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1978 *

Times Mirror Sale [of 69,000 acres] *

1987 *

[Santa Fe Southern Pacific acquisition] *

SFSP agrees to sell timber business for an undisclosed price *

1988 *

SFSP Completes Sale Of Timber Company *

1994 *

Sale Rescues Camino, Calif., Lumber Mill’s 280 Jobs *

1996 *

Town Braced For Devastation *

In California, Dole again accuses Clinton of waging ‘war on the West’ *

Dole bemoans loss of U.S. timber jobs *

Dole says foes favor forests instead of jobs: Says Clinton wages war on the West *

1997 *

What the spotted owl did for Red Emmerson *

Richest List Has Gates at No. 1, Plus 83 Californians *

TIMBER: 3 Firms Got a Third of Logging Road Credits *

Logging Agreement *

1998 *

Standard, Calif., To Get Its First Restaurant in 36 Years *

Global Glut Bringing Asian Chaos to Stable Economies *

1999 *

Logging: Feinstein’s ‘Quincy’ law allows more cutting in huge, dangerous swaths *

SierraPine buys Weyerhaeuser division *

Settlement Protects Sierra County Forest Lands from Premature Development *

Regarding the Settlement between HSRA, SPI and the County of Sierra *

SierraPine of Sacramento completes purchase from Weyerhaeuser *

Weyerhaeuser to Sell Composite Products Facilities, Ply-Veneer Mill to SierraPine Limited *

2000 *

New Breed of Paul Bunyans Likely to Favor Joysticks, Not Axes *

Legislature: Lost in a computer crash at session’s end, proposal to aid working poor tops list of failed measures *

California and the West: Timber Company to Scale Back Calaveras Cutting *

Timber Firm to Modify Its Clear-Cutting Plan Forest *

A Hard Look at Private Logging *

A Timber Town Turns Against Clear-Cutting. *

2001 *

Redding, Calif.-Based Company Accused of Polluting from Mill in Lincoln *

Timber Firm Plans Clear-Cutting in Bid to Save Trees. *

Plans Submitted for New Ski Resort at Lake Tahoe *

Logging Firm to Sell Up to 50,000 Acres to Preservationists *

Timber Firm to Reduce Clear-Cuts in Sierra by 70% *

Utilities to Resume Paying Producers *

County to Sue Edison Over $10-Million Nonpayment *

Sierra Sawmill’s Closing Leaves a Town and Its Workers Grasping for a Future *

Lumber prices cut to shreds: Oversupply forces Sierra Pacific to slow production *

Lumber company sues PG&E to escape cogeneration pact *

Calif. timber firm eyeing Washington *

Land for the people: Land trust plans to buy SPI river holdings *

2002 *

Timber industry has tried to circumvent a forest initiative *

2003 *

Sierra Pacific says local harvest levels shouldn’t decline with mill closure in *

New Sierra Pacific Sawmill in Washington Continues Ramp-Up Towards Full Production *

Trust for Public Land secures Sierra parcels *

Bill worth millions for Rocklin plant *

Sawmill exit: Sierra Pacific to buy assets *

Buyer: Homes could go on Wetsel-Oviatt lumber mill site *

Timber firm sells 1,900 acres in Sierra Nevada to U.S. *

Two sawmills still cutting against a historical trend *

No Bidders for Stanislaus Timber *

Sierra Pacific Shuts Mill Temporarily *

Sierra Pacific Adds to Shutdowns *

2004 *

Sierra Pacific Industries’ Forester Awarded For Archaeological Stewardship *

Roseburg sells California timberlands *

California’s timber industry shows signs of turnaround *

Sierra Pacific to Build Stud Mill Adjacent to its Washington Sawmill *

2005 *

California Suing Sierra Pacific Industries For Fire Negligence *

Modern Sawmill Planned for Everett *

Skagit deal? Sierra Pacific proposes $100M lumber mill *

Sierra Pacific says Permits Doom Everett Sawmill-Power Plant *

Disputes at Martis Valley might be reaching a head *

2006 *

BOE unanimously decides MIC case for lumber mill’s cogeneration equipment *

2007 *

Sierra Pacific Industries to acquire Washington’s Centralia Sawmill Co. *

[Renegy Holdings buys SPI’s Susanville biomass plant from SPI for $1.3M] *

Sierra Pacific Acquires 140,000 Acres of Washington Timberland from The Campbell Group; Simultaneously Buys/Sells Off 43,000 Oregon Acres to Rosboro *

$400K to design a high rise? Would you believe $300K? $200K? *

2008 *

Rayonier buys Washington state timberland *

Rayonier Completes Purchase of 56,300 Acres of Timberland in Washington *

Billionaires battling for ‘premier’ timberland giant [Palco] *

PALCO bankruptcy hearings rest with two-week break *

Drying Up *

Mendocino Redwood plan approved for Palco *

Several TIMO’s and REITs Form National Organization *

The Campbell Group Acquires 23,600 Acres of California Timberland From Sierra Pacific *

Veteran timber interests now back Sierra Pacific *

Noteholders’ claim denied in Palco case *

Logjam *

2009 *

Sierra Pacific to Close Two Sawmills this Summer *

Layoffs at California sawmill change way of life *

Folsom Lake College gets $500,000 grant for tech programs [2008] *

Folsom Lake College shares technical education grant [2009] *

Sierra Pacific to close Camino, Sonora mills *

Camino braces for lumber mill shutdown *

Sierra Pacific Industries Planning 21MW Wood-Burning Co-Generation Plant Near Anderson, California *

The harshest cut *

California Timber Firm to Market Carbon from its Forests *

2010 *

Suits filed to block SPI clear cutting *

Lawsuits battle clear-cutting in Sierra Nevada and Cascade ranges *

Sierra Pacific Industries to Retool Closed Sonora, CA, Sawmill, to Start Operating May 2011 *

Landing a big deal: Group brokers historic deal with state’s largest private land owner *

Council Approves Salt Creek Plan *

Timber companies stand to benefit from new climate law *

State Regulators Approve the Nation’s Biggest Cap-And-Trade Plan *

Aberdeen sawmill selling biomass electricity *

Once-booming Lincoln faces new economic reality head-on *

2011 *

Judge sides with Sierra Pacific; ruling frees up 19 tracts for logging *

Editorial: In timber case, court rules for balance on CO2 *

Softwood Lumber Output Increases In 2010 Helped By Asian Exports *

Sacramento Bee Editorial: Governor needs to keep pledge at Battle Creek *

Redding’s building valuation numbers dismal *

Lawsuit to block Sierra Pacific Industries logging operation rejected *

California report blames roads, not clear-cuts, for erosion damage *

Timber war returns *

Another View: Clear-cuts help us keep our forests healthy *

Dignitaries tour newer SPI mill *

Sonora lumber mill reborn *

Sierra Club wants landmark climate law altered *

Retooled lumber mill back in business *

Timber Companies Stand to Benefit from CARB Regulations *

Activists, Sierra Pacific at clear-cut standstill *

Conservation easement deal worked out for Sierra Pacific land *

Redding-area business owners tell of struggles; legislators hear stories of misery *

SPI Showcases New Technology [Standard mill reopening] *

Ted edges out Red again *

Cap and trade worries escalate *

National Softwood Lumber Board Members Appointed *

SierraPine cuts production in Rocklin *

Fishers returned to area in Sierra after 100 years *

On Battle Creek, the rules are working *

Study: Fish unharmed at Battle Creek *

Battle Creek review shows system works *

2012 *

Logger and Forest Service official to meet today on logger’s claims against the government *

Logger, Forest Service official discuss timber dispute *

Sacramento federal judge to decide whether to seal Moonlight fire documents *

Sacramento judge makes release of Moonlight fire documents risky *

Sacramento Bee challenges judge in Moonlight lawsuits *

Forest industries of Amador, Calaveras getting $16 million boost *

Hitting the mark: Logging conference back in Anderson after 2-year break *

Cash in on carbon: Timber firms can harvest profits from greenhouse gas initiative *

Timber industry puts focus on education *

800 students learn logging’s rich heritage *

Shasta County releases third environmental report on proposed power plant *

Sierra Pacific holding steady in economy *

Environmental group targets SPI logging plans *

Forest Service in legal stew over coverup of lookout's alleged marijuana use *

Land trust takes title to critical parcel on Deer Creek *

SPI teaches students about logging *

Is New Green Law Creating More Green for Logging Companies? *

U.S. attorney fumes at Gov. Jerry Brown's timber deal *

U.S. attorney blasts wildfire proposal *

U.S. attorney lobbies against limits on wildfire liability *

Steinberg questions Brown's wildfire proposal *

Timber tax would just give industry a fire fine escape *

Our View: Roots firm in timber reform plan *

Sierra Pacific Industries, California Company, Reaches $122.5 Million Settlement For Starting Wildfire *

Sierra Pacific to pay $47M and 22,500 acres of land *

Feds, SPI both claim victory in Moonlight Fire settlement *

Record SPI forest fire recovery settlement includes $55M cash and 22,500 acres of land *

Tehama County seeks info on Mill Creek land deal *

1978

Times Mirror Sale [of 69,000 acres]

Wall Street Journal, November 17, 1978, Page 41

ABSTRACT: Times Mirror Co completes sale of 69,000 acres of timberland and sawmill in northern California to Sierra Pacific Industries for about $36 million

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1987

[Santa Fe Southern Pacific acquisition]

Mergers & Acquisitions Database, October 12, 1987

Santa Fe Southern Pacific sold its Santa Fe Pacific Timber Company to Sierra Pacific Industries for $ 460 mil. The unit owns 520,000 acres of woodlands in Northern California. The deal was part of a restructuring program. Goldman Sachs and Salomon Brothers advised Santa Fe.

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SFSP agrees to sell timber business for an undisclosed price

By Jesus Sanchez, Los Angeles Times, October 13, 1987

Santa Fe Southern Pacific, the diversified railroad company in the throes of a major reorganization, said Monday that it had agreed to sell its Northern California timber business to Sierra Pacific Industries of Arcata, Calif.

Privately held Sierra Pacific will pay an undisclosed sum for the 520,000 acres of timberland owned by Santa Fe Pacific Timber, which was put on the block in June by the parent company. Securities analyst John E. Maack Jr. at S. G. Warburg & Co. estimated Monday, based on current market prices, that the timberland brought between $500 and $600 an acre for a total of $260 million to $312 million.

The sale took place amid what many industry experts have described as a glutted market for timberland. Besides SFSP’s 520,000 acres, an estimated 8 million acres of timber -- out of a total of 68.8 million nationwide -- is also up for sale, according to the American Forest Council.

But there has been a rebound of sorts in the industry, Maack said. After bottoming out in 1983, lumber prices have nearly doubled and have reached $160 for 1,000 board feet, the analyst added. Still, prices are nearly half of what they were in the late 1970s.

Santa Fe’s timberland is concentrated in three large tracts: 220,000 acres north of Lake Tahoe, 200,000 acres in the Shasta region north of Redding and 100,000 acres between Grass Valley and Lake Tahoe. The tracts belonged to the Southern Pacific Co., which merged with Santa Fe Industries in 1983 to form Santa Fe Southern Pacific Corp.

The firm then intended to merge its two railroads -- the Atchison, Topeka and Santa Fe Railway and the Southern Pacific Transportation Co. -- but the Interstate Commerce Commission rejected the merger earlier this year on antitrust grounds.

As a result, SFSP has decided to restructure itself, selling off the Southern Pacific along with commercial real estate holdings, pipelines, construction and timberland operations. Bids on the railroad are due within the next week or two.

###

1988

SFSP Completes Sale Of Timber Company

Journal of Commerce, March 1, 1988, Pg. 4B

Santa Fe Southern Pacific Corp. said it closed the $460 million sale of Santa Fe Pacific Timber Co. to Sierra Pacific Industries.

Santa Fe Pacific Timber owns and manages about 520,000 acres of timberland in Northern California. Sierra Pacific is a privately held company based in Redding, Calif.

Closing of the transaction completes the sale of SFSP’s non-core businesses as part of its restructuring program, with the exception of Black Mesa Pipeline, which is still up for sale.

On a pretax basis, SFSP has realized more than $880 million from the sales, including those of Robert E. McKee, a general building contractor; Bankers Leasing and Financial Corp; two non-core pipeline systems; and Santa Fe Pacific Timber Co.

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1994

Sale Rescues Camino, Calif., Lumber Mill’s 280 Jobs

By Clint Swett, Sacramento Bee, May 8, 1994

May 7--The Justice Department has approved sale of the Michigan- California Lumber Co. in Camino, averting a shutdown that would have meant the loss of 280 jobs in the small El Dorado County community.

"There’s real elation here. Everyone’s bouncing off the walls," said Roger Watson, recording secretary of Lumber Production Industrial Workers Local 2749 of his members’ reaction to the news.

The Camino lumber mill will be sold to Sierra Pacific Industries, California’s largest timber company, for an undisclosed amount. SPI, based in Anderson, Shasta County, has told union officials that it intends to shut the mill down beginning May 13, assess its timber inventory…[more]

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1996

Town Braced For Devastation

Lumber mill relocation threatens to collapse local economy

By John Howard, Los Angeles Daily News, March 17, 1996

On a good day, J.L. Patterson makes $75 selling used tools and knick-knacks along the roadside of this rugged mountain town.

On a bad day, maybe $10.

He’s ready for a lot more $10 days: The Sierra Pacific lumber mill that sustained this Northern California town for generations is being dismantled and moved 200 miles to the south.

Departing, too, are 150 well-paid jobs - a third of Hayfork’s direct income and the mainspring of most of its economic life.

"This town is going to dry up and blow away, period," said Patterson, 74, a retired hardware store owner. "What’s going to be left, anyway? Welfare, Social Security, people on pensions... [more]

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In California, Dole again accuses Clinton of waging ‘war on the West’

By Philip J. Trounstine, Knight Ridder/Tribune, July 29, 1996

ANDERSON, Calif. -- He’s twenty-something points down in the California polls, lagging behind President Clinton in urban centers like Los Angeles and San Jose. And his biggest problem is among moderate Republicans and independents who don’t trust him on social issues.

So how did Bob Dole kick off his last campaign trip to California before the GOP national convention in San Diego? By traveling to a lumber company in Shasta County, a solidly Republican region that comprises a whopping 0.6 percent of California’s 14.3 million voters, to attack Clinton’s environmental policies.

The relative handful of conservative, rural voters linked to the logging industry may agree with Dole that Clinton’s timber policy is … [more]

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Dole bemoans loss of U.S. timber jobs

Associated Press, July 30, 1996

ANDERSON, Calif. -- Bob Dole attacked President Clinton on Monday for causing what he called a ``modern American tragedy’’ in the West’s forest industry.

The Republican presidential hopeful kicked off a two-day campaign swing through California by citing federal restrictions on logging that he said have helped pushed unemployment in some communities in the far northern edge of the state well into the double digits.

Dole blamed ``court-managed gridlock’’ and the Clinton administration for the closure of 140 logging mills and the loss of nearly 20,000 timber jobs in California, Oregon and Washington.

In Washington … [more]

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Dole says foes favor forests instead of jobs: Says Clinton wages war on the West

By E. Michael Myers, The Washington Times, July 30, 1996

REDDING, Calif. - Bob Dole accused President Clinton yesterday of devastating the American timber industry by looking out more for the environment than for families who need jobs.

"The plight of our timber industry is a modern American tragedy," Mr. Dole said, summarizing a partisan litany of what he called failures and reversals by Mr. Clinton.

"More than 140 mills in California, Oregon and Washington have closed" during the Clinton administration, Mr. Dole said, citing figures disputed by the Clinton-Gore campaign.

"Nearly 20,000 mill and logging jobs have vanished, and these were good, family-wage jobs that kept the family together. When … [more]

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1997

What the spotted owl did for Red Emmerson

By Carleen Hawn, Forbes, October 13, 1997

IN 1987 THE NORTHERN SPOTTED OWL nearly did in Archie Aldis(Red)Emmerson and his forest products company, Sierra Pacific Industries. Waving the spotted owl banner, professional environmentalists were out to curtail logging on vast tracts of public forest lands, including California, where Sierra Pacific’s mills are.

Sierra Pacific was threatened with a potential shutdown. It owned little timber itself, so counted on buying it from public forests to feed its sawmills. "It was either buy [timber]land or go broke," Emmerson recalls. "This business is the only thing I knew how to do. This was my home. Where else was I going to go?"

By one of those twists of fate that had little to do with Emmerson’s own efforts, a solution was at hand. The giant railroad Santa Fe Southern Pacific Corp. owned 522,000 acres of California timberland. The railroad wanted to concentrate on its core business. It threw the acreage on the market.

Emmerson took a mighty gamble. Putting up all ten of his mills as collateral, Emmerson convinced a syndicate of a dozen banks to lend him $460 million to buy Santa Fe’s acreage. Emmerson: "I hocked my heart and soul."

A lot of smart people thought that at $880 an acre Emmerson was overpaying for timberland that might soon be rendered unprofitable. In October 1987 the stock market crashed. For nearly a week Emmerson waited to see if his bankers would pull out. Impressively, they didn’t.

"I never worried about loaning money to Red," says Tony Zanze, a retired executive with Bank of America, which had been Emmerson’s primary lender since the mid-1950s. "When we had our dog-and-pony shows, there would be people standing in line to give him credit."

Not long after the Santa Fe deal closed, the U.S. Forest Service, responding to numerous court orders, began restricting timber harvests on public lands. The value of privately owned timberland virtually doubled overnight.

"We were lucky," smiles Emmerson. "I bought that land because it was available, not because it was strategic."

Emmerson immediately began leveraging his luck. Over the next eight years he shelled out more than $600 million for an additional 400,000 acres, opening an additional mill along the way. Emmerson: "You can never own too much land because you never know what other restrictions will be coming down the pipe."

From Sierra Pacific’s headquarters in Anderson, Calif., about 150 miles north of Sacramento, 68-year-old Red Emmerson controls 1,332,000 acres of mostly prime timberland, making him the country’s largest private landowner. Sitting at the head of a colossal Douglas fir and oak boardroom table, Emmerson;he’s clad in a chamois shirt, dirty jeans and work boots;seems an unlikely business mogul. Yet his Sierra Pacific Industries is a giant. His mill at Anderson produces up to 800,000 board feet of lumber per day. Altogether Sierra Pacific now produces about 1.3 billion board feet of lumber annually, which is enough to build 300 new homes a day. Only Weyerhaeuser and Georgia-Pacific produce more wood.

Forbes estimates Sierra Pacific’s sales at nearly $1 billion, its aftertax annual earnings at about $100 million. Using an average price of $1,700 per acre, Sierra Pacific’s timber holdings are worth more than $2 billion. Even after deducting mortgages on the land, Emmerson is comfortably a billionaire.

Like his friend and fellow low-tech billionaire Ray Park (see When Red met Ray; Recycling), Emmerson learned the business from his father, Raleigh Humes (Curly) Emmerson. As a child he watched his father build makeshift sawmills in the family backyard in Newberg, Ore. The business failed, and his parents split up when he was 5 years old: His mother, Emily, remained in Newberg and his father eventually headed for northern California.

Emmerson’s mother packed him off to a Seventh Day Adventist boarding school, the Upper Columbia Academy, in Spangle, an agricultural burg near Spokane in the eastern part of Washington State.

To put himself through school Emmerson earned 35 cents an hour driving a truck and working the school farm. He also spent a summer working on a cattle ranch. After he got expelled for hanging a condom on a classroom chalkboard, Emmerson finished his education at a public high school in Omak in northern Washington State.

Upon graduation, he headed for California to hook up with his old man, who was making his way in the lumber business. Young Emmerson worked as a greenchain puller;piling lumber as it came out of the sawmill. By the time he was 20, he and his father had leased a sawmill. And by the time he was 25, they had built a mill of their own and Red was managing the entire business.

Red Emmerson was soon to be tested in the crucible of hard times. From the mid-1970s until the mid-1980s a pair of nasty recessions gripped the U.S. lumber industry. Worse still, beginning in 1976, a series of amendments to the 1964 Wilderness Act and other creeping legislation reduced the amount of land available for timber harvests on public lands, wounding the smaller mill operators who lacked timber acreage of their own. Paul Volcker’s surging interest rates all but killed housing starts. Hundreds of small companies went out of business.

Sierra Pacific hung on, keeping costs low in large part by investing in the best technology (see box, p. 124). Long before it became standard practice, Emmerson paved his mill yards. So what? This cut man-hours in the loading yard and prevented his saws from getting jammed with gravel and mud;reducing time lost changing dull saws. Most everybody in the business now paves their yards, but Emmerson was one of the first.

"We have always been more profitable than our competition," says George Emmerson, Red’s 40-year-old son, now vice president of sales and operations. Comparing Sierra Pacific’s second-quarter earnings with publicly owned competitor Plum Creek Timber’s, Red Emmerson said his net margin was 25% higher. Steven Dietrich, a well-regarded forest products analyst at Jensen Securities in Portland, Ore., confirms that Sierra Pacific could consistently outearn its closest peers, Plum Creek and Crown Pacific, in their sawmill operations.

Between 1976 and 1986 Sierra Pacific spent around $60 million acquiring the assets of less profitable companies that couldn’t hack the hard times.

Harry Merlo, the forceful former chairman of Louisiana-Pacific, remembers the time this way: "As people got out of sawmilling, what did they do? They sold their assets to Red. He was the last man standing."

And with two sons at his side, Emmerson is still expanding. Second son Mark, 37, serves as the company’s chief financial officer. Daughter Carolyn Emmerson Dietz, 38, is president of the Sierra Pacific Foundation and lives in Bend, Ore. All three children own large chunks of Sierra Pacific.

In May Emmerson paid $50 million to Louisiana-Pacific for a 38,000-acre parcel of white fir and pine northeast of Sacramento. That purchase brought Emmerson’s holdings higher than Ted Turner’s (see p. 183) by 32,000 acres. "When Ted Turner hears about this, he’ll probably run out and buy more land," Emmerson chuckles.

Like Emmerson, Turner understands that the more power the environmentalist lobby exercises, the more valuable private land becomes. Maybe that’s why Ted is so chummy with the Greens.

###

Richest List Has Gates at No. 1, Plus 83 Californians

Los Angeles Times; Sep 29, 1997.

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TIMBER: 3 Firms Got a Third of Logging Road Credits

Los Angeles Times; Sep 17, 1997.

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Logging Agreement

Los Angeles Times; Jul 16, 1997.

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1998

Standard, Calif., To Get Its First Restaurant in 36 Years

By Jeff Jardine, The Modesto Bee, April 14, 1998

It’s been 36 years between meals in Standard.

Not since 1962, when a strike at the lumber mill shut down the town’s only cafe, has a restaurant operated there.

That changes today when the Snowshoe Brewing Co. opens a brewery and restaurant in the old Pickering Lumber Co. office building in this community five miles east of Sonora.

The brew pub clearly becomes the centerpiece of Standard, an early 1900s mill town that once boasted 200 homes and 1,000 residents.

The town could be on the verge of a renaissance. Sierra Pacific Industries, which owns the lumber mill, plans to build an 18-hole golf course, 900 …

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Global Glut Bringing Asian Chaos to Stable Economies

Los Angeles Times; Oct 25, 1998.

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1999

Logging: Feinstein’s ‘Quincy’ law allows more cutting in huge, dangerous swaths

By Alexander Cockburn; Los Angeles Times; Sep 9, 1999.

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SierraPine buys Weyerhaeuser division

Sacramento Business Journal, April 19, 1999

SierraPine Ltd., based in Sacramento, has bought the Composite Products division of Weyerhaeuser Co. for an undisclosed price. The deal gives SierraPine the capacity to produce 950 million square feet of composite board at four mills. SierraPine plans to operate all of the facilities it is buying. The mills employ 550 people and generated about $116 million in sales last year. They are located in Adel, Ga.; Moncure, NC; and Springfield, Ore. SierraPine is owned by the principals of Springfield, Ore.-based Timber Products Co. and Sierra Pacific Industries of Redding.

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Settlement Protects Sierra County Forest Lands from Premature Development

February 27, 2009

http://rare-earth-news.blogspot.com/search/label/Sierra%20Pacific%20Industries

(The Case involved Sierra Pacific Industries’ Lands around 15 miles northwest of the town of Truckee which are part of the "checkerboard" of lands given to the railroads in the 1800’s, with the federal government retaining every other square mile)

February 27, 2009, Sierra City--The High Sierra Rural Alliance announced the successful settlement of a lawsuit the group brought against the County of Sierra and Sierra Pacific Industries. HSRA had challenged the County’s approval to rezone over 7000 acres of forested lands from a zone which limited development to a zone which would encourage development. Under the agreement the property owned by SPI in a remote and environmentally sensitive area within the checkerboard of the Tahoe National Forest will remain protected from premature development.

Under the settlement the County has agreed to rescind the disputed approval. Sierra Pacific Industries has agreed to cover all of HSRA’s attorney’s fees and court costs, and HSRA has agreed not to pursue the litigation in court.

The HSRA contended the rezone was not consistent with the County’s General Plan; and, the exemption from environmental analysis the project received was inappropriate. "The suit challenged the legality of the rezone. The settlement was the most cost effective solution for SPI, if they believed their legal position lacked merit," said Michael Graf, attorney for HSRA. With the intent of expanding into the real estate business, the rezone was one in a series of rezones totaling more than 40,000 acres SPI has sought across Sierra Nevada counties in California. The HSRA argued such a vast project by the largest landowner in the state required environmental review. The project was approved with an exemption from analysis under the California Environmental Quality Act.

HSRA spokeswoman, Stevee Duber, stated," the settlement is great news for the integrity of the Tahoe National Forest. It doesn’t make sense to convert remote forested lands for development in view of the environmental challenges we are facing due to climate change and the critical role forests play in enhancing watershed and habitat health,."

"Sierra County’s General Plan is very specific about encouraging development around existing communities and discouraging development in areas remote from existing services. It’s a Smart Growth principle which is widely accepted and supported by a diverse group of organizations, industries, local governments and most recently the State of California in Senate Bill 375" continued Duber, "When these sorts of policies are easily overcome, land speculation and escalating prices result, which in turn creates more pressure for random, unconstructive development."

The rezone, along Henness Pass Road between Perazzo Meadows and Jackson Reservoir would have opened the Tahoe National Forest to significant environmental impacts, as well as alter the rural qualities of Sierra County. Not only would it have removed valuable timberland from production, it would have compromised the commercial use and the forest health of the remaining productive timberlands by introducing incompatible uses. Development on private in-holdings within the National Forest alters the forest structure, can interrupt ecological processes; increase the potential for invasive species, disease and insect infestations; increase fire danger and promote rural sprawl.

Just a few weeks ago it was reported that the Northern Sierra Partnership acquired Perazzo Meadows, a 932 acre parcel, bordering the 7000 acres saved from rezoning by the HSRA. The acquisition is part of a broader plan to permanently protect the forest by purchasing as much as 200,000 acres of private in-holdings within the National Forest. The parcels, which had been slated for rezoning, are shown in red on the map below.

For the past three years the HSRA has been watch-dogging Sierra and Plumas County land-use decisions. The organization is a nonprofit based in Sierra City committed to preserving the rural qualities of the area. They believe rural values provide a balance between human, economic and environmental wellbeing. For more information, visit http://www.highsierrarural.org/.

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Regarding the Settlement between HSRA, SPI and the County of Sierra

posted by Stevee Duber Apr 18, 2009

http://www.highsierrarural.org/announcements/aresponse

Since the announcement of the HSRA settlement with Sierra Pacific Industries and Sierra County, there have been a spate of letters-to-the-editor and an opinion piece in local newspapers implying that the closing of the SPI mill in Quincy was caused by the litigation settlement between the parties. This is not true. The agreement which SPI proposed and was agreed to by HSRA and the County of Sierra resulted in:

7000 acres of land zoned as Timber Production remaining in Timber Production Zone, and

Reimbursement of HSRA costs and attorney fees by SPI, $15,640.

Making sure productive timberland within reasonable distances of timber mills is not converted into other uses protects mill jobs. The monetary settlement consists of less than four months wages for one mill worker. SPI receives generous property tax deductions by having the land in Timber Production Zone rather than General Forest. This case did not cause the loss of 150 jobs at the SPI mill in Quincy or anywhere else.

For more information, please see:

The June 7, 2008 Newsletter, page 3.

Why is the Challenge to Sierra Pacific Industries Rezone Important?

The filed petition can be found here.

The terms of the settlement can be found here.

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SierraPine of Sacramento completes purchase from Weyerhaeuser

Sacramento Business Journal, May 28, 1999

Lumber firm the Weyerhaeuser Co. said it has completed the sale of its composite products business and a ply-veneer plant to SierraPine Ltd. of Sacramento. Terms of the sale were not disclosed. The sale includes mills in Adel, Ga.; Moncure, N.C.; and Springfield, Ore. with a combined annual capacity of 505 million square feet. SierraPine is privately owned by the principals of Timber Products Co. of Springfield and Sierra Pacific Industries of Redding.

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Weyerhaeuser to Sell Composite Products Facilities, Ply-Veneer Mill to SierraPine Limited

Source?

April 1999

Weyerhaeuser Company today announced the signing of an agreement to sell its Composite Products business and a Ply-veneer plant to SierraPine Limited.

Terms of the sale were not disclosed. Weyerhaeuser said it is taking a first-quarter after-tax nonrecurring charge associated with the sale. Both companies expect to close the transaction in the second quarter.

Following completion of the transaction, SierraPine will have the capacity to produce 950 million square feet (3/4-inch basis) of composite board. SierraPine plans to operate all of the facilities it is buying from Weyerhaeuser.

"This is an exciting growth opportunity for SierraPine," said Dwight O’Donnell, SierraPine president. "We believe it will strengthen relations with our current customers, bring on new customers and open up opportunities for all of us within SierraPine. We look forward to welcoming these employees to the SierraPine family."

Weyerhaeuser and SierraPine said they would work closely together to ensure a smooth transition for employees and customers of the Weyerhaeuser facilities.

Composite Products produces and sells industrial-grade particleboard and medium density fiberboard (MDF) manufactured at four mills with a combined annual capacity of 505 million square feet (3/4-inch basis). The business employs 550 people and generated approximately $116 million in net sales during 1998. The facilities sold are located in Adel, Ga.; Moncure, NC; and Springfield, Ore.

Weyerhaeuser Company (NYSE: WY), one of the world’s largest integrated forest products companies, was incorporated in 1900. In 1998, sales were $10.8 billion. It has offices or operations in 12 countries, with customers worldwide. Weyerhaeuser is principally engaged in the growing and harvesting of timber; the manufacture, distribution and sale of forest products; and real estate construction, development and related activities. Additional information about Weyerhaeuser’s businesses, products or practices is available at www.weyerhaeuser.com.

SierraPine Limited is a privately held company owned by the principals of Springfield, Ore. based Timber Products Company and Sierra Pacific Industries of Redding, Calif. SierraPine Limited, headquartered in Sacramento, Calif., has operations in Northern California and Oregon. More information about SierraPine is available at www.sierrapine.com.

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2000

New Breed of Paul Bunyans Likely to Favor Joysticks, Not Axes

Rare cutting of old-growth timber in California forest shows extent to which machine has supplanted man.

by Don Thompson; Los Angeles Times; Nov 5, 2000

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Legislature: Lost in a computer crash at session’s end, proposal to aid working poor tops list of failed measures

By Miguel Bustillo; Los Angeles Times; Sep 2, 2000

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California and the West: Timber Company to Scale Back Calaveras Cutting

Los Angeles Times; Aug 23, 2000

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Timber Firm to Modify Its Clear-Cutting Plan Forest

Sierra Pacific acts after criticism in Calaveras County.

By Bettina Boxall; Los Angeles Times; July 26, 2000

‘But we’re not saying we’re going to stop cutting trees,’ official adds.

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A Hard Look at Private Logging

Los Angeles Times, July 13, 2000

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A Timber Town Turns Against Clear-Cutting.

By Bettina Boxall, Los Angeles Times; July 7, 2000

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2001

Redding, Calif.-Based Company Accused of Polluting from Mill in Lincoln

By Jennifer K. Morita, The Sacramento Bee, February 6, 2001

Feb. 6--Steve and Pat Joyce aren’t joking when they say living near the Sierra Pacific lumber mill in Lincoln is like being under a black cloud.

If they see plumes of smoke billowing from the mill at night, they brace themselves for finding a familiar black grime on their cars the next day.

"It’s this black, gritty stuff," Pat Joyce said. "Sometimes it comes down in little dirt balls or it’s a light dusting, but other times it’s black chunks and it has an oily, sticky base."

The Joyces and their neighbors have complained for three years about the soot … [more]

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Timber Firm Plans Clear-Cutting in Bid to Save Trees.

By Colleen Valles; Los Angeles Times; Dec 30, 2001

Environment: Company seeks to avoid dense second-growth forests, which could feed a massive fire. Proposal has brought opposition.

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Plans Submitted for New Ski Resort at Lake Tahoe

Los Angeles Times; Sep 4, 2001.

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Logging Firm to Sell Up to 50,000 Acres to Preservationists

By Eric Bailey; Los Angeles Times; Jun 5, 2001.

Wilderness: The deal will be among the biggest ever in the Sierra Nevada. The land includes half a dozen scenic river gorges.

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Timber Firm to Reduce Clear-Cuts in Sierra by 70%

By Eric Bailey; Los Angeles Times; Apr 20, 2001.

Logging: Sierra Pacific eliminates 560,000 acres from program. Activists say it is only window dressing.

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Utilities to Resume Paying Producers

by Julie Tamaki; Los Angeles Times; Apr 16, 2001.

Electricity: Some small companies that provide power say the new rate plans are not enough to get them back online.

###

County to Sue Edison Over $10-Million Nonpayment

By JULIE TAMAKI; Los Angeles Times; Apr 12, 2001.

Power: It would be the latest of many small generators to seek payment for the enforced sale of electricity to the utility.

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Sierra Sawmill’s Closing Leaves a Town and Its Workers Grasping for a Future

By ERIC BAILEY; Los Angeles; Mar 13, 2001.

Jobs: The plant’s demise, one of many, is blamed on imported wood and federal rules restricting lumbering in nearby national forests.

 

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Lumber prices cut to shreds: Oversupply forces Sierra Pacific to slow production

by Celia Lamb, Sacramento Business Journal - January 5, 2001

Wholesale lumber prices at the end of 2000 dropped to their lowest levels since the mid-1990s, and industry observers say prices will probably stay low for the next couple of years.

The average framing lumber composite price was $323 per thousand board-feet, a 20 percent decline from a year ago when prices were $402, reported Random Lengths Publications Inc. of Eugene, Ore., which tracks lumber costs. It takes about 10,000 board- feet of lumber to build a three-bedroom house.

"The markets have been oversupplied," said Burrle Elmore, editor of Random Lengths. "Most mills tell us they’re losing money at today’s lumber prices."

Low prices led Sierra Pacific Industries Inc., the state’s largest timber company, to shut down three of its 14 lumber mills for two weeks. Roughly 550 employees of the three mills in Quincy, Susanville and Loyalton returned to work this week. The company’s mills in El Dorado and Placer counties were not affected.

"It just didn’t make any sense to be cutting up high-value logs and then selling the lumber at low prices," said Sierra Pacific spokesman Ed Bond.

His company is selling some commodities at half the prices they received when prices peaked in 1999.

What goes up ... : Falling lumber prices have reversed a trend of rising prices through most of the 1990s due in part to a sea-change in U.S. Forest Service policies.

Prices went up when timber harvests on U.S. public lands in the 1990s dropped by about 80 percent, said Paul Jannke, vice president of wood products for Resource Information Systems Inc., a forest products industry analyst based in Bedford, Mass.

As U.S. lumber production dropped, prices rose until they peaked in 1999.

Rising prices over the last few years created incentives for private companies to buy their own forests until those private lands "completely replaced" public timber sources, Jannke said. Sierra Pacific, for example, bought cheap land as other companies closed up shop in California. Today Sierra Pacific owns more timberland than any other private business, and all of its land is in California.

But the rise in national lumber production capacity on private lands led to the current price dip.

"This is a commodity market, so prices quickly go to the cost floors," Jannke said. "Capacity’s going to continue to increase over the next couple of years as demand declines."

Despite rising national capacity, timber production in California is still about half what it was a decade ago, according to timber tax figures from the state Board of Equalization. About 70 percent of the wood used in California now comes from out of state, said Chris Nance, vice president of public affairs for the California Forestry Association.

The bulk of the wood coming into California is from Canada. But the United States has an import quota on timber products from Canada, so overall levels coming into the country have held steady. The import quota is set to expire March 31.

Imports to the United States from all other countries, however, have risen roughly 35 percent per year since 1994, said Jannke of Resource Information Systems. Brazil, Chile, New Zealand and Mexico have supplied the bulk of those increases.

Just as high prices in the 1990s created a demand for lumber imported into the United States, they lowered demand for lumber exports.

"We’ve lost drastic market share in Japan," Jannke said. "The high prices in North America drove the Japanese to search for other sources. They turned to Europe," which now supplies about 25 percent of Japan’s lumber.

For California lumber producers, the rise in cheap imports and the decline in exports means a glut in the markets.

"Where lumber used to go to other markets it’s now being dumped into the U.S.," said Bond of Sierra Pacific. For example, a type of wood called raitiata pine from New Zealand and Chile sells in California for $300 less wholesale than pine from California, he said.

Forest Service plan: Next week the Forest Service expects to release an environmental impact statement on plans for managing 11 national forests covering 11 million acres of the Sierra Nevada. The management plan amendments will likely add a stamp of authority to the Forest Service’s ongoing transition from timber production manager to ecosystem overseer in the Sierra Nevada.

The Forest Service can expect criticism from timber industry representatives who disliked previous versions of the environmental impact statement. They say shrinking timber sales have increased the risks of catastrophic forest fires by allowing brush and debris to accumulate on forest floors.

In the mid-1980s the Forest Service allowed loggers to cut about 1.8 billion board-feet of timber, enough to build about 180,000 houses, every year in California’s 18 national forests. Now it allows logging of about 450 million board-feet annually, a drop of about 75 percent.

"More than half the sawmills in this state have shut down in the last eight to 10 years," said Nance of the California Forestry Association.

Changing Forest Service policies have resulted from public input and from scientists advising the Forest Service that forest health depends on conserving entire ecosystems, said Forest Service spokesman Matt Mathes.

"In addition to the drop in the amount of timber being cut, we’ve shifted away from clear-cutting old growth," Mathes said. "Currently what we’re mostly doing is selectively cutting smaller-diameter trees," with an emphasis on catastrophic fire protection. "Timber production is now a byproduct as opposed to a driving force."

Timber companies that still depend on Forest Service land for large portions of their products worry about future cutbacks. Cecil Wetsel, owner of Wetsel-Oviatt Lumber Co. in El Dorado Hills, said about 60 percent to 80 percent of the lumber he runs through his mill comes from public land.

"We can’t replace that Forest Service wood," he said.

The company owns about 17,500 acres, including 3,000 it bought in the past five years. But buying timberland is difficult for the company because it’s usually offered in large blocks of thousands of acres, more than the company can take on.

Smaller parcels, in the range of 5 acres to 100 acres, typically sell at relatively high prices to people buying the land for construction or investment. Those buyers aren’t as concerned about long-term land management costs and can pay more up front.

"If we want to manage it for growing timber," Wetsel said, "it’s difficult to compete."

###

Lumber company sues PG&E to escape cogeneration pact

by Celia Lamb, Sacramento Business Journal, May 1, 2001

Lumber giant Sierra Pacific Industries is selling power from its cogeneration plants on the open market, while a suit it filed against Pacific Gas and Electric Co. and the California Independent System Operator gets transferred from state Superior Court to a federal bankruptcy court.

Sierra Pacific sued April 2 to get court approval of its plan to sell power from its cogeneration plants in Lincoln and three other California towns on the open market instead of to PG&E.

On Tuesday the state Superior Court judge overseeing the case extended a temporary restraining order granted April 5 that allows Sierra Pacific to sell power on the open market, said Gordon Erspamer, an attorney with Morrison & Foerster in Walnut Creek who represents Sierra Pacific.

Soon after, PG&E asked that the case be removed to bankruptcy court in Sacramento. The suit is likely to get moved again, to the bankruptcy court in San Francisco that is handling PG&E’s Chapter 11 case.

Sierra Pacific is PG&E’s 20th-biggest unsecured creditor. When the utility filed for Chapter 11 bankruptcy protection April 6, it owed Sierra Pacific $19.8 million, according Pacific Gas Bankruptcy News.

Sierra Pacific has cogeneration plants that use wood waste to generate electricity at its lumber mills near Lincoln in Placer County, Quincy in Plumas County, Burney in Shasta County and Susanville in Lassen County. Together the plants produce 54.5 megawatts at full capacity, enough power for about 54,500 homes.

Sierra Pacific had sold power from its cogeneration plants to PG&E for 17 years under the terms of 30-year contracts. But it claimed the right under California commercial law to cancel those contracts after PG&E defaulted in January on millions of dollars in payments it owed for the power.

The company’s suit is one of about two dozen brought by owners of "qualifying facilities" seeking payments for power they’ve sold and relief from contracts that require them to sell exclusively to PG&E or Southern California Edison. Most of these cases have been brought against SoCal Edison because PG&E filed for bankruptcy as the qualifying facilities were beginning to go to the courts in droves, Erspamer said. Morrison & Foerster is representing power plant owners in about five cases.

"These are boom times for the energy lawyers," Erspamer said. "It doesn’t matter who you represent."

Edison started making only partial payments to qualifying facility owners in November, and PG&E began in January.

###

Calif. timber firm eyeing Washington

Big player planning one or more mills

by George Erb, Puget Sound Business Journal (Seattle) - March 9, 2001

One of the largest private wood-products companies in the country wants to enter the Washington market.

Sierra Pacific Industries of Redding, Calif., has tentatively agreed to buy 45 acres east of Aberdeen in Grays Harbor County, where it plans to build a sawmill and a log yard, said the property’s owners.

The site, located at Junction City, is currently owned by Quigg Bros. Inc., an Aberdeen general contractor, and Citifor Inc., a Seattle-based timber unit of the Chinese company CITIC.

Sierra Pacific’s operation would employ as many as 150 people, according to Quigg Bros. and Citifor. A Sierra Pacific spokesman could not be reached for comment.

The property deal is contingent on reconstructing a railroad line that used to connect Junction City to a main railroad line.

"If it comes to pass, it would be a wonderful boon to our economy," said Michael Tracy, executive director of the Grays Harbor Economic Development Council in Aberdeen. "That’s really exciting."

After seeing its bread-and-butter industry decline for most of the last two decades, Grays Harbor is now also anticipating that Boise Cascade Corp. of Boise, Idaho, will build a wood-composite mill at Satsop.

Sierra Pacific may be considering a second mill in the state, timber industry sources say.

The company owns 1.5 million acres of California timberland and manufactures lumber, panels, molding and window frames.

Forbes magazine in 2000 ranked Sierra Pacific No. 143 on its list of the nation’s largest private companies, with 3,600 employees and estimated annual revenues of $1.4 billion.

Sierra Pacific caused a controversy in California when the company switched to clear-cutting from selective logging. Nonetheless, within the industry the company has a good reputation, timber industry sources say.

"They’ll be well-financed, and they’ll be well-operated," said Paul Ehinger, an industry consultant based in Eugene. Ore.

The company "intends to establish a long-term presence in the Pacific Northwest with its first facility in Grays Harbor County," Quigg Bros. and Citifor said in a March 7 joint statement.

Lumber markets are in a prolonged slump, but, for companies with available capital, now is a good time to establish new mills because startup costs are lower, too. Newer, more efficient mills can also afford to truck logs in from more distant timber sales.

###

Land for the people: Land trust plans to buy SPI river holdings

By Tim Omarzu , The Union (Grass Valley/Nevada City CA), June 5, 2001

SAN FRANCISCO - A conservation group plans to buy more than 30,000 acres in the Sierra Nevada - some of it in eastern Nevada County - from a timber company and make that land available for public use in the next several years.

The first phase of the agreement involves the Trust for Public Land’s purchase of 6,100 acres along the North Fork American River in Placer County from Sierra Pacific Industries, a logging company, for about $6 million. The land would be added to the Tahoe National Forest.

Eventually, TPL officials said at a news conference Monday, they could buy

up to 50,000 acres from SPI for preservation.

‘‘We have frequently crossed the Rubicon this year, and in years to come, we’re hoping to buy the Rubicon,’’ said Alan Front, senior vice president and director of federal affairs for TPL, referring to one of the rivers in the area to be preserved.

SPI, the largest private landowner in California with 1.5 million acres, decided to make the parcels available to the organization after an inventory of its land, said Mark Emmerson, the company’s chief financial officer. He said it would be more economically viable to have the land in the public trust, rather than log it.

‘‘It wasn’t optimal for timber production,’’ Emmerson said. ‘‘We could have sold it for other uses, but we think this land is of greater use visually and recreationally.’’

The first 6,100 acres will be managed by the U.S. Forest Service, and future acquisitions that are part of the agreement could be handed over to the federal or state governments or to another nonprofit organization for public use, said David Sutton, director of TPL’s Sierra Nevada Program.

Money for the first acquisition will come partly from the federal Land and Water Conservation Fund. The federal fund receives its money mostly from from fees paid by companies that do offshore oil and gas drilling. TPL expects to also raise money from private donors.

Some environmental organizations commended the agreement, saying it will help protect what they call ‘‘critical lands’’ in the Sierra Nevada. ‘‘We have been working on protecting the North Fork for 40 years,’’ said Eric Gerstung of the Sierra Club. ‘‘This means a great deal for the public and for our membership.’’

Jay Watson, regional director for the Wilderness Society, agreed.

‘‘The eventual public ownership of these lands will help provide long-lasting ecological integrity to these river ecosystems, as well as providing highly valuable outdoor recreation to the residents of the Golden State,’’ he said in a statement.

What does the TPL land sale mean to Nevada County?

So how does Nevada County fit into a conservation group’s plan to buy as much as 50,000 acres of timber land from Sierra Pacific Industries then hand it over to the U.S. Forest Service, or otherwise make it public?

It will be a while before anything happens here, because efforts are focused on getting $6 million set aside in October’s federal budget to buy 6,100 acres of SPI land in Placer County, near the North Fork American River. The federal funding is not tax dollars; it comes mainly from fees on offshore oil and gas drilling.

After that, the Trust for Public Land will have to decide where next to focus its efforts, said David Sutton, director of the group’s Sierra Nevada program.

SPI has identified about 2,000 to 3,000 acres it would sell in eastern Nevada County, north of I-80 near Kingvale.

Other lands available in the Yuba River watershed are some 2,000 acres southeast of Downieville, including three parcels on the Middle Yuba River.

However, the proposed land deal doesn’t include one high-profile piece of SPI land: acreage on the South Yuba River near Missouri Bar, that caused a storm of controversy in 1999.

SPI proposed to log four parcels there totaling 532 acres, including 171 acres of clear-cuts. After an outcry from environmentalists, SPI agreed in April 2000 to suspend logging until January of this year, in hopes of selling or exchanging the land.

The logging freeze has expired. But the three westernmost parcels surrounded by federal Bureau of Land Management property are still under consideration for a land exchange, said SPI district manager Tim Feller.

"We’re still trying to work with the BLM parcels. But that’s it," Feller said.

The fourth parcel surrounded by USFS land may be logged, he said.

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2002

Timber industry has tried to circumvent a forest initiative

By CHAD HANSON; Los Angeles Times; Mar 24, 2002.

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2003

Sierra Pacific says local harvest levels shouldn’t decline with mill closure in

by Susan Cort Johnson, Lassen County Times, circa December 2003

The closing of the sawmill owned by Sierra Pacific Industries in Susanville the first quarter of the year 2004 will not result in less logging in the Westwood area, according to Ed Bond, a spokesperson for Sierra Pacific Industries. The logs from the company’s timber holdings in the area and timber sales on other private and government lands will simply go to other mills including Sierra Pacific sawmills in Quincy and Burney, said Bond.

Following the announcement of the planned closure of the mill the company made on Monday, Dec. 15, Don Hansen, a forester with Roseburg Forest Products in Westwood, surmised harvest levels for timber companies could decline in proportion to the amount of logs processed at the Susanville mill resulting in less work for local loggers but he couldn’t speak for Sierra Pacific.

"The larger wood that we generate in this area and in the rest of our ownership in California to market to sawmills that need that larger log. Collins Pine Company in Chester buys some of the larger wood and in the past Sierra Pacific in Susanville. Sierra Pacific’s mill in Quincy also cuts some larger wood so there will still be a market in the area," said Hansen.

He said Roseburg does not use that many larger logs at its mills because the U.S. Forest Service limited the harvest of large trees on government lands several years ago. Its closest mill in Weed, Calif., is a veneer plant and it only uses smaller diameter logs.

Sierra Pacific sited loss of timber from government lands as the main reason for closing its mill in Susanville. The company stated private timber sales could not make up the loss.

Hansen said that in recent years a lot of the harvesting locally on private lands has been small logs as timber companies thin overstocked forest for fuel treatment. Therefore mills tooled for larger logs might have to transport large timber longer distances, which cuts into the profitability of an operation.

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New Sierra Pacific Sawmill in Washington Continues Ramp-Up Towards Full Production

Aberdeen Daily World, Feb 4, 2003

It’s huge, incredibly complicated and computercontrolled. The first new tidewater sawmill on Grays Harbor in decades will eventually produce 250 million board feet of standard construction lumber a year.

The new Sierra Pacific Industries lumber mill in Junction City, Washington is operating at low speed right now while workers sort out the bugs in the state-of-the-art sawmill and planer mill.

The plant cuts only Douglas-fir and hemlock. Oversized logs must be shipped out by barge to Sierra’s California plants. "We’re limited by the size of our de-barker, as most mills are," Stanley says. "It handles logs up to 35 inches in diameter." The big main boiler, once complete, will drive an electrical generator that puts out 18 megawatts, which is about enough to power 650 homes. Half of the boiler’s output of 160,000 cubic feet of steam per hour will drive the generator. The other half will heat the mill’s wood-drying kilns. The main boiler should be operational in another three or four weeks.

The plant will only use about 5.5 megawatts, leaving quite a bit of electricity available for sale, but Stanley said outside power sales will only be a small part of the business.

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Trust for Public Land secures Sierra parcels

San Francisco Business Times - April 22, 2003

The Trust for Public Land, based in San Francisco, and Andersen-based Sierra Pacific Industries on Tuesday announced the sale and protection of more than 1,900 acres in the Sierra Nevada.

Two parcels run along the north fork American River and along the Pacific Crest Trail at Barker Pass. The Trust for Public Land transferred ownership of both properties to the Tahoe National Forest.

The 1,280-acre American River property, valued at $1.99 million, and the 628-acre Barker Pass property, valued at $875,000, were purchased using appropriations from the federal Land and Water Conservation Fund. The purchases represent the third and fourth conservation sales under a multi-year agreement signed between forest products company Sierra Pacific and the Trust for Public Land in 2001 to buy and protect more than 35,000 acres from Sierra Pacific in the Sierra Nevada.

Funding for the acquisitions was secured with assistance from Sens. Dianne Feinstein, and Barbara Boxer, both D-California, and Rep. John Doolittle, R-Rocklin.

"I have long believed that public-private partnerships are the key to effective preservation efforts, and I want to congratulate the Trust for Public Land and Sierra Pacific Industries for their willingness to work together for the benefit of California," Feinstein said.

The Trust for Public Land is a nonprofit land conservation organization, specializing in conservation real estate, applying its expertise in negotiations, public finance, and real estate law to protect land for public use and enjoyment.

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Bill worth millions for Rocklin plant

SierraPine tries to cut energy costs

by Celia Lamb, Sacramento Business Journal, July 18, 2003

SierraPine Ltd. -- and perhaps only SierraPine -- could save up to $2 million per year in energy costs for its struggling fiberboard manufacturing plant in Rocklin under an Assembly bill now sitting in front of a state Senate committee.

Large institutions that buy electricity from sources other than their local utilities, a process called "direct access," must pay fees to help cover power costs the state Department of Water Resources accrued from the energy crisis. AB 1284 would let the state Public Utilities Commission cut or defer those fees for some companies through Jan. 1, 2009.

To apply for the waivers, companies would have to declare that the plants receiving direct access electricity face "certain and imminent closure."

SierraPine employs 200 people at its Rocklin plant, which manufactures medium-density fiberboard used to make molding.

Erik Vos, general manager of SierraPine’s Rocklin plant, would not say if the company is considering closing or moving the Rocklin plant. He said the legislation would not apply to SierraPine’s molding plant in Sacramento or its particle board factory in the Amador County town of Martell.

Though a legislative analysis prepared for a state Senate committee concluded that the bill is intended to apply only to SierraPine, the staff of bill author Assemblyman Tim Leslie, a Tahoe City Republican, said it’s not so.

"If you look at the way the bill was written, it does not mention SierraPine," said Brian O’Neel, Leslie’s press secretary, who estimated about two dozen companies could be helped by the bill.

"SierraPine brought this issue to our attention, but it doesn’t necessarily just affect SierraPine," he said. "It affects any company that finds itself in a similar situation."

Tight restrictions: Companies could qualify only if:

  • They received electricity via direct access contracts from before Jan. 1, 2000 through Feb. 1, 2001 at the latest.
  • Those contracts were canceled and the companies signed new contracts with other suppliers within 90 days.
  • The companies participated in "interruptible" programs with utilities through which they agreed to curtail power use during electricity shortages in exchange for rate discounts.
  • The plants collected a profit of at least 2 percent of sales revenue from 1996 to 2000.
  • Electric service cost at least 8 percent of revenue during the same period.

SierraPine and other customers of Enron Corp. were forced back to utility service in early 2001 when the energy company canceled its direct access contracts in California.

In September 2001, the state Public Utilities Commission suspended direct access for new customers, but by then many former Enron customers, including SierraPine, had already lined up new direct access contracts.

Vos would not name SierraPine’s current electricity supplier for the Rocklin plant.

The Public Utilities Commission requires direct access customers to pay 2.7 cents per kilowatt-hour to help cover costs incurred by the state Department of Water Resources as a result of the energy crisis. Pacific Gas and Electric Co. has collected more than $1 million from SierraPine for direct access fees since January 2001, the legislative analysis said.

An earlier version of AB 1284, which passed the Assembly on a 74-0 vote in May, specified a fee cap of 1 cent per kilowatt-hour for qualifying plants. The state Senate energy committee, which passed the bill on a 7-0 vote July 10, altered it to give the Public Utilities Commission authority to decide how much of the fee should be waived or deferred.

Waiving the fees for some direct access customers means that others would have to pick up the tab. But, said Kevin O’Neill, Leslie’s legislative director, "if they go out of business they’re not paying at all."

"The SierraPine situation is indicative of the whole problem of direct access," said Mike Florio, attorney for San Francisco consumer group The Utility Reform Network. "Everybody thinks it’s a great thing when it works to their advantage, and then when it doesn’t they’re back to the Legislature seeking some relief."

Profit margins thin: SierraPine, founded in 1992, is North America’s third-largest manufacturer of medium-density fiberboard, particleboard and molding. In addition to the three California plants, it has factories in Oregon, North Carolina and Georgia.

Owners of the timber firms Sierra Pacific Industries of Redding and Timber Products Co. of Springfield, Ore., share ownership of SierraPine. Sierra Pacific has sawmills in Lincoln and Camino.

The composite-panel industry has been hampered by excess supply due to rising imports and higher production from plants that were modernized five to seven years ago when markets were better, said Rich Donnell, editor of PanelWorld magazine.

"Within the industry, you’re seeing a lot of companies with multiple plants shutting down (some plants) for periods of time or shutting (them) down totally because the market is so soft," he said.

Profit margins tend to be thin at individual mills, so they often can’t absorb sudden increases in energy costs, he added.

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Sawmill exit: Sierra Pacific to buy assets

by Celia Lamb, Sacramento Business Journal, August 22, 2003

Wetsel-Oviatt Lumber Co. of El Dorado Hills is negotiating to sell its assets to Sierra Pacific Industries Inc., which soon will be the last sawmill operator left in Greater Sacramento.

A combination of rising costs and plummeting revenue proved lethal for 64-year-old Wetsel-Oviatt. Last week owner Cecil Wetsel said he would pull the plug in 60 days, leaving 120 employees out of work. Asset sales should more than pay off all creditors.

"We have a lot of good people," Wetsel said. "I’m just sorry I wasn’t able to keep this together."

In addition to the 265-acre mill site, Wetsel-Oviatt owns 17,600 acres of forests. Sierra Pacific has been "very fair" in bargaining for those assets, Wetsel said.

But he and others doubt that Sierra Pacific, which has mills in Lincoln and Camino, will reopen the Wetsel-Oviatt mill.

"It’s highly unlikely that facility will ever run again," said David Bischel, president of the California Forestry Association, a lobbying group.

The El Dorado mill land is zoned for industrial use. One broker put its value at $10,000 to $20,000 per acre, or $2.6 million to $5.2 million.

Sierra Pacific spokesman Ed Bond did not return a phone call requesting comment. Sierra Pacific, based in Redding, is the largest private landowner in the state and has a land development division. In addition to its timber properties it has business parks and residential subdivisions in planning and development stages in Redding, Red Bluff, Sonora, Loyalton and in Mohawk Valley near Graegle.

‘Why are we even doing this?’ Wetsel-Oviatt will join a long list of closed lumber mills. In the last five years 26 percent of California’s major lumber mills and wood products factories have closed, Bischel said. The last mills in Siskiyou and Sierra counties, which once had a bustling timber industry, closed in the last 18 months.

Bischel blames a "dramatic run-up" in regulatory costs. The price tag for a timber harvest plan, which the state requires to set minimum environmental protection requirements before an area is logged, has risen 300 percent in the last five years, he said.

Wetsel said the increasingly complex regulations raised his company’s costs for environmental surveys on a 1,500-acre plot from $15,000 two years ago to $45,000 this year. "I don’t know what they gain by the additional cost," he said. "The regulations are so much more stringent that you wonder why are we even doing this?"

But rising regulatory costs are only part of the problem for Wetsel-Oviatt and other California wood products companies. Lumber markets have been deluged with products from Canada, New Zealand and countries in South America and Europe. Foreign competitors can offer lower prices because their costs of production are cheaper. "When you go to Chile or Brazil, they may be paying $400 to $500 per month for an employee," Wetsel said. "Our health costs are $600 to $800 per month (for one employee)."

Last year Wetsel-Oviatt received $600 for 1,000 board feet of Ponderosa pine, according to owner Cecil Wetsel. This spring the price dropped 32 percent to $410, and some lumber prices dropped to what the company was getting in the 1970s, Wetsel said.

"What’s driving the bottom line is there’s an increasing amount of foreign competition," said Craig Thomas, director of the environmental coalition Sierra Nevada Forest Protection Campaign. "The trick for everybody here is to figure out how ecologically sustainable forestry can occur in spite of these market forces."

Record demand for lumber: Last year there was a record demand for lumber in the United States, said Butch Bernhardt, information services director for the Western Wood Products Association. But about 21 billion of the 56 billion board feet consumed came from foreign countries, mostly Canada.

Some U.S. companies accuse the Canadian government of subsidizing its timber industry and claim that Canadian firms dump lumber in U.S. markets at prices below the cost of production. Canada has accused the United States of violating international free trade agreements by imposing a tariff on Canadian lumber.

Wetsel-Oviatt was also hurt by other rising costs. The company’s monthly natural gas bill rose from as much as $30,000 per month a few years ago to $100,000 per month this year. The company pays $20,000 to $25,000 for electricity surcharges added to the bills of Pacific Gas and Electric Co. customers to help pay for energy costs incurred by the state during the energy crisis.

And, in what may have been the last straw for the company, annual workers’ compensation insurance costs doubled this year to $1.7 million.

"I can’t make all those numbers work," Wetsel said.

"The short of it is the company was just beginning to devour assets," said Judith D’Amico, Wetsel-Oviatt’s vice president of communications and Wetsel’s wife.

Creditors seem to be covered: Wetsel said he expected to have more than enough money from the sale of the company’s assets to repay creditors. He wouldn’t disclose how much debt the company has. The company lost $4.5 million on revenue of $27 million to $28 million last year, he said.

Wetsel-Oviatt got its start in 1939 in the former company town of Omo Ranch east of Plymouth. In 1973 the company moved to its current mill, south of Highway 50 off Latrobe Road.

In the last year and a half, the company spent between $1 million and $1.5 million on new computers and equipment to maximize the amount of lumber it could carve out of each log. The mill produced enough lumber each year to build about 2,000 homes. The company was El Dorado County’s 17th-largest employer.

Wetsel-Oviatt has redirected logs coming into the mill to Sierra Pacific and is working on finishing the processing of 7.5 million board-feet of lumber already delivered to the mill.

Wetsel and industry analysts said Wetsel-Oviatt’s closure will probably have little effect on the market.

"There are lots of other sources of lumber," said the Western Wood Products Association’s Bernhardt, "both domestic and foreign, that are more than willing to take its place."

###

Buyer: Homes could go on Wetsel-Oviatt lumber mill site

by Celia Lamb, Sacramento Business Journal, October 13, 2003

Wetsel-Oviatt Lumber Co. will close its mill in El Dorado Hills on Wednesday, but the new owner says the site could eventually be developed as homes and commercial space.

The family-owned lumber company said this summer that it would close its doors after 64 years in business, brought down by the high cost of regulation and workers’ compensation insurance price increases. The owners decided to sell the assets to pay off creditors. The mill employs 120 people.

Redding-based Sierra Pacific Industries Inc., the last remaining sawmill operator in Greater Sacramento, has reached an agreement to purchase Wetsel-Oviatt’s assets, including the 265-acre mill site and 17,500 acres of forest, company spokesman Ed Bond said Monday. He wouldn’t disclose the price.

As several industry sources had projected, Sierra Pacific will not reopen the mill. Once it closes, Sierra Pacific will evaluate whether its equipment can be used at other company mills.

"The mill will ultimately be dismantled," Bond said. "Down the road it will probably be developed for other uses."

Sierra Pacific is the largest private landowner in California and has its own development division which has several business parks and residential subdivisions in planning or development. The company would probably develop the El Dorado Hills property itself, Bond said; it could include a combination of commercial and residential uses.

"The forest lands are adjacent to some of our current holdings," Bond said. "We will manage them on a sustained yield basis, just like the rest of our lands."

One broker, interviewed by the Business Journal in August, put the value of the industrial-zoned mill property at $2.6 million to $5.2 million.

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Timber firm sells 1,900 acres in Sierra Nevada to U.S.

Associated Press / Las Vegas Review-Journal, April 24, 2003

California’s largest private landowner has sold for public use more than 1,900 acres of Sierra Nevada timberland west of Lake Tahoe, including a section along the Pacific Crest Trail.

The Sierra Pacific Industries land will be incorporated into the Tahoe National Forest after it was purchased by the Trust for Public Land using federal conservation funds.

The Pacific Crest Trail portion includes 628 acres purchased for $875,000 along Barker Pass, about seven miles southwest of Tahoe City and Lake Tahoe, adjacent to the Granite Chief Wilderness. The trail stretches 2,650 miles from Canada to Mexico.

The remaining 1,280 acres purchased for $1.99 million is along the north fork of the American River northwest of Lake Tahoe, and includes land in nearby Duncan Canyon.

The purchases are the third and fourth under a 1991 agreement between the Anderson-based company and the trust to buy more than 35,000 acres along scenic Sierra rivers.

The company and trust credited Democratic California Sens. Dianne Feinstein and Barbara Boxer and Republican U.S. Rep. John Doolittle with including money for the purchases in the federal Land and Water Conservation Fund.

Sierra Pacific has been a focus of criticism by environmental groups for its logging plans for a million acres of its 1.5 million acres of private timberland. But trust executive director Reed Holderman praised the company for its willingness to help protect thousands of acres of its most pristine property.

The American River canyon is so rugged and remote that it remains virtually untouched, the trust said.

Company President A.A. "Red" Emmerson said in a statement that the sale will help the public while the company will use the opportunity to consolidate its logging in areas more appropriate for continued timber harvests.

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Two sawmills still cutting against a historical trend

by Nils Wright, Sacramento Business Journal, May 16, 2003

The two remaining sawmills in El Dorado County continue to operate amid a small forest of problems: low lumber prices, intense competition from imports and rising expenses. And now the wet spring has added to the woes.

In fact, Redding-based Sierra Pacific Industries is now planning to convert some of its property at the 114-year-old Camino mill to a mixed-use development.

Down the hill, 67-year-old Wetsel-Oviatt Lumber Co. in El Dorado Hills has been losing money lately, but it’s hoping that a drop in value of the dollar will make imported softwood lumber less attractive.

"When my father opened the mill here there were 35 small sawmills in El Dorado County and Amador County," said Cecil Wetsel, owner of Wetsel-Oviatt. "Now there are only two left."

Since 1989, 77 mills have closed in California, at a cost of some 20,000 jobs, according to the California Forestry Association. That job count includes logging, forestry and wood product manufacturing.

One California mill has closed this year, in the town of McCloud, a few miles south of Mt. Shasta.

Sierra Pacific Industries ceased operations at its 120-employee mill in Loyalton, about 20 miles west of Reno, in 2001. That was a particularly rough year for mills. Seven California sawmills employing more than 1,300 were closed in 2001, reports the California Forest Products Commission.

Seeking other uses and more logs: Ed Bond, spokesman for Sierra Pacific, said the 165-employee mill in Camino will continue operating but that the company plans to redevelop some of its property in the town for other uses.

Bond said that plans are still being developed at this point.

Shawna Purvines, director of economic development for El Dorado County, said that while Sierra Pacific isn’t shutting its mill, it is looking to "roll it over into some mixed-use development."

She, too, gave no details.

Sierra Pacific owns 127,000 acres in El Dorado County and it’s slowly been buying more tracts over time. It logs on its property as well as federal lands.

Though the timber industry has diminished substantially in the county, Purvines said’ "We still have a large amount of people employed in our forests, either for the federal government or a private company."

Wetsel-Oviatt employs about 125 during peak operations.

Wetsel-Oviatt owns some 15,000 acres of forestland in El Dorado County in addition to 500 acres in Amador County. That’s not nearly enough to keep the company logging, though. The mill relies on logging on nearby U.S. Forest Service lands to bring in between 60 percent and 70 percent of the logs it runs through the mill.

Wetsel said that the only way to stay in business is to maximize efficiency by pouring money into capital improvements. The mill spends about $1 million year modernizing equipment. Last year, for example, the company bought a new carriage and a new hydraulic drive. Wetsel said the mill increased its productivity by 25 percent as a result of those investments.

Short- and long-range woes: This year, the Wetsel-Oviatt and Sierra Pacific mills are getting a late start on logging because of the late wet spring.

Troubles run deeper than the weather.

Last week the going price for softwood construction lumber was $281 per thousand board-feet, down from $328 in the same week in 2002 and a high of $410 in May 2001, reports Random Lengths, a timber publication that tracks lumber pricing.

Prices are low due to a glut of lumber, much of it coming from Canada, Bond said. Canada accounts for 90 percent of the softwood imports coming into the United States.

Bond and Wetsel also cite rising workers’ compensation costs as major problem. Wetsel said his company’s mill is losing money in part because its premium doubled this year to $1.6 million from $770,000 last year.

Cause for hope: Changes could help keep California mills in business.

Logging in Sierra Nevada forests would double if new recommendations by a team of forest rangers and biologists assembled by the U.S. Forest Service are adopted. The controversial Sierra Nevada Plan Amendment would institute new guidelines for managing some 11.5 million acres in 11 national forests in the Sierra Nevada and Modoc Plateau.

The revisions would allow the harvest of more than 450 million board-feet of lumber annually in the first 10 years, 67 percent more than allowed under the current framework. The proposed changes would allow logging of more trees up to 30 inches in diameter, making forest-thinning more economically desirable for timber companies and providing more revenue to the Forest Service.

Adoption of the plan could spark "appeals, litigation and gridlock," Craig Thomas told the Business Journal recently. Thomas heads Sierra Nevada Forest Protection Campaign, comprising 76 environmental groups.

The California Forestry Association said that California’s timber-felling laws are some of the strictest in the nation. Wetsel said that the federal forests in El Dorado County are growing 2 billion board-feet worth of new trees a year and that 200 million board-feet are being logged.

Under the proposed plan, that logging number would at least double, he said.

Monetary exchange rates may help too.

The dollar has steadily lost value in relation to other currencies this year, making imports more expensive. Wetsel said that could help U.S. timber companies cut into some of the Canadian sales.

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No Bidders for Stanislaus Timber

http://www.recordnet.com/articlelink/041803/business/articles/041803-b-1.ph

Sierra Pacific Industries, which attributed the temporary closure of its Chinese Camp sawmill last week to a shortage of logs coming off the national forests, chose not to bid on the Stanislaus National Forest’s largest timber sale in two years.

In fact, no one bid on the Brown Darby Fire salvage-timber sale, which the U.S. Forest Service estimated would provide more than 6 million board-feet of timber.

Chris Conrad, Sierra Pacific’s division timber manager, said his company did not bid on the sale because its requirements made it economically unviable. The requirements included building about $155,000 worth of roads, removing vegetation that can’t be used for logs or other merchantable material and logging large portions by helicopter, which is expensive.

Conrad also said the length of time that the firedamaged timber has been in the woods also was a factor, because its condition has deteriorated and has become less valuable.

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Sierra Pacific Shuts Mill Temporarily

http://www.recordnet.com/articlelink/041003/business/articles/041003-b-1.php

Sierra Pacific Industries is suspending its Chinese Camp sawmill operations for three weeks because of a shortage of available logs, company officials announced. The temporary shutdown, will idle 37 employees. Workers in the log yard, dry kilns, planer and shipping won’t be affected by the shutdown.

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Sierra Pacific Adds to Shutdowns

www.randomlengths.com

Sierra Pacific’s Arcata, California, sawmill has joined Chinese Camp and the Lincoln small-log mill on the company’s list of temporary mill shutdowns. The shutdowns stem from log shortages due to spring breakup. The company notes that several other mills are running short of logs, with each mill operating on a week-to-week basis during the breakup.

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2004

Sierra Pacific Industries’ Forester Awarded For Archaeological Stewardship

Richard Wade Has Discovered 30 Prehistoric and 55 Historic Sites.

Business Wire, January 12, 2004

The California State Board of Forestry and Fire Protection and the California Department of Forestry (CDF) has awarded Sierra Pacific Industries’ (SPI) Registered Professional Forester (RPF) Richard Wade with its "Golden Trowel Award" in recognition of outstanding achievements in the protection of California’s archaeological resources.

Two thousand three hundred people who have completed CDF’s certified archaeological training program are eligible to receive the "Golden Trowel Award." It symbolizes the integration of archaeological site identification and management into … [more]

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Roseburg sells California timberlands

Business Journal of Portland, August 17, 2004

Roseburg Forest Products has agreed to sell approximately 45,000 acres of its Northern California timberlands to Sierra Pacific Industries.

Realty Marketing Northwest, the marketing agent for Roseburg Forest Products, concluded an auction/bid process on Aug. 10. Redding, Calif.-based Sierra Pacific Industries submitted the high bid for the offering. Privately held Roseburg did not disclose the sale price.

In addition to the 45,000-acre transaction, scheduled to close in September, Roseburg reached agreement to sell Sierra Pacific a package of 88,000 more acres of timberland over the next four years.

"These timberland assets are geographically separated from our core operations in Northern California, but very strategic for Sierra Pacific," said Ray Jones, vice president of resources for Roseburg Forest Products.

The Roseburg-based company manages nearly 800,000 acres of land in Northern California and Southern Oregon.

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California’s timber industry shows signs of turnaround

By Mike Lee, The Sacramento Bee, September 17, 2004

CAMINO, Calif. - The darkened control room at Sierra Pacific Industries’ lumber mill shudders every time a big cedar log clanks onto the platform below.

Computer scanners instantly figure the most valuable cuts, and the wood is moved by mechanical arms into buzzing band saws and eventually to the nation’s insatiable building market.

It’s an increasingly unusual sight in California, where a new study shows that nearly two-thirds of the state’s sawmills have been closed in the last 15 years, including the Camino mill’s sister facility in Susanville. Lack of logs forced its closure early this year, following the demise of the landmark El Dorado Hills mill in October.

California’s forest industry - on a rapid retreat for the last decade - may be recovering a little lost ground. Its leaders are heartened by an increase in … [more]

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Sierra Pacific to Build Stud Mill Adjacent to its Washington Sawmill

Campbell Group Timber Trends, Nov 2004

Sierra Pacific Industries’ President, Red Emmerson, announced that his company will build a new sawmill complex adjacent to its existing mill in Junction City, Washington. The new, highly computerized stud mill will be designed to manufacture dimension lumber, the company said. The new mill is expected to add 150 jobs, bringing SPI’s total employment in the Grays Harbor area to more than 360.

The existing sawmill complex began operations in November 2002, the first sawmill owned by SPI outside of its base in northern California. The company said it recently acquired enough land adjacent to the sawmill to accommodate the new facility. The Daily World reports that the company bought 43 acres in a $2.5 million settlement with 19 Junction City residents.

There is no estimate at this time of a startup date for the new mill. However, construction is expected to begin next year, a company spokesman said.

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2005

California Suing Sierra Pacific Industries For Fire Negligence

Julie Eich, Mymotherlode.com, March 28, 2005

The state of California is suing to recoup nearly $1 million it says it spent in fighting several Calaveras County fires that started as a result of negligence on the part of Sierra Pacific Industries.

The lawsuit stems from a series of fires known as the Sourgrass Complex that started on Sierra Pacific property in November 2002. Nearly 865 acres were destroyed as a result of seven fires in the area. It took nearly 700 firefighters to suppress the blazes.

The fires started while Sierra Pacific was burning logging debris in various parts of the county. Sierra Pacific did have permits to burn the material, but high winds fanned the fires out of control during a two-day stretch around Thanksgiving that year. Some embers were carried off company property by the winds and ignited nearby lands.

According to the lawsuit filed by the state attorney general´s office, Sierra Pacific were negligent in setting the debris fires and were also were negligent in maintaining control of them, allowing them to move onto public and private property. The suit also claims that the company failed to take appropriate measures to control the burn, thus causing the fires to spread.

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Modern Sawmill Planned for Everett

Seattle Times, circa August 2002 http://seattletimes.nwsource.com/html/snohomishcountynews/2002154242_sawmill19.htm

Sierra Pacific Industries of Redding, Calif. has proposed building a new sawmill in Everett, Washington. It calls for building a computerized, state-of-the-art sawmill complex and an electrical cogeneration plant on the site of a former eyerhaeuser mill that was virtually the heart of Everett for decades.

According to the letter of intent delivered to the Port, the mill would have more than 200 full-time employees and add 220 other jobs in the community, Russell said.

Only one major sawmill, a Sierra Pacific plant in Aberdeen, Grays Harbor County, has been built in Washington or Oregon in the past 10 years. Sierra Pacific runs 12 sawmills in California and the one in Aberdeen. It has about 3,600 employees and owns about 1.4 million acres in California.

In 1987, at the peak year for lumber production in the 12 Western states, 702 mills were operating, Butch Bernhardt, director of information services for the Western Wood Products Association said. Now there are 242.

Production is expected to be about 300 million board feet annually, more capacity than any of Sierra Pacific’s California mills.

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Skagit deal? Sierra Pacific proposes $100M lumber mill

by Steve Wilhelm, Puget Sound Business Journal, August 5, 2005

Sierra Pacific Industries is negotiating with Skagit County to build a $100 million lumber mill and cogeneration plant after dropping plans to build a mill at the Port of Everett.

Oscar Graham, deputy director of planning and development services for Skagit County, said he met with officials of California-based Sierra Pacific on July 28 for a "pre-application" meeting about the proposed mill.

Company officials have contacted the county several times since then about follow-up matters, and prospects seem good, Graham said.

The 80-acre site, which is west of Mount Vernon and north of State Route 20, is owned by Wallace Ventures LLC, a development company owned by the Wallace family, which also runs a large potato farm in the area.

"My sense is that they are moving ahead deliberately," Graham said, adding that it would be the largest new factory in Skagit County in many years.

Graham said one of the key attributes of the property is a nearby rail spur -- a Sierra Pacific requirement.

The proposed mill would be similar to the mill the company had proposed in Everett, which was to have employed about 200, Graham said. Sierra Pacific canceled that plant early in July, citing too-onerous conditions set by the city of Everett.

Curt Adcock, a Sierra Pacific executive who was to have run the Everett mill, cautioned against concluding that the new proposed mill in Skagit County is a certainty.

"It’s kind of up in the air right now. It’s really not a done deal," he said.

John Lindbergh, owner of the Washington-Oregon Log Market Report, published in Vancouver, Wash., said he expects the new plant will be "the biggest new mill in Washington in the last few years."

Jack Wallace, one of the owners of the proposed site, confirmed there have been discussions with Sierra Pacific but declined to comment further.

Also happy about the possibility is Mike Pieti, executive secretary-treasurer for the Western Council of Industrial Workers in Portland, the union that probably will represent workers at the proposed plant.

"It’s good to see a company that’s moving forward and has hope for the future, because we’ve dealt with far too many closures," he said

Sierra Pacific spokesman Ed Bond did not return repeated phone calls about the project to the company’s Redding, Calif., headquarters.

Sierra Pacific Industries is a privately held company that operates at least 15 sawmills and cogeneration facilities in Northern California, as well as one in Aberdeen, Wash. The company generates about $1.4 billion in annual revenue and employs 3,900 people, according to an estimate from the Business and Company Resources Center, a database operated by the Thompson Corp. of Stamford, Conn.

Sierra Pacific’s mill in Aberdeen already is one of the state’s largest, capable of handling 304 million board feet of structural lumber annually, said Shawn Church, an editor of Eugene, Ore.-based Random Lengths, a lumber industry trade journal.

Sierra Pacific plans to build an addition to the Aberdeen mill to process another 250 million board feed of lumber, but the company has said it will delay the expansion until it finishes the mill proposed for Skagit County, Church said.

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Sierra Pacific says Permits Doom Everett Sawmill-Power Plant

Associated Press, Seattle Times, July 11, 2005

EVERETT — A California company is abandoning plans for a $100 million sawmill and power plant here, in part, it said, because of permit conditions set by the city.

Sierra Pacific Industries had planned to pay $24 million for a 78-acre industrial park on the Snohomish River and to build a sawmill linked with a power plant that would make electricity by burning wood waste.

Company officials say they now plan to take the project to another city in Washington. The decision was announced after a private meeting between Port of Everett officials and the company on Thursday.

"I’m absolutely sick," said Jim Shaffer, a port commissioner. "The blue-collar end of Everett needs jobs. We can’t all be white-collar workers for the aerospace industry. I think it’s just a crime."

In a statement given to port officials, Sierra President Red Emmerson said the company decided to drop Everett as a mill site after it "discovered certain compatibility issues with public and municipal goals."

"These compatibility issues were partially illustrated in a number of permit conditions set by the city of Everett," Emmerson’s statement said.

The city listed 83 requirements for approving the permits required by the project, although some were standard items such as following building codes.

City spokeswoman Kate Reardon said the city had treated Sierra Pacific’s plans fairly and had tried to modify requirements to satisfy the company.

"We felt like we treated them right. We felt like we were expeditious with our process," she said.

The company had expressed concerns about a requirement to provide landscaping to buffer a planned nearby residential development, Reardon said. But the city dropped that requirement after the housing developer said it could install the buffer.

The city also had rerouted a pedestrian path through the property to accommodate the company, she said. The company would have been required to pay for building that section of the path.

"Possibly they’re just not used to working in an urban situation," Reardon said.

Sierra intended to sell much of the electricity on the open market. The company has a plant near Aberdeen.

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Disputes at Martis Valley might be reaching a head

Developers vying with environmentalists at Sierra site

by Barbara Marquand, Sacramento Business Journal, April 25, 2005

When Stefanie Olivieri was a girl, Highway 267 through the Martis Valley between Truckee and Lake Tahoe was a two-lane dirt road, and the valley was a pristine summer playground. Every morning before opening the family store in Truckee, her dad would drop the kids off near Martis Creek with fishing poles and peanut butter sandwiches, and Olivieri and her brother and sister would spend the whole day fishing and hiking.

Much has changed. Highway 267 now bustles with tourist traffic. High-priced homes, a golf course and the Truckee-Tahoe airport have been built.

And plans are under way for more homes, golf courses and resort businesses to feed hungry demand in the growing region.

While developers see golden opportunities in the 70-square-mile valley just north of the Lake Tahoe basin, conservationists such as the 62-year-old Olivieri fear a paradise lost. The conflicting interests have led to one of the most passionately fought land-use battles in California.

Now everyone with a stake in Martis Valley awaits a judge’s final decision in a key court case over the valley’s future. At issue is Placer County’s community plan for the valley, adopted by the Board of Supervisors in 2003 to replace an almost 30-year-old plan.

‘Egregious’ or ‘reasonable’? Conservation groups sued the county last year to stop the plan, charging that the county’s environmental analysis was incomplete and inaccurate.

The environmental groups claim the plan actually allows up to 19,000 housing units and 5 million square feet of commercial space, but that the county based its environmental analysis on estimates of up to only 9,220 residential units and 1.2 million square feet of commercial space.

"What’s been proposed is so egregious and out of step with what people want in the Sierra," said Tom Mooers, executive director of Sierra Watch, a petitioner in the lawsuit against the county. Sierra Watch is joined in its petition by the League to Save Lake Tahoe, the Mountain Area Preservation Foundation, the Sierra Club, and the Planning and Conservation League.

Mooers said decisions on how development proceeds in the Martis Valley will set a precedent for all of the Sierra. The issue has attracted media coverage from San Francisco to New York.

Olivieri, who is the third generation in her family to run Cabona’s store in Truckee, said the county’s plan reflects a "failed stewardship of Martis Valley. ... For me it’s a touchstone kind of place. I was born here and plan to live the rest of my life here, and I want to leave it as remarkable of a place as when I grew up."

But Richard Crabtree, the county’s attorney, calls the conservation groups’ calculations of potential development "simplistic."

"They got those figures simply by taking the number of acres and multiplying by the maximum density allowed in the plan, but that bears no relation to the real world," he said.

Crabtree said the county based its environmental analysis on more realistic development figures. The environmentalists’ calculations don’t take into account development limitations in the county’s zoning ordinance for the Martis Valley or physical limitations, he said, such as cliffs and rivers that would make building in some spots impossible.

Crabtree said the new plan would scale back development from the 1975 plan, which allowed 12,500 homes. The new plan designates 81 percent of the Martis Valley as open space, including golf courses, and forest, which includes land with no more than one house per 40 acres.

"The county believes the plan represents a fair and reasonable accommodation of competing interests of the Martis Valley -- the need for more housing and the need for more open space."

He noted that the county drafted the plan after 31 meetings with a citizens’ advisory group that included development and environmental interests.

An agreement amid the battle: In a tentative ruling in February, Placer County Superior Court Judge James Garbolino sided with conservationists. The judge heard oral arguments last month and is expected to make a final decision in the next few weeks.

If it lost the case, the county would have to fix the problems identified by the judge, but it wouldn’t have to go all the way back to the drawing board, Crabtree said. The Board of Supervisors has not decided yet whether to appeal the decision if the judge rules against the county.

The environmental groups, meanwhile, are confident they’ll win.

But even if they lose the case, Mooers said they won’t stop their conservation efforts. The groups are ready to go to court over individual projects if they can’t negotiate agreements with developers to protect the most sensitive biological and wildlife areas. (The groups do not believe golf courses count as wildlife corridors.)

One landmark agreement has been reached. Last month, Northstar Resort and East West Partners, the resort’s managing partner of development, agreed to pay a transfer fee on all new residential property sales and resales to the Truckee Donner Land Trust. (The trust is a neutral party and is not involved in the lawsuit against the county.) The fee will generate about $30 million over the next 25 years to buy land in the Martis Valley for conservation.

Land trust executive director Perry Norris said the organization will have to augment that money with funds from foundations, individuals and public agencies to reach conversation goals in the Martis Valley. But the $30 million still represents a quantum leap. The trust now has 3,000 acres and will acquire another 8,000 this year, but none of that land is in the Martis Valley.

The agreement also includes a cap on future development to less than 800 acres of Northstar land in the Martis Valley. East West Partners president Roger Lessman says the cap isn’t new; his company had already scaled back the amount of development to that level in response to concerns from a homeowners association two years ago. East West plans to build The Highlands at Northstar, comprising 1,450 condominiums, town homes and a luxury inn.

"The Martis Valley is a very important area, not only to us but to the greater community at large," Lessman said, "and anything we can do to help in preservation of lands is a good thing to do."

Watchful eyes: Environmentalists are closely watching other developments. Projects on the horizon include:

* Hopkins Ranch, a golf course community with 65 homes, just south of the Truckee/Tahoe Airport. DMB/Highlands Group LLC, developer of the nearby Lahontan golf course community, is developing the project. Environmental groups sued the county over its approval of Hopkins Ranch. The final round of briefings in the case is on hold until the judge’s final decision on the community plan.

* Siller Ranch, a 726-home home development on 2,177 acres with 18-hole and 9-hole golf courses, a community park, health spa, interpretive nature center and walking trails. The county approved the project by DMB/Highlands Group in January over objections by environmental groups, which want development shifted off what it feels are the most sensitive areas on the property.

* Eaglewood, a planned 470-home development just south of the Placer County line and west of Highway 267. Martis Valley Associates LLC is developing the project on 475 acres.

Besides Northstar, the biggest landowner in the Martis Valley is Sierra Pacific Industries, which owns 7,343 acres east of Highway 267. No specific development has been proposed there yet.

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2006

BOE unanimously decides MIC case for lumber mill’s cogeneration equipment

By Chris Micheli, Journal of State Taxation, September 1, 2006

In a rare unanimous decision in a Manufacturers’ Investment Credit (MIC) case, the State Board of Equalization (SBE) rejected a Franchise Tax Board (FTB) attempt to deny the MIC to a lumber mill for its cogeneration assets. The mill purchased boilers and turbines (termed "steam generation assets" or SGAs by the SBE) to dry timber as part of its manufacturing process to turn the timber into lumber. A by-product of the manufacturing process is the production of electricity, a portion of which is sold by the mill. In Appeal of Sierra Pacific Industries, an unpublished decision, the taxpayer won a unanimous decision that its equipment could be claimed under the prior MIC law.

The FTB argued that the MIC should be denied because the primary use of the boiler and turbine (the steam generation assets) was to produce electricity, which the FTB said was not a "qualified activity" under the MIC statute. The taxpayer, Sierra Pacific Industries (SPI), successfully argued that the cogeneration equipment was part of the manufacturing process.

SPI owns and operates 11 lumber mills in California. Each mill includes a dry kiln as part of its manufacturing process. The dry kiln requires steam to remove moisture from the lumber. The wood-fired boilers and a turbine are used to produce the steam used in the dry kiln. A side benefit to the boilers and turbines is the production of electricity. According to the taxpayer, the primary use of the boilers and turbines is for the production of steam used in the lumber-manufacturing process.

According to the FTB, the dual purpose of the boilers and turbines make their primary use to produce energy, which is not "manufacturing." Moreover, SPI had several long-term power supply contracts. Therefore, SPI has a separate line of business to produce and sell energy. As a result of this separate line of business, the FTB held that the boilers and turbines failed the "primarily used" test under the MIC law.

The primary discussion before the five-member SBE Board revolved around the issue of the "primary use" of the SGAs. Several questions were posed by the board members regarding the regulatory definition of primarily used. One board member asked the FTB why the staff was not following their own published definition of primarily used. The FTB did not have an answer and did not provide any analytical evidence to support its position that the boilers and turbines were not primarily used (50 percent or more of the time under the law) in the lumber-manufacturing process.

The Lumber-Manufacturing Process

SPI operates sawmills and wood product plants at multiple California locations, and manufactures…

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2007

Sierra Pacific Industries to acquire Washington’s Centralia Sawmill Co.

Forestweb March 20, 200

Sierra Pacific Industries (SPI) of Redding, Calif., is set to acquire the Centralia Sawmill Co. (CSC) in Centralia, Wash.

In a brief press release issued Mar. 19, SPI said the company has an agreement in principle to acquire the Washington state mill, which primarily produces green Douglas fir studs.

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[Renegy Holdings buys SPI’s Susanville biomass plant from SPI for $1.3M]

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Sierra Pacific Acquires 140,000 Acres of Washington Timberland from The Campbell Group; Simultaneously Buys/Sells Off 43,000 Oregon Acres to Rosboro

Forestweb.com, October 2007

Sierra Pacific Industries (SPI) has acquired 140,000 acres of Washington timberlands from The Campbell Group (TCG), plus another 43,000 acres in Oregon that it simultaneously sold off to Rosboro. Industry sources told Forestweb it had been a two-part transaction with TCG, and that about 40,000 acres of Oregon timberland had been sold to Springfield, Ore., based Rosboro.

Rosboro’s CFO Scott Nelson confirmed that his company had acquired 43,000 acres in western Oregon from SPI at the same time it completed its transaction with TCG, on September 27.

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$400K to design a high rise? Would you believe $300K? $200K?

Sacramento Business Journal, November 4, 2007

The break between Craig Nassi and the architects on his proposed Epic condo tower in downtown Sacramento didn’t come out of the clear blue sky.

Nassi had twice bargained down the fee owed to Studio Daniel Libeskind and Stantec Consulting Inc. for the tower he hoped to build at 12th and J streets before the designers ended their agreement for non-payment, the design team said.

Nassi, of BCN Development in Denver, last paid $187,000 in 2005 for the design and owed about $400,000 for later work, according to a letter from a lawyer representing the designers. He got a reduction to $300,000, then to $200,000 paid in installments over eight weeks, but failed to deliver, the letter said. That led the designers to pull the plug last month, which in turn led to yanking the application.

Nassi said Epic isn’t dead, just on hold. "We don’t feel comfortable spending a lot of money on architecture and design when we don’t know if we’ll ever be able or when we’ll be able to do this project," he said. He said he’s an expert in financing such projects and "the financing’s not there ... right now."

Libeskind was also the architect on the proposed Aura condo tower.

And speaking of Aura ...

Developer David Taylor shared a closely held secret with about 650 people a few weeks ago -- he is considering whether to take on the long-delayed Aura condos project on Capitol Mall downtown.

Taylor, a guest speaker at the Business Journal’s economic forecast conference on Oct. 24, said he could decide by the end of the year if he’ll develop the property he owns at 6th and Capitol that once was slated for the $175 million residential high-rise. Nassi and BCN have not secured financing for Aura.

Nassi had an option on the land owned by Taylor, who is finishing the 25-story U.S. Bank Tower next door. But with Aura stalled -- the city withdrew a $10 million loan offer and deep-pocketed lenders are passing in the project -- plans for the high-profile site are uncertain. "It got a lot of interest from buyers," Taylor said. Downtown’s "first high-rise condo tower will be very well done."

Promise or speculation? Taylor said he would not decide, or comment, until the end of the year.

Sierra loans/bytes/stoves

The Auburn-based Sierra Economic Development Corp. has received $595,000 from the U.S. Department of Agriculture for rural development, including $50,000 to develop business plans for wood-pellet and pellet-stove manufacturing in Sierra County’s Loyalton Business Park. Wood is Loyalton’s chief resource. Sierra Pacific Industries of Redding used to have a lumber mill in Loyalton and runs a wood-fired power plant there.

Sierra County would also receive broadband Internet service thanks to a $45,000 loan. Officials hope it will open a path for more home-based businesses.

The remaining $500,000 would support a business loan program. The economic development group, also known as SEDCorp, will take applications for loans of up to $150,000 for companies from El Dorado County to the Oregon border.

Nonprofit SEDCorp is the only U.S. Small Business Administration-designated microlender in northeastern California and has provided over $1.6 million to more than 80 businesses since 1999. It previously had a lending cap of $35,000.

Berry flats in Alkali Flat

A group that runs a nonprofit farm stand in Sacramento’s Alkali Flat area has won a grant to do the same in four Sacramento County neighborhoods.

The $224,000 grant comes from the county’s First 5 Sacramento Commission, which funds programs to improve the health of children up to 5 years old. The Sacramento Mutual Housing Association and Alchemist Community Development Corp. run the stand.

In July, the nonprofits started the stand in Alkali Flat, an area with no supermarket. They hoped to improve access to fresh produce for busy parents and people who don’t own cars.

The market, now closed for the season, drew up to 120 people per day, said Rachel Iskow, executive director of the housing group. Farmers sold produce to the nonprofits, which resold them. The stand also sold locally made soap, jelly, jam, scrapbooks and picture frames.

The groups are looking at the Lemon Hill, Florin and south Natomas neighborhoods of Sacramento County and at Rancho Cordova for the new markets.

OMG! Three fewer letters!

Finally a local environmental company is getting an acronym break.

Since May 2006, when the Sacramento environmental consulting business EIP Associates was bought by the national firm PBS&J Corp., receptionists in the Sacramento office have answered the phone as "EIP Associates, a division of PBS&J." The company kept the alphabet soup to avoid confusion for people who have known the Sacramento office as EIP for almost 40 years.

The company has eased the burden for the receptionists’ tongues; EIP Associates is now simply PBS&J.

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2008

Rayonier buys Washington state timberland

Jacksonville Business Journal, April 8, 2008

Rayonier Inc. has completed the previously announced purchase of 56,300 acres of timberland in southwest Washington from Sierra Pacific Industries.

After adjustments, the final purchase price was $213.4 million or $3,790 per acre. Rayonier’s Washington holdings now total more than 426,000 acres.

The timberlands are heavily stocked with 319 million board feet of timber, increasing Rayonier’s Western region inventory by 27 percent.

The transaction is structured as part of a tax-efficient like-kind exchange through which the company expects to realize tax benefits of approximately $36 million from 2008-2010. Funding for the purchase was provided through a combination of cash and borrowings from Rayonier’s existing revolving credit facility.

Rayonier manages its Washington timberlands in accordance with the Sustainable Forestry Initiative and intends to certify the acquired timberlands.

In late March the company also acquired more than 53,800 acres of timberland in upstate New York for $19.1 million.

Jacksonville-based Rayonier (NYSE:RYN) is an international forest products company with three core businesses: timber, real estate and performance fibers. The company owns, leases or manages 2.6 million acres of timber and land in the United States and New Zealand. The company is structured as a real estate investment trust.

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Rayonier Completes Purchase of 56,300 Acres of Timberland in Washington

Company news release, April 8, 2008

Rayonier (NYSE:RYN) said today that it has completed the previously announced purchase of 56,300 acres of timberland in southwest Washington from Sierra Pacific Industries. After adjustments, the final purchase price was $213.4 million or $3,790 per acre. Rayonier’s Washington holdings now total more than 426,000 acres.

The timberlands are heavily stocked with 319 million board feet of merchantable timber, increasing Rayonier’s Western region inventory by 27 percent. The acquisition also significantly improves Rayonier’s inventory of higher value species, reflecting the property’s mix of 41 percent Douglas-fir and 55 percent hemlock.

"The acquisition of these highly productive timberlands reflects our continued commitment to disciplined, strategic growth," said Rayonier chairman, president and CEO Lee M. Thomas. "We have significantly increased our merchantable timber and have achieved greater scale in the Northwest."

The transaction is structured as part of a tax-efficient like-kind exchange through which the company expects to realize tax benefits of approximately $36 million in the next three years (2008-2010). Funding for the purchase was provided through a combination of cash on hand and borrowings from Rayonier’s existing revolving credit facility.

Based on conservative harvest assumptions reflecting current market conditions, the acquisition is expected to be slightly cash accretive ($.01 to $.02 per share) in 2008 and 2009, with projected increases thereafter as timber markets recover. However, earnings per share dilution of approximately $.06 per share is expected in 2008, primarily due to non-cash depletion expense.

Rayonier manages its Washington timberlands in accordance with the Sustainable Forestry Initiative® and intends to certify the acquired timberlands.

Headquartered in Jacksonville, Fla., Rayonier is a leading international forest products company with three core businesses: Timber, Real Estate and Performance Fibers. The company owns, leases or manages 2.6 million acres of timber and land in the United States and New Zealand. The company’s real estate holdings include approximately 200,000 acres in the fast-growing counties along Interstate 95 between Savannah, Georgia, and Daytona Beach, Florida.

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Billionaires battling for ‘premier’ timberland giant [Palco]

Court fight over bankrupt Pacific Lumber not expected to end anytime soon

By Mike Geniella, The Press Democrat, May 2, 2008

Call it a clash of the titans, the Wall Street kind.

Some of the wealthiest names in America emerged as combatants Thursday in a contentious Texas courtroom battle for control of bankrupt Pacific Lumber Co., the tattered but still regal monarch of West Coast timber companies.

The players so far include four billionaires, a super-sized Dallas gambler and Harvard University’s endowment fund, the richest in the nation.

Why such keen interest in a bankrupt North Coast timber firm?

Because even with its staggering $714 million debt, Pacific Lumber’s 210,000 acres, mill complex and the town of Scotia in southern Humboldt County represent the best there is in big timber country.

"They are premier assets," said a Los Angeles investment analyst.

Pacific Lumber’s weeks-long bankruptcy trial in the U.S. District Court in Corpus Christi was to continue today, but any decision appears unlikely. Further hearings are scheduled toward the end of the month.

Going into Thursday’s hearing, San Francisco’s Fisher family, owner of Ukiah-based Mendocino Redwood Co., and its hedge fund partner appeared to have an edge.

Overnight, Texas financier Charles Hurwitz, the current Pacific Lumber owner who ran the timber firm into bankruptcy after a 22-year reign, and Pacific Lumber executives had signed off on a richer offer by the Fishers and Marathon Structured Finance Fund. In a twist, other company executives who represent subsidiary Scotia Pacific, actual owner of the timberlands, are holding out because they contend the land value is $900 million, far more than what’s being offered so far.

Under the new Fisher-Marathon plan, holders of past-due investment bonds would get $530 million in cash, instead of just $175 million and another $325 million in new financing notes. Marathon would take over the town of Scotia as part of its debt settlement with Pacific Lumber.

Late Wednesday the revised plan was seen as a possible breakthrough, perhaps signaling an end to an 18-month old bankruptcy drama.

But in a surprise move Thursday morning, attorneys for holders of the $714 million bonded indebtedness announced that legendary California timberman Archie "Red" Emmerson may join with Texas banker Andrew Beal and Harvard’s endowment fund to make an even higher offer.

As envisioned under that plan, Emmerson’s Sierra Pacific Industries, California’s single largest landowner, would take over the Scotia mill complex operation in partnership with Harvard and Beal. Beal has said he’s willing to put up $603 million cash for Pacific Lumber’s assets.

Harvard apparently is no newcomer to timber investments.

"It has $5 billion invested in forestry right now," Harvard lawyer Steven Hoort told bankruptcy court Judge Richard Schmidt, according to the Dow Jones Newswires.

But the takeover bid by Mendocino Redwoods, which already owns more than 200,000 acres of timberlands in Mendocino County, and Marathon still has the support of Gov. Arnold Schwarzenegger, North Coast timber industry leaders, environmental groups and state and federal regulators.

Deep pockets, however, have been known to trigger fierce competition.

Brothers William, John, and Robert Fisher are heirs to The Gap fortune founded by parents Doris and Donald Fisher of San Francisco. The Fisher brothers are each worth an estimated $1.4 billion, according to Forbes magazine.

Forbes says Red Emmerson, a Humboldt County native who still wears blue jeans and drives a Chevy pickup, is worth slightly more: $1.5 billion. Emmerson’s family owns Sierra Pacific, believed to be the nation’s third largest private landowner, with 1.8 million acres of timberlands.

Dallas banker Beal’s worth also is an estimated $1.5 billion. And in Texas, Beal’s passion for poker is widely known. He’s sat down to some of the highest-stakes private games ever played, according to the 2005 book "The Professor, the Banker and the Suicide King."

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PALCO bankruptcy hearings rest with two-week break

By Nathan Rushton, The Eureka Reporter, May 3, 2008

There were no surprise deals or breakthroughs in the Pacific Lumber Co. bankruptcy proceedings Friday that wound down uneventfully with the end of testimony in support of the surviving reorganization plans.

It was the shortest day of the week-long hearings in Corpus Christi, Texas, which often ran late into the evenings to hear expert testimony as Judge Richard Schmidt stayed determined to resolve the 15-month bankruptcy case as soon as possible.

Schmidt closed the admission period for evidence in preparation for the closing arguments scheduled for a hearing on May 15 after another lengthy break.

Concerns linger over PALCO and Scotia Pacific Co.’s ability to stay afloat financially while the court moves toward finalizing a plan, that even if approved, could be many months away from being implemented.

In the testimony of Gary Clark, the chief financial officer for PALCO on Thursday, Clark testified that the bankrupt companies are rapidly running out of available operating cash, which threatens to halt mill and other operations by July.

Attorneys have repeatedly raised the possibility that such an outcome could force the current Chapter 11 bankruptcy reorganization into a Chapter 7 bankruptcy liquidation.

"Delays will only make that worse," said John Fiero for the Official Committee of the Unsecured Creditors.

Going into the two-week break, Schmidt asked that the parties focus their attention on the one issue all the parties have agreed is the central issue.

That issue is the value of SCOPAC’s 210,000 acres of timberlands, which is held as collateral by the SCOPAC’s largest creditor, the Timber Noteholders that are owed more than $700 million in loans.

Because he said there are some many factual issues regarding valuation, Schmidt asked that each plan proponent prepare their comments on those aspects of their expert testimony and why they are right, as well as relate what the other experts said and why they are wrong.

While there are range of valuations given for SCOPAC’s lands -- from $430 million to $940 million -- Schmidt indicated that there were essentially only two viable plans competing for the court’s approval.

The Mendocino Redwood Co. and Marathon Structured Finance Fund plan, which offers $530 million cash for the timberlands and seeks to consolidate the debtor companies into a single entity to continue timber and milling operations.

That plan has received the support of PALCO and MAXXAM as part of a deal reached Friday in trade for $2.5 million in cash to MAXXAM, a log purchase agreement and protection from litigation for PALCO and MAXXAM executives.

The other viable plan is from the Noteholders, which aims to sell the timberlands on the open market.

In response to Schmidt’s comments that the best plan would address both the mill and the forest assets, Timber Noteholder attorney William Greendyke told the court his clients were looking into interim financing to continue the operations while the sale of the lands were completed.

Greendyke said the Noteholders were also looking at an alternative course that if their plan is confirmed, would resolve the concerns about the mill, although no specifics were offered after he notified the court previously that Arcata-based Sierra Pacific Industries was also a serious partner to run the mill and was working with one of the purchasers.

Waiting in the wings to potentially purchase the property under the Noteholders’ plan are Beal Bank, which offered $603 million, as well as the Nature Conservancy and the Harvard Endowment Fund.

Still more prospective bidders for SCOPAC’s timberlands continued to make themselves known in court Friday.

A man who identified himself via telephone conference call as "Neal Wolf" told the judge his client was working hard to finalize a written proposal for $565 to $590 million for the purchase of the lands and a 20-year log supply agreement for the Scotia mill.

"We are for real," Wolf said. "We are genuinely interested in making a bid."

Wolf said his client -- apparently the Atlanta-based TimberSTAR -- is a partnership entity that owns more than a million acres of timberlands in Maine, Texas, Louisiana and elsewhere worth more than $1 billion.

But a comment that his client would be looking at securing $300 million in financing to broker the deal brought laughter from many of the attorneys in the courtroom.

Schmidt told Wolf that if the Noteholders’ plan is approved and the property went on the market for auction, Wolf’s client could make a bid.

"If the MRC plan is confirmed, you are pretty much out of luck," Schmidt said.

Before concluding court Friday, Schmidt told the lawyers they should all be commended for what they have done on behalf of their clients.

"It has been very enjoyable on the quality of the lawyering," Schmidt said.

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Drying Up

By Hank Sims, Northcoastjournal.com, May 22, 2008

Is the Klamath Settlement Agreement dying? Not yet, but the proposal to end years of one of the West’s most vitriolic water wars isn’t looking too healthy right now. For the last couple of years, fishermen and environmentalists and Indians and farmers sat around a table, trying to reach an agreement that would share Klamath water, and to improve the overall health of the river. They wanted to avoid the water shutdown of 2001, in which upstream farmers were deprived of the ability to irrigate their crops in order to save fish. And they wanted to avoid the fish kill of 2002, in which as many as 70,000 salmon died in the river in order to save the crops.

Given all the vitriol that preceded the settlement talks, it is remarkable that two of the major antagonists in the battle — the farmers and (most of) the Native Americans — were able to find common ground. The settlement they came to would institute an on-the-ground management team that would control river flows at any given moment, within certain bounds set up by the agreement. It seeks to account for nearly all of the species and interest groups that use the river — not only the coho and chinook salmon and the people who depend on them, but the upstream sturgeon, suckerfish and farmers as well. The agreement is supposed to go to Congress with the support of all the interest groups, who will be vigorously lobbying to make its provisions law.

Now, though, there are two hold-ups. For one, the agreement hinges on another agreement. The groups involved are petitioning investor Warren Buffett, the world’s richest man, to agree to remove the four hydropower dams his PacifiCorp company owns on the Klamath. PacifiCorp is under a court order to provide for fish passage past the dams, and studies have shown that it would be cheaper in the long run to remove them altogether and return much of the Klamath to the wild. But PacifiCorp is nowhere to be seen. The settlement group has been waiting two months for a promised PacificCorp status report on the dams, and many are giving up hope that it will ever arrive.

Just as troubling, parts of the coalition that sat around the table, hammering out that agreement, are now crumbling. Unlike the Karuk, the Yurok and the upstream Klamath tribes, the Hoopa Valley Tribe has refused to sign on, concerned that the agreement does not offer enough guaranteed protection for salmon. Two Oregonian environmental groups departed company from the settlement coalition last year, saying that the Bush administration had hijacked the process and guaranteed farmers too much.

Now, the local Northcoast EnvironmentalCenter has dropped out, and with the stakes this high that’s led to some immense frustration. "I just felt like the NEC has shot from the hip, and they became critical of the agreement before they did their homework," said Karuk Tribe spokesperson Craig Tucker last week.

After the agreement was published, the NEC hired two scientists to review it. The conclusion they came to was that it contained insufficient protections for salmon runs. After the group received the scientists’ report, they pulled out of the agreement. But that seemed to fly in the face of the science that had gone into drafting the report, and earlier this month the parties to the agreement held a "science summit" to address the NEC scientists’ concerns. One of the two scientists recanted, especially after Dr. Thomas Hardy, widely acknowledged as the most knowledgeable person on the Klamath system, endorsed the settlement. The other of the NEC’s scientist had not yet changed his view, and the NEC is holding out for his follow-up report before reconsidering its position.

There’s a lot of hard feelings right now. NEC Executive Director Greg King said last week that the stakes are too high not to be absolutely certain. "We can’t have the fish on the brink of extinction year after year," he said. He said that his organization, like Hoopa Valley, would like to see guaranteed amounts of water for salmon, and also an end to farming in wildlife refuges in the upper basin.

But Tucker — while insisting that he still respects the NEC — said that the group had plenty of opportunities to bring any concerns to the table while the agreement was being hashed out, and failed to do so. Now time has run out, and the stakes on the river are too high for quibbling.

"I wouldn’t say it’s not their place to bring up a concern," Tucker said. "But, shit, they had two years."

And the news from Corpus Christi, Texas, is not that much better. A ruling in the massive Pacific Lumber bankruptcy case, a year and a half in the making, could be handed down at any moment. The field has been winnowed, and there are only a couple of possible outcomes now. A few weeks ago, we would have said that the faction led by Mendocino Redwood Company, a greenish outfit to our south, would be the sure winner — it has the support of nearly everyone here on the ground, as well as mighty politicos in Sacramento and Washington. It has a complete solution for the company. The judge overseeing the case, Richard S. Schmidt, indicated that he believed Mendo Redwoods would be the best option for everyone. The timber lands would be sustainably managed, the mill would stay operational, the town of Scotia would be privatized, the company pensioners would be taken care of, and it would all stay under one roof.

But now things aren’t looking so ducky. The other faction left in the game — the bondholders, who together own $730 million worth of Pacific Lumber debt backed by Humboldt County acreage — are holding on fast, and people in the know are fearing that it is they who have the upper hand. Now led by Texas-based poker star/banker/billionaire Andy Beal, the noteholders have been making the case that the Mendo Redwoods plan is illegal and impossible because it doesn’t give them enough cash. Bankruptcy law states that if secured creditors don’t get their security — in this case, the Pacific Lumber timber lands — then they must at least be paid what that security is presently worth. What is it worth? That’s a very tricky calculation, and it’s now up to Schmidt to make the call. Mendo Redwoods’ figure is significantly lower than the noteholders. Beal himself has made an offer for the land that exceeds Mendo Redwoods’ proposed payout by several tens of millions.

Also, the noteholders’ plans gained a bit of rhetorical weight when it was announced that Red Emmerson, the 78-year-old self-made billionaire out of Redding who helms the Sierra Pacific timber company, said that he would put money down to acquire the Pacific Lumber mill in Scotia. Previously, the noteholders’ plans dealt only with the timber lands; they propose to sell them to the highest bidder. There was no provision made for the future of the company’s other assets, such as the mill or the town of Scotia itself. With a mill operator waiting in the wings, at least one psychological barrier to the noteholders’ plan has been removed.

What happens next? Either Schmidt sides with the noteholders or with Mendo Redwoods. But even then, it’s not so simple. If he sides with the noteholders, there’ll be an auction. The Texas businessman and the timber legend would certainly seem to have the inside track, but other parties — such as the do-gooding coalition helmed by the Nature Conservancy, which would preserve much of the most ecologically valuable land and keep the rest as a working "community forest" — might conceivably have some kind of play. They’d be betting against the big boys, though. If Schmidt sides with Mendo Redwoods, then there will almost certainly be an instant appeal, which could drag on for months or years, leaving the company in its present state of limbo.

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Mendocino Redwood plan approved for Palco

A new Pacific Lumber Co. will be formed by the Mendocino Redwood Co., according to a federal bankruptcy court’s ruling filed Friday.

by John Driscoll, The Times-Standard, June 7, 2008

U.S. Bankruptcy Court Judge Richard Schmidt announced his decision to confirm Mendocino Redwood’s reorganization plan for the more than 140-year old timber company to attorneys in his Corpus Christi, Texas, courtroom.

He also said he would not confirm a plan by bondholders to auction off the timberlands that secure their $714 million debt.

"The credible and persuasive evidence at the confirmation hearing establishes that the reorganized entities are reasonably expected to be stable, creditworthy, able to pay their debts as they mature, able to comply with all non-bankruptcy environmental laws with regard to the regulatory approvals of ownership and operation, and assume all environmental obligations," Schmidt wrote in his ruling.

In an afternoon court session Friday, however, issues were raised that could affect whether Mendocino Redwood can seal the deal. A multimillion-dollar claim filed by bond holders in the case emerged as a sticking point that needs resolution.

The initial news of the ruling was a relief to many Palco employees, whose fate has been uncertain at best. While some questions and concerns remain regarding the way forward, workers were generally upbeat.

Bert Silva, a 31-year Palco employee and current shipping and inventory supervisor, said he felt it was the best possible outcome to the bankruptcy.

"It’s almost like you’ve been underwater and under pressure for so long -- it’s almost like you’re decompressing," Silva said.

Silva was on board when Maxxam Inc. CEO Charles Hurwitz seized control of the company in an unfriendly takeover in 1985. Silva said he’s been through more layoffs than he can count, and said that the prospect of working for a stable company is great.

"We couldn’t have asked for anybody better to take us over," Silva said.

There remain worries about wages Mendocino Redwood will pay employees and whether there may be layoffs in store if the plan becomes effective, however, Silva said.

The judge did require some changes to the Mendocino plan, filed jointly with Palco creditor Marathon Structured Finance Fund. Schmidt told attorneys that he wanted Palco’s litigation against the state over the Headwaters Forest deal left with the bondholders, with any recovery shared by the noteholders and other creditors.

Mendocino Redwood Chairman Sandy Dean said lawyers were going through the judge’s 119-page ruling to make sure they understand the changes.

"Today’s ruling was a really positive step forward," Dean said. "We want to once again express our thanks to all the people in Humboldt County and beyond who have supported us because we think that’s made a difference in the process."

But issues sprung up as potentially serious hurdles in an afternoon court hearing Friday. Attorney David Neier for Marathon said that a claim of about $300 million filed by the noteholders may have to be paid on top of the $510 million "hard cap" set by Schmidt in his ruling.

"It really is a complete road block for our plan," Neier said.

While noteholders’ attorney Zack Clement said bondholders would try to work with Marathon and Mendocino on the issue, he did say the claim was important.

"The reason we filed the claim is we think we’re owed the money," Clement said.

But Schmidt voiced frustration that neither side had made it clear that the issue was so critical in earlier hearings, and put the remainder of the case on a fast track, scheduling most of the outstanding items for Friday.

"I feel somewhat snookered, if you know what I mean," Schmidt said. "I’m not blaming anyone. I feel like I’m being hit from both sides on this issue."

Among the issues Schmidt will take up Friday are an anticipated request of the noteholders on a stay while it pursues an appeal, and a request to pass the ruling to another court for appeal. Clement said that those motions would be filed mid-week.

In ruling against the bond holders’ plan, Schmidt said it was infeasible and laden with conflicts of interest between the largest noteholder -- billionaire investor Andy Beal -- and the other noteholders. He also said the plan doesn’t provide enough certainty, and questioned whether regulatory approval could be attained by the potential future buyer.

Schmidt wrote that even Beal Bank’s uncertain bid of $603 million, when reduced by the expenses of a long auction process, would leave noteholders short by millions compared to the Mendocino Redwood plan.

He also wrote that Sierra Pacific Industries’ recent bid proposal for the Scotia mill is highly speculative.

The decision comes after Palco’s 18 months in bankruptcy. Palco’s own plans to reorganize were withdrawn in recent months, plans which generated major controversy in Humboldt County. Palco and its parent company Maxxam Inc. then put their support behind Mendocino Redwood and Palco creditor Marathon Structured Finance Fund.

Mendocino’s plan looks to blend the timber and lumber operations of the company, while Marathon restructures the town of Scotia. Mendocino Redwood is owned by San Francisco’s Fisher family, which started the Gap chain of clothing stores.

Mendocino and Marathon will pay the noteholders $530 million in cash for the land, which Schmidt valued at $510 million.

The plan will provide $580 million in cash and convert $160 million of debt into equity. Debt obligations would be cut by $625 million and trade creditors would get 75 to 90 percent of claims.

Mendocino said it would seek Forest Stewardship Council certification for the new operation -- as it has for its 230,000 acres in Mendocino County -- and invest $7.5 million in the Scotia mill to improve its flexibility.

If the bondholders cannot get a stay against the ruling, and the outstanding claim issue is resolved, it is possible that Mendocino Redwood could close on the deal shortly thereafter.

"We’re certainly in the end game now," said Palco CEO George O’Brien, "and that’s a good thing."

O’Brien said that Palco has enough money to continue operating, and is continuing to mill and sell lumber.

Palco inventory clerk Joe Timmerman has worked for the company since 1976, and raised his family in Scotia. For many of those years, a cloud of uncertainty hung over him and other employees, he said.

"We knew this time was coming," Timmerman said of the bankruptcy case filed Jan. 18, 2007.

But he said that while he and others worked for Palco and Maxxam, it doesn’t mean they supported everything the companies did. At the same time, he believed in the industry -- and still believes there is potential for the rare commodity of redwood to provide stability in the region.

"Whether I have a job here tomorrow or not, I’m glad it’s going to be here for somebody," Timmerman said.

Palco decision: Reactions at a glance

"Today’s decision in the Pacific Lumber bankruptcy case is good news for the people of California. I commend U.S. Judge Schmidt for his consideration of the principles I articulated in order to preserve the historic Headwaters Forest Agreement, and I hope this decision will establish a strong precedent that weighs both the economic and environmental benefit of long-term sustainability and preservation." -- Gov. Arnold Schwarzenegger.

"I am pleased to hear of Mendocino’s success. They share our long-term view of forest management and have a proven track record of performance. I think that will bring stability back to the forest products business here in Humboldt County. I look forward to working closer to them as our southern neighbor." -- Neal Ewald, vice president and general manager of Green Diamond Resource Co.

"Judge Schmidt’s decision today is a victory for the employees, the town of Scotia and the people of Humboldt County. MRC will protect local jobs and the environment, make sure local vendors receive payment they are owed and promise long-term stability for the region." -- U.S. Rep. Mike Thompson, D-St. Helena.

"MRC inherits a landscape that has suffered grievously from more than two decades of serious abuse. We appreciate MRC’s background in restoration-focused forestry, and want to work with MRC to build a truly sustainable timber company for the long term. MRC needs to make dramatic changes from Pacific Lumber’s practices to fulfill the commitments they have made." -- Sam Johnston, Environmental Protection Information Center.

"This is about as good an outcome as we could have hoped for. It sounds like the judge really did his homework. I’m looking forward to a forest that is wisely tended, and a mill that can generate good and steady jobs." -- Assemblywoman Patty Berg, D-Eureka.

John Driscoll can be reached at 441-0504 or jdriscoll@times-standard.com .

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Several TIMO’s and REITs Form National Organization

Campbell Group Timber Trends, May 2008, citing RISI May 8, 2008

Most, but not all, of the country’s largest TIMO’s and REITs recently joined to create the National Alliance of Forest Owners (NAFO) with a policy and legislation focus, based in Washington D.C. The move marks the first collaboration among such major timberland owners. NAFO was incorporated in April with 14 charter members representing over 28 million acres of private forestland located throughout the US. Members include: The Campbell Group, Forest Capital Partners, Forest Investment Assoc., Green Diamond Resource, GMO Renewable Resources, Hancock Natural Resource Group, Lyme Timber, Molpus Woodlands, Plum Creek, Port Blakely, Potlatch, Resource Management Service, Stimson Lumber and Wagner Forest Management. Currently missing from the membership list are the Forestland Group, RMK, Rayonier and Sierra Pacific.

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The Campbell Group Acquires 23,600 Acres of California Timberland From Sierra Pacific

Campbell Group Timber Trends, May 2008

The Campbell Group LLC (TCG) confirmed it completed the acquisition of 23,600 acres of Northern California timberland from Sierra Pacific Industries at the end of March 2008, for a private investor. Terms of the transaction have not been disclosed

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Veteran timber interests now back Sierra Pacific

by John Driscoll, The Times-Standard, July 1, 2008

A number of longtime Humboldt County timber and ranching interests have thrown their loyalty behind a bid by Sierra Pacific Industries to take over and radically overhaul the Pacific Lumber Co.’s Scotia sawmill.

Former sawmill owners, ranchers, sawmill venders and others filed declarations in U.S. Bankruptcy Court in Corpus Christi, Texas outlining their decisions to support Sierra Pacific instead of Mendocino Redwood Co., which they had backed earlier.

Dennis Scott, president of defunct Eel River Sawmills, ranchers John Rice and Graham Cottrell, landowner Bob Barnum, Bettendorf Trucking manager Ron Borges, former Palco President and CEO John Campbell and others weighed in.

They declared that Mendocino Redwood’s plan to run one shift in Scotia is less viable than Sierra Pacific’s promise to pour $70 million into building two sawmills, fed by timber from its 1.7 million acres as well as the Palco lands. The Mendocino plan wouldn’t produce enough to feed the wood-burning power plant in Scotia, they said.

"Sierra Pacific Industries has a demonstrated track record that proves their knowledge and ingenuity," Barnum said, as did the others.

The new sawmill operation would be able to use logs from a number of local landowners, provide more employment and support independent contractors, they said. Sierra Pacific has said it would close its Arcata operation in the event the plan goes forward.

Sierra Pacific entered the picture in recent months, hitching itself to the noteholders who are owed $714 million in the case. The noteholders have proposed to auction off Palco’s 210,000 acres over a period of months.

Sierra Pacific President Red Emmerson declared that its proposed investment would be recouped by building a "top-flight sawmill."

"As compared with operations today, the overall capacity of the Palco mill will be greatly increased, along with the mill’s efficiency and accuracy," Emmerson said.

Bankruptcy Judge Richard Schmidt in early June ruled that he would not confirm the noteholders’ plan, saying it was rife with conflict and infeasible. Schmidt instead said he’d confirm the plan proposed by Mendocino Redwood and Palco creditor Marathon Structured Finance Fund, which earned overwhelming support from unsecured creditors.

That plan looks to pay about $530 million for the timberlands, shed hundreds of millions in debt, infuse $7.5 million into the Scotia sawmill, and reduce logging. The judge found that the plan would more readily get approval from California regulators, and did not introduce the uncertainty of an auction.

But Schmidt ordered some changes to the Mendocino plan, and Mendocino told him that the changes could be a deal-breaker.

John Driscoll can be reached at 441-0517 or jdriscoll@times-standard.com.

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Noteholders’ claim denied in Palco case

by John Driscoll, The Times-Standard, July 8, 2008

A federal judge upended a potentially deal-killing claim in the Pacific Lumber Co. bankruptcy case Monday, leaving what appears to be only a minor hurdle the Mendocino Redwood Co. must clear to restructure the company.

Judge Richard Schmidt ruled that Palco’s biggest creditors hadn’t proved that the value of the timberlands had dropped by tens of millions of dollars since the case began in January 2008. That value, the timber noteholders claimed, was more than $170 million. If awarded, it would have thwarted Mendocino from closing a deal to reorganize Palco.

Schmidt ruled that the other assets of Scotia Pacific -- the timber-holding arm of Palco -- had only declined by $3.6 million. That amount apparently must be tacked on top of the judge’s finding that Mendocino pay $510 million for the land.

The court today will consider whether to grant a stay to the noteholders while they appeal the judge’s early June plan confirmation order.

Mendocino had joined Palco creditor Marathon Structured Finance Fund early this year to propose a plan to reorganize the company, binding the timberlands to the Scotia sawmill. The noteholders wanted to auction off the 210,000 acres of timberland. The judge in June approved Mendocino’s plan and tossed out that of the noteholders even after a late proposal by Sierra Pacific Industries to rebuild the Scotia mill was brought up. Mendocino Redwood would have to pay $510 million for the timberlands, Schmidt determined.

The noteholders then argued that the collateral -- the timberlands -- that secured its $714 million in credit to Palco, had fallen significantly in value since the start of the case. The claim came up somewhat unexpectedly, but threatened to derail Mendocino’s bid. The noteholders’ claims that Mendocino Redwood and Marathon were involved in some plot to strip value from the timberlands was dismissed as having no credence by the judge Monday, according to lawyers on the telephonic hearing.

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Logjam

By Ryan Burns, Northcoasrjournal.com, November 13, 2008

Times is tough, but in Humboldt County, few have it tougher than mill workers. Hot on the heels of the Evergreen pulp mill shutdown comes another closure, this one on the opposite end of the Samoa peninsula and, hopefully, much shorter-term.

Sierra Pacific Industries’ Arcata lumber mill halted operations Monday citing market conditions, that insurgent job-eating demon. "It’s due to the falloff in housing," explained Mark Pawlicki, spokesman for the Redding-based company owned by lumber mogul Red Emmerson. "We’re seeing a tremendous parallel falloff in lumber demand," he said.

Approximately 100 workers have been relegated to temporary couch, beer and pretzel duty. The mill is expected to reopen Monday, Nov. 24.

The housing slump has taken a toll on many related industries, from construction to real estate to lending and more. With loads of houses sitting on the market, demand for lumber has fallen to levels not seen since 1982, and many mills are looking for ways to cut costs and slow production. The SPI sawmill near Standard, west of Yosemite, for example, recently reduced about 100 of its hourly employees to four-day, 32-hour work weeks indefinitely.

At the height of the construction boom, nearly two million new homes were being built each year. In September, the annual rate of housing starts dropped to 817,000, the second lowest level on record, just behind a nadir reached in September 1991, according to the Commerce Department. California has been among the hardest hit states, and experts are expecting the October figure to break the all-time record thanks in large part to the still-melting meltdown on Wall Street

That drastic construction slowdown has created an inventory glut for SPI and other lumber companies across the country. "We’ve got to work through that inventory rather than [continue to] produce in a down market," Pawlicki said. SPI hasn’t been forced to take such measures since the big downturn in demand of the early ‘80s, he added.

The Arcata mill, one of a dozen owned by SPI and the oldest in their stable, specializes in large-log manufacturing including framing lumber, industrial lumber and Douglas Fir timber, the vast majority of which go into housing. Just a few workers will remain on site for maintenance and shipping during the shutdown.

When asked if the 100-or-so affected workers will continue to get their paychecks during the hiatus, Pawlicki responded, "No, but they can file for unemployment."

He added that the company continues to invest in new technology and insists, "when the market turns around, we’ll be ready for it." Of course, nobody knows when that may happen, and this two-week closure could be the first of many. "We’re hoping the market will turn around," Pawlicki said, but he admitted that they have yet to see any signs of it.

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2009

Sierra Pacific to Close Two Sawmills this Summer

Campbell Group Timber Trends, March 2009

Sierra Pacific Industries has announced plans to permanently close sawmills in Camino and Sonora, CA, plus a power plant in Sonora, this summer. The company cited low lumber prices and a costly and difficult regulatory environment. 310 workers will be affected. The company anticipates that its mill in Camino will run until about June 12, and the Sonora sawmill and biomass-fueled electric power plant will operate until sometime in mid-July to deplete existing log decks.

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Layoffs at California sawmill change way of life

By Marjie Lundstrom, The Sacramento Bee, May 4, 2009

Even at 3 a.m., when his shift begins, Don Tidwell savors the smell of his job.

In the darkness and in the daylight, the odor clings to the buildings and ground and mountain air, saturating the senses.

"Sugar pine smell," explains Tidwell, a 32-year-old father of four. "You know, fresh lumber-mill smell."

That simple workplace pleasure has come to an abrupt end for Tidwell and 149 other men and women, who lost their jobs at the Sierra Pacific Industries sawmill in Quincy.

Monday’s official closure of the small-log mill in Quincy, 146 miles northeast of Sacramento, is part of a wave of mill closures, layoffs and shift reductions in California announced by the timber giant since Jan. 1.

While the Anderson-based company will completely shutter its mills in Camino and Sonora this summer – costing another 310 jobs – the sawmill in the remote mountain town of Quincy will only partially close. Effective Monday, the section of the mill that cuts small-diameter logs will cease operations.

Who and what is to blame for the cascading job losses is a contentious debate involving the timber industry, environmentalists, the federal government and the people of Plumas County.

This much is undisputed: The loss of 150 jobs from the county’s largest private employer is hitting an isolated mountain region that already has one of the state’s highest unemployment rates, at 20.1 percent. Suddenly, the work force of about 320 – now cut nearly in half – must face the harsh realities of an economic downturn and a seniority system that decides who will stay, and who will go.

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Folsom Lake College gets $500,000 grant for tech programs [2008]

by Kelly Johnson, Sacramento Business Journal, September 18, 2008

Folsom Lake College has received a grant of nearly $500,000 to develop integrated career technical programs with local industries.

The $469,000 award comes from the state’s Career Technical Education/Economic and Workforce Development Pathways program. Folsom Lake College, which serves about 9,000 students, will share the money from the Governor’s Career Technical Education Community Collaborative Project grant with several community partner agencies.

The grant program helps the college develop integrated career technical programs in local industries at both the high school and community college level. It emphasizes boosting awareness of these opportunities among middle-school students.

The grant money also will help Folsom Lake College determine how to integrate sustainability concepts into its curriculum.

"We’ve been working effectively with our community partners in El Dorado County in various capacities for years," Dale van Dam, dean of instruction at the college’s El Dorado Center in Placerville, said in a news release. "This grant will allow us to leverage those existing partnerships, and create an awareness of local career options and pathways amongst students of middle- and high-school age throughout our service area."

The college will partner with local schools, businesses and community agencies such as the El Dorado County Office of Education, the Apple Hill Growers Association , the El Dorado Irrigation District, the El Dorado Union High School District, the El Dorado County Builders Exchange, the El Dorado County Farm Bureau, Pacific Gas & Electric Co. and Sierra Pacific Industries.

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Folsom Lake College shares technical education grant [2009]

by Kelly Johnson, Sacramento Business Journal, May 4, 2009

Folsom Lake College and several El Dorado County community partners have been awarded a $500,000 grant to help make pre-teens and teenagers more aware of career opportunities.

Folsom Lake College and several partner businesses, agencies and organizations received this continued funding under Gov. Arnold Schwarzenegger’s Career Technical Education Initiative, which strives to raise the awareness of "middle skill" career opportunities among sixth through 12th grade students, a college news release said Monday.

Middle skill careers are those that require an associate’s degree, certificate or other post-baccalaureate training, but may not necessarily require a bachelor’s degree.

The grant will place sixth through 12th grade teachers in paid summer externships at jobs related to three industry sectors: natural resources, early childhood education, and the travel, hospitality and tourism industry, the release said. The teachers will share with their students the job skills required to work in those industries.

Four Folsom Lake College faculty members also will create and make use of a general education course on sustainability at the college level, and will integrate the concepts of sustainability into other existing Folsom Lake courses.

Other activities proposed for the grant program include putting on two local job fairs for middle- and high-school students, with one focused on green technology jobs and the other on more general local career opportunities. The grant also will fund 32 competitive mini-grants for project proposals by local sixth through 12th grade teachers with a sustainability theme.

Among other activities, the money also will go toward creating a pilot program with two El Dorado County middle schools to train their students to conduct "building performance audits" that would determine how efficiently an existing building’s heating, ventilation, cooling, lighting and insulation systems are performing and how that performance can be improved.

The partners in the grant include the El Dorado County Office of Education, the El Dorado Union High School District, the Black Oak Mine Unified School District, Lake Tahoe Community College, Pacific Gas & Electric Co., Sacramento Municipal Utility District, the El Dorado Irrigation District, Sierra Pacific Industries, the Apple Hill Growers Association, the United States Forest Service, fire fighting agencies, local child care businesses, wineries, hotels and rafting companies.

In September, Folsom Lake College also received an earlier round of funding totaling $469,000 to put toward similar efforts. The latest grant can be used over the next year and a half to continue and expand these efforts.

"We view this grant as a tremendous opportunity to make El Dorado County students more aware of the range of potential career opportunities available to them, not only in their own backyard, but also regionally and nationally," Dale van Dam, El Dorado Center site dean and grant director, said in the release "In addition to implementing this grant, we think we’ve created a consortium of community partners that will be able to pursue other local funding opportunities that will benefit El Dorado County students in the future."

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Sierra Pacific to close Camino, Sonora mills

by Celia Lamb, Sacramento Business Journal, March 24, 2009

Sierra Pacific Industries plans to permanently close sawmills in Camino and Sonora this summer, laying off 310 workers.

The Camino mill will run until June 12, and the Sonora sawmill and a related wood-burning power plant will close in mid-July.

The company will lay off 164 people in Camino and 146 in Sonora. The company informed employees Monday at the two mills and their union, the Carpenter’s Industrial Council, of the planned closures.

"Hopefully things will turn around and we could add shifts back," said Bob Mertz, a Sierra Pacific Industries area manager. "We don’t have any plans to liquidate the plants."

The company said the closures are due to extremely low lumber prices and a costly and difficult regulatory environment.

"First, the downturn in new-home construction has reduced both the demand for lumber and the price SPI receives for its finished products," Sierra Pacific Industries spokesman Mark Pawlicki said in a news release. "Second, there has been a fall-off in the amount of national forest and private timber for sale in this area, causing uncertainty of supply. Third, the (state) Timber Harvest Plan review process has become so complex and costly that plan approval has slowed dramatically."

Pawlicki also said in the release that the three- to five-year planning timeline of timber harvest plans leads forest landowners to harvest timber even in bad markets.

The company, based near Redding, operates 11 mills in California, including one in Lincoln, and three in Washington.

On March 2, the company said it would close a small-log sawmill in Quincy on May 4, laying off 150 people. About 160 people will remain at a large-log mill and wood waste-burning power plant in that town.

"SPI will consider affected employees for other potential opportunities within the company for those who are interested in relocating or transferring," Pawlicki said.

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Camino braces for lumber mill shutdown

Town worries over loss of high-paying jobs, but some say tourism has helped

by Celia Lamb, Sacramento Business Journal, May 24, 2009

Sierra Pacific Industries bought the Camino lumber mill 15 years ago when Michigan-California Lumber Co. threatened to shut it down. Sierra Pacific says it will keep the mill in order and bring it back online when lumber prices improve.

When the Michigan-California Lumber Co. threatened to close its Camino lumber mill in 1994, Sierra Pacific Industries bought the mill and kept it open.

Now, the mill is scheduled to shut down June 12, laying off 164 workers. This time, nobody plans to sweep in and save it.

Sierra Pacific is mothballing the mill, not abandoning it. The company said it will keep the equipment oiled and reopen the mill when lumber prices improve. But even if it’s temporary, the closure has big implications for the tiny El Dorado County town of Camino.

"These are not minimum-wage jobs," said Laurel Brent-Bumb, chief executive officer of the El Dorado County Chamber of Commerce. "These are skilled-labor jobs."

The average wage at the mill is between $15 and $19 per hour, plus benefits, according to Sierra Pacific.

El Dorado County economic development leaders said the job losses will have a ripple effect on other businesses. Based on U.S. Forest Service estimates for other California counties, the shutdown could cause 250 to 400 job losses in the community.

"It’s definitely a source of concern because Camino is a very small town," said William Carey, owner of The Forester Pub & Grill in Camino. "We’ve already noticed many of the mill workers (who would normally be) coming in on a regular basis after work for a beer have stopped coming. I assume it’s because they’re trying to save money."

Camino’s economy has become more diverse than when Michigan-California Lumber owned the mill, which could help buffer the shock.

"We’ve become more reliant on a tourist economy and as a bedroom community serving people who want to work and play in Sacramento and Lake Tahoe," said county Supervisor Jack Sweeney, whose district includes Camino. "We’re a little more stable than we were 20 years ago."

Brent-Bumb said she thinks the layoffs could hurt businesses in Pollock Pines, Placerville and other areas outside Camino.

"I think the impacts are going to be far-reaching," she said. "The shopping areas for those folks, the retail and the services, aren’t directly in Camino. Camino is Apple Hill, wineries and tourist destinations."

Diversity eases the cuts

But many businesses that once depended heavily on the mill now have other sources of customers.

Tom Eckhardt, owner of Camino Power Tool, said his shop used to sharpen saws for the mill.

"They haven’t done much business with us in quite some time," he said. He still sharpens tools for private loggers, but also for landscape businesses, homeowners and other customers not associated with the mill. He said he doesn’t think the pending mill closure has had much effect on his business.

"We haven’t heard of anyone coming in and crying the blues," he said. "The first quarter of this year is matching last year, and a little bit up from the year before."

The opening of Red Hawk Casino in Shingle Springs in December brought in another revenue generator that could help the community weather the mill closure. But Carey of The Forester Pub said he thinks the casino has damaged his business more than the mill closure will.

"We were doing just fine coasting through the recession until the casino opened in December," Carey said. "We experienced an immediate 30 percent drop in business."

Carey said he had to lay off five of his 10 employees to compensate for the loss of customers.

"It’s interesting how a casino can affect an area," he said. "On the one hand it brings jobs in. On the other hand, all that money going into the casino comes from somewhere."

Falling job counts

For Sierra Pacific’s mill workers, there aren’t many opportunities to ply their trade locally. Hammered by higher workers’ compensation insurance costs and more expensive timber regulations, Wetsel-Oviatt Lumber Co. in El Dorado Hills shut down in 2003.

Redding-based Sierra Pacific bought that land, but it dismantled the mill. Sierra Pacific’s next-closest mill, in Lincoln, can’t absorb the Camino workers.

As the housing market busted last year, the market for lumber dropped off. Framing lumber prices in the week that ended May 8 were about 28 percent lower than they were a year ago, according to Random Lengths Inc. of Eugene, Ore. An average framing lumber composite price measured by Random Lengths dropped from $404 per thousand board-feet in 2004 to $252 per thousand board-feet last year.

Timber companies have responded by cutting production. Last year, El Dorado County produced 44.7 million board-feet valued at $6 million, compared to 91.1 million board-feet valued at $18.5 million in 2007, according to the state Board of Equalization.

The economic climate has helped generate political support for reducing costly timber industry regulations in the state. El Dorado County supervisors and business groups have thrown their support behind a state bill, AB 1066, which would allow state-approved timber harvest plans to remain effective for five years, instead of the current three. The state requires timber harvest plans for all logging.

Even if Sierra Pacific could produce more lumber, it would still have to contend with low demand and lousy prices. But Sierra Pacific spokesman Mark Pawlicki said longer time frames for timber harvest plans would help the industry keep its supplies more steady because forest owners could cut their trees more gradually and in line with market demand. That would help stabilize prices and help California compete with other lumber-producing regions, he said.

"It’s not going to save these jobs," said county Supervisor Ray Nutting, a licensed timber operator. "It will bring these jobs back sooner. Working toward that gives a lot of hope and a lot of spirit to these people who want to work."

The mill’s shutdown is expected to have a minor effect on county tax rolls. The mill property is worth about $14.3 million, resulting in an annual property tax assessment of $33,000, said Tim Holcomb, county assessor. The county is working on a reassessment that could lower the property tax burden.

Sierra Pacific also owns forestland in the county, but that doesn’t generate much tax revenue.

"It’s already assessed way below market value," Holcomb said.

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Sierra Pacific Industries Planning 21MW Wood-Burning Co-Generation Plant Near Anderson, California

Campbell Group Timber Trends, July 2009

citing Anderson Valley Post via ForestWeb, July 17, 2009

Sierra Pacific Industries is planning a 21-megawatt woodburning cogeneration power plant at its headquarters north of Anderson, CA. About 17 megawatts could be sold to Pacific Gas & Electric’s power grid. The project would include a new fuel handling building, boiler building, turbine building, cooling tower, electrostatic precipitator, ash silo and electric substation, according to documents filed with Shasta County.

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The harshest cut

Sierra timber practices aren’t front-page news anymore — but the brutal devastation of clear-cutting continues apace

by Cecile Lepage, San Francisco Bay Guardian, Sept 8, 2009

"I wake up at night at 3:30, hearing the logging trucks and knowing what’s happening," Susan Robinson complains. "It makes me sick."

Robinson lives just off State Route 4 in Arnold, a Calaveras County community perched on the western slope of the Sierra.

For the past nine years, this feisty retiree has been clamoring to get Sierra Pacific Industries, California’s leading timber company, to stop clear-cutting the forest. "I’m the daughter of a forester myself. I am not anti-logging," she told us. "Of course, SPI should be able to log its land. But it shouldn’t have the right to obliterate everything."

A decade ago, logging and forestry practices in the Sierra were big news. Media reports, protests, and legislative action focused on SPI’s practice of slicing through entire large tracts of land, hacking down every tree, bush, and seedling and leaving nothing but devastation behind.

But most of the news media have long since moved on to other issues — and the clear-cutting continues. If anything, the pace at which SPI is felling the forest has hastened since the intensive logging controversies grabbed headlines in the 1990s.

"When I recently read the June 2000 issue of the Guardian exposing SPI’s activities in the Sierra, I was pained because I thought, ‘Wow! This could have been written yesterday,’" said Marily Woodhouse, a Sierra Club organizer in Shasta County.

It’s not as if nothing has changed under the Sierra sun. Some timber companies have adopted more responsible practices. But SPI is still a major problem. And as the largest private landowner in the state, its footprint is huge. Conservation activists have been exploring new opposition tactics while maintaining their diligent efforts on the legislative, legal, and educational fronts.

Susan Robinson and the other members of the Ebbetts Pass Forest Watch often take visitors to tour the backcountry roads and see the damage for themselves. On Winton Road, plots managed by SPI are adjacent to the Stanislaus National Forest, which is administered by the U.S. Forest Service — and the contrast is staggering.

Patches SPI harvested two years ago are still bare due to herbicide spraying. Between stumps, 10-inch-long replanted ponderosa pines may poke their frail limbs out of the churned soil, but there’s nothing left on a 20-acre lot for deer, bobcats, raccoons, or woodpeckers to eat, rest on, or breed in. No bees pollinating. No chickarees denning. It will take decades for the seedlings to reach maturity.

On the opposite side of the gravel road, on Forest Service land, sugar pines, ponderosa pines, lodgepole pines, incense cedars, oaks, and white firs of different ages shelter ferns, mushrooms, and berry plants. The forest has been thinned to reduce fire hazard, but it has not been converted to a monoculture tree farm.

"What grows back after you clear-cut is a plantation," said Doug Bevington of Environment Now. "A forest is not simply a collection of trees. What makes a forest a vibrant ecosystem is its diversity, having different species and different ages. And it’s the diversity of the forest that creates the habitat to support more species of life."

CLEAR-CUT FRENZY

You don’t need to travel to the Sierra to get the picture — connecting to Google Earth will suffice. Zoom into Arnold and levitate above Highway 4. Beyond the lush forest "beauty strips," the landscape looks like a moth-eaten blanket of evergreens.

Over the past 10 years, SPI has clear-cut 18 square miles in Calaveras County alone. (Clear-cut also includes slightly more moderate logging techniques that leave few trees and snags remaining on an otherwise desert-like tract.)

State records show that between 1996 and 2006 SPI clear-cut 270,000 acres of forests and dumped 335,000 pounds of herbicide into the soil. That’s roughly 420 square miles of scalped woodland. SPI isn’t the only timber company clear-cutting in this state, it just happens to be the most zealous. And it owns 1.7 million acres.

Proponents and opponents of clear-cutting agree on one point: it’s the most productive and the cheapest way to grow timber. But environmentalists say the ecosystems pay a heavy price for the practice.

Mark Pawlicki, SPI’s director of government affairs, told us that the company meets the standards set by the state’s Forest Practice Rules, and that Californian clear-cutting regulations are the strictest in the country. California allows 20 acre cuts; in Washington, the denuded area can reach 240 acres.

Timber harvest plans are not only reviewed the California Department of Forestry and Fire Protection (CAL FIRE), but also by the California Department of Fish and Game, the Regional Water Quality Control Board, and the California Geological Survey. Recently, SPI has even started to replant its clear-cuts with two or three different tree species.

The scientific community recognizes that clear-cutting has greater ecological impacts than any other harvesting method. Such radical treatment may be the only way to salvage logs from woods killed by insects or fire. And the industry is forced to mitigate some of the impacts — buffer zones, for instance, are required for waterways supporting aquatic life.

But that’s not enough: the tiny tributaries feeding the waterways aren’t protected, so sediment and debris can end up in the protected streams, affecting water quality, fish species, and amphibians. The water cycle is inevitably disrupted, with snowpack melting earlier in the season and rainfall running off the naked slopes. The fragmentation of the forest displaces animals that move around for their living, putting pressure on surrounding lands.

Environmental organizations are also concerned about exacerbation of climate change.

In national forests, clear-cutting has been phased out for more than a decade. Members of Ebbetts Pass Forest Watch wonder why the state can’t make the same rules for private loggers.

"I do reckon that private companies have to make profits," said Forest Watch activist Addie Jacobson. "But we do see companies like Collins Pine harvest timber in a way that all of us are happy with yet make some profit."

GREEN WOOD

Collins Pine has been managing 94,000 acres of timberland in Plumas and Tehama counties since 1941. It primarily uses selective cutting, where only certain trees are sparsely removed. Chief forester Jay Francis says that after a month, you can hardly tell a logged area from a pristine one.

"Our owners do not want us to do anything that compromises the values of our Sierra mixed-conifer forest, whether its wildlife, clean water, recreation, esthetics," he told us. "So we do a very minor amount of clear-cutting. In fact, we just turned in a plan for a 15-acre clear-cut for health reasons. We have an infestation of root-rots in an area. That’s probably the first clear-cut we’ve done in 50 years."

Those cuts are less than six acres wide, meeting the rules of the Forest Stewardship Council (FSC), an international organization that certifies sustainable forest management. Since its inception in 1993, FSC has developed standards to accommodate the commercial, social, and environmental values of forestland. It has the backing of the world’s leading environmental groups, including Greenpeace and the World Wildlife Fund. Consumers can rely on its label to buy environmentally and socially responsible wood products.

Collins Pine was the first privately held logging company in North America to receive FSC certification, in 1993. There are now 22 certified companies.

Gary Dodge, director of science at FSC U.S., contrasted FSC’s approach to wildlife with CAL FIRE’s, which only protects state-listed endangered species. "We also believe that it’s the role of the forest to prevent common species from becoming rare, or prevent rare species from becoming extinct," he said.

In the iconic North Coast redwoods of Mendocino County, the Mendocino Redwood Company has taken its cue from Collins Pine. In 1998, MRC took over 228,800 acres from the environmental villain Louisiana Pacific. From the start, MRC managers stated that they aimed for the business to be a good steward and a successful business. The company received FSC certification in 2000.

"There are a lot of models for what it means to be a successful business, but there are fewer for what it means to be a steward of the land," Sandy Dean, chairman of MRC, told us. "We think quite literally that it is to leave it better than we found it. It includes a reduction in the level of harvest, the elimination of clear-cutting, and the adoption of a specific policy to protect old-growth trees."

SPI is not impressed by this trend. "By and large, the companies that exclusively use selective logging just have a different objective than we do," Pawlicki said. "They’re not growing as much timber as we are."

SPI, nevertheless, is also using the buzz-word sustainability. According to Pawlicki, the state of California requires timber companies to be sustainable anyway. "You can’t cut more than you grow under California law." Jumping on the green-building bandwagon, SPI has also sought certification — with an organization called the Sustainable Forest Initiative that is not recognized by the LEED green building rating system.

NEW BATTLEGROUNDS

These days, conservation activists are trying out new strategies to compel SPI to straighten up its act. ForestEthics’ Save the Sierra campaign aims at protecting forests using the market as a weapon. "The average person may not have heard of SPI," said activist Joshua Buswell Charkow, "but they know its clients: Home Depot, Lowe’s, Kolbe & Kolbe [Millwork Company].

Some environmental groups still resort to litigation. "I’m not too optimistic to think that the industry will reform itself," said Brendan Cummings from the Center for Biological Diversity.

The center recently filed three lawsuits against CAL FIRE for approving timber harvest plans without properly analyzing the greenhouse gas emissions from each specific project. Instead, the agency accepted SPI’s broad assertion that growing its tree plantation over the next 100 years would offset the immediate carbon release caused by plowing the soil and burning the slash. But even if that’s true, the nature of the climate crisis is such that we need to curb emissions right now, said Cummings. In response, SPI withdrew its plans.

Concerned Sierra citizens are also challenging logging plans in the courts. In Shasta County, Marily Woodhouse has been opposing a plan to clear-cut 809 acres in the vicinity of the Digger Creek that flows through her town of Manton for fear it will disrupt an already heavily logged watershed. The Battle Creek Alliance, the coalition she helped form, filed suit in January 2008. "What happens if they drop a plan? Eventually they come back again," she said.

"The lawsuits do slow things down. But the fact is, [the loggers are] never going away."

Past experience has taught activists to be wary. Ten years ago, when SPI’s frenetic activity first came under public scrutiny, rallies and media coverage curtailed the timber giants’ greed. Yuba Valley residents led a protest against a plan to scrape 171 acres along the banks of the South Yuba River. And farther South, locals from Arnold faced with an 884-acre clear-cut launched Ebbetts Pass Forest Watch. SPI kept a low profile for a while, even declaring to the press it would scale back clear-cutting in Calaveras County — only to redouble its practices a few months down the road.

The Yuba River site has been spared, thanks to the intervention of the Trust for Public Land, which has been able to purchase 110,000 acres from SPI. Those parcels, also located in the Tahoe region and Humboldt County, were transferred to public ownership for conservation.

On the policy front, Forests Forever has been leading the charge for 20 years. The lobbying group has sponsored three initiatives in Sacramento to ban or further restrict clear-cutting. The last bill was killed by the Assembly Natural Resources Committee in April 2008.

"There’s a lingering sense that logging is still an economic driver in the state," said Forests Forever executive director Paul Hughes. "But tourism and retirement, which depend on healthy forests, actually contribute more to the economy."

Skeptics say that 80 percent of the wood used in California comes from Washington and Oregon or from the Canadian provinces of British Columbia and Alberta, where clear-cutting is the norm anyway. But as Hughes put it, "You’ve got to start somewhere to fight this abomination."

###

California Timber Firm to Market Carbon from its Forests

by Eric Bailey, Los Angeles Times, October 1, 2009

California timber firm to market its forests as weapon against global warming

Schwarzenegger announces the deal tonight, less than a week after pushing through new rules that let Sierra Pacific sell carbon credits.

SACRAMENTO — The state’s largest timber company Wednesday announced a groundbreaking agreement to begin marketing its vast forests as a weapon in the fight against global warming.

Sierra Pacific Industries’ announcement comes less than a week after the administration of Gov. Arnold Schwarzenegger pushed through new rules that allow the firm to sell its trees’ ability to absorb harmful carbon dioxide from the air.

Environmental groups immediately raised questions about the timing, so soon after the administration pressed the California Air Resources Board to approve the new protocols. "There obviously was a backroom deal going on that helped drive approval of those protocols," said Brian Nowicki of the Center for Biological Diversity.

Promoters of Sierra Pacific’s new pact said such criticisms miss the mark and that the new effort is blazing a trail in the battle against global warming.

"This deal is really marking the way not just for California, but for the global carbon market," said Eron Bloomgarden of Equator, a private equity fund for natural resource projects that will work with Sierra Pacific to find buyers for its carbon credits.

Schwarzenegger, who on Wednesday launched a three-day climate summit in Los Angeles, had originally planned to announce the agreement at an evening news conference but canceled it at the last minute and released a short statement heralding the deal.

"This agreement and the partnerships formed at this summit will help people around the world reduce the 20% of global warming emissions that come from deforestation," the governor said.

Sierra Pacific will, over the next five years, manage 60,000 acres of its forests to boost the amount of carbon dioxide the trees absorb by 1.5 million tons. The company will offer this "offset" for sale to smokestack industries to help compensate for their polluting emissions.

The offsets could be worth $10 million or more at current prices.

The first project involves a plan to permanently declare 20,000 young conifers -- giant sequoias ranging from seedlings to trees 30 years old -- off limits to logging forever.

"They would have been harvested over time -- now they won’t," declared Mark Pawlicki of Sierra Pacific.

Other changes could include slowing the harvest of trees or clearing brush and other debris, providing more light and space for trees. That can speed the growth of conifers, increasing their absorption of gases that trap heat.

Pawlicki said the air board’s new rules provide abundant reviews by regulators to ensure that forests are absorbing more carbon than they otherwise would be.

Opponents of Sierra Pacific’s logging practices say the agreement so far seems to simply promise a big payday to the firm for managing its forest much as it would have anyway. Preserving the sequoias would not increase carbon absorption in the short term, they said.

They also questioned efforts by administration officials to press for approval of the new forest protocols in time for the governor’s summit on climate change.

"The deal . . . smacks of insider trading by the Schwarzenegger administration," said Jeff Shellito, an environmental consultant and former legislative staffer on natural resource issues.

Dan Pellissier, Schwarzenegger’s deputy Cabinet secretary for energy and the environment, said such arguments are "specious," the product of longtime foes who had hoped to stop Sierra Pacific’s practice of clear-cutting.

Opposition to clear-cutting "is like a religion to some folks," he said. "There is no amount of science that will undercut their beliefs."

###

2010

Suits filed to block SPI clear cutting

By Dylan Darling, Redding Record Searchlight, January 28, 2010

A environmental group is trying to stop Sierra Pacific Industries from clear cutting 5,000 acres of California timberland, including land in the north state.

The Center for Biological Diversity filed lawsuits in seven counties Wednesday — including Shasta, Tehama and Trinity — against the California Department of Forestry and Fire Protection, claiming the agency violated environmental and forestry rules in approving 15 SPI logging plans.

"... by continuing to rubber-stamp Sierra Pacific Industries’ clear-cutting plans, the Department of Forestry is chopping a gigantic hole in the credibility of California’s climate policy," wrote Brian Nowicki, a policy director for the center, in a press release about the lawsuits.

Forestry department officials stood by their approval of the SPI plans.

"Here in California we have some of the most stringent environmental requirements in the nation," said Daniel Berlant, spokesman for Cal Fire. "We believe that Cal fire and the landowner met those requirements."

All the planned clear cuts are on land owned by SPI, the state’s largest private landowner, said Mark Pawlicki, spokesman for the Anderson-based company.

He said the Center for Biological Diversity — a group started in New Mexico that now has offices in San Francisco and Washington, D.C. as well as other parts of the country — has filed numerous lawsuits in recent years and he believes their goal is to shut down the forest products industry, calling them "job killers."

"They are out to destroy jobs," he said.

Nowicki said the center doesn’t aim to eliminate timber jobs, rather to improve SPI’s land management practices. Suits also were filed in Amador, Calaveras, El Dorado and Modoc counties.

While SPI has improved its practices in recent years, Nowicki said, it still needs to perfect its calculations on the impact of its clear cutting on climate change. By removing almost all of the trees, Nowicki said SPI is releasing carbon into the atmosphere that contributes to global warming.

But Pawlicki said the practice actually results in planting fast-growing trees, which store more greenhouse gases than the dense woods they replace.

"We are vastly exceeding what would normally occur on the land ... if we just let a forest grow on its own," he said.

The center filed lawsuits that stopped SPI from clear-cutting 1,600 acres last August under similar plans, Nowicki said.

Pawlicki said the company added more information about climate analysis to those plans and turned them back into the state.

"The were reapproved in December," he said.

###

Lawsuits battle clear-cutting in Sierra Nevada and Cascade ranges

by Margot Roosevelt, Los Angeles Times, January 27, 2010

Will clear-cutting forests increase global warming? That’s a contentious issue as California, which is seeking to slash its carbon footprint, wrestles over rules to manage the state’s private forests.

Today, the Center for Biological Diversity, a Tucson-based environmental group, filed lawsuits against the California Department of Forestry in seven California counties to halt logging plans for 5,000 acres across the Sierra Nevada and Cascade regions. The group contends that the agency approved the projects without properly analyzing carbon emissions and climate consequences under the California Environmental Quality Act. "Clear-cutting is an abysmal practice that should have been banned long ago due to its impacts on wildlife and water quality," said Brian Nowicki, CBD’s California climate policy director. "Now, in an era when all land-management decisions need to be fully carbon-conscious, there is no excuse to continue to allow clear-cutting."

Sierra Pacific Industries, the timber company that is proposing the logging, responded that its harvesting would result "in a net sequestration rate of carbon dioxide that far exceeds any emissions that might occur." California requires that clear-cut areas be replanted, so that while logging results in emissions of some of the carbon stored in those trees, replanted areas would eventually compensate.

"This out-of-state organization...won’t be happy until they have taken away every forest-related job in California," said Mark Pawlicki, director of Corporate Affairs and Sustainability for Sierra Pacific. "The plaintiffs do not understand forestry and they do not understand carbon sequestration." Dave Bischel, president of the California Forestry Assn., an industry trade group, said that the logging plans "provide significant data on the carbon sequestration benefits" adding that 40% of the state’s sawmills have closed since January 2000, boosting rural unemployment.

Forests act as carbon sinks, absorbing carbon dioxide from the atmosphere through photosynthesis and storing in the trunks and leaves of trees and shrubs and in the soil. Forestry experts say that the state’s 14 million acres of private timberland could be managed to sequester twice as much carbon as they do now. But the technicalities of how to accomplish that are a matter of bitter dispute between environmental groups, state agencies and the timber industry.

California is poised to adopt a cap-and-trade plan this year that would allow timber companies to calculate the extra carbon they obtain through changing their management practices, and then sell carbon credits or "offsets" to polluting industries, such as utilities and refineries, which are required to cut their carbon dioxide output. Several environmental groups, such as the Environmental Defense Fund and the Natural Resources Defense Council, worked with industry to fashion the rules adopted by the California Air Resources Board to govern forest offsets. But the environmental community is split, and CBD is demanding that the board rescind the rules for failing to account for their environmental impact.

Today’s lawsuits were filed in superior courts in Amador, Calaveras, El Dorado, Modoc, Shasta, Tehama and Trinity counties. "By continuing to rubber-stamp Sierra Pacific Industries’ clear-cutting plans, the Department of Forestry is chopping a gigantic hole in the credibility of California’s climate policy," Nowicki said. He added that, last August, Sierra Pacific withdrew plans to log more than 1600 acres following CBD lawsuits over the greenhouse gas effect. Several dozen new Sierra Pacific plans are pending.

###

Sierra Pacific Industries to Retool Closed Sonora, CA, Sawmill, to Start Operating May 2011

Campbell Group Timber Trends, June-July 2010

Sierra Pacific Industries is making a major investment in Tuolumne County by retooling its sawmill in Sonora, updating an older mill that closed there in 2009. This facility, when completed, will incorporate state-of-the-art technology to produce lumber from a wider array of log sizes than was possible under the older configuration. Remodeling of the old plant is expected to begin by midJuly, and the updated facility is planned for operation in May of 2011.

###

Landing a big deal: Group brokers historic deal with state’s largest private land owner

By Greyson Howard, Sierra Sun, June 25, 2010

http://www.sierrasun.com/article/20100625/NEWS/100629952/1066&ParentProfile=1051

ENLARGE

http://www.nevadaappeal.com/apps/pbcsi.dll/bilde?Site=SS&Date=20100625&Category=NEWS&ArtNo=100629952&Ref=V1&maxw=137&MaxH=137

This map shows the first 4,000-plus acres to be protected, near Henness Pass, as part of the land trust’s historic deal with Sierra Pacific Industries. The land north of Truckee is a checkerboard split among public and private land. The Pacific Crest Trail runs through two of the easterly sections of the newly preserved land.

Truckee Donner Land Trust

TRUCKEE, Calif. — The Truckee Donner Land Trust is in the business of conserving open space, and business is good.

The down economy that has many other nonprofits cutting back and bunkering down has created unique land acquisition opportunities for the group founded in 1990.

Most recently, working with the Trust for Public Land, the group scooped up more than 4,000 acres (with plans for 7,000 acres) in conservation easements on Sierra Pacific Industries’ land north of Truckee, the first-such conservation deal ever brokered with the lumber company.

"This is not just the conservation and protection of over 7,500 acres in the Little Truckee Watershed — we have consummated a conservation transaction with the largest private land owner in California," said Perry Norris, executive director of the Truckee Donner Land Trust. "That’s precedent setting.

The private property runs in a checker pattern of public (U.S. Forest Service) and private land along the historic Henness Pass Road, running from west of Highway 89 north to the hills around Jackson Meadows Reservoir.

The easements prevent clear-cutting and the use of herbicides, still allows some timber harvest and opens the Sierra Pacific Industry land to the public and allow trail building, said John Svahn, stewardship director with the land trust.

And it was possible with $1.83 million from the Northern Sierra Partnership and $6.42 million from the Wildlife Conservation Board, Norris said.

The land and its history

The property is made up of rolling forests, meadows, streams and lakes, Svahn said, and will be open to hikers, bikers, offroaders and snowmobilers.

It straddles watersheds for the Little Truckee River and the Yuba River, and includes sections of the venerable Pacific Crest Trail on its way from Mexico to Canada.

Dave Sutton, Northern California and Nevada director for the Trust for Public Land, said the group has been working in the region for 15 years toward a larger goal.

"The recommendation we’re consistently getting from the scientific community regarding climate change is to accommodate species adaptation, large blocks of land — about 50,000 acres or larger — are critical," Sutton said. "If you look at this easement together with the rest of the work we’ve been doing up there, we’re getting close."

That space allows for plant and animal species to move freely — generally uphill — in response to changing temperatures, rather than running up against developed land, Sutton said.

Henness Pass Road itself is steeped in history, the major east-west thoroughfare during the gold rush, built around 1850 from Marysville, Calif., to Virginia City, Nev., Svahn said, shortly after the 1846 Donner Party disaster.

"It was so heavily used in its day they ran freight during the day with huge wagons and teams, then stagecoaches ran at night — it was that popular," Norris said.

And one of its hotels, spaced 30 miles apart for a day’s journey, became one of the first recreation destinations in the Sierra Nevada.

A historic deal

Norris said the first-ever conservation easement with Sierra Pacific Industries also possibly prevents serious development in the forests north of Truckee.

"This is the same 7,500 acres SPI was petitioning Sierra County to take out of timber production zone and put into general forestry, which mean it could have been subdivided into 160-acre ranchettes," Norris said.

And if enough development goes in and roads start to be plowed year-round, the flood gates open and residential zones appear speckled in among forest service lands, creating a lands-management quagmire for wildlife, ecology and firefighting.

Mark Pawlicki of Sierra Pacific Industries said the deal will benefit both the lumber company and the public.

"The area is very desirable both from a recreation standpoint, high water quality and wildlife habitat ... this puts development off limits," Pawlicki said.

He said Sierra Pacific Industries has transferred more than 100,000 acres to public ownership in the past, but compared to an out-right sale or transfer, the conservation easements along Henness Pass mean SPI can continue to harvest wood for mills in the area, keeping jobs in the northern Sierra.

"You can’t do conservation work in this economy without thinking about the socioeconomic impacts," Norris said. "Allowing timber harvest helps keep 300 jobs in Quincy."

Norris said this deal could open opportunities for conservation easements like it across the state.

"If SPI finds this lucrative, it creates a win-win for business and conservation that could continue on to other lands in the Western United States," Norris said.

Independence Lake

The land trust also recently worked with the Nature Conservancy to buy Independence Lake, north of Truckee, from NV Energy.

"Two points I think are really interesting are this lake is very similar in size to Donner Lake, but is relatively pristine, and in the last 40 years it’s been threatened by two major developments," Norris said.

Those threats came from Disney, who eyed the lake and surrounding mountains for a large ski resort area, complete with Disney Land-like trams in the 1970s, and a planned corporate retreat for Apple’s Steve Jobs in 2002, Norris said.

"This lake has been private since 1860, and now we are writing the final chapter," Norris said. "This property is going to be protected forever ... There is simply nothing else like it."

But some long-time users — such as Kenny Osburn — don’t like the plans for how the public will be able to access the lake, specifically with motorized-boat access being taken away.

"The best we can figure my grandfather was on that lake in the mid-1920s, my father was raised on that lake along with his brothers and sisters, and I spent my whole life on that lake, and we haven’t had any restrictions," Osburn said, adding tax dollars were used for the purchase that restricts public access.

The non-motorized-only rule , Norris said, aims to create a nature experience on the lake where other area water bodies allow motorboats, and to help prevent invasive species, according to the Nature Conservancy.

Osburn said he’s working to prove public right of way on a road into the lake for boat access, and will be presenting a letter for the Attorney General’s Office on the matter to the Sierra County Board of Supervisors.

"They (The Nature Conservancy) took possession of the land around the lake and are using it to dictate what you can and can’t do on the lake," Osburn said.

He did say he has had open dialogue with both The Nature Conservancy and the Truckee Donner Land Trust.

According to the land trust, Independence Lake is home to one of the last remaining wild and native populations of the Lahontan cutthroat trout, the only indigenous trout to the Truckee basin.

The official opening of the lake under the new ownership is Saturday, June 26.

###

Council Approves Salt Creek Plan

By Jim Dyar, Redding Record Searchlight, June 16, 2010

Amid a packed Redding City Council meeting where the city staff reiterated its opposition to six luxury outpads proposed on a 440-lot Salt Creek Heights subdivision in west Redding, the council voted 3-1 to approve the full plan as proposed by developer Sierra Pacific Industries.

With council member Missy McArthur abstaining from the vote, council members Dick Dickerson, Rick Bosetti and Patrick Jones voted in favor of full approval of the Redding Planning Commission’s recommendation for the subdivision plan. Council member Mary Stegall was alone in her opposition to the plan, drawing a round of applause after describing how the measure sets a dangerous precedent for intrusions into the city’s greenway policy and also changes the appearance of the scenic canyon for the benefit of six homes.

McArthur sat out the vote because she’s part of a partnership that owns property just east of the proposed subdivision.

The outpads have drawn controversy because they branch away from the main portion of the proposed development into the greenway and much closer to Salt Creek. There are also concerns related to fire protection for the outpads.

The public comment on the agenda item opened with a presentation by SPI Land Development Manager Gary Blanc, and by Mike Dormer of the contracted engineering firm Sharrah Dunlap Sawyer. Nine public speakers then followed by voicing their opposition to the proposed outpads.

Stegall, who praised the majority of SPI’s development plans, said the controversial outpad lots, once built, will take away from the experience of hiking or biking in Salt Creek Canyon.

Once the luxury lots are built, hikers walking along Salt Creek will "look up and in some places see scraped ground and beautiful homes. Those six (homeowners) will have beautiful views and will love where they live, and they will win because they have the most toys."

Everyone else would lose out on the pristine experience of Salt Creek, which will be visually and physically impacted by the six outpad lots, Stegall said.

Prior to voting for the approval of the subdivision, council member Dickerson said, he wouldn’t support the project if he felt it would negatively impact Salt Creek.

"There are mitigations in place to insure that this project does not have a negative impact on Salt Creek," Dickerson said.

Redding resident Todd Slaughter addressed the council to say that bending the rules on greenway intrusions sets a bad precedent for the future of preserving greenways and open spaces.

"Does bending these rules benefit the community as a whole? That’s the issue you need to judge," Slaughter said.

Prior to the vote, council member Stegall mentioned that Redding’s natural beauty, which includes open spaces and greenways, is a common refrain from residents about why they love living in the area. Disallowing home development along certain portions of the Sacramento River has allowed thousands of others to enjoy access to the river, Stegall added.

Redding resident David Ledger said he worried that opening one side of Salt Creek Canyon to development could soon bring on development on the other side of the canyon, thus further impacting the greenway.

During their expanded statement period, Sierra Pacific’s Blanc said his company has reached a tentative agreement with the Bureau of Land Management to establish a Salt Creek corridor trail easement that would help protect the canyon area. Walking trail improvements would be a part of that agreement.

Council member Bosetti praised the developer for a subdivision plan that was much lower in home density than what could have been approved on the site. The Salt Creek Heights plan also calls for a large park and other pockets of open space.

Related to a question about the importance of the six outpad lots by council member Dickerson, Sierra Pacific’s Blanc acknowledged that the featured lots are of key importance to the development.

"Clearly they are the signature to this project," he said. "Retaining these outpads is essential to this project."

City employees’ retirement

In a busy evening for the council that stretched well past midnight, the council also voted 3-2 to approve a initiative to ask voters to help establish an opening bargaining position with labor unions to negotiate what portion city workers should pay into their California Public Employees’ Retirement System.

Council member Dickerson argued that the measure would be a waste of time and money. The council could decide on an opening bargaining position tonight without spending in excess of $50,000 to put a pair of measures on the November ballot.

"It’s just ludicrous to do this," Dickerson said. "Nothing in this ballot measure will expedite the process. It just doesn’t do anything."

Stegall also voted against the initiative, but Bosetti, Patrick Jones and Missy McArthur formed a majority on the vote. The three said the measures were needed to control costs of an unfunded $85 million liability for retiree health insurance.

Jones said we’re all living in "tough, unfortunate, unprecedented times" that require action to control costs.

Turtle Bay’s hotel plan

The evening also included a 4-1 approval to allow for a change to Turtle Bay Exploration Park’s lease, which would allow the museum to pursue its plans to build a 125-room hotel on its property.

Turtle Bay Board member Arch Pugh told the council that the hotel is a critical step toward securing a self-sustaining venture, especially in light of the city cutting its annual contribution to the park.

"We’re developing ways to become self-sufficient," he said. "That land is viable to our future."

Pugh added that the park is having to cut 10 positions and health benefits of others to stay financially intact.

Also on Tuesday night:

• The council voted unanimously to certify the Bikeway Action Plan allowing for safe bike corridors throughout the city.

• Voted 4-1 to favor a privatized service agreement between Shasta Cascade Wonderland Association and Redding Tourism Marketing Group.

• Voted to amend a lease agreement with the Shasta Regional Soccer Association.

• Voted to endorse a veterans museum to be built at the Redding Airport. Plans are underway for a 16-acre, $20 million museum that would be funded by non-profit veterans organizations.

###

Timber companies stand to benefit from new climate law

by Mark Schapiro and Sarah Terry-Cobo, Californiawatch.org, December 15, 2010

California timber firms could emerge as big winners in the state’s fight against global warming, earning millions of dollars through the sale of carbon credits under a new set of rules approved by the Air Resources Board this week.

The plan has stoked controversy among environmentalists who assert it gives the timber industry too good a deal, enabling them to clear-cut trees at the expense of the overall vitality of the forests, while the timber industry claims the plan will help them promote the storage of carbon dioxide, a greenhouse gas, in the trees on their land.

The state board has responsibility for implementing AB 32, California’s landmark effort to limit greenhouse gas emissions. On Thursday, the board approved a new cap-and-trade system aimed at bringing emissions to 1990 levels by 2020. It will allow companies to cancel out their emissions by purchasing carbon emission reductions somewhere else. A significant portion of those credits, or offsets, are expected to come from the carbon-storing capacity of forests.

California’s top greenhouse gas polluters (map)

http://californiawatch.org/data/californias-top-greenhouse-gas-polluters-map

One of the most controversial provisions would enable timber companies to obtain credits by replanting trees in clear-cut areas of the forest. The protocol also makes California the first place in the world to assign carbon credits to wood products created from the trees themselves.

For those credits, the state relies on a U.S. Department of Energy registry that estimates the carbon in everything from wooden chairs and bed frames to two-by-fours made from fir, pine, cedar and hemlock trees harvested in California.

Timber companies would then be free to sell its pool of credits to utility companies, refineries and major industrial enterprises which need them to meet their emission limits.

The state has proposed a minimum price of $10 a ton and estimates that 20 million tons will be needed over the first decade. The total offset market will likely reach $200 million by 2020, according to Point Carbon, a news service offered by Thompson Reuters.

David Bischel, president of the California Forestry Association, representing timber harvesters and processors, says that the new rules, known as the Forest Protocol, "help to monetize an important environmental benefit by encouraging more standing timber in the forests, and more wood products used by society."

Early drafts of the protocol did not permit clear-cutting, according to Jeff Shellito, an environmental consultant and former aide to state Sen. Byron Sher, now retired. But in 2007, the timber industry began lobbying to alter the protocol in their favor. A nonprofit organization, the Climate Action Reserve, which was created to establish standards for the verification of greenhouse gas emissions and reductions, is the primary author of the new rules.

In 2002, Sher had authored legislation that established forest preservation standards for California’s then-voluntary carbon market. "We went to great pains (in 2002) to ensure you couldn’t get carbon credits from clear cutting," Shellito said.

The biggest timber company and landowner in California, Sierra Pacific Industries – with some 1.9 million acres across the state – was the most aggressive individual timber company lobbying on the regulations. Over the course of 2007 and 2008, Sierra Pacific paid $37,500 to California Strategies, a major Sacramento lobbying firm, to present its case.

The company also nurtured a relationship with Gov. Arnold Schwarzenegger. Sierra Pacific has donated $29,600 to the governor’s campaign committees, and its billionaire owner, Archie Aldis "Red" Emmerson, hosted a $250-a-plate fundraising lunch for the governor’s reelection campaign at his estate outside of Redding. Emmerson is listed by Forbes as one of the world’s 500 wealthiest people.

Altogether, according to campaign contribution records filed with the secretary of state, the company has donated about $890,000 to political candidates and ballot measures in California in the past five years.

The California Forestry Association, a frequent donor to political causes and candidates, also reported spending $245,000 lobbying state agencies on a variety of issues in 2007 and 2008, including climate legislation and the Air Resources Board policy on greenhouse gas emissions.

Among the company’s requests was a plan to qualify what it calls "even-age management" of its forests for carbon credits. Even-age refers to trees that are planted at the same time for future cutting.In September 2007, Sierra Pacific sent a six-page letter to the Air Resources Board outlining the changes it would like to see in the protocols – most of which the board accepted.

A letter from Sierra Pacific to the California Air Resources Board outlines the company’s recommendations.
http://www.scribd.com/doc/45345208/Sierra-Pacific-Letter-Re-Comments-on-Climate-Action-Registry-Forest-Sector-and-Project-Protocols

 

"In our view," wrote the company, "there is no valid reason for requiring multiple ages of mixed species on every acre. Indeed, natural forests before the intervention of humans often consisted of large tracts of even-age stands which were generated from fires. Today’s management often mimics this type of forest through the practice of even-age forestry."

Under this definition, a significant portion of Sierra Pacific’s land could be credited over the next century. The company would have to verify its claims of how much new carbon is being stored in its replanted trees – which it would be entitled to cut again in 50- to 80-year cycles. Sierra Pacific nurseries are already breeding new varieties of native trees to heighten the quantity of carbon in their trunks, leaves and roots. Sierra Pacific officials declined to comment for this article, referring reporters instead to the California Forestry Association.

Critics, like former legislator Sher, say that the new protocol violates some of the basic principles of forest conservation. What the timber industry calls "even-age management" Sher calls "tree plantations."

"The forest companies are interested in being able to harvest their trees, and replant, and then produce a new asset that they can sell," Sher said. "It undermines the biodiversity of the forest. You end up with tree plantations that are much more vulnerable to fire and disease."

Earlier this month, 47 environmental and conservation groups, including the Sierra Club California and the Center for Biological Diversity, protested to the Air Resources Board.

A letter from 47 environmental groups to the California Air Resources Board listing their reasons of protest. http://www.scribd.com/doc/45357485/EnviroLetterARB-12-09

"The protocol subsidizes the current business as usual: aggressive timber management," said Brian Nowicki, a policy analyst with the Center for Biological Diversity, a group that has sued the state over Sierra Pacific’s logging practices. Nowicki questioned whether the rules encourage companies to do anymore than they’re doing already.

Other environmental groups, like The Nature Conservancy and Environmental Defense Fund, support the idea of creating financial incentives to keep trees with more carbon standing and rewarding landowners for agreeing not to convert forests into commercial developments for at least one hundred years, which is another provision of the protocol.

"Landowners will have to go above and beyond their current practices," comments Michelle Passero, a senior climate policy adviser to The Nature Conservancy California. "And that should lead to more protection and better management of our forests."

To Susan Robinson, however, that sounds like clear cutting as normal. Robinson, a former safety manager for Chevron, lives in the area around Ebbetts Pass, a community in Calaveras County that has been one of Sierra Pacific’s most heavily clear-cut areas. She’s now a leader of the Ebbetts Pass Forest Watch, an environmental group representing residents of the small towns in and around the southern Sierras.

During harvest season, which continues until the snowfall, she sees the timber trucks heading down from the mountain headed for the company’s mills in Redding and elsewhere. She says that the new protocol will enable timber companies "to transform natural forests into tree farms."

"We’re not against logging," she said. "But we want to see it done sustainably, and the forest protocol does not do that."

Gary Gero, president of the Climate Action Registry, said he was given a narrow goal: to fight climate change by increasing the quantity of carbon dioxide in trees and wood. "The primary purpose of the protocol," he said, "is to ensure that the total amount of sequestered carbon increases over the next hundred years."

The registry, he said, refused one of Sierra Pacific’s additional requests – that it grant carbon credits for wood discarded in landfills.

The tension between preserving forests and preserving trees for their carbon lies at the heart of the controversy. The state’s climate legislation calls for the air board to "design emissions reduction measures … in a manner that minimizes costs and maximizes benefits for California’s economy." Carbon in trees are the cheapest of various options that would create an abundant supply of offsets, making all credits relatively inexpensive.

Mary Nichols, administrator of the Air Resources Board, said that California "already has the strictest timber standards in the nation, and we will leverage those standards onto other states which hope to participate in the California forest protocol."

Those standards limit clear cuts to 20 acres and require replanting areas of cut trees. She said that states like Washington and Oregon, which permit clear cuts of as much as ten times that, would have to abide by this state’s limitations if its landowners are to gain credits to sell to California industries. The same applies to forests in Brazil and Chiapas, Mexico, which are likely to be the first foreign participants in the California program.

"The advocacy groups in the forest area," she said, "tend to value forests primarily for their ecosystem value, whereas the industry is looking at carbon as elements of value on the land."

She says that the state board is considering additional provisions to "make it absolutely clear that we are not going to provide any incentives for even-aged management."

The measures, she said, would be aimed at ensuring that "no projects [would be] registered as offsets that had been done using any amount of clear cutting at all." Adopting those rules, Nichols said, could take as long as two years.

The California Forestry Association would not comment on the prospect of further tightening of the rules. "We generally find it difficult to comment on potential future events," the group’s communications director, Bob Mion, said in an e-mail.

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State Regulators Approve the Nation’s Biggest Cap-And-Trade Plan

By DEBRA KAHN of ClimateWire, New York Times, December 17, 2010

SACRAMENTO, Calif. — California regulators voted yesterday to approve the most comprehensive U.S. cap yet on greenhouse gases and create the biggest carbon market in the country.

The California Air Resources Board voted 9-1 to approve the state’s cap-and-trade plan, the keystone of its effort to reduce emissions to 1990 levels by 2020 under A.B. 32 and the nation’s first economywide, market-based greenhouse gas scheme in the absence of federal action. California has the world’s eighth-largest economy and the highest gross state product in the United States, at $1.7 trillion in 2009.

The trading scheme will reduce emissions from power plants, oil and gas refineries, steel manufacturers and a host of other heavy industries that emit more than 25,000 tons of CO2 per year. All emitters will start out receiving enough free permits to cover the majority of their emissions, but will gradually have to buy more, via quarterly auctions that will begin in February 2012. The system will cover 85 percent of the state’s industrial emissions by the time it ends in 2020 (ClimateWire, Nov. 1).

Financial analysts have estimated the 2.7 billion allowances will be worth $15-$60 by 2020; a forward trade conducted last month put the price at $11.50 per ton (ClimateWire, Nov .19).

Gov. Arnold Schwarzenegger (R) paid a visit to yesterday’s 10-hour proceedings to point out voters’ support of A.B. 32. Last month they turned down a challenge via ballot initiative: Proposition 23, sponsored by Valero Energy Corp. and Tesoro Corp. It would have postponed the carbon regulations until unemployment fell to 5.5 percent for four consecutive quarters.

"It just shows to you that a huge majority of Californians are big believers in A.B. 32," he said. "And they’re big believers not just in global climate change — let’s be honest, not everyone believes in that. It’s also about our health. It is about 19,000 people that die every year because of pollution-related illnesses. Every sixth child in the Central Valley goes to school with an inhaler. We can do much better than that."

ARB Chairwoman Mary Nichols said more work remained to be done over the next year, including calculating allowance levels for emitters, creating more offsets and determining whether biomass emissions should be covered under the cap. "I think what we’ve got is a very good start that needs a bit more work before it hits the road," she said.

Allowance allocations, revenue recipients remain unclear

The approved regulations refined the state’s approach to handing out allowances to utilities, but final figures remain to be determined. Through a series of meetings with utilities, known as the Joint Utilities Group, regulators decided to calculate the number of allowances based on the expected financial burden to ratepayers. They will take into account both historical emissions and anticipated sales, in order to balance the utilities’ actual emissions burden with the desire to promote energy efficiency and other low-carbon improvements that cost money.

"The allocations will be tailored to where the ratepayer burden lies," said Michael Gibbs, California EPA’s assistant secretary for climate change. Although utilities will receive the allowances for free, they will turn them back over to the state to be auctioned off directly to the electricity generators (in some cases the utilities themselves) to create revenue.

ARB will take the next several months to adjust its estimates and will issue a report in July 2011.

Investor-owned utilities gave the plan tentative praise but warned that even more work is needed to protect customers from high allowance prices. ARB needs to come up with a backstop strategy to lower prices in the event that allowances are more expensive than expected, said Kate Beardsley of Pacific Gas & Electric Co. Utility representatives also objected to giving authority over their profits to the California Public Utilities Commission (PUC).

"We want the ability to work with the PUC on the best way to return allowance value," Beardsley said.

Also undecided is how any revenue from the non-utility auctions will be distributed. Schwarzenegger, board members and an economic advisory committee have stressed the importance of giving proceeds back to electricity ratepayers who will be affected by higher rates — even going so far as to produce a report debating the benefits of tax cuts versus a lump sum payment to households (ClimateWire, Jan. 12). But the agency actually has no power to disburse the money.

"We do not have the authority to determine how the money should be spent, so I guess we’ve gone out on a limb somewhat by allocating the proceeds," Nichols conceded.

Instead, the state legislature will address the issue at some later date, with no guarantee it can even pass a bill. That’s what turned board member John Telles, a cardiologist from Fresno, against the entire regulation.

"This is a regressive tax on the most economically disadvantaged communities," he said of the plan’s expected effect on electricity rates. "I don’t think we can pass something that doesn’t in very strong language protect the people. This is a moral issue that’s beyond the issue of greenhouse gas reductions." He was the board’s sole ‘no’ vote.

Forest controversies smolder

Dozens of witnesses — and several board members — voiced opposition to the provision that would make clearcutting eligible to receive offset credits for improved forest management. The debate has split environmental groups, with the Nature Conservancy backing timber companies’ and offset certifiers’ position that the protocol does not encourage clearcutting.

Brian Nowicki, California climate policy director for the Center for Biological Diversity, urged ARB to remove references to "even-aged management," a term that within California means clearing adjacent areas up to 40 acres.

"Forest clearcutting being included as part of the forest protocols does greatly increase the possibilities for gaming and for the development of nonadditional credits," he said. "There is definitely the concern that there are going to be incentives given for continuing business-as-usual. … It goes to the heart of the additionality of this protocol."

Nichols said that as a practical matter, the board’s only concern should be whether carbon dioxide emissions would be reduced under the protocol.

"If they’re not allowed to get offsets, they’ll keep doing what they’re doing anyway," she said, referring to Sierra Pacific Industries, the major timber company operating in the Sierra Nevada Mountains. "I was and am extremely sympathetic to the views of people who live in and around the forest and don’t like the practice of clearcutting at all, but I think we at this moment are not in a position to craft changes to the protocol that would accomplish our goal in a way that has credibility from the forestry perspective."

Another potentially thorny forest issue also made it through. The plan would exempt biomass power plants from accounting for their greenhouse gas emissions, under the theory that excess wood should at least be used to generate electricity rather than being burned outright.

Representatives of the biomass industry said the provision wouldn’t lead to additional trees being felled for fuel. "There is no facility in California that uses anything other than wood waste from forest projects," said California Biomass Energy Alliance spokeswoman Julie Malinowski-Ball. "I don’t know where that’s going on elsewhere in the U.S., but California is probably the best example of biomass done right."

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Aberdeen sawmill selling biomass electricity

Puget Sound Business Journal, August 5, 2010

The Sierra Pacific Industries sawmill in Aberdeen is selling wood waste that’s being turned into electricity in Grays Harbor County.

KIRO-TV and the Associated Press report that the mill’s biomass-generated electricity is an important alternative energy source for the Grays Harbor Public Utilities District.

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Once-booming Lincoln faces new economic reality head-on

City leaders adjust budget expectations as they work to retain businesses

by Michael Shaw, Sacramento Business Journal, March 21, 2010

The city of Lincoln was handed a sobering assessment last month when an official explained just how quickly cash reserves were depleting.

Without adjusting the budget for falling revenue, city finances would be in the red next year and Lincoln would be $16 million in debt within five years.

"Given the extreme uncertainty and volatility of the economy, additional adjustments may be necessary before the close of the year," the city’s new chief financial officer, Anna Jatczak, said in a memo presented to the city’s mayor, Tom Cosgrove, and City Council members.

Once the fastest-growing suburb in the nation, Lincoln is learning the price of that growth. In no other city in the region did the housing boom have such a profound effect. The number of households more than tripled from 2000 to 2008, going from about 6,200 to almost 22,000, according to an analysis of U.S. Census data by Arkansas-based firm Gadberry Group . Forbes magazine in 2007 named it the fastest-growing suburb of the decade. As the city grew, so did the need for new services.

Then the engine stopped.

Perhaps nothing typifies Lincoln’s trajectory better than its downtown core with its "Main Street" feel not found in most other suburbs. On that street, expansive new office buildings, symbols of a more optimistic time, sit empty across from historic shops.

"Like every other city, we have reached a level where there is not much growth occurring," said Steve Art, economic development director. "We’re not looking at recruiting new businesses right now. We’re concentrating on retention."

But Art was fairly confident the city’s woes aren’t beyond what other communities are facing and that it will be able to emerge from the downturn relatively unscathed.

Working harder, Getting less

At one end of town, job-seekers gather once a month at Sierra Pacific Industries , the city’s largest employer, which employs 350 workers at the lumber mill and takes applications monthly. The company has shut down three other Northern California plants, due to the economy and legal challenges to requests to cull in U.S. Forest Service areas. But activity has remained strong at the Lincoln plant due to the steady demand from consumers who have turned away from move-up homes in favor of fixing up their current ones. The company seems to share the same attitude as Lincoln officials, believing the city will weather the economic storm and rebound.

"It’s not doom and gloom, but we realize we have to work a lot harder with less results," said Mark Luster, community relations manager at Sierra Pacific, who also served two terms as president of the Lincoln Chamber of Commerce. "We have to band together as businesses as we face challenging times." He said the city and the chamber have been focused on helping existing businesses through outreach programs.

Lincoln hired an outside consultant to help develop a marketing and action plan for when a Highway 65 bypass is built and the highway no longer takes traffic through its historic downtown shopping district. Art noted that 99.9 percent of cars traveling through the city now don’t stop at downtown businesses anyway, but those businesses should still be prepared to deal with the changing traffic patterns.

First up for city officials is righting the finances. Lincoln has precious room to trim expenses before the cuts hurt the services residents tend to value most, such as police and fire protection. Those services make up 82 percent of the city’s expenses, according to CFO Jatczak’s report. She did not return a call seeking comment on the budget situation.

As reserves deplete, the city is going to have to make tough cuts, Luster said.

After hearing the numbers, the council voted last month to amend its budget to anticipate lower revenue of about $3.8 million for the remainder of the fiscal year while also reducing its expenses by $759,000.

Still banking on potential

Homebuilding activity, which drove Lincoln’s growth, isn’t likely to return in a big way for a while, said housing analyst Greg Paquin. He noted that homebuyers bought 157 new homes in the city last year. That’s nearly a 90 percent drop in new-home sales since the peak of production, when homebuilders sold 1,442 new homes in the community.

But there are indications that homebuilders still believe Lincoln will be a strong market in years to come. Meritage Homes , for example, purchased 50 large-lot parcels late last year and has opened sales at a new project.

Builders will be looking to attract people like Brandon Brodzky, president and chief executive of Invision Business Consulting and Recruiting. Brodzky could have left Lincoln following the plunge in real estate values after he bought a house in 2006. Instead, he decided to plunge back in, buying a furnished home in 2008 for half the price similar models were selling for a few years earlier. He is renting out the first house.

"I wanted to stay in Lincoln for the main reason I originally moved, as it has great potential for future growth," said Brodzky, who moved there from Roseville. "Being close to shopping such as the Galleria and other areas is great and typically only 10 minutes away at most but far enough away to leave the traffic — and have some peace and quiet."

He also makes it a point to support the community by shopping and eating at Lincoln establishments whenever possible.

"I would also love to see a more active downtown area," he added, "as plenty of history and feel exists there. However, if people want to go out for nightlife, they migrate to the Roseville or Sacramento areas."

Bill Mellerup is one of the people betting that Lincoln will continue to attract residents such as Brodzky. He’s a vice president with land developer Lewis Operating Corp. , which owns 515 acres that the company is seeking to have approved for 2,400 homes, with a school and shopping center. Lewis has been pursuing the project for nine years and knows it will be several more before the investment pays off.

"Lincoln is a great community," he said. "It’s just going to take time. ... We’re in it for the long term."

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2011

Judge sides with Sierra Pacific; ruling frees up 19 tracts for logging

By George L. Winship, Anderson Valley Post, February 22, 2011

A judge has ruled on the side of Anderson-based Sierra Pacific Industries in a lawsuit that effectively tied up 19 timber tracts in eight Northern California counties for longer than a year.

Six of the proposed harvest areas are in Shasta County, and one is in Tehama County, according to court documents.

The lawsuit was a combination of eight suits filed in eight counties on behalf of The Center for Biological Diversity.

Patrick J. Riley, a retired El Dorado County Superior Court judge, ruled in favor of defendants Sierra Pacific Industries and the California Forestry Association last week.

The Center for Biological Diversity argued that the timber plans did not comply with the California Environmental Quality Act because they did not properly address greenhouse gas emissions from timber harvesting.

Attorneys for Sierra Pacific Industries argued that because the company replants trees in harvested areas and grows those trees for 100 years, the net effect was a reduction in greenhouse gas releases since growing trees remove carbon from the air.

Justin Augustine, a staff attorney with The Center for Biological Diversity, said the judge’s ruling failed to address the current problem of greenhouse gas emissions associated with timber harvesting.

"We don’t have 100 years to make up for the additional emissions," Augustine said Tuesday.

Augustine’s group has not decided whether it will appeal the decision.

Although Sierra Pacific Industries was not under an injunction prohibiting the logging of those areas, the company decided to purchase timber from other private landowners to supply their mills, a company spokesperson said Tuesday.

"We could have pushed the issue and gone ahead and logged them, but we held back," said Mark Pawlicki, the company’s director of corporate affairs and sustainability.

Sierra Pacific Industries hopes to have loggers and log haulers in the affected timber harvest areas as soon as the weather allows, since many of the timber harvest plans expire in 2012, Pawlicki said.

The delay in harvesting "could have had a devastating impact" on the privately held forest products company had not its owners, foresters and mills "scrambled to buy more timber from other landowners to make up the difference," Pawlicki noted in a news release announcing the judge’s decision.

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Editorial: In timber case, court rules for balance on CO2

Redding Record Searchlight, February 24, 2011

The legal and scientific issues underlying the Center for Biological Diversity’s lawsuit challenging a number of Sierra Pacific Industries’ logging plans on the basis of their greenhouse-gas emissions might be complex, but El Dorado County Judge Patrick J. Riley’s ruling concludes with a commonsense aside that cuts to the heart of a vital question: Will environmentalists make the perfect the enemy of the very good?

Riley ruled against the Arizona-based environmental group and for Anderson-based Sierra Pacific for technical reasons, but then added a brief comment that highlights the challenge of curbing greenhouse gases.

Following the Center for Biological Diversity’s demands for "technical and unobtainable information" on greenhouse-gas emissions from specific timber projects, the judge wrote, would build regulatory hurdles so high that they could easily stop logging in the state altogether. (And that might be the point, the judge suggested.)

"Such is a rather unique approach to GHG reduction," Riley wrote, noting that California — one of the few states to seriously address carbon dioxide — already imports 80 percent of its wood despite its abundant forests. Closing in-state industry and importing the remaining 20 percent from states or countries that don’t give a rip about global warming would not only bypass California’s greenhouse-gas limits, but add emissions from shipping for good measure.

In brief, we’d be trading a system that makes a good-faith (and already complex and costly) attempt to harvest lumber while curbing CO2 emissions for just taking whatever arrives on the ships from Asia.

It wouldn’t be the first time California outsourced its pollution to places with lower standards, but here we wouldn’t even enjoy the clean air and water in exchange for lost businesses and jobs. Global warming is a global problem, and carbon dioxide produced in Oregon or Russia will trap warmth in the atmosphere no less than the gas from California.

Striking a workable balance under the Global Warming Solutions Act, which California’s voters reaffirmed in November, will be tough for many industries in the best of circumstances.

But if environmental litigation and extreme regulations simply shut businesses down and send them elsewhere, it will manage the dubious feat of ruining California while doing nothing for the planet.

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Softwood Lumber Output Increases In 2010 Helped By Asian Exports

Campbell Group Timber Trends, March 2011

Demand from Asian markets helped Canadian and US producers boost softwood lumber output by 13% in 2010, according to an annual survey by International Wood Markets. Canada’s West Fraser easily retained its position as the largest producer of softwood lumber in North America at 4.68 billion board feet (bbf), or 10% of all output. US-based Weyerhaeuser finished second in North America, slightly ahead of the lumber output of Canada’s Canfor, with 3.30 bbf versus 3.24 bbf.

In 2010, West Fraser, Canfor and Tolko were once again the top three Canadian lumber producers, producing a total of 8.1 bbf or 36.7% of lumber output, versus 7.2 bbf in 2009. Western Canada has benefited from exports to China over the past several years and the survey noted that mills unable to take advantage of those markets would have to wait for the anticipated recovery in the US housing market. The top three US companies in 2010 were Weyerhaeuser, Sierra-Pacific and West Fraser’s US division, producing 22.5% of all US lumber.

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Sacramento Bee Editorial: Governor needs to keep pledge at Battle Creek

Sacramento Bee, June 21, 2011

Jerry Brown campaigned for governor on a strong set of environmental planks. In one of these he promised "to take reasonable steps to ensure a healthier habitat for California’s unique fish species by limiting sediment and other runoff entering streams." Brown now can deliver on that pledge at Battle Creek, one of the Sacramento River’s most crucial tributaries for imperiled fish. But to do so, the governor may need to buck a timber billionaire who has contributed to his campaigns and one of his charter schools – A.A. "Red" Emmerson, owner of Sierra Pacific Industries.

As The Bee’s Matt Weiser reported Sunday, state and federal agencies are spending more than $100 million to restore populations of wild spring-run salmon and steelhead in Battle Creek, which tumbles down the western slopes of Lassen Peak to the Sacramento River.

Because the volcanic springs of this area produce vast amounts of cold, clear water, biologists see Battle Creek as one of those rare habitats where salmon could rebound and flourish.

Yet even as state and federal agencies invest in removing dams and restoring spawning habitat, another agency – the California Department of Forestry and Fire Protection – has been allowing Sierra Pacific Industries to clear-cut thousands of acres in the Battle Creek watershed. Scientists have found evidence that logging is contributing to erosion that has degraded spawning grounds in the creek. While Cal Fire officials say they’ve worked to buffer the creek from any logging sediment, they haven’t yet analyzed the cumulative impacts of all the various clear cuts.

Brown and the Legislature could turn this situation around. Last year, Gov. Arnold Schwarzenegger cut $1.5 million from the logging review program of the California Department of Fish and Game. While the state’s budget problems have since worsened, lawmakers could set fees on businesses seeking timber harvest plans to pay for these reviews. The budget Brown vetoed last week included roughly $10 million yearly in such fees. The governor should insist that the final budget include fees for timber harvest reviews, although perhaps not at the $10 million figure.

Brown also needs to make key appointments to the state Board of Forestry and Fire Protection. Currently, three of the board’s nine seats are vacant, including one for a public member. Brown must ensure this board, traditionally friendly to industry, can balance the demands of timber production with environmental protection, and be willing to use all of its available tools. For instance, the board has the legal authority to impose special logging restrictions in sensitive watersheds, but has yet to use that authority. Battle Creek may be one place to start.

The state’s largest private landowner, Sierra Pacific has worked to cultivate a close relationship with previous governors, and Brown is no exception. The company contributed more than $46,000 to the governor’s campaign last year. Emmerson and another Sierra Pacific executive also paid $10,000 to attend a gala reception last year for Brown’s Oakland School for the Arts, which featured an appearance from actor Robert Downey Jr.

While the governor no doubt appreciates these contributions, we’d hate to think they’d have any impact on his dealings with Sierra Pacific. Quite the opposite. Californians elected him at least partly because of the promises he made on the campaign trail. One of these was to "ensure a healthier habitat for California’s unique fish species by limiting sediment."

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Redding’s building valuation numbers dismal

June hits an all-time low; 117 permits issued

By Scott Mobley, Redding Record Searchlight, July 6, 2011

Building valuation in Redding hit an all-time low in June.

The city issued 117 building permits worth $1.673 million last month. That’s slightly below the $1.677 million in permit valuation the city logged in January 2010, the lowest on record before now.

The June building numbers keep 2011 on pace to be the worst yet in a north state construction industry slump that started in 2007 and deepened into an outright depression in 2009.

Valuation last month was down 82 percent from June 2010, when the Larkspur Group pulled a permit for an office building. That project accounted for the bulk of last June’s numbers.

Jeb Allen, who co-owns Palomar Builders, pulled the lone home building permit the city issued last month.

The firm will build a 2,020-square-foot home in Highland Park presold to a Fremont man planning to retire in Redding, Allen said. The 420-lot Highland Park subdivision sits just east of Interstate 5 between Hilltop Drive and Lake Boulevard.

Palomar started Highland Park in mid-2009, after many other contractors stopped building. Construction costs by that time had begun outstripping median home prices in a foreclosure-flooded market.

The Redding-based builder has pushed ahead with Highland Park despite, or even because of, the recession. Palomar was able to defy the depressed new home construction market, in part, because it teamed up with Sierra Pacific Industries to develop the neighborhood.

Palomar pulled four out of every 10 single family home permits the city issued last year, for a total of 31.

Yet even Palomar’s pace has slowed drastically this year, when the number of single-family home permits issued citywide so far is only a quarter of an already-dismal 2010.

Instead of building five homes at a time, Palomar is building one, said Allen. The firm has taken out four permits since Dec. 31, compared to 15 by this point in 2010.

"It’s definitely a challenging year," Allen said. "We’ve closed nine houses this year, but we did twice that last year."

With Shasta County unemployment hovering around 15 percent, an abundant supply of foreclosures depressing the housing market and no sign of an equity boom developing in the San Francisco Bay area, even the optimistic Allen sees little prospect for improvement the rest of this year or next.

"This is just one of those valleys," Allen said. "I think we have another 18 months before sales are back to three or four a month, back to what we were anticipating."

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Lawsuit to block Sierra Pacific Industries logging operation rejected

By Scott Mobley, Redding Record Searchlight, August 10, 2011

A Shasta County judge has rejected a lawsuit blocking a Sierra Pacific Industries logging operation on 701 acres east of Shingletown.

The California Department of Forestry and Fire Protection (Cal Fire), the agency overseeing timber harvest plans, correctly followed the law when it approved SPI’s application to log trees remaining between earlier clear cuts in the Plateau Flat area between Lake McCumber and Viola, Superior Court Judge Gregory Gaul ruled Friday.

Meanwhile, SPI has voluntarily halted logging on 809 acres around the Digger Butte Lookout east of Manton while the Third District Appellate Court considers a 2010 Tehama County Superior Court decision rejecting a similar lawsuit.

The Anderson-based timber company already has wrapped up logging in the Digger Butte Lookout area for the season, said Ed Murphy, resource information systems manager for SPI.

"We entered into a stipulated agreement so as not to waste time and judicial resources, since we’re not going to operate again until next spring anyway," Murphy said. "If this were next spring we would have fought the injunction, since we would need those logs for our sawmills."

SPI is still cutting roads in the lookout area so trucks can reach other logging areas, said Mark Pawlicki, director of corporate affairs and sustainability for SPI.

And workers are still spraying herbicides on clear cut areas to keep weeds and brush from overrunning the pine seedlings that will become timber for harvest in 60 to 80 years.

All told, SPI has approval to log roughly 2,900 acres around Battle Creek and its tributaries under four Cal Fire-approved timber harvest plans straddling Shasta and Tehama counties. Today it is logging on three of the four tracts.

Erosion concerns

The Battle Creek Alliance, a Montgomery Creek-based nonprofit, has filed lawsuits challenging environmental review on three of those logging plans. Judges in Shasta and Tehama counties have now ruled for Cal Fire and SPI in all three of those suits.

Marily Woodhouse, a Battle Creek Alliance co-founder and plaintiff in the suit rejected Friday, said the group likely will appeal the Shasta County decision on Plateau Flat.

"On paper the SPI timber harvest plans look really good," Woodhouse said. "But if you come out here it’s a whole different story."

Woodhouse and others are especially concerned erosion from logging and road building will increase siltation in Battle Creek, where state and federal agencies are spending $128 million to restore a 48-mile salmon run. Fine-grained mud deposited by waters flushed by erosion-laced runoff could bury salmon and steelhead spawning grounds before the fish have a chance to use them.

The Battle Creek Alliance is part of a coalition of environmental groups teaming up with a commercial fishing organization seeking a temporary halt to clear cutting in the watershed and a study on erosion.

John Laird, head of the state Natural Resources Agency, is still considering the request.

Meanwhile, Woodhouse has been monitoring water quality near the clear cut areas herself, though she says turbidity or cloudiness is always low at this time of year. The silting problems occur with winter runoff, she said.

"This is a rain on snow area, meaning it snows and then we get rain on top of that, so you get more turbidity anyway from the runoff," Woodhouse said. "And the soils here are highly erosive."

Murphy, the SPI resource information systems manager, said the firm carefully monitors water quality for turbidity and other pollution.

Water flowing out of SPI logging areas has had nearly imperceptible turbidity 96 percent of the time over the past decade, Murphy said. Turbidity has been high enough to slightly stunt the growth of fish about two percent of the time.

Storms — not logging — have caused the unacceptable turbidity levels in the Battle Creek watershed occurring the remaining 2 percent of the time over the past 10 years, Murphy said.

"There is nothing, nothing wrong with the water coming off our property," Murphy said.

State water quality control officials have inspected SPI logging operations for erosion and taken enforcement action against them several times, said Robert Crandall, assistant executive officer for the regional water quality control board.

"They (SPI) have taken mitigation," Crandall said.

Erosion is one of a constellation of issues addressed in lawsuits filed by environmental groups against Cal Fire and SPI over the past 18 months.

Michael Graf is one of two San Francisco Bay Area attorneys representing Woodhouse, the Sierra Nevada Conservation Center and others in their appeal of the decision affirming environmental review of the Digger Butte Lookout logging operation.

The litigation is not meant to drive private forestry out of the woods, but to force broader consideration of what clear cutting means for wildlife accustomed to living in complex, diverse forests, Graf said.

"There is plenty of room to cut trees," said Graf. "But do it in a way that is ecologically sustainable, not just logging sustainable."

SPI can clear up to 20 acres of forest at a stretch and leave a minimum of 300 feet between cuts, under timber harvest plans approved by the state. The tree cutting creates a checkerboard pattern of forest and meadow strikingly visible from the air.

Long term, the firm plans to populate the clear cut areas with relatively uniform stands of fast-growing, high-quality timber such as ponderosa and then harvest it again.

SPI owns some 1.7 million acres from the Southern Cascades down the Sierra Nevada’s huge yellow pine belt, making it California’s largest timber operator and private property owner.

The state’s timber harvest approval process must account for the long-term environmental effects of transforming 70 percent of SPI land from forest into tree plantation, Graf said.

In the Digger Butte Lookout timber harvest appeal, Graf asks the court to halt further logging and order Cal Fire to analyze how well surrounding, uncut timber can serve as wildlife habitat to make up for the areas lost to clear cutting.

That older forest bristles with snags and rotting logs and is home to the Pacific fisher, the spotted owl and woodpeckers.

That habitat will be lost if clear cutting is allowed to continue, according to the suit.

"The plantation has no over story, no old growth," said Graf. "If you wait 50 years and then find out it doesn’t work as habitat, then it’s too late."

Shasta County Superior Court Judge Greg Gaul rejected similar arguments in his Friday decision on the Plateau Flat logging operation east of Shingletown. The Cal Fire-approved timber harvest plan for Plateau Flat thoroughly addressed the cumulative effects of habitat destruction and fragmentation from clear cutting across 25,000 surrounding acres, Gaul ruled.

Gaul also rejected Battle Creek Alliance arguments that Cal Fire’s environmental review did not account for the damage caused by hexazinone and other herbicides, erosion, water diversion and the increased greenhouse gas emissions from the loss of carbon-capturing timber.

In each case, Cal Fire thoroughly considered the environmental consequences of these activities and found them less than significant, Gaul ruled.

Gaul followed precedent in giving Cal Fire the benefit of the doubt against charges it had ignored the law in granting SPI permission to log.

"We do not determine whether the Department (Cal Fire) was right or wrong or whether another conclusion might be more reasonable," Gaul wrote.

"The fact that petitioners disagree with Cal Fire’s determination does not demonstrate abuse of discretion."

SPI has faced legal challenges on 35 of its timber harvest plans over the past eight years, said Pawlicki. Nine of those cases went to the state Supreme Court.

Courts have decided in SPI’s favor every time, Pawlicki said.

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California report blames roads, not clear-cuts, for erosion damage

By Matt Weiser, Sacramento Bee, Nov. 10, 2011

Dirt roads, not logging clear-cuts, are likely the largest source of erosion that may threaten salmon restoration in Battle Creek, an important Sacramento River tributary.

That is the conclusion of a new report by a special state task force, presented Wednesday at a meeting of the California Board of Forestry.

The so-called "rapid assessment" report was ordered by the administration of Gov. Jerry Brown after a Bee investigation published June 19. The article highlighted conflicts between the state’s simultaneous approval of clear-cut logging and its support for the $128 million restoration project.

The state has contributed $56 million toward the restoration. It involves removing or modifying numerous small Pacific Gas and Electric Co. dams to return endangered salmon and steelhead to 42 miles of habitat. The restoration is about halfway complete.

Relatively little work has been done, however, to assess habitat conditions once spawning access is restored. Sierra Pacific Industries owns 82 percent of the private timberland in the watershed, and has logged about 20,000 acres since 1997, according to the report.

The report’s authors – state employees who are experts in wildlife, water quality and logging – inspected 16 miles of streams and 55 clear-cuts on Sierra Pacific land. The group saw evidence of erosion entering a stream from just one clear-cut.

Logging roads and county-maintained roads in the watershed, however, presented a larger threat to water quality. Two-thirds of road crossings at streams, and road segments near streams, were producing erosion. This eroding dirt clogs gravels in which fish deposit their eggs, rendering rivers unfit for spawning.

"Sierra Pacific actually welcomes this report, which demonstrates the focus of sediment is on roads," said Cajun James, the company’s research and monitoring manager. "We feel we’re doing the best job we possibly can to reduce sediment inflow."

The Board of Forestry is drafting new rules to address the erosion problem from roads built by logging companies to remove timber. In its recommendations, the task force supports that rule package, and urges counties to adopt similar measures for public roads in rural areas.

The task force also acknowledged limitations in its work. The inspections occurred in the dry season, when erosion is less visible, and included no water quality testing. It also did not consider long-term effects of clear-cutting, or potential for a major storm to cause catastrophic erosion, like an event in 1997.

"The findings actually corroborate very well the concerns brought forward by citizens," said Jodi Frediani, executive director of Citizens for Responsible Forest Management. "There’s got to be an independent water quality monitoring program put in place."

The Battle Creek report can be found online at:

http://www. bof.fire.ca.gov/board_business/other_board_actions

http://www.bof.fire.ca.gov/board_business/other_board_actions/battle_creek_report/final_battlecreek_taskforce_report.pdf

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Timber war returns

Environmentalists revive campaign to stop the clearcutting of forests in California

by Lisa Carmack, San Francisco Bay Guardian, Nov 11. 2011

Protestors in flashy animal costumes picketed the appearance of infamous logger Archie "Red" Emerson, who was giving a guest lecture to the Forestry Department, at the University of California Berkeley campus on Oct. 14 to bring awareness to the increasing use of environmentally destructive logging practices.

The protesters were admittedly having fun parading around as skunks and beavers, but there was a heavy point to go with the theatrics. Emerson’s company, Sierra Pacific Industries (SPI) is being targeted by a new campaign to curtail and eventually eradicate the destructive logging technique called "clearcutting."

The Redding-based Battle Creek Alliance, in cooperation with the Sierra Club, wants Californians to push for environmental protection measures that would ban clearcutting on the state level.

"We’re building a statewide coalition of people from all across the state — and hopefully, eventually, all across the country — who can be helping to call on the state of California and Gov. Brown to stop clearcutting and to protect our forests, watersheds, and wildlife," said Sierra Club member Sarah Matsumoto, an East Bay resident who has joined the Battle Creek Alliance.

Those living close to clearcut areas say that the damage is devastating

"I live about a mile from most of the clearcutting," said Patty Gomez, a resident of the Battle Creek area. "We like to call it ground zero."

The term clearcutting describes the complete eradication of trees and shrubs from forest areas, some the size of Golden Gate Park. The area is then doused with thousands of gallons of herbicides and then replanted as a tree farm.

"Industrial tree farms are sterile and lifeless," said Juliette Beck, coordinator of the Sierra Club’s Stop Clearcutting Campaign. "This particular method is incredibly ecologically destructive."

SPI is the largest private landowner in California, owning 1.9 million acres. It owns 24 industrial facilities and employs approximately 3,400 workers.

"SPI own[s] so much land and potentially controls the fate of the forest," said Beck. "SPI is the poster child for the one percent." Because of SPI’s scorched-earth policy of completely clearing an area and sterilizing it for replanting, biologists are concerned that crucial plant species will soon become extinct.

"After clearcutting, there is a huge flush of sprouting natural regeneration of native species," said veteran biologist Vivian Parker, who has lived in the Battle Creek area for 30 years and has worked for the U.S. Forest Service. "When the newly sprouting plant layer is sprayed with chemical herbicides and thus eliminated, the plants do not get a chance to grow and shed their seed."

Parker argues that this interruption of natural regeneration over several periods of clearcutting will destroy the natural growth of plant life necessary to maintain a healthy forest.

This copious use of herbicides has also been suspect in a strange phenomenon affecting wildlife in North America. According to a study conducted by UC Berkeley professor of endocrinology Tyron Hayes, the use of herbicides, even at extremely small amounts, have been linked to biological mutations such as male frogs growing ovaries.

SPI is insistent that its practices are environmentally sound and internally regulated.

"We monitor all of our own activities to see where we have room for improvement," Mark Pawlicki, director of Corporate Affairs and Sustainability at SPI, told the Guardian. "In many cases we’ve changed our practices." New research on the effects of these herbicides have shown that current regulations don’t always address the cumulative impacts of chemical applications and other practices.

"We now know that it is the very diluted amounts of chemicals that [have the potential to] cause the most damage because they behave just like hormones," Parker said. "The quantities are so small you can barely measure [them], but they have a disproportionate effect."

Hayes’ study was publicized in a press release several years ago by ForestEthics, an environmental nonprofit intimately involved with campaigning against SPI’s environmentally destructive practices.

"After that release, we started getting calls from families," said ForestEthics communication director Will Craven. "One family had a six-year-old daughter who developed brain cancer."

Craven said the family lived across from one of SPI’s mills and close to clearcut areas. He had heard of families developing severe endocrine issues where they could no longer digest fruit or sugar.

Pawlicki cites studies done internally by scientists about the biodiversity of SPI’s land, stating that the proper measures have been taken to put aside enough land for endangered species like the spotted owls and that the effect of the herbicides are negligible if not insignificant.

"People make allegations all the time about us but there’s just no proof," said Pawlicki. "Show us the proof, tell us the evidence that we’re harming anything."

Marily Woodhouse, a resident of the Battle Creek area who has been a particularly passionate adversary of SPI, has spearheaded efforts to collect sufficient information in order for the Central Valley Regional Water Quality Control Board and the California Natural Resources Agency to take legal action; a process she said SPI has tried to undermine.

"SPI has given out the Water Board report and disparaged the way we collected the sample at public meetings," Woodhouse said in an email conversation. "We collected the sample the way the lab instructed us to."

However, these studies have a financial limit. Some tests can cost up to thousands of dollars, and ensuring that the tests are targeting specific herbicides used by SPI can be a guessing game. SPI is only required to disclose chemical use to the California Department of Pesticide regulation once a month and a yearly report can be requested, but this information is not disclosed to the public at the time of application.

The Water Board, a subsidiary of the Environmental Protection Agency, has conducted water tests and found no significant amount of chemicals in nearby watershed, but Parker said she believes this is because the agency doesn’t test for the specific chemicals used by SPI.

"Although they could request this information from the industry, the water board doesn’t know which chemicals are used, the quantities, or locations where they are applied," Parker said. "Lack of information and inadequate testing ensures that the company is able to continue doing business."

Residents and environmental groups have filed several lawsuits against SPI for more than 34 environmental and health policy violations, but have not been successful in curbing SPI’s destructive practices. According to legal experts, this is not necessarily because they don’t have a valid case.

"When you’re challenging these actions by SPI, what you’re really doing is challenging a decision by a state agency for approving their logging plan," said Justin Augustine a staff attorney at the Center for Biological Diversity. "The agency can get deference from the court when it makes a good decision or a bad decision."

The state agency Augustine is talking about is the California Department of Fire and Forestry Protection (Cal Fire). In the hierarchy of state agencies, Cal Fire sits next to the Department of Fish and Game and both are directly under the Natural Resources Agency. Each department plays a role in monitoring and enforcing logging practices and code violations.

Logging companies are required to file a Timber Harvesting Plan that describes the biodiversity of plant life, acreage, and wildlife of an area meant for harvesting. Cal Fire then approves or rejects the plan within 10 days of receipt. This approval process shields SPI from directly facing charges in court because Cal Fire is ultimately responsible for approving the plan.

Sierra Club and the Battle Creek Alliance are now fighting for legislation that will bar the use of clearcutting altogether.

"[SPI] could minimize clearcutting. The method is not appropriate to today’s forests," said Beck. "We are demanding that they make the change to completely stop clearcutting."

A new report by the State Water Resources Control Board regarding SPI is scheduled to be presented at a Board of Forestry hearing on Nov. 9, describing whether or not sediment from the clearcuts is reaching the creeks and harming the valuable salmon recovery project. The report is available on the Board of Forestry website.

"[There has been] a lot of evidence that the logging roads have to do with the sedimentation," said Richard Stapler, deputy secretary of communications at the Natural Resources Agency. "It was brought to our attention by Marily Woodhouse, and is very much worth review."

The review may bring about protections for the Battle Creek watershed, but activists remain focused on legislation to prohibit clearcutting on a broad scale. "Right now the only things valued are the short term profit for the timber industry," said Beck. "There needs to be a change in the way the forests are managed"

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Another View: Clear-cuts help us keep our forests healthy

By Daniel Tomascheski, Sacramento Bee, Nov. 27, 2011

- Daniel Tomascheski is vice president of resources for Sierra Pacific Industries

Katherine Evatt isn’t the only one who can’t see the forest for the trees. It’s not surprising that many people are alarmed to see good forest practices at work. A few acres of downed trees don’t square with their notion of what a healthy forest is supposed to look like.

Ironically, it’s what they don’t see that tells the real story. They don’t know that the robust stands of foothill conifers nearby, filled with wildlife and natural wonders, are themselves the product of decades of sound forestry practices – including commercial harvesting.

The debate over cutting trees has raged for generations, often without facts to back up either side. Few people had ever bothered to actually go into a forest to study it in place over time. But Sierra Pacific Industries has done that now for nearly two decades – with rigorous monitoring and assessment of commercial forestry practices, water quality, wildlife habitat, archaeological resources and native plants.

As an example, SPI has maintained permanent water quality monitoring stations within Shasta County’s Battle Creek watershed – following EPA-approved protocols and testing by an EPA-certified laboratory – taking measurements for temperature and turbidity every 15 minutes, every day for the past nine years. Independently verified data from those stations and testing for the presence of herbicides demonstrate that water quality there can support salmon, trout and other fish species.

Since 1992, SPI has commercially and sustainably harvested within the forest for 22 miles upstream of the state’s fish hatchery on Battle Creek, an important local tributary to the Sacramento River.

At the direction of John Laird, California’s secretary for Natural Resources, an interagency state task force team recently completed a study to determine the suitability of forestry operations to maintain water quality in the greater Battle Creek area, upstream of the $128 million project to restore salmon and steelhead. That group found no connection between modern managed forestry practices and harm to local streams.

What the task force did find was that runoff from public and private roads does contribute small to moderate amounts of sediment to nearby waterways, and it recommended improvements be made to these roads. Sierra Pacific is helping tackle that problem and is committed to working with responsible public and private sources to improve road maintenance.

Broader studies have shown that California’s management practices reduce the risk of catastrophic wildfires that dump thousands of tons of greenhouse gas pollution into the atmosphere, with impacts across nations. That is an environmental benefit that casual observers can’t "see" when they look at a recently cut patch of forest.

What many also don’t see is society’s demand for a sustainable source of building products and other consumer goods – a demand that can’t be met through "thinning" or salvage operations after forest fires. They also don’t see the 3,000 people who hold jobs today with Sierra Pacific, or the 7,000 jobs that the U.S. Forest Service estimates exist because of Sierra Pacific’s commercial forestry operations.

Companies like SPI that do business in California are held to some of the toughest standards in the world. Wood that isn’t produced commercially in California sufficient to meet the demand must be imported from Malaysia, Brazil and other places with far less regulation, posing threats to the environment unimaginable in the Golden State.

So, the next time you see a few mountain acres that have been cleared of trees, keep in mind what you don’t see – healthy nearby forests where trees have grown back using environmentally sound practices and a sustainable source of wood products from California’s own well-regulated forests.

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Dignitaries tour newer SPI mill

by Ryan Campbell, The Union Democrat, October 13, 2011

The Sonora sawmill was running at full steam Wednesday when Sierra Pacific Industries offered dignitaries a rare look inside the century-old plant that has undergone a $15 million facelift.

With saw blades buzzing and the smell of freshly cut ponderosa pine filling the air, workers were busily tending to heavy machinery and shepherding lumber as it snaked briskly along a chain of endlessly cycling conveyor belts.

Ten-ton logs entered from one end of the plant before being paired down to a few dozen 2 by 12 inch boards and neatly stacked in 20-foot-tall rows.

SPI announced early this year that the mill off Standard Road would reopen and 130 workers would be hired. Originally opened in 1901, the mill shut down in 2009 due to a failing economy, reduced availability of timber and a weak lumber market, according to SPI area manager Ryan Land.

"We decided that if we were going to operate here, it was going to have to be a more efficient mill," he said.

The company kicked off a multi-million dollar investment in July, modernizing timber cutting equipment to handle smaller logs and using computer systems to maximize the mill’s lumber output, he said.

SPI spokesman Mark Luster took local dignitaries on a tour of the upgraded Sonora mill on Wednesday.

A lone operator controls a sliding "head rig" that rolls 16-foot bare log sections under a massive band saw, which chops the logs down to a more manageable size. The sections move onto a "pony rig" that cuts the log sections into more recognizable wooden boards. Laser-guided band saws strategically cut the logs to produce the maximum number of boards.

A large bicycle chain-like conveyor takes the rough boards to a drying room, where heat from an on-site power plant sucks moisture out of the raw wood. The 8-megawatt cogeneration power plant, meanwhile, runs on waste wood from the mill and produces almost no pollution.

In the planing warehouse, millimeter-thin layers of wood are shaved off of rough boards as 40 razor-sharp blades spin at thousands of revolutions per minute on a massive steel drum. Any wood waste that isn’t used for power is sent to a large hopper that shakes violently to separate high-quality wood chips for use in home landscaping projects.

"A lot of the technology is basic, fundamental-type stuff," Luster said.

The mill takes in 500 to 600 logs a day and produces 150,000 to 180,000 board-feet of lumber to be shipped to lumber yards throughout the state, according to Land.

Demand for lumber dropped 40 percent following the nationwide economic slowdown in 2008, according to George Emmerson, vice president and chief operating officer of SPI. He said demand for lumber decreased from 64 billion board-feet in 2007 to 38 billion board-feet by 2009.

In 2008, SPI had about 4,500 employees at plants throughout the West Coast, Emmerson said. By 2010, the company laid off 1,400 employees in the following two years, including about 150 from the Standard Mill.

"We watched the economy fail and had to take some drastic actions," he said.

The company reopened the mill following the acquisition of timberland in Tuolumne and Calaveras counties. The mill began upgrades in July, and now has 110 full- and part-time employees, and another 20 people to be hired in the near future, Emmerson said.

He said the mill pays "family wages," and that for every job SPI creates, six to eight more jobs are created in the trucking, logging or service industries.

Tuolumne County Economic Development Authority Director Larry Cope said the mill has an annual payroll of $11.7 million and pays $400,000 in property taxes. He also said the SPI mill will spend $200,000 by working with local businesses.

"That’s a big impact in the community for one entity," Cope said.

Jon Nessl, 30, was happy to have one of the few coveted jobs at the mill. A relief worker, whose job is to stand in for equipment operators while they take lunch breaks, Nessl said he makes roughly $20 an hour and has health benefits.

"Heck, yeah, it’s a good job," said Nessl, who lives in Soulsbyville with his wife and 3-year-old daughter. "It’s really nice to have a steady full-time job."

Nessl said he was a mason and construction worker while the housing industry was prosperous, but had trouble finding work after the economic downturn in 2008.

"It was really hard, the work just stopped," he said.

SPI was co-founded by Emmerson’s father, Archie "Red" Emmerson, who is the third largest private land owner in the nation with 1.9 million acres of forest land in California, Oregon and Washington. SPI is the second largest timber processing company in the U.S. and employs about 3,500 people.

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Sonora lumber mill reborn

Closed since 2009, $15M investment brings in 100 jobs

By Dana M. Nichols, Record.net, October 16, 2011

SONORA - You can buy a lot of laser beams, computers and band saw blades for $15 million. And those devices were essential to retooling the 110-year-old mill in Sonora, making it more efficient and allowing it to reopen this year after having been closed since 2009.

But it still takes human hands and eyes to transform trees into lumber. That’s where Brian Marquette comes in.

"You see the good wood," Marquette said, perched in the head rig control room at the Sierra Pacific Industries mill, his eyes on a 3,000-pound log visible through plate-glass windows.

Every few seconds, Marquette decides how best to slice a log. His left hand moves a lever. The log spins to just the right position. And then log meets blade, sawdust flies and slabs of fresh raw wood move deeper into the mill.

"I’ve been doing this for a long time," Marquette said of the 14 years of mill work that gave him speed and ease at calculating his cuts.

For several years, however, Marquette wasn’t working here. The mill closed in 2009, the victim of both a crashing home construction market and its outmoded equipment.

Still, Sierra Pacific Industries owns more than 70,000 acres of forests in Calaveras County and tens of thousands of acres more in Amador and Tuolumne counties.

Closure of the local mill made it expensive due to trucking costs for the company to manage its Mother Lode forests and more difficult to do enough logging to control fire danger and keep the stands healthy.

"We’d been hauling our logs to Lincoln," said George Emmerson, who oversees SPI operations and is a member of the family that owns the company. Lincoln, 100 road miles away in Placer County, is home to another SPI mill.

In 2010, SPI officials and Tuolumne County officials began meeting, discussing how to modernize the mill. "We spent in excess of $15 million since then," Emmerson said.

The mill reopened in July, hiring 110 people. Wednesday was a chance to celebrate and to invite Tuolumne County officials and local media to take a first peek at the modernized operation.

Yet the computer-guided blades, the sawdust-fired electricity plant and other technological gizmos were not the main event, participants said. Instead, it is the fact that more than a hundred people are back in the mill, and hundreds more are back at related jobs in area forests or driving trucks.

Larry Cope, director of the Tuolumne County Economic Development Authority, said the mill has an annual payroll of $11.7 million, pays $400,000 in property taxes and makes $200,000 in local purchases.

"That’s what Tuolumne County is about. We have the resource here," said Tuolumne County Supervisor John Gray, who grew up watching logging trucks at work here in the 1950s.

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Sierra Club wants landmark climate law altered

By Peter Fimrite, San Francisco Chronicle, May 13, 2011

California’s quest to create the world’s first clean energy economy was again under fire this week when the Sierra Club urged Gov. Jerry Brown to drastically alter key elements of the much criticized climate protection law.

The state’s largest environmental group urged the governor in a May 9 letter to re-evaluate and revise proposed "cap-and-trade" business incentives, particularly the rules that would allow companies to offset their pollution by purchasing credits from clean businesses outside the state and country.

"Curbing global warming will require a fundamental transformation of our energy economy, a task that cannot be outsourced to other countries," wrote Bill Magavern, the director of Sierra Club California. "If polluters are allowed to outsource their emission reductions to other sectors and jurisdictions, the clean-energy revolution will be delayed."

Cap-and-trade has been an almost constant source of tension since 2006, when former Gov. Arnold Schwarzenegger signed AB32, the California Global Warming Solutions Act. The landmark law requires the state to reduce carbon emissions to 1990 levels by 2020, but it has come under repeated attack from groups on the right, who think the regulations are too strong, and organizations on the left, who think they are too weak.

Stanley Young, the spokesman for the California Air Resources Board, defended the law, which is scheduled to go into effect in 2012, as the state’s best shot at establishing a green economy featuring solar energy, hydrogen power, bio-energy and renewable electricity.

"Our goal with the protocol for the offsets is to develop rigorous approaches to ensure that every ton of greenhouse gases obtained through these offsets is verified, permanent and beyond what the normal course of business would deliver," Young said. "We feel that the combination of the cap-and-trade program along with those specific measures will drive innovation and generate green jobs."

600 plants covered

The California program would cover 600 industrial plants, but Young said offsets could only be used for a small fraction of the required emissions reductions. An even smaller portion would be allowed to come from outside the state, he said.

"ARB is committed to fulfilling all the requirements of AB32, including addressing issues regarding impacts on low-income communities and the need to develop rigorous offset protocols," he wrote in response to the Sierra Club. "The regulation was developed over a year and a half and involved dozens of public meetings and workshops and considered and incorporated the input of the broadest range of stakeholders."

The first-of-its-kind program nevertheless took a hit in March when San Francisco Superior Court Judge Ernest Goldsmith accused the state of not looking hard enough at alternatives to cap and trade. The judge is expected to order the California Air Resources Board to analyze other options and conduct an environmental review before it can adopt the protocols.

That decision came after a failed ballot measure in November backed by Valero Energy Corp., and Tesoro Corp., that would have suspended the climate law. The two companies have refineries in California that emit greenhouse gases.

Magavern said Thursday that the Sierra Club actually supports AB32, but believes the cap-and-trade system as it is now written "bends over backward to accommodate oil companies and other big polluters," whose toxic emissions often waft over adjacent low-income communities.

He said logging companies like Sierra Pacific Industries have taken advantage, dedicating 60,000 acres of California forest to the carbon offsets market. The plan, he and others said, is to grow more trees than are chopped down over the next 100 years and sell credits for the carbon dioxide that is stored in the extra trees.

"We think that those protocols leave it open for Sierra Pacific to clear cut forests in California and to actually get incentives for doing that," Magavern said. "This shows the problems with offsets if you don’t strictly oversee them. We don’t think that clear cutting is the way to reduce greenhouse gas emissions."

Governor’s statement

The governor’s office issued a statement late Wednesday saying Brown would carefully examine the Sierra Club’s concerns and "looks forward to working with them and other stakeholders in making sure that AB32 is properly and vigorously implemented."

Other environmental organizations support cap and trade, insisting that it is the only way to provide businesses with the kind of incentives that are necessary to fight global warming.

"The Sierra Club is not just looking for changes, but to derail or stop the program altogether," said Tim O’Connor, director of the California Climate Program for the Environmental Defense Fund. "It is not right to put a pause on this program. We need to reduce emissions now. We feel the program, as written, drives innovation and protects our economy as we try to reduce emissions."

The back and forth indicates that a rift in the environmental community is widening. Rainforest Action, International Rivers, Greenpeace, Friends of the Earth and the Natural Resources Defense Council have also criticized carbon-offset programs, including the one proposed by the Air Resources Board, for letting polluters off the hook.

Seven Western states and four Canadian provinces have joined California in writing regulations in anticipation of a regional effort to curb emissions.

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Retooled lumber mill back in business

By Dana M. Nichols, Record (Stockton, CA), July 10, 2011

July 10--SONORA -- Saws are again cutting lumber and 100 employees went to work last week at the retooled Sierra Pacific Industries mill just outside Sonora, the company announced Friday.

The Sonora mill and an associated electrical plant had 146 workers when it closed in 2009.

Initially, it looked like the mill might be gone for good. But then the Tuolumne Ecomomic Development Authority and Sierra Pacific officials began collaborating to develop a plan to retool the plant so it could produce lumber from small logs. The large-diameter trees that were grist for the old mill for many decades have become scarce in the central Sierra Nevada…[more]

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Timber Companies Stand to Benefit from CARB Regulations

By Mark Schapiro and Sarah Terry-Cobo

Globalization Comes Home, Vol. 18, No. 1, 2011

http://urbanhabitat.org/cj/18-1/schapiro

A lawsuit brought by environmental justice groups has put AB 32 on hold. The plaintiffs are from communities located near agricultural and industrial operations and say that "trading" carbon credits will generate more pollution near their homes. The court’s March 17 decision will require California Air Resources Board (CARB) to go back and look at alternatives to the cap-and-trade plan, analyzing options, such as directly regulating polluters. While there has been quite a bit of coverage on the impacts of the "trade" portion of the program on communities located near greenhouse gas emitters, few seem to have been aware that the program also has implications for communities that live near the "offset" locations that aim to reduce these emissions. —STC

California timber firms could emerge as big winners in the state’s fight against global warming, earning millions of dollars through the sale of carbon credits under the set of rules approved by the Air Resources Board on December 16, 2010.

The plan has stoked controversy among environmentalists who assert it gives the timber industry too good a deal, enabling them to clear-cut trees at the expense of the overall vitality of the forests, while the timber industry claims the plan will help them promote the storage of carbon dioxide, a greenhouse gas, in the trees on their land.

The state board has responsibility for implementing AB 32, California’s landmark effort to limit greenhouse gas emissions. On December 16, 2010, the board approved a new cap-and-trade system aimed at bringing emissions to 1990 levels by 2020. It will allow companies to cancel out their emissions by purchasing carbon emission reductions somewhere else. A significant portion of those credits, or offsets, is expected to come from the carbon-storing capacity of forests.

One of the most controversial provisions would enable timber companies to obtain credits by replanting trees in clear-cut areas of the forest. The protocol also makes California the first place in the world to assign carbon credits to wood products created from the trees themselves.

For those credits, the state relies on a U.S. Department of Energy registry that estimates the carbon in everything from wooden chairs and bed frames to two-by-fours made from fir, pine, cedar, and hemlock trees harvested in California.

Timber companies would then be free to sell their pool of credits to utility companies, refineries, and major industrial enterprises, which need them to meet emission limits.

The state has proposed a minimum price of $10 a ton and estimates that 20 million tons will be needed over the first decade. The total offset market will likely reach $200 million by 2020, according to Point Carbon, a news service offered by Thompson Reuters.

David Bischel, president of the California Forestry Association representing timber harvesters and processors, says that the new rules, known as the Forest Protocol, "help to monetize an important environmental benefit by encouraging more standing timber in the forests, and more wood products used by society."

Early drafts of the protocol did not permit clear-cutting, according to Jeff Shellito, an environmental consultant and former aide to state Sen. Byron Sher, now retired. But in 2007, the timber industry began lobbying to alter the protocol in their favor. A nonprofit organization, the Climate Action Reserve, which was created to establish standards for the verification of greenhouse gas emissions and reductions, is the primary author of the new rules.

In 2002, Sher had authored legislation that established forest preservation standards for California’s then-voluntary carbon market. "We went to great pains (in 2002) to ensure you couldn’t get carbon credits from clear cutting," Shellito said.

The biggest timber company and landowner in California, Sierra Pacific Industries—with some 1.9 million acres across the state—was the most aggressive individual timber company lobbying on the regulations. Over the course of 2007 and 2008, Sierra Pacific paid $37,500 to California Strategies, a major Sacramento lobbying firm, to present its case.

The company also nurtured a relationship with Gov. Arnold Schwarzenegger. Sierra Pacific donated $29,600 to the governor’s campaign committees, and its billionaire owner, Archie Aldis "Red" Emmerson, hosted a $250-a-plate fundraising lunch for the governor’s reelection campaign at his estate outside of Redding. Emmerson is listed by Forbes as one of the world’s 500 wealthiest people.

Altogether, according to campaign contribution records filed with the secretary of state, the company has donated about $890,000 to political candidates and ballot measures in California in the past five years.

The California Forestry Association, a frequent donor to political causes and candidates, also reported spending $245,000 on lobbying state agencies on a variety of issues in 2007 and 2008, including climate legislation and the Air Resources Board policy on greenhouse gas emissions.

Among the company’s requests was a plan to qualify what it calls "even-age management" of its forests for carbon credits. Even-age refers to trees that are planted at the same time for future cutting. In September 2007, Sierra Pacific sent a six-page letter to the Air Resources Board outlining the changes it would like to see in the protocols—most of which the board accepted.

"In our view," wrote the company, "there is no valid reason for requiring multiple ages of mixed species on every acre. Indeed, natural forests before the intervention of humans often consisted of large tracts of even-age stands which were generated from fires. Today’s management often mimics this type of forest through the practice of even-age forestry."

Under this definition, a significant portion of Sierra Pacific’s land could be credited over the next century. The company would have to verify its claims of how much new carbon is being stored in its replanted trees—which it would be entitled to cut again in 50- to 80-year cycles. Sierra Pacific nurseries are already breeding new varieties of native trees to heighten the quantity of carbon in their trunks, leaves, and roots. Sierra Pacific officials declined to comment for this article, referring reporters instead to the California Forestry Association.

Critics, like former legislator Sher, say that the new protocol violates some of the basic principles of forest conservation. What the timber industry calls "even-age management" Sher calls "tree plantations."

"The forest companies are interested in being able to harvest their trees, and replant, and then produce a new asset that they can sell," Sher said. "It undermines the biodiversity of the forest. You end up with tree plantations that are much more vulnerable to fire and disease."

Prior to the December vote, 47 environmental and conservation groups, including the Sierra Club California and the Center for Biological Diversity, protested to the Air Resources Board.

"The protocol subsidizes the current business as usual: aggressive timber management," said Brian Nowicki, a policy analyst with the Center for Biological Diversity, a group that has sued the state over Sierra Pacific’s logging practices. Nowicki questioned whether the rules encourage companies to do anything more than they are doing already.

Other environmental groups, like The Nature Conservancy and Environmental Defense Fund, support the idea of creating financial incentives to keep trees with more carbon standing and rewarding landowners for agreeing not to convert forests into commercial developments for at least one hundred years, which is another provision of the protocol.

"Landowners will have to go above and beyond their current practices," comments Michelle Passero, a senior climate policy adviser to The Nature Conservancy California. "And that should lead to more protection and better management of our forests."

To Susan Robinson, however, that sounds like clear cutting as normal. Robinson, a former safety manager for Chevron, lives in the area around Ebbetts Pass, a community in Calaveras County that has been one of Sierra Pacific’s most heavily clear-cut areas. She’s now a leader of the Ebbetts Pass Forest Watch, an environmental group representing residents of the small towns in and around the southern Sierras.

During harvest season, which continues until the snowfall, she sees the timber trucks heading down from the mountain for the company’s mills in Redding and elsewhere. She says that the new protocol will enable timber companies "to transform natural forests into tree farms."

"We’re not against logging," she said. "But we want to see it done sustainably, and the forest protocol does not do that."

Gary Gero, president of the Climate Action Registry, said he was given a narrow goal: to fight climate change by increasing the quantity of carbon dioxide in trees and wood. "The primary purpose of the protocol," he said, "is to ensure that the total amount of sequestered carbon increases over the next hundred years."

The registry, he said, refused one of Sierra Pacific’s additional requests—that it grant carbon credits for wood discarded in landfills.

The tension between preserving forests and preserving trees for their carbon lies at the heart of the controversy. The state’s climate legislation calls for the air board to "design emissions reduction measures… in a manner that minimizes costs and maximizes benefits for California’s economy." Carbon in trees is the cheapest of various options that would create an abundant supply of offsets, making all credits relatively inexpensive.

Mary Nichols, administrator of the Air Resources Board, said that California "already has the strictest timber standards in the nation, and we will leverage those standards onto other states, which hope to participate in the California forest protocol."

Those standards limit clear cuts to 20 acres and require replanting areas of cut trees. She said that states like Washington and Oregon, which permit clear cuts of as much as ten times that, would have to abide by this state’s limitations if its landowners are to gain credits to sell to California industries. The same applies to forests in Brazil and Chiapas, Mexico, which are likely to be the first foreign participants in the California program.

"The advocacy groups in the forest area," she said, "tend to value forests primarily for their ecosystem value, whereas the industry is looking at carbon as elements of value on the land."

She says that the state board is considering additional provisions to "make it absolutely clear that we are not going to provide any incentives for even-aged management."

The measures, she said, would be aimed at ensuring that "no projects [would be] registered as offsets that had been done using any amount of clear cutting at all." Adopting those rules, Nichols said, could take as long as two years.

The California Forestry Association would not comment on the prospect of further tightening of the rules. "We generally find it difficult to comment on potential future events," the group’s communications director, Bob Mion, said in an e-mail.

Mark Schapiro is a senior correspondent at the Center for Investigative Reporting (CIR). Sarah Terry-Cobo is a freelance reporter and research assistant for CIR’s Carbon Watch series. This article was first published by California Watch and is reporoduced with permission.

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Activists, Sierra Pacific at clear-cut standstill

Logging concerns arise at Battle Creek

By Dylan Darling, Redding Record Searchlight, August 7, 2011

VIDEOS

http://www.redding.com/news/2011/aug/07/activists-sierra-pacific-at-clear-cut-standstill/

Waiting to hear whether Gov. Jerry Brown will temporarily halt clear-cutting on Battle Creek upstream of a $128 million fish restoration project, Marily Woodhouse continues to collect water samples.

"They just say they are working (on it)," said Woodhouse, a Manton resident who helped found the Battle Creek Alliance.

The Battle Creek Alliance is among a coalition of environmental and commercial fishing groups that asked Brown in late June to stop the saws near Battle Creek. John Laird, head of the state Natural Resources Agency, is looking into the request, and his spokesman said last month that he would have more to say in a couple of weeks.

More than a month later, Laird has met with Woodhouse’s group and Sierra Pacific Industries — the Anderson-based timber giant that does the bulk of the clear-cutting near Battle Creek — but hasn’t made a recommendation on a ban, said Richard Stapler, Laird’s spokesman.

"At this point it is listening and learning from their particular points on the issues," Stapler said.

He said Laird still plans to meet with Pacific Gas and Electric Co. and the Central Valley Regional Water Quality Control Board before making a recommendation to the state Board of Forestry and Fire Protection.

"This is a pretty complex issue," Stapler said.

Using a telescoping painting pole and a glass jar, Woodhouse has been collecting water samples from Battle Creek for more than a year.

Each week she pulls samples from about a dozen spots. She says the samples show Sierra Pacific’s logging is muddying the water, making it possibly harmful for the fish downstream.

So she says the logging should be stopped before it nullifies the U.S. Bureau of Reclamation’s dam removal and stream restoration effort started last summer.

The bureau is removing five small PG&E hydroelectric dams and improving fish passage on Battle Creek. The project, set for completion in 2015, will open 42 miles of prime salmon and steelhead habitat, according to the bureau.

The bureau samples water flowing down Battle Creek and its tributaries, but there’s been no indication of dangers for fish, said Pete Lucero, spokesman for the bureau in Sacramento.

"We have not seen anything that would cause us any concern of upstream effects of logging," he said.

Sierra Pacific says it, too, is sampling along Battle Creek near its logging operations and those tests indicate the water is clear, said Mark Pawlicki, company spokesman. It’s the clarity of the water that attracted the bureau to Battle Creek in the first place, he said.

"The water coming from our property is the quality they want for fish," he said.

Although Sierra Pacific clears nearly all the trees from patches of woods around Battle Creek, Pawlicki said it leaves 150 feet of buffer around the creek.

"There is no sediment that gets through that to the stream," Pawlicki said.

Lab results from sampling by Sierra Pacific and state scientists show the creek is clean, said Michael Bacca, forest practice manager with the California Department of Forestry and Fire Protection in Redding.

"They’re above drinking water standards in some cases," he said.

Responding to the concerns about Battle Creek, regional water quality inspectors sampled it last week, said Robert Crandall, assistant executive officer of the regional water quality board.

"We wanted to find out if there are any activities going on that needed permits," he said.

He said he expects a report on Battle Creek next week.

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Conservation easement deal worked out for Sierra Pacific land

By Jane Braxton Little, Sacramento Bee, Aug. 9, 2011

TRUCKEE – Conservationist groups and Sierra Pacific Industries have reached a first-of-its-kind agreement that protects wet meadows and wildlife habitat in the headwaters of the Little Truckee River.

A conservation easement on 7,085 acres near Jackson Meadows Reservoir in Sierra County will permanently limit development along Henness Pass Road while allowing recreation and selective logging in the mixed conifer forest.

The deal announced last month is the first conservation transaction negotiated with Sierra Pacific, an Anderson-based timber company and the state’s largest private land holder.

Truckee Donner Land Trust worked with the Trust for Public Land, a national conservation organization, to set the terms of the agreement and raise $3.25 million to purchase the development rights from Sierra Pacific, said Perry Norris, executive director of the land trust based in Truckee.

"It is a giant step forward for conservation that Sierra Pacific worked with a local and regional land trust on a conservation easement," he said.

For the timber company, which previously dropped plans to rezone the property for development, the deal is an opportunity for public education as well as new partnerships, said Mark Pawlicki, a Sierra Pacific spokesman.

"They saw a unique value for recreation without further development, and we can still harvest timber on our land," he said.

The agreement halts further development along Henness Pass Road, where the numerous existing homes include one with a helicopter pad.

"That development was like an arrow pointing into the heart of the Little Truckee River and the Middle Yuba River watersheds," said David Sutton, Trust for Public Land director for Northern California and Nevada.

Sutton and others have spent years working to consolidate management of lands in the region where historic ownership has created a checkerboard of private and public lands. In addition to protecting critical migration corridors in an area where wolverines have recently been seen, the easement is strategically located to help conserve key watersheds and river corridors.

"Without it, we could jeopardize the resource values of the entire region," Sutton said.

The Henness Road conservation easement makes a total of nearly 40,000 acres of land that has been protected in the 200,000-acre Sierra checkerboard area, which stretches from Lake Tahoe north to Lassen Volcanic National Park.

The Truckee Donner Land Trust bought the conservation easement with funding from the Wildlife Conservation Board and the Nature Conservancy. It allows public access for hiking, snowmobiling, hunting and bird watching, and gives the land trust the right to build public trails.

Selective and dispersed logging will continue to send timber to Sierra Pacific sawmills, enhancing local economies, Norris said.

The newly protected acreage was part of a Sierra Pacific plan in 2007 to rezone about 40,000 acres in eight Northern California counties from forests to designations that would eventually allow housing and commercial development. Company officials applied to remove the widely dispersed lands from timber production zoning, starting a 10-year countdown that would have ended their tax benefits but allowed rezoning to new designations that permit development.

A lawsuit filed by High Sierra Rural Alliance stalled the rezoning of the 7,085 acres in Sierra County, eventually launching the negotiations that resulted in the recent conservation agreement. In Lassen County, Sierra Pacific withdrew its zone change following settlement of a similar legal challenge over 5,500 acres of timberland.

The company is proceeding with rezoning on 6,339 acres in Tehama and Shasta counties but has withdrawn its requests in Butte, Plumas, Siskiyou and Trinity counties, Pawlicki said.

Sierra Pacific is open to other opportunities to protect the natural resources on its 1.9 million forested acres, he said.

"Lots of unique areas with different values exist on our land. We’re always willing to look at various opportunities," said Pawlicki.

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Redding-area business owners tell of struggles; legislators hear stories of misery

By David Benda, Redding Record Searchlight, October 8, 2011

A panel of state lawmakers and Shasta County elected officials got an earful from local businesses Friday.

They heard stories of the misery and frustrations businesses sometimes endure in California.

Everything from taxes, costly environmental regulations, workers’ compensation insurance and state wage laws was groused about inside the Shasta County Supervisor Chambers in downtown Redding.

The panel heard from two trucking firms, a restaurateur, gas station owner, contractor, technology firm, home health care business and Sierra Pacific Industries — the nation’s second largest timber producer.

"I think I have borrowed about $100,000 over the last four or five years to keep up with all the" new environmental and air regulations, Rick Jindra, owner of Jindra’s Auto Service 76 in Redding, told the panel.

The Assembly Republican Working Group on Economic Recovery and Job Creation, chaired by Dan Logue of Grass Valley and Shannon Grove of Bakersfield, hosted the town hall discussion.

Grove’s frustration with California’s "anti-business environment" reached a boiling point after listening to nearly two hours of testimonials.

"I’m ready to pick up a weapon," Grove said, after wondering aloud if she should make her comment because there were TV cameras in the room. An audible gasp could be heard after Grove’s statement.

Afterward, Grove, a small-business owner herself, explained she wasn’t advocating violence. It was a figure of speech, a call for businesses to unite and demand changes.

"I’m not angry. ... It was a metaphor," Grove said. "We just need to get in and fight" the copious taxes, fees and regulations that are hurting rural businesses up and down the state.

Businesses like Stidham Trucking in Yreka, whose president, Richard Stidham, told the panel that California’s taxes and fees make it hard to compete against trucking companies in Oregon, whose border is only 22 miles from Yreka.

Stidham has a fleet of 80 trucks and pays about $3,000 a year licensing the rigs in 47 states.

"Nineteen hundred dollars of that is from California base plates," Stidham said. He estimates it costs him about $100,000 a year just to do business in California.

Scott Putnam, CEO of Apex Technology Management Inc. in Redding, suggested that every piece of legislation should first be analyzed on how it will affect businesses before it becomes law.

"What does this do to businesses competitively?" Putnam said.

Logue and his group have held similar job summits in California in Grass Valley, San Diego and Susanville.

Legislation changing rules that govern telehealth medicine is one potential new law that has come out of the town hall meetings, Logue said.

Logue vowed to take back what he heard Friday and "go back and draft legislation that will help take the burden off the shoulders of businesses that create wealth in this state."

But Redding City Councilman Rick Bosetti, who will challenge Logue in the 2012 Republican primary in the newly configured 1st Assembly District, wondered why Logue waited so long to bring his panel to Shasta County.

"Why now? Why are we having this up here ... now all of a sudden in Jim Nielsen’s Assembly district and he’s going to be running in his district?" said Bosetti, who didn’t go to Friday’s town hall. "So I guess he gets some free airtime."

Bosetti said the only way to fix the business environment in California is in the Assembly, adding that both Republicans and Democrats have to be involved.

"It seems to me maybe we should have brought together four or five people from the other party to sit in on some of these meeting," Bosetti said.

In addition to Logue and Grove, Anderson Mayor Norma Comnick, Shasta Lake City Councilman Greg Watkins, Shasta County Supervisor Les Baugh and Redding City Councilman Dick Dickerson sat on Friday’s panel.

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SPI Showcases New Technology [Standard mill reopening]

by Sabrina Ambler, Mymotherlode.com, October 12, 2011

VIDEO http://www.mymotherlode.com/news/local/popupV.php?&ID=1369248

Standard, CA-- The reopening event and tour of the newly upgraded Sierra Pacific Industries (SPI) sawmill on Standard Road provided a lesson in efficiency. SPI employs 3,500 people with 3,000 working in California. The Sonora Mill employs 110 now and will be hiring 10 additional workers. Slightly more than half work the eight hour day shift and the remainder work through the night.

The new equipment (see photos) allows the mill to handle a greater range of log sizes from eight inches up to 48 inches. The finished products range from wood sold directly to Home Depot to some used in a window manufacturing plant that SPI owns. The wood is for shelves, decorative molding, doors, pencils, and woodchips for landscaping.

Mark Luster, Community Relations Manager says, "Pretty much any pencil that you buy is made from Incense Cedar harvested in California. Wood is good."

The lowest grade of sawdust and scraps are burned onsite in an eight megawatt power plant. The plant creates more power than the mill uses and also heats water that is used in the kilns to dry the wood for two days to two weeks depending of the size and type of wood.

The Sonora Mill was officially closed in August 2008 according to Vice President of Sales and Marketing, George Emmerson because of "lower productivity" when compared with other mills that are further from the forests where the lumber is harvested. In his speech at the opening ceremony he said, "It’s pretty rare rebuilding in this environment and economic times." Emmerson specifically praised Economic Development Director Larry Cope for his role in facilitating the process.

Representatives on behalf of the Tuolumne County Board of Supervisors, Tom Berryhill and Jeff Denham were there to commend the company and facility.

The event was attended by approximately 40 people who all received a lengthy tour of the retooled facility. All of the equipment is new and was designed and built onsite by Sierra Pacific Industries. "Employees who work here offer suggestions on how things can be made more efficient," according to Luster.

The mill has been gathering a six month supply of wood and continues to ramp up production. For video see the myNews video section

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Ted edges out Red again

Redding Record Searchlight, October 23, 2011

Media mogul Ted Turner failed to retain his top spot in the Land Report 100, an annual survey of the nation’s largest landowners.

The new No. 1 is Liberty Media Chairman John Malone, who began acquiring land in Colorado, New Mexico and Wyoming in the 1990s.

The north state’s Red Emmerson, co-founder of Sierra Pacific Industries in Anderson and California’s largest private landowner, finished third behind the two media giants. Emmerson dropped a spot in the this year’s list.

Forbes magazine wrote: "At his customary spot in the Top 5 at No. 3 is Archie ‘Red’ Emmerson, whose Sierra Pacific Industries boosted its holdings to almost 1.9 million acres this year."

Emmerson’s land holdings grew about 200,000 acres over the past year.

Forbes notes that the Emmerson family’s empire was established in 1949, when Emmerson and his father, Curly, leased a mill in California.

Land Report editor Eric O’Keefe told me last year that it’s no coincidence that many on Land Report’s survey are major timber operators.

"Timber is such a solid asset. As it sits on the stump, it actually becomes more valuable because older, mature trees are worth more than younger ones," O’Keefe said.

Sierra Pacific Industries today has mills in California and Washington and is the second largest timber producer in the country.

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Cap and trade worries escalate

Businesses still unclear on what rule’s approval means for them

by Michael Shaw, Sacramento Business Journal, October 28, 2011

Sacramento-area companies — from electricity generators to food processors — are fretting about possibly paying hundreds of thousands of dollars under California’s new "cap-and-trade" climate change rules.

After years of discussion and rule making, the California Air Resources Board last week approved the cap-and-trade program for the state’s largest electricity generators and industries. While the cleanest facilities aren’t likely to have initial costs under the rules, others will have to reduce emissions or pay for the privilege of emitting greenhouse gasses.

Business interests have said the changes amount to a $2 billion "tax" on California industries. But just who has to pay and how much isn’t clear, according to several local companies.

In Sacramento, at least 10 facilities fall under the new rules, from the publicly owned Sacramento Municipal Utility District and Sacramento County’s Kiefer Landfill, to private companies such as sawmill operator Sierra Pacific Industries in Lincoln.

Pacific Coast Producers , which operates a tomato canning plant in Woodland, uses natural gas-powered boilers and considers itself to be clean. But the company is worried about being forced to buy expensive credits or slow its production under cap and trade.

The facility will be competing against others in the same industry for "allowances" — which are essentially free-emissions credits. The most allowances go to the cleanest companies.

Pacific Coast vice president Mona Shulman said the company and the California League of Food Processors have been working to show the Air Resources Board how many variables go into a processing operation, meaning production — and the carbon dioxide emissions that go with it — aren’t easy to predict.

"Agriculture is very dependent on Mother Nature," Shulman said. "We can’t say with certainty we’re going to process this many tons in January."

As a midsized company, Pacific Coast Producers also is concerned about competing for carbon credits with the likes of large oil companies, while still remaining competitive in the food industry against other producers not subject to climate change laws. The company competes against others in the Midwest and overseas.

‘A market for carbon’

The Air Resources Board adopted the rules under the requirement that California return to 1990 levels of emissions by 2020. The rules set a cap on the amount of emissions a company can release while allowing those companies to trade — or purchase — another company’s unused credits. The free allowances will decrease over time, forcing industries and electricity producers to get more efficient or pay up.

At the outset, each industry sector must purchase 10 percent of its allowances, although that burden isn’t shared equally. Those that emit fewer greenhouse gasses than their competitors might not have to pay at all, while the worst polluters might have to pay double.

"This essentially creates a market for carbon," said Stanley Young, spokesman for the air board. The rules will drive improvements in energy efficiency by forcing companies to pay for it or purchase offsets, he said.

That has irked business advocates.

Brenda Coleman, a policy advocate at the California Chamber of Commerce , said the 10 percent requirement is a $2 billion tax on business during a bad economy, and the chamber lobbied hard to get it removed.

Electricity generators are treated differently under cap and trade. Utilities won’t have to purchase any of their allowances to start, but in the case of publicly owned utilities, they must use them in ways to benefit ratepayers.

Roseville Electric will receive enough allowances from the state to absorb an estimated $7.5 million in direct costs under the cap and trade system, said James Takehara, an analyst with the utility company. But if it purchases power from others who have to pay under the new program, those costs will be passed on to Roseville Electric. That could lead to millions of dollars more in indirect costs that won’t be offset by allowances, he said. Takehara cautioned that the numbers were from a preliminary analysis and could change.

Officials at SMUD and those in charge of Kiefer Landfill, where power is generated from waste, said they were still trying to analyze the impact and had no further comment.

Shopping for offsets

University of California Davis’ campus and its medical campus in Sacramento have both been identified as emitters of greenhouse gas and will have to purchase allowances under the program, said Sid England, an assistant vice chancellor at the university. He estimated the cost eventually will land between $600,000 and $2.4 million for each, depending on the going rate for allowances.

But UC Davis is hoping to convince the air board to allow it to invest the money for energy improvements on its campuses, rather than for more general offsets or programs.

While some industries will face additional costs, cap and trade will likely mean a boon for the green economy as it creates a market for offsets. Offsets reduce emissions in ways that aren’t directly related to those that purchase them.

Saskia Feast, vice president of sales and marketing at EOS Climate Inc. in San Francisco, said the company has doubled in size in the last six months. EOS sells offsets to companies voluntarily seeking to reduce their carbon footprints. Now, it’s poised to capture much of the market for companies forced to buy offsets under cap and trade.

The company reduces emissions by destroying atmosphere-harming refrigerants that have been banned but are still leaking from old air conditioners and other equipment.

While business interests have pressed for delays or softer implementation of rules, she noted that voters in November soundly rejected an effort to delay implementation of cap and trade.

"We have a challenge with climate change," Feast said. "We need to reduce emissions, and this is the most cost-effective way to do that."

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National Softwood Lumber Board Members Appointed

SPI News release

http://www.spi-ind.com/html/pdf_spi/NationalSoftwoodLumberBoardMembersAppointed.pdf

WASHINGTON, Nov. 1, 2011 – U.S. Department of Agriculture Secretary Tom Vilsack today appointed 19 representatives to serve on the first national Softwood Lumber Board. Members will serve two, three or four-year terms of office.

Members appointed to represent U.S. manufacturers are: Alden J. Robbins for the Northeast and Lake states region; Jack Jordan, Henry C. Scott, Michael Case, Robert Taylor, Fritz Mason and Aubra Anthony, Jr. for the South region; and Steven J. Zika, Marc A. Brinkmeyer, George R. Emmerson, Andrew W. Miller and Rick Re for the West region.

Members appointed to represent Canadian importers are: James Lopez and Charles Tardif for the East region; and Duncan Davies, Al Thorlakson, Hank Ketcham and H. David Gray for the West region. Francisco Figueroa will represent all other importing countries... [more]

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SierraPine cuts production in Rocklin

Roseville-based wood products manufacturer will cut 51 jobs

by Melanie Turner, Sacramento Business Journal, November 18, 2011

SierraPine, a manufacturer of fiberboard and particle board, is shutting one of two remaining production lines at its Rocklin plant because of low demand from the still-troubled housing market.

The company said other factors contributing to the move — and loss of 51 jobs — include increased competition and tighter state regulations.

Most of the employees being laid off made $18 an hour plus benefits. Others in production and maintenance earned around $22 an hour.

"These were good-paying jobs with benefits," SierraPine president Jim Skinner said.

Roseville-based SierraPine is set to shut down the production line Dec. 16, according to ... [more]

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Fishers returned to area in Sierra after 100 years

by Peter Fimrite, San Francisco Chronicle, December 9, 2011

The furry, dark brown creatures hesitated at first and then shot out of their plywood cages and bounded into the forest near the hamlet of Stirling City.

It was the latest triumph in a remarkable campaign to bring back a long-lost predator known as the Pacific fisher to the northern Sierra Nevada.

The four stubby-legged mammals were released by California Department of Fish and Game biologists as part of an innovative effort to reintroduce the weasel family species to a region they were driven out of 100 years ago.

Three female fishers and one male were exposed to the dreaded sunshine - they’re nocturnal - and gently prodded out of the open doors of their boxes onto Sierra Pacific Industries timberland in Butte County, bringing to 39 the total number of fishers moved into the area over the past three years. That’s one less than the 40 fishers the reintroduction plan calls for.

"This is a milestone for us," said Richard Callas, a senior environmental scientist for the Department of Fish and Game, which is working with the U.S. Fish and Wildlife Service and North Carolina State University researchers. "We will continue to monitor them for the next three or four years. We want to see how they are using the land, what habitats are important, how they are faring and how they migrate to other areas."

Unusual partnership

The fisher program is the result of a highly unusual partnership with Sierra Pacific, one of the country’s largest timber companies and the state’s largest private landowner.

The idea was first broached in 2004, when Sierra Pacific offered Fish and Game officials five large tracts of land where fishers historically occurred but no longer existed. The department evaluated each plot and determined that a 168,000-acre tract of timberland near Stirling City, near Paradise Ridge, was the most suitable place to reintroduce the species.

Pacific fishers are cantankerous animals with lush fur, long slender bodies and short legs. They are related to martens, wolverines and weasels. The females are half the size of the males, which weigh about 10 pounds. They mate in the spring, but otherwise have little to do with one another.

Porcupine dinner

Fishers prefer dense old-growth forests where they can hunt in the trees and den in hollowed-out areas up high. They hunt squirrels, chipmunks and mice, and often scavenge carcasses and also eat roots and plant material. They are one of the few animals that kill and eat porcupines, going for the throat and then turning the spiny beasts over to feed on the stomach.

Curiously, though, fishers don’t eat fish. It is believed they were named by early settlers who thought they looked like European polecats, also known in French as fiche or fitchet. The Dutch equivalent, visse, means "nasty."

The small, feisty mammals once ranged throughout the Sierra, Klamath, Cascade and Coastal ranges, but hunting, logging, development and habitat loss drastically reduced their numbers. In the early 20th century, fisher pelts, called North American sable, fetched hundreds of dollars.

Trapping banned

By 1946, when fur trapping of fishers was banned in California, the population had been reduced and was living in an area that was less than half of its former range. Fishers, for the most part, were wiped out in Oregon and Washington. Only two populations now exist in the state; on the border between the Klamath and coastal mountain ranges and the other in the southern Sierra, near Yosemite. Nobody knows exactly how many are left - they are notoriously difficult research subjects because they have wide ranges, leave few signs and assiduously avoid human contact - but recent estimates had them down to 850.

Fishers have been named as candidates for the endangered species list, but they have not been awarded the federal protection despite repeated warnings that they are perilously close to extinction. Fishers have been relocated to the Crater Lake area of Oregon and in Olympic National Park, in Washington, but this is the first time it has ever been done in California, Callas said.

Sierra Pacific has agreed to manage its property over the next 20 years in a way that would benefit fisher mating, denning and habitat. In exchange, the company can expect regulatory leniency, including an incidental take permit, if the animals are ever listed under the Endangered Species Act. An incidental take permit is required when habitat modifications could injure or harm a listed animal.

Partnerships needed

Callas said partnerships with private landowners are the only way long-term, wide-ranging wildlife conservation recovery programs like this one can be accomplished.

"It is important because these animals have been absent from a substantial portion of their historic range," he said. "It puts more eggs in the conservation basket if landowners are willing to restore habitat and commit to protecting a species in an area where they have been missing for most of a century."

The animals that were relocated were trapped in a variety of different places at times of year when no mating was going on and the females were not raising young. Fifteen fishers were released at the site during the winter of 2009 and 2010, 13 animals were released last year, and 11 more have been released this year. Callas said he expects to capture and release one more male fisher this winter.

Tracking devices on the relocated animals show that most have remained in the area where they were released, but a few of the males have wandered as far as 60 miles.

"We had an animal that left Stirling and moved all the way to the Central Valley," he said. "We believe it crossed Highway 99 to the Sacramento River and then turned around and went back on a parallel course almost to the place where he was released. It was amazing."

Wildlife biologists and a team of researchers from North Carolina State will continue tracking and studying the fishers in the hope that they will learn more about the elusive animal’s habits and one day help them repopulate their entire range.

Pacific fisher facts

-- About the size of a large house cat.

-- Member of the weasel family, which also includes minks, martens, otters and wolverines.

-- Lives up to 10 years.

-- Feeds on birds, rodents, reptiles, insects and vegetation. One of the few known predators of porcupines.

-- Range reduced dramatically in the 1800s and early 1900s through trapping, predator and pest control, logging, urbanization and farming.

Source: U.S. Fish and Wildlife Service

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On Battle Creek, the rules are working

by Dan Tomascheski, Redding Record Searchlight, December 12, 2011

- Dan Tomascheski is vice president of resources at Sierra Pacific Industries.

Positive environmental news is not easily found these days, but there’s a success story right in our backyard. It’s about the restoration of critical salmon habitat and the good-faith collaboration that is making it possible.

Private landowners, government agencies, members of the environmental community, and others have come together to restore some 50 miles of freshwater streams in the Battle Creek watershed. The watershed flows from the flanks of Lassen Peak to the Sacramento River in Shasta and Tehama counties. The streams in the greater Battle Creek watershed were blocked to salmon and steelhead access in the early 1900s when dams were constructed to provide for flood control, irrigation, and power generation.

It’s widely recognized that even though timber harvesting, ranching, farming, and the development of small communities occurred over the past century, the water quality in Battle Creek remains very high. State and federal fisheries managers have identified this watershed as one of the most promising for sustaining and enhancing the natural breeding cycles of threatened salmon and steelhead.

Coleman National Fish Hatchery was built to offset lost habitat on the Sacramento River when Shasta Dam was built. A collaborative study and restoration plan determined that much more could be done in tributaries such as the greater Battle Creek watershed. This restoration project envisions the removal of five diversion dams on Battle Creek and placing fish screens and ladders on three other dams. While the dams and focus of the restoration efforts are many miles downstream from the lands owned by Sierra Pacific Industries (SPI), fisheries experts have determined that it’s the high quality of the water flowing through the watershed that makes the chances for successful restoration extremely high. Periodic reports from the three federal agencies and two state agencies involved in the recovery efforts confirm these findings.

Our own research into water quality impacts in Battle Creek has been underway since we purchased the property 19 years ago. We do 24-hour-a-day continuous water quality monitoring at numerous stations along Battle Creek tributaries as well as other randomized water sampling on our lands.

Over 16 million data points have been collected in the past decade and mirror the results produced by the public agency assessments. Third-party hydrologists who are nationally recognized experts have audited and verified the accuracy of our data set and monitoring program.

In addition, and contrary to claims made by anti-timber harvesting activists, tests over a decade have been conducted to assess the impacts of using herbicides to suppress competing vegetation until our newly planted trees become established. Both our own scientists and state water agency staff have found no sign of herbicide in Battle Creek watercourses.

It’s important to note that assessments in the watershed continue to demonstrate high levels of water quality. On SPI’s forest land, a special interagency field inspection was recently conducted to measure the effects of SPI’s past and current timber harvest activities on water quality. They found no correlation between harvest activities and water quality that could be termed significant or detrimental.

The interagency review did make an important point with regard to forest roads. If these roads are built improperly or are poorly maintained, they can contribute sediment to watercourses. Roads built many decades ago and roads with high levels of public use are most likely to carry some sediment to streams. SPI has started to work collaboratively with Shasta and Tehama County road departments to identify and prioritize work to reduce potential impacts from public or older private roads.

The water quality results give us confidence that our forest management practices are complying with California’s stringent regulations and that they are effective in protecting water and wildlife. As one of many active members of the Battle Creek Conservancy, we will continue to work with that collaborative effort to improve the salmon and steelhead habitats in these watercourses.

The men and women on our staff have dedicated their professional lives to maintaining the quality of the resources in their care. We believe our commitment to science-based, collaborative efforts will continue to show positive results into the future.

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Study: Fish unharmed at Battle Creek

By Damon Arthur, Redding Record Searchlight, December 24, 2011

Poorly designed roads are leaching sediment into Battle Creek and its tributaries while the federal government is spending millions of dollars to restore the stream as a salmon fishery, according to a recent study on the area.

But the study, authored by several state and federal agencies, says there is not enough sediment washing into the creek to hurt fish.

The study refutes claims by Battle Creek Alliance officials who complained that clear-cut logging in the Battle Creek watershed was responsible for silting up the stream and harming fish.

"The basic assumption that clear cutting is causing turbidity has been refuted in this report," said Mark Pawlicki, a spokesman for Sierra Pacific Industries of Anderson.

The report was prepared after Marily Woodhouse and others from the Battle Creek Alliance took water samples from Battle Creek and its tributaries they said showed that SPI’s clear cutting of forest in the area contributed to silting in the streams.

"These concerns have garnered statewide attention with the recent publishing of several stories in the Sacramento Bee detailing the potential for clear cutting-related impacts to the success of the restoration in Battle Creek," the report says.

But the report, prepared and written by officials with several state agencies, found little soil was being washed into the creeks from clear cuts. However the report said some dirt roads and culverts in the area leached "a generally low or unobservable level" of sediment into the creeks.

"The highest magnitudes of sediment delivery from roads were associated with poor BMP (best management practices) implementation (e.g. poor road drainage) and/or poor location (e.g., road segments within 30-50 feet of a watercourse)," the report says.

"Poor BMP implementation was commonly associated with county-managed roads or SPI-managed roads with public access," the report says.

However, Marily Woodhouse, a spokeswoman for the Battle Creek Alliance, said those who worked on the report tested the water for only five days in September, the driest month of the year. They should have conducted water testing for at least a year, she said.

She also said the report takes into account only individual clear cuts, rather than the cumulative impacts of all the clear cutting that SPI does in the watershed.

Woodhouse said she also wanted an independent study, rather than one prepared and written by the same state officials who do the timber harvest plans on the clear cuts.

Mary Marshall, who is overseeing the Battle Creek fishery restoration for the U.S. Bureau of Reclamation, said their environmental reports done on the streams in the watershed about 10 years ago did not find problems with turbidity in the water.

Silting and sedimentation in the stream has not harmed fish living in the streams, she said.

Just the opposite has happened since 2010, she said.

Since work began on removing dams and adding fish ladders in Battle Creek, there have been new salmon spawning areas found in Battle Creek downstream from the logging areas, Marshall said.

The bureau has plans to remove five hydroelectric dams on Battle Creek and build fish ladders around three others, Marshall said. All of the dams belong to Pacific Gas & Electric Co. The first dam was removed last year, Marshall said.

The bureau has estimated it will spend $128 million to bring salmon and steelhead back to the Battle Creek watershed.

When SPI clear cuts an area, a 150-foot buffer is left between the logged area and streams with fish, said Cajun James, SPI’s research and monitoring manager. The soil is ripped, similar to plowing, which allows rainwater to flow into the soil, rather than causing rainwater erosion into nearby creeks, she said.

Loggers also leave forest slash on the ground to help collect rain and keep it from eroding the soil into nearby streams, she said.

Shasta County Public Works Director Pat Minturn said his department will have to further study the roads in the area to find out where roads, culverts and ditches may need to be modified to redirect runoff away from streams.

"The task force noted relatively long stretches of roads draining into watercourses on county-managed roads and SPI-managed roads that were accessible to the public," the report says.

The report recommends relocating or abandoning roads near streams.

Minturn estimated the county would spend about $20,000 a year over the next few years completing work on modifying roads in the area.

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Battle Creek review shows system works

Redding Record Searchlight, EDITORIAL, December 26, 2011

It’s no surprise that Sierra Pacific Industries would face tough scrutiny for its aggressive industrial forestry in the headwaters of Battle Creek, which is the subject of an expensive state and federal effort, finally launched in the fall of 2010 after a decade of study, to remove several old Pacific Gas and Electric Dams and open spawning grounds for wild salmon. A broad mosaic of clear-cuts and improved fish habitat just don’t seem like a natural fit.

But after complaints by a local environmental group, the Battle Creek Alliance, led the state to order a review this fall of logging in the watershed and its effect on water quality, the apparent verdict is in. And, go figure, thanks not least to tough state forestry rules designed to protect streams and the fish that live in them, it appears Battle Creek remains very healthy indeed — despite heavy recent logging by Sierra Pacific.

A Regional Water Quality Control Board-led survey this fall confirmed that the creek is running clear. To the extent there’s room for improvement in reducing erosion, the board found it not on Sierra Pacific’s logging sites but from roads — many of them owned and maintained by Shasta and Tehama counties and open to logging trucks, sure, but also hikers and hunters and local residents.

The Battle Creek Alliance dismisses the results, saying they didn’t measure water quality in the rainy winter months and didn’t account for the cumulative effects of Sierra Pacific’s timber cutting throughout the Lassen Peak foothills. Of course, it’s not as if this is the first look anyone’s taken at Battle Creek. Thanks to the restoration project, it is intensively monitored.

But we daresay this argument isn’t about the sediment loads in Battle Creek, so much as it’s about clear-cutting itself. These environmentalists love the forests and don’t like the Anderson-based company’s heavy-handed logging. Strictly on aesthetics, we wouldn’t argue with their dismay at clear-cutting.

But it’s also inarguable that California has by far the strictest logging rules in the nation, designed to protect wildlife and waterways. The burden of complying with those regulations has put many small timber companies out of business. Sierra Pacific is one of the few companies left with the scale and the expertise to cut wood while earning a profit.

Judging from the Battle Creek review, the system is working as designed. It’s allowing timber harvests — and we all use wood one way or another — while preserving water quality as state law mandates. What would it take for environmentalists to see they’ve won?

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2012

 

Logger and Forest Service official to meet today on logger’s claims against the government

by Jane Braxton Little, Sacramento Bee, January 9, 2012

GREENVILLE – Four years after the Moonlight fire roared through 65,000 acres of forest near this Plumas County town, the damage continues to sear the rural community.

A local logger is challenging the U.S. Forest Service about logs removed from the burned area.

How this dispute is resolved could affect the economic future of this timber-dependent town, and local leaders are waiting on the outcome of a meeting today between the logger and the agency’s regional forester to try to resolve the issue.

Randy Pew, owner of the logging company that bought the charred timber, has criticized the Forest Service for "grossly erroneous estimates" of the quantity and quality of the material he harvested to sell to a local sawmill.

The agency overestimated the volume of marketable logs by as much as 90 percent, Pew said.

In August, he filed a claim with the Forest Service for partial damages totaling $375,725. He plans to file another one claiming damages of an additional $1 million or more, he said.

"Their estimates were off by thousands of truckloads of logs," said Pew. He was recognized by the Forest Resources Association as national outstanding logger of 2001.

Forest Service officials in California have rejected Pew’s claim, citing loggers’ responsibility to make their own estimates of the material available before submitting bids to buy it.

An independent review, conducted by a forester with the Forest Service in Oregon, upheld the findings of agency officials in California. While his Dec. 16 report cites "likely" underestimates of the incense cedar harvested, Steven R. Nelson found no mistakes made by Plumas National Forest officials.

That leaves Pew facing the threat of bankruptcy.

If the Forest Service refuses to acknowledge its estimate errors and share the losses over harvesting the timber burned in the Moonlight fire, Pew Forest Products will be out of business, he said.

"I’m at the end of my rope," said Pew, who has been buying Forest Service timber for 34 years.

Pew Forest Products is the largest private employer in Indian Valley and plays a significant role in Plumas County’s timber-based economy.

If Pew’s company goes down, it will take 30 local jobs with it. The ripple effect would hurt other businesses and local schools, already threatened with closures due to declining enrollment.

"I want to save my home and my life, but I’m also worried about all these people and my community," Pew said.

Plumas Forest officials are sympathetic with Pew’s plight and its potential for far-reaching effects, said Laurence Crabtree, deputy forest supervisor.

"This company has treated thousands of acres of ground for this forest and the public. We need companies like this for fuels management and timber harvesting," Crabtree said.

Although they disagree on the issues, Crabtree said he respects Pew’s campaign to keep his business alive: "He’s fighting for his company and his way of life. He and his family are hardworking people who feel strongly about their community and their profession."

Pew was the only bidder on a 7 million board-foot sale of trees along 21 miles of road within the Moonlight burn. The contract allowed him to log additional areas and Pew eventually harvested around 37 million board feet – enough wood for building 3,700 single-family houses.

The terms of the contract emphasized the responsibility of the bidder to make his own evaluation of the quantity and condition of timber in the additional areas, Crabtree said. The agency expects bidders to "go out there and look for themselves" rather than to depend on Forest Service estimates, he said.

Pew said years of experience with agency estimates of timber volume have given him confidence in them, so he did not make his own estimates.

"We trusted them. I had no reason to believe the Forest Service volumes would be off," he said.

But the trees he logged by helicopter last winter had deteriorated in the three years since the fire. The poor quality of the cedar forced him to cover twice the ground and devote four months to a logging operation he expected to take six weeks, he said.

Pew estimated that he spent around $10 million for work that should have cost half that amount.

While the Forest Services uses scientific tables to estimate deterioration by species, it has no table for cedar, the species with the most economic value, Crabtree said.

Pew said the agency’s estimates for the value of the cedar he logged were off by as much as 90 percent.

"Cedar was my hope to survive, and it just killed me," he said.

Crabtree said the agency’s depreciation evaluation process was appropriate.

Left in a standoff with the Forest Service, Pew has taken his case to politicians. The Plumas County Board of Supervisors has sent letters supporting him to Tom Tidwell, chief of the Forest Service, as well as the county’s federal representatives.

He is scheduled to meet today with Regional Forester Randy Moore.

Crabtree declined to speculate on what might result from the meeting between Moore and Pew. "Let’s just let Randy and Randy talk," he said.

Meanwhile, two jury trials later this year will determine who should assume financial responsibility for the fire.

About 2,500 firefighters were involved in fighting the Moonlight fire, which destroyed two structures and five outbuildings. Both the Forest Service and Cal Fire are seeking damages for the costs of suppressing the blaze, estimated at $31.5 million.

Defendants in the separate cases include Sierra Pacific industries, W.M. Beatty and Associates; Howell’s Forest Harvesting; and several individuals.

A federal jury trial is scheduled for April 16 in the Eastern District of U.S. District Court in Sacramento.

The Cal Fire case is scheduled for an Aug. 14 jury trial in Quincy.

###

Logger, Forest Service official discuss timber dispute

by Jane Braxton Little, Sacramento Bee, January 11, 2012

An hourlong meeting Monday between Randy Pew, a Plumas County logger, and Randy Moore, regional forester for the U.S. Forest Service, resulted in no specific solutions.

Both, however, said the conference was productive toward resolving their dispute over logs Pew removed from federal lands burned in the 2007 Moonlight fire.

"I have some hope. At least they were willing to listen," Pew said.

He has charged the Forest Service with "grossly erroneous estimates" of the quantity and quality of the material he harvested from the Moonlight blaze over the last three years.

The estimates, "off by thousands of truckloads of logs," forced him to spend more time covering a much greater area to harvest enough merchantable timber to meet his sales commitment to a local sawmill, Pew said.

He has filed a $375,725 claim with the Forest Service for partial damages and plans to file another one claiming an additional $1 million in damages.

The federal agency has denied his claim. Responsibility for evaluating the quantity and condition of timber in a Forest Service sale rests with the logger, said Laurence Crabtree, deputy supervisor of the Plumas National Forest.

That leaves Pew facing bankruptcy, he said. If his company goes down, it will take 30 local jobs with it.

Moore is concerned about the effect of the dispute on both Pew and the Indian Valley community, said John Heil, a regional spokesman for the Forest Service in Vallejo.

The agency is looking at further opportunities for Pew to work on national forest land, Heil said.

"We are taking his concerns very seriously," he said.

Pew said his ultimate goal is to survive this crisis, hire back his crew of local loggers and continue the business he has operated for 34 years and now shares with his son, Jared.

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Sacramento federal judge to decide whether to seal Moonlight fire documents

By Denny Walsh, Sacramento Bee, January 19, 2012

Map

http://www.sacbee.com/2012/01/19/4198229_a4198338/sacramento-federal-judge-to-decide.html

A Sacramento federal judge is scheduled to hear arguments today on a Bee challenge to sealing documents in a legal slugfest between the government and Sierra Pacific Industries over the origin of a monster wildfire in 2007 and who should pay for the devastation it wrought.

Sierra Pacific, one of the nation’s biggest timber products companies and the largest private landowner in North America, has asked U.S. District Judge Kimberly J. Mueller to seal evidence that the company claims tends to show a coverup of misconduct and fraud on the part of U.S. Forest Service employees in connection with the agency’s investigation of the Moonlight fire.

Why does the company want the material sealed? It told the judge that the United States does not want the public to have access to its contents and, while Sierra Pacific may not agree that such information should be withheld, it is willing to accommodate the government.

Sierra Pacific is suing the government for refusing to allow Forest Service employees to testify in Plumas Superior Court suits seeking compensation for damages caused by the Moonlight fire. The lumber giant wants summary judgment from Mueller, and to support that quest, it submitted evidence – including the documents that would be sealed.

The contested evidence consists of excerpts of sworn testimony from depositions taken as part of a separate suit pending in federal court, also before Mueller, in which the United States claims it is entitled to more than $700 million in Moonlight fire damages from Sierra Pacific and private landowners.

The government claims the fire, which scorched 65,000 acres in Plumas and Lassen counties, was sparked when a bulldozer belonging to a Sierra Pacific contractor struck a rock. That theory is hotly disputed by Sierra Pacific and the contractor.

The blaze burned furiously for two weeks, filling the Sacramento Valley with haze and sending a plume of smoke as far east as Salt Lake City. It reduced the terrain to a moonscape and destroyed two structures and five outbuildings.

Six lawsuits in Plumas County – one brought by the state and the others by private landowners – plus the United States’ suit in federal court, seek more than $1 billion in damages and interest from Sierra Pacific and others.

In opposing the sealing of evidence, Bee attorney Karl Olson cites federal appellate law, which he says makes clear there is a "strong presumption of access to judicial records," especially those related to requests for final adjudication such as motions for summary judgment.

"A major fire consuming tens of thousands of acres is obviously a ‘significant public event’ and the public has every right to know what the parties’ allegations, defenses and evidence are in this case," Olson wrote in a brief filed last week.

"Neither Sierra Pacific nor the U.S. Department of Agriculture (the Forest Service’s parent agency) has advanced any reason whatsoever why the papers in this case should be sealed – there are no trade secrets or national security interests at stake – and there are none.

"At most," Olson wrote, "it may be that one of the parties wants some of the papers sealed because that might lead to ‘a litigant’s embarrassment, incrimination or exposure to further litigation.’ " But, he declared, that’s not enough, and cited a 2006 opinion of the 9th U.S. Circuit Court of Appeals, the highest court in the West with jurisdiction over California and eight other states.

In order to overcome the public’s First Amendment right of access, it has to be demonstrated that sealing "serves a compelling interest," that the interest would probably be harmed in the absence of sealing, and that there are no alternatives, according to the Olson brief.

It says there is no countervailing interest in this instance, "much less the required compelling interest."

"The public has every right to know whether the government is at fault or, on the other hand, whether a large corporation is trying to shift blame for causing a major fire," Olson contends. The answer, he argues, "has a serious impact on millions of Californians."

Sierra Pacific does not oppose The Bee’s stance, pointing out in its response that it did not want the documents sealed in the first place. The company suggests that Mueller privately review the documents and decide whether the public has a constitutional and common law right to the information.

Assistant U.S. Attorney Todd Pickles filed a convoluted response implying the United States is in favor of the people’s right to know. But, in an effort to be helpful, he urges a plan that would ensure the people would never know what the documents say.

Pickles argues the documents are irrelevant to the issue raised in Sierra Pacific’s summary judgment motion, "so they should not be filed under seal or on the public record. Accordingly – the constitutional issues raised by the Sacramento Bee need not be considered at this time."

As to his argument that Forest Service employees have a legal right to privacy when it comes to what Pickles alleges are personnel matters, Olson’s brief counters, "No party or third party should have any expectation of privacy in this dispute."

The brief quotes the California Supreme Court as observing in a 1999 decision that parties in civil cases are "entitled to a fair trial, not a private one."

###

Sacramento judge makes release of Moonlight fire documents risky

by Denny Walsh, Sacramento Bee, January 26, 2012

A Sacramento federal judge has avoided making public a set of documents sought by The Bee that were offered to support a critical motion in a bitter legal battle over how a 2007 wildfire started and who should pay for damages it caused.

U.S. District Judge Kimberly J. Mueller said the party offering the documents, timber giant Sierra Pacific Industries, is free to file them publicly within three days of Tuesday, the day she signed a 10-page order filed Wednesday.

Mueller noted a prior ruling that the documents are immaterial to the matter at issue in Sierra Pacific’s lawsuit against the U.S. Department of Agriculture.

"In light of (the prior) ruling, SPI’s attempt to file the documents at all appears to be improper," the judge stated.

She added ominously, "If SPI files the exhibits, and the court later determines that the filing was improper, the court then will issue an order directing SPI to show cause why it should not be sanctioned."

So, if the documents are filed publicly, attorneys at the Sacramento firm Downey Brand LLP who represent Sierra Pacific are looking down the barrel of possible monetary penalties.

The documents purportedly bear on Sierra Pacific’s allegations that U.S. Forest Service personnel are guilty of fraud and misconduct in connection with the detection and investigation of the mammoth Moonlight fire that ravaged 65,000 acres of national forest and private property in Plumas and Lassen counties.

Sierra Pacific’s attorneys did not oppose The Bee’s opposition to a sealing order, explaining it was only because the government wants the material "made inaccessible to members of the public" that they asked for such an order.

The government’s response to The Bee’s opposition makes clear that is an accurate characterization of its position.

Mueller says that case law seems to be on The Bee’s side with respect to judicial records generally. But, she says, the documents in question "have not yet been filed."

Under the court’s rules, she says, documents submitted with a request to seal are lodged with the judge but not made part of the record until a ruling on the request. If the request is denied, they are returned to the submitting party.

As part of Wednesday’s order, Mueller denied Sierra Pacific’s sealing request and will return the documents to the company’s lawyers, thus relieving her of making them public.

The court’s rules notwithstanding, the documents have been filed and are part of the court’s docket, according to Sierra Pacific’s papers. Mueller’s order does not address that circumstance.

The seven exhibits at issue – excerpts from sworn deposition testimony given in a U.S. lawsuit against Sierra Pacific and others that seeks damages caused by the Moonlight fire – are among papers attached to a declaration of Downey Brand attorney Elizabeth Stallard in support of Sierra Pacific’s motion for summary judgment in its suit against the government.

According to the Stallard declaration, which was filed Jan. 4, copies of the seven exhibits are "attached hereto, and filed under seal herewith."

Additionally, the request to seal documents, also filed Jan. 4 and signed by Downey Brand attorney Janlynn Fleener, advises the judge that the seven exhibits have been served "on all other parties in this matter."

Court papers are not to be served until they are filed.

###

Sacramento Bee challenges judge in Moonlight lawsuits

by Alicia Knadler, Plumas County News, February 1, 2012

The Sacramento Bee lost its effort to keep legal documents from being sealed in lawsuits between the federal government and Sierra Pacific Industries (SPI), yet they won in a way, as well.

The legal maneuverings and mountains of paperwork between Sacramento and Plumas County are similar to a Rube Goldberg-style contraption.

"Many things have been sealed in these two lawsuits," Sacramento Bee Legal Affairs Reporter Denny Walsh said of the federal cases that will be heard in the Sacramento U.S. Court. "And I finally got tired of it."

In a Jan. 19 article, he described the documents as a potential "coverup of misconduct and fraud on the part of U.S. Forest Service employees in connection with the agency’s investigation of the Moonlight fire."

And even though the documents, including sworn testimonies, might show a coverup, SPI is willing to accommodate the government by allowing them to be sealed, kept from the public.

Sacramento Bee attorney Karl Olson filed a brief against the sealing, which was unopposed by Sierra Pacific attorneys, Walsh reported in a second article Jan. 26.

Misconduct on the part of Sierra Pacific was also mentioned in Walsh’s report, when he quoted U.S. District Judge Kimberly L.J. Mueller.

She said Sierra Pacific was free to file those documents publicly, yet even their attempt to do so seems improper, because they have already been ruled immaterial to their suit against the Forest Service.

Doing so will also open them up to possible sanctions, or monetary penalties, according to Walsh.

"Sierra Pacific’s attorneys did not oppose The Bee’s opposition to a sealing order, explaining it was only because the government wants the material ‘made inaccessible to members of the public’ that they asked for such an order," Walsh reported. "The government’s response to The Bee’s opposition makes clear that is an accurate characterization of its position."

Maneuverings aside, the documents were already filed as sealed and are part of the court docket, according to Walsh, something the judge did not address.

Damages and interest claimed in the lawsuits, both state and federal, total more than $1 billion, he reported.

Jury trials in both courts are scheduled to begin in April 2012.

Walsh’s complete reports are available online by entering the word Moonlight as a search term at sacbee.com.

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Forest industries of Amador, Calaveras getting $16 million boost

By Dana M. Nichols, [Stockton CA] Record.net, February 3, 2012

SAN ANDREAS - Economically depressed Amador and Calaveras counties are about to receive millions of dollars in forest-restoration funding from the federal government.

U.S. Secretary of Agriculture Tom Vilsack announced Thursday a 10-year commitment of up to $16 million to revive the health of forest-related industries on national forest lands in the two counties.

The Cornerstone Project in the headwaters of the Mokelumne, Calaveras, Stanislaus and Cosumnes rivers will receive $730,000 this year.

Funding means that federal officials have recognized that the region is at the forefront of a nationwide movement to restore forests, said Calaveras County Supervisor Steve Wilensky.

"This is a huge game changer in our forest. It will increase the scope and scale of work. It will allow us to put our workforce back to work in the forest," Wilensky said.

Over the past seven years, Wilensky has collaborated with loggers, job-training agencies, environmentalists, property owners and federal and state agencies to overcome a variety of problems, including overgrown, fire-prone forests and the widespread joblessness caused by the closure of most lumber mills in the Mother Lode.

The Cornerstone Project is one of 10 new forest restoration projects across the United States that Vilsack announced Thursday. Only one other - in the Lassen National Forest east of Redding - was in California.

Catastrophic wildfire has been a particular concern of forest managers in recent years. Decades of fire suppression and plantation-style tree planting has led to dense forests with lots of undergrowth that are vulnerable to high-intensity fires.

In contrast, before the Gold Rush, forests in the Sierra Nevada generally had frequent, low-intensity fires that resulted in a landscape with fewer but much larger trees and open meadows below the trees.

In addition to the new funding for the federal Collaborative Forest Landscape Restoration Program, officials with the Stanislaus and Eldorado national forests were already planning to spend about $21 million on forest thinning and restoration over the next decade.

Combined, the two funding sources mean that more than 38,000 acres of forest will receive thinning or other treatment. In addition, the project will open the forest to new commercial enterprises, including increased harvesting of small-diameter trees for milling, and businesses that create products such as animal bedding, fence posts, fuel pellets, and compost.

"There will be a product yard in Wilseyville that will be handling green waste," Wilensky said.

Over the past seven years, several groups laid the groundwork to make it possible for such substantial federal funding.

The Calaveras Healthy Impact Product Solutions Project began training forestry workers and securing fire-safety grants to do thinning work. Later, the Amador Calaveras Consensus Group brought loggers, environmentalists, land owners and others together to resolve differences that could have blocked progress.

As a result, recently trained crews are already sending small-diameter logs to the recently-retooled Sierra Pacific Industries mill near Sonora, and sending chipped fuel to a biomass electrical generation plant near Ione.

Wilensky said that the National Forest lands are only the start. Hundreds of thousands of acres are also managed by the U.S. Bureau of Land Management or private owners. He said the initiative is important not just to the health of forests, but also to the communities that will have new economic opportunities.

"All of these plans that we have been making had to be supported by opening new opportunities on federal lands around here. And this is the engine that will drive that. We are not done yet."

Contact reporter Dana M. Nichols at (209) 607-1361 or dnichols@recordnet.com. Visit his blog at recordnet.com/calaverasblog.

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Hitting the mark: Logging conference back in Anderson after 2-year break

By George L. Winship, Anderson Vallet Post, February 7, 2012

Returning to the Shasta District Fair grounds in Anderson after a two-year hiatus in Redding, the 63rd annual Sierra-Cascade Logging Conference and Equipment Show (Feb. 8-11) is getting back to its roots in 2012, said conference President Mark Lathrop.

Uncertainty regarding the City of Redding’s lease of its convention center to a private operator caused show officials to reconsider the location earlier this year, Lathrop said.

When not planning the largest forest products and construction equipment exposition in the western United States, Lathrop serves as Community Relations Manager for Anderson-based Sierra Pacific Industries.

Plans for this year’s event got underway almost immediately after last year’s conference ended, Lathrop said.

"The board members and their committees have been working out the details to make this conference the best ever," Lathrop said. "We plan to have all of the same events that have made the logging conference wildly popular with the public each year. Plus, we are adding a new event, the log-loading skills competition, which promises to add even more excitement."

Some of California’s top college logging sports teams — including Humboldt State University, the University of California at Berkeley, Cal Poly-San Luis Obispo, Shasta College and Modesto Community College — will compete in ax throwing, underhand chopping, choker setting, hand saw (single buck, double buck and Jack & Jill) as well as power saw races for the "Bull of the Woods" title and a perpetual trophy, Lathrop said.

In addition, logging sports professionals and former college participants will perform and provide demonstrations that instruct and inspire student competitors, he added.

While many of the competitions hearken to an earlier era when teams of beefy woodsmen used razor-sharp steel axes and two-man buck saws to chop down forest giants and cut them into logs ready for transport to nearby sawmills, the fairgrounds will also feature displays of the newest mechanized cutting, pruning, bucking and loading equipment that perform all those functions in mere seconds, Lathrop said.

"We hold an annual conference to enable manufacturers and dealers to display and demonstrate equipment, tools and supplies relating to forest management and construction, including conservation groups, recreational groups and other industries of common interest," the conference website states.

Another important function of the annual trade show is to promote better understanding of the forest products industry by the general public, Lathrop explained.

"We want to encourage and aid the training and proficiency of young people interested in logging, forestry and related fields even as we continue to promote the art, practice and standards of safe logging and responsible forestry in our industry," he said.

Something new this year: NASCAR fans will have a chance to own actual race helmets autographed by Jeff Gordon, Denny Hamlin, Greg Biffle, Matt Kenseth, Kyle Busch, Kurt Busch, Jeff Burton or Clint Bowyer, Lathrop wrote in a Facebook post.

The helmets will be offered to the highest bidders during the Friday evening Lumberjack Banquet and Education Auction, held this year at the Gaia Shasta Hotel, 4125 Riverside Drive, in Anderson.

Admission to the banquet is by ticket only and costs $50 per person.

Also new this year is a Saturday breakfast honoring all of the conference’s past presidents who can attend, he noted.

"We started looking at all of the folks who are in the industry and they are the ones who have gotten us through several years of a tough economy. They are tough individuals and we want to honor them," Lathrop said.

A golf tournament at Gold Hills Country Club in Redding at 9 a.m. and a noon media competition get things underway Wednesday, Feb. 8, but the Conference officially begins with the traditional Kickoff Breakfast at 7:30 a.m. Thursday, Feb. 9, in Fusaro Hall at the fairgrounds in Anderson.

Third generation Etna rancher Jeff Fowle, a past-President of the Ag Chat Foundation, will be the featured speaker at the Kickoff Breakfast.

Tickets to the event are $25 per person.

Fowle will also present a free seminar at 9 a.m. Friday, Feb. 10, titled "Social Media: Make It Work for You and Your Industry." Fowle began using social media three years ago and currently has 40,000 active followers on Twitter. His blog receives more than 4,000 hits each week.

With a clear desire to help others and advocate for agriculture, Fowle teaches others to "discover their own voice and become influencers" using social networks to promote issues as well as business, Lathrop said.

Show vendors will be featured guests during the President’s Reception, a 6 p.m. dinner set for Thursday, Feb. 9, in Fusaro Hall. Tickets for that event are $30 each.

A Ladies Day Brunch will be offered at 10:30 a.m. Friday, Feb. 10, in the Community Room at Anderson City Hall.

Tickets are $10, which includes a tri-tip and chicken barbecue luncheon catered by Anderson Rotary Club. Entertainment will be provided by rising Country music singer Summer Schappell, accompanied by Lou White.

Except those noted above, all other events, exhibits and competitions at the fairgrounds are admission-free and the public is encouraged to attend, Lathrop said.

Returning this year is the ever-popular wildlife show put on by Wild Things, founded in 1987 to house and care for displaced wildlife while educating the public regarding the importance of conservation and an appreciation for natural wonders, the conference website states.

A wide variety of animals will be displayed in the Pepsi Pavilion at 3:15 p.m. Friday, Feb. 10, and two shows on Saturday at 11 a.m. and 2 p.m.

If inclement weather, however, the animal shows will move to the Joe Spear Judging Arena that offers covered seating on metal bleachers.

"On behalf of the board of directors, committee chairs and committee members, we invite you to the 63rd annual Sierra-Cascade Logging Conference. We are looking forward to seeing everyone again this year," Lathrop said.

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Cash in on carbon: Timber firms can harvest profits from greenhouse gas initiative

By David Benda, Redding Record Searchlight, February 10, 2012

ANDERSON — California’s call to reduce greenhouse gas emissions by 2020 means new revenue for timber landowners willing to play the carbon-offset market.

Steven Brink of the California Forestry Association said the Global Warming Solutions Act, or Assembly Bill 32, is an opportunity for the industry.

"The cap-and-trade element of the initiative is where the opportunity is for forest landowners," Brink said during a panel discussion on forest carbon Friday inside Fusaro Hall at the Shasta District Fair grounds.

The two-hour presentation, attended by some 40 people, was part of the Sierra Cascade Logging Conference.

Under AB 32, the state has identified more than 400 plants — oil refineries and cement manufacturers — that need to reduce their emissions. One way they can do it is by purchasing carbon allowances.

The forestry industry through land management will be able to sell carbon offsets. The landowners can register sequestered carbon from the management of their lands with the state and then sell the credits on the open market, Brink said.

Ed Murphy, resource information system manager for Sierra Pacific Industries in Anderson, expects the state carbon registry to open this fall.

"If they make it, we will have projects to register at that point," Murphy said after Friday’s panel discussion.

Murphy couldn’t say how much SPI, California’s largest timber operator and private property owner, would make from the sale of credits.

"We don’t have any idea because we don’t know at this point what the market will bear," said Murphy, who participated on Friday’s panel.

But both Murphy and Brink said the way the rules are written, trading carbon credits will probably be a market dominated by large landowners.

In exchange for selling credits, the owner has to keep his land wooded for the next 100 years.

That’s a requirement that makes a timber company like Collins Pine of Chester wary of making a market in carbon credits.

"It’s always kind of difficult when you’re talking about making a commitment for 100 years," Terry Collins of Collins Pine told panel moderator William Keye of the California Licensed Forester’s Association. "There is a lot of uncertainty that makes us hesitant to do that."

Collins Pine owns and manages 160,000 acres of forest in California and Oregon.

Sierra Pacific Industries, by contrast, owns some 1.7 million acres in California.

Most small landowners can’t afford the costs of registering and participating in the carbon credit program and/or locking up large swaths of land for the next century, Brink said.

Murphy also is frustrated that biomass plants, which burn wood scraps to produce energy, can’t participate in the carbon trade game. Both Sierra Pacific Industries and Collins Pine operate biomass plants.

Murphy explained the state believes biomass operators already are generously compensated for the energy contracts they cut with the utilities. However, anybody who has negotiated a contract with Pacific Gas & Electric Co. knows that is not the case, Murphy said.

"Why play the backdoor game? Pay the biomass plants for the economy of offsets," Murphy said.

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Timber industry puts focus on education

By Tim Hearden, Capital Press’ February 13, 2012

ANDERSON, Calif. - Talk to just about anyone in the forest products industry long enough, and it’s a good bet the subject will land on the importance of education.

Timber giant Sierra Pacific Industries helps put on an annual education day for elementary school students in the woods each spring, and it sends teams to fairs and festivals to teach kids about the many uses of wood.

Reminders of the efforts to instruct young people - and recruiting the next generation of forest professionals - could be seen everywhere at the Sierra Cascade Logging Conference here Feb. 7-11.

About 800 students - mostly fourth-graders - toured the conference’s heavy equipment exposition Feb. 9. In addition, students from a community college and three universities took part in logging sports competitions, and several local colleges had booths at the conference trade show.

"That’s the biggest thing that we’re about is educating the public and the world about what we do as an industry," said conference chairman Mark Lathrop, community relations manager at SPI. "We are proud of what we do."

At one of the stations during the education day, John Livingston, a heavy equipment instructor at Shasta College in Redding, Calif., taught the students how an excavator works.

"This is a great experience for these kids," Livingston said. "They learn a lot about equipment and the whole forestry industry."

Teachers said the lessons were well organized and that the kids learned a great deal.

"I learned that wood is in a lot of things - that a lot of things come from trees," said Max Fowler, a fourth-grader at St. Joseph School in Redding.

His classmate, fourth-grader Connor Hobbs, said he learned about planting trees.

"You’re not supposed to plant your tree too deep," he said. "It won’t grow."

At the logging sports competitions, teams from Shasta College, California State University-Humboldt, California Polytechnic State University-San Luis Obispo and University of California-Berkeley tested their skills with saws and axes in a covered arena at the Shasta District Fair grounds.

Events included the underhand chop, in which competitors stand on logs and cut them in two with an ax; hand saw divisions with single competitors or teams of two; and an ax throw. Wesley Palmer of Los Molinos, Calif., who was Shasta College’s coach and captain, said the team goes to about three meets a year.

He said the exhibitions show onlookers some of the history of logging.

"I think it definitely shows some of the ways they used to do things," he said. "A lot of the activities ... are stuff they used to do in the logging camps back in the old days."

In the trade show, a row of college recruiters included Jim Ostrowski, a forester and instructor at College of the Siskiyous in Weed, Calif.

"There’s a lot of people who don’t know much about the forest products industry, but we all use the products," he said of the conference’s activities. "It’s great to be able to educate people about where forest products come from and that it’s a renewable resource."

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800 students learn logging’s rich heritage

By Maghan Hunt, Anderson Valley Post, February 14, 2012

Over 800 students from Shasta and Tehama counties participated in Education Day on Thursday before the 63rd annual Sierra-Cascade Logging Conference and Machinery Expo kicked off that afternoon.

Anderson High School has participated since 1953 in the logging conference. According to Anderson teacher Carol Perea, the agriculture and ROP students have always been active in the logging conference.

"Sierra Pacific Industries and Anderson High school have had a long standing educational/business relationship," explained Perea. "AUHS students assist in monitoring the 4th graders, to keep the visit safe for everyone, and also serve as speakers with Tommy 2x4 and his handlers.

The high school students also assist with putting all the materials in the back packs given to the 4th graders and packaging the seedlings each class is given.

"It is important for everyone, especially children, to understand and respect the timber industry and our natural resources. It is that very industry that created many towns in the whole of America. Timber harvesting was really the first form of agriculture in the U.S.," stated Perea in an email.

Students also learn the importance and breadth of the industry through the different careers — biologists, registered foresters, hydrologists, soil experts and botanists, truck drivers and heavy equipment operators.

There are so many people who have little to no understanding of how one species depends upon another, and how carefully managed many forests are to keep them healthy," Perea said. "The more people who understand the principles of forest ecology, the more wise and prepared they are for their future, whether it is finding a career, or simply co-habitating our planet and taking care of our natural resources."

The Wild Things show also emphasized the importance of a healthy forest and its benefit to wildlife.

"We come to the logging conference every year," said Gabe Kerschner, owner of Wild Things, Inc. "We’re talking about healthy forests and the good work the industry does helping wildlife and preserving forests. We actually have more acreage now than we did 100 years ago."

Kerschner showed off Precious a Northern Pacific rattlesnake, O.P., a Virginia opossum, and Shasta, a Golden Eagle, to students.

With the help of his niece Kyra, visiting from Australia, Kerschner explained the dangers as well as the importance of each animal and how it came to be in his care.

Precious, the rattlesnake, was hit by a weed whacker and almost had her tail taken off completely. According to Kerschner, the gentleman noticed he hit Precious, scooped her up into a box and brought her to him.

O.P. was one of seven baby opossums who was left orphaned after his mother was hit and killed by a car.

The driver noticed the babies and brought them to Kerschner’s wild life rescue.

Shasta, the golden eagle, is from Shasta County. He has a power line injury which doesn’t allow him to catch enough food to live.

According to Kerschner, he and Shasta have been together for about 10 years.

After the wildlife show, Stihl Series competitors Tom Martin of Las Vegas and David Green of Bend, Ore., demonstrated different logging techniques used in the early days, like ax cutting, bucksaw cutting, choke setting and ax throwing.

Martin and Green were just two of six professionals demonstrating each event for students.

According to Martin, he and Jim Taylor began coming to the Sierra-Cascade logging conference 10 years ago, where they put on the collegiate competition between different colleges with competitive logging teams.

Martin then brought down Green, one of his students, as an assistant. Together, the duo has been running the college competition as well as entertaining students for the past few years.

Both Green and Martin are professional logging competitors in the Stihl Timbersports Series.

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Shasta County releases third environmental report on proposed power plant

New report calls facility ‘carbon neutral’

By Damon Arthur, Redding Record Searchlight, February 18, 2012

Shasta County officials have issued a third draft of an environmental impact report for a proposed cogeneration plant in Anderson, once again changing their stance on greenhouse gases.

The report says the proposed Sierra Pacific Industries’ $40 million plant would not have a significant environmental impact, even though it will release about 330,000 tons of greenhouse gases annually from burning wood to generate electricity.

The first version of the report, released in August 2010, concluded the plant’s greenhouse gases would have a significant impact on the environment. The second report, released in September 2011, reversed the earlier opinion and concluded the 330,000 tons of gases would not have a significant impact on the environment.

The most recent report, released this week, also says the amount of gas released would not have a significant environmental impact. But the report uses a different rationale to reach that conclusion.

"They’ve changed their approach radically once more," said Kevin Bundy, an attorney for Center for Biodiversity in San Francisco.

The county has made the report available to the public and is taking public comment on the revised report until April 2.

The plant would generate about 31 megawatts of electricity by burning mainly wood waste left over from processing lumber at Sierra Pacific’s Anderson mill. A megawatt provides enough power for 250 to 300 homes.

The report says releasing more than 25,000 tons of greenhouse gas, mainly carbon dioxide, annually would be considered a significant impact on the environment.

But the plant is considered "carbon neutral" because the carbon dioxide from the plant would be released into the atmosphere anyway — through burning the wood in the environment or the material decaying. As the gases are released into the atmosphere they become part of the Earth’s natural carbon cycle, the report says.

"Therefore, while the project would result in the direct emission of GHGs (greenhouse gases) associated with biomass combustion, this biomass combustion would not contribute to a net increase in GHG emissions," the report says.

Lio Salazar, an associate planner with the Shasta County Planning Department, said the county decided to rewrite the greenhouse gas portion of the report again to address concerns from the Center for Biodiversity and Citizens for Responsible Industry.

The plant would generate 12,351 tons of greenhouse gases annually from activities associated with operating the plant, such as operating vehicles to keep the plant running, the report says.

Those two groups said the second version of the greenhouse gas report did not comply with the California Environmental Quality Act because it did not set a numeric threshold that said at what level greenhouse gases would have a significant environmental impact.

Bundy said he appreciates that the county is being responsive to his group’s concerns, but the most current report’s rationale uses antiquated science.

"To the extent they’re saying biomass (burning) is carbon-neutral they’re taking a big step backward," Bundy said.

If the Sierra Pacific plant is approved, there will be six wood-burning power plants in Shasta County, generating a total of 2.16 million tons of greenhouse gases annually, according to the California Air Resources Board.

Sierra Pacific has said 35 to 50 people would be employed during the construction of the facility and 19 people would work there after the plant is complete.

The Second Re-circulated Introduction and Greenhouse Gas Sections of the draft environmental impact report is available at http://bit.ly/wlRTEY. Copies of the report also are available at the Shasta County Department of Resource Management, at the corner of West and Placer streets in Redding.

---- The libraries in Redding and Anderson also have copies of the report. The report can be purchased on disc or paper from Pages Copy Center, 1698 Market St. in Redding.

---- Written comments should be sent to the county Resource Management Department, Planning Division, 1855 Placer St., Redding, CA 96001; attention Lio Salazar, associate planner.

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Sierra Pacific holding steady in economy

Lincoln sawmill’s production same historically

By Stephanie Dumm, Lincoln News Messenger, February 29, 2012

When the housing bubble burst late last decade, Sierra Pacific Industries did not experience any layoffs at its Lincoln plant.

That’s according to Sierra Pacific spokesman Mark Luster, who said the Lincoln sawmill "didn’t get affected as much" by the burst.

The News Messenger toured Lincoln’s Sierra Pacific sawmill with Luster on Feb. 24.

Luster said three Sierra Pacific sawmills closed in 2008 and 2009.

"Lincoln has been a very efficient sawmill and the location helps," Luster said. "There are a number of factors that allowed the mill to continue to operate."

Those factors are the sawmill’s "proximity to resources and we can ship product from here to go to a number of places," Luster said.

As a company, Luster said, production went down but Lincoln’s facility has "produced the same as we did historically."

The plant was built in 1980 and currently has 350 employees, Luster said.

Jobs range from entry-level positions for doing tasks such as cleaning, heavy equipment operators, office staff, professional foresters and cogeneration power plant operators.

The plant has two sawmills and a cogeneration power plant, which Luster said has been operating for four years.

To provide power to the plant, wood chips are burned to heat water, and Luster said, "the steam comes in at 900 degrees and turns the turbine."

The power plant creates enough electricity "to power 20,000 homes," according to Luster.

All the electricity used by Sierra Pacific is generated by the cogeneration power plant, according to Luster, and any remaining electricity is sold to PG&E.

The wood chips used to heat the water to create electricity are what Luster called a "value-added product."

"Everything that comes in from the forest, we use 100 percent of the product," Luster said. "Over 5,000 products are made using value-added products."

Luster said wood chips and sawdust are used to make cellulose, which is used in products including cleaners, shampoo, fingernail polish and parmesan cheese.

"There are lots of things made out of wood products that we use on a daily basis," Luster said.

Luster said five different species of lumber are used in Sierra Pacific products: ponderosa pine, sugar pine, Douglas fir, white fir and cedar.

The pine species are used for crown molding, doors, table tops and furniture. The fir species are used for "dimensional products, like framing and constructing buildings," Luster said.

Cedar is used for fence boards and to make pencils. Sierra Pacific does not make pencils but "pencil stock," according to Luster.

The trees are brought in via logging trucks and are stored on site in the log yard until they are ready to be used. A couple hundred of trucks pass through Lincoln during the summer, according to Luster in a previous story.

"We put water on the logs because when the logs come in and sit in the sun, they start to dry out. If they start to dry out, they will crack, split and start to decay," Luster said. "Fifty years ago, we used to put the logs in a pond but now we spray them instead of soak them."

The trees then get cut to length, go through a de-barker and metal detector, before going through a computer scanner.

"It takes a picture of the log with a laser and then extrapolates the best possible breakdown of the log, based on the dimensions, to maximize the amount of wood products," Luster said.

The wood chips, sawdust and bark are captured to be used as value-added products, Luster said.

The operator in the control room, or sawyer, "helps the computer make better decisions," Luster said.

Bob Newton, Sierra Pacific’s head sawyer, said he "loves everything" about his job that has held for 20 years.

"I enjoy the challenge of running the machine and seeing how much I can cut every day," Newton said. "If I didn’t love it, I wouldn’t do it."

The pieces of cut lumber then go to the gain saw, where they again go through a laser scanner to be cut, "maximizing each piece."

The boards get edged and then are surfaced, followed by a trip to a dry kiln, which Luster said is to "extract inner cellular water."

It could take anywhere from five days to six months for logs to go from the log yard to finished product, Luster said.

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Environmental group targets SPI logging plans

By Amy Gittelsohn, Trinity Journal, March 7, 2012

An environmental organization has delivered a "notice of intent to sue" letter to Sierra Pacific Industries if the company continues with a list of timber harvest plans sited primarily in Trinity County.

The Humboldt-based Environmental Protection Information Center (EPIC) says the plans will harm northern spotted owls which are listed as threatened, in violation of the Endangered Species Act.

The 24 timber harvest plans named by EPIC cover 5,594 acres, mostly in the area east of Trinity Lake. It also names plans in Humboldt, Shasta and Lassen counties.

The notice letter is required under the law and begins the process that allows EPIC to file a lawsuit after a period of 60 days.

The plans targeted are for areas within known spotted owl territories, said EPIC Conservation director Andrew Orahoske.

"There are opportunities to do some selection within that area," Orahoske said, "but what Sierra Pacific is doing is clear cutting within a half mile. That’s very damaging."

SPI Spokesman Mark Pawlicki disagreed.

"They’re alleging that we’re taking spotted owls and adversely affecting habitat," he said. "Our response is we’re not doing either."

Pawlicki said SPI operates under stringent California regulations that take spotted owls into account.

"We’re managing for that species along with many others," he said.

Of the 24 timber harvest plans named, Pawlicki said about two-thirds have been approved by the state and about one-third are in the process of being approved. Some have already been logged, he said, and "some are in various stages of operation."

SPI is the largest private landowner in the state and owns nearly 1.9 million acres in California and Washington. The Anderson-based, family-owned company owns approximately 175,000 acres in Trinity County.

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Forest Service in legal stew over coverup of lookout's alleged marijuana use

By Denny Walsh, Sacramento Bee, March 25, 2012

The Moonlight fire was the U.S. Forest Service's worst nightmare.

For two weeks in September 2007 it raged like a fire-breathing dragon across 65,000 acres in Plumas and Lassen counties, devouring everything in its path, including 46,000 acres of lush national forest.

But there is an additional troubling dimension to this catastrophe, one that, like the fire itself, still haunts the Forest Service. From the start, there was a recognition of potential legal complications if it became known that a Forest Service patrol officer claimed another agency employee may have been smoking marijuana while he manned the lookout tower closest to the site where the fire started.

That fear has now been realized. A timber company being sued for causing the fire has filed documents in court that reveal the government tried to cover up the claim, causing dissension within the Forest Service.

Long before the devastating wildfire was contained, federal and state investigators were satisfied that a bulldozer belonging to a company harvesting timber for Sierra Pacific Industries hit a rock and a spark flew into dry duff on private property.

Sierra Pacific and the logger, Howell's Forest Harvesting, strongly dispute that.

The final report on the fire, publicly released on June 30, 2009, included no mention of suspected marijuana use by the Red Rock lookout the day the fire started.

In court papers, Sierra Pacific lawyers describe the report as "completely sanitized."

Yet, their cooperation and that of two federal judges was enlisted by assistant U.S. attorneys in sealing and redacting court records regarding the marijuana claim, despite the fact that once they were part of the court file they were public by law.

The Bee went to court in January to thwart the government's latest maneuver to hide the records. As a result, 544 pages of material, plus redactions, were placed on the public docket by Sierra Pacific lawyers.

In defending their client, the lawyers insist that seasonal Forest Service employee Caleb Lief was "distracted" at the time the fire emerged from an incipient, smoldering stage and, by the time he became aware of it, the flames were beyond control.

"If Lief had spotted the Moonlight fire as soon as it became visible from the Red Rock lookout, the fire would have been contained and extinguished before it could reach" national forest land, SPI lawyers argue in court papers.

They further argue that the Forest Service "suppressed evidence of this misconduct in an effort to protect its position" in a tangle of litigation.

U.S. Attorney Benjamin Wagner said in a prepared statement: "We dispute the allegations regarding the USFS employee at the Red Rock lookout, but in any event, we consider those allegations to be merely an effort to distract from the central issue of the case" – that is, whether Sierra Pacific and others are responsible for starting the fire.

Troubling report

The accusations at the core of the imbroglio came from patrol officer Karen Juska, who reported that when she went to the Red Rock lookout station that day to pick up a radio in need of repair, Lief's "hand and the radio had a heavy odor of marijuana." She also reported seeing a small glass pipe in the tower's cabin.

As she and Lief stood by her truck shortly thereafter, Juska said in a written report, she spotted smoke and pointed it out to Lief. The fire was 10 miles from the tower, which had a direct line of sight to the location.

Lief is adamant he saw the smoke and drew Juska's attention to it. He denies he possessed or used marijuana at the tower. He insists he is the victim of a Juska vendetta because he discussed her shortcomings with her supervisor, who then told her.

Court documents show Juska's accusations reverberated through the USFS bureaucracy:

* Assistant Plumas Forest Manager Ron Heinbockel, who supervised both Juska and Lief, informed his own supervisor of the written report submitted by Juska.

* Heinbockel, who told superiors he wouldn't rehire Lief as a seasonal lookout, and others in the Plumas chain of command questioned whether the Forest Service should be employing Lief.

* Putting together the report on the Moonlight fire, Diane Welton, a special agent with the Forest Service's law enforcement unit, encountered Juska's accusations and told her not to talk about what she had seen at Red Rock. Welton testified she relayed Juska's story to her supervisor, who assured her he would follow up.

Yet, no one within the Forest Service ever investigated the accusations themselves, which means there was never an official resolution.

Lief takes action

Lief was informed in March 2008 that he would not be rehired as the job was going to an injured female employee on light duty. He filed a gender discrimination complaint.

Court documents reveal:

* Over his protests, Heinbockel was forced to write a good performance review of Lief because it was mere "speculation" that he had or was using pot on the day the Moonlight fire started, and to rehire Lief "to settle the EEO complaint." Heinbockel emailed his supervisor on Sept. 21, 2007, that he was "very uncomfortable" with what was going on. "I have heard that this was not the first time Caleb has had this situation observed while on duty at other forests," he wrote. He raised the specter of legal problems if Lief was passed off as reliable to a future employer, and he warned that the decision to rehire him as a lookout created a serious "safety" risk.

* Juska was forced to rewrite the report on her Sept. 3, 2007, visit to Red Rock and eliminate all mention of marijuana.

* Lief was fired in 2009 over a separate incident involving Juska. He filed another EEO complaint, this time claiming wrongful termination.

Throughout this period, it was the mantra of more than one USFS official that the marijuana allegations were never proved. And throughout this period, testimony shows, more than one USFS official had in mind the potential legal risk those allegations held.

"This is our main lookout in Moonlight Valley," Heinbockel told an investigator looking into Lief's wrongful-termination complaint. "I could just see all sorts of legal problems; that the attorneys would say the main lookout is stoned and let the fire go."

Maria Garcia, who was deputy Plumas National Forest supervisor and now supervises the Santa Fe National Forest in New Mexico, testified there should have been an investigation of the Red Rock incident, and she knew that the fact there was not would be an issue at some point, and the question would be whether Lief spotted the Moonlight fire as soon as possible.

Garcia's boss at the Plumas Forest, Alice Carlton, now supervisor of the Umpqua National Forest in Oregon, testified, "I remember … intuitively understanding that … somebody could try to make hay out of this or twist the facts … later on, use it for their own gain."

But, Carlton added, "There was never any intention to cover up."

Carlton acknowledged that, due to the lack of proof regarding marijuana, she made it clear to her subordinates that Lief should receive a positive performance review and should be rehired as a seasonal lookout.

Heinbockel testified that he believes Carlton wanted to make sure Lief "stayed on (the government's) side."

Given what's at stake, it's doubtful defense lawyers will quit pressing Red Rock and related matters as critical evidence favoring their client.

The lawyers told the court: "Much as the government would like to run from Red Rock, it is a central issue" … because "any recovery by the United States is reduced in proportion to its responsibility for its own damages."

Lief colorfully sums up the other side: "What we have here is Sierra Pacific trying to throw spaghetti against the wall and see what sticks. Excuse the pun, but this is a smokescreen, a diversionary tactic to turn attention away from its own negligence and make me the fall guy for this fire."

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Land trust takes title to critical parcel on Deer Creek

By Steve Schoonover, Oroville Mercury-Register, April 27, 2012

Six-hundred acres around Lower Deer Creek Falls in eastern Tehama County have become the property of a land trust, securing a 30-mile stretch of the creek from development.

In addition, the Lassen National Forest has been allocated $1.5 million for additional land purchases nearby in Mill Creek Canyon.

The purchases will help close a gap between two currently separated parts of the Lassen Forest. The area, a bit over 30 miles northeast of Chico, is a checkerboard of public land and private property owned mostly by lumber firm Sierra Pacific Industries.

The section around Lower Deer Creek Falls was a critical piece, as it was one of the last parcels of private land on the creek itself for the 30 miles downstream from Elam Campground off Highway 32.

All but about five miles of that stretch provides spawning grounds for rare Central Valley spring-run chinook salmon. Deer Creek is one of just a half-dozen creeks used by the fish.

The falls are a couple of miles downstream from the westernmost Highway 32 bridge. The falls drop about 15 feet, but a fish ladder has been built there to allow salmon to pass.

The salmon, listed as threatened, spend the summer in deep, cool pools along the creek before spawning in fall.

The purchase was made possible by allocation of $1.1 million in November by the California Wildlife Conservation Board to the Western Rivers Conservancy, which had obtained the land from SPI.

That allowed Western Rivers to transfer title to the

Northern California Regional Land Trust. Jamison Watts, the trust's executive director, said in a press release that the group "will manage the land as a protected waterway for fish, wildlife and people."

"With no dams and little development, Deer Creek is a rare treasure in the Northern Sierra Nevada," said Sue Doroff, Western Rivers Conservancy's executive vice president in that press release.

"It is one of the most productive fisheries in the Sacramento River system, and by conserving it, we are helping to ensure the health of the area's spring chinook and steelhead," she added.

Western Rivers is coordinating purchase of another 2,700 acres in the area that SPI has indicated it is willing to sell.

And with the $1.5 million allocation to the Lassen Forest by the Department of Agriculture, more of that land should be obtained.

Lassen Forest public services staff officer Chris O'Brien indicated the Lower Deer Creek Falls parcel had been the top priority for that money, but that there was a list of several parcels the money could be used for.

With the falls property preserved, he indicated the forest would shift the funds to purchasing other critical parcels along Mill Creek. It's another stream in which spring-run chinook salmon spawn.

"Protecting the creeks for the people is the point of this," O'Brien said. "It doesn't matter if the Land Trust or the Forest Service holds the title."

The grant to the Lassen Forest was part of $40.6 million distributed nationwide earlier this month from the Land and Water Conservation Fund, a repository of royalty payments from offshore oil and gas drilling.

California received about $8 million, which will also fund land purchases in the Six Rivers, Shasta-Trinity, Tahoe, Eldorado and San Bernardino national forests.

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SPI teaches students about logging

by Maghan Hunt, Anderson Valley Post, May 15, 2012

Hundreds of students from around the county gathered in Shingletown for the Sierra Cascade Logging Conference In Woods Day.

Employees from Sierra Pacific Industries manned stations around the Lake McCumber site to explain what area of the company they work for, what type of work they do and why it is important to the environment as well as the company.

"My favorite part was when they told us about the specific jobs they have," said Anderson High senior Jose Raya. "Like with the biologist, I didn’t think it was that detailed."

Students from Cottonwood Union, Evergreen Union and Anderson Union High School District came to learn more about the forest and logging industries. According to Carol Perea, a teacher at Anderson High, her students were learning about areas of the logging industry they would like to get into after college.

Perea added that the logging conference has been paying transportation costs for schools interested in having their students learn more about the logging industry for the past seven years.

"It’s important for the students to meet the professionals who are doing" jobs they are interested in, said Perea.

The professionals talk to the students about their background and how it is applied to what they do in their current job. They also tell the kids about the degrees they hold and the classes they need to take.

One of the professionals, Jim Antos a tree faller, told students about the various jobs he had, including teaching. Perea asked her students if they would have ever guessed he had a teaching credential, and all said no.

Antos told students that he loves his job and being outside in nature, explaining how math, especially geometry, plays a big role in what he does.

Anderson senior Ben Cox participated in two things Sierra Pacific Industries sponsored for students – the GIS/GPS Map It Day, as well as In-Woods Day.

"In-Woods was my favorite," said Cox. "I watch ‘Ax Men’ and have never seen (logging) in real life. I thought it was interesting."

For senior Makayla Kuhnke, the GIS/GPS Mat It Day gave her a taste of nature and showed her how she could combine her interest in mechanics with forestry.

"Everything you document," said Kuhnke. "If you see a bone by a tree, you put a mark on your map and then write it in your journal, that way you know that mark 56 is where you saw the bird bone."

According to Perea, students who attended the mapping day went to Shasta College the following day and created maps based off the coordinates they had gathered using a software program called ARC.

Because ARC is similar to Adobe’s Photoshop program, students with a background in Photoshop picked up ARC quickly and now have a usable life skill, said Perea.

She added that Sierra Pacific Industries and Anderson High have had a working relationship since the 1950s and have been going into the woods learning about the logging industry for 18 years.

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Is New Green Law Creating More Green for Logging Companies?

NBC Bay Area Investigates California's new Cap and Trade Law

By Stephen Stock, Liza Meak, and Jeremy Carroll

NBC Bay Area, May 18, 2012

California's new Cap and Trade program has been hailed as the gold standard in environmental law for the entire world. Not only are other states looking to the law but other countries, too, are watching to judge its effects on the global economy and environment.

Now, NBC Bay Area's Investigative Unit has learned of questions surrounding fundamental issues about how the new law is applied and who benefits from it that could undermine the entire program's credibility.

That credibility is the key to a viable, working Cap and Trade system, according to a spokesman for California's Air Resources Board, which will oversee, implement and police Cap and Trade.

"We have standard accounting procedures," said Stanley Young, communications director for California's Air Resources Board, "to make sure that everything is by the book."

"That's why we have only allowed so far four protocols to be set in place."

The Investigative Unit spent the last four months researching California's new Cap and Trade program. At 262 pages, the law is as difficult to get your arms around as a giant Sequoia. The first 44-and-a-half pages alone are dedicated to spelling out definitions in the law.

Click here to read the entire law.

These Cap and Trade rules took nearly eight years of back and forth negotiations between various stakeholders before a final version was agreed upon and became law.

While Cap and Trade is being sold as the first step towards reversing global warming, NBC Bay Area's Investigative Unit discovered some critics who point to the very law and say there are loopholes built into it that allow the program to be "gamed" to make some companies millions of dollars without significant benefits to the environment or significant reductions in greenhouse gases.

Under the new California Cap and Trade law, companies that pollute will be able to mitigate up to 8 percent of what they put into the air by buying what's called carbon offset credits.

NBC Bay Area's Investigative Unit traveled to the High Sierra to see exactly what's at stake.

It's where the tension between caring for the environment and providing for our economy has come to a head with some environmentalists crying foul.

Brian Nowicki serves as the California Climate Policy Director for the Center for Biological Diversity. He says California is missing a big opportunity. "The program has loopholes and accommodations in it," Nowicki says.

"It's a tough road to hoe to get a ton of offset grants, says the ARB's Stanley Young. "We want to make sure that every ton we get from offsets is a rigorous, strict, and permanent as the ton we get from reducing the industrial facilities," Young added. "That's why we have only allowed so far four protocols to be set in place."

Under those four protocols adopted by California's Air Resources board, companies can claim carbon offsets in four ways:

  • Get rid of old chemical refrigerants
  • Capturing methane from dairy farm manure
  • Planting trees in the city or urban environment
  • Improving forestry management

It's getting carbon offsets for planting new trees in the forest where The Investigative Unit encountered questions about the current rules and whether they truly reduce greenhouse gases.

"I think of it as gaming the system," say Bruce Castle, an activist with the environmental group Ebbetts Pass Forest Watch.

Castle, along with Ebbets Pass Forest Watch members Susan Robinson and Ron Szymanski, have been documenting the timber logging in the Sierra in Tuolomme and Calaveras Counties.

"Logging companies should not be allowed to be subsidized for this kind of practice," Robinson said.

"Especially when all they do is dump all this carbon into the atmosphere (by harvesting acres of trees," Szymanski said.

Basically, these critics say the logging companies benefit twice under the current Cap and Trade rules, first by cutting the trees, then by getting paid through carbon offsets to replant those trees, part of their normal business practice.

"Because of the accommodations made for the current business plan for the timber industry, California's current carbon program fails to ensure additionality," said Nowicki. "That means that it doesn't guarantee that offset credits are only being awarded for tree growth that is occurring as a result in genuine changes in forest management."

It's an argument NBC Bay Area Investigative Reporter Stephen Stock put to the Air Resources Board's Stanley Young.

"You hear the critics," Stock said. "If you're doing business as usual how do the rules improve the environment if you're not taking more carbon out of the air?"

"Right," Young answered. "But you're not doing business as usual. We have very strict rules. You have to grow trees bigger, you have to manage the trees better."

Companies that harvest timber like Sierra Pacific Industries, also known as SPI, admit they stand to gain tens or even hundreds of millions of dollars through carbon offsets.

"You're not doing this out of the goodness of your heart," Stock said to Ed Murphy, SPI's manager of Resource Information Systems. "Of course not," replied Murphy.

Murphy further explained his position on the issue raised by The Center for Biological Diversity: Additionality (or adding more things such as trees to reduce carbon further than what would be expected under normal or 'business as usual' conditions.

"Under the definition of additionality, there's a process called common practice," said Murphy. "We can show we're well above common practice in terms of total carbon stored. But more importantly, the change in business practices comes when once we move into the offset market, we can no longer cut the forest down."

That's why SPI claims it is reducing greenhouse gas emissions. They showed us this in a graph showing that as carbon reduction increases their expectation of taking more carbon out of the atmosphere also increases.

Click here to see a copy of the graphs.

This, Murphy said, is part of SPI's proposed carbon offset plan which will cover 100 years of growth for the trees involved.

"We are withholding harvesting (that) we could have otherwise done," Murphy said.

"In order to get this carbon offset?" Stock asked.

"In order to maintain the carbon offset that we have sold," Murphy said.

Right now SPI's carbon offset proposal includes counting three large tracts of harvest and replanted land, including 20,000 acres around Cherry Lake to get carbon offsets. If approved by the Air Resources Board, those carbon offsets could potentially earn SPI millions of dollars off of trees planted 15 to 20 years ago.

That, The Center for Biological Diversity's Brian Nowicki says, is the flaw in the current rules.

"Under earlier versions of the California Carbon Offset programs forest clear cutting was not allowed to qualify as a reduction, as a carbon offset program," said Nowicki.

That has now changed.

"This most recent version (of the Cap and Trade law) that we are using now has as part of the carbon offset program a written cooperation with the timber industry in order to accommodate their current business practices and that explicitly includes forest clear cutting, " said Nowicki.

"I think that is a tremendous missed opportunity," said Nowicki. "By saying that business as usual forest practices should qualify and not putting in criteria that would improve forest management in California, or don't forget other states, as well, because the program exists outside our borders is a tremendous missed opportunity."

Murphy insists SPI is NOT going to be doing business as usual on those three plots of land that are proposed to be part of the carbon offset program. Instead, Murphy says SPI, is, in fact, changing their business model on those three pieces of land.

"What I'm changing is I no longer have the ability to go the other way, because once I've sold that carbon, I've made that 100 year promise that comes with it," said Murphy.

The state Air Resources Board insists they won't let any company game the system and will hold them to a strict standard in order to get any carbon offset.

"You must do better than business as usual," Young says. "If you don't, you don't get additional tons, and you don't get tons to sell, and we will not allow those tons to enter into the cap and trade market."

Brian Nowicki remains unconvinced by the proposed projects for carbon offsets including the three made by SPI so far, saying, "That is definitely our concern, that the projects that we are seeing registered by the timber industry largely reflect the plans that they had anyway."

What concerns environmentalists even more is not that these companies might benefit financially, but that the goal of reducing carbon in our own atmosphere will fail under these new rules.

Stanley Young of California's Air Resource Board insists that won't happen and he admits the credibility for the entire cap and trade system rests on this issue, convincing everyone that some companies aren't gaming the system for financial gain.

Click here to see map of SPI proposed forest projects.

http://cbdnet.info/CAR%20projects/default.aspx

Click here to see the forestry management protocol

http://www.arb.ca.gov/regact/2010/capandtrade10/cappt5.pdf

Click here to see ARB's information on climate change and forestry

http://www.arb.ca.gov/cc/forestry/forestry.htm

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U.S. attorney fumes at Gov. Jerry Brown's timber deal

by Kevin Yamamura, Sacramento Bee, May 24, 2012

Gov. Jerry Brown has tucked provisions into his budget that would limit payouts in wildfire liability cases, potentially saving timber companies and other major California landowners hundreds of millions of dollars as federal prosecutors pursue record-high damages in court.

The Democratic governor also has asked lawmakers to impose a 1 percent lumber tax to fund forestry oversight while reducing industry costs. And he wants to reduce the frequency with which California reviews tree-cutting plans for environmental impacts.

Brown has pitched the ideas as ways to help the state's timber industry provide jobs in the wake of a construction downturn and fierce competition with lumber producers from the Pacific Northwest. He also highlights $30 million in new lumber tax funding for environmental reviews that have gone missing due to budget cuts.

But the plan has drawn strong opposition from the Sacramento-based U.S. Attorney's Office, which is aggressively pursuing wildfire negligence cases, as well as some environmentalists who believe Brown is giving the industry too much.

Brown's draft legislation addresses wildfire lawsuits filed by government agencies. It would more narrowly define what courts can consider when calculating wildfire damages and tie awards to the "prefire fair market value" of property, intended to limit variables such as aesthetic or habitat losses. Federal courts generally rely on state laws to calculate wildfire damages.

U.S. prosecutors suggested the proposal could impact their pending case against the state's largest landowner, Sierra Pacific Industries, and other defendants for a 2007 fire in Lassen and Plumas Counties where damages could reach $600 million.

The case is slated for trial two days into the new fiscal year, after Brown is expected to sign the budget.

"This proposed legislation appears to be a fairly cynical attempt by Sierra Pacific Industries to undermine the federal government's position in our pending lawsuit against that company," said U.S. Attorney Benjamin B. Wagner in a statement. "...I hope that members of the Legislature see this measure for what it is: not a solid policy proposal, but an attempt by one party to a lawsuit to tilt the playing field in its favor after three years of litigation in federal court."

Brown says in his budget summary that current state law "leads to claims far exceeding restoration costs." Federal prosecutors in recent years have won unprecedented amounts, such as a $102 million settlement from Union Pacific Railroad Co. for a 2000 fire in Plumas and Lassen National Forests, far above the previous $14 million record. That award included money not only for firefighting and commercial timber loss, but also impacts on recreation, habitat and public scenery.

Timber companies, environmentalists and Brown officials have met for several months to draft the proposal that ended up in Brown's May budget proposal. On April 21, Brown received three contributions from the timber industry toward his November tax initiative. Those include $10,000 from Sierra Pacific Industries, $10,000 from Green Diamond Resource Company and $5,000 from the California Forestry Association.

Sierra Pacific Industries also gave $46,800 toward Brown's 2010 gubernatorial campaign.

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U.S. attorney blasts wildfire proposal

by Chris Megerian and Anthony York, Los Angeles Times, May 24, 2012

Gov. Jerry Brown’s new budget proposal includes a provision that would limit legal liability for causing wildfires, a clause that the U.S. attorney in Sacramento on Thursday blasted as a "fairly cynical attempt" to benefit the powerful timber industry.

The proposal comes as the federal government is suing Sierra Pacific Industries, the state’s largest timber company, for allegedly contributing to the 2007 Moonlight fire, which scorched 65,000 acres in Plumas and Lassen counties. The civil trial is scheduled to start on July 2.

"This proposed legislation appears to be a fairly cynical attempt by Sierra Pacific Industries to undermine the federal government’s position in our pending lawsuit against that company," said U.S. Attorney Benjamin Wagner in a statement. "I hope that members of the Legislature see this measure for what it is: not a solid policy proposal but an attempt by one party to a lawsuit to tilt the playing field in its favor after three years of litigation in federal court."

Brown's proposal covers some of the same ground as a bill introduced by Assemblyman Curt Hagman (R-Chino Hills) earlier this year. That bill, which would also limit legal liability for wildfires, is supported by the influential insurance industry, which has given $225,000 to Brown’s proposed November ballot measure that would raise state taxes.

The timber industry has also reached into its pockets to support Brown’s tax campaign. Sierra Pacific has donated $10,000, and the California Forestry Assn. and Green Diamond Resource Company have pitched in another $15,000.

The Brown administration and Sierra Pacific did not immediately respond to requests for comment. Lea-Ann Tratton, spokeswoman for the Consumer Attorneys of California, which opposes limits to legal liability, said there are ongoing negotiations in hopes any deal does not affect pending lawsuits.

The Moonlight fire started on land owned by Sierra Pacific, according to the federal government’s lawsuit, which called it an "incident of the kind that ordinarily does not occur in the absence of someone’s negligence."

The federal government is seeking nearly $200 million to pay for stopping the fire and rehabilitating the land, as well as other costs. The largest wildfire settlement ever reached by the federal government was $102 million, which was paid by Union Pacific Railroad for the 2000 Storrie fire north of Sacramento.

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U.S. attorney lobbies against limits on wildfire liability

by Chris Megerian, Los Angeles Times, May 25, 2012

Benjamin Wagner, the U.S. attorney in Sacramento, has launched an unusual and intense lobbying effort to stop Gov. Jerry Brown's proposal to limit legal liability for wildfires.

In a letter sent Friday to state Senate and Assembly leaders, Wagner said the proposal would undermine a high-stakes federal lawsuit against Sierra Pacific Industries, California's largest timber company. The civil trial, which involves alleged negligence causing the 2007 Moonlight fire, is scheduled to start on July 2 and could leave the company on the hook for $600 million.

Wagner wrote that his "deep concerns" are shared by the other three U.S. attorneys in California. He called the proposal an attempt to "tilt the legal playing field in the final days before the trial," and he urged lawmakers to "reject this unseemly effort to protect the alleged wrongdoer in a major federal case."

Brown's plan would limit the amount of money government agencies can recoup for battling wildfires and restoring damaged public lands, preventing them from seeking what the proposal calls "excessive damages." The timber industry, which owns large swaths of territory in California and donated to Brown's campaigns, says the federal government has sought several times more than the true cost of repairing the damage.

Wagner said in an interview that the federal government is seeking as much money as possible because recovering from wildfires is a long and expensive process.

"This is not about sending a check to the Treasury," he said. "The money that is recovered in these cases goes right back into the national forests."

Jack Pitney, a political science professor at Claremont McKenna College, said it's rare for federal prosecutors to delve into the legislative process in Sacramento.

"Usually U.S. attorneys only interact with state politics when they're indicting somebody," Pitney said.

Wagner said he's not interested in shaping public policy, but is concerned that Sierra Pacific was working outside the courtroom to affect the outcome of the federal government's case.

"It appears to us that they're trying to get the Legislature to suddenly change the rules," he said.

Sierra Pacific did not immediately return a request for comment. Nor did representatives for Assembly Speaker John Perez (D-Los Angeles), but an aide to Senate President Pro Tem Darrell Steinberg (D-Sacramento) said he plans to meet with Wagner to discuss the issue.

"The pro tem does not wish to affect any ongoing investigation or prosecution by the U.S. attorney," said Steinberg's spokeswoman, Alicia Trost.

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Steinberg questions Brown's wildfire proposal

by Chris Megerian, Los Angeles Times, June 1, 2012

Senate President Pro Tem Darrell Steinberg signaled Friday that he's uncomfortable with Gov. Jerry Brown's proposal to limit legal liability for people who cause wildfires.

His statement comes days after meeting with Benjamin Wagner, the U.S. attorney in Sacramento, who opposes the proposal and has mounted a rare lobbying effort to stop it.

Wagner is suing Sierra Pacific Industries, the state's largest timber company, for alleged negligence in the 2007 Moonlight fire. The company could be on the hook for $600 million, and the civil trial is scheduled to start July 2.

Brown's proposal would limit the amount of money government agencies can recoup for battling wildfires and restoring damaged public lands, preventing them from seeking what his administration calls "excessive damages." The timber industry says federal prosecutors have taken advantage of California laws to sue for much more than the land is actually worth.

Steinberg (D-Sacramento) did not take a position on the federal government's case against Sierra Pacific, but told reporters that he is concerned that Brown's proposal could affect an ongoing case.

"They're silent on whether or not the legislation" would impact lawsuits that have already been filed, he said. "But that silence creates ambiguity in a way that could affect that litigation."

Although Brown included the proposal on wildfire liability in his revised spending plan, Steinberg said he doesn't want to act on it before the June 15 budget deadline.

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Timber tax would just give industry a fire fine escape

San Francisco Examiner editorial, June 7, 2012

In his new budget, Gov. Jerry Brown has quietly inserted provisions that would allow lumber companies and major Northern California landowners to recklessly slash trees and leave the detritus behind to catch fire. So much for Governor Moonbeam.

According to The Sacramento Bee, Brown’s budget provisions would limit liability on the part of lumber companies and landowners in cases where their negligence led to major forest fires. In return, the lumber industry would have to pay an additional 1 percent lumber tax in order to fund forestry oversight.

The tax would raise some $30 million a year to finance environmental reviews of timber harvest projects — reviews that would otherwise be starved of funds, thanks to the budget crisis. In addition, Brown’s office has claimed, the bill would keep California’s timber industry viable in the face of competition from Oregon and Washington.

But federal officials in the Sacramento U.S. Attorney’s Office have complained, arguing that the bill would undermine their efforts to hold irresponsible timber companies to account. In particular, the feds are suing Sierra Pacific Industries, the state’s largest landowner, for a major forest fire in 2007. If the U.S. Attorney’s Office is successful, the case could result in damages of up to $600 million.

If Brown’s bill passes, the potential damages exacted by the government could be reduced by as much as 75 percent. Timber companies could walk away from irresponsible forest management practices without facing the wrath of the public.

This bill is not simply a blatant giveaway to the timber industry. The increased lumber tax is significant, and the state is broke. Asking the lumber companies to finance environmental reviews of their own operations, while offering them a cap on liabilities in cases where their negligence leads to major fires, is certainly a creative option.

But it’s one that offers too much carrot and not enough stick. California’s forests are dwindling, and we have a critical interest in ensuring that our remaining woodlands are treated with care. Federal prosecutors have recently won surprisingly large damages for irresponsible forest management, including a $102 million judgment from Union Pacific for a major fire in Lassen and Plumas national forests in 2000.

That money financed the cost of fighting that fire, restoring the habitat and helping the local tourism industry recover.

And it sent a message to the timber companies: treat our forests with care. The government is watching.

Brown’s proposal is not the worst to come out of Sacramento. But timber companies must be kept on alert, not allowed to treat the last of our forests with nonchalance. We urge the state legislature to carve this provision out of the state budget and vote no.

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Our View: Roots firm in timber reform plan

Merced Sun-Star EDITORIAL, June 19, 2012

Hammered by a lagging economy and imports of forest products, California's timber industry is looking for help. It is finding it in Gov. Jerry Brown's administration, and not just because the governor has been a recipient of campaign donations from Sierra Pacific Industries -- the state's largest single private landowner.

Brown recognizes, as do we, that sawmills and forest products are important to our rural economies. They provide the jobs that many depend on.

That doesn't mean timber companies should get a green light to return to an era of unsustainable logging practices. Far from it. But California is a major consumer of forest products. If we want wood, we should attempt to grow a reasonable amount of it, even under environmental laws that are far more protective than those in other states and Canada.

To help the state's timber industry, the governor has proposed a multipart plan -- much of which has generated little or no controversy. Even the controversial part has a common-sense solution.

First, to help pay for reviews of timber harvest plans (and speed regulatory processes) the governor has proposed a new fee on certain wood products sold in California. This fee, which has the support of the timber industry, could generate up to $30 million yearly -- relieving pressure on the general fund.

The proposal would extend the duration of timber harvest plans approved by the state from the current three years with two one-year extensions to five years with one two-year extension. He'd also make administrative changes and attempt a pilot project to make permit processing faster.

One part of the package, however, has generated plenty of heat from federal officials and others. The governor's plan would limit the damages the U.S. Forest Service could seek from private landowners who cause a wildfire that spreads onto federal property. State law allows the federal government to seek double damages in such situations.

That has resulted in awards that private landowners say are excessive -- such as the

$102 million the feds recovered from Union Pacific for the Storrie fire, which burned 52,000 acres in the Plumas and Lassen national forests 12 years ago.

The proposed damage limits has drawn fire from both Benjamin B. Wagner, U.S. attorney for the Eastern District of California, and U.S. Agriculture Secretary Tom Vilsack.

In a May 25 letter to legislative leaders, Wagner said damage recoveries are important for restoring lands after a big fire. He wrote that the proposed change is unfair because it would provide relief for private landowners facing damages, but would not relieve public agencies from wildfire lawsuits by private landowners, who have sought double damages in the past.

He also contended the legislation would "undermine the position of the United States in a major case" pending against Sierra Pacific Industries for its role in the 2007 Moonlight fire, which burned 46,000 acres of national forest land in Plumas and Lassen counties.

We're not convinced that double damages are necessary for the Forest Service to restore timberland following a fire. In fact, there is often precious little evidence that any post-fire restoration is being done.

We also have concerns that past damages awarded could hurt the ability of small timber companies to get insurance and stay in business.

Yet we agree with Wagner that private landowners shouldn't be given relief from damages that are not extended to public land agencies.

If lawmakers advance this legislation and limit double damages from wildfires, they should apply the limitation equally to public and private landowners.

They should also make clear that such changes are prospective, not retroactive, to avoid interfering with any ongoing litigation.

Editorials are the opinion of the Merced Sun-Star editorial board. Members of the editorial board include Publisher Eric Johnston, Managing Editor David W. Hill and Guest Editor Andy Krotik.

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Sierra Pacific Industries, California Company, Reaches $122.5 Million Settlement For Starting Wildfire

By Mary Slosson, Reuters, July 17, 2012

Logging company Sierra Pacific Industries agreed to pay the United States $122.5 million in damages to settle a lawsuit over a 2007 wildfire that was among the most devastating in California history, the Department of Justice said on Tuesday.

The settlement is the largest ever received by the United States for damages caused by a wildfire, the so-called Moonlight Fire that charred 65,000 acres in September 2007.

The blaze was sparked by employees of the logging company and a contractor who struck a rock with a bulldozer, prosecutors said, sending sparks into the dry ground on a day the National Weather Service had issued a red flag warning, indicating a high fire danger.

The smoldering fire went unnoticed because the employees skipped a company-required fire patrol, prosecutors said.

"Instead, the designated fire watch left the work area and drove 30 minutes away to get a soda. When he returned over an hour later, there was a 100-foot wall of smoke billowing from the work area," the Department of Justice said in a statement.

Sierra Pacific Industries denied responsibility for the fire, but could not be reached for comment on Tuesday.

The settlement will include a $55 million cash payment and 22,500 acres of land in California owned by Sierra Pacific. The U.S. Forest Service will choose the land, which prosecutors said is expected to bridge gaps between existing national forests and will support critical watersheds and sensitive species habitats.

The Moonlight Fire scorched more than 46,000 acres of national forests in September 2007, killing more than 15 million trees on public land, some of which were more than 400 years old. It also destroyed thousands of acres inhabited by sensitive species including the California spotted owl.

"The Moonlight Fire was a devastating blow to National Forest land here in California," U.S. Attorney for the Eastern District of California Benjamin B. Wagner said in a statement.

"What was lost was priceless and will not return for over a century. The recovery in this case will help start the process of making the public whole."

Sierra Pacific Industries owns nearly 1.9 millions acres of timberland in California and Washington state and is the second largest lumber producer in the United States, according to the company.

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Sierra Pacific to pay $47M and 22,500 acres of land

IHB.de/Fordaq, July 20, 2012

California's largest timber company has agreed to pay $47 million and donate 22,500 acres of land to settle a lawsuit over the 2007 wildfire that destroyed about 65,000 acres. Three years after filing a lawsuit to exploit ambiguities in California law on fire damages, the United States settled its claims against Howell's Forest Harvesting, Sierra Pacific Industries, and numerous private landowners regarding the Moonlight Fire, a large forest fire that began on Labor Day, 2007, and burned approximately 45,000 acres of National Forest Service land in Plumas County.

Sierra Pacific Industries denied liability, despite agreeing to the settlement announced Tuesday. Federal prosecutors said the Moonlight Fire was caused by two unsupervised employees who operated bulldozers on a red-flag warning day with high fire danger.

The United States initially sought over $791 million in damages from the named defendants, plus interest, but after three years of contentious litigation and numerous defense discoveries revealing investigative misconduct, ultimately agreed to accept a settlement payment of $55 million from all parties, along with 22,500 acres in property that Sierra Pacific agreed to contribute for the public's enjoyment.

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Feds, SPI both claim victory in Moonlight Fire settlement

by Dan McDonald, Plumas County News, July 24, 2012

The exact cause of the 2007 Moonlight Fire remains a matter for debate.

The federal government said an investigation found that a Sierra Pacific Industries (SPI) contractor started the 65,000-acre fire. Sierra Pacific still insists it was someone else.

Attorneys for both sides were claiming victory last week after SPI and other defendants agreed to pay the federal government $122.5 million in damages.

According to the Department of Justice, the settlement represents the largest recovery ever received by the United States for damages caused by a forest fire.

The largest previous settlement was $102 million paid by the Union Pacific Railroad in 2008, in connection with the 2000 Storrie Fire.

"We are very pleased with this settlement, which is fair and reasonable given the scope of the damage suffered by the national forest land due to the Moonlight Fire," U.S. Attorney Benjamin Wagner said.

The Moonlight Fire, which ignited Sept. 3, 2007, on private forestland in Plumas County, raged for more than two weeks. More than 46,000 acres of the 65,000 acres burned were in the Plumas and Lassen National Forests.

According to a joint investigation by the U.S. Forest Service and CalFire — which attorneys for SPI claim was flawed — a subcontractor working for SPI ignited the fire.

Sierra Pacific Industries attorney William Warne said he was pleased with the settlement, considering the government was seeking more than $700 million in damages.

But he blasted the government for its "bounty hunter mentality." Warne said SPI was named as a defendant just two days after the fire started. He said SPI was targeted because of its financial resources.

"That has been our position all along," Warne said during a conference call with reporters after the settlement was announced Tuesday, July 17.

Sierra Pacific said it agreed to the settlement because a judge ruled that SPI could be found responsible for the fire even if neither the company nor its contractors started it.

SPI Director of Corporate Affairs Mark Pawlicki called the judge’s pretrial ruling "unprecedented."

"Ultimately, the pretrial ruling that the defendants could be liable for someone else’s fire is unprecedented and baseless," Pawlicki said. "And we believe any such ruling would be contrary to California law and public policy."

However, Warne claimed the government agreed to settle for a fraction of the amount it was seeking because of evidence SPI uncovered during its own investigation. He said he didn’t want to outline details because SPI still has up to six separate state court actions associated with the fire, including an $8 million suit by CalFire to pay firefighting expenses.

"We found suppressed documents and photographs and diagrams that were not included in the public version of the report, which identified the cause of the fire," Warne said. "And we believe that those documents and diagrams and photographs were at odds with the investigators’ conclusions.

"Typically, a settlement signifies the end of a dispute," Warne said. "But this is just the beginning."

Investigation

The government’s investigation found that two employees for Howell’s Forest Harvesting, an SPI subcontractor, were operating bulldozers in a remote area on a red flag warning day. A red flag day is a condition of high fire danger declared by the National Weather Service.

The investigation found that the fire was ignited when the track or blade of one of the bulldozers struck a rock and created sparks that ignited a smoldering fire.

The government said the fire smoldered for a long period of time, but went undetected because the employees did not conduct their company-required fire patrol after they shut down for the day.

Instead, the investigation found the designated fire watch employee left the area and drove 30 minutes away to get a soda. When he returned an hour later, there was a 100-foot wall of smoke billowing from the work area.

According to the investigation, the employee was without a means of calling to report the fire and had no access to fire-suppression equipment, which was located about a mile from the work area.

"Like many forest fires, it may have been easily avoided with proper safeguards," said Assistant Attorney General Ignacia Moreno.

Warne said the government’s investigation was biased.

"We believe that the investigators in this fire made numerous missteps, violated their training and started with certain defendants in mind, which is a phenomenon known as ‘expectation bias,’" Warne said. "As a consequence of expectation bias, they were engaged in an investigation where they were ultimately simply trying to support their initial conclusions."

The settlement

Sierra Pacific and the other defendants agreed to pay $55 million in cash.

SPI’s portion includes payment of $17 million within 60 days from the date of the settlement agreement. SPI was ordered to pay an additional $30 million in twice-yearly payments of $3 million each on Jan. 1 and July 1 every year starting July 1, 2013, until full payment is received.

Howell’s, W.M. Beaty & Associates Inc. and a group of landowners will collectively pay $8 million.

U.S. Forest Service spokesman John Heil said the $55 million would be used to pay for restoration of the areas that were burned in the Plumas and Lassen national forests.

Warne said the $55 million cash settlement should be considered a victory for the defendants.

"To be in position where you were facing a financial death penalty case and to walk away with paying $55 million is a huge victory for private citizens and private business in California," Warne said. "The only sour note is that we really wanted to try this case. And we are going to try this case in state court."

In addition to the cash settlement, Sierra Pacific agreed to give the government 22,500 acres of land it owns in California. The land has an approximate value of $3,000 per acre, or a total of approximately $67.5 million.

Within 10 days of the agreement, SPI will identify 200,000 acres of undeveloped wildland, from which the U.S. Forest Service may select any part or parts.

If the Forest Service does not select 22,500 acres of potential settlement land from the initial 200,000 acres offered within 10 days, SPI will identify another 100,000 acres for the USFS to consider.

The process of identifying additional 100,000-acre blocks will continue until 22,500 acres of potential settlement land has been identified.

Quincy jobs safe

In a memo to employees of Sierra Pacific’s Quincy mill that was sent before the settlement was announced, SPI owners Red, George and Mark Emmerson emphasized that no jobs would be lost because of the settlement.

"We wanted you to know in advance that this settlement will not affect your job or the overall viability of SPI," the owners said in the July 9 memo. "We will remain a strong company in the forest products industry and plan to continue operating just as we always have bee

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Record SPI forest fire recovery settlement includes $55M cash and 22,500 acres of land

by Jim Reece, Tspntv.com, July 27, 2012

The U.S. Attorney’s office announced a record $122.5 million settlement with Sierra Pacific Industries for the 2007 Moonlight Fire recently, saying it was the largest ever recovery for damages caused by a forest fire.

U.S. Attorney Benjamin B. Wagner said the United States settled a major lawsuit for damages resulting from the Moonlight Fire, which was started Sept. 3, 2007 on private forest land in Plumas County.

Wagner said the fire threatened several communities, including Susanville in Lassen County. More than 3,000 firefighters were assembled to contain the fire, and the U.S. Forest Service spent more than $22.5 million fighting the fire.

The settlement amount is to be paid as $55 million in cash and a conveyance of 22,500 acres of land in California owned by Sierra Pacific Industries. The Forest Service will choose the land at its sole discretion from large selections offered by SPI.

The land currently has approximate estimated private economic value of at least $3,000 per acre, or a total value of approximately $67.5 million, Wagner said. Current value may increase depending on the nature and location of specific parcels selected.

"Once the property is selected and rededicated to the use and enjoyment of future generations, the value of the land to the public is expected to substantially exceed that figure," he said. "Much of this land is expected to bridge gaps between existing National Forest land and support sensitive species and critical watersheds and habitat."

Assistant Attorney General for environment and natural resources, Ignacia S. Moreno said: "The Moonlight Fire was a devastating fire that destroyed millions of trees and critical wildlife habitat, and threatened communities." He said "like many forest fires it may have been easily avoided with proper safeguards."

He said the "settlement is just and fair and will compensate the people of California for public lands and natural resources lost to the Moonlight Fire." Wagner said: "What was lost was priceless and will not return for over a century. The recovery in this case will help start the process of making the public whole."

Pacific Southwest Regional Forester Randy Moore was "pleased with the settlement and with the opportunity to restore the landscape on two national forests. This settlement furthers the Region’s Ecological Restoration efforts."

The fire killed more than 15 million trees on more than 46,000 acres of public lands in the Plumas and Lassen National Forests. Some of the trees were more than 400 years old, and two million of the trees could have been harvested for commercial use, with enough timber to build more than 73,000 single-family homes.

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Tehama County seeks info on Mill Creek land deal

By Rich Greene, Red Bluff Daily News, October 19, 2012

The Tehama County Board of Supervisors formally requested more information Tuesday regarding a proposed land deal between Sierra Pacific Industries, Lassen National Forest and the Western Rivers Conservancy in the Mill Creek area.

Earlier this year around 600 acres near Lower Deer Creek Falls became a part of the Northern California Regional Land Trust, which secured a 30- mile stretch of the creek from future development.

Additional funding for future land purchases was available from a federal Land and Water Conservation Fund grant.

Western Rivers Conservancy was coordinating the purchase of another 2,700 acres from Sierra Pacific, and Lassen National Forest had $1.5 million available for additional land purchases in the nearby Mill Creek Canyon.

On Tuesday the board authorized Chairman Bob Williams to send a letter to Forest Supervisor Jerry Bird requesting additional information regarding real estate transactions citing the Freedom of Information Act and coordination of governmental agencies.

The Board of Supervisors has several concerns regarding this acquisition, the letter states.

Tehama County contains portions of the Lassen National Forest within its boundaries and takes an active interest in this transaction because it essentially removes approximately 2,385 acres from private land to public land within our county.

Roughly 25 percent of land in Tehama County is owned by government agencies.

According to the Western Rivers Conservancy website, the Deer Creek project in Tehama County is an effort to restore endangered salmon and steelhead in the Sacramento River system as well as enhance hiking and backpacking opportunities in the area.

The group hopes to keep the area dam-free and undeveloped.

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