Tongass Timber Economics 101

By Joseph R. Mehrkens (retired economist)

This paper is designed as a briefing paper.  Future revisions and additions will periodically occur.  It will be available on the Greater Southeast Alaska Conservation Community website.  It is the sole product of J.R. Mehrkens and is based primarily on Tongass information collected since 1977 and organized into a series of Excel Spreadsheets.

Introduction:  It is well known that the Tongass timber program is a real money loser.  The GAO (federal Government Accountability Office) found in the late 1990s that the Tongass timber program lost 80-94 cents on every dollar spent.  The loss is far worse today – especially with the new wrinkle where the Forest Service uses old-growth timber sale revenues to finance even greater money losing activities, e.g., stewardship/restoration contracts.  In essence, this means more old-growth is logged to ostensibly repair past old-growth logging and to create more potential restoration projects.

While forest restoration is a good goal, there are far superior ways to pay for it.  However, first it’s important to revisit some of the basic underlying issues of Tongass timber economics such as taxpayer losses, the steep decline in timber demand and the high costs for logging roads (the greatest contributor to taxpayer losses).

In economic analysis there are two primary tasks: (1) identifying the stream of costs and benefits over time to determine if benefits exceed costs, and (2) identifying who benefits from and who pays for the project.  To date all of the Tongass restoration projects (proposed or in-progress) have done neither.

Download the entire paper here.

NOTE: Joseph R. Mehrkens is a retired resource economist residing in Juneau, Alaska. He has B.S. in Forestry from the University of Minnesota and a M.S. in Forest Economics from Michigan State University. Since 1979 he has worked as an economist for the U.S. Forest Service, The Wilderness Society, the Alaska Department of Commerce and Economic Development and as a private consultant. Past work assignments include assessments of the timber trade between Alaska and the Pacific Rim countries, Congressional reports on the annual supply and demand for Southeast Alaska timber, lobbying for the passage of the Tongass Timber Reform Act of 1990, testifying before Congress on taxpayer subsidies for Tongass NF timber, and recommending changes to the President’s Budget for the Tongass NF for consideration by the House and Senate Appropriations Committees.

3 thoughts on “Tongass Timber Economics 101”

  1. This report is amazing. While the country struggles under a mountain of debt, and sequestration, the government spends hundreds of thousands of dollars for every timber job in Alaska. And we liquidate old-growth forest in the process. What is wrong with this picture? This story should be on the front pages in Washington DC.

  2. I would comment but I was well trained while in the Forest Service that Alaska was “different” and not to be commented on by others..who don’t know about it.

    I do remember when I worked on the 95 RPA program, one of the issues we worked on was Roadless. Lyle Laverty was the Director of Recreation and the Policy Lead for that issue.
    When we went to Chief and Staff meeting to discuss it, someone asked “but what about Alaska?” and that derailed the conversation such that the end results was “don’t do anything with the rest of the country”. In retrospect, it’s interesting how the dynamics of meetings can change the course of decisions. Jack Ward Thomas was Chief and Dave Unger was Associate Chief. If I had participated in the conversation, I would have said, “let’s just leave it out and work on the rest for now.”


Leave a Comment

Discover more from The Smokey Wire : National Forest News and Views

Subscribe now to keep reading and get access to the full archive.

Continue reading