“Really worthwhile social change is seldom easily accomplished. It takes a long time to build trust on common ground. Our collaborative groups deserve enormous public thanks for staying the course when it would have been much easier to throw in the towel. As a direct result of all their hard work we have a pathway forward. We also have the science, tools, technologies and skill sets needed to move forward with the restoration work necessary to protect forests that are the cornerstones and building blocks of both our rural and urban lifestyles. The only missing piece of any consequence is the sawmill we need to build. None of us can afford to walk away from this challenge.”
Washington Forests Program Manager
The Nature Conservancy
Lloyd McGee is Washington Forest Programs Manager for The Nature Conservancy. He lives in Wenatchee, and is currently deeply involved in a search for someone with whom the Conservancy can partner in the construction and operation of a sawmill he hopes to site at a yet unknown location in central Washington. He first revealed his search to us when we interviewed him in March of 2015.
That McGee is still searching – more than a year later – attests to the degree of difficulty in finding an investor willing and able to plunk down as much as $50 million in the climate of political uncertainty that orbits around a host of issues associated with the often stymied management of national forests east of the Washington Cascades.
If you find the venerable and well-respected Conservancy’s interest in building and operating a sawmill a bit unusual, you are not alone. But, as McGee points out in this revealing interview, his ambitious search for a sawmilling partner is consistent with the Conservancy’s mission, which is “to conserve the lands and waters on which all life depends.” Herein, he explains his reasoning.
McGee brings considerable experience to his relatively new post in Wenatchee. Before joining the Conservancy five years ago, he worked for 18 years for Vaagen Brothers Lumber Company in Colville, where he served as a forester and log buyer. He was also president of the Northeast Washington Forest Coalition for 10 years while working for Vaagen Brothers Lumber Company. NEWFC remains one of the most successful forest restoration collaboratives in the nation, owing to its remarkably diverse membership. NEWFC’s following runs the gamut from wilderness advocates to lumber manufacturers. The group has thus far completed 35 restoration projects on the Colville National Forests, easily the most endangered forest in the State of Washington.
In our 2015 interview with McGee, he told us he applied for the program manager’s job with the Conservancy because he wanted to round out his career by “looking through a different prism.” Apart from searching for sawmill investors, he works with and chairs collaborative groups that have several forest restoration projects underway in central and eastern Washington.
McGee is a 1983 graduate of the University of Idaho, College of Forestry, where he earned degrees in Forest Resource Management and Forest Products Business Management.
Evergreen: Mr. McGee, you may have the most unusual job in the conservation world. Outside of the Nature Conservancy, we can’t name a single conservation group in the United States that employs someone whose job it is to hunt for investors to partner in a saw-milling venture.
McGee: I can’t either, but that isn’t all I do, though it is a big part of everything I do.
Evergreen: How so?
McGee: The Conservancy’s mission is to conserve the lands and water on which all life depends. In our part of the world – central and eastern Washington – our lands and our watersheds are in grave danger due to the rapid spread of insects and diseases that are fueling wildfires larger, more destructive and more frequent than at any time in recorded history. Working with our collaborative partners, we are striving to significantly increase the acres of forest restoration treated, but budgets are limited. We need to utilize revenues from the sale to sawmills of the bi-product logs and biomass that are removed from the treatments and reinvest those revenues into more acres restored. However, without local sawmills, the potential revenues are being spent on long distance hauling of these logs to distant mills.
Evergreen: We know the forest health/wildfire story pretty well, but we frankly never expected a conservation group would step into the political limelight that shines on our region’s forest health crisis. As you know, there has been great controversy about what – if anything – should be done to reduce the wildfire risk, though the stakeholder collaborative groups working in Washington appear to have quieted criticism from most of the “do nothing” activists.
McGee: We’ve come a long way in terms of our understanding of the underlying causes of our big wildfires, and you are quite right; the collaboratives have done a lot to increase public understanding and trust. Doing nothing has never been a viable option, but figuring out what to do and how to do it has taken quite a lot of time.
Evergreen: So how is your search for investors progressing?
McGee: About as well as can be expected. We knew going in that finding investors willing to deploy as much as $50 million of their own money wasn’t going to be a walk in the park. We are looking at ways to share in the investment risk or ways to spread the risk. I answer lots of questions from potential investors, often from well qualified people who have experience in processing biomass and bio-fuels and a range of innovative products manufactured from small diameter trees.
Evergreen: What sorts of questions do they ask?
McGee: The big questions, which we aren’t yet able to answer, all concern the predictability and sustainability of the fiber supply that is available within an efficient haul distance in Central Washington. . We’re working on a log supply study that answers the most pressing questions about available supply and expect to have these answers by November, 2016.
Evergreen: When you say “we,” we presume you mean the Conservancy.
McGee: That’s correct.
Evergreen: Do you have any back-of-the-envelope estimates you can share?
McGee: We know what’s been offered annually, on average, by the various timberland owners within an economically viable haul distance – about 35 million board feet log scale by the Forest Service, another 20 million from the Washington Department of Natural Resources, about 65 million feet by the Yakama Tribe, some 70 million by the Colville tribe and anywhere from 100 to 300 million feet from private timberland owners, which is a real wildcard based heavily on market prices.
Evergreen: That’s quite a swing on the private side, and not much from the Forest Service given the fact that they are central and eastern Washington’s largest landowners.
McGee: That’s true, but private landowners are the wild card, for sure, which is why it is so important for us to get the mill sized properly for the available supply of fiber. We anticipate starting at about 30 million board feet annually, but need to reach 50 million as quickly as possible. We are in a race to proactively reduce fuels in the accessible parts of forests most impacted by insects and disease before fires consume these landscape. Time is not on our side.
Evergreen: All the more reason why investors need reliable and dispassionate answers to their questions concerning consistency of supply.
McGee: And the major reason why we’re doing a log supply study.
Evergreen: Aren’t there timber purchasers that own sawmills west of the Cascades that regularly buy timber on the east side?
McGee: Yes. And there are sawmills from Northeast Washington and Northeast Oregon that purchase timber in Central Washington. Sierra Pacific, Hampton Industries and Sea-Sno are fairly regular buyers from the Westside. Sea-Sno however has recently gone out of business, which is a growing trend for Washington sawmills. Boise-Cascade and Vaagen Brothers Lumber from Northeast Washington and Boise-Cascade from Northeast Oregon all purchase timber in Central Washington whenever they need to supplement their more local supplies.
Evergreen: Those are long trips given the cost of diesel fuel.
McGee: The average haul distances exceed 200 miles one way. You’d be amazed how much potential revenue that could be invested in our local forests and communities that is instead going up diesel stacks between here and those distant sawmills.
Evergreen: But you can buy a lot of diesel for the price of a new sawmill, though you have to wonder if any of those companies might be your investors.
McGee: Could be, but no one is going to invest until we can answer the supply questions.
Evergreen: With all of their experience processing and marketing small diameter trees, you would think Vaagen Brothers would be interested.
McGee: I’ve talked to Duane, for whom I worked for 18 years, and I get the same answer: show me how the wood supply can be sustainable and at what annual volume level, and I can tell you whether or not a mill is feasible and how long it will take to amortize the investment. I have a lot of respect for Duane, so I listen pretty carefully to what he says. No one in our region knows more about processing small diameter timber, but he isn’t going to invest here unless we can show him a stable and predictable supply.
Evergreen: Which brings us to a subject Mr. Vaagen and other western lumbermen know well: the uncertainty associated with investing on the basis of a supply of logs that may or may not be available from national forests east of the Cascades, or anywhere else in 80-some million acres of diseased and dying national federal forests in the western United States.
McGee: The Nature Conservancy and the Forest Service recently completed a report that does a nice job of quantifying and prioritizing the challenges we face in Inter-mountain, mixed conifer, dry site forests. In the Wenatchee area, the national forest that is closest in terms of haul distances is the four million-acre Okanagan-Wenatchee. Of those four million acres, 3.1 million are set aside in roadless and no-harvest areas, leaving approximately 900,000 acres, and of those 900,000 acres approximately 400,000 are in some level of departure from their historic range of natural variability, meaning that they need thinning, prescribed fire, or time to grow to restore historic conditions.
Evergreen: We recently interviewed both Ryan Haugo, the Conservancy’s forest ecologist in this area, and Paul Hessburg, one of the Forest Service’s lead scientists at the Pacific Northwest Research Station in Wenatchee, so we are quite familiar with their findings. The Okanagan-Wenatchee, which you reference, and the Colville National Forest in northeast Washington, are both in trouble.
McGee: They are, the Colville even more than the Okanagan-Wenatchee, but both forests can be greatly helped by combinations of thinning and prescribed fire following thinning. Prescribed fire, whether used after thinning or on its own, is a reliable tool for reducing biomass accumulations that are fueling the big wildfires we are seeing in our region.
Evergreen: The report you reference goes to considerable length to make the case for using fire more aggressively as a tool for reducing woody biomass accumulations in forests that have grown too dense. The public reluctantly accepts the inevitability of smoke from wildfires, but doesn’t have much patience with smoke from prescribed or managed fire.
McGee: That’s true, and organizations like yours need to help us explain the choices we face. It comes down to how you want your smoke – in small doses from prescribed burns in the spring and fall or big does from wildfires during the summer. If we accept small doses in the spring and fall, we can slowly move away from the big doses that darken summer skies and make it difficult to be outside in air that is neither clean nor healthy.
Evergreen: We know the Forest Service is having a terrible time ramping up its restoration treatments on physical scales that are ecologically meaningful. What’s the problem?
McGee: There are many: funding, staffing, a very complicated regulatory process and public concerns that a program large enough to be ecologically meaningful might spawn a rebirth of the federal timber sale program that dominated national forests for nearly 50 years following World War II.
Evergreen: Do you think that could happen?
McGee: No, I don’t. Here is what is being done differently than in the past. For those involved in forest collaboration, our conservation community representatives and forest products industry representatives are finding common ground in the management of our National Forests. We are acknowledging together that our forests need ecological restoration which requires active management in the accessible zones of watersheds while protecting the inaccessible natural areas. Road building is at a minimum and road decommissioning is being implemented where negative impacts on water and fisheries are being observed. While we work together to accomplish valuable ecological restoration objectives, we also are considering critical economic impacts to our projects and local communities. That is where our sawmill recruitment efforts will support our ecological restoration objectives. Cross boundaries management and sharing resources is also a focus so that forest resilience to insects, disease and fire is accomplished on all forest lands. For example, private landowners also worry about the risk to lands they own that are adjacent to federal forests that have been impacted by insects, diseases and excessive fuel build-up, so we are working to enlist their participation in the landscape scale restoration projects at the collaborative table.
Evergreen: When you say landscape scale, are you talking about working across multiple ownerships and watersheds?
McGee: Yes. We have the science and the tools needed to work on 50,000 to 100,000-acre projects. These are scales that are ecologically meaningful and allow for operating efficiencies you simply can’t achieve in 300 to 500-acre projects our collaborative groups have been struggling with for the last 10 or 15 years. We will never get ahead of our forest health problems if we continue working at this pace.
Evergreen: Can you give us some idea of how slow the going is compared to what should be happening?
McGee: Annually, we are treating about 1 to 2 percent of the 400,000 acres of the Okanagan-Wenatchee National Forest that were given the highest priority in the report we’ve been discussing. These are acres that could easily be mechanically treated and burned applying the latest technologies that are being utilized on on public and private lands successfully today.
Evergreen: And the Forest Service says it can’t move any faster in national forests without more staff and funding from Congress?
McGee: That is what we are consistently hearing from the Forest Service Forest Service leadership. Part of the problem is the fire borrowing practice. The current model for funding fire suppression forces the Forest Service to borrow money from its forest management programs budgets to pay for rapidly rising firefighting costs. It has become a vicious downward spiral. More than half the Forest Service’s entire annual budget now goes to cover firefighting costs.
Evergreen: Front-loading the Forest Service budget so there is ample money to do the thinning and stand tending work you describe would seem to be a much wiser, more productive investment than throwing money down a firefighting rat-hole year after year.
McGee: We certainly think so. Proactive management is significantly more effective and a more efficient use of funds than reactive fire suppression in an emergency mega fire situation to save forests and communities, there is no ceiling on the fire suppression investment. In 2015, approximately 135 million dollars were spent in Washington State suppressing fires on over 1 million acres.
Evergreen: What’s the solution?
McGee: First fix the fire borrowing mess. Each National Forest should have a stable budget that can be counted on each year that would not be siphoned away for fire suppression. Their budgets should be predictable allowing them to develop and implement sound work plans. The Forest Service should have enough firefighting personnel so that key forest restoration planning personnel are not being sent to fight forest fires every summer. Nothing gets done in their absence.
Evergreen: Some 250 federal agencies are tethered to the National Environmental Policy Act. None of them seem to have trouble navigating NEPA regulations, yet it can take the Forest Service anywhere from 2 1/2 to 5 years or more to complete an environmental assessment, and even longer to complete an environmental impact statement. Do you have any idea why?
McGee: The Forest Service tends to be under more extreme scrutiny than other agencies because of the high value of our national forests to our society and our conservation community. The “timber wars” from the recent past between industry and conservation led to appeals and litigation stemming from “over-harvesting” concerns and what the appropriate harvesting levels should be. The appeals and litigation nationally, of which The Nature Conservancy was not engaged in, led the Forest Service to attempt to create bullet proof NEPA documents by collecting, analyzing and documenting very site specific information to withstand litigation scrutiny, which took tremendous time and resources. Forest collaboration has since helped relieve some of that pressure with diverse groups building support for projects to minimize objections and appeals. The challenge moving forward is to get away from the need to analyze every acre and every issue, and move toward addressing conditions that, if found in the project, will be addressed in a “condition based” analysis, rather than a “site specific” analysis. This approach could save valuable planning time. Some collaborative groups and legislative representative are looking at reforming the NEPA process and making it more costly for appellants and litigants to file appeals and law suits if their complaints are not upheld. The Nature Conservancy is more interested in minimizing appeals through collaboration and partnerships and finding efficiencies within the NEPA process.
Evergreen: We have a copy of the 2005 Environmental Assessment the Forest Service filed on Mississippi’s Desoto National Forest following Hurricane Katrina. It is a 17-page document that took less than 90 days from start to finish – pretty astonishing when you consider the years it sometimes takes the Forest Service to complete the same documents here in Washington.
McGee: I can only say that the Nature Conservancy is doing everything it possibly can to help the Forest Service get its work done faster and more efficiently. Our current log supply study is a good example. We have an urgent need here that no investor is going to touch until we can quantify questions related to log supply availability and certainty.
Evergreen: And it will be difficult to answer those questions without referencing the 5,000-pound elephant standing in the middle of the room that can’t seem to move any faster that it is now.
McGee: That’s true, which again is why the Conservancy is committed to helping the Forest Service and its volunteer stakeholder groups get more work done on the ground faster and more efficiently. Please remember that Congress has empowered these collaborative groups precisely because they represent such diverse stakeholder interests, so it isn’t as though there is a smoother pathway forward that the Forest Service could be following.
Evergreen: The report we’ve been discussing points to the fact that our region’s forest health problems aren’t limited to national forests east of the Cascades.
McGee: There are problems on federal, state, private and tribal land at varying degrees, which argues a strong case for the large landscape recommendations the science team made. And the fact that there are problems on all ownerships speaks to the seriousness of the problem, and the potential for the right sawmill investors. The right size and type of sawmill will need to work with all landowners to acquire their timber supply and that fits with the study that shows that forest insects, disease and fires know no boundaries.
Evergreen: The investor reluctance we’ve been discussing isn’t entirely the Forest Service’s fault. There are also problems with a few environmental groups that prefer litigating Forest Service restoration plans to participating in stakeholder collaboratives. Would you agree?
McGee: I would agree. Litigation has become a “gotcha” game in which lawyers battle it out over miniscule planning details. The Nature Conservative is a big supporter of all-inclusive, face-to-face collaboration because it generally settles misunderstandings and disagreements before they become roadblocks.
Evergreen: Bringing socially different rural and urban values together here hasn’t been easy, has it?
McGee: Really worthwhile social change is seldom easily accomplished. It takes a long time to build trust on common ground. Our collaborative groups deserve enormous public thanks for staying the course when it would have been much easier to throw in the towel. As a direct result of all their hard work we have a pathway forward. We also have the science, tools technologies and skill sets needed to move forward with the restoration work necessary to protect forests that are the cornerstones and building blocks of both our rural and urban lifestyles. The only missing piece of any consequence is the sawmill we need to build. None of us can afford to walk away from this challenge.