Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.
+1 212 318 2000
Europe, Middle East, & Africa
+44 20 7330 7500
+65 6212 1000
The U.S. Forest Service is offering to renegotiate timber sale contracts in an effort to save sawmills in the Rocky Mountain region that have been hit hard by bark beetle infestations, the recession and financially unviable agreements.
Acting regional forester Jerome Thomas said Thursday that sawmills are needed more than ever to help cope with a bark beetle infestation that has ravaged an estimated 41 million acres in the West. The offer will help sawmills in Colorado, South Dakota, Wyoming and Nebraska, he added.
Bark beetles have killed 4 million acres of forests in Colorado and Wyoming. Loggers have only been able to cut down about 60,000 acres of dead trees to protect local communities, watersheds, campers and hikers from wildfires and falling trees.
"These contracts have been a liability, rather than an asset," Thomas said.
U.S. Sen. Mark Udall said Colorado's three sawmills -- in Montrose, Saguache and Delta -- are struggling because of the downturn in the housing market and lower demand for wood products. Contracts with the federal government before the recession don't provide them with enough money to cover the costs of cutting trees and turning them into lumber and other wood products, he said.
"By allowing the mutual cancellation of these contracts, the U.S. Forest Service is helping the local economy and promoting a healthy forest management industry.... After they are free from these old contracts, the mills can take dead or hazardous timber that would otherwise go to waste and use it to create jobs," Udall said.
The rice-sized bugs burrow under the bark and lay their eggs, turning green needles the color of rust as they bore through the tree's vascular system and restrict its ability to draw water. Eventually the needles fall off, and the tree turns gray, making them a wildfire danger.
Sloan Shoemaker, vice chairman of the Colorado Bark Beetle Cooperative that includes government representatives, utility and water providers, the wood products industry and environmentalists, said much of the beetle kill is not economically viable, no matter how many concessions the sawmill industry gets.
Donovan insisted new contracts are the answer. "We can sell everything we produce," he said.
Thomas said he does not know the number of other sawmills affected or the value of the contracts.
John Baxter, owner of the Mountain Valley Lumber Co. that builds log homes in Saguache, said the agreement will help save more than 35 jobs.
"The log home business just fell off the cliff," he said.
Pat Donovan, who is the receiver for the Intermountain Resources sawmill in Montrose that is struggling financially, said renegotiating the contracts could make sawmills more competitive, but he wants to see the details first.
Eric Sorenson, co-owner of the Delta Timber Co., said his company uses aspen for sawing and other wood products and reducing the cost would also help his company.