Resource Development Special Section
Viking Lumber Mill on Prince of Wales Island.

© Division of Forestry

Resource Development Special Section
Viking Lumber Mill on Prince of Wales Island.

© Division of Forestry

Young Growth,
NEW
Opportunities
Timber industry holds on amidst multitude of obstacles
By Brad Joyal
F

or decades the forest sector was Alaska’s second-largest industry, reaching its peak in the ‘70s. But since the early ‘90s, federal policies and management practices have failed to provide a sufficient timber supply. New government policies and federal land use shifts have particularly affected Southeast, which saw allowable harvest levels reduced significantly after the Tongass Land Use Management Plan was issued in 1997 and then amended in 2008 and 2016.

“Southeast has really struggled,” says John “Chris” Maisch, state forester and director. “Most of the struggles are based on timber supply and availability of supply, in addition to what has happened with the Tongass. Less wood has meant less employment and less economic diversity. That’s the bottom line.”

While Southeast’s economy has felt the harshest fallout from the new policies, the Interior has seen small, yet steady growth in the timber industry in recent years as wood biomass projects are implemented to fulfill the growing need for cost efficient space heating and electrical generation.

Deep Job Losses
What once was a pillar of Alaska’s economy has become a shadow of its past. According to the Alaska Forest Association, the logging and wood industry employed 4,600 people in 1990. That number plummeted to approximately 400 direct logging and manufacturing jobs in 2018, in addition to 100 federal jobs that were available last year. While employment opportunities have been weakened throughout the state, Maisch notes it’s especially noticeable in Southeast.

“It has diminished dramatically in Southeast,” he says. “Twenty or twenty-five years ago, there were 5,000 direct employees working in the logging industry in Southeast. We use 300, roughly, as the number for Southeast jobs these days.”

Maisch adds that the industry’s struggles have been made especially noticeable in Alaska Economic Trends, a monthly publication by the Alaska Department of Labor and Workforce Development. “They used to report about different employer sectors in the back of that publication every month,” he says.

“Now, I think, forestry and sawmilling are lumped in with agriculture. It doesn’t even report out as its own line item anymore.”

Growth in the Interior
Southeast’s timber and forestry industry remains stunted, but the Interior is experiencing steady growth. Northland Wood, which employs more than thirty year-round employees and as many as fifty employees during the summer, is the largest mill in the Interior. The mill opened in Fairbanks in 1965 and grew to open a second location in Anchorage in 2004. It offers graded lumber, which is air dried and typically lasts longer than lumber that is dried in a kiln.
“That’s the big advancement in the last twenty years in the Interior—the use of wood for wood energy.”
John “Chris” Maisch, State Forester and Director
Although there are a handful of lumber yards like Northland Wood, the main reason the Interior’s timber and forestry industry is experiencing modest growth is because the region has placed an emphasis on utilizing wood to heat or power new operations.

“That’s the big advancement in the last twenty years in the Interior—the use of wood for wood energy,” Maisch says. “Most of that is space heating, but there is some power that’s produced at the Tok School, on a small scale, with wood. We went from no biomass wood heating to now, there’s literally biomass projects all over the state—all the way up to the Kobuk River and down to Ketchikan. The majority of them are in the Interior, and the bigger chip ones are Delta and Tok’s schools.”

The development of biomass use for wood heating is beneficial because it can be done with a lower quality of wood. The Interior is using wood taken off fuel mitigation treatments, reducing risk around various communities while also producing energy for large boilers and individual home heating setups.

From an economic standpoint, the use of biomass has a noticeable impact on smaller communities such as Delta and Tok, as it creates jobs. “There aren’t a lot of other employment opportunities in places like that,” Maisch says.

“Southeast has really struggled. Most of the struggles are based on timber supply and availability of supply, in addition to what has happened with the Tongass. Less wood has meant less employment and less economic diversity. That’s the bottom line.”
John “Chris” Maisch, State Forester and Director
Products Produced
Each mill has its specialties, though the bulk of the products being produced include large cants and flitches, shop and dimensional lumber, railway ties, shakes and shingles, music wood, and various specialty and craft products. For the past five decades, Sitka Spruce and Western hemlock of high quality have been exported from Alaska to the Pacific Rim in the form of logs, lumber, and timbers. Firewood and wood pellets are always big sellers.

A big portion of the round log exports are sent to Asia, with China and Japan consistently leading the way as the most common destinations for Alaska’s lumber. The University of Montana’s Bureau of Business and Economic Research collaborated with the Pacific Northwest Forest Inventory and Analysis Program of the US Forest Service to release a 2015 census about Alaska’s forest products industry and timber harvest. The census, which was released in 2017, shows that 84 percent of Alaska’s Sitka Spruce logs that were exported in 2015 were sent to China. The remaining 16 percent went to Japan. China received 70 percent of the state’s Western hemlock log exports, Japan accounted for 11 percent, and Korea 19 percent. Japan and Korea accounted for the overwhelming majority of Western red cedar exports, receiving 51 and 48 percent, respectively. Canada imported the remaining 1 percent of Western red cedar logs.

“We quantify the value of the round log export in Southeast—just the logs that go into the Asian market and some domestic United States—at around $1.2 billion in value during the past ten years,” Maisch says. “That’s pretty significant. The sawmill lumber economic impact is in the millions, so it’s not a huge number compared to a lot of other industries.”

Domestically, Alaska mills provide kit cabins and kit homes throughout the state. Logging and Milling Associates, based in Delta, is among the cabin kit leaders in the industry. According to the company, “We are focusing on making precut packages with the option of saddle notches. These would show up at your building site packaged and labeled for easier construction. No cutting tools would be required.”

“It’s really high-quality stuff—they’re really beautiful homes.” Maisch says. “Some of the other mills just do smaller kit cabins, a 16 by 16-foot or a 12 by 12-foot, whatever it is you’re after.”

White spruce logs processed in the Interior.

© Division of Forestry

Ravn continues to provide regional service for Alaskans.
White spruce logs processed in the Interior.

© Division of Forestry

“We maintain an active timber services camp to monitor harvest and reforestation efforts. The year after timber harvest, we hire a contractor to plant seedlings to reforest the acres harvested.”
Alisha Drabek, Executive Vice President, Afognak
Land Usage
Alaska’s forests are managed by four entities: the federal government (51 percent); state and local government, including the Alaska Mental Health Trust and the University of Alaska (25 percent); Alaska Native corporations (24 percent); and private landowners (0.4 percent). Because private landowners account for such a small fraction of Alaska’s lands, private timberland owners supply a very limited amount of timber to the industry.

Timber harvests located on Native, federal, Mental Health Trust, and University of Alaska lands reached 100 million board feet in 2018, the majority of which were on Native corporation lands. Of the 16.8 million acres that make up the Tongass, 5.5 million acres are considered commercial timberland. A little more than 465,000 acres have been logged in the Tongass since 1907, and that number isn’t expected to grow much in the future. The Tongass Land Use Management Plan, amended in 2016, states that only 0.4 percent of commercial-grade old-growth acreage will be harvested between now and 2116. The young-growth in the Tongass is growing at a rate of 500 million board feet annually; however, it will be thirty to forty years before the young-growth is mature.

According to Maisch, the lack of supply from the Tongass has put an emphasis on the state’s roadless rule. “That’s why the state is very involved to get the roadless rulemaking completed to allow for a full-exemption rule to apply to the Tongass,” he says. “There’s a lot of land that’s designated for forest development in the forest plans that’s technically off limits because of the roadless rule. To harvest it would be by helicopter, and that’s a pretty expensive proposition.”

Afognak Native Corporation, based in Kodiak, is among the Native corporations that have engaged in the timber industry. It most recently sold timber in 2017, anticipating that harvesting will begin in 2020.

Before that, Afognak has not had any timber harvests on its lands since 2013, which were associated with a 2007 timber sale.

“We typically sell timber to a logging contractor through a multi-year contract, whereby the contractor is required to harvest within agreed standards and timespan on our ANCSA lands,” says Dr. Alisha Drabek, executive vice president at Afognak. “We maintain an active timber services camp to monitor harvest and reforestation efforts. The year after timber harvest, we hire a contractor to plant seedlings to reforest the acres harvested.”

Drabek notes that all of the timber reforestation on Afognak lands either meets or exceeds the stringent requirements initiated by the Alaska Forest Resources and Practices Act. “For example, while we must have 200 surviving trees per acre, we plant 250 seedlings per acre,” she says. “And, with natural regeneration, we are getting 400-plus new trees per acre.”

“Timber is Afognak’s most renewable resource. We estimate that our earliest reforested timber could be ready for harvest within the next twenty to thirty years, continuing to provide benefits for future generations.”
Alisha Drabek, Executive Vice President, Afognak
Future of Forestry
Last month the Alaska Forest Association held its fall meeting in Ketchikan, accompanied by a symposium which prioritized establishing an inventory and examining the potential of the state’s young-growth resources.

Although the young-growth trees present in Southeast are of high quality, there aren’t enough of them available yet because the logging industry really didn’t catch on in the region until the ‘50s when two long-term contracts were put in place for pulp mills. “That’s the wood that’s now starting to become some of the older young growths, and some of the harvesting that occurred earlier,” Maisch says.

Afognak is a few decades away from its reforested timber being ready for harvest, but Drabek ultimately views the progress—even if it’s years away—as a resourceful benefit that will stand the test of time.

“Timber is Afognak’s most renewable resource,” she says. “We estimate that our earliest reforested timber could be ready for harvest within the next twenty to thirty years, continuing to provide benefits for future generations.”

Drabek continues: “Shareholders of Afognak Native Corporation and other sister ANCSA corporations do receive hiring preference for work on Afognak Island. Income from timber sales is contributed to our Shareholder Settlement Trust to benefit shareholders in the form of distributions in perpetuity.”

While the future of the roadless rule is yet to be determined, Maisch says he’s encouraged by continuous improvements at mills based in the Interior. Growing demand for biomass wood may be at the forefront of that, but, perhaps even more importantly, those mills and lumber yards have access to the state’s boreal forests in the Interior.

“They’ve all been slowly investing in and upgrading their equipment,” Maisch says of the Interior-based mills. “The reason for that, in my opinion, is because they can get wood. They have a future, and banks look at that. They can get loans and they can make investments with confidence knowing that they’re going to actually have a wood supply. That doesn’t exist in Southeast Alaska right now.”

Alaska’s Division of Forestry continues to address the challenges associated with Southeast’s timber supply. Two project agreements were initiated in 2018, including one on Gravina Island in Ketchikan that will comprise a joint timber sale with planned forest restoration work. The second project is focused on thinning spruce to improve the health of the Chugach. Information and conversations like those that took place at the October symposium will also continue to benefit industry leaders in the ongoing transition from old growth to young growth opportunities in the Tongass.