[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]




 
             ISSUES AFFECTING JOBS IN THE FORESTS INDUSTRY

=======================================================================

                           OVERSIGHT HEARING

                               before the

                      SUBCOMMITTEE ON FORESTS AND
                             FOREST HEALTH

                                 of the

                         COMMITTEE ON RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                      Wednesday, February 4, 2004

                               __________

                           Serial No. 108-84

                               __________

           Printed for the use of the Committee on Resources



 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house
                                   or
         Committee address: http://resourcescommittee.house.gov


                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
91-602                      WASHINGTON : DC
____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512ï¿½091800  
Fax: (202) 512ï¿½092250 Mail: Stop SSOP, Washington, DC 20402ï¿½090001

                         COMMITTEE ON RESOURCES

                 RICHARD W. POMBO, California, Chairman
       NICK J. RAHALL II, West Virginia, Ranking Democrat Member

Don Young, Alaska                    Dale E. Kildee, Michigan
W.J. ``Billy'' Tauzin, Louisiana     Eni F.H. Faleomavaega, American 
Jim Saxton, New Jersey                   Samoa
Elton Gallegly, California           Neil Abercrombie, Hawaii
John J. Duncan, Jr., Tennessee       Solomon P. Ortiz, Texas
Wayne T. Gilchrest, Maryland         Frank Pallone, Jr., New Jersey
Ken Calvert, California              Calvin M. Dooley, California
Scott McInnis, Colorado              Donna M. Christensen, Virgin 
Barbara Cubin, Wyoming                   Islands
George Radanovich, California        Ron Kind, Wisconsin
Walter B. Jones, Jr., North          Jay Inslee, Washington
    Carolina                         Grace F. Napolitano, California
Chris Cannon, Utah                   Tom Udall, New Mexico
John E. Peterson, Pennsylvania       Mark Udall, Colorado
Jim Gibbons, Nevada,                 Anibal Acevedo-Vila, Puerto Rico
  Vice Chairman                      Brad Carson, Oklahoma
Mark E. Souder, Indiana              Raul M. Grijalva, Arizona
Greg Walden, Oregon                  Dennis A. Cardoza, California
Thomas G. Tancredo, Colorado         Madeleine Z. Bordallo, Guam
J.D. Hayworth, Arizona               George Miller, California
Tom Osborne, Nebraska                Edward J. Markey, Massachusetts
Jeff Flake, Arizona                  Ruben Hinojosa, Texas
Dennis R. Rehberg, Montana           Ciro D. Rodriguez, Texas
Rick Renzi, Arizona                  Joe Baca, California
Tom Cole, Oklahoma                   Betty McCollum, Minnesota
Stevan Pearce, New Mexico
Rob Bishop, Utah
Devin Nunes, California
Randy Neugebauer, Texas

                     Steven J. Ding, Chief of Staff
                      Lisa Pittman, Chief Counsel
                 James H. Zoia, Democrat Staff Director
               Jeffrey P. Petrich, Democrat Chief Counsel
                                 ------                                

               SUBCOMMITTEE ON FORESTS AND FOREST HEALTH

                   SCOTT McINNIS, Colorado, Chairman
            JAY INSLEE, Washington, Ranking Democrat Member

John J. Duncan, Jr., Tennessee       Dale E. Kildee, Michigan
Walter B. Jones, Jr., North          Tom Udall, New Mexico
    Carolina                         Mark Udall, Colorado
John E. Peterson, Pennsylvania       Anibal Acevedo-Vila, Puerto Rico
Thomas G. Tancredo, Colorado         Brad Carson, Oklahoma
J.D. Hayworth, Arizona               Betty McCollum, Minnesota
Jeff Flake, Arizona                  VACANCY
Dennis R. Rehberg, Montana           VACANCY
Rick Renzi, Arizona                  Nick J. Rahall II, West Virginia, 
Stevan Pearce, New Mexico                ex officio
Richard W. Pombo, California, ex 
    officio


                                 ------                                
                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on Wednesday, February 4, 2004......................     1

Statement of Members:
    Hayworth, Hon. J.D., a Representative in Congress from the 
      State of Arizona...........................................     6
    Otter, Hon. C.L. ``Butch,'' a Representative in Congress from 
      the State of Idaho.........................................     4
        Prepared statement of....................................     5
    Pearce, Hon. Stevan, a Representative in Congress from the 
      State of New Mexico........................................     3
        Prepared statement of....................................     4
    Pombo, Hon. Richard W., a Representative in Congress from the 
      State of California........................................     1
        Prepared statement of....................................     2
    Renzi, Hon. Rick, a Representative in Congress from the State 
      of Arizona.................................................     6

Statement of Witnesses:
    Barber, Patricia, Northern Pine Regional Director, 
      International Paper Company, Ticonderoga Mill, Ticonderoga, 
      New York...................................................    10
        Prepared statement of....................................    12
    Doyon, Cassandra, Owner, Rocky Mountain Timber Products and 
      Doyon Logging, Del Norte, Colorado.........................    22
        Prepared statement of....................................    24
    Lovett, Dale, Special Projects Coordinator at Large, Pulp and 
      Paperworkers' Resource Council, Wickliffe, Kentucky........    28
        Prepared statement of....................................    30
    McCarthy, Laura Falk, Forest Protection Program Director, 
      Forest Trust, New Mexico...................................    13
        Prepared statement of....................................    15
    Mims, Gerry, General Mechanic, Smurfit-Stone Container 
      Corporation's Pulp and Paper Mill, Hodge, Louisiana........    19
        Prepared statement of....................................    21
    Squires, Owen, Rocky Mountain Regional Director, Pulp and 
      Paperworkers' Resource Council, Lewiston, Idaho............     7
        Prepared statement of....................................     8

Additional materials supplied:
    Colgin, Thomas, Great Lakes Special Projects Director, Pulp 
      and Paperworkers' Resource Council, Statement submitted for 
      the record.................................................    46
    Gibson, Kent B., Snowflake, Arizona, Statement submitted for 
      the record.................................................    49
    Reandeau, Larry, Georgia-Pacific Mill, Wauna, Oregon, 
      Statement submitted for the record.........................    50


   OVERSIGHT HEARING ON ISSUES AFFECTING JOBS IN THE FORESTS INDUSTRY

                              ----------                              


                      Wednesday, February 4, 2004

                     U.S. House of Representatives

               Subcommittee on Forests and Forest Health

                         Committee on Resources

                             Washington, DC

                              ----------                              

    The Subcommittee met, pursuant to notice, at 2:00 p.m., in 
Room 1334, Longworth House Office Building, Hon. Steve Pearce 
presiding.
    Present: Representatives Pearce, Duncan, Hayworth, Renzi, 
Otter, Pombo (ex officio), Inslee, Tom Udall, and Mark Udall.
    Mr. Pearce. [Presiding.] The Subcommittee on Forests and 
Forest Health will come to order.
    The Subcommittee is meeting today to hear testimony on 
issues affecting jobs in the forest industry.
    I ask unanimous consent that Representative Otter have 
permission to sit on the dais and participate in the hearing. 
Hearing no objection, so ordered.
    Under rule 4(g), the Chairman and the Ranking Minority 
Member can make opening statements; if any other members have 
statements, they can be included in the hearing record under 
unanimous consent.
    Now I would like to recognize and welcome our Full 
Committee Chairman, Mr. Pombo, for any statement that he may 
have.

  STATEMENT OF THE HON. RICHARD W. POMBO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Pombo. Thank you, Mr. Chairman, for leading us on such 
an important issue here today.
    The forest products industry was a sustainable sector of 
the American economy that helped produce a hard-working ethic 
across the Nation. Unfortunately, the industry has become a 
victim of government regulations and policies, a web of red 
tape and lawsuits and sensational campaigns by 
environmentalists that created a hands-off approach to forest 
management. Today, more and more forest product companies are 
struggling to stay in business.
    An obvious indicator of this problem is the collapse of the 
Forest Service timber sale program. Averaging around 11 billion 
board feet annually for decades, it has plummeted to less than 
2 billion board feet in the last couple of years, which is on 
Chart 1 there. The resulting job losses have been directly 
proportional--which is represented in the second chart. In 
California alone, 26 percent of the remaining mills have closed 
in the last 5 years.
    This comes at a time when forest growth greatly exceeds 
fuel and timber removals, exacerbating a critical problem 
already existing on 190 million acres of Federal lands. The 
case in the forest industry is clear: As the jobs disappeared, 
the vitality of our forests declined, and the incidence of 
catastrophic fire skyrocketed. In essence, we have and are 
effectively eliminating the skilled labor we need to treat our 
forests and put unemployed Americans back to work.
    So it is appropriate that the first hearing of the Forest 
and Forests Health Subcommittee this year be on the issue of 
jobs, particularly because it will be necessary to rebuild a 
skilled workforce in order to effectively implement the Healthy 
Forests Restoration Act.
    I would like to thank the panelists for coming here today 
to share your thoughts on this timely and important issue.
    I would like to also add that in my opening statement, I 
talked about the unemployed, but I think we also have to 
recognize the underemployed--the people who have spent careers 
in the forest products industries who had a good, high-paying 
job, who are now doing other things in order to survive, in 
order to pay the mortgage and keep their families together, who 
are living on a lot less money than they should be and what 
they previously were.
    So I think that when you look at this issue as a whole, you 
also have to take into account those people who lost their jobs 
in the forestry industry who have taken lower-paying jobs just 
to hold their families together.
    I thank you, Mr. Chairman.
    Mr. Pearce. Thank you, Chairman Pombo.
    [The prepared statement of Mr. Pombo follows:]

          Statement of The Honorable Richard Pombo, Chairman, 
                         Committee on Resources

    Thank you, Mr. Chairman, for leading on such an important issue.
    The forest products industry was a sustainable sector of the 
American economy that helped produce a hardworking ethic across this 
nation. Unfortunately, the industry has been a victim of government 
regulations and policies, an impenetrable web of red tape and lawsuits, 
and sensational campaigns by environmentalists that created a ``hands 
off'' approach to forest management. Today, more and more forest 
product companies are struggling to stay in business.
    An obvious indicator of this problem is the collapse of the Forest 
Service timber sale program--averaging around 11 billion board feet 
annually for decades, it has plummeted to less than 2 billion board 
feet in the last couple years (see chart 1). The resulting job losses 
have been directly proportional (see chart 2). In California alone, 26% 
of its remaining mills have closed in the last five years.
    This comes at a time when forest growth greatly exceeds fuel and 
timber removals, exacerbating a critical problem already existing on 
190 million acres of federal lands. The case in the forest industry is 
clear: As the jobs disappeared, the vitality of our forests declined, 
and the incidence of catastrophic fire skyrocketed. In essence, we 
have, and are, effectively eliminating the skilled labor we need to 
treat our forests and put unemployed Americans back to work.
    So it is appropriate that the first hearing of the Forest and 
Forests Health Subcommittee this year be on the issue of jobs, 
particularly because it will be necessary to rebuild a skilled 
workforce in order to effectively implement the Healthy Forests 
Restoration Act.
    I'd like to thank the panelists for coming here today to share your 
thoughts on this timely and important issue.
                                 ______
                                 

    STATEMENT OF THE HON. STEVE PEARCE, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF NEW MEXICO

    Mr. Pearce. I would welcome you all to the hearing here. I 
especially want to recognize Laura Falk McCarthy from my home 
state, who is here today as a witness and who was a witness at 
the field hearing of the Subcommittee which we held December 
the 15th in Grants, New Mexico.
    Today we meet to examine the decline of jobs in the forest 
industry. While the map provided by the Pulp and Paperworkers' 
Resource Council, over on the right, shows mill closures and 
layoffs across the United States, I have personal experience 
with this same problem in my district. I can also tell you that 
regardless of where forest mills and factories close, it has a 
tremendous impact on local families, economies, and 
communities.
    Just prior to the hearing, I had the opportunity to take a 
picture with many of the Pulp and Paperworkers' Resource 
Council members who are here today. I do not know any one of 
them personally, but I can tell you that when I look at them, I 
see the same decent people who go to work in my home town in 
the oil and gas industry.
    These people here today are the faces that I see when I 
think about the need for the environmental community and for 
the rest of us to come to terms. We are losing valuable jobs, 
and these people are paying the price in this battle. I think 
that balanced, common-sense thinning of our forests can provide 
jobs, but it can also provide a tremendous improvement to our 
natural resource, our national forests.
    In New Mexico, timber sales have declined dramatically. 
From 1976 to 1985, an average of 123.6 million board feet were 
cut and sold in New Mexico. Between 1996 and 2003, only 27.7 
million board feet were cut and sold--almost a 100 million 
board feet decline--a 78 percent decline.
    At the same time, with the lack of timber harvests, the 
amount of timber on our forests continues to rise. Year after 
year, net growth in national forests has exceeded the amount 
harvested. In the Southwest, this problem has been intensified 
by drought, insects, disease, and pinon-juniper encroachment. 
This has led to 80 percent of the forests in the Southwest 
being at moderate to high risk of catastrophic wildfire.
    With the passage of the Healthy Forests Restoration Act, 
massive amounts of woody biomass must and should be removed 
from public lands. In New Mexico, as is the case across much of 
the Nation, there is insufficient infrastructure now to handle 
biomass. Even if more timber were made available to harvest off 
of public lands, only two mills are currently in operation in 
New Mexico. There are also very few operational biomass plants 
to handle the woody biomass that will be available due to the 
Healthy Forests Restoration Act.
    We need to ensure that implementation of the Healthy 
Forests Restoration Act is done properly so we bring our 
forests back into a healthy condition and so the necessary 
infrastructure to support this goal is put into place.
    Congress has passed numerous laws, and even more 
regulations and policies have been put into place to protect 
our forests. Regardless, each year, millions of acres are 
devastated by catastrophic wildfire. At the same time, more and 
more jobs in the U.S. forest industry are lost. It is clear 
that many of our environmental protections are flawed and need 
reform. A balance must be met. The Healthy Forests Restoration 
Act is a step in the right direction.
    It is with that that I thank our witnesses for traveling 
here today. I look forward to this important discussion.
    [The prepared statement of Mr. Pearce follows:]

Statement of The Honorable Stevan Pearce, a Representative in Congress 
                      from the State of New Mexico

    Good afternoon. I want to recognize Laura Falk McCarthy from my 
home state, who is here today as a witness and who was a witness at the 
Field Hearing the Subcommittee held December 15th in Grants, New 
Mexico. Today, we meet to examine the decline of jobs in the forest 
industry. While the map provided by the Pulp and Paperworkers' Resource 
Council shows mill closures and layoffs across the United States, I 
have personal experience with this in my district. I can also tell you 
that regardless of where forest mills and factories close, it has a 
tremendous impact on local families, economies, and communities.
    In New Mexico, timber sales have declined dramatically. From 1976 
to 1985 an average of 123.6 million board feet were cut and sold in New 
Mexico. Between 1996 and 2003 only 27.7 million board feet were cut and 
sold. This is a 78 percent decline.
    At the same time, with the lack of timber harvests, the amount of 
timber on our forests continues to rise. Year after year, net growth in 
national forests has exceeded the amount harvested. In the Southwest 
this problem has been intensified by drought, insects and disease, and 
pinpon-juniper encroachment. This has led to 80% of the forests in the 
Southwest being at moderate to high risk of catastrophic wildfire.
    With the passage of the Healthy Forest Restoration Act, massive 
amounts of woody biomass must be removed from public lands. In New 
Mexico, as is the case across much of the nation, there is insufficient 
infrastructure to handle biomass. Even if more timber were made 
available to harvest off of public lands, only two mills are currently 
in operation in New Mexico. There are also very few operational biomass 
plants to handle the woody biomass that will be available due to the 
Healthy Forest Restoration Act. We need to ensure that implementation 
of the Healthy Forest Restoration Act is done properly, so we bring our 
forests back into a healthy condition, and so the necessary 
infrastructure to support this goal is put into place.
    Congress has passed numerous laws and even more regulations and 
policies have been put into place to protect our forests. Regardless, 
each year millions of acres are devastated by catastrophic wildfire. At 
the same time, more and more jobs in the U.S. forest industry are lost. 
It is clear that many of our environmental protections are flawed and 
need reform. A balance must be met. The Healthy Forests Restoration Act 
is a step in the right direction.
    It is with that that I thank our witnesses for traveling here 
today. I look forward to this important discussion.
                                 ______
                                 
    Mr. Pearce. We will reserve Mr. Inslee's time for opening 
comments, and at this point, I will recognize Mr. Otter so that 
he can introduce one of his witnesses from his district and to 
give a short opening statement.

STATEMENT OF THE HON. C.L. OTTER, A REPRESENTATIVE IN CONGRESS 
                    FROM THE STATE OF IDAHO

    Mr. Otter. Thank you, Mr. Chairman. I appreciate you 
inviting me here even though I am no longer on this Committee.
    I also want to welcome a fellow Idahoan, and that is Owen 
Squires, who is the Director of the Rocky Mountain Region Pulp 
and Paperworkers' Resource Council, who will be testifying here 
today.
    I am proud to represent Owen and the many folks who work in 
the forest products industry. I could not do it all by myself 
as well as I do without the information and the ideas that I 
have received from Owen and his colleagues over the years.
    I would also like to welcome the other witnesses, and I 
look forward to their testimony.
    We are all hearing a great deal about the good news that 
the economy is beginning to recover. However, there are too 
many communities in my district that missed out on the good 
economic times of the nineties and are wondering if their 
economy every will recover. Too many of my timber-dependent 
counties have double-digit unemployment. Unfortunately, the 
only way the jobless numbers in most of those communities gets 
any smaller is when people move away.
    The no-cut timber policy of the last Administration 
resulted in the closure of 32 lumber mills in my district 
alone. Those mill closures resulted in the loss of thousands of 
good-paying jobs, disruption of the families within those 
communities, and an ever decreasing devaluation of the tax 
base.
    I am pleased this Administration realizes that harvesting 
timber can be good for the environment and the economy, and I 
am hopeful that with tools like the Health Forests Reform Act, 
we can bring some common sense back to the management of our 
public lands and some jobs back to our rural communities.
    Again, Mr. Chairman, I look forward to the testimony today 
and the Committee's deliberations on this critical issue.
    Thank you.
    Mr. Pearce. Thank you, Mr. Otter.
    [The prepared statement of Mr. Otter follows:]

 Statement of The Honorable C.L. ``Butch'' Otter, a Representative in 
                    Congress from the State of Idaho

    Thank you, Mr. Chairman. While I am no longer a member of the 
Committee, I appreciate you allowing me to attend this timely hearing 
on such an important topic. I also want to welcome a fellow Idahoan to 
the Committee. Owen Squires, Director of the Rocky Mountain Region Pulp 
and Paperworkers' Resource Council, will be testifying today. I am 
proud to represent Owen here in Congress. I couldn't do my job half as 
well without the information and ideas I have received from Owen over 
the years.
    I also would like to welcome the other witnesses. I look forward to 
their testimony.
    We all are hearing the great news that the economy is beginning to 
recover. However, there are too many communities in my district that 
missed out on the good economic times of the ``90s and are wondering if 
their economy will ever recover. Too many of my timber-dependent 
counties have double-digit unemployment. Unfortunately, the only way 
the jobless numbers in some of those communities get any smaller is 
when people move away.
    The no-cut timber policy of the last Administration resulted in the 
closure of 32 lumber mills in my district alone. Those mill closures 
resulted in the loss of thousands of good-paying jobs that may never 
return.
    I am pleased this Administration realizes that harvesting timber 
can be good for the environment and the economy. I am hopeful that, 
with tools like the Healthy Forests Reform Act, we can bring some 
common sense back to the management of our public lands and some jobs 
to our rural communities.
    Again, I look forward to today's testimony and the committee's 
deliberation of this crucial issue.
    Thank you, Mr. Chairman.
                                 ______
                                 
    Mr. Pearce. Mr. Renzi, do you have an opening comment?

STATEMENT OF THE HON. RICK RENZI, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF ARIZONA

    Mr. Renzi. Thank you, Mr. Chairman.
    I also want to thank you for holding the hearing. I 
appreciate also the Subcommittee addressing this important 
issue, particularly since I have many personal commitments to 
helping to bring back the sustainable industries involving wood 
product, particularly to rural Arizona.
    We had a 460,000-acre landscape fire called the Rodeo-
Chediski fire up in northeastern Arizona, part of Congressman 
Hayworth's old district that he actually visited with the 
President right after the fire. In addition, we have had 
several major fires out in Arizona that have been caused by the 
fact that we are not able to entice industry back into the 
woods with the kind of capital outlays they need to make in 
order to be able to get a proper return on their investment and 
then help us thin the forest, crush the brush, and then be able 
to come back in behind it with prescribed burns. You cannot 
prescribe the burns until you have thinned the forest.
    So I am grateful, Mr. Chairman, and I look forward to the 
testimony today. I have a couple of people from my district 
here today. I want to thank the manager of the town of Eagar, 
Arizona, Mr. Bill Greenwood, for traveling all this way; Mr. 
Herb Hopper from Holbrook; Mr. Rob Davis from Show Low; and Mr. 
Kent Gibson from Snowflake, Arizona; and I think Estelle Bowman 
is also here representing the Indigenous Community Enterprises.
    Thank you all for coming all this way. I look forward to 
the testimony.
    Mr. Pearce. Thank you, Mr. Renzi.
    Mr. Hayworth, would you like to make an opening statement?

   STATEMENT OF THE HON. J.D. HAYWORTH, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF ARIZONA

    Mr. Hayworth. Mr. Chairman, thank you.
    I look forward to hearing the testimony of the witnesses 
who are here with us today.
    I join Mr. Renzi in welcoming my former constituents given 
the fact that some of the maps changed with the Decennial 
Census.
    One other note--and I am so pleased to see the presence of 
minority staff--I would hope--and I know that many people have 
very busy schedules--but I think, Mr. Chairman, we should note 
during this hearing that none of our friends on the other side 
is here. I presume that an interest in job creation and job 
preservation is a nonpartisan issue, so I hope that our friends 
on the other side of the aisle can join us today, or I am sure 
that staff will relate with interest the proceedings here, and 
certainly we have a record of it, but the record should note 
thus far that none of our friends have joined us here to listen 
to job creation. But I look forward to the comments today.
    Mr. Pearce. I would now like to introduce our witnesses 
today.
    We have Mr. Owen Squires, the Rocky Mountain Regional 
Director of the Pulp and Paperworkers' Resource Council; Ms. 
Patti Barber, Northern Pine Regional Director, International 
Paper Company; Ms. Laura Falk McCarthy, Forest Protection 
Program Director, Forest Trust; Mr. Gerry Mims, General 
Mechanic, Smurfit-Stone Container Corporation's Pulp and Paper 
Mill; Ms. Cassandra Doyon, Owner of the Rocky Mountain Timber 
Products and Doyon Logging; and Mr. Dale Lovett, Special 
Projects Coordinator-at-Large, Pulp and Paperworkers' Resource 
Council.
    I would remind the witnesses that under our Committee 
rules, you must limit your oral testimony to 5 minutes, but 
your entire statement will appear in the record.
    I now recognize Mr. Squires for his statement.

 STATEMENT OF OWEN SQUIRES, ROCKY MOUNTAIN REGIONAL DIRECTOR, 
    PULP AND PAPERWORKERS' RESOURCE COUNCIL, LEWISTON, IDAHO

    Mr. Squires. Good afternoon, Mr. Chairman and members of 
the Committee.
    My name is Owen Squires, and I am the Director of the Rocky 
Mountain Region of the Pulp and Paperworkers' Resource Council. 
My testimony today will also reflect the views of the Idaho 
State AFL-CIO and my PACE Local 80712 and Local 80608. These 
two locals and the International reflect the views of most of 
the people in the Pulp and Paperworkers' Resource Council and 
also those people within the pulp and paper industry.
    I would like to thank the Chairman and the members of the 
Committee for their hard work on passing the Healthy Forests 
Restoration Act. We think it is a step in the right direction. 
I would also like to thank the Committee for their work on the 
Canadian Soft Wood Agreement, which is not settled yet, but we 
hope will be settled some time in the future.
    Let me make it perfectly clear that only with adequate 
funding and strong leadership can the Healthy Forests 
Restoration Act hope to accomplish anything for local 
economies. Under the present laws and under the present 
gridlock, nothing is accomplished within these communities.
    We live within rural America--that is where we make our 
living, that is where we recreate, and that is where we live. 
And with the danger of catastrophic wildfires, it is like 
living in a tinderbox.
    The reality of what is going on in local economies is the 
fact that without the infrastructure needed to harvest timber, 
local economies are dying on the vine all over rural America.
    The barriers that result from there being no incentive to 
find solutions to the management problems in our national 
forests has meant that many small communities have dried up and 
withered away. There is no local input to solve local problems. 
And anybody who has seen one of these catastrophic wildfires 
roll over the horizon realizes the legacy that it leaves.
    In towns on the map that we have prepared before you there, 
you can see the devastation that is left. The map that says 
``Mill closed''--that small town is in Craigmont, Idaho--it 
represents a mill that only employed 30 people, but it was in a 
town of 300 people. Therefore, 30 percent of the town lost 
their jobs. One reason that those people would not go to work 
there was there was no sustainable forestry, there was no way 
to build an infrastructure back into the mill, and you cannot 
hire somebody to come to work in your mill if you only have 18 
months of timber supply.
    In Clearwater County, Idaho, which is in Representative 
Otter's district--and Butch has done a lot to try to help us--
we are at 28 percent unemployment. At Shearer Lumber Company, 
which lies in Idaho County, a county of 9,000 square miles, you 
can actually stand in the mill yard and throw a rock into the 
national forest. But for too many years, we have been 
prohibited from cutting anything out of that national forest, 
although it lies there full of root rot and bark beetle 
infestation. It is one of the last spawning grounds of the 
great steelhead salmon, but we cannot protect the habitat. Yet 
we were locked into a raging debate in the Pacific Northwest 
over what to do about downstream dams.
    In Oregon, they have laid off 100 State troopers. In the 
State of Washington, their budget crisis has reached economic 
proportions.
    When President Kennedy--and I was just a young kid--but 
when he pointed this Nation toward the moon, we all knew that 
it was a legacy that we were going to have, and it was a 
journey of generations, not election cycles. Our national 
forests cannot survive and cannot be claimed if we change every 
8 years, with no long policy in sight. We do not have the time 
to wait. We need to do something.
    We hope that the Healthy Forests Restoration Act will be a 
step in that direction.
    This map shows more than closed mills. It has left our 
communities with a legacy of alcoholism, child abuse, and 
domestic violence. It is what you end up with when you have 
once proud wage earners reduced to begging from the Federal 
Government.
    This concludes my remarks, and I will be ready to answer 
any questions.
    Thank you very much.
    [The prepared statement of Mr. Squires follows:]

  Statement of Owen Squires, Director, Rocky Mountain Region Pulp and 
            Paperworkers' Resource Council, Lewiston, Idaho

EXECUTIVE SUMMARY
      Our Nation is experiencing record-breaking and 
uncharacteristic wildfire seasons that leave in their wake millions of 
acres of blackened forests and wildlife habitat, thousands of destroyed 
structures and the loss of human life.
      Western states and local governments are in desperate 
financial shape because of declining revenues brought on by decades of 
declining forest management activities, especially on our federal 
lands.
      There remain many barriers that prevent the treatment of 
the current forest health crisis on the National Forests. Excessive 
planning and environmental analysis, overlapping agency jurisdictions, 
conflicting management policies and inadequate funding must be 
addressed if we hope to make real headway in restoring forests to 
health.
      An opportunity exists now to use smaller forest fuels to 
manufacture wood products, produce paper goods and generate 
electricity--all which will contribute to our nation's economy and 
benefit working families.
      We need leadership--leadership from the Administration 
and Congress to aggressively address the problems that exist in order 
to restore our forests to health, protecting them, as well as wildlife 
and communities, from uncharacteristic fires.

TESTIMONY
    Good afternoon Mr. Chairman. My name is Owen Squires and I am the 
Director of the Rocky Mountain Region Pulp and Paperworkers' Resource 
Council (PPRC). My testimony today also reflects the views of the Idaho 
AFL-CIO, PACE Local 80712 and Local 80608 and the members within the 
PPRC. These organizations represent a vast majority of our nation's 
pulp and paper workers, forest products workers, as well as the people 
living in rural forested communities that face an ever-increasing risk 
to uncharacteristic wildfires.
    I would like to thank the Chairman, and members of the Committee 
for their hard work and leadership in securing the passage of the 
Healthy Forests Restoration Act. This legislation, along with the 
President's Healthy Forests Initiative, has provided western rural 
forested communities hope along with an expectation that the dangerous 
fire risk situation in our national forests and close to our homes and 
communities will be addressed. But let me make it perfectly clear that 
only with adequate funding, strong leadership, congressional oversight, 
and some additional relief from out-of-date laws, will the situation 
improve.
    My testimony today will focus on issues associated with the plight 
of wood products workers and the people who live in rural forested 
communities in the western United States. The issues I will discuss 
are: 1) the realities in rural economies; 2) the lack of needed 
infrastructure to complete necessary forest management activities; 3) 
the out-of-date laws that impede active resource management; and 4) the 
barriers that result from there being no real incentives to find 
solutions to management challenges.
    My point of view is that responsible, active forest management will 
help promote the long-term health and sustainability of our nation's 
forestlands as well as the economic viability of rural communities. It 
is imperative that efforts continue to focus on protecting forests, 
wildlife and communities. In order to accomplish these important 
objectives, both the Forest Service and Department of Interior must be 
provided the tools and funding they need to implement forest management 
and fuels reduction activities.
    Western States and counties are in desperate financial shape 
because of declining revenues and a shift in population brought on by 
decades of declining Federal timber harvest levels.
    In Clearwater County, Idaho, local school districts are considering 
a four-day school week in order to lower costs. Without the revenues 
that once came to schools from timber harvest receipts, school 
administrators are forced to look for ways to reduce expense. 
Unfortunately, that cost-cutting sometimes comes at the expense of our 
children's opportunity to learn.
    On the Nez Perce National Forest in Idaho, Shearer Lumber Company 
which lies on the outskirts of the small town of Elk City, must close 
its doors after (1958) 46 years of operation. One of the main reasons 
for the mill closure is the lack of log supply. This situation seems 
impossible to me--I can stand in the sawmill log yard and literally 
throw a rock into the Nez Perce National Forest. But endless litigation 
stops almost every management project the Forest proposes. This is 
doubly troublesome because the Nez Perce National Forest is in the 
middle of a severe forest health crisis. Millions of acres of Lodgepole 
pine are dead or dying as a result of a devastating bark beetle 
infestation, and root rot.
    In Oregon, 100 State Police troopers have been laid off, and in 
Washington State the budget crisis is causing lawmakers to make very 
tough choices. A book could be written about California's economic 
woes. Many states are in the same tough economic condition, due in part 
to a drastic reduction in revenues from timber harvest activities on 
the National Forests. Other western states, where the manufacturing and 
industrial support infrastructure has all but disappeared, are in 
similar shape.
    After the 2002 Los Alamos fire in Arizona, the machinery to do the 
forest cleanup had to be brought into the state from Denver. There 
isn't a company left in the region that has the infrastructure to 
support the needed salvage and restoration activity.
    When a mill shuts down, the first thing that happens is the trained 
personnel move away seeking other employment. Then the mill is 
dismantled and the property is given to the county or the city as a 
future industrial complex, removing it from the property tax rolls. The 
homes and property that once belonged to the mill workers is bought up 
and converted to summer cabins or vacation homes. We continue to see 
one rural community after another change from places where working 
people made good livings and raised their children to vacation 
destinations for others. The rural landscape and culture of Idaho will 
be forever changed.
    The solutions are as complicated as the problems, but a few 
opportunities stand out providing a place to begin.
    When President Kennedy pointed the Nation toward the moon in 1961, 
Americans understood this was a long- term commitment, not one of 
election cycles, but one of generations. One of the problems with 
Forest Service management policies is that they change every four to 
eight years, along with the political winds. Instead, we need a long-
term solution. If there are mistakes we can adjust. We don't know what 
products and services are going to come from our national forests, just 
as we could not have dreamed about the future at the beginning of NASA.
    To continue to allow the present gridlock to continue is 
unacceptable.
    There are many preservationist organizations, whose leadership 
makes six-figure salaries working toward continued gridlock. They 
continue to seek donations thus maintaining the present do-nothing 
policies. To find a solution is counter to their finical goals.

CONCLUSION
    Mr. Chairman, a very serious problem facing our nation's forests 
has been identified and needs our immediate attention. It affects 
hundreds of million acres of our public wildlands and places millions 
of private acres and tens of thousands of rural communities at risk. We 
have the science, the professionally trained resource managers, and a 
workforce ready for the task. What we need is leadership--leadership to 
act. Our expectation is that both the Administration and Congress will 
continue to provide that leadership, in a bipartisan fashion, to 
overcome the hurdles, provide the funding and meet the challenges of 
improving forest health, enhancing wildlife habitat, protecting rural 
communities, and using the excess forest fuel to manufacture wood 
products, produce paper goods and generate electricity. Without this 
leadership and the resulting action on the ground, people living in our 
rural forested communities will continue to lose hope and the 
likelihood of businesses investing in the needed infrastructure to 
accomplish this critically important environmental work is seriously 
compromised.
    This concludes my prepared remarks, I would be glad to answer any 
questions you or the subcommittee may have regarding this important 
issue.
                                 ______
                                 
    Mr. Pearce. Thank you, Mr. Squires, for your testimony.
    I now recognize Ms. Barber.

STATEMENT OF PATRICIA BARBER, NORTHERN PINE REGIONAL DIRECTOR, 
INTERNATIONAL PAPER COMPANY, TICONDEROGA MILL, TICONDEROGA, NEW 
                              YORK

    Ms. Barber. Thank you and good afternoon.
    I am Patti Barber, and I work for International Paper 
Company in Ticonderoga, New York.
    I have worked at International Paper for 27 years, and 9 of 
those years I have been recording secretary for PACE Local 5. 
In that time, I have witnessed a lot of changes.
    I am very concerned about the state of our forest industry. 
We are told that our economy is growing and that new jobs are 
being created. The jobs that are being created are not all 
manufacturing jobs. Many of our first-generation paper makers 
are out of jobs. These people are at a time in their lives when 
they should be thinking about retirement; instead, they have 
lost their jobs. Thousands of these workers who used to make a 
good wage are wondering where they will find their next job.
    I have been a member of the Pulp and Paperworkers' Resource 
Council since 1996. I was at a training seminar when three 
gentlemen gave a presentation about the PPRC and why this 
grassroots organization was created. I saw a video of the 
devastation that was caused by the spotted owl. I witnessed 
grown men with tears in their eyes and watched people in the 
West talk about how they lost their jobs in paper mills and 
lumber mills.
    I knew that I needed to become involved, so that hopefully 
by educating people in my mill and our children to proper 
forest management, this sort of disaster would not happen in 
our home town. The first meeting I attended was in Redding, 
California where I met some workers who had lost their jobs. 
The comment was made that within 4 years, this would happen in 
the East. Six months later came the Maine referendum with 
Jonathan Carter. I have been actively involved since then.
    Ticonderoga is a small historic town in the northeastern 
part of New York on Lake Champlain bordering Vermont. Our mill 
produces an excellent printing paper product. As I speak today, 
our mill is facing major fiber concerns. Our mill cannot exist 
without a suitable fiber supply. This year, the Northeast has 
faced many severe weather problems making it hard for fiber 
supplies to keep the mill satisfied. We run the threat of 
running out of fiber. The mill will not survive without fiber 
to make paper.
    International Paper Company's Ticonderoga mill has spent 
millions of dollars to keep our mill up-to-date with EPA's 
required pollution standards, conforming to Cluster Rule, MACT 
1 and MACT II is in the process.
    The workforce at our mill was over 1,200 workers at one 
time. To date, we now have fewer than 600. International Paper 
Company is the only mill in Essex County and the 6 million acre 
Adirondack Park.
    Our country needs to get back those manufacturing jobs that 
we have lost to foreign countries which will help boost our 
economy even more. What happened to being made in America or 
buy U.S.A.-made products? Almost everything we buy on a daily 
basis is made in another country. Check the labels in your 
clothing. Products made in the U.S.A. are far and few. When I 
first became a PPRC member, I was asked how many items I bought 
that were made in the U.S.A. Today, it is still hard to say how 
many I can buy. But I do continue to look for that label.
    The Pulp and Paperworkers' Resource Council believes in 
seeking a balance between jobs and environment. We feel this 
can be accomplished given a level playing field. Please check 
out the PPRC's map of all the job losses, mills, and lumber 
mills that have been closed or curtailed. Where have all these 
displaced workers gone? Are we headed backward toward the 
becoming a Third World country? Will the United States become a 
national park?
    I would like to commend the Resources Committee for working 
very hard with the PPRC on the Healthy Forests Initiative. I 
would also ask that the Resources Committee continue to work at 
making sure it is implemented properly so that fiber from our 
national forests can again be a reliable part of the wood 
supply.
    I would also like to ask the Resources Committee to help in 
amending the Endangered Species Act to protect private 
landowners and workers like me whose livelihood is derived from 
growing timber on private lands. The ESA is being used by 
environmental groups to de-industrialize America and make 
growing timber unprofitable to private landowners.
    In closing, please think of all my coworkers at home and 
how they will manage if they should lose their jobs. Please put 
faces on the circles on that map which shows 100 workers here 
and 200 workers in another spot. All those dots have a name.
    The PPRC will continue to show up in an effort to keep our 
jobs in the paper industry. I commend all those who are 
overseas, not only our military who are fighting to keep 
America safe, but those who cannot find good-paying jobs in 
this country and have made the sacrifice to support their 
families in another country.
    A special thank you to the Resources Committee for taking 
the time to listen to our testimonies. The PPRC looks forward 
to continuing to work with the Committee in making our country 
a better place.
    Thank you very much.
    [The prepared statement of Ms. Barber follows:]

Statement of Patricia (Patti) Barber, Northern Pine Regional Director, 
  Pulp & Paperworkers' Resource Council, International Paper Company--
     Ticonderoga (N.Y.) Mill Recording Secretary, PACE Local 1-0005

    My name is Patti Barber and I work for International Paper Company 
in Ticonderoga, New York. I have worked at International Paper Company 
for 27 years and 9 of those years as the Recording Secretary for 
P.A.C.E. Local 1-0005 in our mill. In that time I have witnessed a lot 
of changes. I am very concerned about the state of our paper industry. 
We are told that the our economy is growing and that new jobs are being 
created. The jobs being created are not all manufacturing jobs. Many of 
our first generation paper makers are out of jobs. These people are at 
a time in their lives where they should be thinking about retiring, but 
instead have lost their jobs. Thousands of these workers who used to 
make a good wage are wondering where they will find a job that was as 
good as the one we lost.
    I have been a member of the Pulp & Paperworkers' Resource Council 
since 1996. I was at a training seminar when 3 gentlemen gave a 
presentation on the PPRC On why this grassroots organization was 
created. I saw a video of the devastation that was caused by the 
Spotted Owl. I witnessed grown men with tears in there eyes as they 
watched the people in the west talk about how they lost their jobs in 
paper mills and lumber mills. I knew that I needed to become involved 
so that hopefully by educating the people in my mill and our children 
to proper forest management, this sort of disaster would not happen in 
our hometown area. The first meeting I attended was in Redding, 
California, where I met some of the workers that had lost their jobs. 
The comment was made that within four years this would be happening in 
the east. Six months later came the Maine Referendum with Jonathan 
Carter. I have been actively involved since then.
    Ticonderoga is a small historic town in the northeastern part of 
New York, on Lake Champlain, bordering Vermont. International Paper 
Company's Ticonderoga mill is the only major industry in the 6 million 
acre Adirondack Park. Our mill makes an excellent printing paper 
product. As I speak today, our mill is facing major fiber concerns. Our 
mill cannot exist without a suitable fiber supply. This year the 
Northeast has faced many severe weather problems making it hard for 
fiber supplies o keep the mill satisfied. We run the threat of running 
out of fiber. The mill will not survive without fiber to make paper.
    International Paper Company's Ticonderoga mill has spent millions 
of dollars to keep our mill up-to-date with EPA's required pollution 
standards, conforming to Cluster Rule, MACT I, & MACT II is in the 
process.
    The workforce at our mill was over 1200 workers at one time. To 
date we now have only a little over 600 employees. International Paper 
Company is the only paper mill in Essex County and the Adirondack Park.
    Our country needs to get back those manufacturing jobs that we have 
lost to foreign countries, which will help, boost our economy. What 
happened to Made-in-America? Buy U.S.A.-made products. Most everything 
that we buy on a daily basis is made in another country. Check the 
labels in your clothing. Products made in the U.S.A. is few and far. 
When I first became a PPRC member I was asked how many items I bought 
were made in the U.S.A.. That was a tough question and still is. But, I 
continue to look for that label made in U.S.A.
    The Pulp & Paperworkers' Resource Council believes in seeking a 
balance between jobs and environment. We feel this can be accomplished 
given a level playing field.
    Please check out the PPRC's map of all the job losses, the mill and 
lumber mills that have been closed or curtailed. Where have all these 
displaced workers gone? Are We headed backward to becoming a third 
world country? Will the United States become a national park?
    I would like to commend the Resources Committee for working very 
hard with the PPRC to pass the Healthy Forests Initiative. I would also 
ask that the Resources Committee continue to work at making sure it is 
implemented properly so fiber from our national forests can again be a 
reliable part of the wood supply.
    I would also like to ask the Resources Committee to help in 
amending the Endangered Species Act (ESA) to protect private landowners 
and workers like me whose livelihood is derived from growing timber on 
private lands. The ESA is being used by environmental groups to de-
industrialize America and make growing timber unprofitable to private 
landowners.
    In closing, please think of my co-workers at home and how they will 
manage if they should lose their jobs. Put a face to the circles on 
that map that shows 100 workers here and 200 workers in another spot. 
All those dots have a name. The PPRC will continue to show in an effort 
to keep our jobs in the paper industry. I commend all those who are 
overseas, not only our military, who are fighting to keep America safe, 
but for those who can't find good paying jobs in our country and have 
made the sacrifice to support their families in another country.
    A special thank you to the Resources Committee for taking the time 
to listen to our testimonies. The PPRC looks forward to continuing to 
work with the committee in making our country a better place.
                                 ______
                                 
    Mr. Pearce. Thank you, Ms. Barber, for your testimony.
    I now recognize Ms. McCarthy.

  STATEMENT OF LAURA FALK MCCARTHY, FOREST PROTECTION PROGRAM 
               DIRECTOR, FOREST TRUST, NEW MEXICO

    Ms. McCarthy. Thank you for the opportunity to testify 
today.
    I am here representing the Forest Trust, a conservation 
organization based in New Mexico. The Forest Trust's mission is 
to protect the integrity of forest ecosystems and improve the 
livelihoods of rural people--a mission that means we think it 
is important for forests to provide people with jobs.
    Through our research center, technical assistance program, 
and consulting forestry business, we have first-hand experience 
with issues that affect forest-related employment.
    My testimony focuses on the role of Federal forest and fire 
policy in providing rural employment and business 
opportunities. I will address five points.
    First, the National Fire Plan has had beneficial effects on 
jobs in the forestry sector because of three key authorities 
and programs that Congress built into it. These authorities 
were, first, the ability for Federal land management agencies 
to give preference to contractors who would hire local workers; 
second, the ability to contract with nonprofits such as 
economic development organizations and youth corps to do fuels 
reduction work; and third, the National Fire Plan's Economic 
Action Program, which provided roughly $13 million per year in 
marketing and utilization projects to bring new jobs and 
manufacturing to forest-dependent communities.
    Documentation of the number of jobs has been sparse, but 
the University of Oregon's Ecosystem Workforce Program is 
tracking the impact of Federal forest policies on rural 
communities and has some results from Oregon, Washington, and 
Northern California. These studies by Dr. Cassandra Moseley 
found that most of the new agency fire-fighting jobs went to 
people form nearby areas. In contrast, the Oregonian reported 
that most of the contracted fire-fighting jobs were awarded to 
five large companies who sent their workers around the country 
to fight fire, displacing local fire fighters.
    Dr. Moseley's studies of thinning contracts in contrast to 
fire-fighting found that the National Fire Plan employed 
slightly more local people than other forms of service 
contracting, but that contractors from small rural communities 
still captured just a small percentage of the total funds 
awarded. While the gains to rural communities have been small, 
the economic opportunities I have described are nevertheless 
critical to forest-dependent communities that are struggling to 
stay out of poverty and to achieve standards of living that 
most Americans take for granted. The three authorities Congress 
put in the Fire Plan made these small gains possible.
    Unfortunately, two of the beneficial programs were 
authorized year-to-year through appropriations, and the third, 
the National Fire Plan Economic Action Program, received no 
funding in 2004. Regrettably, the Healthy Forests Restoration 
Act, did not address or include these programs.
    My second point is that environmental is needed to assure 
sustainable forests and jobs. Efforts to change NEPA appeals 
and ESA distract the agencies and Congress from the real 
problems.
    Eight reports by the Government Accounting Office and two 
reports by Northern Arizona University's Ecological Restoration 
Institute have shown that 2 percent of fuels treatments are 
litigated, and that only 20 percent are appealed. When projects 
are appealed, the GAO found that the implementation usually 
began within 90 days, which is about the same amount of time it 
takes to award a contract. According to ERI's studies, 
endangered species are not the most common subject of appeals.
    In New Mexico, I have had community members tell me 
repeatedly that they need the environmental laws to guarantee a 
community voice. They tell me they would rather work within the 
existing legal framework that relinquish full control to the 
Federal agencies, which is what they believe will happen if 
NEPA and the Endangered Species Act are dismantled and where 
they think HFI will lead us. I hear people complaining, not 
about NEPA but about Agency disregard for the needs of forest-
dependent communities, insufficient funding for fuels reduction 
projects, and the diversion of project money for fire fighting.
    How many studies will be needed to show that NEPA appeals 
and ESA are not the root problems? We need Congress to focus on 
the real problems of funding the agencies to restore fire-prone 
forests and stopping the cycle of fire suppression and fuels 
accumulation.
    My third point is that forest-dependent communities face 
many problems and need help from Congress to address them. 
Among these problems are high rates of poverty and 
unemployment, collapsing forest industry and infrastructure, 
insufficient access to technical assistance, capital, 
technology, and product development research, and contracting 
procedures and insurance burdens that prevent local businesses 
from fully employing residents in fuel reduction and fire 
suppression work.
    Community-based forest workers have identified the barriers 
to their businesses, and they need help from Congress to find 
permanent solutions.
    My fourth point is that forest-dependent communities have 
so much at stake that they have joined together with a range of 
other partners to outline a Community-Based Forest and Public 
Lands Restoration Act that will provide solutions to these 
problems. The bill was introduced in the 107th Congress as S. 
2672 and passed the Senate, but it has not gone any further. 
The essence of this Act is to direct the land management 
agencies to restore forests using community-based approaches.
    Community forest workers are seeking support in the House 
for the ideas expressed in this legislative proposal. A broad 
coalition is forming around the interests of rural communities.
    My fifth and final point is that the land management 
agencies perform very little monitoring of the outcomes of 
their programs. As a result, other organizations have found it 
necessary to step in to fill the void--for example, the studies 
I cited by the University of Oregon.
    I will therefore conclude by telling you about the 
important work of the National Community Forestry Center. The 
Center was started by the National Network of Forest 
Practitioners 4 years ago in a groundbreaking effort to improve 
the well-being of communities and forests by helping rural 
people access, produce, and use information. This Center has 
played a key role in helping communities to monitor the 
National Fire Plan, and many of the facts I have raised in this 
testimony were derived from research that was carried out by 
the Center and its partners. Funding will end in December 2004, 
and more support is needed to extend this innovative and 
successful effort.
    I will close there.
    [The prepared statement of Ms. McCarthy follows:]

              Statement of Laura Falk McCarthy, Director, 
          Forest Protection Program, Forest Trust, New Mexico

    Thank you for the opportunity to testify today. I am here 
representing the Forest Trust, a forest conservation organization based 
in New Mexico. The Forest Trust's mission is to protect the integrity 
of forest ecosystems and improve the livelihoods of rural people--a 
mission that reflects our belief that it is important for forests to 
provide people with jobs. The Trust operates several programs, 
including a research center, technical assistance to forest-dependent 
communities and small businesses, and consulting forestry on private 
lands. We have first-hand experience with the issues that affect 
forest-related employment.
    My testimony focuses on the role of federal forest and fire policy 
in providing rural employment and business opportunities. I will 
address five points as follows: (1) key mechanisms in the National Fire 
Plan that created jobs in rural communities; (2) the need for 
environmental protection to assure sustainable forests and jobs; (3) 
challenges facing small- and micro-size forest businesses that Congress 
can help address; (4) solutions proposed in the Community-Based Forest 
and Public Lands Restoration Act; and (5) monitoring the effects of 
federal forest and fire policies and the role of the National Community 
Forestry Center.
1. Key Programs in the National Fire Plan Created Jobs in Rural 
        Communities
    Three provision of the National Fire Plan have been important to 
forestry job creation in rural communities. First, the National Fire 
Plan gave the federal land management agencies authority to give 
preference to contractors who would hire local workers. Second, the 
plan included programs to build community capacity by expanding the 
government's ability to engage non-profit agencies in fuels reduction 
work, such as economic development organizations and youth corps. 
Finally, the National Fire Plan Economic Action Program (EAP) invested 
12.6 million dollars in marketing and utilization projects to bring new 
jobs and manufacturing to forest-dependent communities. These combined 
provisions resulted in modest employment gains in forest-dependent 
communities. Unfortunately, the Healthy Forests Restoration Act failed 
to include any of the provisions for rural communities that were so 
successful in the National Fire Plan.
    A handful of studies have shown that National Fire Plan programs in 
2001 and 2002 brought jobs to rural communities. These studies looked 
at two kinds of employment--firefighting and fuels reduction (thinning 
and slash disposal). The research was conducted by Dr. Cassandra 
Moseley at the University of Oregon's Ecosystem Workforce Program, and 
focused on the economic effects of the National Fire Plan in Oregon, 
Washington and northern California. In firefighting, Dr. Moseley found 
that most of the new agency fire suppression jobs went to people from 
nearby areas. In contrast, the Oregonian reported that most contract 
fire suppression jobs were awarded to five national companies that sent 
workers around the country to fight fire. In addition, many of these 
national companies also received large fuel reduction contracts. The 
profits made in firefighting make it possible for the large contractors 
to be the low-bidders in fuels reduction, thereby filling jobs that 
would otherwise have gone to local residents.
    A new report by the National Association of State Foresters and 
partners contributed additional information about the barriers keeping 
local workers from being employed in regional firefighting. This report 
documented that local fire departments were frequently forced to sit on 
the sidelines while their communities burned because of federal 
policies about firefighter deployment. This inefficiency has raised 
firefighting costs because of transportation expenses and delayed the 
fire response time.
    Dr. Moseley's studies of fuel reduction contracts in the Northwest 
found that the National Fire Plan employed more local people than other 
forms of service contracting, but that contractors from small rural 
communities still captured only a small percentage of the total funds 
awarded. The studies also determined that local employment was most 
likely when service contracts required the use of heavy equipment, and 
that most of the labor-intensive jobs were still awarded to non-local 
operations.
    The gains for rural communities in the National Fire Plan were 
initially significant but have declined in the last several years. The 
special contracting authorities giving preference to contractors that 
hire local workers and allowing non-profits to compete for fuel 
reduction contracts were only temporary, authorized through the 
Interior and Related Agencies Appropriations bills in 2001, 2002, 2003, 
and hopefully, though I have not confirmed it, the 2004 budget. Funding 
for the Economic Action Program declined significantly in 2003. The 
National Fire Plan portion of EAP was zeroed out in the President's 
2004 budget and was not restored by Congress. Regrettably, the 
provisions of the Healthy Forests Restoration Act and funding in the 
2004 Budget have not replaced these temporary authorities and programs.
    Community Needs: The programs that stimulated rural jobs in fuels 
reduction and restoration, and were temporarily authorized through 
Appropriation Bills, should be continued through more permanent 
legislation. Specifically, rural communities need the agencies to level 
the contracting playing field with authorities that benefit local 
workers, to make non-profit agencies and youth corps eligible for fuels 
reduction work, and to fund investments in marketing and utilization 
through an effective mechanism, such as the Economic Action Program.
2. Conflicts Over Environmental Protection Distract from the Root 
        Problems
    Studies examining the claim that environmental laws are responsible 
for a decline in forest-related jobs have not found evidence of the 
connection. Eight reports by the Government Accounting Office and two 
reports by Northern Arizona University's Ecological Restoration 
Institute have shown that fewer than 2% of fuels treatments are 
litigated and less than 20% are appealed. Of the projects that are 
appealed, the GAO found that implementation usually begins within 90 
days, which is about the time it takes to award a contract. According 
to NAU's studies, endangered species are not the most common subject of 
appeals.
    In my work in New Mexico, I have had community members tell me 
repeatedly that we need the environmental laws to guarantee sustainable 
management and a community voice. They tell me they would rather work 
within the existing legal framework than relinquish full control to the 
federal agencies, which is what they believe will happen if NEPA and 
the Endangered Species Act are dismantled, and where they think HFI 
will lead us. Communities use the appeals process to gain a seat at the 
decision-making table and they fear that without it, the agencies will 
stop listening to their concerns.
    When forest-dependent communities are asked to describe the 
challenges they face, environmental laws are usually low on the list. 
Instead, local contractors say they are concerned that land management 
agencies have received insufficient funding to carry out fuels 
reduction and that, as a result, they cannot get steady work. For the 
last three years, I have talked to District after District about 
planned projects, and found out later that the projects were shelved 
because there was no money for implementation. Some of the funding gaps 
are a result of fuel reduction funds being transferred to pay for 
firefighting, and some are because of insufficient funding. The 
agencies annual reports to Congress showed that they only achieved 
about 60% of their fuel reduction targets in 2001 and 2002. Last week, 
the President announced he will seek $760 million for fuels reduction 
and restoration activities. This funding is a promising start, but 
allocation of the funds in the appropriations process needs to benefit 
rural communities.
    Community Needs: It is time for Congress to focus on the real 
problems of funding the agencies to restore fire-prone forests and 
stopping the vicious cycle of fire suppression and greater fuel 
accumulation. How many more studies will be needed to show that NEPA, 
appeals, and ESA are a distraction from the root problems? Congress 
should watch carefully as the expedited processes in the Healthy 
Forests Initiative are implemented before concluding that further 
rollbacks of environmental protection are needed.
3. Small- and Micro-size Forest Businesses Face Many Challenges
    Forest-dependent communities are struggling to stay out of poverty 
and to achieve the standard of living that most Americans take for 
granted. Many people suffered when timber processing plants pulled out 
of their communities. Nationally, the highest unemployment rates are in 
forest-dependent communities. In some communities, the closing of mills 
has been followed by a decision to rebuild community capacity, to 
become more self-reliant, and to form local businesses that will put 
people to work in the woods, restore degraded forest conditions, and 
manufacture new value-added products.
    Yet, many complex issues confront these community-based businesses, 
which are usually small- and micro-sized by the Small Business 
Administration's definition. First, the businesses are often in 
communities, with little or no remaining forestry infrastructure--
including processing facilities and transportation networks. Second, 
the small enterprises often find themselves shut out of competition for 
federal restoration projects, because of inappropriately sized 
contracts and policies that favor large contracts. Third, the 
businesses do not have sufficient access to technical assistance, 
cutting-edge technology, or product development research. And, finally, 
the businesses find it difficult to access capital for high-tech 
equipment and processing investments because of an uncertain supply of 
raw material.
    Community Needs: Community-based foresters have identified the 
barriers to new businesses and need help from Congress to find 
permanent solutions to the identified problems. Chief among these are 
continuing the National Fire Plan policies that supported rural 
community businesses and ensuring consistent and long-term planning and 
budgets.
4. Community-Based Forestry Act is Needed to Provide Solutions
    Forest-dependent communities are not well-represented in the 
political process, but they have the most at stake when it comes to 
jobs in the forest industry and the larger picture of public forest 
management. Community forestry workers from western states have joined 
together with a range of other partners to outline a Community-Based 
Forest and Public Lands Restoration Act that will provide solutions to 
the problems I have just described. The bill was introduced as S.2672 
by Senators Craig and Bingaman in the 107th Congress and passed the 
Senate.
    The essence of the Community-Based Forest and Public Lands 
Restoration Act is to direct land management agencies in the 
Departments of Agriculture and Interior to conduct ecosystem 
restoration and maintenance activities using community-based 
approaches. The bill addresses all aspects necessary for forest 
restoration to succeed, from the watershed to the wood shop, and 
integrates the various mandates of the land management agencies under 
one umbrella. The six key parts of the bill are: (1) restoring 
ecosystem integrity with clear direction and contracting mechanisms to 
carry out restoration; (2) concrete mechanisms for collaboration with 
communities to rebuild trust and move beyond confrontation; (3) 
monitoring by agencies and stakeholders to ensure accountability and 
corrective action based on lessons learned; (4) technical assistance 
and local enterprise development to rebuild forest infrastructure where 
jobs are most needed; (5) contracting and other authorities to 
stimulate local workforce capacity; and (6) applied research to benefit 
rural communities and businesses.
    Community Needs: Community forestry workers are seeking support in 
the House for the ideas expressed in this legislative proposal. We have 
been working with forest industry groups, the Western Governor's, State 
Foresters, Counties, and environmental groups, and have found common 
ground in the interests of rural communities. We urge you to engage in 
this important discussion about how to generate the investment needed 
to have healthy forests and healthy communities.
5. Monitoring is Needed to Document Outcomes of Federal Forest and Fire 
        Policies
    Discussions about sustaining the economic benefits of the National 
Fire Plan, the effects of environmental laws on the ability to carry 
out forest management, and the need for investments in rural 
communities and forestry infrastructure, are complicated by the fact 
that the federal land management agencies perform very little 
monitoring and evaluation of the outcomes of their programs. Studies of 
employment like the ones I previously cited are sponsored by the 
University of Oregon, with partial agency funding, but they are limited 
to the Pacific Northwest and therefore cannot provide an accurate 
picture of the job situation for the nation. Similarly, the agencies 
are not conducting ecological monitoring, except in the context of 
evaluating post-fire effects. Communities are extremely interested in 
monitoring, as the stewardship contracting pilot projects discovered, 
but the agencies are paralyzed by the challenges of conducting 
scientifically credible monitoring and utilizing multi-party groups for 
evaluation.
    I will conclude by telling you about the important work of the 
National Community Forestry Center. The Center was started by the 
National Network of Practitioners four years ago in a groundbreaking 
effort to improve the well-being of communities and forests by helping 
rural people access, produce, and use information. The program was 
funded through a national competitive, peer-reviewed grant program 
administered by USDA Cooperative State Research, Education and 
Extension Service. The Center has played a key role in helping 
communities to monitor the National Fire Plan and to assess barriers to 
implementation. So far, more than 28 communities have partnered with 
the Center, resulting in over 60 publications and numerous workshops, 
newsletters, and Internet resources. Some of the facts I have raised in 
this testimony were derived from research that was carried out by the 
Center and its partners.
    Community Needs: Communities value the Center because it builds 
capacity in communities and lets residents become the experts, instead 
of funding outside experts to come into the community and then take 
their knowledge away when the funding ends. Funding for the National 
Community Forestry Center will end in December 2004 and more support is 
needed to extend this innovative and successful effort.
SUMMARY AND CONCLUSIONS
    1.  The National Fire Plan had beneficial effects on forestry 
sector jobs and rural economies because of three key authorities and 
programs that Congress built into the plan. Unfortunately, two of these 
authorities were only temporarily authorized through Appropriations in 
2001, 2002 and 2003, and the third received no funding in 2004. The 
temporary authorities that stimulated rural jobs in fuels reduction and 
restoration should be made permanent, and investment in marketing and 
utilization should be funded through an effective mechanism such as the 
Economic Action Program.
    2.  The claim that environmental laws are responsible for a decline 
in forest-related jobs has not been substantiated, and forest-dependent 
communities do not cite environmental laws as their number one problem. 
Congress should focus attention on the more pressing need to fund the 
agencies to implement fuel treatments and to provide consistently 
adequate funding for wildfire suppression.
    3.  Forest-dependent communities are struggling with poverty and 
high unemployment. Many communities have recognized that they can 
rebuild their capacity, become more self-reliant, and form local 
businesses that will put people to work in the forest industry. Yet, 
these small enterprises face tremendous barriers and need help from 
Congress to find permanent solutions.
    4.  Community forestry workers from western states have joined 
together with a range of other partners to outline a Community-Based 
Forest and Public Lands Restoration Act that address the problems 
facing forest-dependent communities. A broad coalition is forming and 
House members are urged to engage in the discussion about how to 
generate the investment needed for healthy forests and healthy 
communities.
    5.  Communities are extremely interested in monitoring the effects 
of federal forest policy, but the land management agencies are 
paralyzed by the challenges of conducting scientifically credible 
monitoring and utilizing multi-party groups for evaluation. The 
National Community Forestry Center has taken steps to monitor the 
National Fire Plan and to assess barriers to implementation. Funding 
will end in December 2004 and more support is needed to extend this 
critical resource for forest-dependent communities.
                                 ______
                                 
    Mr. Pearce. Ms. McCarthy, thank you for your testimony.
    I recognize now Mr. Mims.

   STATEMENT OF GERRY MIMS, GENERAL MECHANIC, SMURFIT-STONE 
 CONTAINER CORPORATION'S PULP AND PAPER MILL, HODGE, LOUISIANA

    Mr. Mims. Good afternoon, Mr. Chairman, members of the 
Committee.
    My name is Gerry Mims. I am employed as a general mechanic 
at Smurfit-Stone Container Corporation's Pulp and Paper Mill 
located in Hodge, Louisiana. I am a member of Local 5-1505 of 
Paper, Allied-Industrial, Chemical and Energy Workers 
International Union, a 14-year member of the Jackson Parish 
School Board, a landowner, and have been a leader in our 
region's Pulp and Paperworkers' Resource Council. I have worked 
closely with our mill's Wood Procurement Organization to 
understand the impact Federal policy is having on our industry.
    First, I want to point out that our company and our mill at 
Hodge is a non-landowning company. We do not have a fee-based 
ownership from which to draw our supply of raw material but 
instead, we rely heavily on forest products grown on public and 
family forest lands. In Hodge, our procurement organization 
maintains the largest Cooperative Management Program in the 
State of Louisiana, with over 1,815 landowners. We provide 
forest management, plans, advice, wildlife information, and 
millions of trees for regeneration efforts. Our wood 
procurement operations are third-party certified in both ISO 
4001 and the Sustainable Forestry Initiative Program of the 
American Forest and Paper Association.
    The Kisatchie National Forest is located in nine parishes 
that are within the normal operating area of our mill fiber 
supply, approximately 40 to 80 miles from our facility. In the 
1980's, we enjoyed a regular supply of pulpwood and sawmill 
residue chips from the forests and sawmills that received logs 
from these public lands. As a result of revisions to the forest 
plan to meet the Endangered Species Act, court directed edits 
for the red-cockaded woodpecker, the harvest levels dropped to 
10 percent of their previous levels. In some years, there have 
been no harvests at all.
    The result has been a number of sawmill closings, and our 
mill has had to go further out to replace the pulpwood at 
higher cost. The jobs at sawmills were not the only ones lost. 
The logging community and those that service those families 
suffered as well.
    While Congress provided some assistance to the affected 
school districts that depended on the 25 percent revenue share, 
the net result has been reduced funding, both for the affected 
parishes and the further diluted State funding from other 
parishes.
    The fallout from the loss of markets and logging capacity 
in the area sends a strong signal to the family forest owners 
about the risk of investing in future forest and the liability 
to them related to the ESA. What species will appear on the 
scene that will limit their right to harvest their investment? 
The ESA needs sensible reforms that protect jobs, communities, 
private property rights and species.
    A new issue of regulation currently impacting landowners 
and loggers in southeastern Louisiana and presenting a serious 
threat to practicing forestry in forested wetlands throughout 
the South is application of Section 10 of the 1890 Harbors and 
Rivers Act by the New Orleans District of the Corps of 
Engineers.
    The Corps is stopping logging by issuing cease and desist 
orders to landowners and loggers for not having a Section 10 
Harbors and Rivers Act permit before conducting their forestry 
operations. In the 100 years that forestry has been practiced 
in these forested wetlands, there has never been a need or 
request for a Section 10 permit. The Corps has begun issuing 
these cease and desist orders within the last year without 
cause or reason for their actions.
    Congress created the Harbors and Rivers Act in the 1890's 
to prevent navigable waters from being impeded by structures 
placed in or near these waters. The New Orleans Corps of 
Engineers stated that cutting trees and placing them before 
harvesting equipment to prevent rutting the soil is placing a 
structure in navigable waters that falls under their 
jurisdiction, requiring a permit. Past and present forest 
activities have no impact on navigable waters in the area, and 
the action by the Corps has no justification other than to 
demonstrate they have the power to affect the lives and 
livelihood of hardworking citizens.
    On one particular tract on which the Corps has issued a 
cease and desist order, the Environmental Protection Agency 
issued a letter that a Clean Water Act permit was not required 
because it followed normal silvicultural practices. Not only is 
the Corps' threat of jail and heavy fines disconcerting to the 
landowners and operators--the Corps activity has a 
destabilizing impact on timber markets, prices, and the future 
of managing forested wetlands.
    A cost estimate resulting from the Corps' latest actions 
approaches $225,000 resulting from lost timber values to 
equipment down time to comply with the Corps' directives. If 
this issue is not resolved soon, the loss of timber supply and 
the higher costs of replacing the lost material will be felt 
throughout the timber industry.
    We ask that Congress take action to limit this expansion of 
Corps regulation.
    The Total Maximum Daily Load issue impacts over 3,000 
stream segments in Louisiana alone. Most landowners and even 
the industry have little ability to analyze and comment on the 
real impact this issue could have on their lives. The potential 
for future regulation when the 5-year review comes forward is 
even greater, especially if the standard applied is not 
applicable to Louisiana.
    The EPA requires a TMDL to be prepared for any pollutant 
that impairs a stream, bayou, river, or lake. The EPA or State 
Offices of Environmental Protection have the authority to 
regulate any activity along, adjacent, or near these impaired 
water bodies in an effort to meet the TMDL. Frequently, the 
standard for the TMDL is based on data collected from streams 
outside the affected area.
    An example of this is the year-around 5 mg/liter standard 
for dissolved oxygen in streams. In Louisiana and in other 
Southern States, the summer heat and low water flow limits the 
dissolved oxygen to only 3 mg/liter, making streams out of 
compliance with no possibility of correcting the situation. 
TMDLs should be structured through use of attainability studies 
on a local level and implemented in a reasonable manner.
    Forcing national standards on local situations increases 
the likelihood that forest industries will have to close 
because they will not be able to meet the TMDL requirement.
    Thank you for the opportunity to present my remarks.
    [The prepared statement of Mr. Mims follows:]

              Statement of Gerry Mims, General Mechanic, 
        Smurfit-Stone Container Corporation's Pulp & Paper Mill

    My name is Gerry Mims. I am employed as a General Mechanic at 
Smurfit-Stone Container Corporation's Pulp and Paper Mill located in 
Hodge, Louisiana. I am a member of Local 5-1505 of Paper, Allied-
Industrial, Chemical and Energy Workers International Union (PACE), a 
fourteen-year member of Jackson Parish School Board, a landowner and 
have been a leader in our region's Pulp and Paperworkers' Resource 
Council (PPRC). I've worked closely with our Mill's Wood Procurement 
Organization to understand the impact Federal Policy is having on our 
industry.
    First, I want to point out that our company and our mill at Hodge 
is a non-landowning company. We do not have a fee-based ownership from 
which to draw our supply of raw material, but instead, we rely heavily 
on forest products grown on public and family forestlands. In Hodge, 
our procurement organization maintains the largest Cooperative 
Management Program in the State of Louisiana, with over 1,815 
landowners. We provide forest management, plans, advice, wildlife 
information and millions of trees for regeneration efforts. Our Wood 
Procurement Operations are third-party certified in both ISO 4001 and 
the Sustainable Forestry Initiative (R) Program (SFI) of American 
Forest and Paper Association (AF&PA).
    The Kisatchie National Forest is located in nine parishes that are 
within the normal operating area of our mill fiber supply, 
approximately 40 to 80 miles from our facility. In the 1980's, we 
enjoyed a regular supply of pulpwood and sawmill residue chips from the 
forest and sawmills that received logs from these public lands. As a 
result of revisions to the Forest Plan to meet Endangered Species Act 
(ESA) court-directed edicts for the red-cockaded woodpecker, the 
harvest levels dropped to 10% of their previous levels. In some years, 
there have been no harvests at all. The result has been a number of 
sawmill closings, and our mill has had to go further out to replace the 
pulpwood at higher cost. The jobs at sawmills were not the only ones 
lost. The logging community and those that service those families 
suffered as well. While Congress provided some assistance to the 
affected school districts that depended on the 25% revenue share, the 
net result has been reduced funding, both for the affected parishes and 
the further diluted state funding from the other parishes.
    The fallout from the loss of markets and logging capacity in the 
area sends a strong signal to the family forest owners about the risk 
of investing in future forests and the liability to them related to the 
ESA. What species will appear on the scene that will limit their right 
to harvest their investment? The ESA needs sensible reforms that 
protect jobs, communities, private property rights and species.
    A new issue of regulation currently impacting landowners and 
loggers in southeastern Louisiana and presenting a serious threat to 
practicing forestry in forested wetlands throughout the South, is 
application of Section 10 of the 1890 Harbors and Rivers Act by the New 
Orleans District of the Corps of Engineers.
    The Corps is stopping logging by issuing Cease and Desist Orders to 
landowners and loggers for not having a Section 10, Harbors and Rivers 
Act permit before conducting their forestry operations. In the 100 
years that forestry has been practiced in these Forested wetlands, 
there has never been a need or request for a Section 10 permit. The 
Corps has begun issuing these Cease and Desist Orders within the last 
year without cause or reason for their actions.
    Congress created the Harbors and Rivers Act in the 1890s to prevent 
navigable waters from being impeded by structures placed in or near 
these waters. The New Orleans Corp of Engineers states that cutting 
trees and placing them before harvesting equipment to prevent rutting 
the soil is placing a structure in navigable waters that falls under 
their jurisdiction, requiring a permit. Past and present forest 
activities have no impact on navigable waters in the area, and the 
action by the Corps has no justification other than to demonstrate they 
have the power to affect the lives and livelihood of hardworking 
citizens.
    On one particular tract on which the Corps has issued a Cease and 
Desist Order, the Environmental Protection Agency (EPA) issued a letter 
that a Clean Water Act permit was not required because it followed 
normal silvicultural practices. Not only is the Corp's threat of jail 
and heavy fines disconcerting to the landowners and operators, the 
Corps activity has a destabilizing impact on timber markets, prices, 
and the future of managing forested wetlands.
    A cost estimate resulting from the Corp's latest action approaches 
$225,000 resulting from lost timber values to equipment downtime to 
comply with the Corp's directives. If this issue is not resolved soon, 
the loss of timber supply and the higher costs of replacing this lost 
material will be felt throughout the forest industry.
    We ask that Congress take action to limit this expansion of Corps 
regulation.
    The Total Maximum Daily Load (TMDL) issue impacts over 3,000 stream 
segments in Louisiana alone. Most landowners, and even the industry, 
have little ability to analyze and comment on the real impact this 
issue could have on their lives. The potential for future regulation 
when the five year review comes forward is even greater, especially if 
the standard applied is not applicable to Louisiana.
    The EPA requires a TMDL to be prepared for any pollutant that 
impairs a stream, bayou, river or lake. The EPA or state Offices of 
Environmental Protection have the authority to regulate any activity 
along, adjacent or near these impaired water bodies in an effort to 
meet the TMDL. Frequently, the standard for the TMDL is based on data 
collected from streams outside the affected area.
    An example of this is the year-round five mg/liter standard for 
dissolved oxygen in streams. In Louisiana and other southern states, 
the summer heat and low water flow limits the dissolved oxygen to only 
three mg/liter, making streams out of compliance with no possibility of 
correcting the situation. TMDL's should be structured through use 
attainability studies on a local level and implemented in a reasonable 
manner.
    Forcing national standards on local situations increases the 
likelihood that forest industries will have to close because they won't 
be able to meet the TMDL requirement.
    Thank you for the opportunity to present my remarks.
                                 ______
                                 
    Mr. Pearce. Thank you, Mr. Mims.
    Ms. Doyon?

  STATEMENT OF CASSANDRA DOYON, OWNER, ROCKY MOUNTAIN TIMBER 
        PRODUCTS AND DOYON LOGGING, DEL NORTE, COLORADO

    Ms. Doyon. Mr. Chairman and members of the Subcommittee, 
thank you for the opportunity to speak with you today.
    My name is Cassandra Doyon. I am co-owner of Rocky Mountain 
Timber Products and Doyon Logging in Del Norte, Colorado. My 
husband Richard and I ventured into sawmilling in 2003 as a 
means to continue working in the woods.
    Rocky Mountain Timber Products was born out of five mill 
closures in Colorado, New Mexico, and Wyoming. For 20 years, 
our logging company supplied raw material to a number of 
production mills. Since no one was left to buy our forest 
products, we decided to open a mill of our own in June of 2003, 
that employs a total of 19 people.
    Del Norte is located in the San Luis Valley, a rural area 
where good jobs are scarce, an the jobs we provide are 
significant. We are always looking for innovative ways to 
better use byproducts and add value to our business. We waste 
nothing. Everything that comes into our mill leaves as a 
product. We see ourselves as what we hope is an emerging 
restoration industry. We provide a service to the forest, land 
managers, and consumers while improving forests for all 
values--forest, health, wildlife, and watershed.
    The wood products industry in much of the Western United 
States lacks the ability to carry out large-scale restoration 
projects. We have lost most of the infrastructure to process 
small-diameter and underutilized trees. Small companies might 
not accomplish large landscape objectives quickly, but we can 
build the lost capacity if we are given a chance.
    Colorado and other States with forest health issues need 
businesses like ours to serve as a management tool and to 
provide jobs, a tax base, and products. Let me illustrate some 
of the reasons that led to this lack of infrastructure.
    First is the need for U.S. Forest Service projects. The 
most accessible wood and the forests in need of restoration are 
right in our back yard, and the land is Federal. We need the 
Forest Service to be consistent. The agency talks about lots of 
projects to meet National Fire Plan objectives, but not many 
have materialized. This has a great impact on communities and 
businesses like ours.
    A second is poor-quality material. Restoration is not only 
about removing sick trees, it involves managing for diversity 
and size and age classes while maintaining the integrity of 
ecosystems. We need this diversity and integrity for our 
business, too.
    A third is international competition. Other countries are 
simply out-competing us. They can bring in finished products 
cheaper than we can produce rougher products.
    Fourth is regulations. We welcome regulations that make 
doing business safer. In fact, worker safety and health is a 
top priority in our business. Workman's compensation and 
insurance costs continue to climb each year, yet our profit 
margins continue to shrink. We need flexibility and training to 
better implement OSHA rules.
    Fifth is training. We and the U.S. Forest Service could use 
training opportunities that show us each how to do a better job 
with the new contracts that are coming out. We need help on how 
to prepare a successful bid package; they need training on how 
to factor in the risks, constraints, and costs for small 
businesses like ours.
    On rebuilding infrastructure, I would like to make a few 
suggestions that would help support the establishment of forest 
product businesses like ours.
    First, consistent program of work--the Forest Service must 
be a consistent and predictable supplier of material. Our 
business planning depends on being able to predict where our 
supply of wood will come from each year, and we need accurate, 
reliable information. We are not asking for industrial 
forestry--we want restoration work.
    Second, utilize stewardship contracting. These authorities 
could help meet some of our predictability needs for planning 
and investment. Restoration projects for several thousand acres 
over 5 years would allow us to work with the markets and meet a 
number of land management objectives.
    Issues remaining over the agencies' ability to commit to 
longer-term contracts. They need help figuring out how to make 
these projects available without putting all the financial risk 
on the operator.
    Third, the Healthy Forests Initiative--the Healthy Forests 
Restoration Act calls for two provisions in addition to getting 
work done that are very important to communities--local 
collaboration through the development of community wildfire 
protection plans and multi-party monitoring. We want to make 
sure that communities have the capacity and resources to both 
develop these plans and assess the accomplishments and effects 
of fuels reduction programs.
    Fourth, flexibility--operators and Forest Service staff 
need to work together on those projects closely to achieve 
these objectives and make the projects financially feasible. 
Seasonal closures and operating restrictions often leave only 
several months a year to get equipment moved in and work done. 
But there are many opportunities to be more flexible about 
those closures.
    Fifth, treat the landscape. The Forest Service and partners 
should look at the needs of their landscape--fire risk, 
habitat, watershed, et cetera. Priority should be placed on 
managing those areas that are at greatest risk and that have 
the highest ecological values. Priorities should not be 
artificially constrained by what is in the wildland urban 
interface. Forests should combine objectives for restoration, 
fuels reduction, and timber sales.
    Sixth, rural community assistance. The Forest Service has 
provided technical and financial assistance to small companies 
through its rural community assistance program. We would like 
to see this program strengthened in order to help companies in 
rural communities identify new technologies and marketing 
strategies. Without the financial and technical support of our 
Four Corners Sustainable Forests Partners, the U.S. Forest 
Service, and the Colorado State Forest Service, our mill would 
not be in place today.
    I would urge Congress to implement mechanisms to increase 
investment in and support for small business development and to 
increase congressional oversight of trade practices to protect 
local industry from global markets.
    In closing, I would just like to say that a little common 
sense would help in terms of improving our national forests and 
preserving forest-based businesses like ours. The demand, 
technology, and raw materials are available. We see ourselves 
as partners with the U.S. Forest Service, the public, and the 
land.
    Thank you again for this opportunity.
    [The prepared statement of Ms. Doyon follows:]

                 Statement of Cassandra Doyon, Owner, 
             Rocky Mountain Timber Products & Doyon Logging

    Mr. Chairman and Members of the Subcommittee, thank you for the 
opportunity to speak with you today. My name is Cassandra Doyon. I am 
co-owner of Rocky Mountain Timber Products and Doyon Logging in Del 
Norte, Colorado. My husband Richard and I ventured into saw milling in 
2003 as a means to continue working in the woods. Rocky Mountain Timber 
Products was born out of five mill closures in three states over the 
last five years. For twenty years, our logging company supplied raw 
material to a number of production mills: U.S. Forest Industries, South 
Fork, Colorado; Rio Grande, Espanola, New Mexico; Louisiana Pacific 
mills in Olathe and Walden, Colorado, and Saratoga, Wyoming. In 2001, 
we purchased a log loader with the help of the Four Corners Sustainable 
Forests Partnership in order to supply material to Saratoga, Wyo., by 
rail. This mill stopped buying material in late 2002.
    Since no one was left to buy our forest products, we decided to 
open a mill of our own. In June of 2003, after two years of research 
into equipment, markets, costs, and other planning, we purchased a 1970 
Circle Saw Mill in Utah and brought it to Colorado. We employ ten 
people at the mill and seven people remain on our logging crew in 
addition to Richard and myself. Del Norte is located in the San Luis 
Valley, and has a population of approximately 1700. The San Luis Valley 
is a rural area where good jobs are scarce, and the jobs we provide are 
significant. We also contract with several trucking outfits. At this 
point, we are primarily producing dimensional lumber and beams. We have 
just added a Planer. This allows us to produce tongue and groove 
products as well as house logs. We are always looking for innovate ways 
to better use of byproducts and add value to our business.
    We waste nothing, as everything that comes into our mill leaves as 
a product. The bark, shavings, and sawdust all end up as mulch or 
animal bedding either on farms in the San Luis Valley or with Renewable 
Fiber, a newly formed animal bedding company, near Denver. The creation 
of this small operation has required over $600,000 in start-up capitol. 
We have received a small amount of assistance from the Four Corners 
Partnership and the U.S. Forest Service Economic Action Programs via 
the Rio Grande National Forest. The rest has required a great deal of 
personal financial risk on our part and our bankers unwavering trust.
    We have projected that our mill will need about 3 to 4 million 
board feet of logs per year to break even. Our raw material is 
primarily sourced from thinning and restoration work on private land in 
New Mexico, 120 miles away. We handle most local species: spruce, white 
fir, ponderosa pine, and aspen. Most of the wood we handle is small 
diameter and timber of low quality. Fortunately, the private land we 
work on does have a few larger trees that need to be removed for 
restoration too. These higher value trees help us cover the costs of 
our restoration work and make the business economically viable. We must 
have a variety of size classes to make the mill work. A few larger 
trees can make it worthwhile to restore a forest and take away the 
small trees that are the big problem. This does not mean we are looking 
only for large trees or to high- grade forests. We see ourselves as 
part of what we hope will be an emerging ``restoration industry'' 
providing a service to the forest, land managers, and consumers. Our 
business is designed to help improve forests for all values--forest 
health, wildlife, watershed, and others while also producing products 
that people want. According to a study conducted by Dr. Denny Lynch at 
Colorado State University in 2001, 95% of the wood product used by 
Coloradoans comes from out of state. This should not be the case.
    Before the production mills closed we had no need to personally buy 
federal timber sales. Companies like U.S. Forest Industries would 
purchase timber sales and then contract with logging companies like 
ours to bring the wood to the mill. This was good for us because the 
mill bore the risk involved with markets and the costs involved with 
bonding. Now we are both the logger and the mill. We now have entered 
the very complex world of bidding on federal projects.
    For our mill to be successful, we will have to perform restoration 
activities on and timber contracts from surrounding National Forests. 
Yet, we have not been the successful high bidder to date for national 
forest timber sales.
    The Rio Grande National Forest planned to sell salvage sales of 
trees killed in the Million fire in June 2002. However, 20 months after 
the fire, the Rio Grande National Forest still does not have a Decision 
Notice for that project, let alone sell any of the dead trees that are 
quickly deteriorating. There is a similar situation on the San Juan 
National Forest, also in our working circle. The Missionary Ridge fire 
burned 75,000 acres. Their EIS proposed to manage only a few thousand 
acres in well-roaded areas. Last week, a federal judge issued an 
injunction on this project. The wood will not be viable after this 
summer. The aspen alone in that rehabilitation effort (approximately 
six million board feet) would have run a small mill for an entire year. 
We hope that the National Forests in our area will be able to offer 
more consistent access to projects that can provide raw materials. We 
also hope they will start to offer stewardship contracting 
opportunities. We appreciate the ``best value contracting'' provisions 
in stewardship contracting, which allow the agencies to consider 
factors other than low bid. Being a local business with a good record 
of quality performance would give us a better chance at winning a 
project. As it stands, timber sales are awarded to the high bid and 
service contracts are awarded to the lowest bid.
Summary of Issues
    The wood products industry in the western United States lacks the 
ability to carry out large-scale restoration projects. The 
infrastructure to process small-diameter and underutilized trees 
generally does not exist, or is economically infeasible given low 
product values. In many regions, the lack of a consistent material 
supply from public lands hinders contractors' ability to invest in the 
necessary equipment.
    Several years ago when Richard and I began to realize that what 
little infrastructure was left in our region would be gone soon, we 
felt hopeless. Our employees are like family and our love of forests 
and forestry is generational. There are literally thousands of acres 
just in our county that are in need of restoration and many have 
already been impacted by insects, disease, and fire. We have taken a 
huge personal risk in order to continue playing a role in restoring our 
forests and hopefully continuing our livelihood. The deeper we get into 
this new business the more apparent it becomes as to why many don't 
make it. I would venture that a small restoration oriented mill in the 
West is probably one of the most disadvantaged businesses there is. Let 
me offer just a few examples that illustrate this:
      Need for U.S. Forest Service Projects: Most of our 
counties are 75 percent or greater federal land. While we can get some 
private land work, the largest need for restoration is not on private 
land. The most accessible wood and the forests in need of restoration 
are right in our back yard and the land is federal. For small business 
like ours, hauling distances make a critical financial difference. Even 
a small program of timber sales and thinning projects would make our 
businesses more viable. But, they must be consistent. There is no 
predictability in what to expect from any of the National Forests. The 
agency talks about lots of projects to meet National Fire Plan 
objectives but not many have materialized. We want to restore our 
national forests. They are our backyard and we want them to be there 
for generations to come.
      An agency burdened: The Forest Service seems very weighed 
down by a jumble of confusing and often conflicting policies and rules. 
While we do not blame them entirely, the result is that not a whole lot 
gets done in terms of tangible projects.
      Poor Quality material: Most of the trees we get to make 
our products are low quality. Much of our forests are suffering from 
insects, disease and overcrowding. This results in the types of fires 
we have seen over the last few years. So, in typical restoration 
projects, we have to cut and handle a lot of low-quality trees. We also 
try to cut a few good ones in order to do well in our local markets and 
make the economics work. There is still a lot of uncertainty and risk 
for small enterprises like ours trying to make any profit while 
conducting restoration work.
      International Competition: Canada, Mexico, Chile and 
other countries are simply out-competing us. They can bring in finished 
products cheaper than we can produce rougher products. Freight costs 
are about the only advantage we have.
      Regulations: We welcome regulations that make doing 
business safer. In fact, workers safety and health is a top priority in 
our business. But again the playing field seems unlevel for our type of 
business. Our business is considered risky so workman's compensation 
and insurance costs continue to climb each year, yet our profit margins 
continue to shrink. Meeting these costs is particularly difficult for a 
small enterprise like ours. We need flexibility and training to better 
implement OSHA rules. Big fines would shut us down for good. We need 
training programs and help in complying with the many rules that apply 
for our type of operation.
      Training: We and the U.S. Forest Service could use 
training opportunities that show us each how to do a better job with 
the new hybrid contracts that are coming out. We need help on how to 
prepare a successful bid package for a stewardship contract. There are 
so many factors and risks involved with federal contracts. They need 
training on how to factor in the constraints and costs for small 
businesses like our workman's comp costs, Davis-Bacon wage 
requirements, etc. I am attending a workshop for bidders in Durango, 
Colo., later this week sponsored by the Four Corners Partnership and 
Colorado State Forest Service. Hopefully, this will be a start.
Federal Policy Initiatives
    As you can see there are many factors that affect a business like 
ours, but I am going to focus my comments on those policies and issues 
under the purview of this committee.
    It is difficult to keep track of the many federal policies and 
regulations that ultimately result in very little management on public 
lands. For an outside observer, federal agencies seem continually 
running from one new initiative to the next, trying to adapt, but 
essentially being ineffective. In Region 2 of the Forest Service, the 
budget has increased over the last few years each year but actual 
projects on the ground have continued to decline. Just in the last few 
years we have seen the Road less Area Initiative, reintroduction of 
Lynx, an emphasis on Management Indicator Species, new National Forest 
Planning rules, the National Fire Plan, Stewardship Contracting and now 
the Healthy Forests Initiative. Each of these things is absolutely 
important and could have positive implications for the betterment of 
our forests. But, they seem to only add to the confusion and internal 
conflict of Forest Service staff. The Agency seems to get whipped 
around, and in the end, they get very little done. The Forest Service 
does not suffer, but the communities and businesses like ours certainly 
do. The fires continue to burn at unnatural levels, forest health 
declines, and we are unable to keep our businesses viable.
    As I mentioned, we have lost virtually the entire forest and wood 
products infrastructure in our area. We need to rebuild an 
infrastructure--a skilled workforce and business enterprises--if the 
critical work of restoring healthy forest ecosystems is to be 
accomplished. We also need to create innovative, value-added 
enterprises to use the byproducts of this restoration work, if we are 
to establish a viable and appropriate economy. From what we have seen, 
the greatest opportunity to start building this infrastructure is with 
small entrepreneurial companies like ours looking for a market niche. 
Small companies might not accomplish large-landscape objectives 
quickly, but we can build capacity, begin doing the important work, and 
start building trust and lessons... if we are given a chance. Colorado 
and other states with forest health issues need businesses like ours to 
serve as a management tool and to provide jobs, a tax base, and 
products. We are small but we are also a real part of our community. If 
we go out of business our area has not only lost good jobs, but also 
the land manager has lost an important tool.
    I would like to make a few suggestions that would help support the 
establishment of forest product businesses, like ours:
    1.  Consistent program of work-- We do not expect a guaranteed 
supply. However, the Forest Service must be a consistent, predictable 
supplier of material. Our business planning depends on being able to 
predict where our supply of wood will come from each year, and we need 
accurate reliable information from the Rio Grande and San Juan National 
Forests. Each Forest should be able to make a mix of projects that 
include multiple objectives for restoration available each year. For 
example, a forest could provide a thousand acres a year of pine 
restoration work that are more like traditional timber sales, two 
service contracts for various restoration activities that have little 
to do with product removal, and treatments to create one hundred acres 
of aspen restoration. If a Forest would combine their objectives for 
restoration, fuels reduction and timber sales, this would be possible. 
We are not asking for industrial forestry, we want restoration work. 
The traditional approach to management used by the Forest Service won't 
work today.
    2.  Utilize Stewardship Contracting--Stewardship Contracts open new 
opportunities for meeting forest plan objectives for the National 
Forests Now that the stewardship contracting authorities have been 
expanded from the pilot program, this should be possible. This would 
help meet some of our predictability needs for planning and investment. 
If we have several thousand acres to manage over five years, it would 
allow us to work with the markets, meet a number of land management 
objectives for the agency, and allow us to reduce the enormous risks we 
have, and the Agency would get quality work. Issues remain over the 
agencies ability to commit to longer-term contracts due to annual 
appropriation limits and other complications. They need help figuring 
out how to make these projects available without putting all the 
financial risk on the operator.
    3.  Healthy Forests Initiative--To truly have a healthy forest 
initiative, the Administration and Congress need to fund restoration 
work, and to help small local business stay in business. Ecologically 
our forests are out of balance, we need to put that balance back, and 
we need an infrastructure of people who can do it. We are excited about 
the possibility that this legislation will help reduce the risk of 
fires and insect epidemics on the Rio Grande and San Juan National 
Forest, and we are hopeful that these National Forests will be able to 
implement projects quickly that we can bid on. The Healthy Forest 
Restoration Act (H.R. 1904) calls for two provisions that are very 
important to communities, and therefore to local small businesses like 
ours: local collaboration through the development of community wildfire 
protection plans, and multiparty monitoring. Multiparty monitoring 
processes measure not only ecological but also social and economic 
effects and include different stakeholders. We want to make sure that 
communities have the capacity and resources to both develop their 
community wildfire protection plans through collaborative processes, 
and assess the accomplishments and effects of the implementation of 
this hazardous fuels reduction program. There is a need for federal 
officials and local stakeholders, including potential contractors and 
workers to receive training on how to do collaboration at the local 
level. Collaboration is not something that can be done or designed by 
the federal agencies alone. Considerable experience has been gained on 
how to develop collaborative efforts through existing authorities for 
stewardship contracting pilots, the Collaborative Forests Stewardship 
Program in New Mexico, and the Secure Rural Schools and Community Self-
Determination Act. In the elaboration of community wildfire protection 
plans, sufficient levels of funding should be allocated to ensure that 
up-front collaboration and multiparty monitoring are a reality in rural 
America.
    4.  Flexibility--Today's timber sales and service contracts are an 
opportunity to improve forest health, reduce fire risks, improve 
habitat, rehabilitate roads, etc. They aren't yesterday's efforts to 
get out the cut. Operators and Forest Service staff need to work 
together on those projects closely to achieve these objectives and make 
the projects financially feasible. Seasonal closures and operating 
restrictions often leave only several months a year to get equipment 
moved in and work done. But there are many opportunities to be more 
flexible about those closures, especially if say the closure is for 
winter recreation and we have no snow.
    5.  Treat the Landscape--The Forest Service and partners should 
look at the needs of their landscape: fire risk, habitat, watershed, 
etc. Priority should be placed on managing those areas that are at 
greatest risk and that have highest ecological values. Priorities 
should not be artificially constrained by what is in the wildland urban 
interface. The National Fire Plan seemed to bring more equipment, 
staff, prescribed burning, and hydro axing but very little in terms of 
actual thinning and restoration projects. The Healthy Forest Initiative 
seems to provide opportunity for a local collaborative process to 
identify and prioritize restoration projects for implementation.
    6.  Rural community assistance--Small, innovative enterprises like 
ours, trying to develop a niche in doing forest restoration could use 
some help. The Forest Service has provided technical and financial 
assistance to small companies through its rural community assistance 
program. We would like to see this program strengthened in order to 
help companies in rural communities to identify new technologies and 
marketing strategies to become successful. We have personally 
benefitted from these programs via both the Rio Grande and the Four 
Corners Sustainable Forests Partnership. The grants we received from 
Four Corners made our mill operation possible. We have also received a 
lot of technical assistance through utilization and marketing experts 
jointly funded by those U.S. Forest Service Programs and Colorado State 
Forest Service.
    I would urge Congress to implement mechanisms to increase 
investment in and support for small business development, and to 
increase congressional oversight of trade practices to protect local 
industry from global markets.
    Thank you again for this opportunity.
                                 ______
                                 
    Mr. Pearce. Thank you, Ms. Doyon.
    Mr. Lovett?

   STATEMENT OF DALE LOVETT, SPECIAL PROJECTS COORDINATOR AT 
  LARGE, PULP AND PAPERWORKERS' RESOURCE COUNCIL, WICKLIFFE, 
                            KENTUCKY

    Mr. Lovett. Good afternoon, Mr. Chairman.
    My name is Dale Lovett. I am a Special Projects Coordinator 
for the Pulp and Paperworkers' Resource Council. I am a 20-year 
employee at the MeadWestvaco Corporation's mill in Wickliffe, 
Kentucky, and I am a proud member of the Paper, Allied-
Industrial, Chemical and Energy Workers International Union.
    I want to begin by thanking the Chairman for extending the 
invitation to share our concerns about our industry today. The 
PPRC takes great pride in having established a credible 
reputation for helping work through many environmental issues, 
and we are privileged to have our voice heard by our Nation's 
leaders.
    As I began to gather my thoughts about what to say today, I 
could not help but remember what the early members of the PPRC 
were told during their first visit to Washington. They were 
told by a Congressman, and I quote: ``If you people had half a 
brain, you would go home and find yourselves a new line of 
work, because in the next 10 years, we are going to shut down 
all heavy industry in this country.'' Well, I guess the good 
Congressman did not realize that papermakers do not have half a 
brain--we have whole brains, and we are still here. We are 
still coming back.
    Over the last decade, our industry has made tremendous 
investments in our mills to stay competitive, and we still pay 
20 percent more in salaries than manufacturing in other leading 
nations we compete with. That is something when you take into 
account the rising cost of litigation we face, our escalating 
health care costs, excessive environmental regulation, 
overtaxation when compared to competing nations, and the trade 
barriers and other protective policies practiced by foreign 
governments.
    Despite all that, for the most part, we still out-compete 
our competitors. With great pride, I can tell you the American 
worker is still the most productive worker in the world. It is 
just that the cost of doing business in America is higher than 
it is everywhere else.
    But we are seeing the effects of our domestic pressures in 
the global economy now. We have lost around 3 million 
manufacturing jobs in the last 3 years with the closure of 
paper mills and other manufacturing sector operations across 
the U.S. And over the last decade, we have gone up against many 
obstacles that have threatened our existence. I have some brief 
examples of how attempts to change public policy and regulation 
have posed considerable risk to the competitiveness of my 
industry.
    In the early nineties, our industry entered into a working 
relationship with the EPA to develop new regs concerning both 
the air and water emissions from bleached pulp and paper mills. 
But when the 1993 proposal was released by the EPA, we were 
faced with the possibility of having to adopt methods that 
would cost the industry $11.5 billion, shutter 33 mills and 
eliminate 86,000 jobs. I am glad to have been a small part of 
the solution that resulted in the EPA resulting recommendations 
that achieved the original goal but only cost $2.8 billion.
    In the mid-nineties, an anti-forestry referendum was put on 
the ballot in the State of Maine that would have essentially 
ended the practice of forestry there if passed. This ballot 
measure proved costly. While public opinion ultimately decided 
that forestry is necessary and beneficial, the numerous 
campaigns we waged to defeat these measures diverted precious 
capital that could have otherwise been spent on plant upgrades 
or other efforts to make our mills more competitive. After the 
election, a newspaper reported one of the referendum supporters 
as saying, ``It is really not that important the ballot 
initiative did not pass. If we can make investors wary of 
coming to Maine for the sake of timber, we have won our 
battle.''
    In 1999, once again, the EPA set its sights on escalating 
another regulation with its revision to the Clean Water Act's 
TMDL regulation. The major flaw in this reg was its intention 
to designate forestry as a point source for runoff into our 
streams and rivers. They wanted to make ``forestry'' the same 
as a sewer pipe.
    If implemented as originally intended, this reg would have 
required Federal permits prior to any type of silviculture 
activity on private property, thus increase our costs, causing 
administrative delays, and subjecting sound, sustainable 
forestry to potential legal challenges.
    PPRC members and many of our friends from all across the 
Nation attended public hearings concerning this matter, and the 
outcry forced the Administration to withdraw one of the 
forestry provisions due to lack of public support and from 
broad bipartisan opposition on Capitol Hill.
    The PPRC and PACE, my union, have worked together with this 
industry on these efforts, and we are very much united 
concerning these issues. Win or lose, on each and every issue 
we take on, we have to stay in the arena during the years 
ahead.
    There is no single piece of legislation that can address 
all of our problems, but there are some things we can do that 
will make a difference.
    I think the most important thing we can do is to recognize 
that making environmental improvements as dictated by our 
Government adds to the bottom line. And the cost of 
manufacturing in the United States is rising sharply in large 
measure because of costs related to regulation.
    I believe that we have to change the way we look at 
industrial processes and change the way we look at writing 
regulations that reduce all emissions. To build flexibility 
into meeting regulatory mandates would e a good beginning. 
Allowing those who understand the operations of a facility to 
develop ways to meet our environmental goals without mandating 
the fix could pay dividends beyond imagination.
    Americans have a knack at being innovative, we really do. 
It is the single thing that has made us what we are today. 
Please help us keep America strong by helping us maintain our 
competitiveness in the global economy.
    Thank you, sir.
    [The prepared statement of Mr. Lovett follows:]

   Statement of Dale Lovett, Special Projects Coordinator at Large, 
                 Pulp & Paperworkers' Resource Council

    Good afternoon, Mr. Chairman. My name is Dale Lovett. I'm a Special 
Projects Coordinator for the Pulp & Paperworkers' Resource Council 
(PPRC) and a twenty-ear employee at the MeadWestvaco Corporations' 
Papers Group mill in Wickliffe, KY, and a proud member of the Paper, 
Allied-Industrial, Chemical and Energy Workers International Union.
    I want to begin by thanking the Chairman for extending the 
invitation to share our concerns about Americas Forest Product 
Industry. The PPRC takes great pride in having established a credible 
reputation for helping work through many environmental issues, and 
we're privileged to have our voice heard by our nation's leaders.
    As I began to gather my thoughts about what to say today, I 
couldn't help but remember what the early members of the PPRC were told 
during their first visit to Washington. They were told by a 
Congressman, and I quote, ``If you people had half a brain you would go 
home and find yourself a new line of work, because in the next ten 
years we're going to shut down all heavy industry in this country.'' 
Well, I guess the good Congressman didn't realize papermakers don't 
have half a brain, we have whole brains. And we're still here.
    Over the last decade our industry has made tremendous investments 
in our mills to stay competitive, and we still pay 20 percent more in 
salaries than manufacturing in other leading nations we compete with. 
That's something when you take this into account the rising cost of 
litigation we face, escalating health care costs, excessive 
environmental regulation, over-taxation when compared to competing 
nations, and the trade barriers and other protective policies practiced 
by foreign governments. Despite all of that, for the most part, we 
still out-compete our competitors. With great pride, I can tell you the 
American worker is still the most productive worker in the world and, 
coupled with our wealth of natural resources in America, we're still 
holding on. But we're not sure how much longer we can hold on, without 
some relief.
    We're now seeing the effects of our domestic pressures in the 
global economy. We've lost three million manufacturing jobs in the last 
three years with the closure of paper mills and other manufacturing 
sector operations across the U.S. We need to recognize that in the 
world marketplace we're going to have to size up our ability to 
compete...looking at the added costs we pay.
    Over the last decade we've went up against many obstacles that have 
threatened our existence. I have some brief examples of how attempts to 
change public policy and regulation have posed considerable risk to the 
competitiveness of my industry.
      In the early 90's our industry entered into a working 
relationship with the EPA to develop new regulations concerning both 
the air and water emissions from bleached pulp & paper mills. But when 
the 1993 proposal was released by the EPA, we were faced with the 
possibility of having to adopt methods that would cost the industry 
11.5 billion dollars, shutter 33 mills, and eliminate 86,000 jobs. I'm 
glad to have been a small part of the solution that resulted in the EPA 
adopting recommendations that achieved the original goal but only cost 
$2.8 billion.
      In the mid-nineties, an anti-forestry referendum was put 
on the ballot in the state of Maine that would have essentially ended 
the practice of forestry there, if passed. This ballot measure, proved 
costly. While public opinion ultimately decided that forestry is 
necessary and beneficial, the numerous campaigns we waged to defeat 
these measures diverted precious capital that could otherwise have been 
spent on plant upgrades or other efforts to make our mills more 
competitive. After the election, a newspaper reported one of the 
referendum supporters as saying, ``It's really not that important the 
ballot initiative didn't pass. If we can make investors wary of coming 
to Maine for the sake of timber, we've won our battle.''
      In 1999, once again the EPA set its sights on escalating 
another regulation with its revision to The Clean Water Act's TMDL 
regulation. The major flaw in this reg. was its intention to designate 
forestry activity as a ``point source'' for run off into our streams 
and rivers. They wanted to make ``forestry'' the same as a sewer pipe. 
If implemented as originally intended the regulation would have 
required federal permits prior to any type of silviculture activity on 
private property. Thus increasing costs, causing administrative delays 
and subjecting sound sustainable forestry to potential legal 
challenges. PPRC members and many of our friends from all across the 
nation attended public hearings concerning the matter and the outcry 
forced the Administration to withdraw the regulation due to the lack of 
public support and from broad bipartisan opposition on Capitol Hill.
      More recently we've been dealing with the EPA's New 
Source Review permit program for industrial air emissions. Under NSR, 
many simple process changes or routine maintenance that could reduce 
emissions and improve efficiency has been avoided because they might 
trigger violations. Think about it, anytime you have a regulation 
that's over 4,000 pages long and is open to interpretive guidance, 
nothing is certain. If we have to wait for a permit to be issued from 
the federal government before implementing a change, we were looking at 
an 18 month window just to get the ok. I am glad to report that we 
support the latest efforts to reform NSR and have worked tirelessly the 
past few years to help build the momentum needed to initiate the 
necessary changes.
    The PPRC and PACE, my union, have worked together with this 
industry on these efforts and we are very much united concerning these 
issues. Win or lose on each and every issue we take on, we have to stay 
in the arena during the years ahead.
    There is no single piece of legislation that can address all of our 
problems. But there are some things we can do that will make a 
difference.
    The most important thing we can do is to recognize that making 
environmental improvements as dictated by our government, add to the 
bottom line. And the cost of manufacturing in the United States is 
rising sharply, in large measure because of costs related to 
regulations.
    I believe we have to change the way we look at industrial processes 
and change the way we look at writing regulations that reduce all 
emissions. To build flexibility into meeting regulatory mandates would 
be a good beginning. Allowing those who understand the operations of a 
facility to develop ways to meet our environmental goals without 
mandating the fix, could pay dividends beyond imagination. Americans 
have a knack at being innovative. It's the single thing that has made 
us what we are today. Please help us keep America strong, by helping us 
maintain our competitiveness in the global economy.
    Thank You.
                                 ______
                                 
    Mr. Pearce. I thank each of you for your presentation and 
your compelling thoughts. Each one of you had something that 
really struck me--the fact that the good intentions of the 
environmental community do not always have good outcomes--the 
alcoholism, the child abuse, and the other problems that you 
have mentioned, Mr. Squires; and Ms. Barber, reminding us that 
all the dots do have names, and all have outcomes in their 
personal lives; Ms. McCarthy, for bringing some balance to make 
sure that our discussions do not become too animated in the 
need to create jobs, that we do need to reach the balance in 
this equation; and Ms. Doyon, for your thoughtful suggestions 
and the reminder, which I find particularly insightful, that we 
burn our forests and then we refuse to cut them down and use 
them for useful products, that even then, we would prefer as a 
regulatory society to watch them rot in the forest; and Mr. 
Lovett, for that half-brain and tenacity you bring to the 
equation, thank you very much.
    Mr. Inslee has come in and has declined the opening 
statement.
    I will start off the questions, and then we will recognize 
members of the Committee.
    Ms. McCarthy, I just need to make an entry into the 
testimony to give some balance. You quoted a GAO statistic that 
is somewhat different from those I find that was abnormally low 
in the number of appeals that are filed. The records I show are 
that 59 percent of the eligible forest-thinning projects in the 
U.S. are appealed--they were appealed in 2001 and 2002. 
Additionally, 52 percent of eligible forest-thinning projects 
proposed near communities in the wild and urban interface were 
appealed in Fiscal Years 2001 and 2002. Environmental appeals 
were found to be overwhelmingly without merit, with 161 of 180 
challenges being thrown out in the same Fiscal Year 2001 and 
2002 period. The appeals delayed thinning projects by at least 
120 days cumulatively in 2001 and 2002.
    Clearly, I think the GAO would agree that the appeals have 
a major impact on this whole discussion of fuels reduction and 
the jobs that we have created.
    I think at this point, I will recognize other members on 
the Committee for questions and come back to the Chairman for 
questions at the end of the time.
    Mr. Pombo?
    Mr. Pombo. Thank you very much.
    It is interesting to hear this testimony. In the years that 
I have been involved with this and watched what has happened in 
California with our timber industry and our timber mills, one 
of the things that I have heard for the last 15 years is that 
when we lose jobs in the timber industry, we will just retrain 
and bring in other industries.
    I have always found that a little bit preposterous to hear 
people make that suggestion, because most of the timber-
dependent communities that they like to talk about are 
extremely remote, with a few thousand people who live there, 
and the people who do live there for the most part, if they 
have a higher education, it is in the forest industry, 
something that would help them with their business and with 
their chosen profession, and the thought of bringing a high-
tech company into a community with a few hundred people in it, 
none of whom are educated as computer engineers or computer 
scientists, really points out how little thought they have 
given to what the problems truly are.
    Unfortunately, a lot of your stories we have heard before; 
they are not unique. They are from people from other parts of 
the country, from other forests, who have gone through the same 
challenges and the same problems that you have.
    Our effort as a Congress, as a committee, has been to 
strengthen and restore the jobs in our timber-dependent 
communities and to bring those resources onto market.
    I want to ask Ms. Doyon a question on competition. You said 
that your business was the result of five other timber mills 
closing. Are there no other timber mills in your area that are 
currently operating?
    Ms. Doyon. Not in Rio Grande County, but in adjoining 
counties, there are two other small mills.
    Mr. Pombo. Comparable in size to yours?
    Ms. Doyon. We just got started in June of 2003, so we are 
still in the process of putting everything together, and they 
have been established already, so I do not know what their 
capacity is.
    Mr. Pombo. How big of a tree are you set up to take now?
    Ms. Doyon. Do you mean diameter?
    Mr. Pombo. Yes.
    Ms. Doyon. We can take any size diameter. We have a shaver 
so we can make shavings, so we can go from small to whatever 
large diameter we bring in.
    Mr. Pombo. If you have two or three small operations in 
your immediate area, you really do not have a lot of 
competition there; there are not a lot of choices that the 
timber companies have as to where the logs go.
    Ms. Doyon. Right. There are no more big mills in our area 
to take the timber to; there are just a few small ones, and 
that is it. There is no place for the wood to go.
    Mr. Pombo. One of the problems that we have run into with 
the Healthy Forests Initiative is that in certain areas, there 
are no timber mills left, and there are areas where the Forest 
Service or BLM is telling us they want to go in and do fuels 
treatment and thinning, yet there are no timber mills anywhere 
near there.
    When we had our hearing in Southern California at Lake 
Arrowhead before the fires started, we were told that the 
nearest timber mill to there was approximately a 9-hour drive 
away; that the last timber mill in that area had closed several 
years before, because they could not get any timber projects 
through at all, and the mill closed. So they did not have 
anyplace to send, and the local utility was being forced to 
clear the path underneath their power lines, and the trees that 
they were taking out were going into the dumps; they were going 
into the local landfill, because they had nowhere to take these 
trees.
    That is one of the concerns that I personally have as we 
move forward with the Healthy Forests Initiative, that we have 
a strong and healthy industry that is there and capable of 
taking whatever fuels or trees are removed from the forests. 
And I think it is something that this Committee seriously has 
to look at in the future in terms of how do we move forward 
with the Healthy Forests Initiative if we have destroyed the 
infrastructure and the possibility of having some economic 
activity come out of these fuels that we are removing.
    But I appreciate the testimony of the witnesses. It is 
unfortunately something that most of us have heard and seen in 
our own districts, but I appreciate all of you making the 
effort to be here and participating in this hearing.
    Thank you.
    Mr. Pearce. Thank you, Mr. Chairman.
    Mr. Inslee?
    Mr. Inslee. Thank you, and thanks to the Committee for 
convening this important meeting. I have a couple of points and 
a question.
    First, I saw that the heading of this is regarding forests 
and jobs in the forests, and I think our inquiry is really too 
limited, because as far as at least the panelists--and I know 
this is not the fault of the panelists at all--but as far as I 
can tell, we have totally ignored a very, very large component 
of the creation of jobs in our national forests. We have 
totally ignored the value of forests creating enormous whole 
recreational industries which are growing significantly in my 
State, in the State of Washington. These jobs are dependent on 
national forests, and yet apparently, our Committee's mindset 
is that the only jobs that count are those regarding harvest 
itself rather than all the thousands of jobs that have been 
created in my State associated with recreational opportunities 
in our national forests.
    I think our Committee would do well by expanding our 
inquiry across the whole field of jobs that can be and should 
be created as a result of our forests, one of which--and 
perhaps this is not too obvious, but I will mention it--we have 
thousands and thousands and thousands of jobs created by our 
forests as the wellspring of clean water. If you have clean 
water, you have jobs associated with that because you have a 
meaningful economy. You have people willing to build houses in 
your area because you have clean water.
    We have not looked at those jobs at all in our inquiry here 
today. So I would like to see our Committee at some point look 
at the whole universe of jobs that are created by our forests.
    Second, I think our Committee still needs to help those--
and I did not get to hear your testimony, Ms. Doyon, and I 
apologize; I was attending another meeting--but those who have 
jobs created through some of these forest restoration programs 
we have. And I just want you to know that the real impediment 
to increasing the number of jobs created through forest 
restoration, of thinning projects principally, the real choking 
off of those jobs, is the lack of appropriations by the U.S. 
Congress to do this work.
    We could be doing at least 50 times more work in thinning 
these forests if the U.S. Congress would appropriate the money 
to do it. And I want to give you the sad fact--the U.S. 
Government spent every, single dime appropriated by Congress 
doing these thinning projects in the last 2 years that they 
had. So there is no artificial restriction on the law of doing 
these thinning projects, which would create great jobs for you, 
which are good jobs--we hope, in any event--but Congress simply 
has not appropriated the money to do it.
    I mention this to you because we have had a lot of 
discussion about the regulatory aspect of this, but the real 
impediment to the growth of thinning jobs is the lack of this 
Congress appropriating money to do it. And the reason they have 
not done it is not because the work does not need to be done--I 
think there is bipartisan consensus that we have very 
significant additional thinning that we have to do--the real 
impediment is that some folks in the U.S. Congress believe it 
is more important to give Enron tax breaks than to do the 
thinning in the forests that we need to do.
    And people need to know that, that that is a value decision 
that folks have made in Congress that are stopping--not 
stopping--that are retarding the growth of these thinning 
projects. And Congress needs to increase the appropriation for 
these thinning projects so we can increase jobs in the woods 
under that rubric.
    A question if I can, and this is kind of an open question. 
Can someone help me understand the economics in the association 
of trade policy and prospective gluts in the market from 
foreign fiber that I have heard tell of and how that affects 
our local job conditions?
    Mr. Lovett, would you perhaps like to tackle that and tell 
me what the situation is out there?
    Mr. Lovett. I will do my best, sir. I will have to remind 
you that I am a maintenance employee in the mill and not a 
trade expert.
    Mr. Inslee. Well, those are the guys who know how things 
work, so you are the right one to ask.
    Mr. Lovett. In the spectrum of international trade, what we 
are finding is that competing nations have all kinds of crafty 
ideas and ways to protect their markets. They are very 
protective of their markets for our finished goods. They really 
like our raw materials; they would be glad to take the raw 
materials and create the jobs that turn those into a finished 
product--and they are even happy to sell them back here.
    In our industry, we are not real labor-intensive, and we 
know that the labor cost in China is almost nonexistent. It is 
almost free labor. And we know that while they may have an 
environmental regulation, nobody adheres to it. There is no EPA 
looking over their should. And you know we make our products 
here under the highest environmental standards in the world. 
Let that be known. We make them under the highest environmental 
standards in the world, and we can put out the tons per man-
hour out of our mills to compete with those folks, but their 
costs are lower there, and there are so many things--the cost 
of energy. You have the tax structure in the United States. We 
have the cost of regulation. We have public policy that limits 
our fiber supply. That is part of the problem here.
    We know what our problems are. These mill closures are not 
having to do with some type of phenomenon that we do not 
understand. We have just got to be willing to work together 
here and address them. Give us a level playing field where our 
industry can be competitive, and we will do it. We have 
renewable resources. We do a good job taking care of the 
environment. We have more forests in this country than we had 
100 years ago. The Nation's population has probably tripled--I 
do not know; I am not up on the Census. We are the best 
stewards of the land in the world, but we darned sure do not 
seem to be getting any credit for it these days. And foreign 
competition is tough. It is very, very tough. All of your 
capital investment is going to Southeast Asia, China, 
Indonesia, Malaysia, South America in this industry, because 
nobody wants to invest here. Who wants to go through the 
regulatory process, the permitting process? If we go to get a 
permit to make an upgrade in our mill that will actually 
benefit the environment, we have to wait 18 months before we 
can get the permit from the Federal Government before we can do 
something good.
    It is just really--and I am a union member, sir. I have 
been in the union all my life, and I am proud of that. But we 
are seeing our jobs disappear for things that we cannot 
control. They closed a mill in Maine about a year and a half, 2 
years ago, and they were talking to the local union president, 
and he said, ``We lost so much money that if the workforce had 
just worked for free, we still would have lost money.''
    We just have some fundamental changes that have to be made 
in this country, and we have got to address them. We have to 
decide does manufacturing have a future here in America, or are 
we just going to give it away; are we going to let it go 
because it is not that important anymore.
    And you talked about tourism. I live in the lakes area 
where we have a lot of tourism, and those are important jobs, 
sir. But I am not willing to give up my living wage job that I 
can send my kids to college without asking the Government for 
some help, I can buy their books, and I can pay for it out of 
my own pocket. I do not want a part-time, minimum-wage job with 
no health care and no pension as my future
    Mr. Inslee. Thank you.
    Ms. Doyon. There is something else I could add to that. In 
the timber industry, they put the tariff on the Canadian 
imports, which was great, but the Canadians get their timber 
free--they do not have to pay for theirs, where we have to pay 
to buy our timber. When they put the tariff on, all they did 
was double their production. So what that did was flood the 
markets. It was great that they put the tariff on, but they 
just doubled production, and it flooded the markets, and then 
we cannot sell our product because the markets are flooded, and 
we do not have any market for that
    Mr. Inslee. Thank you.
    Mr. Pearce. Thank you, Mr. Inslee, and thank you, Mr. 
Lovett, for again keeping in perspective the kinds of jobs that 
we are talking about, the relative pay of the recreational jobs 
that were mentioned versus the pulp and paper industry that we 
are affecting.
    I have one kind of open question. Mr. Mims, I realized when 
I was going through my list of comments that I overlooked your 
comment about the cooperative management of the 1,815 pieces of 
property. I think that was very compelling, and that is one 
thing I look to industry to do.
    As I look in my district--sometimes we think that 
Government can create jobs, and Government can create the 
solution to this--we have one mill in my district that the 
Forest Service decided that they are going to get it up and 
spinning, much like your mill. My question is if any of you 
have seen similar projects. They started with I think an 
initial grant of $800,000. It is now over $1 million given to 
one operator. They don't have a plant yet working. And we 
realize now that the Forest Service gave the grant to build a 
sawmill in an area where there is no power available.
    It just really frustrates me to know that there good, 
hardworking people like you who are willing to take the risk 
yourselves, and the government is sitting out here, squandering 
our money the way that they are.
    Do you all see similar instances in any of your areas?
    Mr. Squires. Mr. Chairman, I have not seen an instance like 
you related, but I will tell you this, that if the Federal 
Government and the Forest Service will come through with long-
term contracts, there are entrepreneurs ready to move into 
national forest lands, and we need to do that before the 
infrastructure completely disappears. There are mills and 
people ready to go to work, but you cannot do it on an 18-month 
or a 4-year contract.
    We do not know the goods and services that we are going to 
recognize off national forest lands until we have better long-
term access to it. Those mills and those harvesting techniques 
should be held accountable to national standards, but they have 
to be long-term, whether it be biomass generation facilities or 
anything else.
    We would never have guessed in 1961 what we would have 
gained off NASA. We can never guess the goods and services that 
we will get off national forest lands unless we have access to 
them.
    Congressman Inslee mentioned clean water. Clean water does 
not come when we have fire-ravaged territory and the salmon 
river runs gray with silt. We need to look at this on the long-
term effects. With long-term contracts, those entrepreneurs 
will come forward, and they will put sawmills where there is 
power, they will build cogeneration where we need it, and it 
will take care of itself. That is what built this Nation, if we 
can just get back to the basic standards that we once came 
from.
    And one thing--if my forefathers who stood on those bridges 
north of here and fought that great war in 1776 had known what 
we were going to do to Federal lands, they sure as hell would 
have written something in the Constitution about it.
    Thank you.
    Mr. Pearce. Thank you again for those compelling points.
    Mr. Duncan?
    Mr. Duncan. Thank you, Mr. Chairman.
    I want to thank Mr. Lovett for the statement he made a few 
minutes ago, because I think he summed up the situation 
probably better than I could.
    I have noted before that it seems that most of these 
environmental extremists come from very wealthy or at least 
very upper-income families, and perhaps they do not realize how 
much they are hurting the poor and lower-income and working 
people of this country by driving up prices and destroying 
jobs. But I have sat here for years and heard how they always 
say do not worry about closing these mills or these different 
businesses, because we are going to retrain the people for the 
tourist industry.
    Well, you cannot base the whole economy of this Nation on 
the tourism industry, and as Mr. Lovett mentioned, that is 
basically a minimum wage or lower wage industry anyway.
    I would like to read for the record part of what is in the 
briefing paper that we were given for this hearing. It says: 
``Just as most forests are located in rural areas, most jobs 
directly related to the forest products industry are also 
located in rural areas. The loss of even a few jobs in a 
sparsely populated area can devastate a community.'' And all of 
us know about communities that have been devastated.
    ``Further, the forest products industry is one of the 
largest employers of high school-educated workers''--perhaps 
some of these upper-income environmentalists do not care about 
these high school workers particularly--``a sector of the 
workforce vulnerable to an inconsistent source of timber. This 
has led to an increase in poverty and unemployment levels in 
affected communities, stressing county governments that already 
struggle to make ends meet.''
    ``Among the various segments most impacted since the mid-
nineties, more than 50,000 pulp and paper mill jobs have been 
lost while an additional 71,000 jobs have been lost in the 
lumber and wood products industry. From 1990 to 2003, over 900 
mills, pulp and paper plants and other forest product plants 
were closed. In 1989, trees harvested on National Forest system 
land supported roughly 130,000 jobs. Last year, national forest 
timber supported only 30,000 jobs.''
    And I am told that those statistics do not include the 
logging jobs. These are forest product jobs. And when it talks 
about 900 mills closing, I remember last year--most people here 
have seen or heard of the movie or the book ``Seabiscuit.'' I 
read in one newspaper that the county that Seabiscuit lived in 
for most of his life in Northern California had 36 paper mills 
until just recent years, and now they have none because of all 
the environmental rules and regulations and red tape.
    Now they are trying desperately to come up with a tourist 
industry based around Seabiscuit. But again I will say that you 
cannot turn the whole country into a tourist attraction. I wish 
you could. But we have to have some manufacturing jobs and 
other types of jobs that are decent jobs for people. And all of 
us are getting concerned about these millions of jobs that we 
have lost over the last 10 or 12 years to other countries, and 
we are going to have to start doing something about this.
    I remember a few years ago, I was told that in the mid-
eighties, Congress passed a law that the environmentalists 
wanted that we would not cut more than 80 percent of the new 
growth in the national forests. They tell me we have about 23 
billion board feet of new growth in the national forests each 
year. Now we are cutting less than 3 billion board feet in the 
national forests, less than one-seventh. And as Mr. Lovett 
mentioned, there are more trees now than ever before.
    I remember reading Bill Bryson's book, ``A Walk in the 
Forest,'' about hiking the Appalachian Trail. There is a 
section in there where he notes that New England was only 30 
percent in forest land in 1850, and now it is 70 percent in 
forest land.
    A couple of years ago, there was an article in the 
Knoxville News Sentinel, where I am from, that said that 
Tennessee was 36 percent in forest land in 1950, and now it is 
almost half forest land.
    Yet if we went to any school in this country and asked the 
kids are there more trees today than there were 50 or 100 years 
ago, and they would all say there are fewer trees now because 
there has been such a brainwashing for so many years by some of 
these environmental extremist groups, and as I said earlier, it 
is really hurting the poor and the lower-income and working 
people of this country, and it is getting to a point where we 
have got to do something about it.
    I appreciate the witnesses coming here to tell their 
stories today, and I hope that we can provide them with some 
help, but this hearing is an important thing because at least 
we start the conversation.
    I yield back the balance of my time.
    Thank you, Mr. Chairman.
    Mr. Pearce. Thank you, Mr. Duncan.
    Mr. Hayworth?
    Mr. Hayworth. Thank you, Mr. Chairman.
    Again I would like to thank all the witnesses.
    Ms. McCarthy, I have a few questions for you. Is your 
organization involved either directly or indirectly with the 
Forest Conservation Council of New Mexico? That organization 
filed lawsuits which have caused really disastrous delays to 
the timber salvage projects in the Apache-Sitgreaves National 
Forest after our Rodeo-Chediski fire.
    Is your organization involved either directly or 
indirectly?
    Ms. McCarthy. Neither. We are not involved at all. The 
Forest Trust is an organization that will defy categorization 
as either an environmental group or a forest industry group. We 
are smack in the middle because we are foresters, and we 
practice responsible forestry. We are the middle ground.
    Mr. Hayworth. So, no involvement at all of your members, 
categorically--
    Ms. McCarthy. Categorically.
    Mr. Hayworth. --no involvement whatsoever?
    Ms. McCarthy. That is absolutely the truth. We do not file 
lawsuits. We do not work with that organization--
    Mr. Hayworth. My question is not did you file lawsuits. Is 
there any connection either directly or indirectly with the 
Forest Conservation Council of New Mexico?
    Ms. McCarthy. Well, I have talked to Brian Byrd on the 
phone one time in my life, and that was probably enough.
    Mr. Hayworth. OK. I thank you for that.
    Your testimony was interesting, because you spoke of new 
economic venues. For example, you talked about the employment 
of local fire fighters in certain areas. But what was missing 
was any type of quantitative documentation.
    How many jobs have been created according to that 
University of Oregon study that you cited?
    Ms. McCarthy. That study does not--it was a challenge to 
interpret it. That way that study is written, it makes 
comparisons of jobs through the National Fire Plan versus the 
Jobs in the Woods Program in the Pacific Northwest--
    Mr. Hayworth. So perhaps it was more interpretive and--not 
your characterization, but mine--perhaps more in the realm of 
academic wishful thinking.
    You also state that the Forest Trust mission is to improve 
the livelihoods of rural people. Perhaps you did not play a 
direct or indirect role in what transpired in Arizona, but it 
has been my experience, and I think my colleague who now 
represents the area that I represented when this fire was going 
on, that delays in hazardous fuel reduction projects due to 
organizations, whatever we document them--some call them the 
environmental fringe; I think perhaps the more accurate 
description is the new prohibitionists, for they seek to 
prohibit any type of meaningful economic interchange--does more 
than just disrupt the livelihoods of rural people--we see lives 
destroyed. We see wildlife destroyed.
    In fact, the irony of what we saw with the Rodeo-Chediski 
fire, ladies and gentlemen, was that the increase in 
particulates, the air pollution, and the pyrocumulus clouds 
eclipsed anything seen in the worst rush hour in Phoenix, 
Arizona, now the fifth-largest metropolitan area in the 
country.
    And what happened to the water tables? And what happened to 
the very species so many of these regulations purport to 
protect? It was just obscene. And still we have organizations, 
perhaps not affiliated with anyone at this table, but from home 
States outside of Arizona that have sought to delay the very 
projects that could employ people and could try to help us get 
a handle on what has been disastrous policy.
    Again, Ms. McCarthy, I appreciate your testimony here 
today. I just wonder theoretically, because as you say, the 
Forest Trust--and I accept your testimony--tries to serve I 
would guess as a bridge, a mediator. Would you agree that 
whether hazardous fuel reduction projects are accomplished by 
the Government or nonprofits or even private companies, the 
same result can be accomplished to benefit the forests and 
surrounding communities?
    Ms. McCarthy. I would agree with that, and I guess what 
strikes me is that it does not make sense to me to base our 
Federal forest policy on reaction to the action of some 
extremists. I think our policy needs to be more visionary than 
that, and I think we are headed in that direction, and we can 
go further.
    Mr. Hayworth. Well, I thank you for that clarification. I 
would just point out--and again, I am glad to see my friend 
from New Mexico is here--with a good Arizona background, we 
should point out for purposes of full disclosure, family 
history--that what troubles me in this discussion is that there 
seems to be such animosity toward a private solution.
    I am sorry my friend from Washington State is not here 
anymore to talk about the dollars appropriated and the lack 
thereof. It would seem to me, ladies and gentlemen of the 
Committee, and those who join us here today, that if we could 
employ people, which we can and which we have done--as Mark 
Twain said, history does not repeat itself, but it rhymes--if 
we were able to strike the balance that so many have spoken of 
here today, that we can employ people and, rather than costing 
the taxpayers, we could have the balance required to create 
jobs, to have a meaningful industry, one predicated not on the 
new prohibitionists and overregulation and micromanagement and 
paralysis by analysis and lawsuits that have hurt people, but 
instead, we could actually get people back to work and save the 
taxpayer money in the process--as my friend, the old 
broadcaster Mel Allen used to say, ``How about that?''
    I thank you very much for the time, Mr. Chairman.
    Thank you, witnesses.
    Mr. Pearce. Thank you, Mr. Chairman.
    Mr. Udall, do you have questions?
    Mr. Tom Udall. Thank you very much, Mr. Chairman, and my 
good friend Mr. Hayworth, thank you.
    I do not know whether you know the family history, but my 
grandmother was born in what is New Mexico territory, so I felt 
like I was going back to my roots when I went back to New 
Mexico. You may not have known that.
    Mr. Hayworth. Well, if my friend would just yield further, 
I understand--
    Mr. Tom Udall. Well, let me get my question in. Let us get 
to the substance of it, since we have these important witnesses 
here.
    Let me first say on Ms. McCarthy's organization, Forest 
Trust, they have done some very good work in New Mexico, and I 
think they try to look at the forest issue in a broad-gauge way 
and do bring people together, and I think it is important that 
that be recognized.
    I would like to ask her about some of these studies that 
she mentioned earlier, and specifically the bill introduced by 
Senator Bingaman that passed over in the Senate, and to 
contrast that bill with this Healthy Forests Initiative.
    It seems to me that we are not really taking care of local 
communities and the unemployment problems and forest-dependent 
communities if we are not doing those things that she mentioned 
earlier--having contractors hire local workers, having youth 
conservation workers doing fuel reduction, those kinds of 
things.
    Could you talk a little bit about those parts of the 
National Fire Plan that we did not really emphasize in Healthy 
Forests, and is it your belief that we should have done that?
    Ms. McCarthy. Thank you for the question.
    I have to go back a little bit to the Western Governors' 
Association and the 10-Year Comprehensive Strategy that was 
signed off on by the Secretaries of Agriculture and Interior 
after about the first year of the Fire Plan.
    It came out with four goals that were supported at the 
Federal, State, local, and tribal levels. Those goals were: 
fire suppression, hazardous fuel reduction, restoration, and 
community assistance.
    One of the reports that I am working on now is an analysis 
of where the money has gone through the National Fire Plan, and 
if you look at it, 70 percent of the money has gone to fire 
suppression, 20 percent has gone to hazardous fuel reduction, 
and restoration and community assistance have gotten the 
remaining 10 percent. There are a lot of reasons for all that, 
but the bottom line is that if we are not investing in 
community assistance and restoration, we are not going to 
accomplish the four goals.
    I think the Healthy Forests Restoration Act was essentially 
about the second of those goals, that is, the hazardous fuel 
reduction piece. So the Community-Based Forestry Act that I 
referenced earlier is about accomplishing the third and fourth 
goals, that is restoration and community assistance.
    Mr. Tom Udall. The part of this that I think is frustrating 
for all of us is that we are spending 70 percent on 
suppression, and every year we put money into fuel reduction, 
doing the prevention, trying to get out front of these 
catastrophic fires, and we say, well, we are going to do the 
fuel reduction, and then we pull all the money away to fight 
the fires.
    Could you comment a little bit on that kind of mentality 
that is going on here?
    Ms. McCarthy. It is a big problem, and it needs to be 
solved. There is a coalition of about 80 groups, including all 
sides of the circle, so to speak, that are working on that 
problem. There are also some Federal task forces that are 
looking at that. It is a key part of the solution. We have to 
find a different way to fund fire suppression and build in 
incentives to keep those costs down, because otherwise we are 
going to keep having to divert the funds that need to go to 
reduce hazardous fuels. It is a lose-lose situation as it 
stands today.
    Mr. Tom Udall. And it seems to me that when we hold up this 
promise that we are going to do fuel reduction, we are going to 
try to deal with forest fires in a preventive way, but then, we 
do not put the kind of money in there to do it, and yet hold up 
that we have put money in and then pull it out every year to do 
suppression, we are not really giving the straight story to the 
public about what is going on. I know my communities that are 
surrounded by forests keep wondering why we are not starting 
projects, why we are not doing things at the local level, and 
there are projects that have started, but many times they get 
stopped or they are halted because moneys are pulled away for 
suppression.
    So I think we need to work this whole authorization 
budgetary side to make sure that we are really sending a 
message to the Forest Service that we want the prevention done, 
we want the fuel reduction done in a timely way, especially 
with local resources and local people and local workers.
    Thank you very much, Mr. Chairman.
    Mr. Pearce. Thank you, Mr. Udall.
    Just a comment on that, that in our district, there is a 
prescribed burn that has passed through all the channels of 
regulation that is funded. One person in the whole system at 
the field level, a biologist, has blocked the project. 
Everybody upstream has approved the project. I think the 
characterization that it is a funding issue sometimes avoids 
the truth.
    Mr. Renzi, you have questions.
    Mr. Renzi. Thank you, Mr. Chairman.
    I live in Flagstaff Arizona, home of Northern Arizona 
University and have done a lot of work with Wally Covington 
there at the Ecological Research Institute. You cited that 
study.
    I think it is fair, Ms. McCarthy, that in the numbers when 
you talk about the 2 percent only being appealed, for full 
disclosure, we caveat the fact that those were total forest and 
landscape-related cases nationwide, that many of those cases 
are nonappealable, that they include not only campground 
cleanup but recreationsite debris removal. I have firsthand 
knowledge of what I am sharing with you, so that in the future, 
when you do cite it, you will hopefully caveat it.
    You mentioned that we should not engage in efforts to 
change NEPA, and I do not agree with you. The Rodeo-Chediski 
fire, 460,000 acres, that Congressman Hayworth spoke of, a good 
portion of it was on the White River Apache Reservation, as you 
know. We were not able to do a full-blown NEPA in that area, 
thank God, and they were able to go in an salvage that wood in 
a post-crisis situation, and their forest is now, by academic 
standards, scientific standards, not political standards, in 
better shape than we have up in our national forest on the 
ABRS, on the Sitgreaves.
    So here we are, able to streamline NEPA because it is on 
sovereign land, and yet the Native Americans are doing a better 
job managing their forests now than we are. So I just wanted to 
mix that in gently into the mix.
    I also want to ask that when we talk about--Mr. Squires 
mentioned the ``journey of a generation, not an election 
cycle,'' that is so well-said, sir. I am going to steal it from 
you and use it in my reelection, if you do not mind.
    Mr. Squires. Please do.
    Mr. Renzi. I think it goes to the nexus of the argument, 
which is that we have got to have a consistent supply of forest 
product over generations in order to get this done in a 
collaborative effort.
    Today I had the opportunity to sit with Herb Hopper, who is 
working with the Four Corners Sustainable Alliance 
Association--I know you mentioned it in your testimony, Ms. 
Doyon--and he pointed out to me that we really need to help 
bring back the small businesses, not just these large 
landscape-type stewardship programs which we are headed toward 
with the Healthy Forests Initiative. But you all are putting 
together nonprofit organizations to help obtain grant money, 
and you are trying to survive off grant money for your startup, 
embryo kind of funneling or conduit. The embryo conduit for you 
all is these grant moneys.
    I want to ask if what you are having to rely on for 
sustainable funding is grant money, where can we go--there is a 
model out there that these nonprofit organizations should come 
together in a collaborative-type effort and that the Federal, 
State, and local governments should put up some sort of 
financial guarantee, let us say some sort of a bond instrument, 
the new creative idea--I am sure you experts have heard about 
it--where the bond then serves as the collateral for you all, 
your small businesses, to be able to startup, large businesses 
to be able to come and be sure that you are going to get the 
kind of return on your investment that you are going to need 
for the capital outlay and the risk that you take in order to 
get back into the mill business.
    I just wanted to hear some thoughts on it from anyone here, 
the experts we have.
    Cassandra, do you want to take a shot at that, or Laura? My 
time is running out.
    Ms. Doyon. Mainly just consistency of the program. If we 
had the consistency in the program, and we knew the timber 
contracts were going to be out there that we could rely on to 
get a job, to get the money back in, it would be a lot of help.
    Mr. Renzi. So you are saying consistency as far as the--
    Ms. Doyon. In the Forest Service contracts.
    Mr. Renzi. Going back to the product.
    Ms. Doyon. Right, right.
    Mr. Renzi. The consistency of having the product available 
to you; that would be enough to sustain you. Let me go this way 
with my questioning. If you were to look back--how many years 
has your company been around?
    Ms. Doyon. Twenty.
    Mr. Renzi. Twenty, OK. In the startup portion of it, what 
could we have done to help you in that take-off, that first 3-, 
5-year phase? As a small business owner, I know that that is 
the most vulnerable portion. What could we have done to help 
you get started--because I am looking for how we are going to 
grow the small business industry in the forest.
    Ms. Doyon. A lot of times, we jump in there not knowing 
anything. There is too much information and not enough--
    Mr. Renzi. The paperwork.
    Ms. Doyon. Too much paperwork, too much jumble.
    Mr. Renzi. Right. Well, that's the Government.
    Ms. McCarthy, real quick, did you want to add?
    Ms. McCarthy. I think--I have heard several people say 
this--it is really about investment, and while there may be a 
point in time at which private enterprise can fully pay for the 
costs of thinning and restoration, I think we are in a 
transition phase that requires investment, and bonding is one 
mechanism that we might use.
    Mr. Renzi. All right.
    Thank you all very much.
    Thank you, Mr. Chairman.
    Mr. Pearce. Thank you, Mr. Renzi.
    There are dozens of questions that I would like to ask, but 
each one of us has pressing appointments. I am going to save 
the personal questions for last.
    Ms. Doyon, I am going to ask you a very personal question, 
and you do not have to answer it. I ask it because my wife and 
I bought a business 14 years ago, and we had four employees, 
and literally, we were not sure we were going to make it 
through the first 6 months. And when we got through 6 months, 
the gut-wrenching fact that we had risked our house and home, 
that we had signed those as collateral, continued to be a heavy 
burden through the full 14 years of ownership. We sold our 
company in October. We had 50 employees. But every day was a 
pretty hard grind.
    My question to you is: Without some of the changes that you 
have recommended, what are your chances of success in your 
business?
    Ms. Doyon. Slim and none.
    Mr. Pearce. Slim and none.
    I really think that you all, the union workers, the people 
who are working in the companies, you people who have a slim 
and none chance of survival--you are the reason I came here.
    If we do not begin to protect the entrepreneurial spirit 
and the hardworking spirit of the hearts and souls of the 
people who work in this country, we do not have a future.
    You made the point very well, Mr. Lovett, that the overseas 
corporations do not have one-tenth the costs we do. I looked at 
a slide last year--we are paying right now about $7 for natural 
gas. In the Soviet Union, for the same gas quantity, they are 
paying 50 cents. Our productivity is so high that we can pay 20 
percent more for labor, pay those higher energy costs, and 
still just eke out a living here. But we are driving this 
element of our society out through things that are senseless.
    And I will tell you it is absolutely senseless to watch the 
wildfires rage across Southern New Mexico knowing that there 
will not be a healthy stream anywhere near one of those. And 
when we do not cut the trees, and we leave them sitting there--
there are counties in my district that got 2 inches of rain 
last year. We have a billion too many trees in New Mexico by 
Forest Service estimates. Each one soaks up just a particle of 
water, maybe a gallon, maybe 100 gallons, but if it is one 
gallon a day, that is a billion gallons a day that should be 
percolating into our watersheds and into our streams and into 
our aquifers--and we are refusing to cut one board foot out of 
our forests when they are dying.
    You presented very well that the quality of timber that you 
get is not good enough; the timber is weakened by disease and 
pests. Every single one of you could tell us stories.
    I really appreciate it. You have come a long way to 
testify, every, single one of you. I appreciate that, and I 
appreciate the balance. We cannot just go clearcutting. None of 
us is saying that. But we absolutely have to do things smarter, 
or we are going to lose the heritage not only of our forests 
but the fine people who work there and make their jobs in the 
forests.
    I appreciate you coming in to testify.
    Committee members can submit additional questions if you 
have those. For me, this has been a very compelling hearing. 
The record will be open for 10 days for additional responses. 
All of you who did not quite get your full testimony in, be 
assured that it will be introduced into the record and will be 
there in full, even if you were not able to read it.
    If there is no further business before the Subcommittee--
    Mr. Tom Udall. Mr. Pearce, could I just make one statement 
on the GAO, to make that part of the record?
    Mr. Pearce. Yes.
    Mr. Tom Udall. I was just reading this GAO report here, and 
according to the report, of all 818 fuels reduction decisions--
which is 194 of them--less than 25 percent were appealed, and 
only about 3 percent were litigated. That is what the GAO said, 
and I just want that to be part of the record.
    Thank you very much, Mr. Chairman. Thank you for doing this 
hearing, and I appreciate the witnesses coming.
    Thank you.
    Mr. Pearce. Thank you, Mr. Udall. I would clarify that the 
appealable questions are what we were talking about. Many of 
the statistics you mentioned were not appealable, and it is 
very important for those distinctions to be made that over 50 
percent of those were appealed.
    With no further business from any of the Subcommittee 
members, I again thank the members and the witnesses.
    We stand adjourned.
    [Whereupon, at 3:38 p.m., the Subcommittee was adjourned.]

    [The following information was submitted for the record:]
      Colgin, Thomas, Great Lakes Special Projects 
Director, Pulp and Paperworkers' Resource Council, Statement 
submitted for the record
      Gibson, Kent B., Snowflake, Arizona, Statement 
submitted for the record 
      Reandeau, Larry, Georgia-Pacific Mill, Wauna, 
Oregon, Statement submitted for the record

    [The statement of Mr. Colgin follows:]

                            February 4, 2004

Honorable Committee Members

    My name is Tom Colgin and I live in Michigan's Upper Peninsula. I 
have worked in the pulp and paper industry for the past 26 years. When 
I first became employed in this industry I would be lying if I said it 
was environmentally friendly. Over the years our mill has stepped to 
the for front and complied with all regulations and made this complex 
one of the cleanest and the most up to date in the state of Michigan. 
We were named Michigan's Clean Corporate Citizen of the year. Something 
we are all proud of.
    But because of the federal regulations that affect this industry we 
continue to struggle with timber supply, appeals, litigations, and 
environmental protectionists that threaten the very being of this mill.
    The Environmental Extremist have used the appeals process to all 
but shut down our nations forests. Which has added to the cost of the 
whole process and puts the forest service back into the process of 
doing the whole timber sale all over again. Which adds to the time 
before the harvest takes place and in all likely hood lessons the value 
of said timber. And the only thing it costs the person is a postage 
stamp. And they use it every chance they get. You have to wonder why or 
how a person from Arizona can appeal a timber sale in Upper Michigan. 
But the process is used time and again to stop or slow the process 
down.
    Everyone has pointed fingers and blamed this group or this 
administration for our forest health issues. But no one has stepped to 
the forefront and did anything to fix them. The healthy forest 
initiative passed and no sooner was it signed and the ink wasn't dry an 
environmental group stepped in and litigated it. We have forests all 
over the U.S., Federal, State and private that are burnt over and bug 
infested that cannot be managed because of appeals or litigations. How 
can we continue to stand by and let this happen.
    In the meantime our jobs continue to be lost to other countries. 
With no environmental regulations. These are good paying jobs that hard 
working Americans thought was their future, and plant after plant 
closes, moves off shore or just goes away. Our manufacturing in this 
country becomes less and less. We have gotten free trade agreements 
which have helped everybody or country except our own. What we need is 
fair trade agreements as we can compete with anybody in the world if 
we're on a level playing field. But we're not as our political leaders 
continue to cut deal after deal and pass legislation that make it 
harder to do business here and easier and more profitable to do it off 
shore in some other country.
    We need laws that will protect our jobs here in the United States. 
Other wise the manufacturing sector of this country will be a thing of 
the past as industry after industry here become a thing of the past.
    Our ESA is another ploy of the extremist groups to tie the hands of 
industry. As a side note, in the early 90's I attended a meeting in 
Escanaba, Michigan on the Canadian Lynx. In attendance at the meeting 
was U.S. Fish and Wildlife, Biologists from Mich. Wis. And Minn. 
Department of Natural Resources plus there Canadian counter parts. 
During the hearing all the parties present stated that it didn't make 
sense to list the Lynx. When I returned to the mill I told our then 
mill manager that I had just seen Michigan's Spotted Owl. He thought I 
was joking. Why list an animal that isn't present? In one of our 
western states they were monitoring for the Lynx and none could be 
found. So they doctored the tests. Until someone admitted to what they 
had done, nobody knows the difference. What impact would those tests 
have had hadn't someone stepped to the plate and taken responsibility 
for them. We'll never know but it's scarey to think of the potential. 
Canada worried that if the Lynx is listed in the U.S. they will have to 
follow suit. And they offered to give the U.S. all they want. As they 
have more than enough to go around. There concern was what impact would 
listing have on the winter snowmobile industry which all of these 
states depend on. As Lynx habitat begs for non compacted snow. What 
effect will this have on the logging industry? Fish and Wildlife didn't 
care, nor did they ask. It's all about another animal, plant, etc. on 
the endangered species list. And the funds that are set aside to fund 
these programs. When a plant or animal are more important than a human 
being, something is wrong with the process. This act needs to be 
reformed as its being used by environmental groups to shut industry 
after industry down. It's their trump card to bring progress to a stand 
still.
    What we need is a common sense approach that protects our land, air 
and water quality. Plus laws that protect our Jobs. Let's go back to 
when these laws were enacted and find out what the intent of the law 
was. And factor in the human element, as it is a very important part of 
our society. And the industries in the United States can compete with 
anybody in the world.
    Thank you for your time.

                             Respectfully,

                             Thomas Colgin

                                 ______
                                 

 Statement submitted for the record by Tom Colgin, Great Lakes Special 
    Projects Director, Pulp and Paperworkers' Resource Council, One 
                   Superior Way, Ontonagon, Michigan

    These comments are on behalf of Tom Colgin who is a labor leader 
and employee at Smurfit-Stone Container Corp. Ontonagon, MI 49953. We 
utilize the Ottawa National Forest for up to 25% of wood fiber supply. 
Appeals and litigation are slowing the Ottawa Timber Program to a 
stall. We participate in the public processes on the Ottawa and see 
first hand why Notice, Comment, and Appeal Procedures for Projects and 
Activities need to be improved.
Healthy Forests Initiative:
    We support the President's Healthy Forest Initiative, thereby 
allowing the Forest Service to develop procedures that better meet the 
needs of the public and the agency. We recognize that the changes that 
are being proposed must be consistent with the Appeals Reform Act and 
others, constraining the options available for improving these 
procedures.
    The Ottawa National Forest timber program is currently supplying 
40% of what they have historically put up for sale. This is causing 
extreme pressure on other lands and causing fiber and log shortages 
with-in the region. Aspen as an example is in decline because of old 
age and disease on the Ottawa. Sale preparation is hampered by appeals 
and litigation. Aspen that is falling over from rot and fungus should 
fit the categories with in the Healthy Forest Initiative for 
streamlining the sale preparation before it is too late to salvage 
these stands.
[GRAPHIC] [TIFF OMITTED] T1602.001


Endangered Species Act:
Canada Lynx:
    Background: On July 8, 1998 the U.S. Fish and Wildlife Service 
published a proposed rule to list the lynx under the Endangered Species 
Act of 1973, as amended (Federal Register Volume 63, No. 130). The 
final rule listing the contiguous United States Distinct Population 
Segment was published on March 24, 2000 (Federal Register Volume 65, 
No. 58).
    The Lynx Conservation Assessment and Strategy (LCAS) was developed 
to provide a consistent and effective approach to conserve Canada lynx 
on federal lands in the contiguous United States. The USDA Forest 
Service, USDI Bureau of Land Management, and USDI Fish and Wildlife 
Service initiated the Lynx Conservation Strategy Action Plan in the 
spring of 1998. The overall goals were to develop recommended lynx 
conservation measures, provide a basis for reviewing the adequacy of 
Forest Service and BLM land and resource management plans with regard 
to lynx conservation, and facilitate Section 7 conferencing and 
consultation at the programmatic and project levels.
    There have been no documented occurrences of lynx on the Ottawa in 
at least two decades. However, the Ottawa continues to conduct site-
specific winter track surveys for mammals, including lynx, prior to 
management activities in the areas containing habitat for Lynx. In 
addition, the Ottawa has been an active participant in the national 
effort to detect lynx using the National Lynx Detection Protocol or 
``hair snare''. The Ottawa completed ``hair snare'' detection surveys 
in 1999, 2000, and 2001 with no positive detections to date.
    Habitat: Historically, Lynx occurred primarily in the boreal 
forest, sub-boreal and western mountain forests of North America, and 
mixed coniferous/deciduous forests of southern Canada, the Lake States 
and New England. Lynx habitat or territory can be characterized as 
having areas of mature forests with downed logs and windfalls to 
provide cover for denning sites, and escape and protection from severe 
weather. Early successional forest stages provide habitat for the 
lynx's primary prey, the snowshoe hare. Lynx and snowshoe hare 
populations increase and decline dramatically in approximately 10-year 
cycles. When the snowshoe hare population crashes in the boreal forest 
regions of Canada, lynx tend to disperse southward, oftentimes reaching 
the northern tier of states in the United States. Verified records of 
lynx (animals trapped and verified by MDNR) have all occurred during 
cyclic lows of the hare cycle. The winter of 1972-73 was the last year 
with a large number of documented occurrences in the Great Lakes Region 
(Ruggiero et al. 2000). During that winter, several specimens were 
collected in Minnesota and Wisconsin; however, none were recorded in 
MI. (Ruggiero et al. 2000)
    As part of this, the Ottawa has identified and mapped potential 
lynx habitat and 12 Lynx Analysis Units (LAU's) within its 
administrative boundaries. The LAU is a project analysis unit upon 
which direct, indirect, and cumulative effects analyses are performed. 
LAU boundaries remain constant to facilitate planning and allow 
effective monitoring of habitat changes over time.
    Analysis of lynx habitat centers on some key habitat components 
that constitute potential habitat. These factors are foraging habitat 
(prey habitat), denning habitat, acreage and connectivity of suitable 
habitats, and human disturbance. Because there is no direct evidence of 
lynx in the Upper Peninsula, productivity, mortality, competition and 
regional landscape factors are not relevant at this time.
    Lynx habitat management has the potential to shut off large areas 
of the Ottawa National Forest for Logging and Snowmobiling in spite of 
the fact that none exist on the Ottawa. The Importance of the 
relationship between the snowshoe hare and the lynx needs to be 
understood. The problem really is a lack of forest openings that can 
grow grass and herbaceous plants for the hare. When we do not harvest 
(clear-cut or thin) the forest, the grass and lower plants are shaded 
out. With no habitat for the hare there is no lynx habitat.
    The ESA needs to be over hauled and Forest Plans need to be 
implemented so that these types of assaults on rural economies are 
eliminated.
Wetlands Regulations:
    We at Smurfit Stone Container are committed to protecting water 
quality through the use of Best Management Practices. We have a stated 
policy and an environmental management system (SFI-ISO) that is third 
party certified ensuring this goal is met. In regard to harvest of 
timber on our neighboring National Forest we find that we are severely 
limited in ability to harvest federal sales. They have policies which 
restrict our ability to utilize them as a stumpage supply year around. 
In effect their stated policy on most cutting areas says: ``Restrict 
operations to winter only (December 15 to March 15, depending on frozen 
conditions) on areas with heavier and less well drained soils (i.e., 
ELTP's 96B, 96C, 97B, 97C, 105B, 168B, 168C, 168D, 210B) to prevent 
potential rutting and minimize road construction/reconstruction needs. 
Hauling would be restricted to use of frozen roads during the same 
period.''
    This puts a very limited amount of time over the year where USFS 
timber is available. Again this puts pressure on other lands and makes 
the USFS less desirable to do business with.
Higher Energy Costs:
    We are recommending that Congress allow more exploration for oil 
and natural gas. As natural gas prices continue to spiral upward, 
forest products manufacturers desperately need this energy and the 
flexibility to substitute lower-cost alternative fuels--such as coal, 
biomass and shredded tires to run their boilers. The one-two punch of 
increased fuel prices combined with an economic downturn is wreaking 
havoc on the competitiveness of American pulp and paper producers. 
Forest Industry can't afford to be locked into a single high-cost fuel 
source when they are literally fighting for survival in a global market 
characterized by unregulated competitors and razor-thin profit margins.
    We believe there is an immediate need for policy reforms that will 
accelerate projects to increase energy efficiency and conservation. 
Research and development of new technologies should be encouraged and 
fully funded. Streamlined permitting processes should allow for maximum 
flexibility for facilities to meet energy needs in the most efficient, 
cost-effective and environmentally sound manner possible.
    We all know that reliable and cost-effective energy is vital to our 
economy. Achieving a successful energy strategy requires us to confront 
difficult policy decisions and find resolution. More domestic available 
energy supplies are wanted and vitally needed.
    We would like to thank the legislature for passing the Healthy 
Forest Restoration Act. We petition the USFS to allow timber harvest to 
increase harvest to a sustainable level. A forest must be managed for 
it to be truly sustainable, referring to the animals, water, plants, 
and aesthetics. When it is left alone and nature take's its course, you 
lose many desirable plant and animal species such as the Snowshoe Hare 
and its predators. After all that we have been through with the Ottawa 
over the years. To name a few things our company has been involved in, 
roads, BMP's, forest planning, HFRA, ESA, habitat, over mature diseased 
timber, fighting off appeals, energy, and other objectives. If we 
cannot achieve these sound environmental objectives and have a timber 
program on the Ottawa, our mill may no longer be competitive and have 
to close. That would be detrimental to the people, land, and animals 
around the Ottawa National Forest. We ask you to please allow the 
Forest Service to manage the Ottawa National Forest for the good of the 
forest, its animals and plants, and the United States citizens that 
work around that forest.
                                 ______
                                 
    [The statement of Mr. Gibson follows:]

            Statement of Kent B. Gibson, Snowflake, Arizona

    My name is Kent Gibson from Snowflake, Arizona. I thank the House 
Resources Committee for this important hearing and for the opportunity 
to express my concerns. I have worked 30 years in the forest products 
industry, and I am currently employed by a large paper mill as an 
instrument and controls technician. For 27 years I have been a member 
of the United Paperworkers International Union and the PACE 
international union. Our membership working with our companies provide 
this country with high quality paper products. Today I represent over 
300,000 of my brothers and sisters who depend on wood fiber and timber 
to produce our products. I am currently serving on the national 
steering committee of the Pulp and Paperworkers' Resource Council, a 
grassroots labor organization representing the interests of the 
nation's pulp, paper, and solid wood products industry. We are 
dedicated to conserving the environment while taking into account the 
economic stability of the workforce and surrounding community.
    The testimony I give today needs to be viewed within the framework 
of my section of the forest products industry, which is the pulp and 
paper industry of this country. I also ask that you remember that my 
counter parts in logging, lumber mills, plywood and particle board 
mills, and many other industries such as livestock producers who depend 
on our national forest lands are experiencing problems equal to or 
greater than those I speak of today.
    In 1992, a group of five employees from Stone Forest Industries 
traveled to Washington D.C. to meet with members of congress and 
discuss the serious problems facing the forest products industry. The 
hard fact is that within 5 years I was the only member of that group 
who had a job in the forest products industry. My friends who worked at 
sawmills in Flagstaff, Eagar, Arizona, and South Fork, Colorado, along 
with towns like Fredonia, Heber, and Winslow were all losing their 
mills a vitally important part of their social and economic viability.
    It is estimated that the two small lumber mills remaining in 
Arizona may produce about 2 % of the 500 million board feet of timber 
harvested in Forest Service Region 3 during 1989. As alarming as this 
trend is to our state, the problem is not isolated to the forest 
products industries of Arizona. In the last 10 years at least 135 pulp 
and paper mills have been closed in the United States. Since 1997 more 
than 30,000 people have lost their jobs in the pulp and paper industry. 
This represents 30,000 families who have lost their primary source of 
income, hundreds of counties, cities, and towns which have lost much of 
their tax base. This occurred despite the fact that the basic forest 
reserves of this country had not declined but continued to increase.
    The mill that I work in chose to reconfigure our operation to 100% 
recycle fiber. This decision in part was due to the difficultly in 
obtaining a reliable supply of wood for fiber. Paper mills have always 
used small diameter timber, thinnings, and chipped wood to produce our 
products; in 1989 the Snowflake mill used an estimated 60,000 cords of 
pulp wood and 290,000 units of wood chips, (a unit is just over a ton) 
an economic impact of $23,443,000.00 to our communities, state and 
business. In the 1990's it became increasingly more difficult to secure 
contracts for the wood needed to supply our operations. Arizona forests 
needed thinning but our mill was hauling chips from as far away as east 
Texas and Montana to supply our operation. 39,500 cords of wood and 
182,400 units of chips were used in the final year of timber-based 
operation, 1997, with an economic impact of $24,139,000.00. The 
national impact of the loss of forest products revenue in just the pulp 
and paper mills is significant!
    In the past decade alone much of the forest products industry in 
this state is gone. And without industry there is no infrastructure to 
support the work that must be done to return the forests to sound 
health. We must realize that industry is a vital tool in the recovery 
of our forests. Some say that we can place the cost of forest health 
recovery on the taxpayers and require someone other than Industry to 
help restore the forests. I ask why pay someone else to do the work 
when industry has a need for the resources and will produce the 
products used by every one of us.
    The areas that were most affected by the Rodeo-Chediski forest fire 
were not properly managed due to heavy restrictions. There is an 
absolute cause and effect relationship that exists between poor forest 
health and catastrophic wildfires. Had these forests been properly 
managed we would not have seen the hundreds of thousands of acres 
destroyed in our state and the millions of acres across this nation 
just last year. There are many tools needed to return our forests to a 
healthy condition, but we cannot forget three important tools which are 
thinning, controlled burning, and logging.
    The members of the Pulp and Paperworkers' Resource Council strongly 
support The Presidents Initiative to prevent wildfires, return the 
forests to health and create stronger communities. There should be no 
place for catastrophic wildfire in our forest management philosophy. It 
is imperative that a healthy forest management plan be implemented, and 
funded in order to protect our forest resources throughout the United 
States. Forest communities across this nation cannot survive with the 
current policies in place, which do not allow for resource management.
                                 ______
                                 
    [The statement of Mr. Reandeau follows:]

   Statement of Larry Reandeau, Georgia-Pacific Mill--Wauna, Oregon, 
Western Regional Director--Pulp & Paperworkers' Resource Council, Vice 
                      President--PACE Local 8-1097

    My name is Larry Reandeau and I work for the Georgia-Pacific paper 
mill in Wauna, Oregon. I am submitting testimony to the House Resource 
Committee today because I am very concerned about the loss of jobs in 
the paper industry. In order to help the committee understand some of 
the problems we face as an industry, I want to tell you about some of 
the issues Georgia-Pacific faces every single day just to keep the 
Wauna mill running. When the mill was built in 1965 in rural Oregon, 
all the natural resources were in place for the business to be 
profitable. The mill site is on the Columbia River so there was a 
plentiful water supply, transportation accessibility and inexpensive 
energy (the dams). There was also a plentiful fiber supply--pulp logs 
and residuals from sawmills--all located in close proximity to the mill 
site. It was an ideal situation.
    In 2004, the situation is less than ideal. The water supply is 
still there but very strictly regulated, transportation costs are 
steadily climbing, energy costs are astronomical and fiber is 
expensive--if it is available. The battles the mill faces every single 
day to stay in business are endless.
    The Wauna mill is an excellent mill wits top-of-the-line equipment. 
This past year, Georgia-Pacific built one of the world's most modern 
tissue machine at our mill site with
    an investment of $250 million. This machine is designed to make 
paper using less fiber than was previously needed. Now that investment 
is in jeopardy because the Oregon DEQ's water permit for the Wauna mill 
is being challenged. At stake--1135 family-wage jobs and $1 billion 
asset for Georgia-Pacific.
    Presently, the Wauna mill's operating permit is being challenged in 
court. The petitioners claim that DEQ violated state and federal law 
due to some of the conditions contained in our permit. We feel the DEQ 
and the EPA properly interpreted the regulatory requirements in 
preparing Wauna's NPDES permit.
    The issues raised by the petitioners were addressed during a public 
comment period held last spring before our new operating permit was 
issued. The DEQ evaluated the comments and determined that the Wauna 
mill permit met all applicable state and federal requirements. However, 
despite going through all the proper legal requirements to get this 
operating permit, the petitioners have filed suit against the DEQ and 
our operating permit is now in jeopardy.
    For years, our mill has been a leader in implementing new 
environmental requirements. Two of the environmental leadership 
highlights include converting our chemical recovery furnace to a low-
odor operation in 1986, plus being one of the first mills in the United 
States to eliminate chlorine gas and hypochlorite from the pulp bleach 
process. These technologies are deemed by the EPA to be state-of-the-
art and have only recently been implemented by many pulp mills in order 
to comply with the EPA Cluster Rules. Because of these voluntary 
changes, the Wauna Mill was meeting most of the effluent limitations in 
our new NPDES permit 10 years before it was issued. Even though we have 
a proven to be a good steward of the environment, our operating permits 
continue to be challenged at great cost to our mill site.
    In 1996 the Wauna Mill was the first pulp mill in the nation to be 
issued a Title V air permit, which is an extensive document covering 
all control and monitoring aspects of air emissions from the mill. Our 
first air permit expired and we recently received a renewed air permit 
with even more permit conditions. Will this permit be challenged? It 
seems a likely scenario. Two other mills in close proximity to our mill 
are dealing with similar issues. The Title V operating permit for the 
Georgia-Pacific mill in Camas, WA is being challenged by a person 
living 225 miles away in Sequim, WA. The Boise-Cascade facility in St. 
Helens, OR is presently defending their water discharge permit.
    Our mill has always strived to be in continual compliance with its 
environmental obligations. We have had to change processes and install 
new control equipment as new laws are passed and regulations imposed. 
Since 1985, the Wauna Mill has spent over $60 million dollars on new 
equipment for environmental compliance. By 2005, that amount will rise 
to over $70 million. On-going environmental costs are also a 
significant part of the Wauna mill expenses. In 2004, the mill will pay 
about $250,000 in regulatory fees alone to the DEQ.
    There are other issues to consider in order for the Wauna mill to 
stay profitable and stay in business besides operating permits. We need 
fiber to make paper! Purchasing that fiber supply means projecting 
future costs for the yearly operating budget. This last year we 
projected what we thought was an ``over-the-top'' figure for the cost 
of fiber supply. Our ``over-the-top'' figure was short by $10/ton--a 
$6.2 million shortage in our budget on one line item!
    We have bought chips from Montana, logs from Alaska and imported 
pulp from Brazil for fiber supply. It is necessary to buy secondary 
fiber to add to the mix, which costs more than virgin ton. We used to 
buy residuals from sawmills in the area for fiber supply. We also 
bought the bark to generate our steam. Now most of the sawmills are 
closed. President Clinton's Forest Plan changed everything--even though 
we were guaranteed a fiber supply in the plan! The small timber 
companies and sawmills still surviving struggle to stay in business. 
Approved timber sales are tied up in court after approval so machinery 
sits idle, crews are laid off or lose their jobs, and many of the 
companies can't survive the wait and go bankrupt or out of business. I 
have always lived in the Pacific Northwest and it seems impossible that 
fiber could ever be in short supply. We grow trees better than any 
place in the world, but even getting salvage logs or thinnings out of 
the forest for fiber supply is virtually impossible these days.
    Energy is another compelling issue facing the Wauna mill. When the 
mill was first built, we had the benefit of some of the most 
inexpensive electrical power in the nation. This changed, however, 
especially when salmon was listed as endangered under the ESA. Even 
though dams in the Northwest are still capable of supplying all of us 
with affordable power, they are being forced to spill the water from 
the reservoirs to save the fish. If that was not enough, the 
environmental community is constantly challenging the actual existence 
of the dams. Ultimately, power costs have risen dramatically which only 
adds to our problems at the mill. One of the results of the rising 
power costs was the shutdown of the #3 paper machine at Wauna. Seventy-
five employees lost their positions on this machine. They were moved to 
other jobs in the mill, displacing 75 other employees with less 
seniority. I was one of the employees working on #3 PM. After being a 
papermaker for 35 years and running the paper machine as a machine 
tender, I am now driving a forklift truck. The #3 paper machine was 
totally rebuilt and modernized in 1989 at an investment of many 
millions. It was not an out-of-date piece of machinery when the mill 
was forced to shut it down. It should have non efficiently and 
profitably for many more years. It used a lot of power in the pulp 
process, however, and became expendable when power became less 
affordable.
    Some of the issues affecting the mill have also affected the 
surrounding community. The closest town is Clatskanie, Oregon. The 
school tax base in Clatskanie used to be supplemented by timber taxes. 
That source of tax exists no more. In the Clatskanie school district, 
three schools have closed due to budget problems--two grade schools and 
one middle school. Our middle school children now attend school in the 
same building as the high school students. The number of days in a 
school year has been reduced to save money. Many employees working at 
the Wauna mill choose to live out of state where the schools are better 
and the value of the real estate appreciates. Only one sawmill still 
operates in the area. Local loggers, timber fallers and log scalers 
drive hundreds of miles to find work and some trucking companies have 
left town or filed for Chapter 11. Some of the local businesses have 
had to close their doors including a sawmill, two gas stations and two 
restaurants.
    The stories of the Georgia-Pacific mill at Wauna, OR and the town 
of Clatskanie are not unique. Paper mills across the nation face the 
same issues every day that we do here at Wauna. Local communities have 
been affected the same way Clatskanie has been affected. Thousands of 
jobs have been lost and hundreds of facilities have closed--you only 
have to look at the PPRC map of mill closures to see the veracity of 
this statement.
    In order for the industry to make plans for the future, confidently 
invest in capital improvements, and protect jobs, I feel the major 
issues the industry faces are securing a reliable and less expensive 
fiber supply, protecting our operating permits once our mills have met 
all the standards, and stabilizing energy costs. Therefore, I would 
like to offer the following suggestions:
      Ensure that regulations upon which permits are issued are 
sound and based on good verifiable scientific evidence.
      Clearly define what an ``at risk'' forest means so that a 
judge does not define it for us and fuel loads can be reduced to 
protect habitat for endangered species.
      Allow the Forest Service to form long-term partnerships 
within the industry in order that the biomass can be removed for energy 
and the thinnings for fiber supply. This will give our mills a long-
term, sustainable, reliable source of fiber.
      Instead of ``forest salvage'' sales, why not ``rebuilding 
habitat'' sales--mandate that all habitat for endangered species 
destroyed by forest fire be immediately rebuilt and replanted in order 
to protect endangered species under the ESA and prevent erosion that 
further damages the forest and the wildlife habitat.
      Require that any decision made under the ESA is fully 
supported by scientific data obtained according to protocol--e.g., the 
Senate bill just introduced by Senator Gordon Smith (S. 2009)
      Provide tax incentives and easier permitting for 
alternative power supplies such as cogeneration, wind generation, etc.
    The membership of PACE Local 8-1097 at the Georgia-Pacific Wauna 
mill, the Pulp and Paperworkers' Resource Council and I very much 
appreciate the opportunity to submit testimony before the House 
Resources Committee. Thank you for taking the time to hold the hearing, 
listen to and read our testimonies and, most especially, for working so 
hard to solve some of the problems our industry faces every day.

                                 
