Soaring lumber prices could be a boon for Southeast Alaska’s struggling timber industry. The pandemic has fueled the demand for both renovations and the new home construction market, and supply has not kept up.
But industry experts are divided over how to best seize the opportunity in the region: By cutting what’s left of Tongass old-growth or by retooling to cut younger, second-growth trees.
In March, the National Association of Home Builders blamed rising materials prices for adding an average $24,000 to the cost of a new home.
Most of that cost is due to the skyrocketing price of lumber which is in high demand and “soaring to just absolutely record highs,” said resource economist Brett Watson with the Institute for Social and Economic Research at the University of Alaska Anchorage.
There are a number of explanations: low-interest rates have spurred home-buying, people doing more do-it-yourself projects and renovations, and also a bottleneck in the supply caused by the pandemic.
But could this be an opportunity for Southeast’s struggling timber sector?
“What I imagine that timber mills are looking at now during this recent run-up is thinking about whether or not these prices are here to stay,” Watson added.
Opponents of old-growth logging push second-growth solutions
Catherine Mater is an Oregon-based forestry consultant who’s worked both for timber outfits and for environmental groups opposed to old-growth logging. She’s been advocating for retooling Southeast’s timber economy to use second-growth trees instead of logging old-growth forests.
“What we have in Southeast Alaska is literally a wall of wood that’s going to happen whether the industry is ready for it or not,” she told CoastAlaska during a visit to Juneau in September 2019.
“And the real question is, can we do a good transition so that you’ve got an industry that could reinvent itself?”
Two years later, Mater says she still believes the focus on old-growth logging is a fight that no one can win.
“Alaska really is the last state in the nation that harvests old-growth material — no one else is doing it,” she said in a recent telephone interview from Corvallis. “Everyone has transitioned to young growth harvesting. And the industry is not just surviving, but it’s thriving right now.”
The industry says Tongass second-growth is decades from viability
But Alaska’s timber industry remains focused on old-growth supply. That’s despite the Tongass National Forest’s 2016 plan to transition away from logging ancient forests.
The Forest Service prepped one of the largest timber sales in recent history on Prince of Wales Island. But environmentalists sued in 2019 — after objecting to clear-cutting old-growth forests — and a federal judge agreed that the agency’s review process was flawed.
It sent the Forest Service back to the drawing board to revive a portion of the old-growth logging plan. But in the meantime, it’s taken tens of thousands of acres of forest off the table — including second-growth lumber — and that means there’s little supply available on federal lands, says those who work in the industry.
“There are no young growth sales scheduled in the Forest Service,” Eric Nichols of Alcan Lumber in Ketchikan told CoastAlaska. “So people can talk about all this stuff. But until you see these timber sales actually come up, you can’t count on them.”
He’s skeptical that second-growth trees are the answer. His company exports old-growth logs to Asia where he says there’s a strong market for their clear, knot-free timber. And he says it’s more economical to export overseas than transporting logs to mills in Alaska or down south.
“By the time we build the roads and harvest the timber, truck them from a small island, put them in the water and transport them to a mill in Washington,” Nichols said, “our cost to do that is higher than what we can generate from the log.”
Others who make their living in this industry agree: Second-growth timber sales don’t pencil out. Especially as the costs of doing business rise.
Wes Tyler operates Icy Straits Lumber and Milling on Chichagof Island, west of Juneau. Most of his work is old-growth logs he agrees are prized for their clear, knot-free wood.
He doesn’t dismiss the potential for second-growth harvest but he says that is further south and out of range of his small mill near Hoonah.
The region’s industry now employs just a few hundred people at most, compared to the thousands when Alaska Pulp Corporation in Sitka and the Ketchikan Pulp Company operated their mills.
“It’s going to be difficult because the whole system of things — the whole infrastructure that used to be there in the old days — is gone,” Tyler said.
The last major sawmill in the region is Viking Lumber in Klawock. The company didn’t respond to calls for comment about the potential for second-growth trees. Nor did the Alaska Forest Association returns calls or emails.
Tyler says that it would take major investment to get Southeast’s timber manufacturing sector running again.
“And so, somebody is going to have to spend a lot of money to set up for a volume-type infrastructure that’ll handle that,” he added.
The timber business is a long game. Tyler says in the northern reaches of the Tongass National Forest there could one day be potential for second-growth harvests in future decades.
“Most likely it would be another 30 to 40 years of growth before it is actually viable,” he added in a follow-up email.
Political winds shift the direction of Tongass management
Politics play a role as much as economics, leaving Eric Nichols of Alcan Timber deeply skeptical of his industry’s future. Chinese tariffs on timber exports imposed during the Trump administration’s trade war hurt the industry. Clinton-era Roadless Rule policies were supported under Obama but rolled back by Trump.
“Every four years, we keep changing the direction of the Tongass is going we’re going through that right now again,” Nichols said, “and you cannot make the investments needed either on the harvesting side, or on the manufacturing side, based upon an unsteady supply from the Forest Service.”
The political transition means the feds aren’t ready to show their cards of how management might change.
“We are evaluating the implications of the new administration changes and will provide updates as they become available,” Tongass spokesman Paul Robbins Jr. wrote in an emailed statement.
On top of it all, Sealaska, the regional Alaska Native corporation, and largest private landowner exited the timber business — destabilizing the sector even further.
Yet Catherine Mater, the forestry consultant, says the pieces to revitalize the industry are in place — and have been for a long time. Working from the Forest Service’s own data and as well as her firm’s in-field surveys, she’s prepared a report that shows tens of millions of board feet of marketable stands of trees that are at least 60 years old.
“Had Southeast been on track to transition to young-growth starting this year, you would have had competitive material flowing in not only to Alaska markets but in my opinion, in the Lower 48 markets,” she said. “The pricing has been so good.”
Of course, nobody can know for sure whether these higher prices are here to say. But both Mater and Nichols do agree on one point: second-growth timber isn’t being offered on the Tongass. That is hasn’t been the focus of the Forest Service.
The current timber sales in the works are about 1,850 acres of old-growth forest being prepped for sale on the north end of Prince of Wales Island. And a second project east of Ketchikan could offer about 6,040 acres of the national forest for logging.
Of that only about 1,000 acres of that timber sale would be second-growth forest as the emphasis continues to feed the demand for centuries-old trees, something conservationists have already raised their objections to.
Jacob Resneck is CoastAlaska's regional news director in Juneau.
