit of lower labour costs but they are most likely extracting higher value from more diversified wood products. To gain the benefit of coastal wood, we need to diversify our wood product manufacture to achieve greater value. Growing larger timber of higher quality fits the terrain and forest circumstances of the BC coast. It makes a better economic and ecological fit than the present commodity wood products focus.

Public forests were intended to result in diversified wood product manufacturing industries because public wood could be purchased by a variety of entrepreneurs. In BC, this benefit of public forests was lost when most of the wood was allocated to an oligopoly of a few commodity producing forest companies. The path to diversity of manufacture of coastal timber remains blocked by these arrangements. A sustainable future means that we have to change our arrangements for managing and selling wood from our public forests.

Saturday, October 8, 2011

Clear cutting

Be wary if something is called scientific. Forty or fifty years ago progressive clear cutting of forests on the BC coast was called scientific. The old growth virgin forests were called decadent and these were to be replaced by new young forests that would grow quickly. The future is now here and the photo shows a young forest being harvested on the BC coast.

There is more to this photo than first meets the eye. It is a story of how the dots were not quite connected on the scientific forestry idea of forty to fifty years ago. The idea gave rise to the rapid liquidation of virgin coastal forests. A scientific logging binge one might say! Forty years ago some foresters that worked for these coastal forest companies were thinking about connecting the dots and were discussing the inevitable future. These foresters wondered about the wisdom of harvesting the best most accessible timber first and what would happen when the time of transition arrived. The transition would be a time of dealing with the least accessible and valuable virgin timber and dealing with the harvest and manufacturing of  logs that were much smaller in diameter.

Since the liquidation of the virgin forests occurred rapidly the transition is rapid and difficult. The heavy log loader is capable of loading very large logs. Instead it is employed in placing small second growth logs on the truck. Most of the BC coast is mountainous and logging is mountain logging. It is more costly than logging on the plain and the costs of harvesting on the BC coast are high. A stand of young second growth has much less total volume of timber compared with a stand of old growth. This fact tends to increase the cost of logging a unit of volume of second growth. Present harvesting of second growth targets the most accessible timber to help reduce harvesting and hauling costs.

The foresters that saw this coming forty years ago were cogs in the wheel of a machine. They had specialized tasks in forest engineering or silviculture. The drivers of the machine were far away in centralized locations of Victoria and Vancouver. The BC Government and its partners, an oligopoly of a few forest corporations given timber allocations at non market administered prices were on a roll to convert virgin forests to quick dollars.

Sunday, October 2, 2011


In the last blog, it was noted that silviculture in BC seldom extends beyond regeneration after harvest. The forest stand in the photo was planted in 1960 and it was spaced in 1980. The stand now has fewer larger trees and it is more resistant to winds. Stand tending has benefits
This stand is on the west coast of Vancouver Island.  There quite a few alternatives for the future of this stand. In most parts of the world, growth in a stand of conifers will decline when an age of 70 to 100 years is reached.  It is usually better to harvest and establish a new stand.
On the west coast of BC, nature grew some of the largest conifers in the world. Stands of conifers can put on good growth for 200 years. Later growth is quality growth of clear knot free wood. Stands can be thinned to provide timber before the final harvest. Nature on the west coast of BC was into the business of long rotations, so there may be some wisdom in terms of security of wood supply in following what nature was doing.
Unfortunately BC does not have a diversity of wood products manufacturers. The higher quality wood from longer rotations needs value added manufacturers to realize its full value.  Most of BC's timber from its public forests has been allocated to an oligopoly of commodity wood products manufacturers. Our wood utilization plants are set up to handle volume rather than value.
The stand in the photo is situated near a paved highway and it will be attractive in terms of low truck hauling costs. It is likely to be harvested in the near future to feed construction lumber mills or pulp mills. The Coast of BC presents challenges bay way of terrain that adds costs to competitive industrial commodity timber production. Longer rotations aimed at growing wood value rather than just wood volume may be a smarter option for the management of coastal forests. Unfortunately we are so locked into industrial commodity timber supply that we cannot stop to consider alternatives.