Payson Roundup: 4FRI Contract Bombshell

This blog has had numerous posts, debates and discussions about the Four Forest Restoration (4FRI) in Arizona, including this article, “Is the US Forest Service killing the last best chance to save the Southwest’s forests?”

Well, the latest development via the in-depth reporting of Pete Aleshire with the Payson Roundup in an article yesterday titled, “Forest Contract Bombshell.” Below are extensive snips from that article:  [Note: emphasis added – mk]

Amid fresh furor, the U.S. Forest Service is considering letting a troubled timber company transfer the biggest forest restoration project in history.

The Forest Service announced on Monday that it has received a request from Pioneer Forest Products to transfer the 10-year, Four Forest Restoration Initiative (4FRI) contract to thin 300,000 acres in Northern Arizona to another, unnamed company.

“We are in the process of reviewing the application,” said Cathie Schmidtlin, media officer for the Southwest Region of the U.S. Forest Service, “to determine whether the transfer of assets is in the best interest of the government. If we determine it is not, the contract would stay with Pioneer. If it is determined to be in the best interest of the government, then the contract liability would transfer to the new owner, who would be contractually obligated to carry out the terms and conditions of the 4FRI contract.”….

At least one of the key groups that helped develop the 4FRI plan immediately responded to the announcement by calling for an inspector general’s investigation of the “potential irregularities” in the award of the contract.

“Many of us saw this one coming right from the start. Pioneer’s business plan read like a fantasy novel,” said Todd Schulke, with the Center for Biological Diversity, which helped develop 4FRI in collaboration with representatives of the timber industry, forest health researchers and local officials like Gila County Supervisor Tommie Martin. “But the Forest Service chose Pioneer despite having more realistic options. Either Pioneer misled the agency about its financial viability or the Forest Service chose to look the other way when there were serious questions. Why?”

Gila County Supervisor Tommie Martin said, “this could be the best thing that has happened to 4FRI — or it could be abysmal business as usual. Anyone who has the financial backing to buy this contract, the willingness to ‘take on’ the whole social functioning/disfunctioning that has grown around it and the desire to fulfill it definitely has my attention … and my respect if they can actually pull it off.”….

The Forest Service awarded the contract to Pioneer more than a year ago. The contract originally required Pioneer to thin about 15,000 acres in 2013 and 30,000 acres annually after that. The plan called for feeding those small-diameter trees into new mills in Winslow to produce biodiesel fuel and a type of “finger-jointed” furniture.

Several months ago, the Forest Service modified the terms the contract so that Pioneer only had to thin 1,000 acres in the next 18 months, amid reports that the company was having trouble getting financing for its proposed mills in Winslow.

The Forest Service statement released on Monday said “we cannot disclose the names of the potential new owner as this information is confidential while the proposed agreement is under review. The first task order of the contract, the Ranch task order located on the Apache-Sitgreaves National Forests is progressing satisfactorily and expected to be completed ahead of schedule.”…..

The stakeholders generally expected Berlioux Arizona Forest Restoration Products (AZFRP) to win the bid for the contract, since he had helped develop the approach behind 4FRI.

Instead, the Forest Service’s contract review office in Albuquerque awarded the contract to Pioneer Forest Products. One of the principals in the company was Marlin Johnston, who was a longtime Forest Service official who formerly ran the agency’s regional timber harvest office. In that post, he battled demands of environmentalists that the Forest Service quit cutting the remaining old-growth, fire-resistant trees.

Supporters of the 4FRI approach, like Supervisor Martin, questioned the award of the contract to Pioneer. She noted that Berlioux had not only offered to pay more money to the Forest Service for the contract, but had also agreed to monitor whether the thinning projects had the intended effects on tree growth, fire patterns and wildlife.

Moreover, Martin and others questioned Pioneer’s plan to compete with overseas markets in making finger-jointed furniture and use branches and slash to make diesel fuel, although previous efforts had failed.

By contrast, Berlioux proposed using the trees to make Oriented Strand Board — a sort of high-tech plywood that currently represents a $2 billion industry. Berlioux ran Europe’s first OSB factory.

Moreover, Pioneer principal owner Herman Hauck, 84, hasn’t operated a timber company or mill since Hauck Mill Work Company went bankrupt in 1969, according to an investigation by freelance writer and radio reporter Claudine LoMonaco, published in The Santa Fe Reporter, an alternative weekly. She had prepared a story on Pioneer’s dubious background for the public radio station in Flagstaff, but station officials killed the story.

The Forest Service contracting office declined to release many key details of Pioneer’s proposal and has never explained why it awarded the contract to the company that offered to pay the least.

Forest Service officials on Monday remained tight-lipped. In an e-mail to the Roundup accompanying the release Schmidlin said “this is all the information I’m able to provide at this time. The Forest Service will gladly share additional information in the near future, when the review process is completed. I don’t know how long the process will take.”

The swirl of questions about the contracts have forced the very people who developed the 4FRI approach to become increasingly vocal critics of the Forest Service’s implementation.

Martin, in an e-mail exchange on Monday, said she hopes the Forest Service will now seek expert, outside help. “The FS track record on the business side of this contract conversation has been so poor that unless they get ‘outside’ help evaluating the situation, the proposal and bringing business science to bear  — I’m skeptical of the outcome … even knowing that a blind squirrel finds a nut once in a while!”

Moreover, she said “for me there is still the whole social agreement concerning big tree/old tree retention that was agreed upon by the counties, enviros, industry and others that the FS have completely thrown out the window and claim that us wanting to leave them all ‘is not good science.’ Nonsense!”

She said old-growth trees constitute just 3 percent of the trees in the ponderosa pine forest of Northern Arizona, even though the Forest Service management plan calls for increasing that tally to 20 percent. “For instance, the 33,000-acre Rim Lakes thinning portion of the 4FRI proposal by Heber has only an average less than one old tree per acre to start with!”

She said she hopes the Forest Service will now agree to leave virtually all of the trees larger than 16 inches in diameter. “We’re asking that they leave ALL the big/old trees (with few exceptions) — get rid of all the dog hair thickets and get ahead of the fire danger curve — and then go back to the drawing board and see if there needs to be more mosaic, more age/structure classifications, etc. within the treated area. They claim their science shows restoration occurs faster/better with some of the old growth gone — again I say nonsense! First let them show me where they have restored a forest — ANYWHERE — and then we’ll talk about it.”

Schulke made the same point. The Center for Biological Diversity has battled the Forest Service for years attempting to prevent the harvest of old-growth trees in an effort to save endangered, old-growth dependent species like the Mexican spotted owl and the Northern goshawk. But the group promised to go to court to support 4FRI if the Forest Service agreed to leave the remaining old-growth trees.

“Ignoring the collaborative agreement was an outright breach of the social license that enabled 4FRI in the first place,” said Schulke. “Large trees are not only critically important to the survival of an array of endangered and threatened species, they’re also more fire resistant — they help to reduce the risk of catastrophic fires. We fully support 4FRI. But the Forest Service bungling has put communities at risk from the fire unnecessarily. It’s time to demand action.”

14 Comments

  1. What about the markets for the end products of the two competitors for the contract? Arizona Forest Restoration Products proposed an OSB mill — I don’t know if their proposal included ancillary products. Putting all of the eggs in the OSB basket might have been risky, since OSB is so closely related to US housing, as we’ve seen in recent years.

    OTOH, Pioneer planned to manufacture a range of products. This is from the press release issued last year by the 4FRI Stakeholder Group (www.4fri.org/):

    “Specifically, Pioneer Forest Products plans to build a plant near Winslow, Ariz., at which ponderosa pine timber will be converted into non-commodity, high value lumber, laminate wood panels, door and doorframe, window frames, furniture, cabinetry, and specialty components. They intend to use a portion of the slash from the forest operations and mill waste to fire the kiln used to dry the material. They intend to use the remainder to create bio-diesel fuel at a bio-diesel plant built as part of the overall operation. Pioneer Forest Products was selected from among four proposals by the Forest Service, in part, because it is an appropriately-scaled, community-based industry capable of removing small-diameter trees to help offset forest restoration treatment costs.”

    One can argue that Pioneer’s mix of products was more diversified and flexible.

    I recently read a 2012 article that said “a shift in the ratio that prevailed in the middle of the last decade of 80% single-family, 20% multi-family to more of a 70-30% split today represented about a 10% drop in OSB consumption.”

    Maybe someone here can tell us more about the OSB market. Was it risky to bet 4FRI on one product?

    From what I recall, the 4FRI Stakeholder Group was deeply divided over the choice between Pioneer and AZFRP.

    • Does anyone remember why they had to have only one company get the trees? Wasn’t there enough volume for both? It also seems odd that they couldn’t just say to both of them “work together and come up with something; you both have good ideas.” I’ve always found that commerce is the greatest peacemaker.

      At least that’s what we used to do with research proposals. And the FS did with IT at one time.

  2. I’m gonna have to say…that it was the “bungling” of forest policy 20 years ago by Todd and the CBD that got them into this mess. (I did a story a couple years ago about the Wallow fire, and wanted to title it “forest disasters:how radical enviros bungled forest policy”…but the editor toned it down. ) I’ve probably told the story here before, so I won’t belabor the subject, but in short the 1987 Apache Sitgreaves forest plan called for “transitioning” from Large diameter logs to thinning by 1997. The plan called for “commercial thinning” on 20,000 acres per year by 1997…the very thinning that Todd champions now. The forest used to pre-commercial 30,000 acres/year from the 60’s to 80’s,,,treees that would be ready for harvest by 1997. While the rest of the timber industry transitioned to small diameter trees, the ASNF saw it’s “sawtimber” harvest drop from 50 MMBF/year in the 80’s to 2 MMBF in 1996…two years after the CBD litigation shut em down. But hey…In the spirit of “finding common ground”…it’s best to airbrush that history away.

    • Yeah, the “transition” is kind of suspect. “We know that logging big trees is wrong but let us keep doing it a little longer. We promise to stop (someday).” Enviros did not bungle forest policy, the “experts” in the Forest Service did. They kept targeting big trees well after they should have stopped, and they will gladly go back to it, as they keep trying to do in eastern Oregon – thinking up lame new excuses to amend the Eastside Screens.

        • Gil: There are good reasons Tree maintains his anonymity. Here is yet another example. Obviously no one in their right mind would agree with many of the blithe statements he makes as if they were Fact and Truth and Obvious. In addition to his Big Tree silliness, he somehow assumes that forest management policy was in the hands of the Enviros at one time, and it was theirs to bungle — but they didn’t! Someone else bungled it instead and it’s all their fault and he’s telling! How’s that for a grasp on reality?

          Is it really worth asking for scientific documentation for statements from an anonymous person that are obviously ridiculous? You and I (and almost all other readers of this blog) know that is an impossible task. So why even ask? That’s just what trolls do, though — try to get the rest of us to respond to their goofy statements and personal attacks. When we do, they win.

          Apparently Tree is an expert or something and has the ability to dictate our history as he sees it, and speak for all of the rest of us about what we think about things. He also occasionally provides some good links and references in addition to his baiting pronouncements. I just wish everyone would sign their real name, or act civil and offer constructive comments if there are good reasons for their anonymity.

      • Can anyone answer the following? What percent of Arizona’s forest was Mexican spotted owl (MSO)habitat 100 years ago? I wasn’t aware that MSO habitat consisted of very low density (20-30 TPA) very open “frequent fire” understory forest. Before the Wallow fire, the Apache Sitgreaves 2009 draft forest plan revision stated that 20% of the “forested acreage” was classified as “large tree high density,” while only 5% was in that category 100 years ago. Is it possible that the “low density large trees” that were logged over the past 100 years wasn’t even MSO habitat in the first place? Only two questions are relevant.
        #1–what percentage of the pre-settlement forest was MSO habitat? (the USFWS 2011 Draft MSO recovery plan sez “owl likely existed in small patches of dense forest embedded in a matrix of open forest.”)
        #2–was the low density “old growth” that was logged even MSO habitat in the first place? You can save it for the sake of looking at it, but don’t claim it was MSO habitat.

        Another strange anomaly is the MSO seems to show an affinity for nesting on “steep slopes.” To the extent that models used to predict MSO habitat use steep slopes as one of the criteria. Research in the 2011 recovery plan found 80% of nests on steep slopes (MSO’s are even found nesting on cliffs in the Grand Canyon).To the extent that back in the 80’s the USFS’s biggest concerns about MSO habitat was proposals to start “skyline” logging on the ASNF.

        The whole MSO listing had more to do with cheap tawdry politics, northern spotted owl court precedence, and “error on the side of caution cause we really don’t know yet” science. Read the 2011 draft recovery plan…it reads a little different than the 1995 one.

        • Derek: You know the answers to your questions. Mexican spotted owl habitat was different 100 years ago, and it was different from the modeling descriptions we’re being told today. The real question is: What is the record for Mexican spotted owls 100 years ago?

          Were they even present? How many? What did they eat? Who ate the owls? This whole habitat thing seems to be mostly an inter-agency land grab problem. I think it’s time we pulled the curtain on these modelers and took a good look at their methods.

          I wrote a paper on this very topic for another area of owl habitat in 1996. It was essentially (but not by design) a confidential research report prepared by a legal firm for a large Washington landowner/client:

          http://www.nwmapsco.com/ZybachB/Reports/1996_Spotted_Owl/index.html

          I am currently having this paper peer reviewed for possible current publication, but I will post it here one way or another once the results have come in.

          Derek, Gil, Matthew, JZ, Sharon, Jon, Steve, Andy, Mac, greg, Larry and/or anyone else interested in giving me a hand on this, I’d appreciate very much any and all feedback on about a dozen pages of this report. Most of the rest are maps and photos and the Missing Intro. I’m particularly interested in your thoughts on Spotted Owl Habitat (pp. 43-50) and Conclusion[s] (pp. 61-65), if you have the time or interest.

        • Reply to my reply. I should add a #3 question. Is it possible, seeing the percentage of “large tree high density” today VS. 100 years ago, that there is “more” MSO habitat today than then? what a delicious irony. Maybe someone ought to ask Wally Covington that.

          I also want to point out that the 20% in that “large tree high dense” category was on ground to steep to log, which seems to be the very habitat the owl prefers. Also, there was no “skyline” logging in Arizona, purely a tractor logging show. Nothing over 35% grade.

          Only a society that has met all it’s “basic needs” has the leisure time and security to feel angst about what their for fathers did to meet those basic needs. You can criticize the logging of all that “low density non-MSO habitat old growth,” but to do so also requires you to ponder the ramifications of not doing so. Action and reaction thang ya know. Flagstaffs trendy historic district with all the groovy coffee and art shops was built out of that old growth. It’s simplistic thinking to ignore it.

          I read that a few years ago someone polled the Chinese and asked them “what do you do in your leisure time.” Their response was “what is leisure time.” Still in the basic needs phase. Perhaps their children will be tree sitters in 30 years.

          • Derek, as you know that’s also true in this country. My church when I lived in Virginia was of recent immigrants. Getting jobs, housing, health care, and immigration services were high on the agenda. That’s not to say that the environment isn’t important, but our parishioners’ list of environmental priorities might not be the same as some other neighborhoods with different economic conditions.

  3. I can’t wait to find out the reason why Pioneer couldn’t attract financing…if we ever hear. The bio-diesel out of pine needles or whatever was a scheme…but the finger jointing sounds pretty plausible. While you can build a house out of ponderosa, structural engineers will specify the stronger doug fir. If I’m correct, most ponderosa is used in door and window moulding. Easily molded, takes a good stain. Next time you buy a Pella window, look at the frame…it’s all finger jointed (probably greatly reduces warpage now that I think of it). The mills that I know of that are supplied by P-pine cut 1×4’s…not 2×4’s. Never-the-less…I’d love to hear why they couldn’t get financing. I wonder if a “non-guarantee” from a supplier of raw material with a lousy track record for reliability(USFS) had anything to do with it?

    For all the talk about “thinning doghair” in Arizona…the FIA data shows that like 85% of the stands are classified as “sawtimber.” They also show a much larger cubic foot volume in trees over 16″ diameter than most forests. Frankly, if I remember, the percentage of cubic volume in trees under 12″ was smaller than other forests that have a thriving timber industry. Quite perplexed at the small tree mantra.

  4. Another side of the story? Here’s a viewpoint from 4FRI stakeholder Paul Sommerfelt

    4FRI In Trouble? Another Viewpoint
    Recent media reports have highlighted what appear to be problems with the 4FRI contractor, and the process in general. While there might perhaps be some valid issues sprinkled throughout these reports, they are largely hidden behind the veil of eager reporting and the same old tired comments from a small group. Stories such as these, once picked up by others and then repeated, have an unfortunate tendency to soon be regarded as “fact”, even though the details may not bear that out.

    It should be noted that those identified and quoted in these recent reports lost out in the contractor selection process: they had formed an alliance to back one another, engaging in some very direct pre-contractor selection “do-or-die, our way or the highway” positioning in an attempt to force the USFS into a corner. Frankly, such overt outside-the-bounds-of-good-behavior maneuvering alienated a large segment of the 4FRI stakeholders.

    That same group is now engaged in a campaign to paint the contractor selection as flawed and the entire 4FRI process as doomed. Not only is it highly unjust and very shortsighted to suggest the selection process was tainted, it is incredible to assume that the inability of any single entity to fulfill a contract obligation, something not yet demonstrated, could spell total failure for an entire project.

    Business prospects in any field have always come and gone, and will continue to do so. This is the basis of entrepreneurship: some will prosper; while others result in nothing more than talk. If we are to succeed in restoring our forests, we must focus on desired long-term outcomes (forest treatments) and not put all our hope in a single business model or company.

    There are multiple issues surrounding the contractor and the status of efforts underway, some protected by confidentially issues and other business matters. We need to be extremely careful to not swallow the agenda of a specific individual or disgruntled group of folks. If the current contractor fails, we evaluate why, and then move forward to another one. We are currently engaged in a good-faith attempt at getting the largest forest restoration project in the history of this country off-the-ground, an effort that will require millions of dollars of private-venture capital to succeed. We didn’t go the moon with the first rocket launch, and the success, or failure, of any one company can’t be considered success or failure for the entire overall project.

    No one, not even the most die-hard proponents and advocates of 4FRI, are suggesting, however, that we simply close our eyes and hope – that is never a strategy. That is why most stakeholders, in this for the enduring good of our forests and acting in a productive, forward-looking mindset, are committed to hold both the US Forest Service and Contractor accountable, and are actively working to vet production promises and technology. It is just happening out of public view, somewhat the opposite of those only too eager to talk to anyone who will listen. We need understanding, efficiency, and a healthy business climate to reach our goals of a restored forest, protected communities, and vibrant sustainable wood based industries. We don’t need rocks or simple headlines.

    We need to remind ourselves that it’s always easier to shoot at a target than build the model, to find fault than to create, to find a small group who will agree with you than develop a large group who will work with you. Which group will we choose to be in, and what do we want our legacy to be? Are we committed to a single way of doing business, or to our forests?
    4FRI is very much alive and continues to move forward. For information on how you may join and support the effort, visit http://www.4fri.org/

  5. Just want to add (cause I’m sittin at work bored of drawing lines)…that the 4FRI isn’t like other “collaborations” in the West. Collab’s in Idaho, Montana, Oregon and Wash. are “loosely” between moderate enviros and the timber industry (lotta other groups in there too), while there is no timber industry in Arizona (no offence to the guys who log 6 MMBF/yr. on the Coconino). The 4FRI is more like a collaboration between “moderate enviros and radical enviros” (I know, I know…there’s a lot of conservatives, including writers for RANGE, who are a pretty conservative lot who support it-and I support it). Moderate enviros who sympathize and supported the radicals…but who now want the USFS to bail them out…and who don’t really understand how forestry works or worked. No big deal…just a distinction.

    Another interesting topic Sharon…is “silviculture methods used by the early forest service” (circa 1907-1950) specifically in dealing with “multi aged stands” like those in P-pine. I try to visualize how the USFS managed these stands in the past…especially in the SW. People assume that a USFS timber sale of old growth in 1907 was a clearcut. But instead it was more like several “shelterwood prep entrys.” Take the oldest and most “decadent” the first go around, increase growth on remaining mature trees, come back 20 years later take a few more per acre…come back 20 years take the remaining overstory/thin the regen. You see that on “Lick Creek” in the Bitteroots and in the BH’s. People have to remember that it wasn’t 20-50 TPA of even aged 200 year old trees, but multi aged. You might have 10-200 year old’ers, 10-100 years old, 10-60 years, ect…so it made sense to let the remaining younger trees put on growth before harvest. I want to add…that fire was an enemy to these early foresters in these type forests not so much cause it killed the mature trees, but because it killed the regen…which they were VERY interested in increasing. We’ve all seen the “time lapse” photos of the regen on Lick Creek…but they’re soon to log Lick Creek again…and it will be a “commercial” thinning of that dense regen this time. The “fire suppresion” generation of trees. I guess I’m rambling like this cause in the SW…the whole place was like Lick Creek (not as dense though)…where harvest was a series of shelterwood and overstory removals of the “low density” stuff, which basically “bought them time” until the regen was of sawtimber size…which it is now…and was beginning to be in 1995.

    I also want to point out something on the whole 16″ diameter limit. I sent you the photo of the “butt slab” where the tree rings showed the radical increased growth rate that followed the thinnings (I’ll post it someday…when I’m not overworked). When a 12″ DBH tree is thinned today in Arizona…to say a density of 75 TPA (suitable for fire), in 20 years you’re gonna have 75 >16″ dbh trees. Will anyone cut some of them then to “restore” it to pre-settlement density’s? OR will they leave em alone to create an old growth paradise that never historically existed? Now who’s “manipulating nature” to fulfill their human desire. Is that any different than the USFS manipulating nature to grow timber? I”ll guarentee that no-one, especially the enviros, will want to cut it back down to the 20-30 TPA. Hell, that is the shelterwood harvest density that they critizise now. I don’t think they can handle the truth of the pre-settlement SW forest density…so they want to “improve” on it. And how is that mentality any different than the USFS wanting to “improve” on it? AT least we got lumber to build Flagstaff’s historic district.

    Anyway, now I can get back trying to analize what some incompetant surveyor did 40 years ago, then go find his grave and do “you-know-what” on it. lol.

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