Logs on Trains from Oregon to Wyoming: The E&E News Story , Subsidies and Bugs

I couldn’t find a photo of today’s version, at least Bend is near Gilchrist.


This E&E News story is good, but sadly it’s behind a paywall. I’m going to excerpt a few paragraphs.

Moore told E&E News last week he’s not sure how long the timber transport pilot project will last but that his main goal is to keep mills open in places like the Black Hills, where his agency’s own policies to limit timber harvests on the 1.2-million-acre Black Hills National Forest have been blamed for squeezing local mills. The local timber industry and lawmakers who represent the region are watching every move. The Biden administration is funding the program through the 2021 infrastructure law, with an initial goal of moving around 3 million board feet by March. The arrangement is connected to a $50 million forest stewardship partnership with the National Wild Turkey Federation.

If the pilot project succeeds, it might show one way the Forest Service can step up forest thinning in places like California and Oregon. In those states, milling capacity has shrunk but forest managers say thick vegetation and dead trees will invite more and bigger wildfires as climate change worsens.

If the experiment stumbles, Moore may hand the same troubles to his successors without a clear solution, and communities reliant on forest products will continue to face the threat of mill closures as they have in the Black Hills, where Neiman Enterprises — a partner in the project — has said it can’t sustain its mills without a more dependable supply of wood.


“We’re not saying this is the best solution, but it’s the one we’ve come up with for right now,” Moore said in a brief interview at the National Association of Counties’ winter legislative conference.
“We have to start somewhere,” Moore added. “What’s critical to us is that these mills stay in business, and if we can work collectively across many different landscapes to do that, we should do that.”

Wood products companies and forest policy consultants said the experiment’s success hinges on finding uses for the wood that help make up for the cost of transportation — and on the federal government’s continued willingness to subsidize the effort if it doesn’t pencil out. “I don’t know how the numbers work out unless the feds pay from start to finish,” said Catherine Mater, a wood products engineer in Oregon who frequently works with the  Forest Service.
That’s because many of the trees that would be thinned from ailing Western forests would have diameters of less than 10 inches, Mater said, and many mills aren’t equipped for such small material.


The wood products company most involved in the timber project, Neiman Enterprises, sees opportunity in medium-sized logs it can secure from markets that are already saturated, said Marcus Neiman, a vice president at the family-owned business. The company makes heating pellets at its mill in Spearfish, S.D., near the Black Hills National Forest, using sawdust and wood shavings from ponderosa pine, which grows in the region. Neiman said the pellet business is challenging but that he sees “plenty of opportunity to broaden the reach of biomass markets in the U.S.” as part of a comprehensive approach to forest management.

In an initial “proof of concept” experiment, the company paid to ship logs from Oregon to its mill in Hulett, Wyo., Neiman said. Negotiations on the first timber sale through the program are nearing completion, he said. The company can turn medium-sized logs into boards, as well as exploring other products, he said.


The National Wild Turkey Federation, a hunting group that seeks to protect wildlife habitat, is supporting the transport pilot through a 20-year stewardship agreement with the Forest Service. The agreement includes a directive from USDA to help move timber from areas that are short on milling capacity — but need forest work — to areas that have a shortage of timber to supply local mills.
The arrangement, with the Burlington Northern railroad as another partner, isn’t necessarily cost effective but addresses the needs to keep mills running and reduce potential wildfire fuel in forests, the NWTF has said (Greenwire, Jan. 6).


When I finally ran down an economist, he told me that transportation subsidies, for a variety of reasons, are indeed a thing. If you look under USDA transportation subsidies, you will find transit subsidies for workers to get to work, subsidies to offset logistics cost of getting containers to a container yard and the USDA BCAP program(I’m not sure it’s currently funded, but here’s a link to a CRS report on the program..)

Matching payments are intended to provide incentives for collecting underutilized biomass for bioenergy production. This would remove existing biomass where it might not currently be profitable to do so (e.g., crop residue or forest undergrowth)

Bottom line.. USDA and other government agencies subsidize many things for many reasons. We can disagree about whether they “should”, but it’s not unusual.

We’re not economists, but having observed them ..

If we assume that these logs would otherwise be burned in piles, then there’s the social cost of carbon (which I think is a bogus number but many people use) plus smoke effects.

So to figure out what is the best use, we’d have to look at other possible uses and non-uses.

Then we’d have to make assumptions about “what if the same lumber were produced somewhere else? where would that be? what would be the impacts to the tax base, etc.?”

Then there’s non-market values of all shapes, sizes and descriptions, and timelines.

I think that’s what NWTF (NWTF received 50 mill for a master stewardship agreement, this is just a piece) as trying to get at here..

The process of moving timber by railcar in previous years was viewed as an outdated method, as it was considered unprofitable for companies seeking to create forest products. However, considering the immense ecological value (i.e., wildfire risk reduction, carbon optimization, watershed health, wildlife habitat, etc.), the process has the potential to set the precedent for getting fuels out of the forest and transformed into carbon-storing forest products. [NWTF, USDA Begin Restoration, Timber Transit as part of Master Stewardship Agreement]

There’s also concern for disadvantaged communities.  Hulett isn’t in one, according to EPA’s map  but there are sections of South Dakota that are. it looks like an hour or so away.


Here’s an answer to a popular question, thanks to Larry’s Kurtz’s blog. 

“what about the bugs?

In 2020 Neiman bought Interfor Corporation’s specialty sawmill in the Klamath County town of Gilchrist, Oregon near where the logs will be loaded. Neiman owns the Klamath Northern Railway which connects to the Union Pacific. The UP intersects with Burlington Northern Santa Fe at Crawford, Nebraska and the BNSF has sidings in Upton, Wyoming. To minimize the movement of insects and diseases the 33 and 16.5 foot fire salvage ponderosa pine logs will be peeled and shipped to Upton then trucked to Neiman’s mill.


It appears to me that Neiman is successfully running the Montrose and Gilchrist mills,  so the he and the folks he works with know a lot about this and have been successful.  Maybe once they figures this out, someone will entrepreneur a sawmill in California. Who knows? I’m with the Chief on this one, let’s give it a try.  There’s the old story of a CEO who said “we have enough people warning about a flood, bring me someone who can build an ark.”


18 thoughts on “Logs on Trains from Oregon to Wyoming: The E&E News Story , Subsidies and Bugs”

  1. I guess time will tell if this works out or not. Yes, USDA does subsidize a lot of things, just look at all of the farm subsidies. With all of the incentives and subsidies (10-year stewardship, etc.) of the 4FRI project, with the intent of luring a mill to Northern Arizona which to date has not really worked out, maybe it’s better to subsidize the transportation to an existing mill? Who knows?

    It would still be good to know just how much actual funding is going towards this. What are the opportunity costs of doing something else with that funding (pre-commercial thinning?) The carbon capture argument with these things always leaves out the carbon footprint of the logging and transportation to the mill, which in this case involves a long train ride to the Black Hills, the mill operations, and the transportation to point of sale.

    How much of a fire risk are standing, fire killed trees? While there is some risk and yes, they will eventually fall down, I think that generally the risk is exaggerated to justify things like this. Reburns through old fires are usually not a big component of annual fire occurrence.

    • The Caldor Fire reburned through the old Pilliken Fire, with many plantations lost on both private and USFS lands. It also burned through parts of the Cleveland and Fred Fires, too. There is little doubt that the Dixie Fire did similar things.

      The dead fuels just don’t ‘go away’, even after many decades. Old cull cedars were cut in the 40s and 50s, and those logs still exist after all this time. Pretending that fuels do not matter, here in California, is not a good idea. The site-specific conditions call for action in overstocked flammable forests.

      • So, I have a few questions. What was the timeframe between the Pilliken Fire and the Caldor fire? What carried the fire? Was it 1,000-hour fuels or brush/grass? What was the rate of spread through the fire? Were the 1,000-hour fuels consumed or are they still laying there? Of course, a fire can reburn, no doubt about it, especially after a few years with brush and grass regrowth and no overstory, so conditions easily become hot and dry with increased wind exposure. The question is, what role do those 1,000-hour fuels play? I am suggesting that their impact is overplayed. Now, if you are making an investment with planting, it may be prudent to reduce the larger fuels, but I would still say it is likely that it would be the 10-hour fuels that would impact a plantation. Of course, if they planted a tree next to a downed log for shade, then that log would probably impact a seedling.

        • These plantations were from the Pilliken Burn, which used to be the biggest fire on the Eldorado, back in the 70s.


          These USFS plantations were also from the Pilliken Burn. These were thinned (with me inspecting) back in 2000. (It certainly looks like it was thinned again, in this view). The Caldor Fire burned through this, as well.


          The entire Pilliken Fire is within the Caldor Fire footprint. The Cleveland Fire (1992) and the Fred Fire (2003) were also reburned with the Caldor Fire.

          Remember, also, that bark beetle victims add to the flammability of unburned forests, too. We only need to look at Yosemite National Park to see how unmanaged forests struggle with current conditions (including human-caused wildfires).

          • In the 1980s I served on a crew working on a fire in the Pilliken burn, where lots of standing and dead, and still charred, trees burned again. The planted trees were just starting to overtop the deerbrush. A fixed-wing aircraft dropped at least one line of retardant, which stopped the fire from advancing one on flank and gave us time to build line — and to eat Kentucky Fried Chicken meals brought in for us. I recall that the fire was thought to have been accidentally started by woodcutters who were getting firewood from some of the trees killed in the Pilliken burn. I myself cut lots of charred but sound California black oak within the burn. Great firewood, even if black with char.

    • An annual aerial survey in 2022 found more than 36 million dead trees across California, including more than 26 million across 19 national forests. That’s on top of tens of millions that died in the last decade. California’s few mills are swamped. If the logs aren’t shipped somewhere, they’ll just add to the fuels problem.

    • Dave and Larry,

      I’ve worked on the Eldorado NF in California and had many field trips on the Black Hills. They are way different…the Hills is so much wetter. The first time I saw a log deck on the Hills I was astounded. They are just so different… and different from central Oregon as well. And there are different species with different properties, as Larry says, the western Sierra is a combo of species.

      I think the key to this analysis is “what are the alternatives?” If it is burning the logs in piles or in the next fire, then the carbon and smoke will be in the air. People seem to be increasingly concerned about air quality. As to the mill operations and transportation, you would have to look at where else would you get the lumber? Right now I can see wood products on train cars from Montana.. or others in the stores from Canada. Like many issues, the analysis depends on where you start, and how far you go, in which directions..

      • Thanks for doing this post, Sharon, there has been some interesting discussion on a key question for our times…..what do we do with all of this excess wood, whether it be dead or green? Apparently, the free market is not up to the task for a variety of reasons. I have tried to make the point that fire-killed snags are not nearly the risk as they are presented (and that is the justification in this particular case). Those snags have an ecological value if they remain out there but they also have a market value if harvested within time.

        If it is in society’s best interest that we deliver these logs to a mill, even if it is heavily subsidized, then let the case be made for that. However, we need to know the facts. What are the financial costs? What is the taxpayer paying for this? Will every sawmill operator get a deal like this? If not, why not? The federal government has a lot of contract regulations to deal with and it’s for a reason. It’ so everything is on the up and up.

        If big subsidies are ok, why stop with just rail transport? Why not pay a mill operator that has a mill in a location where there is too much mill capacity, to move his or her mill to California? In this case, I might actually be ok with that.

        Or, could we sell these California logs to the Japanese? They pay fair market value and pick the logs up at the Port of San Francisco? I believe that may take some legislation but just asking.

  2. This concept might pass a subsidy litmus test, until you look at the recent 8-10 years of logging history on the Black Hills NF, and the role of Neiman Bros and political tampering. Too long to detail here, but it begins with fires and bugs eating MAJOR holes in standing timber inventory, followed by a well-intentioned “landscape restoration” effort to cut the crap of what remained (departure from allowable sale quantity) to prevent further losses. Neiman knew ALL THIS, happily taking the surge in supply, while making no plans to adjust milling downward. Then place a winning bet on pressuring the Trump administration to keep the annual harvest up, profiting hugely during the Covid19 period when lumber prices went through the roof, finally closing their Hill City SD mill while blaming the FS. And oh, by the way, did Neiman take credit for job losses associated with enhanced mill efficiency?

    I have no quarrel with Neiman seeking logs elsewhere – that’s free market sourcing – but this sets a HORRIBLE PRECEDENT with feds paying the freight. Every mill owner feeling the supply pinch will be knocking on Chief Moore’s door with their hand out for a manufactured subsidy. Stinks!

    • So Neiman has used Republican political influence to achieve his ends, so should not be subsidized? Would you extend that to corporations who use Democratic influence during Democratic administrations to achieve their ends?

      • I think the FS should basically avoid political favors, focus most on what’s best for the resource and consider the larger picture… They may have crafted a technically LEGAL methodology, but setting such a precedent here seems UNWISE. This situation reflects an industry wherein many mills and corps are struggling to survive, much of which is due to intense competition and constant economizing of mill practices. Neiman got themselves in this mess, and the consequences of cutting too much for too long were easy to predict. Were they asked to invest their own previous windfall profits into the solution? I doubt it. So, yes, I object to the subsidized “bailout” because the PARTICULAR circumstances here don’t warrant it.

      • I don’t think that was the point. It’s that the government shouldn’t be in the business of bailing out companies that make bad business decisions (and both parties tend to do that). Unless it’s a collateral effect of doing something that is justifiably important to the greater good (which some are arguing is the case here).

  3. Good discussion; I am of the opinion, being an old – emphasis on “old” forester, I have been reluctant to support shenanigans of taxpayer dollars supporting the timber industry. However, that time has passed. As Dave mentioned 4-FRI, I think he is onto something; “take the mountain to the Muhammad”. Or, ship the logs to existing industry! 4-FRI is a disaster and never has done much other than blow millions of dollars on a lick and a promise.

    I agree too Sharon, the “Social Cost of Carbon” is a meaningless contribution of “process heavy” nonsense! It has little utility on Project scale, and questionable at Regional levels.

    Our government flits our tax dollars away on so many other whims, why not use it to move logs? Great for local economies (the senders and receivers), the railroads (they are subsidized anyway) and if that’s what it takes to address forest management concerns, let ‘er rip!


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