[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
                      HEARING TO REVIEW THE FUTURE
                        OF OUR NATION'S FORESTS

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

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON DEPARTMENT OPERATIONS,
                   OVERSIGHT, NUTRITION, AND FORESTRY

                                 OF THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              June 3, 2009

                               __________

                           Serial No. 111-16


          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov


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                        COMMITTEE ON AGRICULTURE

                COLLIN C. PETERSON, Minnesota, Chairman

TIM HOLDEN, Pennsylvania,            FRANK D. LUCAS, Oklahoma, 
    Vice Chairman                    Ranking Minority Member
MIKE McINTYRE, North Carolina        BOB GOODLATTE, Virginia
LEONARD L. BOSWELL, Iowa             JERRY MORAN, Kansas
JOE BACA, California                 TIMOTHY V. JOHNSON, Illinois
DENNIS A. CARDOZA, California        SAM GRAVES, Missouri
DAVID SCOTT, Georgia                 MIKE ROGERS, Alabama
JIM MARSHALL, Georgia                STEVE KING, Iowa
STEPHANIE HERSETH SANDLIN, South     RANDY NEUGEBAUER, Texas
Dakota                               K. MICHAEL CONAWAY, Texas
HENRY CUELLAR, Texas                 JEFF FORTENBERRY, Nebraska
JIM COSTA, California                JEAN SCHMIDT, Ohio
BRAD ELLSWORTH, Indiana              ADRIAN SMITH, Nebraska
TIMOTHY J. WALZ, Minnesota           ROBERT E. LATTA, Ohio
STEVE KAGEN, Wisconsin               DAVID P. ROE, Tennessee
KURT SCHRADER, Oregon                BLAINE LUETKEMEYER, Missouri
DEBORAH L. HALVORSON, Illinois       GLENN THOMPSON, Pennsylvania
KATHLEEN A. DAHLKEMPER,              BILL CASSIDY, Louisiana
Pennsylvania                         CYNTHIA M. LUMMIS, Wyoming
ERIC J.J. MASSA, New York
BOBBY BRIGHT, Alabama
BETSY MARKEY, Colorado
FRANK KRATOVIL, Jr., Maryland
MARK H. SCHAUER, Michigan
LARRY KISSELL, North Carolina
JOHN A. BOCCIERI, Ohio
SCOTT MURPHY, New York
EARL POMEROY, North Dakota
TRAVIS W. CHILDERS, Mississippi
WALT MINNICK, Idaho

                                 ______

                           Professional Staff

                    Robert L. Larew, Chief of Staff

                     Andrew W. Baker, Chief Counsel

                 April Slayton, Communications Director

                 Nicole Scott, Minority Staff Director

                                 ______

   Subcommittee on Department Operations, Oversight, Nutrition, and 
                                Forestry

                     JOE BACA, California, Chairman

HENRY CUELLAR, Texas                 JEFF FORTENBERRY, Nebraska, 
STEVE KAGEN, Wisconsin               Ranking Minority Member
KURT SCHRADER, Oregon                STEVE KING, Iowa
KATHLEEN A. DAHLKEMPER,              JEAN SCHMIDT, Ohio
Pennsylvania                         CYNTHIA M. LUMMIS, Wyoming
TRAVIS W. CHILDERS, Mississippi        
                                     FRANK D. LUCAS, ex officio
COLLIN C. PETERSON, ex officio

               Lisa Shelton, Subcommittee Staff Director

                                  (ii)


                             C O N T E N T S

                              ----------                              
                                                                   Page
Baca, Hon. Joe, a Representative in Congress from California, 
  opening statement..............................................     1
Childers, Hon. Travis W., a Representative in Congress from 
  Mississippi, prepared statement................................    32
Fortenberry, Hon. Jeff, a Representative in Congress from 
  Nebraska, opening statement....................................     2
Herseth Sandlin, Hon. Stephanie, a Representative in Congress 
  from South Dakota, opening statement...........................    11
Kagen, Hon. Steve, a Representative in Congress from Wisconsin, 
  opening statement..............................................    10
Lummis, Hon. Cynthia M., a Representative in Congress from 
  Wyoming, opening statement.....................................     5
    Submitted material...........................................     7
Peterson, Hon. Collin C., a Representative in Congress from 
  Minnesota, prepared statement..................................    12
Schrader, Hon. Kurt, a Representative in Congress from Oregon, 
  opening statement..............................................     4

                               Witnesses

Jensen, Jay, Deputy Under Secretary for Natural Resources and 
  Environment, U.S. Department of Agriculture, Washington, D.C...    13
    Prepared statement...........................................    16
Koehn, Steve, Maryland State Forester, on behalf of the National 
  Association of State Foresters, Parkton, Maryland..............    33
    Prepared statement...........................................    35
Bentz, Clint, on behalf of the Oregon Tree Farm System and 
  American ForestFoundation, Scio, Oregon........................    38
    Prepared statement...........................................    40
McPeek, Brian, North America Conservation Region Director, The 
  NatureConservancy, Denver, Colorado............................    45
    Prepared statement...........................................    47
Dr. Monaghan, Tom, on behalf of the National Alliance of Forest 
  Owners, Starkville, Mississippi................................    53
    Prepared statement...........................................    55
Neiman, Jim D., Vice President and CEO, Neiman Enterprises, Inc., 
  Hulett,Wyoming.................................................    59
    Prepared statement...........................................    60
Smith, Matt, on behalf of the Society of American Foresters, 
  Falconer, New York.............................................    64
    Prepared statement...........................................    66

                           Submitted Material

Smith, Matt, on behalf of the Society of American Foresters, 
  Falconer, New York.............................................    82


          HEARING TO REVIEW THE FUTURE OF OUR NATION'S FORESTS

                              ----------                              


                        WEDNESDAY, JUNE 3, 2009

                  House of Representatives,
             Subcommittee on Department Operations,
                 Oversight, Nutrition, and Forestry
                                   Committee on Agriculture
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 1:36 p.m., in 
Room 1300 of the Longworth House Office Building, Hon. Joe Baca 
[Chairman of the Subcommittee] presiding.
    Members present: Representatives Baca, Kagen, Schrader, 
Dahlkemper, Childers, Fortenberry, and Lummis.
    Also present: Representatives Herseth Sandlin, Markey, 
Thompson, and Goodlatte.
    Staff present: Adam Durand, John Konya, John Riley, Lisa 
Shelton, April Slayton, Rebekah Solem, Patricia Barr, Brent 
Blevins, and Jamie Mitchell.

 STATEMENT OF HON. JOE BACA, A REPRESENTATIVE IN CONGRESS FROM 
                    THE STATE OF CALIFORNIA

    Mr. Baca. I would like to call the meeting to order. The 
Subcommittee on Department Operations, Oversight, Nutrition, 
and Forestry to review the future of our nation's forests will 
come to order at this point. We will begin with opening 
statement by myself and then other Members that are present 
will have opening statements if they wish. There will be 5 
minutes provided for each of the opening statements. We may 
have other Members--if there is no objections to non-Members of 
this Subcommittee who to come and be here--we will allow them 
to sit here with us and then ask questions. Is there any 
objection? Hearing none, then we will proceed and we will allow 
that.
    Good afternoon. I am pleased to welcome everyone to this 
hearing examining the future of our nation's forests and forest 
policy. Thank you all for being here, particularly the new 
Deputy Undersecretary, Mr. Jensen. Thank you very much. And our 
second panel of witnesses as well. Before we begin the hearing, 
I have a few comments. It is my pleasure to Chair the 
Subcommittee that has jurisdiction and duties over the U.S. 
Forest Service. I know firsthand about the values of the 
national forest to a community. The beautiful San Bernardino 
National Forest borders in my district, and of course everyone 
can say theirs is better and beautiful, but I think all of ours 
are pretty good within our area.
    The recreational opportunities, economic benefits, plus the 
natural enhancement to our environment contribute to a higher 
quality of life for not only my residents but throughout the 
areas where many residents have forests in their area as well. 
It is not only our responsibility but also a personal interest 
of mine to help create and maintain policies that protect and 
promote our forests; and we are here to talk and to hear how we 
can protect our forests and enhance our forests too as well as 
developing a kind of partnership in collaboration. Forests are 
dynamic entities, ever changing environments that respond to 
the effects of weather. Climate change and other factors 
similarly are policies that must be flexible enough to meet 
these changes.
    I am sure that today's hearing will provide a good overview 
of the major issues affecting the current forestry policies and 
we have to look at those current policies that we have. I and 
other Members of the Subcommittee have many questions 
surrounding the forest health, wildfires prevention, and the 
role a forest can play in solving climate change. For example, 
how do we best limit the devastating impact of bark beetle, 
another invested pest in our forest. What balance do we strike 
between the development in our forest because as we all know 
there is a lot of development of homes in our area. And what 
forest land preservations to ensure that we do not lose more 
communities to wildfires and mud slides.
    How can we better equip our brave men and women who fight 
fires on the ground to ensure both they have continued 
protection and success? Do we need to look at those policies? 
Do we need to modify those policies? In addition, there ways 
that we can be cost effective in the type of equipment that we 
have as well with our forestry firefighters out there, and how 
can we best work with the businesses and labor communities to 
ensure the survival of timber related to industries during 
these times of economic difficulties and how can we utilize 
America's forest to better protect the health of our water 
resources. As a Californian, water conservation is an issue of 
particular importance to me because of the state's continued 
drought problem, and as a father and grandfather, I know it is 
critical that we protect America's forests for all our future 
generations to enjoy.
    We must find workable solutions to the hazards facing the 
future. Ultimately, we must have better legislation to serve 
these forests and many dedicated people who work for the forest 
as it relates to the industry that we are all working together. 
So today we will listen, learn from an excellent panel of 
witnesses about the future forestry policies, and I hope this 
hearing will build an important body of evidence so that we can 
continue to work together collaboratively in partnership to 
preserve our forests, our nature, and our environment and 
create that healthy quality of life for all of those that are 
impacted by it or its surroundings. I now yield to our Ranking 
Member, Congressman Fortenberry, for his opening statement.

    STATEMENT OF HON. JEFF FORTENBERRY, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF NEBRASKA

    Mr. Fortenberry. Thank you, Mr. Chairman, for holding this 
hearing. I apologize for running behind. As you know, Mr. 
Chairman, the future of forestry is an essential issue for all 
of us, all Members of this Committee, regardless of how much 
forest we might actually have in our respective districts. 
Forestry has been a vital component of this country and its 
economy for more than 400 years. Timber-related fields employ 
more than 1 million people, interestingly more people than are 
currently employed by the automobile industry. Forest land 
comprises roughly 750 million acres of Federal and private land 
across the country which is 33 percent of the total land area 
of America. There are many issues facing the future of forestry 
in the United States, and I would like to address a few of 
those, Mr. Chairman, if I could.
    Like the economy at large, forestry has suffered a recent 
downturn. Demand for lumber has dropped more than 50 percent 
since 2005. New housing starting this year will be only 20 
percent of 2005 levels, the lowest level in 50 years, and 
roughly 20 percent of jobs in this field have disappeared. We 
must examine ways that we can help this important sector of our 
economy weather the storm. The Conservation, Credit, Energy, 
and Research Subcommittee of the Agriculture Committee held a 
hearing last month on the current definition of renewable 
biomass and the renewable fuel standard. The consensus from the 
testimony that day was that the definition needed to be amended 
to include more sources of wood.
    I am sure everyone on our panel, or I hope everyone on our 
panel, will agree wood is the original renewable energy 
resource. Our nation's timber, furniture, and paper factories 
have been using wood chips as a source of renewable energy long 
before the term biofuel became popular. I would also like to 
take this opportunity, Mr. Chairman, to mention a bill that I 
introduced earlier this year, H.R. 2170, to promote the use of 
biomass as a renewable energy resource. Specifically, this 
legislation creates a revolving loan to be used by schools and 
other institutions for capital costs needed to convert to the 
use of biomass for energy generation. The legislation addresses 
the major obstacles facing schools and other institutions 
seeking to convert to woody biomass as an energy source, 
namely, capital cost. By creating a revolving fund with zero or 
low interest loans, these public institutions could then take 
the next step forward in creating and utilizing this 
sustainable energy source.
    These institutions could then pay back the loans with their 
savings and energy cost. Another issue, Mr. Chairman, invasive 
species represent an ongoing threat to our health of our 
nation's forests. Federal, state, and private landowners must 
work together to ensure that these species do not further 
damage to our nation's treasured forest. I am aware that this 
is an issue facing several members here today. Wildland forest 
fires are also an increasing problem. As the Forest Service 
continues to devote a larger share of its budget to fighting 
these fires, it is able to devote fewer resources to other 
programs that are meant to assist state and private landowners. 
These fires threaten communities and property and Congress must 
work with the Administration to see that these issues are 
addressed in the future.
    I want to welcome Mr. Jensen and our witness from the 
private sector on the second panel as well. I look forward to 
hearing from our witnesses about the current state of forestry 
in the United States and what actions they recommend to ensure 
that forestry remains a vibrant integral component of our 
nation's economy. With that, I yield back, Mr. Chairman.
    Mr. Baca. Thank you very much.
    At this time, I will recognize the individuals in order 
that they came in with the exception of going back and forth 
between the Democrat and the Republican.
    At this time, I would like to recognize Mr. Schrader for 5 
minutes.

 STATEMENT OF HON. KURT SCHRADER, A REPRESENTATIVE IN CONGRESS 
                    FROM THE STATE OF OREGON

    Mr. Schrader. Thank you, Mr. Chairman, and Ranking Member 
Fortenberry, for holding this very important hearing on current 
and future policy in our American forests. I value the 
Committee's willingness to address these critical issues 
relating to forest health, including the wildfire prevention, 
forest restoration, and enhancing access to woody biomass. Our 
Federal and private forests have served as an economic and 
social cornerstone in American history, and I appreciate the 
Subcommittee's willingness to address critical issues to ensure 
their health and viability for future generations. Frankly, I 
am very concerned over the current state of our forests. Our 
forests are under extreme duress from drought, insects, 
diseases, wildfire, and, frankly, poor management due to lack 
of funding.
    Our rural forest counties are facing historic unemployment 
and the forest industry, a significant institution critical for 
good jobs in rural Oregon, is struggling just to stay alive. 
While urban areas are in one of the worse recessions in their 
history, rural America has been in one since the 1980s. They 
have had longstanding double digit unemployment that is only 
now coming home to roost in some of our urban environment. I 
hope this Congress understands that our forests, the backbone 
of these rural counties, can be part of the economic and 
environmental solution. This is not the 1970's or 1980's timber 
management anymore. This is a cleaner, smarter, environmentally 
friendly, and sustainable industry that is part of the global 
climate change solution and creating much needed jobs in rural 
America. If properly managed, our forest can be a key resource 
toward economic revitalization, through job creation, 
construction of new homes, bio-product manufacturing, and a 
positive market influence while all being one of the world's 
greatest carbon sequesters known to man.
    Our forests through the use of woody biomass has the 
ability to help us become more energy independent as we strive 
to utilize more forms of renewable energy. This not only 
decreases our dependence on foreign energy, it increases and 
ensures the energy produced at home in our communities creates 
good jobs. And I hope as we begin discussing the Clean Energy 
and Security Act of 2009, this Congress recognizes the benefits 
of adopting a workable, pragmatic biomass definition like the 
one in the 2008 Farm Bill that the Chair and Ranking Member and 
others here have worked so hard to put in. Once again, I really 
appreciate the opportunity to have this hearing and recommend 
we adopt good policies as a result of what we hear today.
    Mr. Baca. Thank you very much.
    Next, I would like to recognize the gentlewoman from 
Wyoming, Ms. Lummis, for 5 minutes.

   STATEMENT OF HON. CYNTHIA M. LUMMIS, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF WYOMING

    Ms. Lummis. Thank you, Mr. Chairman. I join the gentleman 
from Oregon in applauding you for holding this hearing today. 
It is a very important hearing, and I appreciate your doing it. 
I am aware of your commitment understanding how Federal 
policies affect the nation's forests, and so I am so pleased 
that you have invited Jim Neiman from my home State of Wyoming 
to testify today, and I am very much looking forward to his 
testimony. I know of no one in my state that knows forestry 
better than Jim Neiman so thank you so much, and thank you, 
Jim, for coming to Washington.
    This hearing is broad in scope covering many aspects of 
forestry policy. That is how it should be for the first hearing 
of the year on the subject. I do want to renew my invitation to 
the Chairman to hold a field hearing to explore the issue of 
bark beetle destruction in greater detail. I would be pleased 
to host such a hearing in Wyoming so we can visit the vast 
swaths of forest destroyed by beetles in my state. In addition 
to the beautiful forests that make up our national parks in 
Yellowstone and Grand Titan, Wyoming is home to nine national 
forests encompassing about 8.8 million acres of land. Put into 
context, national forests in Wyoming cover about a million 
acres more than the total land areas of Maryland, Delaware, and 
the District of Columbia combined. Add the vast tracts of state 
and private forests, and you begin to understand the monumental 
task of maintaining healthy forests in my state.
    To some, forestry policy is an academic exercise, a way to 
experiment with grand theories about the role of fire, disease, 
and the management of forests. To citizens of Wyoming, Federal 
forestry policy is so much more. Decisions about fuel 
reduction, beetle prevention and mitigation, prompt harvesting 
of dead and dying trees, and the overall health of our forests 
have real tangible effects on our livelihood. We live near or 
even in these forests. We base entire industries off them. We 
recreate and enjoy them and we count on these forests to 
attract thousands of tourists every year. In fact, while I was 
home over the break in one county 79 percent of forest users 
reported just driving through to enjoy the scenery as their 
favorite use of forest lands.
    Healthy forests are integral to our lives and livelihoods. 
That is why I am so concerned about the current state of our 
forests. The bark beetle epidemic in Wyoming has already 
destroyed millions of acres of adult forests. I ask unanimous 
consent to enter into the record a map of the Bridger-Teton 
National Forest that illustrates this damage. The blue areas 
mark the beetle kill which had destroyed about 40 percent of 
that forest since 1991. As vast as that seems, 40 percent earns 
only a silver medal for the highest rate of destruction in 
Wyoming. Forest managers estimate that by 2012 every single 
adult lodgepole pine in southern Wyoming and northern Colorado 
will be destroyed by bark beetle. This is devastating to our 
forests and our forest economies. It is also downright 
dangerous as we enter another wildfire season.
    I am eager to hear the steps that the Forest Service 
intends to take to mitigate the beetle epidemic and to reduce 
the fuel load that has continued to grow year after year. For 
Wyoming's forests, we can no longer wait. Our forests are 
crying out for help in the here and now. I yield back. Thank 
you, Mr. Chairman.
    [The submitted material of Ms. Lummis follows:]

Submitted Map and Photos by Hon. Cynthia M. Lummis, A Representative In 
                   Congress From The State Of Wyoming

[GRAPHIC] [TIFF OMITTED] T1116.001

 [GRAPHIC] [TIFF OMITTED] T1116.002

 [GRAPHIC] [TIFF OMITTED] T1116.003

    Mr. Baca. Thank you very much for your statement. And I 
know the minority Ranking Member and I just discussed that 
maybe we can go in the near future and have that kind of 
hearing in Wyoming since I look forward to going back there. I 
have relatives in that area and, of course, the Ranking Member 
says he has never been to Wyoming so it gives him an 
opportunity to go there as well.
    Ms. Lummis. Thank you, Mr. Chairman. Consider yourselves 
invited. We will fall all over ourselves to make your trip 
enjoyable and informative.
    Mr. Baca. Thank you.
    Next, I would like to recognize Mr. Kagen from the State of 
Wisconsin for 5 minutes.

  STATEMENT OF HON. STEVE KAGEN, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF WISCONSIN

    Mr. Kagen. Thank you, Mr. Chairman, for calling this 
hearing, and thank you for everyone who is about to testify. In 
the great State of Wisconsin, we are an agricultural state. We 
have a great deal of forest land. Nearly 70 percent of that 
land is owned by private industry by private families, and we 
take good care of our forests. But at the same time, we have 
all the same challenges as other people across the country. It 
is an economic issue, and with the downfall of our housing 
markets we have also lost much of our lumber industry. In the 
State of Wisconsin nearly 300,000 people are employed because 
of our forests in the lumber industry and others. We have about 
1,800 employers who are directly linked to the lumber industry 
and the forest industry.
    So we have an economic reason to be very keenly interested 
in the testimony we are about to hear today. We also have an 
environmental concern. You know, we are Wisconsin, the source 
of Earth Day, Aldo Leopold, Gaylord Nelson, so in that 
Wisconsin tradition about caring not just about people's health 
but the health of our environment and how they are 
interrelated, I look forward to hearing your testimony. In 
particular, we have experienced recently some wildfires, and, 
Mr. Jensen, I look forward to hearing how you are addressing 
that and what the Forest Service intends to do, and more 
particularly throughout the state and the region the emerald 
ash borer is becoming an increasing economic pest.
    So I look forward to your testimony and working with you to 
fashion some solutions that make sense, not just for Wisconsin 
but for forest owners and landowners and recreators all across 
the country. I yield back my time.
    Mr. Baca. Thank you very much, Mr. Kagen.
    Next, I would like to call on the gentlewoman from 
Pennsylvania for 5 minutes, Ms. Dahlkemper.

 STATEMENT OF HON. KATHLEEN A. DAHLKEMPER, A REPRESENTATIVE IN 
            CONGRESS FROM THE STATE OF PENNSYLVANIA

    Ms. Dahlkemper. Thank you, Mr. Chairman. I am from 
Pennsylvania, and Pennsylvania means Penns Woods, so obviously 
our forest in Pennsylvania is very near and dear to us, and I 
am from the Northwest part of Pennsylvania, still very much of 
a forested area. I also have a special interest in the fact 
that 12 years ago, I founded and then ran an arboretum until I 
came to Congress. I actually miss my arboretum and learned a 
lot about trees over that time, but I just will concur with 
everyone's opening statements so far. Certainly, the economic 
and environmental impact of trees is great in my district as it 
is throughout this country, and we are dealing with emerald ash 
borer and we are surrounded in my district by it and just the 
southern part of the district, we think it has actually entered 
that part of the district at this point.
    So these are all issues that I am looking forward to 
hearing from our different witnesses from today. And just 
lastly, I am going to end with a quote that we put in the 
arboretum, and it is that a society grows great when old men 
plant trees under whose shade they know they shall never sit.
    Mr. Baca. Thank you very much. Next, I have the gentlewoman 
from South Dakota, Ms. Herseth Sandlin, for 5 minutes 
recognized.

 STATEMENT OF HON. STEPHANIE HERSETH SANDLIN, A REPRESENTATIVE 
           IN CONGRESS FROM THE STATE OF SOUTH DAKOTA

    Ms. Herseth Sandlin. Thank you very much, Chairman Baca, 
and Ranking Member Fortenberry for allowing me to join you at 
this Subcommittee hearing. I appreciate your commitment to our 
nation's forests, and I look forward to hearing from our 
witnesses today about the challenges facing our forests and the 
forest industry. I would like to extend a welcome to all of our 
witnesses today, but like Ms. Lummis, I would like to extend a 
special welcome to Jim Neiman, who I would like to count as an 
honorary South Dakotan given all the great work that he does in 
the western part of my state. This hearing is especially timely 
given the consideration in the Energy and Commerce Committee on 
their approval of the energy and climate change legislation we 
have been hearing so much about.
    Acre by acre, healthy forests can sequester more carbon 
than any other land use, and furthermore forests can serve the 
key source of woody biomass, an important energy source. I 
strongly believe that forests must be fully recognized in any 
energy and climate change legislation for the essential role 
they play in reducing carbon emissions and in generating 
renewable energy. According to one 2005 U.S. Government study 
often referred to as the billion ton study each year our 
nation's forests are capable of generating about 368 million 
dry tons of woody biomass and our agricultural lands can 
produce almost 1 billion dry tons.
    Unfortunately, given these unprecedented opportunities, our 
forests and related industries and the rural communities they 
often sustain are facing a startling set of challenges. Forest 
products companies provide crucial tools for managing our 
national forests, but these companies must make multi-million 
dollar investments in equipment and mills in order to be 
competitive nationally and internationally. Thus, when the 
economy is faltering and when Federal forest policy is 
uncertain, it becomes difficult for private companies to make 
the long-term investments that are needed for healthy rural 
economies and sustainable forest management. At the same time, 
in addition to the economic difficulties facing mills and 
related service providers, many of our public and private 
forests are also experiencing significant stress from droughts, 
development, disease, and other factors. Like too many forests 
across the west, South Dakota is witnessing significant threats 
from wildfire and mountain pine beetles in the Black Hills 
National Forest, both of which point to the need for up front 
preventive management.
    Mr. Neiman's experience and insights from his work in the 
Black Hills of Wyoming and South Dakota will illustrate the 
interconnections among forest health, forest management, and 
the forest products industry. In particular, I applaud his 
interest in construction of electrical coal generation facility 
near the Spearfish, South Dakota sawmill. This co-gen proposal 
is exactly the type of innovative project that we need to 
expand our clean, renewable energy sources as we bring on line 
new low carbon sources of energy and seek to create 
opportunities for rural states to fully participate in the new 
energy economy.
    It is exactly projects like Mr. Neiman's that may be 
stymied if we don't correct the flawed definition of renewable 
biomass contained in the renewable fuels standard enacted as 
part of the 2007 Energy Bill and in any renewable electricity 
standard that Congress seeks to pass this year. As noted by 
among others the Society of American Foresters on whose behalf 
Mr. Smith is testifying today, the definition of renewable 
biomass contained in the energy and climate change legislation 
approved in the Energy and Commerce Committee needs to be 
improved in important ways. I have introduced H.R. 1190, which 
would correct the mistakes made in the 2007 Energy Bill, where 
nearly all federally sourced biomass was excluded from the RFS.
    I am also an original co-sponsor of Chairman Peterson's new 
bill, which would implement the similar farm bill definition of 
renewable biomass for the RFS. I am strongly committed to 
ensuring that H.R. 2454, the American Climate and Energy 
Security Act, includes a definition of renewable biomass for 
the RES and RFS that adequately recognizes the role federally 
sourced slash, mill residue, and other materials should play in 
meeting our renewable energy goals. The current definition in 
the bill is incomplete and inadequate. An overly narrow 
definition will continue to hinder responsible forest land 
management and slow our nation's movement toward energy 
independence, as well as to lead to shortfalls in cellulose 
fuel production under the RFS and hurt many rural communities' 
ability to participate in the new energy economy.
    Thank you again, Mr. Chairman, for this very important 
hearing, and again I commend you for the foresight and the 
timeliness of the issues we will be discussing today.
    Mr. Baca. Thank you very much for your statement, Ms. 
Sandlin.
    The Chair would request that other Members submit their 
opening statements for the record.
    [The prepared statement of Mr. Peterson follows:]

  Submitted Statement of Hon. Collin C. Peterson, a Representative in 
                        Congress from Minnesota

    Thank you Chairman Baca for holding this hearing today to educate 
Committee Members about forestry policy and the Agriculture Committee's 
role in ensuring that Federal policy preserves and improves the health 
of our nation's forests.
    Forest fires, insect epidemics and other threats to the health of 
our nation's forests must be addressed with proper management and 
planning. The Agriculture Committee has jurisdiction over forestry on 
federal lands, forestry research and forestry assistance to states and 
to private landowners, which means that we have an important role to 
play in protecting forestry resources.
    Forests are an important feature of our national landscape, but 
they also have the potential to play an important role in the future of 
renewable energy production in the United States. Unfortunately, 
provisions included in the 2007 Energy Bill prevent forestry resources 
from playing a meaningful role in renewable energy. I have fought for 
two years now to expand the definition of renewable biomass included in 
that law to include woody biomass from public land. This woody biomass 
has little economic value and often ends up in landfills or pile burns. 
The technology needed to convert woody biomass into biofuels has been 
demonstrated on a pilot scale, and allowing that wood waste to be used 
for energy production would create an incentive to continue these 
activities. This is a win-win situation - removing wood waste that can 
fuel forest fires and using it for renewable energy, but for some 
misguided reason, provisions added at the last minute to the bill 
passed by Congress are preventing this from happening. Many of this 
Subcommittee's members joined me in co-sponsoring legislation that will 
fix this and other problems with the Renewable Fuel Standard, and we 
are united in the belief that we need to pass legislation to fix these 
major problems if we are ever to see a second and third generation of 
biofuels in this country.
    Chairman Baca, thank you again for holding this hearing, and I look 
forward to the testimony from our witnesses.

    We would like to begin with our first panel. We would like 
to call on Mr. Jay Jensen, who is the Deputy Undersecretary for 
Natural Resources and the Environment U.S. Department of 
Agricultural, here in Washington, D.C. Each of the panelists 
will have 5 minutes, but in your case since you are the only 
panelist, we will allow you to go the 6 minutes that you have 
indicated at this point. Mr. Jensen.

  STATEMENT OF JAY JENSEN, DEPUTY UNDERSECRETARY FOR NATURAL 
  RESOURCES AND ENVIRONMENT, U.S. DEPARTMENT OF AGRICULTURE, 
                        WASHINGTON, D.C.

    Mr. Jensen. Thank you, Mr. Chairman. I hope I can add to 
the wealth of knowledge and understanding that is clearly on 
this panel here right now, so hopefully I will add a little bit 
of insight into that. I am truly honored and humbled to be 
here. This is my first hearing in this new role, and I take it 
as an auspicious sign that, Mr. Chairman, I am here before you 
because as a child growing up in Los Angeles, my first exposure 
to forests was up in San Bernardino. Mr. Chairman and Members 
of the Subcommittee, thank you for this opportunity to appear 
before you today to provide the Department's view on the future 
of our nation's forests. We are blessed with some of the most 
diverse, beautiful, and productive forests on the planet. We 
are a great country, in part, because we have great forests.
    The mission of the U.S. Forest Service is to sustain the 
health, diversity, and productivity of the nation's forests and 
grasslands for the needs of present and future generations. 
This mission extends to assisting both public and private 
forests nationwide. As we look to the future today, I would 
like to have our conversation focus as much as we can on the 
values our forests provide more than on any specific output. It 
is clear that we have our challenges ahead of us, yet I believe 
we need to rethink our relationship with our forest lands in 
terms of their long-term values, not just their short-term uses 
if we are all to get to the best solutions to these challenges.
    Our forests are owned privately by individuals, families, 
and companies, we have already heard this, 420 million acres on 
that side of the ledger, 56 percent, and publicly by counties, 
states, and the Federal Government, about 330 million acres, 
about 44 percent of the ledger. One can find these forests in 
the back country far from cities, around communities, and 
sometimes in our own backyards. Our challenge is to reconnect 
urban and rural Americans to these forests and to focus on how 
we can work together to deliver all these important and 
essential values.
    As part of this delivery, we must have a clear assessment 
of the current condition of our nation's forests. Our forest 
scientists, located at universities and research stations 
throughout the nation, are continually gathering and analyzing 
this data, primarily through the forest inventory and analysis 
program to help us better understand the conditions we are 
facing. Here are some specifics. Insects and disease, while 
tree mortality caused by insects and disease tend to be 
cyclical, it is currently at the highest level in 50 years. 
Eight percent of the forested area in the U.S. is at risk of 
attack or mortality. Beetle killed trees cover areas of the 
Northern Rockies, the Southwest, and the dry forests of the 
Northwest, estimated around 8 million acres over the past few 
years.
    Similarly, areas of the Lake States are being ravaged the 
emerald ash borer, as we have heard from a number of folks here 
today, and it is threatening to move into the plains states. 
Around 137 counties in 12 states reported that Asian long 
horned beetles are destroying trees in the Northeast, and right 
here in our backyard of the nation's capitol five major cities 
in New York, New Jersey, Massachusetts, and others. Water, 53 
percent of our nation's demand for water comes from forested 
watersheds. Protecting those forested head waters is going to 
be key. Wildfire, public and private forests have built up 
excess hazardous fuels due in large part to a century of fire 
exclusion. On the nation's forests alone, just alone, between 
60 and 80 million acres of forest land is classified as densely 
stocked and at risk of catastrophic wildfire.
    Further, over the past 10 years fires have burned on 
average around 7 million acres per year. This is a size nearly 
twice the size of the State of New Jersey. Management 
predictions for the next decade indicate fires may well burn in 
excess of 10 million acres per year. Last year we lost 2,000 
homes, about 4,000 buildings total. In 2009, we are on 
trajectory to surpass that number right now, and for all 
Federal, state and local fire agencies, the cost of fire 
suppression continues to grow. Forest land conversion, over the 
next 10 years we anticipate that almost 22 million acres of 
forest within 10 miles of existing cities and towns will be 
further subdivided and developed into non-forest uses.
    In addition, many of the owners of larger tracts of these 
lands are growing in age. Right now there is 100 million acres 
owned by people at age 65 years or older, and they are 
beginning to contemplate how to pass on those lands to the next 
generation, who may have different ideas for the forest lands. 
Considering that the majority of forest land in the country is 
owned by private family forest land owners, around 280 million 
acres, 10 million plus people, change is coming and it may be 
significant. Urban forests, today over 80 percent of the 
population lives in urban settings where the average canopy 
cover is around 27 percent with trees. These trees help clean 
our air, minimize flooding, cool our neighborhoods and offset 
demand for energy. One million tons of pollutants were scrubbed 
last year and over 800 million tons of carbon were either 
stored or offset as estimated.
    The right tree in the right place can save homeowners big 
money and help to mitigate climate impacts. And we can't forget 
climate change. It is estimated that the U.S. forest offset 
approximately 11 percent of the gross U.S. emissions each year. 
With wildland fires and loss of forest land increasing forests 
as carbon sinks are not a given. Lastly, community vitality. In 
addition to these resource challenges the forest products 
industrial infrastructure is in decline right now in many 
places since 2006, our numbers we have are around 127 mills 
have closed. Accompanying that decline is a loss of jobs and a 
decline in community vitality. More often than not, these mills 
are a huge part of the fabric of these rural communities, and 
while much of this is a result of the current recession and the 
associated decline in housing starts that does nothing to 
soften the blow. And for forest managers, this loss of the 
strategic infrastructure makes resource management more 
difficult and costly.
    These are numerous challenges ahead but every set of 
challenges also offers opportunity. I am particularly excited 
about opportunities related to the development of new markets 
around ecosystem services and bio-energy, which amongst other 
things helps to maintain, reconnect, and renew the bond between 
communities and their forests. We can deliver the many values 
we have come to appreciate and want if we invest the time and 
energy to work together. There is no doubt that people and 
interests will have differing ideas on how to tackle these 
issues and leverage opportunities, yet it has been my 
experience that people on opposite sides of the forestry table 
often have the same values. They just differ on how they want 
to see those values expressed on the land. While for one person 
protection is eliminating human influence on the ecosystem for 
another protection is aggressive treatment. Both want the 
forest to exist and thrive.
    So if we can focus on values and focus more on the outcomes 
of our actions, meaning we focus more on what we leave behind 
in our forests rather than on what we take away from our 
forests, we can enlarge the dialogue and arrive at a better 
solution. Collaborative dialogue, a means to an end, is the 
path forward here. Currently, collaborative efforts are 
flourishing across the nation creating increased understanding 
between citizens of diverse backgrounds. This is a notion we 
are very supportive of. Our intention will be to provide the 
means to multiply these successes across the country. As an 
example, on a national and local scale, collaborative efforts 
of the past few years have revolved around the development of 
community wildfire protection plans. There are over 56,000 
communities at risk and right now around 4,700 communities have 
completed these plans. There is more work to do. These plans 
prioritize fuel reduction areas across the landscape. A perfect 
example of this notion is what the Mountain Area Safety Task 
Force in San Bernardino, California has accomplished.
    Taken further, in Arizona, this is another example, through 
former Governor Janet Napolitano's Forest Health, Oversight, 
and Advisory Committee, they have worked at the same concept at 
multiple levels of Government to the point where interests are 
now agreeing on how much biomass can sustainably be taken off 
of Federal lands on the scale of millions of acres, perhaps a 
lesson for the energy bill debate that we have been talking 
about here today. And while these examples deal with in large 
part with wildfire the notion of communities getting together 
to chart a course and make a statement of what is most 
important to them can reap rewards on almost any issue and on 
any scale, be it kudzu eradication in Mississippi or forest 
restoration work in Montana, so we have much restoration work 
ahead to accomplish.
    Fortunately, the U.S. Forest Service is staffed by some of 
the best trained, hardest working professionals in the world, 
but it won't be one entity alone. We know we cannot achieve 
these objectives without the active participation and 
collaboration of citizens, other Government resource management 
agencies, elected officials, conservation interests, the forest 
products industry, and the general public. Simply put, our 
belief is that healthy forests equate to healthy communities. 
We must conserve, protect, and enhance our forests. We welcome 
your involvement and assistance in that effort. This concludes 
my prepared statement, and I would be pleased to answer any and 
all questions that you have. Thank you.
    [The prepared statement of Mr. Jensen follows:]

  Prepared Statement of Vay Jensen, Deputy Undersecretary For Natural 
Resources And Environment, U.S. Department Of Agriculture, Washington, 
                                  D.C.

    Concerning The Future of Our Nation's Forests
    Mr. Chairman and Members of the Subcommittee, thank you for the 
opportunity to appear before you today to provide the Department's view 
on the Future of Our Nation's Forests. We are blessed with some of the 
most diverse, beautiful, and productive forests on the planet. We're a 
great country in part, because we have great forests. The mission of 
the U.S. Forest Service is to sustain the health, resilience, and 
productivity of the nation's forests and grasslands to meet the needs 
of present and future generations. Our mission extends to assisting 
both public and private forests nationwide.
    Over 100 years ago, the forests of the east and south were 
significantly cut over, as were some in the west, largely due to the 
primary objectives of the time, the conversion of forests to crop land, 
and the use of wood for building railroads, mining and fuel. The 
National Forests and the United States Forest Service were created over 
a hundred years ago in the initial stages of the American conservation 
movement, in part, to stop rampant deforestation and to begin the 
practice of scientific and sustainable forest management. Eventually, 
national forests were established in the east primarily for the purpose 
of healing cut over watersheds. The goal of stopping and reversing the 
deforestation crisis of 100 years ago was largely achieved. Today, our 
nation's forests cover about one-third of the country, provide 51 
percent of the nation's demand for water (US Forest Resource, Facts and 
Historical Trends, 2005), provide wood and paper products, provide 
habitat for threatened and endangered species and other wildlife, and 
offer beautiful settings for billions of recreation visits (RPA, 2005).
    Today I'd like to focus on the values our forests provide, rather 
than on any specific output. I believe we need to rethink our 
relationship with these lands in terms of their long-term values, not 
just their short-term uses. These values include everything from clean 
drinking water to hardwood for furniture to grizzly bear habitat to an 
experience of solitude as a respite from urban life to biomass that can 
help solve some of our nation's energy challenges. To protect and 
maintain the values the nation's forests provide requires much vision, 
planning, and work. Our forests are owned privately by individuals, 
families, and companies, and publicly by counties, states, and the 
federal government. One can find these forests in the backcountry far 
from cities, around communities, and sometimes in our own backyards. 
Our challenge is to reconnect urban and rural Americans to these 
forests and to focus on how we can work together to deliver all these 
important and essential values.
    As part of delivering those values, we must have a clear assessment 
of the current condition of our nation's forests. Our forest 
scientists, located at universities and Research Stations throughout 
the nation, are continually gathering and analyzing data to help us 
better understand the conditions we are facing. In addition, our Forest 
Inventory and Analysis division has been gathering on-the-ground data 
on the condition of our nation's forests for the better part of a 
century. These assessments point to the challenges our nation's forests 
are currently facing due to changes caused by insects, disease, noxious 
and exotic weeds and fire, and the conversion of forest land for 
development. Here are some specifics:

      While tree mortality caused by insects tends to be 
cyclical, it is at its highest level in fifty years. Eight percent of 
the forested area of the US is at risk of attack and potential 
mortality (RPA 2005). Beetle killed trees cover large areas of the 
Northern Rockies, the Southwest, and dry forests in the Northwest. 
Similarly, areas of the Lake States are being ravaged by the Emerald 
Ash Borer and the Asian long horned beetle is destroying trees in New 
England and right here in the backyard of the nation's capitol. The 
impact of insects and disease is not limited to the back woods. Cities 
and towns throughout the Northeast are witnessing the death of their 
beloved trees along streets and within community parks.

      Public and private forests have accumulated a significant 
amount of excess hazardous fuels (brush and woody materials) due, in 
large part, to a century of fire exclusion. On the National Forests 
alone, between sixty and eighty million acres of forest land is 
classified as densely stocked with small diameter trees and at risk for 
a catastrophic wildfire (Budget Director re: Congressional testimony 
provided in 2009). As a result, wildfire is burning large amounts of 
forests across the nation. In recent years fires have burned about 
eight million acres each year of forest and grassland. This is an area 
nearly twice the size of the State of New Jersey. Management 
predictions for the next decade indicate that fires may well burn in 
excess of ten million acres of forest and grassland annually 
(Quadrennial Fire Review). In addition, more homes are being burned 
each year. For many federal, state and local agencies, the cost of 
suppression continues to grow.

      Forested lands are being invaded by noxious and exotic 
weeds. On the National Forests alone, our management estimates indicate 
that to be six to eight million acres annually (Invasive Species Threat 
to America's Forested Ecosystems, Ielmini).

      Over the past fifty years urban areas have increased in 
size by 60 percent. During that same period, forested acreage has shown 
little change. The actual picture is somewhat more complex than the 
simple statistics alone would suggest. The amount of forest area is 
generally shrinking in the eastern and western states due to 
urbanization and fragmentation, while the amount of forest area is 
increasing in the interior of the nation as some of our cropland 
reverts to forest. Over the next ten years we anticipate that almost 22 
million acres of forest within ten miles of existing cities and towns 
will be further subdivided or developed (Forest on the Edge, Stein, 
McRoberts, and Alig, 2006). In addition, many of the owners of large 
tracts of forest are senior citizens, indicating vast tracts of 
forested land will be transferred to new owners who may or may not 
maintain them as large forested tracts. Considering that the majority 
of forestland in this country is owned by private family landowners, 
change is coming and it may be significant.

      Today, over eighty percent of the population lives in 
urban settings (cities and towns with a population greater than 2500). 
The average canopy cover in these cities and towns is 27 percent. These 
trees have many environmental benefits in the urban ecosystem including 
cleaning the air and actually cooling neighborhoods which reduces our 
energy needs. Open space also provides areas for filtering surface 
water and helps mitigate potential flooding. Management estimates 
indicate that there are 3.8 billion trees in these settings (Forest 
Resource Facts and Historical Trends, 2009). As noted, the impact of 
insects and disease is also a major concern in these urban ecosystems.

      We continue to demonstrate our appreciation for forest 
settings in large numbers. Last year, we estimate that Americans made 
several billion visits to forest settings. On the National Forests, our 
survey data indicates that the Forest Service hosted approximately 186 
million visitors. These forested settings are critical to the quality 
of life for many of us and our communities. (Forest Resource Facts and 
Historical Trends, 2009)

    In addition to resource challenges, the forest products industrial 
infrastructure is in decline in many places. Accompanying that decline 
is a loss of jobs and a decline in community vitality. Much of this is 
a result of the current recession and the associated decline in housing 
starts. This makes resource management, where needed, more difficult.
    There are numerous challenges ahead, but every set of challenges 
also offers opportunity. There are significant opportunities to begin 
addressing these challenges by maintaining, reconnecting, and renewing 
the bond between communities and their forests. We can deliver the many 
values we've come to appreciate and want if we invest the time and 
energy to work together.
    We look forward to working with the Congress to address many of the 
challenges facing America's forests. Some of those challenges include:

      private forests and development,

      insect, disease and noxious weed epidemics in both rural 
and urban settings,

      hazardous fuels reduction near communities, municipal 
watersheds and critical infrastructure,

      moving towards more fire resilient forested landscape,

      balancing sustainable wood products and the biomass 
industry which helps restore healthy ecosystems,

      managing roadless areas,

      supporting such values as clean water, clean air, and 
fiber and carbon sequestration and storage,

      protecting and enhancing wildlife and fish habitat, and

      providing opportunities for citizens to choose forest 
settings to recreate, refresh, and renew themselves.

    Another challenge our forests face is the deep divide that persists 
in the wake of decades of debate about how to best manage for the 
desired multiple uses. Some of our forests need restoration work and 
sustainable active management to remove hazardous fuels, to ensure 
clean water flows; all while maintaining forest health and resiliency 
in a changing climate. It is important to note that not every acre 
needs active management. We must move beyond the all or nothing ideas 
of competing interests by focusing on shared values and how they can 
overlap and come together. This requires intelligent, collaborative 
planning, smart, scientific based management, and inclusive decision-
making.
    It's been my experience that people on opposite sides of the 
forestry table often have the same values. They just differ in how they 
would want to see those values expressed on the land. While for one 
person, protection is eliminating human influence on an ecosystem, for 
another it is aggressive treatment. Both want the forest to exist and 
thrive. If we can focus on values, we can enlarge the dialogue and 
arrive at a better solution.
    Currently, collaborative efforts are flourishing across the nation, 
creating increased understanding between citizens of diverse 
backgrounds. Here are several recent examples where people have been 
working together to accomplish this vision:

    1. The town of Woodland Park, Colorado, working with the Front 
        Range Fuels Treatment Partnership Roundtable, of which the 
        Forest Service is a member, was the recipient of the Community 
        Demonstration Project Award. The project already has attracted 
        $100,000 to help treat fuels in high-risk areas. One hundred 
        percent of the project is in the Wildland Urban Interface 
        (WUI). Funding from the Governor's Energy Office, the Colorado 
        Forest Restoration Institute, and the Office of Smart Growth 
        will be matched with funding from national foundations and 
        local organizations to make the Woodland Park Healthy Forest 
        Initiative a reality. This collaborative project of various 
        federal, state, local government, nonprofit, and individual 
        partners is dedicated to the improvement of the resiliency and 
        health of forests in and around the Woodland Park area, and the 
        implementation of the Teller County Community Wildfire 
        Protection Plan. Current funding for this project from the 
        grant and from other partners exceeds $350,000.

    2. The National Forests of Mississippi produced a nearly completed 
        draft Land and Resource Management Plan that was a result of 
        excellent collaboration with all interested parties. The 
        collaborative process clarified the wide support for 
        prioritizing native ecosystem restoration and habitat 
        improvement for threatened and endangered species as core 
        components of the plan. This collaborative process demonstrates 
        how active forest management is a tool for meeting ecosystem 
        restoration goals, sustaining healthy, resilient forests while 
        also supplying desired goods and services to the local 
        communities.

    3. The Mississippi Forestry Commission is leading a collaborative 
        effort to address the kudzu problem. Utility companies, 
        federal, state and local officials spend thousands of dollars 
        each year to control kudzu. Kudzu contributes to the intensity 
        of woodland fires because it is highly flammable and provides a 
        fuel ladder from the forest floor to the forest canopy. The 
        purpose of this collaborative and comprehensive approach 
        between state and federal agencies and non-governmental 
        organizations is to address the threat and destruction that 
        kudzu poses to farmers, ranchers, and foresters on both public 
        and private lands.. The coalition intends to facilitate a 
        voluntary and cooperative effort in educating the public, 
        researching this pest species, and providing a means of 
        control, suppression, or selective eradication of kudzu. As a 
        partner in these efforts, Secretary Vilsack recently approved 
        $1.6 million for American Recovery and Reinvestment Act 
        invasive species projects on the Holly Springs National Forest.

    Our intention is to provide the means to multiply these successes 
across America. We are committed to a vision where Americans will sit 
down to not only address impacts, but more importantly, to protect and 
promote the full range of forest values that are important to all of 
us.
    On a national and local scale, one particularly successful 
collaborative effort over the past several years has been the 
development of Community Wildfire Protection Plans (CWPPs). The 
National Association of State Foresters estimates that there are over 
56,000 communities at risk. To date, more than 4,700 at-risk 
communities have completed (CWPPs). These plans prioritize fuels 
reduction areas across the landscape. Federal and state agencies have 
found CWPPs to be very useful in helping prioritize agency fuel 
treatments via these collaborative mechanisms.
    The Administration is increasing support for the Forest Legacy 
Program as well as the Land and Water Conservation Fund, both of which 
will help Americans protect important forested landscapes for future 
generations.
    We have much restoration work to accomplish on the nation's 
forested landscapes. Fortunately, the U.S. Forest Service is staffed by 
some of the best-trained, hardest working professionals in the world. 
They know we cannot achieve these objectives without the active 
participation and collaboration of federal and state resource 
management agencies, elected officials, residents living in and close 
to forested areas, the forest products industry, environmental 
interests, and the general public. We look forward to working together 
with the Congress and our partners to, among other things: 1) conserve 
working forest landscapes, 2) protect our nation's forests from harm - 
wildfire, invasive species and the ravages of insect and disease 
outbreaks, and 3) enhance benefits associated with trees and forests; 
e.g., water quality as well as sustainable communities and landscapes.
    I am convinced that with the help and continued engagement of the 
Congress and our state and local community partners, we can improve 
upon these successes by restoring our forests, public and private, 
consistent with the values we cherish. Simply put, healthy forests 
equal healthy communities. We welcome your involvement and assistance 
in that effort.
    This concludes my prepared statement, and I would be pleased to 
answer any questions you may have.

    Mr. Baca. Thank you very much for your testimony. And we 
all agree that we have all got to work in partnership and got 
to collaborate if we are really looking at where we are at 
today and where we need to be in terms of the future. With 
that, I would like to begin by yielding myself 5 minutes and 
then we will ask each of the other individuals if they have any 
questions. They will be given 5 minutes to ask questions. 
Again, thank you very much, Mr. Deputy Undersecretary Jensen. 
As California, I am too well aware of the devastating effects 
that recent wildfires have had on our national forests. I also 
know the terrible impact the shift of Forest Service funds to 
fire suppression activities has on many of our other important 
programs that safeguard the environment and health of our 
forest. Do you see any other feasible answer to the constant 
underfunding problem besides increasing the budget of the USFS?
    Mr. Jensen. I do. I am glad you are asking this. This is 
probably one of the most immediate challenges we have right 
now. There are going to be some discussions. I know discussions 
are ongoing right now within Congress about looking at the 
budget structure and restructuring that. I think you have noted 
in the President's 2010 budget there is also a notion of 
creating a contingency fund to try to help get ahead of that 
problem and that curve because currently right now we are 
looking at other program areas to fund our fire suppression 
efforts, and that is not something that is acceptable.
    What I would put on the table in answer to that is this 
issue has been debated and discussed for more than 10 years, 
and there are some pretty good efforts out there that if we 
turn to what some of the states have been doing in the past, 
notably the Western Governor's Association developed back in 
2001, along with the help of multiple other collaborators, a 
10-year comprehensive wildfire strategy. I would encourage the 
panel to look closely at that document as I believe it is a 
pretty good blueprint as to where we might want to look 
forward.
    Mr. Baca. Along the same lines as we look at, is there 
enough funds in the emergency or reserve in conjunction with 
other states too as well because the states also have to pick 
up a certain portion of it, and is there anything that we need 
to do or to begin to look at in how we can look at that budget 
especially under emergency situations that are unexpected, 
whether it is wildfires in our areas, where it is mud slides or 
diseases or water or even endangered species or any other act?
    Mr. Jensen. We currently feel that we are more than 
prepared for this wildfire season and going into the next 
budget cycle and prepared with the President's budget to handle 
these issues right now. The season itself will certainly 
dictate the reality of that, but right now we feel we are 
prepared. But as the season unfolds, we will look forward to 
connecting with you and working with other agencies and 
departments at the Federal, state, and local levels to try to 
figure out what we need to ensure that we have the resources 
that are needed out there to protect our communities and for 
our wildland firefighters.
    Mr. Baca. Thank you. I know that we all agree that the men 
and women who are firefighters are remarkable for their ability 
and bravery and they do an outstanding job in protecting us 
down at the bottom, and then also protecting our forestry too 
as well, but one aspect of firefighting that is rarely 
discussed is the science of firefighting. Are we providing 
firefighters with the most up-to-date equipment to make sure 
they are adequately protected?
    Mr. Jensen. We believe right now that we have, and do have, 
the right resources in place. And we would look forward to 
hearing from you if there are certain areas and interest where 
you see otherwise but the way we structured and prepared for 
the season otherwise feel like our firefighters are prepared 
for the season.
    Mr. Baca. Well, it is not just about having the resources 
for them. It is looking at if we can be cost effective and get 
other kind of equipment that are just as protective and better 
in handling and fighting fires. And that is one of the things 
that I have heard from a lot of the firefighters is that we 
need to update the kind of equipment that we have that is more 
modernized, that it is even more cost effective than some of 
this heavy equipment that they are constantly carrying right 
now. And so we have the resources but we are spending on 
outdated equipment, and we need to look at what is it that we 
need to do now scientifically and still get the same kind of 
results to preserve cancer presumption and other things. And I 
know the doctor knows a lot of this because he is involved with 
a lot of the patients and others. But to see what needs to be 
done, we need to explore that as well, and hopefully you can 
begin to look at the equipment that we have.
    Do we need to make changes? Is it cost effective for us? 
Because, you know, if we can save money there and buy equipment 
and still be safe, then we have to look at other alternatives. 
And there isn't one set of policy that is in place, and part of 
the problem is that every state, every area has its own policy 
in terms of their own equipment. And do we need to standardize 
it so this way we can be more cost effective or do we still 
allow the autonomy of each state? That is something that we 
need to begin to look at as well. And being cost effective and 
looking at what resources we have and what we will have in the 
future.
    Let me ask you the other question, regarding the stimulus 
package, many of the projects will receive funding. Can you 
tell us the criteria that were used to select Forest Service 
projects?
    Mr. Jensen. Certainly. Currently we are about halfway 
through the release of the Recovery Act funds that have been 
allocated for the Forest Service, and the way the products are 
selected are through a competitive criteria based process of 
looking at jobs both near term and longer term chronic 
unemployment, as well as the impacts and outcomes that those 
projects would have on the ground.
    Mr. Baca. Thank you. My time has expired, so at this time I 
would like to recognize Mr. Fortenberry for 5 minutes.
    Mr. Fortenberry. Mr. Jensen, congratulations on your new 
position and obviously you have a passion for it given your 
testimony. I would like to return to the subject though of 
changing the definition of the renewable fuel standard to 
include more sources of wood renewable biomass. It wasn't 
uncommon when I was young to see large piles of trees pushed up 
as development from occurring, pushed into piles and simply 
burned. That is a vivid image I have of growing up. Recently on 
my way home, going down the interstate, probably coming back 
from here, and that memory from childhood was evoked again as I 
saw a large pile of woody trees pushed up and simply burning. 
It is rare to see that now but the thought crossed my mind, 
what a waste.
    Now it is not always practical, clearly, in certain 
clearing situations to move wood to a renewable type of energy 
conversion, but at the same time a growing sensitivity to allow 
for waste wood products and other forms of biomass to be 
converted and the technology allowed to be developed to 
regularize woody biomass as a part of our renewable fuel 
strategy. We have to build a big book with multiple strategies 
in order to build a sustainable energy future, and I think 
renewable woody biomass has an important role to play there. I 
also think none of this should be wasted. So as a 
representative of the Administration, is this a directive that 
you would like to see? What are your thoughts and ideas on how 
we make progress in this regard?
    Mr. Jensen. Secretary Vilsack has been very clear on his 
desire and support of creating wealth and the health of rural 
communities across this country and part of that equation is 
trying to find uses, sustainable uses, that protect fish, 
water, and wildlife habitat along the way. When that can be 
done in conjunction, I am very much in support of.
    Mr. Fortenberry. So again place it though in terms of a 
priority within the Administration. How are you going to 
develop and unpack that as one--it is a small chapter, we 
understand, but a lot of small chapters have to be built in 
order to create a renewable, sustainable energy future.
    Mr. Jensen. Working landscapes are going to be a key 
component of the agenda that we are starting to put together 
right now, and what that means is trying to knit the 
connections between the urban landscapes and the rural 
landscapes, protecting the head waters in the forest down to 
the urban forests where a lot of the population gets its first 
exposure to these sorts of issues and what the glorious 
benefits of trees and forests are. We are going to work to make 
sure that that knitting of the working landscapes is done 
sustainably, which means it takes into account the ecologic, 
the economic, and the social aspects of that coming together.
    Mr. Fortenberry. Is there any resistance to changing the 
definition of the renewable fuel standard to include more 
sources of wood--renewable sources of wood?
    Mr. Jensen. I think that debate is ongoing right now, and 
it is pretty clear that there is a certain amount of resistance 
or discussion points that are happening right now. The 
Department and the Administration are still figuring out its 
exact position on that matter.
    Mr. Fortenberry. Well, I think we can help you.
    Mr. Jensen. It is safe to say that the Secretary feels that 
the definition, an overly narrow definition, would not be of 
benefit to that objective of----
    Mr. Fortenberry. What do you see as the drawbacks from 
pursuing this more aggressively? What is your hesitation?
    Mr. Jensen. It is around the sustainability of use of that 
materials. We have to make sure that the systems that get put 
in place are done in a sustainable manner and that is the----
    Mr. Fortenberry. You heard my comments. I qualified it by 
saying renewable woody biomass. Thank you, Mr. Chairman.
    Mr. Baca. Thank you very much. Next, I have Mr. Schrader 
for 5 minutes recognized from Oregon. By the way, it is next to 
the state that just won the World Series women's softball from 
Washington State.
    Mr. Schrader. We take pride with our Oregon State Beavers 
having done pretty well in the World Series for the men too, so 
men and women are doing great up in the Northwest. Thank you, 
Mr. Chairman. I appreciate you being here, and apologize for 
the tenor of my questions because I agree with the Ranking 
Member that we need the Administration and the Forest Service 
to step up in a big, big way on the biomass discussion. You 
have the expertise. You have the knowledge. You need to impart 
that, frankly, to the rest of the Administration and make sure 
they understand that our forests are part of the solution, not 
a part of the problem, so I really would urge you to get on 
with that. Why is it that the Forest Service is not 
implementing HFRA? I mean basically why are we being held 
hostage by the extreme environmental organizations that sue at 
every opportunity and not implementing the goals of the 
Congress and this nation under HFRA?
    Mr. Jensen. I don't have all the numbers in front of me 
right now, but I think I would put on the table right now that 
the agency has pursued projects under the Healthy Forest 
Restoration Act to the tune of hundreds of thousands of acres 
right now. If there are specifics or there are some concepts 
and ideas that you would like to pursue in earnest, we look 
forward to some conversations with you on how we can get at 
more.
    Mr. Schrader. Well, I would hope some of the panelists 
might discuss and see how well we are implementing that. 
Certainly in my part of the world it is not working at all. I 
would also take issue, you said that we have the equipment, we 
are prepared to deal with the fire season and such. We have the 
right resources. How can you say that without the air tanker 
fleet being in the air? Basically without that air tanker 
fleet, we have hamstrung, frankly, the Forest Service ability 
to fight these fires, and they are just going to rage out of 
control and it falls to the states to step up with resources 
they just don't have.
    Mr. Jensen. I will look to get more information for you on 
this, but my understanding is that our air tanker fleet and 
helicopter fleet is in the air right now. The status and 
briefing I had this morning, I think had 10 active tankers out 
there. There has been in the past some grounding of the air 
tankers, and some of those issues have been worked through. It 
had to do with the safety certificates of those planes. We are 
currently looking to the future to make sure that our fleet is 
exactly what we need and currently right now we feel that the 
resources we have to come to bear are adequate to deal with the 
situation at hand.
    Mr. Schrader. I pleasantly disagree. I am glad your 
attention is on it though and hope we do a little more. One of 
the strategies that my state has adopted that I don't see the 
Forest Service adopting is an early intervention strategy. By 
getting into these fires early with resources up front you not 
only save money, you burn less carbon into the atmosphere, you 
protect homes, you protect trees. Why is the Forest Service not 
adopting an initial attack strategy like has been used very 
successfully--as a matter of fact, with that strategy my state 
is actually able to buy insurance from Lloyd's of London to 
help defray the cost of excessive catastrophic wildfires 
because we have a strategy they believe in.
    Mr. Jensen. Oregon has got some interesting and unique 
abilities in that regard. The agency shares that objective. Our 
goal and our direction as well is to have early and aggressive 
initial attack done safely. So we hope that it is clear that 
there may be some challenges in Oregon right now in front of 
you but we definitely share, and that is a key part of our 
strategy, is that you have to catch these fires early before 
they move into the larger conflagrations that cost us the 
larger dollars than we currently are implementing as a few 
strategies to help with that. I would be happy to discuss with 
you further.
    Mr. Schrader. I appreciate the response and look forward to 
working with you on that and the rest of the Committee. And I 
apologize again for the tenor of my questions, but I am just 
really interested in making sure that the Forest Service is 
shown to advantage and our healthy forests remain healthy or 
get healthier. Thank you, sir. I yield back.
    Mr. Baca. Thank you very much. Before I recognize the next 
person to ask a question, I just wanted to recognize Glenn 
Thompson from Pennsylvania, who has been with us since the very 
beginning of the hearing and then also I would like to welcome 
Ms. Markey from Colorado who are sitting here too as well. I 
would add--I would like to recognize Ms. Lummis for 5 minutes.
    Ms. Lummis. Thank you, Mr. Chairman. In light of both the 
Ranking Member and the gentleman from Oregon's comments and the 
gentlelady from South Dakota in support of changing the RFS 
standard to include renewable woody biomass, I won't ask the 
same question. However, I would ask unanimous consent to insert 
for the record a photo that shows a huge slash pile much as you 
described, Mr. Fortenberry, that could be used as woody biomass 
under the renewable fuels and renewable electric standards, but 
otherwise could and would go to waste. So I want to ask 
unanimous consent to introduce that, Mr. Chairman. As well, I 
would like to ask unanimous consent to enter into the record a 
second photo that shows the type of destruction that we are 
seeing in the west of adult lodgepole pines due to bark beetle. 
This particular photo is from the Frazier Forest in Colorado.
    And, Mr. Chairman, with all due respect to my beloved 
Jackson Hole Mountain Resort, I do occasionally sneak down to 
Steamboat Springs and Winter Park to ski in Colorado because I 
am closer to the Colorado border than to Jackson. And it is 
just devastating there. You would be stunned if you saw Winter 
Park, Colorado, absolutely stunned. It is devastating for these 
economies, and the fuel loads are very dangerous. So my 
question is this. What specific steps do you anticipate the 
Forest Service undertaking to reduce the hazardous fuel load in 
areas like this?
    Mr. Jensen. Right now we are looking at a very unique and 
unfortunate circumstance in the sense that we have the Recovery 
Act. It is in response to some terrible times that are out 
there right now, but it is also providing some amazing 
opportunities to get ahead of some of these problems. And I 
don't have specific numbers in front of me right now but we are 
using some of those monies to get ahead of this to do exactly 
the types of things that you are talking about. We are not 
going to have ever enough money to throw at this to get at the 
problem, but we have some pretty unique opportunities right 
now, and we are going to be doing our best.
    Ms. Lummis. Mr. Chairman, another question. This is with 
regard to HFRA. When projects include road closures or wildlife 
protection in addition to HFRA requirements the Forest Service 
seems to be hesitant to use HFRA. Do you agree with that 
assessment and, if so, why is that the case?
    Mr. Jensen. I would have to know the specifics of the case. 
As with most forest management decisions, the tool you use is 
usually driven by the types of circumstances on the ground and 
every choice and decision looks different in different parts of 
the country, so the HFRA tool while it may be appropriate in 
some places may not be the one solution in all, and I would 
hope that our forest managers and our rangers in the field are 
using the right tool for the right place.
    Ms. Lummis. Well, Mr. Chairman, just to comment, and that 
is that I would ask you, almost plead with you, to look at the 
Bridger-Teton Forest management in Wyoming. I am tremendously 
concerned about that forest in terms of its management. It is 
my personal opinion that the Shoshone Forest is better managed 
than the BT. And, furthermore, this devastation that is 
occurring on its northern Colorado and southern Wyoming border 
is beyond the pale, and I strongly encourage you to visit, Mr. 
Jensen. You will be stupefied. Thank you.
    Mr. Baca. Thank you very much, Ms. Lummis. Next, I would 
like to call on Mr. Kagen from Wisconsin for 5 minutes.
    Mr. Kagen. Thank you, Mr. Chairman. Than you again, Mr. 
Jensen, for being here and coming under fire, so to speak, but 
it isn't so hot in here that you can't take it. I would like to 
know exactly, and you don't have to report this now, but this 
Committee as an oversight Committee is very interested in 
knowing the total number of dollars that you have received 
through the stimulus funds, the name of every program that you 
originated, the name of the director of that program, how many 
jobs you have created through those specific programs, and the 
economic impact on the communities in which you are investing 
those hard-earned Federal tax dollars. I think these are the 
questions that the people in Northeast Wisconsin are very 
interested in.
    You don't have to provide it today, but through each and 
every one of those programs, we would like to see how that is 
moving. And if you don't mind giving us a report month by 
month, we would really appreciate it. Could you do that? That 
is a yes?
    Mr. Jensen. We will certainly follow up with you and get 
you the details you need.
    Mr. Kagen. I am going to interpret that as, yes, we will.
    Mr. Jensen. Very good.
    Mr. Kagen. So that is a yes. That is a very good thing. It 
is unanimous. The other question I have for you is a real easy 
one. What are the top three complaints you are getting from 
people you are working for, from state agencies, from 
foresters, from private landowners, from people trying to make 
a living, what are the three most common complaints that you 
are getting through the Forest Service, and what are you 
responding, what are you doing in response to those problems 
that they are presenting to you?
    Mr. Jensen. I would put that in the context right now of 
dealing with economic recovery, wildfire, and then generally 
the discussion right now around forest management and the 
utilization of the forests and the biomass themselves.
    Mr. Kagen. Have you given any consideration--I appreciate 
what you are hearing, and I would appreciate a more in-depth 
response in writing as to how you are responding to their 
demands, and perhaps more importantly have you taken any time 
to study your own department to decide how you could become 
more lean in your functioning, more rapid in your respond? We 
understand how long it takes to grow a crop of trees. We all 
agree here on this Committee that every tree should be 
reclassified as an agricultural product. But we don't want your 
department to take as long as it takes to grow trees to harvest 
them to respond to these problems, so have you taken a look or 
do you have an in-house report or an active person that is 
looking at how to become more lean within your own department?
    Mr. Jensen. The most important thing for us is to make sure 
that these dollars get to the ground and to the people that 
need them. We have been looking and we are still early in this 
Administration right now, but we have been looking at certain 
efficiencies to do just that, and we will be happy and look 
forward to further discussion.
    Mr. Kagen. Very good. Then with your saying yes, we will 
stop over, a number of us on the Committee are interested in 
stopping over at the USDA to take a look personally at how you 
are doing and maybe you can give us some response in writing 
before we get there. We will be there in about 4 weeks.
    Mr. Jensen. I look forward to that.
    Mr. Kagen. Very good. I yield back my time.
    Mr. Baca. Thank you very much. Now I would like to 
recognize the gentleman from Pennsylvania for 5 minutes, Mr. 
Thompson.
    Mr. Thompson. Thank you, Chairman. Thank you, Ranking 
Member, for putting this hearing together. Mr. Jensen, 
congratulations on the new position, and I was real pleased to 
hear in your opening remarks about recognition or the 
partnership and community vitality surrounding our forests and 
national forests. And I have to tell you, I am very pleased 
with the fact that we have an individual such as yourself with 
your experience as a forester and a wildland firefighter in 
that position. I think that is very good. Just to start out, I 
am going to change course just a little bit in terms of 
discussion.
    The Forest Service web site has a statement many of the 
communities most affected by the economic downturn are located 
near national forests, and that has been my experience. I have 
the Allegheny National Forest, 513,000 acres that were 
organized 86 years ago. I am fortunate to serve a district that 
includes that treasure. Unfortunately, the economic downturn in 
and around the Allegheny National Forest in my district has 
been really brought about more by the actions of the Forest 
Service recently than the state and national economy. For 
example, the recent agreement between the Forest Service and 
out-of-state environmental organizations will in fact close 
down oil and gas production in the Allegheny. Ninety-three 
percent of the Allegheny National Forest sub-service mineral 
rights are privately owned. The United States Government made a 
decision to leave those in private hands when it formed the 
forests, and oil and natural gas has been produced there for a 
century under strict control of the Pennsylvania Department of 
Environmental Protection.
    Another example of Forest Service policy shift is reduction 
in timber harvesting. Under the 1986 forest plan the Allegheny 
could be producing 90 million board feet a year, and this year 
we will be lucky to hit 25 million even though the ANF is, I 
believe, the only national forest which actually turns a profit 
because of the value of the cherry hardwood specifically. The 
continuously declining timber harvest and natural gas and oil 
production brought about by policy decisions of the Forest 
Service, not the economic downturn, really are killing the 
economy of the ANF region and fly in the face of the 
President's policy of job preservation and creation. I wanted 
to get your opinion on that. Is there an explanation why there 
is a contradiction between the words of what the President is 
calling for in terms of job preservation and creation and, 
frankly, the action of the Forest Service related specifically 
to overseeing in the Allegheny National Forest?
    Mr. Jensen. First, I would say we very much share the 
sensitivities around this current economic climate, 
particularly in the districts around the Allegheny National 
Forest, and the need to look at this nation's energy needs and 
what those lands can potentially provide for that. We are 
hoping that our actions to date from what little I know right 
now on that are moving forward with those two items in mind, 
but also being mindful of the protection responsibilities that 
the forest has for the surface and the forests that are on 
there right now. We will look forward to having some 
conversations with you further to learn more about what is 
happening in your district and get a little better sense for 
the details.
    Mr. Thompson. Again, I quote from the Forest Service web 
site. The Forest Service has always risen to the great 
conservation challenge of our time and with this in mind 
Abigail Kimball, the Chief of the Forest Service, has 
identified three times in particular that have stood out, 
climate changes, water issues, and the loss of connection to 
nature, especially for kids. The phrase climate change appears 
on the main page of the Forest Service web site 15 times, yet 
there is no mention of timber or harvesting, the historic 
reason that the Forest Services in the Agriculture Department, 
not the Interior Department. And I guess I would just ask, this 
is really just a core principle question, what your belief is 
are the core functions of the Forest Service, and what role 
does timber harvesting play in its future.
    Mr. Jensen. I guess I would turn back to the mission of the 
agency, and that is to protect the health, diversity, and 
productivity of the nation's forest lands. And turning again 
back to my testimony a little bit, I think the focal point on 
this is there is a place for timber. There is a place for oil 
and gas. We want to focus on what is being left behind, not so 
much on what is coming off.
    Mr. Thompson. In the Allegheny National Forest with the 
issues going on there in a recent meeting with Chief Kimball, 
she was kind enough to come into the office and we talked about 
the crisis there and the Forest Service agreement with the out-
of-state environmental groups to apply NEPA to future gas and 
oil production. I asked Chief Kimball for copies of the studies 
done by the Service demonstrating the necessity for NEPA 
application, and she said that there were none and that the 
Service relied on pictures of environmental damage, and so my 
question, I guess, is do you believe that such an important 
decision should be based on photographs and opinion rather than 
thorough analysis and documentation?
    Mr. Jensen. I just don't know enough about the details of 
that. I will commit to work with you to find out a little more 
about that.
    Mr. Thompson. I look forward to that, and I appreciate your 
presence here today.
    Mr. Baca. Thank you very much. At this time, I would like 
to call on the gentlewoman from South Dakota for 5 minutes, Ms. 
Herseth Sandlin.
    Ms. Herseth Sandlin. Thank you, Mr. Chairman. Just to 
follow up, Deputy Undersecretary, and again I echo the 
congratulations of others on the panel for your position. I 
look forward to working with you. But I do want to delve into 
some follow-up questions based on the line of questioning of 
Mr. Thompson and Mr. Fortenberry. More specifically, can you 
describe the steps that USDA is taking to provide more 
stability and predictability in the annual timber sales volume, 
and more specifically what is the Forest Service doing to 
address the shortfalls in meeting allowable sales quantity 
levels established by forest management plans throughout the 
United States?
    Mr. Jensen. Our current efforts right now are focusing and 
being drive a lot by the current economic recession, and so the 
active efforts that we are in right now are looking around the 
timber sale program and making rate adjustments around some of 
those timber sales to make sure that when these contracts were 
signed some years ago, they may have been signed when the 
markets looked at a lot different than now when they are 
actually moving towards action on the ground. The prices look a 
whole lot different, and that is the focal point right now of 
where we are trying to make sure that these timber sales go 
forward in an economic, viable fashion.
    Ms. Herseth Sandlin. So the focal point is on adjusting 
rates, but not necessarily addressing the shortfalls in the 
ASQ?
    Mr. Jensen. We are going to need to have some more 
discussions around that, and I would look forward to hearing 
what your vision for those are right now. As I come on board, 
there is a real strong focus on the immediacy of the near term 
implications of the economic recession and that is where the 
focal point is.
    Ms. Herseth Sandlin. And I think that is an appropriate 
focus, but I will look forward to talking with you about our 
experience in the Black Hills National Forest. Are you familiar 
with the Ponderosa Pine in the Black Hills and how quickly it 
regenerates?
    Mr. Jensen. The most productive.
    Ms. Herseth Sandlin. And you are familiar with some of the 
problems we have had over the course of the last decade as it 
relates to meeting ASQ levels to sustain our industries but 
also to manage the forest in a much more effective way?
    Mr. Jensen. I have heard from some of the constituents in 
that area and will look forward to a lot more detailed 
conversations from here.
    Ms. Herseth Sandlin. Great. And then on the biomass issue, 
are you familiar with the recent assessment, I believe it was 
by the Energy Information Administration, that we are in danger 
of not meeting the targets set forth for cellulosic ethanol 
development and the renewable fuel standard?
    Mr. Jensen. I am not familiar with that.
    Ms. Herseth Sandlin. I would point you to that report, and 
again it will follow up. If it is not the EIA, but I am fairly 
certain that it was the EIA that did the assessment. And you 
are familiar with the President's recent comments of last week 
in terms of his commitment to achieving advanced biofuels while 
maintaining the sustainability of the current corn ethanol 
industry, but clearly a demonstration of his commitment to 
cellulosic biofuels? You are familiar with his comments that he 
made last week?
    Mr. Jensen. I have not seen them most recently, but I am 
very familiar with the commitment of the Administration towards 
advanced biofuels and cellulosic ethanol.
    Ms. Herseth Sandlin. And so with that, the Secretary nor 
the President has yet to put forward a position on the 
definition of renewable biomass for either the RFS or the RES?
    Mr. Jensen. That is my understanding, correct.
    Ms. Herseth Sandlin. What role, in your opinion, can 
utilizing woody biomass on Federal lands play in accomplishing 
our goals for bioenergy?
    Mr. Jensen. I think there is a huge role. Starting from a 
community standpoint, I think the obvious one of trying to 
reduce fuel loads out there on the landscape to protect those 
communities, and then also trying to tie that into the economic 
possibilities done sustainably to those communities is a huge 
one to get that going.
    Ms. Herseth Sandlin. You have mentioned sustainable, 
sustainability a couple of times in your opening testimony and 
responses to questions. Do you feel that more information is 
necessary as it relates to sustainability even as it concerns 
utilizing slash and other materials coming off the forest under 
current management practices?
    Mr. Jensen. I would say yes. It is clear that to make good 
decisions we need to have the best information we possibly can, 
and we are trying to--we want to make sure that the programs 
and capacities that we have in place give us the answers we 
need to make the best decisions on the ground.
    Ms. Herseth Sandlin. Well, how long do you anticipate that 
that will take and in the interim are we just going to continue 
to burn or let rot existing slash piles in our national 
forests?
    Mr. Jensen. We are prioritizing our works to make that they 
are done in areas that are of highest risk and where there is 
energy within the communities to get at those situations. That 
is not to say that it is enough. We need to double our efforts 
and get in front of this instead of behind it and reactive to 
it, but we are definitely trying to work to target our resource 
with the best information and best science we have to make sure 
it is done in the right way.
    Ms. Herseth Sandlin. Well, I appreciate your responses to 
my questions, and I would implore you and the Secretary and the 
President to weed into the debate on biomass and to take a 
position in light of the over arcing goal to meet the targets 
that we set forth in 2007 and get these answers to some of the 
lingering questions that some may have as to sustainability so 
that we can achieve our energy independence goals as well as 
sustain our rural communities that rely on our Federal forests 
as well as our private forests across the country. Thank you, 
Mr. Chairman.
    Mr. Baca. Thank you very much, Ms. Sandlin. At this time, I 
would like to call the gentlewoman from Colorado, Ms. Markey, 
for 5 minutes.
    Ms. Markey. Yes. Thank you, Mr. Chairman, for the 
opportunity to speak at this Subcommittee hearing. Mr. Jensen, 
I want to elaborate on what my colleague from Wyoming was 
talking about with the devastation of the bark beetle in 
southern Wyoming and northern Colorado. Two weeks ago, 
Secretary Vilsack was in Fort Collins, Colorado with me. We 
visited Colorado State University, and we were talking to some 
of the researchers looking at the bark beetle problem, and they 
said that in 5 years 90 percent of the lodgepole pines in 
Colorado will be dead, 90 percent in 5 years. It is well over 2 
million acres. You know, of course, this has an enormous 
increase in the risk of wildfires. And I know that there is 
some stimulus money coming but there is just really not going 
to be enough funds for the magnitude of the problem that we are 
dealing with in southern Wyoming and northern Colorado.
    Some of our county commissioners have come to me and said 
we know the Forest Service is doing other programs like 
prescribed burns on our grasslands in the eastern part of the 
state, can some of that money at all be shifted to fighting 
wildfires as a result of the bark beetle problem. So can you 
tell me, is there any discussion, I know we passed the FLAME 
Act. We hope to have more money for fire suppression. There is 
stimulus money as well. But are you looking at shifting any 
money within the existing Forest Service budget as well?
    Mr. Jensen. Most certainly, and I think the region has 
received a good amount of money to date and obviously this is a 
priority in the future as well. I would note that this is 
exactly the type of issue why it is important that we have 
these sort of public and private partnerships that are 
inclusive of traditional and new industries that are out there 
to be able to get out all the work because as you just said 2 
million acres is a lot. And it is not going to be solved alone 
by the public dollar. We need to move forward in partnership 
where we can work with communities and work with existing and 
new industries to find solutions.
    Ms. Markey. Thank you, Mr. Chairman.
    Mr. Baca. Thank you very much, Ms. Markey. At this time, 
that concludes the questions of our panel. I would like again 
to congratulate you on your position, Mr. Jensen, and thank you 
very much for appearing before us. And if there are any 
additional questions that Members may have had that they didn't 
have an opportunity, they may submit them for the record and 
hopefully you will be able to respond back to those particular 
questions. Again, thank you very much.
    Next, I would like to call our next panel up front. Would 
they please come to the table? Thank you. I think at this time 
everybody has sat down, but we would like to welcome our second 
panel to the hearing. I would like to begin by again 
reintroducing our Member from Oregon to introduce our guest 
from Colorado, Mr. Schrader, would you please introduce the 
Member from Oregon?
    Mr. Schrader. Thank you, Mr. Chair. It is my pleasure to 
introduce the representative from Oregon Tree Farm System and 
American Forest Foundation, Mr. Clint Bentz. Clint is known as 
a major leader and advocate for family forestry in our 
Northwest. He is the Chairman of the American Tree Farm System, 
the first Family Forest Landowner President. He was recognized 
in 2002 along with his father as the Western National Tree 
Farmers of the year. Also, a graduate of the Master Woodland 
Manager Extension Program based out of Oregon State University, 
the best land grant institution in the country. He is also an 
author and recently wrote ``Ties to the Land, Your Family 
Forest Heritage'' in partnership with OSU. Clint manages a 25-
acre tree farm and 700-acre family tree partnership at the Blue 
Den Ranch in Scio, Oregon. He is also an avid trout fly 
fisherman and recently honored by Governor Kulongoski for his 
work as President of the Oregon Aquaculture Association in 
aiding salmon recovery efforts, a big deal in my state, and 
showing fish and forestry are not incompatible.
    In his spare time, he works as a certified public 
accountant. He also helped rewrite Oregon's property tax 
program for small woodland owners, and in Scio he lives with 
his wife, Maureen, and their six children, so he does have some 
spare time. And I thank Mr. Bentz for making a long trip to 
Washington and commend his dedication of aiding forestry and 
fishing in our great state. I look forward to your testimony.
    Mr. Baca. Thank you very much for that introduction. Next, 
I would like to have the gentlewoman from Wyoming, Ms. Lummis, 
to introduce her guest from Wyoming.
    Ms. Lummis. Thank you, Mr. Chairman. It is really an honor 
for me to welcome Jim Neiman to Washington, D.C. He is in the 
middle of a very busy season for his business, but he dropped 
everything at our request to join us today, and there is no one 
more knowledgeable about forest industry or just forestry in 
general in Wyoming. Jim Neiman has served on the University of 
Wyoming board of trustees. Jim Neiman is a steward of the land 
and the natural resources in Wyoming. I served a brief stint as 
the Director of State Lands and Investments to which forestry 
is tied in Wyoming, and also 8 years on our Board of Land 
Commissioners, and no one was more helpful in terms of 
providing advice with regard to good stewardship of the State 
of Wyoming's forested lands than Jim Neiman.
    You will learn a great deal from him today. Jim Neiman is 
also involved in Devil's Tower Forest Products in Hulett, 
Wyoming, and it is the last remaining sawmill in the entire 
State of Wyoming. So the survivability of this industry is at 
risk in spite of their best efforts to employ good stewardship. 
And so I am so excited to hear your testimony today about 
cogeneration, about renewable resources, and the great 
stewardship that you provide. Thank you for being a wonderful 
Wyoming citizen and looking forward to your testimony today, 
Jim.
    Mr. Baca. Thank you very much. Next, I would like to have 
Mr. Childers recognize his guest from Mississippi.
    Mr. Childers. Thank you, Mr. Chairman. I would like for the 
Committee to join me in welcoming Dr. Tom Monaghan here. Mr. 
Monaghan has had a long career with Mississippi State 
University, which I will take issue that another college that 
was mentioned was the best land grant institution in the 
country. We have one that we think is the best. He is from 
Starkville, which is technically not in my district but he and 
I have a lot in common in that we are both tree farmers and 
have a great respect for the land and what it produces. I 
welcome you here today. He has also worked with the Mississippi 
Forestry Association, the National Association. I am looking 
forward to hearing from you today. Dr. Monaghan, thank you for 
being here, sir. Welcome.
    Mr. Baca. Thank you very much. Then I would like to have 
Ms. Markey introduce her guest from Colorado.
    [The prepared statement of Mr. Childers follows:]

  Submitted Statement of Hon. Travis W. Childers, a Representative in 
                       Congress from Mississippi

    I want to thank Chairman Baca and the other Members of this 
Committee for holding this essential hearing. I also want to thank Mr. 
Monaghan for taking the time to testify today and for representing the 
Forests Owners of my home state.
    Mississippi's forests have been a vital a part of the cultural 
fabric of our state for over 200 years. The Forestry industry provides 
8.5% of all jobs in Mississippi. Mississippi State University is both a 
premier research institution in forestry and an important educational 
resource for forest owners. The state's 6 National Forests provide 
residents and tourists alike with some of the most pristine hiking, 
camping and fishing areas in the entire country. Mississippi is also a 
leader in forest conservation as the first state to implement a 
comprehensive state-sponsored forest resources inventory and finally, 
over 65% of Mississippi's land is in forests.
    on energy, conservation, and agriculture policies it is important 
that we recognize the vital role forestry can play in all of these 
issue areas. I am pleased to participate in this hearing and I am 
looking forward to listening to the testimony of all of the witnesses 
and I hope to learn more about the ways we as Members of Congress can 
help bolster our National Forests and our forest industry.

    Ms. Markey. Yes. Thank you, Mr. Chairman. And I want to 
thank all of our speakers today, and I want to thank Mr. Brian 
McPeek for being with us today from Colorado to speak about the 
great work of the Nature Conservancy and what you do in North 
America. The previous speaker today highlighted the bark beetle 
epidemic in the Rocky Mountain region. The Forest Service 
expects the bark beetle epidemic will kill most of the mature 
lodgepole pine covering 2.2 million acres in Colorado and 
southern Wyoming over the next 5 years. The epidemic can be 
seen by the large swaths of red trees and is now spreading to 
the eastern slope and the Ponderosa Pines on the front range.
    While these beetles are native to Colorado, the increase in 
numbers over the past several years has been attributed to 
increased temperatures leaving large areas of dead wood and 
increasing the risk of wildfire. While some forest areas are 
growing back, these younger, smaller trees also increase 
wildfire risk. Infestation prevention techniques in Colorado 
are very labor intensive and do not guarantee the trees will 
survive. Therefore, it is important to focus on our wildfire 
prevention efforts. For the future of our forests in Colorado, 
it is imperative that we provide a stable source of funding for 
emergency wildfire suppression such as provided in the FLAME 
Act.
    Finally, I would like to stress the importance of providing 
the USDA Animal and Plant Health Inspection Service with the 
resources that they need to update the quarantine 37 
regulations for the importation of plants into the U.S. Without 
these updated regulations our forests are prone to invasive 
species. Updating these regulations will ensure that we are not 
unnecessarily exposing our forests to destructive and invasive 
plants. Thank you again for being here, Mr. McPeek, and we look 
forward to your testimony.
    Mr. Baca. Thank you very much. And we have two other 
panelists that are here. We have Mr. Steve Koehn, Maryland 
State Forester, on behalf of the National Association of State 
Foresters, Parkton, Maryland. Thank you, and welcome to the 
panel. We also have Matt Smith, on behalf of the Society of 
American Foresters from Falconer, New York. I would like to 
welcome all of you to the panel, and thank you very much for 
agreeing to be out here and giving us your expert testimony. We 
will begin with Mr. Koehn at this time. Again, you have 5 
minutes. Each of the speakers will have 5 minutes and then at 
the conclusion of the panelists, we will ask questions. But 
there may be a time that I believe that the bell may be ringing 
for votes at 3:00. What we will do is go as far as we can and 
then break for recess and then come back and reconvene. So, Mr. 
Koehn, you may begin.

STATEMENT OF STEVE KOEHN, MARYLAND STATE FORESTER, ON BEHALF OF 
 THE NATIONAL ASSOCIATION OF STATE FORESTERS, PARKTON, MARYLAND

    Mr. Koehn. Thank you. Chairman Baca, Members of the 
Committee, thank you for the opportunity to appear today on 
behalf of the National Association of State Foresters. My 
remarks today will highlight the role of the nation's forests 
as a strategic national resource. I also want to address the 
importance of markets for ecosystem services and traditional 
forest products in ensuring the nation's forests provide 
environmental benefits today and for future generations. All 
the nation's forests face numerous threats from changes in 
forest ownership and land use to wildfire, climate change, 
insects and disease. These threats will inevitably impact their 
ability to deliver essential environmental services like clean 
air and water and may provide these services at no cost or very 
little cost to the American public.
    Water quality has emerged as one of the most important and 
public environmental issues of our time. In the United States, 
well over half of our population depends on water supplied 
through areas that are originating on or protected by forest 
lands. Forests increase the resilience of watersheds through 
water storage, soil protection, nutrient buffering, and 
filtering of sediment and other pollutants. Increasing the 
ability of private forest landowners, public forest managers 
and communities to manage, protect, and enhance forests is one 
of the greatest challenges to ensuring the future 
sustainability of clean drinking water and our waterways and 
our water dependent ecosystems.
    State level best management practices have become widely 
accepted and understood tools to help reduce non-point source 
pollution by providing forest buffers and limiting soil 
disturbance, sedimentation, and leaching of fertilizers into 
our waterways. BMPs have relied on both regulatory and 
voluntary mechanisms for their implementation and have been 
found to be very effective in controlling non-point source 
pollution. New regulatory requirements will impact the ability 
of private forest landowners to realize value from a working 
forest. They also are often unnecessary given that BMP 
implementation and compliance rates are consistently quite 
high. Forest practice regulations threaten to place additional 
burdens on private forest landowners and serve as a 
disincentive in many cases to maintain forest land cover.
    Land conservation of non-forest uses such as urban and 
industrial development pose greater risks to impairing water 
quality. Legislative efforts should target and encourage the 
development of private and more diverse force markets. These 
will help landowners hold on to their forest land in the face 
of increasing development pressures. Fundamentally, sustainable 
force management is not possible without diverse, viable, and 
robust markets. The absence of markets deprives landowners of 
financial incentives for them to keep forest as forest. In 
other words, no markets, no management, no cash flow, no 
conservation. Markets for traditional forest products have 
typically done the heavy lifting as far as providing economic 
returns to landowners. Today, however, global competition has 
created a situation where U.S. imports of forest products have 
grown at a faster rate than American exports.
    The current economic downturn and housing slump have also 
reduced the demand for paper products and lumber and led to a 
15 percent decrease in the forest product industry's work 
force. State foresters are well positioned to work with Federal 
partners to correct these declines, support new markets, and 
help create jobs at the local level. In the meantime, emerging 
carbon markets have been making important progress. Carbon is 
projected to become one of the largest commodity markets in the 
world. However, water quality protection, forest and habitat 
conservation programs are also critical ecosystem services and 
should have a place in an active market place. State foresters 
believe that it is important to re-establish effective programs 
that maintain and diversify markets even in difficult budget 
times and particularly when the nation's forests are being 
called upon to address national climate and renewable energy 
priorities.
    The renewable electric standard in the proposed American 
Clean Energy and Security Act, better known as H.R. 2454, adds 
yet another dimension of the role of forests as a strategic 
national resource. State foresters believe that the forest 
biomass will be essential in meeting the goals of producing 15 
percent of the nation's energy from renewable sources by the 
year 2020, particularly in states such as my home State of 
Maryland where wind and solar and other renewable energy 
options are less viable. Including a broad biomass definition 
in an RES like the one found in the 2008 Farm Bill will be 
essential in attracting new investment in renewable energy 
facilities. Including a restrictive biomass definition in H.R. 
2454, would severely constrain the ability of new projects to 
generate renewable electric credits under a Federal RES.
    Our nation's priorities for renewable energy are 
underscored by global efforts to address a changing climate. 
NASF supports a national cap and trade program that includes 
forest carbon offset projects that guarantee reductions in 
atmospheric greenhouse gases. Forestry projects offering 
quantifiable emission reductions but cannot meet higher 
standards for offset markets should be eligible for incentives 
beyond offsets. Although they may not be able to qualify for 
offset payments support for these incentives and other 
programmatic efforts could some from the sale of allowances for 
carbon emissions as well as other sources.
    Mr. Baca. Your 5 minutes are up, but if you can conclude 
real quick, and if I can ask the other panelists to look at the 
light and try to stay within the given time limits because we 
have quite a few witnesses and the bell has just rung for us to 
vote.
    Mr. Koehn. I will wrap up immediately.
    Mr. Baca. Thank you.
    Mr. Koehn. As long as public values continue to be derived 
from private forest lands, there is an undeniable role for 
Federal investments in order to achieve cooperative 
conservation on state and private forest lands. NASF asks that 
this Committee give favorable consideration to appropriate 
allocations for these important services, and with that I 
conclude my remarks.
    [The prepared statement of Mr. Koehn follows:]

 Submitted Statement of Mr. Steven Kohen, Maryland State Forester, on 
    behalf of the National Association of State Foresters, Parkton, 
                                Maryland

    Chairman Baca, Members of the Committee, thank you for the 
opportunity to appear today on behalf of the National Association of 
State Foresters. NASF represents the directors of the state forestry 
agencies of all fifty states, eight territories and associated states, 
and the District of Columbia. State Foresters manage and protect state 
and private forests across the U.S., which encompass two-thirds of the 
nation's forests, as well as support our federal partners in their 
efforts.
    Private forest lands in the U.S. encompass approximately 495 
million acres and provide significant environmental benefits at little 
or no cost to society. All forests face myriad threats from changes in 
forest ownership and use, wildfire, climate change, as well as insects 
and disease. These threats will inevitably impact the ability of the 
nation's forests to deliver any number of environmental services.
    In today's discussion, I will highlight the vital role our forests 
play as a strategic national resource that will continue to ensure 
water quality and quantity, provide renewable energy, mitigate climate 
change and allow wildlife to adapt to new habitats. I will also address 
the importance of markets for traditional forest products as well as 
for "ecosystem services" in ensuring that the nation's forests provide 
environmental services today and for future generations.

Water Quality and Quantity
    Water quality has emerged as one of the most important public 
environmental issues of our time. The availability of sufficient 
amounts of clean water is critical to communities, agriculture and 
industry, fisheries, wildlife, as well as wetland and estuarine 
habitat. In the U.S., well over half of our population depends on water 
supplies that originate on or are protected by forestlands. Forests are 
essential in increasing the resilience of watersheds through water 
storage, soil protection, nutrient buffering and filtering of sediment 
and other pollutants.
    Water quality is an important indicator of how well land is 
managed. Increasing the ability of private landowners, public forest 
managers and communities to manage, protect and enhance forests is one 
of the greatest challenges to restoring and ensuring the future 
sustainability of clean drinking water and healthy waterways and 
ecosystems.
    State-level Best Management Practices (BMPs) have become widely 
accepted and understood tools to help minimize soil disturbance, limit 
sedimentation and leaching of fertilizers and pesticides into nearby 
streams, provide forested buffers around streams and other water 
bodies, and provide guidelines for proper road and water crossing 
construction. BMPs have relied on both regulatory (i.e. through state 
forest practices acts) and voluntary (e.g., landowner education and 
technical assistance programs, third-party certification) mechanisms 
for their implementation and have been very effective in controlling 
non-point source pollution when they are properly implemented. Overall 
implementation and compliance rates are consistently to be quite 
high.1A\1\
---------------------------------------------------------------------------
    \1\  NCASI. 2008. Compendium of State and Provincial Forestry Best 
Management Practices.
---------------------------------------------------------------------------
    Because regulatory requirements impact the ability of private 
forest owners to realize value from a working forest, policymakers must 
consider the economic implications whenever new environmental 
requirements are entertained. Without considerable forethought, new 
regulations which place additional burdens on private forest landowners 
may serve as a disincentive to maintain forest cover and could 
encourage conversion to non-forest uses (e.g., urban or industrial 
development) which-in many cases-pose greater risks to impairing water 
quality in rivers, lakes, streams, ponds and other waterways. 
Conversely, regulation that helps to establish private and more diverse 
markets can be an important way of helping forest landowners hold onto 
their forestland in the face of increasing development pressures.

Renewable Energy
    The House Energy and Commerce Committee recently passed their 
version of the American Clean Energy and Security Act (i.e. HR 2454) on 
May 21. The bill included a Renewable Electricity Standard (RES) that 
would require the nation's utility providers to supply as much as 
fifteen percent of their power from sources such as wind, solar and 
biomass by the year 2020. Reaching this goal will hinge on whether 
Congress can craft an RES that does not interfere with the ability of 
the nation's forests to contribute to renewable energy. Forest biomass 
will be essential in meeting national goals for renewable energy, 
particularly in states-such as Maryland-where wind, solar, and other 
renewable energy options are less viable. Including a broad biomass 
definition-such as the one found in the 2008 Farm Bill-in an RES will 
be essential in attracting new investment in renewable energy 
facilities. In Maryland, for instance, two wood-based bioenergy 
facilities are planned on the Eastern Shore to meet increased energy 
demands imposed by an ever-increasing population.
    The first anticipated project is Fibrowatt's FibroShore facility 
which would utilize a projected 50,000 tons of forestry residues 
alongside 300,000 tons of poultry litter to deliver 40 MW of power to 
as many as 50,000 homes. FibroShore's sister power plant is FibroMinn 
located in Minnesota, the first of its kind biomass-fueled facility in 
North America.
    The second project - which is under consideration by the Maryland 
Environmental Service (MES), a quasi-public entity -is envisioned to 
need an estimated 80,000 dry tons of forest residues (i.e., bark, 
chips, tops, limbs, unmerchantable small trees) to produce as much as 
10 MW of power annually at the Eastern Correctional Institution (ECI). 
Given a biomass-fueled facility is a base-load operation - compared to 
intermittent production, like wind and solar -- it is possible to 
realize excess generation that could be fed to the PJM grid.
    In addition to renewable energy, these two projects will also 
generate green jobs in areas of Maryland which are experiencing 
unemployment rates higher than the state average and median incomes 
below the state average.
    New markets will provide Maryland-as well as other parts of the 
nation-with the infrastructure needed to improve forest health and 
productivity while creating incentives for families and individuals to 
maintain their forests in forests. Both would also produce measurable 
environmental benefits including a reduction in harmful greenhouse gas 
emissions and reduced non-point source nutrient pollution in the 
Chesapeake Bay.
    Limiting the availability of forest biomass by including a 
restrictive biomass definition in HR 2454 could severely constrain the 
ability of the FibroShore and ECI projects (as well as other similar 
projects across the country) to generate renewable electricity credits 
(RECs) under a federal RES. Removing the possibility of RECs would 
serve as a disincentive to investment, would likely have a detrimental 
effect on the economic viability of the projects, and would likely 
contribute further to the erosion of energy reliability at a time when 
PJM predicts rolling brownouts and blackouts throughout Delmarva by 
2011 and 2012, respectively.

Climate Mitigation & Wildlife Adaptation
    National priorities for renewable energy are underscored by global 
efforts to address a changing climate. Our forests will serve as a 
strategic national resource in our collective climate mitigation and 
adaptation efforts. NASF supports a national cap-and-trade program that 
includes forest carbon offset projects that guarantee reductions in 
atmospheric greenhouse gases (GHG). Forest carbon offsets offer one of 
the quickest means of reducing carbon emissions, are highly cost-
effective, and provide valuable co-benefits such as clean water, 
wildlife habitat, clean air and recreational opportunities. State 
Foresters recommend that eligible offset project types should include 
afforestation, reforestation, improved forest management, and others 
such as avoided deforestation to be added at a later date. Early 
adopters participating in existing regulatory and voluntary carbon 
markets should be rewarded in order to maintain their current and 
future interest in supplying emissions reductions.
    Forestry projects offering quantifiable emission reductions-but 
that cannot meet higher standards for offset markets-should be eligible 
for incentives beyond offsets. Although they may not be able to qualify 
for offset payments, support for these incentives or other programmatic 
efforts could come from the sale of allowances for carbon emissions as 
well as from other sources. We recommend that legislation offer these 
kinds of incentives to reward forest project types with quantifiable 
climate benefits-including avoided deforestation-and would designate 
Forest Legacy, EQIP and other Farm Bill programs as part of a ready 
delivery system.
    NASF supports legislation that includes new and expanded funding 
for adaptation activities across the nation's federal and non-federal 
forests. Past proposals have focused climate adaptation funding on 
federal lands and have omitted opportunities to help fund adaptation 
activities on state and private forest lands. State forestry agencies-
in coordination with state fish and wildlife agencies-help provide 
forest-based habitats for fish and wildlife (among many other forest-
related benefits) in the face of changing climates. Cooperative 
Forestry Assistance programs can play an essential role in implementing 
forest adaptation strategies on private forestlands. Yet, with the 
exception of a very small allocation for the Forest Legacy Program, HR 
2454 makes no provision for funding these programs as part of the 
Natural Resources Climate Change Adaptation Fund. NASF asks that this 
Committee ensure that adaptation funding be allocated to support 
nonfederal forests as well as federal forests and wildlife needs.

Importance of Markets for Sustainable Forestry
    Sustainable forest management is not possible in the absence of 
diverse, viable and robust markets. The absence of markets results in 
passive management and deprives landowners of financial incentives for 
keeping forests as forests. In other words: no markets - no management; 
no cash-flow - no conservation. Today, markets exist for traditional 
forests products and for the "ecosystem services" forests provide. Both 
have important roles in providing incentives which encourage 
conservation and for implementing sound forest management and 
stewardship practices.

Markets for Traditional Forest Products
    Markets for traditional forest products (e.g., lumber, pulp, 
piling, poles) have done the bulk of the heavy lifting as far as 
providing economic returns to landowners and have helped reward them 
for keeping forests as forests. Currently, the nation's forest products 
industry faces significant global competition creating a situation 
where U.S. imports of forest products have grown at a faster rate than 
American exports. Further, the current economic downturn and housing 
slump have reduced the demand for paper products and dimensional lumber 
resulting in a loss of traditional markets all across the country. Over 
the past three years alone, 15 percent of the forest products 
industry's workforce-found mostly in our rural areas-has been left 
without a job as a result of mill closings.

Ecosystem Service Markets
    Ecosystem services are the values that forests provide above and 
beyond the traditional products like lumber and pulp. Important 
progress has been made in regard to carbon and renewable energy markets 
under the high-profile urgency of climate change. In fact, the market 
for carbon is projected to become one of the largest commodity markets 
in the world. But water quality protection, forest conservation, and 
habitat conservation programs are also critical ecosystem services that 
should also have a place in an active marketplace.
    In Maryland, the "Bay Bank" is attempting to provide innovative 
solutions to bridge the gap by offering a basic online market 
infrastructure to help landowners determine what markets and programs 
they are eligible to participate in and then generate and market 
credits for various ecosystem services. Landowners can place different 
practices on their land; see what types of credits those practices are 
capable of generating; and the costs and benefits of implementation and 
potential income from credits. The multi-state nature of the registry 
will also assist the development of regional markets.

Programs Needed to Facilitate Diverse & Robust Forest Markets
    NASF strongly supports the new Office of Ecosystem Services and 
Markets, led by former USDA Forest Service Associate Chief Sally 
Collins. The leadership role of USDA through this office will be 
critical in developing markets which will compensate landowners for the 
wildlife, water, clean air and carbon storage benefits their forests 
provide.
    State Foresters and the USDA Forest Service should also be involved 
in efforts to support new markets-particularly for low value materials-
and thus helping to correct declining markets particularly at a time 
when unprecedented global competitive pressures confront the forest 
products industry and as the nation's forests are being called upon to 
address national priorities related to renewable energy and climate 
mitigation. State Foresters believe it is important to reestablish 
effective programs that maintain and diversify markets even in 
difficult budget times. Past programmatic efforts in these areas were 
not clearly articulated and have lost sight of their intended purpose. 
New programs could help identify and fund the most innovative projects 
from around the country which address priority issues in each state, 
ensure longevity of benefits, maintain and create jobs, and promote the 
overall goal of improving the prospects for practicing sustainable 
forestry.
    It is also important to recognize the important role of Farm Bill 
programs in achieving these national goals. NASF sincerely appreciates 
the leadership of Chairman Peterson and Members of the House 
Agriculture Committee in crafting the Forestry Title of the 2008 Farm 
Bill. The State Assessments and Strategies specified in that title are 
critical in developing direction and future appropriations for 
Cooperative Forestry Assistance programs. Similarly, State Forestry 
agencies anticipate improved services and cost-share capabilities 
through the enhanced forestry provisions contained in the Environmental 
Quality Incentives Program.
    I would like to commend Chairman Baca and Ranking member 
Fortenberry for holding this hearing today and thank the Committee 
Members for allowing us to offer our views on the future on the 
nation's forests.

    Mr. Baca. Thank you very much. Mr. Bentz.

  STATEMENT OF CLINT BENTZ, ON BEHALF OF THE OREGON TREE FARM 
      SYSTEM AND AMERICAN FOREST FOUNDATION, SCIO, OREGON

    Mr. Bentz. Thank you, Chairman Baca, Ranking Member 
Fortenberry, and Members of the Committee. My dad brought our 
property in 1964, and we were like most family forest 
landowners trying to figure out how to pay the mortgage. We 
bought it originally to run cattle on. It was a cutover stump 
ranch. There really wasn't a whole lot happening on the 
property. And so we ran cattle. We created a fish hatchery. We 
built some lakes. We had private recreation. We were just kind 
of doing anything we could. And in the late 1970's a 
stewardship forester, our local stewardship forester, Mike 
Barsoti, started talking to my dad about managing for the 
timber resources. And so we had some cost share funds that were 
available at that time, and we started pushing brush and 
planting trees. And over the last 20 years, we have re-planted 
and re-started about 400 acres of forest.
    I moved home about 20 years ago, and we realized we were 
making all these investments in the land. We were going to 
create a state tax problem for our family. We started talking 
also about generational transfer issues that this work that my 
dad was doing and that I came back to help him with, we would 
not live long enough to see through to completion, and so if we 
were going to be successful, we needed to engage our children 
and our grandchildren in this process so they had as much 
passion about it as we did. And out of that resulted this ties 
to the land curriculum that is now being used nationally by 
family forest landowners across the country connecting inter-
generationally to the land.
    As a result of all of our work, we were named the 2002 
National Outstanding Tree Farmers of the Year by the American 
Forest Foundation. America's Forest Foundation has a tree farm 
program, which was founded in 1941 in Oregon. We were the first 
tree farm Committee. And we work basically doing education and 
outreach and recognition of family forest landowners. There is 
91,000 of us across the country. We have 24 million acres under 
internationally third party certified green management of the 
property so sustainably managed for wood, water, wildlife, and 
recreation. I just finished a three-term chair as the chairman 
of the organization. I am continuing as a trustee. Oregon has 
produced four National Tree Farmers of the Year over the last 
60 years so Oregon actually has the largest number of tree 
farmers that have received that award.
    Small forest landowners in the United States are defined as 
being under 1,000 acres. There are 10 million of them, and they 
own more than a third of the forests in the United States. 
Average holding is under 100 acres. If we compare that to 
family farms there is roughly the same number of acres, about 
250 million acres of family farms. There is 2-1/2 million 
family farmers. There is 10 million family forest landowners, 
but basically the same land base that they are controlling. In 
Oregon, the forest products industry is the largest forest 
products industry in the United States. We produce more than 18 
percent of the total U.S. softwood lumber production, so timber 
still is a big deal in Oregon. We are the Persian Gulf of 
timber, we like to say out there, so even though we have the 
Silicon Forest growing up near Portland.
    Ninety percent of endangered species rely on our forest 
land. We are facing all kinds of issues with multi-generational 
issues. Our loss of markets, we are being left out. Many of the 
renewable building standards that are coming out don't 
recognize wood at all or if they do they don't recognize our 
wood as a part of the standard. We have development pressure. I 
know in Oregon forest land goes for about $1,000 an acre. If 
you can put a house on it, it is worth $30,000 an acre. That is 
a huge differential that makes it very hard to talk family 
forest landowners into keeping the land in that use. Of course, 
we have generational change. One in five owners is over 75 
years of age. We are going to have 44 million acres of this 
land change hands in the next 5 years.
    So we have this climate change bill in front of us. We want 
to make sure that family forest landowners qualify for carbon 
offsets, that the work we are doing can be in there. We are now 
trading--we have pilot projects American Forest Foundation has 
set up to help family forest landowners aggregate and trade 
carbon in the voluntary markets. We want to make sure that 
whatever new rules get written coming out of Congress don't 
throw those people under the bus, that they are able to 
continue to trade their carbon and aggregated. Again, most of 
our landowners are small, so a lot of times economies of scale 
aren't there so we still need incentives. We need cost share, 
we need other help to help them get through. I think the bottom 
line for me is that family forest landowners really care deeply 
about their land. We own the land but really it owns us. 
Stewardship is a natural part of that ethic. We don't live long 
enough to see the fruit of our labors.
    Our success, the success of American Forest Foundation is 
built on engaging the hearts and minds and the creativity of 
these folks, and I know that if you recognize and reward these 
landowners for the hard work that they are doing, they will 
give back to you far more than you ever give them. Thank you.
    [The prepared statement of Mr. Bentz follows:]

 Prepared Statement of Clint Bentz, on Behalf Of The Oregon Tree Farm 
          System And American Forest Foundation, Scio, Oregon

    Tanking member Fortenberry, Members of the Subcommittee, thank you 
for the opportunity to appear before you today on behalf of America's 
family forest owners. I'm a family forest owner in Oregon, where my 
siblings and I own 700 acres and manage it as a certified property 
under the American Tree Farm System - a program of the American Forest 
Foundation. ATFS certification means that my forest, like that of the 
91,000 other family forest landowners in the system, is managed in a 
way that ensures the continuation of clean water, wildlife, 
recreational opportunities, and renewable wood products.
    We were honored by the American Forest Foundation as the National 
Outstanding Tree Farmers of the Year in 2002 for our conservation and 
outreach efforts. We were also honored by Oregon's governor, Ted 
Kulongoski, for our conservation efforts on behalf of the Oregon Salmon 
Plan. I just completed my 3-year term as Chairman of the National 
Operating Committee of the American Tree Farm System - the first family 
forest landowner to hold that post in the organization's 65-year 
history. I currently serve as a Trustee and Treasurer of the American 
Forest Foundation.
    As a Certified Public Accountant, I speak, write and work with 
family forest landowners around the nation on the issue of maintaining 
family ownership of farm and forestland across the generations. I'm 
also a member of the Oregon Small Woodland Owners Association, which 
represents over 3,000 family forest owners in Oregon. I'm here today on 
behalf of the American Forest Foundation and the 91,000 family owners 
in the American Tree Farm System.

Why Forests Matter
    In Oregon, families own 4.7 million acres, or around 15 percent of 
the forested landscape. Nationally, 56 percent of the 751 million acres 
of forestland is privately owned. Of this private forestland, 62 
percent, or 264 million acres is owned directly by individuals and 
families. This family forestland is owned by roughly 10 million 
individuals, with an average land holding of less than 100 acres. The 
forest industry in Oregon is the largest in the nation, accounting for 
18 percent of total U.S. softwood lumber production. Our soils and wet 
climate have made Oregon the "Persian Gulf" of timber in the U.S. 
Voluntary efforts by private forest landowners in Oregon over the last 
10 years under the Oregon Salmon Plan have restored over 3,700 miles of 
stream banks and have made 3,100 miles of stream accessible to fish by 
improving culverts and stream crossings.
    Securing the future of the nation's family-owned forests is a 
priority we should all be concerned with, whether we own forests 
ourselves, work in the forestry sector, or simply live in an urban 
environment. Family forests that are sustainably managed are critical 
to our daily lives.
    Across the nation, these family forests supply the bulk of the wood 
for wood products, clean water and air, wildlife habitat, and 
recreational opportunities. Ninety percent of our nation's endangered 
species rely on family-owned forests for some part of their critical 
habitat. If these lands aren't managed sustainably and families are not 
able to hold onto their lands, we will lose a vast part of our nation's 
natural infrastructure, the jobs and economic value that forests 
provide for rural communities, the hunting, fishing, and other 
recreational opportunities, and the scenic beauty we all enjoy.
    Ensuring Clean Water Supplies. Safe drinking water is pretty much 
taken for granted in the U.S., but in fact more than 50 percent of the 
freshwater flow in the lower 48 states depends on forested watersheds 
for purification. Forests protect water quality by stabilizing soils, 
slowing runoff, preventing erosion and floods, and filtering 
pollutants. The US Forest Service estimates that 180 million Americans 
depend on forests for their drinking water.
    A Green Building Material. Wood itself is increasingly recognized 
as one of the best "green" building materials for many reasons-it is 
renewable, forest products store carbon, and it takes far less energy 
to provide than other building materials like steel and concrete.
    Mitigating Climate Change. Since trees absorb carbon, our nation's 
forests are effectively reducing 10 percent of all harmful carbon 
dioxide pollution in the U.S. every year. Without forests, we would be 
sliding even closer and faster into climate change.
    The US EPA predicts, with the right incentives to encourage good 
forest management practices (planting trees, replanting cut trees or 
trees damaged by disasters, lengthening cut rotations, and avoiding 
deforestation), forests could actually do much more to combat climate 
change-capturing and storing up to 20 percent of all U.S. carbon 
emissions.
    This is important-we have 20 percent of the solution to our 
nation's climate challenges right here in our back yard today-in the 
nation's forests. This is a climate mitigation tool that we can put to 
work immediately.
    Providing Renewable Energy. Forests can also supply significant 
amounts of renewable energy, for both fuels and electricity. As we 
strive to reduce the nation's reliance on foreign sources of oil and 
fossil fuels, we should turn to the nation's forests, where we have 50 
percent more biomass today than we did in 1950. If these lands are 
managed sustainably, we can meet our wood fiber and our renewable 
energy needs.
    The thing I love about being a Tree Farmer is that I don't live 
long enough to see the fruit of my own labors. Everything I do on our 
Tree Farm is for the benefit of generations yet to come. Anything I do 
on our land that generates income is due to something that the previous 
generations created. We care about these lands and our goal is to leave 
them to the next generation better than we found them.
    My father purchased our property in 1964 to provide summer pasture 
for our cows. At the time it was a "cut-over stump ranch" that had been 
significantly degraded by the prior owners. In the 1980's we began to 
manage for timber, and in one generation a forest that had been gone 
for over 50 years began to re-emerge. When he passed away seven years 
ago, the task of management fell to me. I am working hard to ensure 
that my children acquire the passion and vision to continue the work of 
restoration Dad and I started on this property 30 years ago and see it 
through to completion.
    As a professional, I have worked with several families who have 
owned their forestland for 6 to 10 generations. Imagine the sense of 
heritage and pride these families have in their lands. They are true 
stewards and while they own the land, in many ways the land owns them. 
With the many challenges in family life today, these properties can 
become a unifying force keeping families working together for a common 
purpose. They can also be a source of division and frustration if the 
families do not work to keep this sense of heritage alive.Clearly, 
there is a lot at stake with this essential aspect of our nation's 
natural infrastructure. Unfortunately, the news isn't all good. These 
family forests are at grave risk for a number of reasons. When I get 
family forest owners together to talk about why we are so passionate 
about out lands in the face of the risks of fire, insects & disease, a 
rapidly changing regulatory environment, declining markets, the estate 
tax and climate change, the only answer we can come up with is Brain 
Damage! We love these lands. The dirt gets under your skin and you 
become a part of it.

Development Pressures
    Family forest owners are faced with tremendous development 
pressures, as urban areas grow, and the cost of owning their land 
rises. The US Forest Service predicts that by the year 2030, roughly 
44.2 million acres of forests will experience substantial increases in 
housing density. When forests are converted to other uses, the US 
Forest Service reports that these negative impacts are common:
      Decreases in native fish and wildlife and their habitats

      Changes in forest health

      Reduced opportunities for outdoor recreation

      Poorer water quality

      Greater loss of life and property to wildfire

      Decreases in production of timber and other forest 
products.

    While development pressures have certainly slowed due to the 
economic slump, we are sure to see it pick back up. Annually, we lose 
about 1.5 million acres, an area about the size of the state of 
Delaware. What does this mean? Well, the slide? We lose the ecological 
services like water and air filters and these lands become much harder 
and more costly to manage for economic and ecological purposes.

Climate Change and Forest Health
    Scientists around the globe predict that as our climate changes, 
we'll see drastic changes to our forested ecosystems. Many predicted 
changes will negatively impact America's forests-increased catastrophic 
wildfires and insect and disease outbreaks, shifts in forest species 
compositions, and major drought.We are already seeing the affects of 
the changing climate today. Take, for example the massive mountain pine 
beetle outbreak in the Rocky Mountain region, where millions of acres 
of forests are dying from the outbreak. Scientists believe the severity 
of this outbreak is due to a number of factors, one of which is the 
fact that earlier warming in spring and a longer growing season have 
allowed the beetles to increase their rate of reproduction to a level 
we did not think was possible. Earlier spring warming is already 
causing alarm in southern Vermont where folks have seen the harvest 
time for maple syrup consistently starting earlier and earlier until it 
is now a whole month earlier.
    We also have a growing collection of invasive forest pests and 
pathogens that threaten the nations forests, whether it's the emerald 
ash borer in the Lake States, Sudden Oak Death in my neighborhood, 
Asian longhorned beetle in the Northeast, or the European wood wasp in 
New York, or cogongrass in the south, it seems that every forested 
region is facing more threats from pests that arrive from overseas due 
to our increasingly global economy.

Declining Traditional Markets
    One risk to our family forests is the changing economics of 
forestry. In the West, most of our lumber goes into the housing market. 
The decline of new housing starts from 2.1 million to fewer than 
500,000 in two years has decimated the forest products industry and 
sent timber prices to historic lows. Contributing to this problem is 
the fact that we are importing logs and lumber from countries whose 
environmental regulations are not as strict as our own.In the South and 
East, we see paper production moving offshore for a variety of reasons 
with a resulting loss of pulpwood markets. Markets for wood products of 
all kinds are declining, and without cash flow to the landowners, there 
can be no conservation of the land. While the economic downturn is 
magnifying this, we have seen dramatic declines in market opportunities 
for traditional wood products from family forests for more than a 
decade. This is due in large part to the global economy and rising 
competition from places like South America and Asia. We are quickly 
losing our ability to compete with other countries, as manufacturing 
and environmental costs rise here in the U.S. and the regulatory 
climate for forest owners continues to grow more burdensome.
    Forest owners, who previously may have done some cuts to generate 
revenue each year, have had to hold off the last couple of years 
because of the weak market. One of our Tree Farmers in Louisiana, Judd 
Brooke, was only able to get about ten cents on the dollar when 
clearing down trees from Hurricane Katrina, compared to the pre-Katrina 
prices. In Oregon, log prices are currently at or below the cost to 
harvest and transport the logs to the mill. I didn't harvest any timber 
last year and won't harvest any this year either.
    As a result, many saw mills have been closing down, making it more 
and more expensive (especially with higher gas prices) to ship timber 
to farther-away saw mills. Loggers and truckers are going out of 
business and young people are choosing other careers. Together, these 
types of market trends have put tremendous pressure on rural 
communities that have long been dependent on timber production. This is 
happening at the same time that we are importing 35 percent of our 
lumber from other countries.

Aging Population of Forest Owners
    It's of course a fact that the U.S. population is aging. However, 
this issue is much more pronounced in the population of family forest 
owners where most family forest owners are above the age of 55. 
Generational change is a huge issue for family forestlands. With nearly 
20 percent of the acres are owned by individuals over 75 years of age, 
and half owned by someone of retirement age, we expect over 40 million 
acres of family forests to change hands in the next five years. In many 
cases, these families have not begun engaging the next generation to 
prepare them for the handing over of the baton. For certain, the 
average size of these holdings will decrease as this land is further 
fragmented, and this is likely to have impacts on how these lands are 
viewed and managed by the new owners. Eighty percent of family forest 
owners list as a top priority the passing of their lands to the next 
generation. Surprisingly, less than a third of the current generations 
of landowners inherited their land from the previous generation. Almost 
80 percent of forest landowners have purchased at least some of the 
lands they manage.
    Raising timber is a multi-generation project. In Western Oregon, it 
takes 40-80 years to raise a tree from seedling to harvest. In Eastern 
Oregon and the Inland West, it takes on average 80-120 years to raise a 
tree to maturity. Hardwoods in the Midwest and East can take up to 150 
years to produce high quality hardwood lumber. That is 3 to 6 
generations of owners for one harvest cycle. If families fail to 
prepare for generational change, this is a point where we see a lot of 
forests shift into non-forest uses, become fragmented, or developed, 
never to return to a working forest.
    Another impact is the effect of the estate tax on family 
forestlands. When the land gets valued and taxed at fair value 3 to 6 
times between planting and harvest, it often results in the premature 
harvest of the timber, followed by the sale of the land. For many 
families, after they pay estate bills, there is not enough of the 
property left to make it worthwhile to keep it.
    So, now that I've laid all this depressing information on you, we 
have some policy solutions to address these threats, capture the 
tremendous value of family forests for climate mitigation, renewable 
energy and other ecosystem services like clean water, and help keep 
this essential element of our rural economies intact. This is how we 
will truly secure the future of the nation's forests.

Expanded Market Opportunities
    While the primary motivation for ownership among most family forest 
owners is not timber production (it is a top 10 reason, but not a top 
five reason for owning the land), financial incentives are an essential 
element for keeping them on the land-no cash flow, no conservation.
    Maintaining and improving traditional wood products markets. These 
markets have and will continue to be a strong source of income for 
family forest owners, if the appropriate policies and incentives are 
put in place. This includes ensuring that wood grown on family forest 
lands is considered "renewable" in new and emerging green building 
markets. Unfortunately, some green building standards, including the 
Standards used by our very own General Services Administration, exclude 
the use of wood from most family forests, including the 30 million 
acres certified under the American Tree Farm System.
    Emerging renewable energy markets. This Committee has been at the 
forefront of the debate over emerging energy markets for biomass. This 
new market has the potential to offset revenue streams lost by the 
declining timber market. Unfortunately, family forest owners are 
essentially left out of the renewable fuels market due to an unduly 
limited definition in the Renewable Fuels Standard. Emerging carbon 
markets. Carbon markets represent another minor, yet important, 
emerging income stream for family forest owners. However, it is 
critical that the policies are structured to reflect the needs of 
family owners; otherwise, the vast climate mitigation potential in 
these forests will go untapped. Right now, there are still many 
questions and uncertainties present in the House climate bill, HR 2454, 
that could make or break this market opportunity for family forest 
owners. The American Tree Farm System already has pilot programs in 
place where family forest landowners are aggregating and selling their 
carbon on the existing voluntary markets. We want to see these efforts 
encouraged and expanded under whatever regulatory structure is adopted 
by Congress.
    Emerging Ecosystem Service Markets. In addition to carbon markets, 
markets for other ecosystem services, like clean water and endangered 
species habitat are emerging. The 2008 Farm Bill took a step in the 
right direction, requiring the development of standards and guidelines 
for ecosystem services and the establishment of the USDA Office of 
Ecosystem Services and Markets. We must have policies in place that 
encourage the development of these markets, to secure the continuation 
of these services in the future.

Investments in Conservation
    In addition to market opportunities, we also need incentives for 
family forest owners to continue managing their land sustainably and 
stay on the land. These incentives help add to revenue streams from 
markets and are by far preferable to a regulatory approach. Again, no 
cash flow-no conservation.Tax Incentives. Tax policy can serve as 
either a major incentive or a major deterrent to family forest owners 
who wish to keep their land in the family and manage their forests 
sustainably. This is especially true as development pressures and land 
values escalate, often putting forest land owners in a situation where 
they may feel forced to sell in order to pay property, estate or other 
taxes. Forest land is a unique, risky, investment, often requiring 
significant upfront expenditures that can take 30-150 years to yield 
favorable returns. In many cases, there is a 10-fold or more difference 
in the value per acre as forest land or development land.
    Tax incentives can take the form of lower income taxes for forest 
revenue, an estate tax system that encourages rather than discourages 
intergenerational ownership of family forestlands, tax credits or 
deductions for conservation activities such as conservation easements 
or endangered species conservation. Congress will have an opportunity 
this year to tackle several of these issues, including the estate tax 
and tax credits for conservation easements.
    Conservation Incentives. Tax policy is just one way to create 
incentives for forest conservation and sustainable management. Other 
incentives, like those provided in the 2008 Farm Bill through programs 
like the Environmental Quality Incentives Program, also help spur 
sustainable forest management. We also need better safe harbor 
agreements so that when a landowner creates habitat for an endangered 
species, they are not punished by losing the ability to continue the 
active management of their lands.
    This year, with climate legislation moving, Congress has a unique 
opportunity to create incentives for climate mitigation activities on 
family forests. While carbon offset markets are one way to do this, 
they won't work for every forest owner. Pilot projects underway at the 
American Forest Foundation indicate that while family forest landowners 
can effectively aggregate their carbon for sale in carbon offset 
markets, the economic feasibility drops precipitously for forests at or 
below 80-100 acres.
    Because the vast majority of forest owners own less than 100 acres, 
we need other ways to capture the carbon benefits of these forests-if 
we are going to double the sequestration in forests from 10 to 20 
percent. Incentives will do the job, provided the legislation includes 
them. Unfortunately, the current Waxman-Markey climate bill only 
includes incentives for international forestry projects, and leaves out 
America's forest owners and farmers. Congress can rectify this and 
provide an incentive for carbon sequestration that can start happening 
immediately.
    Research Investments. Today, more than ever, we need cutting edge 
research to face the challenges before us. Whether it's figuring out 
how forests can help solve climate problems or finding a way to control 
increasing number of invasive forest pests, there is no shortage of 
questions that need answers in order for our forests to continue to 
thrive. Unfortunately, forest research funding has drastically declined 
over the past decade, due in large part to a decreasing investment from 
the private sector. Investments in research at our federal agencies and 
our universities are essential to getting the right information in the 
hands of those making decisions about forests.
    Federal Forest Policy. The problems that plague our national 
forests have made them bad neighbors to the family forestland owners 
that live on their borders. In the Pacific Northwest Region over the 
last 10 years, the average size of a wildfire on the national forest 
was 133 acres. On state and private lands the average size was 24 
acres. In 2007, more than 500,000 acres of national forests in Oregon 
were damaged as a result of bark beetles and other insects and disease 
problems caused largely by stress from drought and historically 
overstocked stands.
    Wildfire and insect and disease issues do not honor property lines, 
and the federal forests need to be funded and actively managed to 
restore the health of this vital ecosystem and national resource. In 
2007 in Oregon alone, less than 7 percent of the annual growth in the 
federal forests was harvested. Nearly 20 percent of the annual growth 
was lost to fire, insects and disease, and the remaining 73 percent of 
the growth is still there, increasing the stress on these already 
overstocked stands. This is a recipe for disaster.
    By comparison, on private forest lands in Oregon in 2007, 75 
percent of the annual growth was harvested, 4 percent was lost to fire, 
insects and disease, and 21 percent of the growth is still there in the 
woods.
    The US Forest Service concluded in 2007 that forest health could be 
restored by thinning these stands, burning after thinning, harvesting 
insect-infested trees, and selected harvesting which restores the 
forest to healthy, historical stocking levels. Private landowners in 
these same areas have adopted these practices and have seen great 
improvements in the health of their forests. This was vividly brought 
home to Oregonians in the recent B & B fire where national forestlands 
were devastated and the adjoining private forests escaped relatively 
unharmed.
    Education Investments. All the market opportunities, incentives or 
other policies we enact will have little effect if the next generation 
of landowners, conservationists, and general citizens do not have the 
awareness and skills to tackle our environmental challenges. 
Investments in education about the environment, science, math, and 
other areas, that help prepare our children to meet these challenges in 
essential. There are several opportunities through USDA, including 
through the US Forest Service's conservation education programs, to 
increase these investments. This should also be a priority as we seek 
to secure the future of the nation's forests.
    This Congress and decisions made over the next several years will 
have a dramatic impact on the future of the nation's family forests. 
Right now, the future is looking good, family forest owners have 
tremendous potential to help solve some of our toughest environmental 
challenges and Congress is poised to help see this happen. We must make 
the right decisions about our nation's forests, ensure adequate market 
opportunities and provide incentives that will help us address our 
pressing challenges and secure the future of this precious natural 
resource.
    I believe that families have the ability to hold and manage land 
sustainably over the generations. However, if we don't help them 
succeed, we will lose a vast part of our nation's natural 
infrastructure, the jobs and economic value that forests provide for 
rural communities, the hunting, fishing, and other recreational 
opportunities, and the scenic beauty we all enjoy.Forests have long 
provided traditional benefits like wood, wildlife, and recreation. Now, 
we are also depending on forests to provide ecosystem services like 
clean drinking water, carbon sequestration, and biomass for clean fuel. 
Family forests will play an essential role to help our nation with its 
most pressing environmental issues-climate change and the demand for 
renewable energy. But family forest owners need supportive policies and 
market incentives if their forests are going to do all they can to 
survive as healthy forests, providing all the "free" benefits the 
public now enjoys.
    Thank you again for the opportunity to speak to you. I'm happy to 
answer any questions you may have.

    Mr. Baca. Thank you very much. Mr. McPeek.

 STATEMENT OF BRIAN McPEEK, NORTH AMERICA CONSERVATION REGION 
       DIRECTOR, THE NATURE CONSERVANCY, DENVER, COLORADO

    Mr. McPeek. Thank you, Mr. Chairman, and Members of the 
Committee. I appreciate the invitation to testify today. First, 
Mr. Chairman, I want to thank you and the Subcommittee for your 
great leadership and support on farm bill conservation 
programs. Thank you for that. As you know, The Nature 
Conservancy is a leading conservation organization working in 
all 50 states and 30 countries around the world. Our mission is 
to preserve the plants, animals, and natural communities that 
represent the diversity of life on earth by protecting the 
lands and waters they need to survive. Forests in the United 
States provide extensive habitat for many of the plants and 
animals that the Nature Conservancy is committed to protect and 
made profound contributions to the ecological health of our 
lands and waters.
    From our first acquisition of a 60-acre hemlock gorge in 
New York State in 1955 to the 310,000-acre purchase of Plum 
Creek forest lands in western Montana last year, the 
Conservancy has more than 50 years of experience in developing 
strategies to conserve forest habitats. Forests in the United 
States and around the world have many values from improving air 
quality to providing clean drinking water to storing carbon and 
sheltering an incredible diversity of plants and animals. 
Forests have an immensely positive impact on the American 
economy and the quality and character of the American way of 
life.
    Despite their economic and environmental importance, 
forests in the United States are threatened on many fronts and 
are showing severe signs of stress. Another 44 million acres of 
forest, as someone cited earlier, are predicted to be lost in 
development by 2030. Wildfires cost us $2 billion a year to 
extinguish at the same time that overgrown brush and trees are 
choking lands that are adapted to periodic fire. An astounding 
array of non-native insects and diseases are found across the 
continent. These pests can destroy all or nearly all oaks, 
maples, hemlocks, birches, willows, and bay in the U.S. climate 
change; specifically, increases in temperature and new patterns 
of precipitation is beginning to affect our forests in profound 
ways. The length of the fire season, expanding populations of 
some native insects like the bark beetle in Colorado are now 
tied to climate change with dramatic and noticeable impacts.
    The country's movement towards renewable energy creates 
huge opportunities for forests as an alternative energy source. 
Without sideboards to encourage sustainability, we run the risk 
that the energy boon could trigger losses of native forests and 
biodiversity. Finally, budget cuts to Federal and state 
forestry programs have trimmed back technical assistance to 
private landowners at a time when shifting markets and the 
threats I described make information and technical assistance 
all the more important.
    A wide and balanced range of strategies are needed to 
address these threats. The Nature Conservancy believes that 
successful forest management must incorporate five overall 
management strategies. First, we need forest planning and 
management at the landscape level wherever possible. Second, we 
need to focus adequate resources to conserve private forests. 
Third, we need to manage forests for their full range of values 
and benefits. Fourth, we need to make restoration a key 
component of forest policy. And, finally, we need forest 
management to take climate change into account. In our written 
testimony, we have provided a number of specific 
recommendations for each strategy, and I will end my comments 
by focusing on three specific projects that we are involved in 
that we think are good examples of the programs you might 
support.
    The 25 million acre flood plain of the Mississippi River 
north of New Orleans was once one of the great bottom wetland 
hardwood forests on earth. Eighty percent of the delta, 
however, has been converted to farmland. While most of this 
land should remain in agriculture, there are at least a million 
acres of very wet and flood prone soils that should be restored 
to bottom land hardwoods. This restoration would reduce the 
impacts of flooding trapped nutrients, provide wildlife 
habitat, and store carbon. The Conservancy's experience in 
forest and hydrological restoration in the delta suggests that 
the wetland reserve program in tandem with a new carbon reserve 
program, a carbon offset program, and a land and water 
conservation fund can restore bottom hardwoods over hundreds of 
thousands of acres on both public and private land.
    In the Jemez Mountains in New Mexico, they are a candidate 
area for the newly created Forest Landscape Restoration Act. 
This forest supplies water to several towns and cities, as well 
as recreation, grazing, and modest amounts of timber, burned 
severely in the 2000 Sierra Grande fire. The green forest that 
remains is severely overgrown. Partners have been working 
together to plan and manage the various jurisdictions in this 
landscape for over a decade. While their approach has received 
some results were this landscape to receive sustained funding 
under the Forest Landscape Restoration Act the scale of 
treatments could increase dramatically. Finally, the Garcia 
Forest, 24,000-acre Garcia River Forest in Mendocino County, 
California, is among the first and largest forest to be 
recognized by the California Climate Action Registry as a 
verified source of carbon credits.
    The Nature Conservancy owns the conservation easement on 
the property, ensuring protection that makes verification 
possible. The giant redwoods and Douglas fir in the Garcia 
River Forest can store more than 77,000 tons of carbon 
emissions annually, the equivalent of taking more than 14,000 
cars off the road every year. The Garcia River Forest is poised 
to offer the most reliable and valid carbon credits in the 
country to private companies and public organizations seeking 
to offset the greenhouse gas emissions while allowing for 
sustainable harvest activities in the process sustaining water 
quality, habitat for salmon, forest and wood product jobs in 
the local economy. As we have outlined in the testimony, 
forests are critical to the American way of life and are 
necessary to sustain our water supplies and products we use 
daily. The Nature Conservancy looks forward to working with 
this Committee as opportunities emerge to enact forward looking 
legislation that protects our nation's forests and the benefits 
they provide to people. Thanks again.
    [The prepared statement of Mr. McPeek follows:]

 Prepared Statement of Brian McPeek, North America Conservation Region 
           Director, The Nature Conservancy, Denver, Colorado

    Mr. Chairman and Members of the Committee:
    Thank you for your invitation to testify today on the future of our 
nation's forests. My name is Brian McPeek, and I am Director of the 
North American Conservation Region of The Nature Conservancy.

Introduction
    The Nature Conservancy is a leading conservation organization -- 
working in all 50 states and more than 30 countries around the world -- 
with the mission of preserving the plants, animals and natural 
communities that represent the diversity of life on Earth by protecting 
the lands and waters they need to survive.
    Forests in the United States provide extensive habitat for many of 
the plants and animals The Nature Conservancy is committed to protect, 
and forests make profound contributions to the ecological health of 
freshwater and estuarine ecosystems. From our first acquisition of a 
60-acre hemlock gorge in New York State in 1955 to the 310,000-acre 
purchase of Plum Creek forest lands in western Montana last year, the 
Conservancy has more than 50 years of experience in developing 
strategies to conserve forest habitats.
    While acquisition of interests in land, whether outright or by 
conservation easements, remains an important conservation strategy for 
us, to address the scope and complexity of today's conservation 
challenges, we also use other conservation tools: policy advocacy for 
the management of public and private lands, conservation incentives for 
private landowners, implementation of payments for ecosystem services, 
reforestation and restoration projects, learning networks and technical 
assistance. In pursuing these strategies we partner with many 
organizations and interests -- from rural communities to large 
corporations, from municipal governments to federal agencies -- to 
achieve lasting forest conservation.

The Essential Values of Forests
    Forests in the United States and around the world have many values 
-- they improve air quality, provide clean drinking water, regulate 
stream flows, maintain water temperatures to improve fish habitat, 
filter out pollutants, mitigate flooding and erosion, moderate our 
climate, store carbon, supply wood fiber and wood products, and are a 
renewable energy source. They are habitat for an incredible diversity 
of plants and animals, and forests are the setting for outdoor 
recreation and tourism. Forests have an immensely positive impact on 
the American economy and on the quality and character of the American 
way of life.

Forests Are Threatened on Many Fronts
    Despite their economic and environmental importance, forests in the 
United States are threatened on many fronts and are showing signs of 
severe stress:

Land Use Conversion and Fragmentation.
    Relentless conversion of forests to other uses, especially 
        urbanization, is a primary threat with as much as 44 million 
        acres of forest land predicted by the U.S. Forest Service to be 
        lost to development by 2030. In some places, including western 
        lands adjacent to national forests and land along the 
        Appalachians, second home development is the leading cause of 
        fragmentation, while in other places urbanization, along with 
        road and energy development or off-road vehicle use are the 
        primary contributors.

Climate Change
    Climate change scientists are continually releasing new information 
        about the impacts of climate change on U.S. forests. Recent 
        studies have documented the effect of warmer temperatures and 
        variability in precipitation on the length and intensity of 
        fire seasons, the life cycle of native bark beetles, and on the 
        viability of a wide range of species.

Altered Fire Regimes
    The typical interval between natural fires is every 1-35 years for 
        about 2/3 of the continental United States. More than 80 
        million acres of these lands are now prone to catastrophic 
        wildfires because fire suppression and other management 
        activities have increased tree density and fuel loads. Fire 
        risks are exacerbated by climate change impacts, such as longer 
        summer weather, higher summer temperatures, early peak snowmelt 
        and faster runoff. Under the drought conditions now present in 
        some places, the woods have become tinderboxes where wildfires 
        are likely to do long-term ecosystem damage.

Invasive Pests and Pathogens
    An astounding array of non-native insects and diseases threaten 
        forests across the continent, most acutely in the East, the 
        Pacific Coast, the South, the Rockies and the upper mid-west. 
        These pests could destroy all or nearly all oaks, maples, 
        hemlock, birch, willow and redbay adding to the existing 
        extirpation of the American chestnut and the American elm. 
        Estimates of economic damage for each of several pests run to 
        the tens or even hundreds of billions of dollars, but policies 
        to prevent these pests are out of date and inadequately funded. 
        Climate change appears to be having an impact on native insect 
        species causing them to spread to new areas and interact in new 
        ways with their host trees, producing devastating impacts such 
        as the 15 million acres currently impacted in the Rocky 
        Mountains by the native mountain pine beetle.

Energy Development and Woody Biomass Use
    Forests are a renewable resource and can be used as an alternative 
        energy source. However, without sideboards to encourage 
        sustainable use, such activities could lead to huge losses of 
        native forests and biodiversity. When wood-fueled energy 
        facilities are out of balance with wood supplies overcutting of 
        native forests or their conversion to non-native species could 
        result.

Reductions in Funding for State Forestry Programs and Technical 
        Assistance
    In recent years, budgets for many state forestry programs have been 
        drastically reduced as have some Federal programs providing 
        technical assistance to private land owners. At a time of 
        shifting markets and increasing threats, the lack of management 
        information and technical assistance presents a distinct threat 
        to privately owned forests.

The Nature Conservancy Recommends Five Overall Strategies to Address 
        These Threats
    A wide and balanced range of strategies are needed to address these 
threats. The Nature Conservancy believes that successful forest 
conservation must incorporate five overall management strategies:
    1. Wherever possible forest planning and management should take 
        place at the landscape scale.
    Forest managers have experience working at small scales, whether at 
        the stand level on a large ownership or across small properties 
        in a fragmented landscape. Our experience tells us that we 
        cannot address threats like altered fire regimes or land use 
        conversion unless we are working at a larger, landscape scale. 
        Large blocks of contiguous forest are increasingly more and 
        more important where they exist in the United States, providing 
        critical habitat for an array of endangered and sensitive 
        species that are often confined to forest remnants and rare 
        forest habitats.
    2. Focus adequate resources to conserve private forests
    Threats to the nation's forests cannot be addressed only by 
        attention to the management of public lands. In the 13 Southern 
        states, for example, more than 85% of the forest land is 
        privately owned. While over time a small proportion of these 
        lands may shift to public ownership, the great majority will 
        not. Private land conservation incentives, including robust 
        funding for the Forest Legacy Program, will be essential to 
        keeping forests in forests.
    3. Manage forests for their full range of values and benefits
    Traditionally forests have been managed for only a few purposes, 
        such as wood production and recreation. We now realize that 
        forests provide other very important values such as protection 
        of water resources, carbon storage, protection from natural 
        disasters, control of soil erosion and maintenance of stream 
        water temperatures. Market strategies and valuation of the 
        benefits forests are essential if landowners are to have an 
        economic rationale for long-term forest stewardship. Similarly, 
        public land management must achieve a more encompassing balance 
        of uses.
    4. Make restoration a key component of forest policy
    Many American forests have been lost or degraded over time, 
        compromising their values, and making restoration critically 
        important. While forest management is increasingly targeted at 
        restoration of habitat elements that were once common in 
        forests, it is insufficient to address the scale of the 
        problem. Across the nation many restoration efforts are 
        underway: old timber roads are being decommissioned, culverts 
        removed, fish structures installed, and overgrown brush and 
        trees thinned out by mechanical means or with controlled fire 
        that replicate natural conditions, all demonstrating the 
        efficacy of restoration to forest conservation. In addition, 
        many areas where forests have been removed or significantly 
        altered can, and where appropriate, should be restored back to 
        more natural conditions.
    5. Forest management must take climate change into account
    The impacts of a warming climate are already being seen in our 
        forests. Long range forest planning should include evaluation 
        of likely climate impacts and adopting measures to help forests 
        become more resilient and more able to adapt to change, 
        whatever the rate and scope of impacts turns out to be.

A Number of Policy Barriers Impede Management that Carries Out These 
        Overall Strategies
    On private lands, the current set of funding and incentive programs 
function effectively at smaller scales, but are difficult to coordinate 
across agencies and jurisdictions to achieve landscape scale outcomes. 
State land policies vary widely, but to the extent that they rely on 
federal funding and programs, they are impeded by similar policy 
barriers.
    Federal land management is inhibited by policies that require 
longstanding forest management practices be continued into the future, 
even though public needs and expectations have changed. Legislation 
that was ground-breaking and innovative in its time - for example the 
Multiple Use/Sustained Yield Act of 1960, National Forest Management 
Act of 1976 and Federal Land Policy and Management Act of 1976 - now 
creates barriers to the development of markets for water and carbon, 
and management of environmental services from forests that are critical 
to sustain people and nature.

Specific Actions Are Needed to Conserve America's Forests on Both 
        Private and Public Lands
    In conformance with the overall strategies that I have outlined in 
this testimony, The Nature Conservancy makes the following specific 
recommendations for conservation of private and public forest lands:
    On Private lands:
    Increase Funding for and Expand Farm Bill Forest Programs
    The 2008 Farm Bill included important steps forward for forest 
        conservation. We are grateful to the Committee for this 
        progress. Given our growing understanding of forest threats, 
        however, the forestry incentives included in the 2008 Bill 
        should be better funded and greatly expanded, particularly to 
        address the water resource and carbon values of forests. While 
        there is much discussion of ecosystem service markets, these 
        have been slow to develop. In the meantime, the reserve and 
        cost share programs in the Farm Bill can become, in effect, 
        surrogates for true markets by paying forest land owners for 
        forest practices that provide additional, significant and 
        quantifiable values to society. Toward that end:

      Increase funding for the reserve and cost share programs 
included in the 2008 Farm Bill (Wetlands Reserve Program, Conservation 
Reserve Program, Environmental Quality Incentive Program, and the 
Wildlife Habitat Incentive Program).

      The Wetlands Reserve Program should be expanded and 
funded to explicitly address the conservation of forested headwater 
streams

      A new reserve program is needed to reward landowners for 
forest practices that increase long term carbon storage on their lands. 
Such a program would be different from a framework for tradable 
emissions offsets and designed to be more suited to the needs of small 
and medium sized landowners.

      Funding is needed to complete the State Forest Resource 
Assessments required by the 2008 Farm Bill as a guide to the strategic 
and landscape scale application of Farm Bill incentives. In the past, 
incentive programs have been so distributed across states that they 
have not achieved a critical mass of protection and management in 
watersheds or landscapes. State Forest Management Plans can be used to 
better focus these programs.

      Funding should be restored to the State and Private 
Forestry Program of the Forest Service for state forestry programs to 
again provide technical assistance to private landowners.

    Extend and Expand Tax Incentives for Forest Conservation
    Tax policies can be significant incentives and disincentives for 
        forest land stewardship. The Conservancy recommends that:

      Tax deductions for conservation easements be made 
permanent

      Legislation should increase the tax limitation on the 
amount excluded from a gross estate for lands covered by a conservation 
easement

    Define Forests Offsets in the Climate Bill to Meet International 
        Standards
    A framework for defining tradable forest carbon offsets should be 
        adopted as part of climate change legislation that is robust 
        and credible, including clear principles on additionality, 
        permanence, leakage, measurement, verification, and 
        environmental criteria.
    In addition, while strongly supporting market-based approaches, the 
        Conservancy believes that other complementary policies are 
        needed to ensure the full climate mitigation potential of the 
        forest sector.
    On Public Lands
    Fund the Forest Landscape Restoration Act and Address Wildfire 
        Budget Issues
    With passage of the Forest Landscape Restoration Act (FLRA) as part 
        of the Omnibus Public Lands Bill of 2009, a new tool is 
        available for accomplishing large scale forest thinning and 
        restoration over an extended time period. To meet its promise, 
        the FLRA should be funded at $40 million annually, as provided 
        in its authorization. This should be a priority for Congress, 
        along with restructuring the appropriation process for the U.S. 
        Forest Service to provide funding for fighting wildfires that 
        does not compromise other spending by the Service.
    Revise Forest Service Organic Statutes to Reflect Additional Forest 
        Values
    Revise the Multiple Use Sustained Yield Act of 1960 (MUSYA), to 
        allow for "ecosystem services and compatible recreation" that 
        meets the needs of the American people in the 21st century. 
        Reshape the Organic Act to provide a foundation for the 
        definition of ecosystem services and values in authorizing 
        legislation that modifies the multiple use mandate, i.e., 
        managing each acre for all uses, and provides a framework to 
        ensure that the ecological health of federal lands is restored 
        and maintained for future generations. Revise existing targets 
        for products and services to include targets for ecosystem 
        services, and realign the Forest Service budget to support the 
        transition from multiple-use to restoration and ecosystem 
        services. Incorporate mechanisms into Forest Service policies 
        that encourage payment for ecosystem services that directly 
        benefit communities, and use these funds to maintain and expand 
        ecosystem benefits.
    For All Lands
    Ensure Rules Governing Live Plant Imports Move Forward Swiftly
    USDA's Animal and Plant Health Inspection Service (APHIS) needs to 
        move swiftly to implement programs to prevent insects and 
        diseases from entering our country from overseas, and to 
        improve response to those pests that do arrive. Because 
        American trees did not evolve in concert with these pests, they 
        often have little resistance, and devastation can result.

    The most critical need is to move forward revision of rules 
        governing live plant imports. These rules have become outdated 
        over several decades as the number of plants imported each year 
        has risen from a few thousand to more than 2 billion plants. 
        APHIS announced its intent to revise them in 2004, but action 
        has been too slow due to a combination of insufficient 
        resources and insufficient leadership attention. For example, 
        putting forward the first phase of a planned three phase rule-
        making has taken more than four years. The first phase still 
        has not been published in the federal register, although it has 
        been substantially complete for a year. This Committee could 
        help highlight the problem and encourage faster action on the 
        remaining phases of the rule revision via oversight hearings.

    Ensure that Renewable Energy Standards Protect Forests from Over-
        cutting and Conversion

    Renewable Energy Standards (RES) should not encourage the large 
        scale destruction of forest resources. While forests can be 
        used to provide renewable biomass for the production of energy 
        (including biofuels), recent studies have shown that if 
        facilities for the generation of energy from woody biomass are 
        not scaled to available wood supplies, and these supplies are 
        not harvested in a sustainable manner, forests in those 
        woodsheds are at risk from overcutting to meet the demand and 
        natural forests may be converted to plantations, often of non-
        native species, to meet the demand. The Nature Conservancy 
        believes the RES regulations should be developed to avoid these 
        outcomes.

    Similarly, while wood and other plant materials from National 
        Forests can provide energy and fuels, it is our view that 
        federal lands should not be expressly harvested for this 
        purpose but rather fuel should come as a by-product of forest 
        restoration.

    Provide Funding for the Careful Expansion of Public Forest Lands 
        Including the Conservation of Large-scale Landscapes and 
        Corridors

    The Land and Water Conservation Fund and the Forest Legacy Program 
        have been important in securing additions to federal and state 
        forests and, in the case of the Forest Legacy Program, to 
        buying easements over private forest lands. These programs have 
        been greatly underfunded in relation to the demand. The 
        Conservancy recommends that LWCF be funded at the authorized 
        level of $900 million annually and the Forest Legacy Program 
        increased to at least $150 million annually. We are gratified 
        by the President's FY10 budget request of $90 million for the 
        Forest Legacy Program; however, we are concerned that the 
        budget request for the Forest Service's portion of LWCF has 
        been reduced by more than $20 million from FY09 enacted.

    These existing programs, however, are not sufficient to create the 
        large and connected forested landscapes needed to sustain 
        critical habitat and other forest values in the face of climate 
        change. To accomplish this we are supportive of a new federal 
        matching program designed to catalyze large landscape 
        conservation through planning and capital funding to create 
        landscape connections. In tandem with such a program, we 
        propose that Farm Bill Programs give priority to these same 
        larger landscapes.

    Use a Mitigation Protocol: Avoid, Minimize, and Compensate

    Our country is moving into a period of large scale investment in 
        energy, transportation and other infrastructure. This 
        investment has the potential to fragment and otherwise damage 
        forests. Where wetlands, large blocks of unfragmented forest, 
        or endangered species are involved, or on public lands, 
        infrastructure planning should employ the mitigation protocol 
        (avoid, minimize, compensate) to plan the location and design 
        of infrastructure such that it avoids the most significant 
        forest habitat and, where, impacts cannot be avoided, provides 
        compensatory investments that most effectively offset the 
        impacts. Here, too, State Forest Resource Assessments can be 
        important in identifying areas best avoided as well as areas 
        where forest restoration can be most useful.

    No Net Loss of Natural Forests

    Given the importance, and rapidly diminishing extent, of our native 
        forests, the federal government should consider establishing a 
        national policy goal to maintain and expand the existing 
        ecological benefits of forests. A federal target could be 
        established, to be reached in the near future, e.g. 2020, with 
        the intent that federal forest and other policies be modified, 
        developed and implemented to meet this goal. Attainment of this 
        goal should not preclude periods of time where there may be a 
        decline in stocks (e.g., natural disturbance or restoration of 
        forest health) - the goal would be to drive policies that seek 
        to maintain and/or expand our forests over time.

Several Projects from Our Work in the Field Exemplify What Needs to Be 
        Done
    To illustrate our recommendations I would like to describe three 
projects in which the Conservancy has been involved with a particular 
emphasis on the role of forests in the protection of water resources.
    Mollicy Farms and the Mississippi Delta

    The 25 million acre floodplain of the Mississippi River north of 
        New Orleans was once one of the great bottomland hardwood 
        forests on Earth. 80% of the Delta, however, has now been 
        converted to farmland. While most of this land should remain in 
        agriculture, there are at least a million acres of very wet and 
        flood prone soils that should be restored to bottomland 
        hardwoods for their multiple values, including reducing the 
        impacts of flooding, trapping nutrients, providing wildlife 
        habitat and storing carbon.

    In a prototype of such restoration, a 20,000 acre tract on the 
        Upper Ouachita National Wildlife Refuge has been replanted in 
        bottomland hardwoods by the U.S. Fish and Wildlife Service and 
        through the Economic Stimulus Bill the levees separating the 
        tract from the Ouachita River will be breached to allow the 
        Mollicy tract to flood during times of high water. Ecosystem 
        services such as carbon storage, flood mitigation, nutrient 
        removal and wildlife production from these lands will be 
        monitored over time in an attempt to better quantify ecosystem 
        values. The Forest Service has already made investments in the 
        Delta, and would be an excellent location for piloting 
        coordination of a new carbon reserve initiative with an 
        enhanced Wetland Reserve Program. LWCF and new landscape 
        conservation funds might also be used here to expand the chain 
        of National Wildlife Refuges along the region's rivers to 
        better manage flood waters, reduce the flow of nutrients to the 
        Gulf of Mexico, and provide even more wildlife habitat.

    The Jemez Mountains

    The Jemez Mountains in northern New Mexico are a candidate area for 
        the newly created Forest Landscape Restoration Act. This 
        million acres of forested, mountainous land is truly multi-
        jurisdictional with lands managed by Bandolier National 
        Monument, Valles Caldera National Preserve, Santa Fe National 
        Forest, Bureau of Land Management, Los Alamos National 
        Laboratory, Jemez Pueblo and Santa Clara Pueblo. The forest 
        supplies water to several cities and towns, as well as 
        recreation for locals and New Mexico's urbanites, grazing for 
        local communities and modest amounts of timber products. The 
        forest sustained one of the first large scale wildfires in 
        2000, the Cerro Grande Fire, and across the entire region the 
        mid-elevation forests are severely overgrown and in need of 
        fuels treatment. In addition, the low-elevation pinon juniper 
        woodlands suffered a massive infestation of native pine beetles 
        during the drought period 2002-2005, killing 90% of the pinon 
        pines across the entire landscape.

    Climate change studies by The Nature Conservancy and others have 
        recently identified the Jemez Mountains as having New Mexico's 
        most extreme temperature increases and precipitation decreases 
        during the recent period of global warming. Partners have been 
        working together to plan and manage the various jurisdictions 
        in this landscape for more than a decade. While their piece 
        meal approach has already achieved some results, designation of 
        this landscape to receive sustained funding for treatments 
        under the Forest Landscape Restoration Act would allow 
        restoration at a much larger scale, boost resiliency of the 
        forest to climate change impacts, and sustain critical water 
        supplies for New Mexico's largest urban areas.

    The Garcia River Forest

    The 23,780 acre Garcia River Forest is almost 24,000 acres of 
        forest in Mendocino County, California and is among the first 
        and largest forest to be recognized by the California Climate 
        Action Registry as a verified source of carbon credits. The 
        Conservation Fund owns and manages the property as a 
        sustainable working forest that safeguards wildlife habitat, 
        improves water quality and preserves the traditional economic 
        base of the local community. In partnership, The Nature 
        Conservancy owns the conservation easement on the property, 
        ensuring protection, regardless of ownership, that makes 
        verification possible. The redwoods and Douglas fir in the 
        Garcia River Forest have the capacity to store more than 77,000 
        tons of carbon emissions annually, which is the equivalent of 
        taking more than 14,000 cars off the road every year. By 
        achieving the Registry's high standard of carbon verification, 
        Garcia River Forest is poised to offer the most reliable and 
        valid carbon credits in the country to private companies and 
        public organizations seeking to offset their greenhouse gas 
        emissions, as well as protecting water quality, fish and 
        wildlife habitat particularly for Pacific salmon restoration 
        while also providing forest and wood product jobs in the local 
        economy.

Conclusion
    Thank you for your interest in the future of the nation's forests. 
As we have outlined in this testimony, forests are critical to the 
American way of life and are necessary to sustain our water supplies 
and provide products we use daily. Forests are threatened in numerous 
ways, and we run the risk of losing too much forest land, and of 
unhealthy forests that are killed by fire, insects, or climate stress. 
The Nature Conservancy looks forward to working with this Committee, 
the entire Congress, and the Administration as opportunities emerge to 
enact forward-looking legislation that protects our nation's forests 
and the benefits they provide to people.

    Mr. Baca. Thank you very much for your testimony. What we 
will do at this point what we will do is recess and convene 
after the votes are concluded. And I appreciate the panel's 
staying here until after we are done voting. So at this time we 
will recess and we will reconvene right after votes. Thank you 
very much.
    [Recess.]
    Mr. Baca. We will reconvene the Subcommittee hearing. We 
will start with Dr. Tom Monaghan.

 STATEMENT OF TOM MONAGHAN, ON BEHALF OF THE NATIONAL ALLIANCE 
           OF FOREST OWNERS, STARKVILLE, MISSISSIPPI

    Mr. Monaghan. Mr. Chairman, thank you for this opportunity 
to appear before the Subcommittee. I am here as a private 
forest land owner, forester, scientist, educator, and 
conservationist. In 2002 I retired as extension leader of the 
Department of Forestry at Mississippi State University, and now 
am employed by the Mississippi Forestry Association. We 
represent forest landowners and businesses, and we are a member 
of the National Alliance of Forest Owners, which represents 
owners in 47 states. My testimony will focus primarily on 
private landowners, but as you know forest owners are dependent 
on loggers and manufacturers for markets and vice versa. We are 
all in a fox hole together. 427 million acres of U.S. forest 
land are privately owned by 10 million individuals and firms 
and represent much of the wealth of our country. To sustain 
these diverse forest and their benefits, we have to know more 
about those 10 million owners and their diversity.
    Their objectives vary from income to recreation, from 
secluded home sites to long-term investments. Forest owners are 
people like you and me or they may be farmers, factory workers, 
professionals, housewives, retirees, widows, blue collar and 
white collar. Another private ownership group has changed 
recently. In the past, forest industries owned manufacturing 
facilities in vast forests to supply their mills with wood. Now 
most of their forest land has been sold to new companies like 
real estate investment trust or timber investment management 
organizations which are owned by individual investors. Some of 
you may be owners through your pension fund or life insurance 
company. These firms employ professional foresters and managers 
and focus on long-term sustainability and profitability. In the 
past 100 years, our forest land area has remained relatively 
stable. Unlike the rest of the world the volume of our standing 
timber has grown by 50 percent in the past 50 years, and this 
growth has occurred during a time of increased use of forest 
products. How could that be?
    Well, it is through sound forest management by the private 
owners that I have mentioned. Recently, however, markets have 
begun to dwindle and the positive trends of the past 50 years 
may be in jeopardy. Markets are important to sustainability. If 
trees have no value what is the incentive to pay ever 
increasing annual taxes. A little widow on Social Security once 
told me, and I quote, ``I can't afford to hold on to this 
forest land that has been in my family for 100 years. I am 
being taxed on what they say I should be producing, but I can't 
afford to do what it takes to help my timber produce.'' Some 
forest owners like that little old lady depend on their forest 
to yield enough income just to pay their taxes and keep their 
land, but collectively forest owners depend on the value of 
their forest for a variety of things like retirement, college 
fund, long-term investment, savings account, collateral for 
borrowing money, medical emergencies, and for some it is their 
primary income.
    But there is one thing for which forest-related income is 
essential and that one thing is sustainability. The economic 
value of forests is the engine that drives our collective 
ability to sustain our forest resources. Incentives are useful, 
but there must be a market incentive in order for a practice 
such as tree planting to be a viable investment. Even if an 
incentive such as a cost share program reduces the initial 
investment a landowner still must be able to recover their part 
of the investment through timber sales or other markets. If 
not, it is a bad economic investment. Bad investments won't 
sustain our forests. Good investments will. If forestry is not 
a good investment, if trees have little or no economic value 
what is the incentive for a family to incur risk of natural 
disasters year after year?
    Hurricane Katrina was one we won't soon forget. Wildfire, 
insects and disease, epidemics or others, but there are other 
threats too. One threat is that public policy can deny owners 
the opportunity to realize reasonable returns on their 
investments. Without returns, the land may be converted to 
other uses that do not provide the benefits of the forest. You 
will soon consider legislation to tackle renewable energy. 
Private forests should be able to play a vital role and take 
advantage of these markets. The national climate policy should 
allow owners to use carbon credits as a source of revenue. 
State forestry regulations already protect the environment and 
ensure sustainability.
    We don't need additional regulations that could cause 
landowners to take their land out of forest use just out of 
sheer frustration. Tax policies are also important. They should 
not create disincentives. Believe or not, overpayment of taxes 
is not uncommon by forest owners. A lack of knowledge is 
another problem. The extension programs at land grant 
universities, for example, their mission is to interpret 
research and design targeted education programs for forest 
owners, but these programs are woefully underfunded, yet they 
represent the best opportunity to translate public policy from 
paper to action. Keeping working forests is the key to 
sustainability. The private landowners have shown that they can 
do this, and they will continue to do so if they have a 
sustainable business environment, viable markets, targeted 
incentives, freedom from over regulation, and access to new 
technology and information. Let us work together to design 
policies that help landowners keep their forest working. Thank 
you.
    [The prepared statement of Mr. Monaghan follows:]

   Prepared Statement of Dr. Tom Monaghan on behalf of the National 
           Alliance of Forest Owners, Starkville, Mississippi

I. Introduction
    Mr. Chairman, thank you for this opportunity to appear before the 
Subcommittee on Department Operations, Oversight, Nutrition and 
Forestry today and to assist you and your colleagues, also of this 
Subcommittee, in your efforts to chart the future of our nation's 
forests.
    I am pleased to appear before you today as a private forest 
landowner, a forester and a lifelong steward of our natural resources. 
In 2002, I retired as the Forestry Extension Leader from the 
Mississippi State University Extension Service. In that role, I led our 
state's extension foresters in delivering a variety of educational 
outreach programs to private landowners and forestry personnel, all 
designed to promote stewardship and sustainable forest management 
practices on the land. The day after retiring, I began a second career 
with the Mississippi Forestry Association (MFA), a statewide membership 
organization representing private landowners, professional foresters, 
professional wood suppliers, forest industry manufacturers and 
businesses and federal and state agency personnel who manage forests to 
produce clean water, clean air, wildlife habitat and outdoor 
recreational opportunities for all Mississippians.
    The Mississippi Forestry Association is a member of the National 
Alliance of Forest Owners (NAFO), an alliance that represents forest 
owners in 47 states, encompassing more than 74 million acres. NAFO is 
an organization of private forest owners committed to promoting federal 
policies that protect the economic and environmental values of 
privately-owned forests at the national level.
    My testimony today will focus on the present and future 
contributions of private forestland in the United States. I will 
examine the importance of forests to our national natural resources 
infrastructure; how forests can meet important national objectives, 
such as clean air, water, energy, climate change mitigation and the 
demand for forest products in our everyday lives; and the importance of 
federal policies that support the ongoing efforts of private forest 
landowners to invest in and be good stewards of their land.
    While I will focus on private forest landowners, please keep in 
mind that all members of the forest products community, including 
forest owners, resource professionals, loggers and manufacturers play 
key roles in sound forest management.

II. Private forest owners manage the majority of forestland in the U.S. 
        Forest inventory is generally increasing and ownership patterns 
        are dynamic. Private forest landowners generally seek to keep 
        working forests in tact rather than convert them to other uses.
    Nationally, there are 755 million acres of forestland. Of that, 427 
million acres, 2.5 times the size of Texas, is private forestland owned 
by over 10 million people. Unlike much of the rest of the world, the 
U.S. is expanding its overall forests and standing timber inventory. 
Over the past 100 years the amount of forestland has remained 
relatively stable. Additionally, the standing inventory (volume of 
growing stock) of hardwood and softwood tree species in U.S. forests 
has grown by 49 percent between 1953 and 2006. This has occurred 
because of sound forest management and through the increased importance 
of forests and forest products in our economy and society in general. 
Recently, however, markets have begun to dwindle, potentially 
jeopardizing the positive trends of the past 50 years.
    Americans own forests in a variety of ways, including family 
ownership, partnerships, small and large businesses, private 
investments, such as Timber Investment Management Organizations (TIMOs) 
and publicly traded investments such as Real Estate Investment Trusts 
(REITs). The vast majority of forestland owners are families. For them, 
forests represent a significant family investment as well as a 
considerable share of their wealth. In Mississippi, the 175,000 
individual and family forest landowners who own and manage 10 acres or 
more of the state's timberland, have long looked to an investment in 
land and timber as a very significant means of support for their 
retirement, for college funds, for savings accounts, for medical 
emergencies or simply as "rainy day" reserves. Others have used the 
value of their lands and forests as collateral when borrowing money to 
build homes or pay for college educations.
    Of course, much of the value of these family forests comes in 
benefits without a specific price tag, including family recreation, 
hunting trips, solitude and aesthetics. To many of these families, 
their forests represent more passion than profit.
    Other private forest landowners include small and large businesses, 
partnerships and investment organizations such as TIMOs and REITs. 
These owners have taken on new significance over the last few years. 
Most Americans still see the forest products industry as a vertically 
integrated industry that owns forests for specific manufacturing 
purposes. However, over the past two decades, most of the forests owned 
by large manufacturing companies have been transferred to businesses 
that focus solely on responsible long-term forest management with 
little or no manufacturing interests. Today over 80 percent of the 
forests formerly owned by large manufacturers is now owned by companies 
and organizations comprised of professional foresters and land managers 
who responsibly manage their forests for multiple market opportunities 
over the long-term. Apart from the inevitable changes in land use that 
accompany a growing population, the long-term value of these private 
forest lands comes primarily from keeping them in a working forest 
condition.
    Throughout my testimony today, you will hear me use the term 
"working forest." A working forest is one that is conserved, not 
preserved. President Teddy Roosevelt said, "Conservation means 
development as much as it does protection." He charged our nation with 
using our natural resources to provide sustained environmental, 
economic and social benefits over time. Working forests, then, are 
forests that provide an important base for family-supporting jobs in 
America's rural communities, that are the source of sustainable 
building and consumer products, contribute significantly to national 
priorities, like energy independence and security and climate change 
solutions and that address human health and quality of life needs, 
water quantity and quality, essential wildlife habitats, recreation and 
other important environmental services.

III. Private working forests are an increasingly critical part of our 
        natural resource infrastructure because they are fundamental to 
        a strong economy, a clean and healthy environment and achieving 
        our national objectives for addressing climate change and 
        developing new domestic sources of low-carbon, renewable 
        energy.
    Nationally, private landowners own the majority of our forests. 
This is particularly true in the Southern states where private 
landowners are the principal stewards of forests and wildlife. In fact, 
44 percent of the private forests in the United States are in the 
South. In contrast, the federal government owns the vast majority of 
the forests in Western states.
    Private forests provide significant economic benefits to society, 
providing the raw material for a major industry in our country. The 
forest products industry ranks in the top ten manufacturing sectors in 
48 states. It accounts for approximately 6 percent of the total U.S. 
manufacturing GDP, placing it on par with the automotive and plastics 
industries. Additionally, it generates more than $200 billion a year in 
sales and employs more than 1 million people earning $54 billion in 
annual payroll. Through all of this, the U.S. forest products industry 
pays approximately $7 billion annually in federal, state and local 
taxes. The U.S. forest products industry is a world leader in natural 
resources stewardship by providing valuable consumer goods and services 
while maintaining the highest standards of environmental stewardship in 
the world.
    In addition to economic benefits, private forests produce a wide 
variety of environmental services desired and needed by our society, 
including outdoor recreational opportunities, diverse wildlife habitat, 
the storage of atmospheric carbon and the production of clean air and 
clean water. For instance, nationally, private forests provide 53 
percent of our freshwater supply. Outside of the Western region of the 
U.S., state and privately owned forests provide 89 percent of the 
freshwater supply.
    Nationally, forests sequester almost 200 million metric tons of 
carbon each year, offsetting 10 percent of annual U.S. emissions from 
burning fossil fuels. This fact has been recognized by the 
international community and federal regulators. The United Nations' 
2007 Intergovernmental Panel on Climate Change ("IPCC") highlights 
forest management as a primary tool to reduce GHG emissions. The IPCC 
states that, "In the long-term, a sustainable forest management 
strategy aimed at maintaining or increasing forest stocks, while 
producing an annual sustained yield of timber, fiber or energy from the 
forest, will generate the greatest mitigation benefit." The EPA has 
identified responsibly managed forests as one of five key "groups of 
strategies that could substantially reduce emissions between now and 
2030."
    No other land use comes close to producing the array of 
environmental, economic and social benefits provided by our nation's 
private forestlands. They are a vital part of our national 
infrastructure that shouldn't be lost. Sustaining and enhancing the 
value of these forests both to society and to forest owners so they can 
continue to benefit our nation is of vital national importance.

IV. The potential use of wood for renewable energy and to address 
        climate change provides an opportunity to strengthen existing 
        markets and encourage the development of new markets for 
        private working forests.
    Congress is currently focused on renewable energy policy that will 
diminish our nation's dependence on fossil fuels and enhance our 
country's energy independence. Developing the full contribution our 
private working forests can make to this national priority will at once 
help us meet our renewable energy goals and maintain our working forest 
resources. As existing markets decline, emerging energy markets can 
provide new opportunities for private forest owners to realize 
sufficient economic return to continue making long-term investments in 
their forests.
    Wood is the original renewable energy and has been used at the 
industrial level for decades. Currently, the forest products industry 
generates approximately 80 percent of all renewable biomass energy, 
making it the largest industrial renewable energy producer. The current 
technology for using wood to produce electricity and heat is mature and 
readily accessible. Emerging technology also holds significant promise 
for utilizing wood cellulose to produce ethanol. Each of these 
applications provides a viable future source of domestic renewable 
energy from a wood resource that is efficient, plentiful, sustainable 
and beneficial to our climate and overall environment.
    If Congress mandates a certain level of renewable electricity 
generation, it should provide sufficient flexibility to allow renewable 
forest biomass to make its full contribution. This will help keep our 
working forests working by promoting new market opportunities for wood 
that otherwise may have little or no economic value.
    Congressional interest in renewable energy is in many ways driven 
by climate change considerations because of the potential to replace 
carbon intensive fossil fuel energy with renewable energy that 
significantly reduces our nation's overall carbon footprint. Private 
working forests are a fundamental part of the solution to global 
climate change. Both the United States Government and the international 
community recognize the value forests provide in sequestering carbon 
through absorbing CO2 and storing carbon in trees, soils and forest 
products.
    Our nation will realize these benefits by developing and promoting 
markets, like renewable energy, that help private forest owners 
continue managing their forests for long-term economic and 
environmental benefits .
    Just as with renewable energy, as national climate change policy 
and legislation is considered by Congress, it should explicitly include 
the positive contributions of private working forests. Such policy 
should help maintain a robust manufacturing base for working forests to 
help maintain existing markets that foster long-term forest viability 
and investment. Any climate change framework should also allow offset 
credits from forest management and harvested wood products to be 
generated and traded as a flexible, cost effective way for regulators 
and other industries to achieve net greenhouse gas reductions.
    Renewable forest biomass energy production on a much larger scale 
and the opportunity to participate in climate change mitigation markets 
offer two promising new markets for forest landowners. As history has 
taught us, maintaining existing markets and expanding new market 
opportunities for working forests help ensure they will remain and even 
increase over time.

V. New and existing markets should rely on local and state level 
        oversight, third-party certification, and education programs as 
        the most effective means to sustain working forests on the 
        landscape over the long-term.
    Sustaining the environmental, social and economic benefits of 
responsibly managed forests will occur only if governmental policies 
are aligned with the fundamental economics of forest ownership. 
Governmental policies must be scientifically based and developed 
through transparent and inclusive processes. They should recognize the 
important role played by a healthy, domestic forest products 
manufacturing base, which enables forest owners to continue to meet 
their ecological, economic and social responsibilities.
    Private forest landowners are diverse and demonstrate sustainable 
forest management in a variety of ways. These include reforestation of 
harvested sites to maintain the forest cycle, using Best Management 
Practices (BMPs) defined through voluntary and regulatory state 
forestry programs and forest certification standards, supporting 
training and outreach programs for loggers and family forest owners, 
using consulting foresters and other natural resource professionals and 
supporting research and technology development on sustainable forest 
management.
    Additionally, private forest landowners verify their adherence to 
sustainable forest management principles in many ways, including: 
compliance with state and federal laws and BMPs; cooperative agreements 
with government agencies, conservation organizations, and multi-
stakeholder partnerships; and transparent data collection and 
reporting. Forest certification is an especially important method. 
Credible forest certification systems are designed to integrate social, 
environmental and economic performance, verified through independent, 
third-party auditing and communicated through a brand or label on 
products. Several credible forest certification programs are available 
in the marketplace.
    This robust yet flexible array of tools, in the form of federal, 
state and local laws, regulations, programs and BMPs have measurably 
improved the environmental performance of forest operations in the 
United States over time. They have also worked to promote environmental 
goals without sacrificing jobs and economic activity. As policymakers 
consider the imposition of new federal regulations on private working 
forests or market limitations on the participation of private working 
forests in emerging renewable energy markets, the implications for the 
economic viability of working forests must be considered to avoid 
inviting an unintended result -- compelling private forest owners to 
consider alternative land uses for working forests that do not provide 
the environmental services that promote healthy watersheds, wildlife 
habitat, carbon sequestration and similar benefits that are highly 
valued by society.
    Rather than creating new federal regulatory overlays on effective 
existing practices at the federal, state and local level, Congress 
would be well advised to rely on the current framework that has been 
developed through transparent public processes over decades to strike 
the right balance between social, economic and environmental benefits. 
New federal intrusions into the existing framework, particularly in a 
manner that results in federal pre-emption of current state and local 
practices, may create powerful market disincentives that will hinder 
rather than promote our nation's overall energy and environmental 
objectives.

VI. Conclusion
    Keeping working forests working across the landscape as a 
fundamental part of our nation's natural resources infrastructure is 
essential to the well-being of our country. Private forest landowners 
provide unique economic, social and environmental benefits to our 
nation. While many of these benefits provide direct economic returns to 
society and to the landowners - the forest products we use every day 
and the jobs that sustain many communities - many are essential 
benefits to society that the private landowner provides for free - 
clean air, clean water and wildlife habitat.
    The most effective way to keep working forests working is to 
promote policies that seek to sustain both the benefits working forests 
provide to society and to forest owners. This includes viable markets 
for existing and familiar products and services as well as innovative 
new markets for wood and the environmental benefits provided by sound 
forest management.
    While oversight is important, it should be based at the state and 
local level - where environmental stewardship is best understood and 
practiced. This is the approach that has increased the productivity and 
extent of our forests in the United States at a time when many parts of 
the world have seen massive deforestation. By supporting practices that 
work while seeking new and promising market opportunities, our working 
forests can continue to provide the many benefits that have made them 
an extraordinarily valuable part of our nation's past, present and 
future.
    For more information, please contact:
    National Alliance of Forest Owners
    (202) 367-1163, [email protected]

    Mr. Baca. Thank you very much, Mr. Monaghan. At this time, 
we would also like to welcome to the Subcommittee hearing our 
past Chair of the Agriculture Committee, Mr. Goodlatte. Thank 
you very much for being with us. Would you like to make a 
statement, and then I will just quickly turn it over to----
    Mr. Goodlatte. Yes. Mr. Chairman, I really appreciate you 
holding this hearing. I wish I were a member of this 
Subcommittee, and I really thank you for allowing me to sit up 
here on the dais and after the others have asked questions, if 
I am given the opportunity, I may have a question or two.
    Mr. Baca. Thank you very much.
    Mr. Goodlatte. Thank you, Mr. Chairman.
    Mr. Baca. Next, we will call on Mr. Neiman.

  STATEMENT OF JIM D. NEIMAN, VICE PRESIDENT AND CEO, NEIMAN 
               ENTERPRISES, INC., HULETT, WYOMING

    Mr. Neiman. I am extremely humbled and honored, Mr. 
Chairman. Thank you for the opportunity to testify today. My 
name is Jim Neiman, and I am the Vice President and CEO of 
Neiman Enterprises in Hulett, Wyoming. Hulett is in the 
Northeast corner of Wyoming 8 miles from Devils Tower National 
Monument, our nation's first monument. The Neiman family has 
been in the forest products business for three generations. We 
currently own three sawmills and one pellet operation with 490 
employees and 250 independent contractors that we feel are 
families we need to support. I appreciate your attention to the 
future of the nation's forests. My comments are focused 
primarily on the nation's forests, especially the Black Hills 
National Forest. A health forest products industry is critical 
to the future of our national forest, and they make it possible 
for our company to operate on and contribute to management 
objectives also on private lands.
    The single most important factor in existing sawmill 
infrastructure in the intermountain west is supply raw material 
from national forests. A year ago there were three sawmills in 
Wyoming. Now only one remains, and this ours. The biggest 
reason the other two sawmills closed was historic and 
unpredictable national forest timber supply. Without a 
consistent supply of timber, no mill owner can justify the 
investment to maintain competitiveness in the competitive 
industry. My company is seriously exploring a partnership to 
construct and operate a $50 million 19 megawatt electrical co-
generation facility in our South Dakota operation that would 
also produce steam for dry kilns in the adjacent university.
    The benefits of this facility would be increased supply of 
renewable energy, better utilization of forest biomass, and 
additional local jobs, up to 40. I need two things to make this 
work. First, a consistent and predictable supply of timber 
sales from the Black Hills National Forest. The sawmill side of 
our business has to be financially sound in order for us to 
make co-generation work. Second, we need a conclusive 
definition of biomass in the RES. The RFS definition excluded 
an area all Federal fiber from counting toward renewable 
biofuels. Unfortunately, H.R. 2454 just approved by the Energy 
and Commerce Committee is on the verge of repeating this 
mistake by disqualifying any fiber from Federal lands if it 
comes from a mature forest stand. My recommendation to Congress 
is that all biomass for a national forest timber sale that 
conforms to applicable law and the forest plan should qualify 
under the RES. The Forest Service's mission is to sustain the 
health, diversity, and productivity of the nation's forest and 
grasslands to meet the needs of present and future generations.
    When I look at national forest statistics of acres burned 
and acres of trees killed by beetle epidemics, I am not sure 
the Forest Service is achieving that mission. Most of the 
current timber sales in the Black Hills National Forest respond 
to the pine beetle epidemic. Instead of always responding to 
crisis, the national forests should develop and implement 
proactive strategies to prevent those crises in the first 
place. In the Black Hills and much of the west, we know what it 
takes to reduce the risk of mountain pine beetle and fires. 
Simply put, the problem is primarily a function of tree 
density. Dense stands have a higher risk of bugs and fires and 
thin stands have a much lower risk. Annual growth on the 
national forest timberlands far exceeds the annual harvest. 
Increasing the national forest timber sale program would have 
multiple benefits including stabilizing forest products 
companies, adding green jobs to our local economies, 
strengthening our nation's manufacturing sector, increasing the 
health of our forests, and increasing flow of clean water.
    Sawmilling has been a challenge, but this recession is 
worse than anything my father can remember since the Great 
Depression. We are doing everything we can to maintain our 
operations, keep our employees and contractors, and help manage 
the forests. We are not asking for a bail out, but there are 
contractual steps the Forest Service can take that would make a 
big difference in maintaining the current infrastructure of 
forest products companies. However, timing and speed is 
essential. I want to thank Mr. Jensen for his kind words that 
he spoke earlier to the industry, and in conclusion thank you 
for allowing me to testify, I appreciate your time and 
attention. I offer my full assistance to the Subcommittee and 
to you, Mr. Chairman, to Congresswoman Herseth Sandlin, and 
especially to Congresswoman Lummis for the invitation. Thank 
you very much.
    [The prepared statement of Mr. Neiman follows:]

Prepared Statement of Mr. Jim D. Neiman, Vice President and CEO, Neiman 
                   Enterprises, INc., Hulett, Wyoming

Introduction
    Thank you Chairman Baca, Members of the Subcommittee, and Rep. 
Lummis, for the opportunity to present testimony today.
    My name is Jim Neiman, and I am the Vice President and CEO of 
Neiman Enterprises, Inc. in Hulett, Wyoming. Our family has been in the 
ranching business for 5 generations and in the forest products business 
for 3 generations. We currently own and operate three sawmills and one 
pellet mill in the Black Hills of South Dakota and Wyoming. Our company 
directly supports about 750 families through our 490 employees and 250 
local independent contractors, and those families live in communities 
throughout the Black Hills. We produce lumber for wholesale and retail 
markets throughout the United States, plus shop grade lumber for window 
and door companies. We also sell sawmill by-products, such as bark, 
sawdust, shavings, and chips for decorative bark, particleboard, pulp 
and paper, animal bedding, and wood pellets.
    I am currently the Vice-President of the Board of Trustees for the 
University of Wyoming. I also serve on the Board for the Hulett 
National Bank, Hulett Airport Board, Black Hills Forest Resource 
Association and Intermountain Forest Association, and am a member of 
the Federal Timber Purchasers Committee, which is allied with the 
American Forest and Paper Association. I have also served in the past 
on the Wyoming Occupational Health and Safety Commission, and the 
Wyoming Economic Development and Stabilization Board.

Background
    I appreciate the Subcommittee's attention to the future of our 
nation's forests, and I hope my testimony will be helpful to you. My 
comments are primarily about the future of our nation's national 
forests. I'm most familiar with the Black Hills National Forest, which 
straddles the Wyoming - South Dakota border, since our company relies 
on the Black Hills NF for approximately 75% of our supply of timber. 
Similarly, many other sawmill owners across the country also depend on 
local national forests for an important percentage of their timber 
supply and share my concerns and anxieties about long-term management 
and health of the national forests.
    Case No. 1, the very first timber sale from the national forests, 
which was sold to Homestake Mining Company in 1899, was located in the 
Black Hills NF. Since then, the management of the Black Hills NF has 
been generally very successful. However, the last ten years have been 
challenging, to say the least. In 1999, Forest Service Chief Dombeck 
remanded the 1977 forest plan revision, a traumatic event that resulted 
in no new timber sales for most of FYs 2000 and 2001, and required two 
forest plan amendments and five years to fix the problems identified in 
the Chief's decision. In total, the Black Hills NF spent 16 years 
completing a 10 to 15 year forest plan. Since 2000, forest fires have 
burned 184,000 acres of the Black Hills NF, and a mountain pine beetle 
epidemic has festered out of control, affecting 200,000 acres to date, 
and still killing over 100,000 new trees each year.
    Many other national forests have experienced similar, or worse, 
catastrophic forest fires and insect epidemics. A catastrophic mountain 
pine beetle epidemic has killed 2 million acres of lodgepole pine trees 
in Northern Colorado and southern Wyoming. These catastrophes have 
caused great harm to forest ecosystems, and therefore, cause great 
hardships to family-owned small businesses like mine.
    Both the acreage of forest fires and the number of trees killed by 
mountain pine beetle are a function of numerous variables. However, the 
most significant variable, and the one over which we have the most 
control, is the underlying condition of the forest. Simply put, the 
problem is there are too many trees competing for a limited amount of 
water. Reducing the risks of mountain pine beetle in ponderosa pine 
isn't rocket science. Dr. John Schmid, arguably the world's leading 
researcher on mountain pine beetle has maintained a series of plots in 
the Black Hills for years. His bottom-line finding is that the duration 
and intensity of mountain pine beetle infestations are primarily a 
function of the number of trees in the stand -- the more trees, the 
higher the risk of mountain pine beetles. Conversely, thinned stands 
have a significantly lower risk of mountain pine beetles.
    Maintaining a Viable Forest Products Industry as a Management ToolA 
healthy forest products industry is critical to achieving long-term 
forest health objectives on the Black Hills NF, or any national forest. 
Further, the timber supply from the national forest makes it possible 
for our company to exist to manage timberlands for private landowners. 
We have a diverse, integrated forest products industry in the Black 
Hills. However, the forest products companies depend on the Black Hills 
NF selling the forest plan Allowable Sales Quantity (ASQ). 
Unfortunately, the Forest Service has fallen far behind achieving the 
Black Hills NF forest plan ASQ, with detrimental effects to both the 
Forest and the forest products companies.
    The single most important factor for the viability of existing 
industry infrastructure is supply of raw material from national 
forests. Our company relies on the Black Hills National Forest for 
approximately 75% percent of our sawtimber supply. Without a consistent 
supply, I cannot justify the investments necessary to keep these 
facilities on the cutting edge of technology, and expanding my 
operation into new product utilization avenues to better accommodate 
forest health programs, including small-diameter trees, becomes 
completely out of reach.
    We need the Forest Service to make up a significant portion of that 
accumulated ASQ shortfall. The annual growth on the Black Hills 
National Forest, and virtually every other national forest, is 
significantly higher than the annual harvest (see Attachment 1). 
Consequently the overstocking and mountain pine beetle risk are 
compounded each year by new growth, ultimately leading to even higher 
risks of mountain pine beetles and fires.
    This year, the forest products industry is facing the most 
challenging period since the Great Depression. Last month, the Western 
Wood Products Association (WWPA) predicted 2009 lumber demand of just 
28.9 billion board feet, down from an all-time high of 64.3 billion 
board feet in 2005. Home construction and remodeling account for nearly 
70% of U.S. lumber consumption. The WWPA forecast was for just 432,000 
new home starts in 2009, one-fifth of the 2005 level.
    Nationally the forest products industry employs more than one 
million people directly and ranks among the top ten manufacturing 
employers in 48 states. Lumber, panel, and pulp and paper mills are 
frequently the economic hubs of their communities, making the 
industry's health critical to the economic vitality of countless 
communities in every region of the country. Frequently, forest products 
companies provide some of the best, if not the only, full time, year 
round jobs in rural areas where unemployment often exceeds the national 
average. The overall effect has been to rob the wood and paper industry 
of economic value, threatening the viability of a key manufacturing 
sector while potentially threatening the long-term health of our 
forests. With the near total collapse of the nation's housing market, 
our industry has suffered a disproportionate blow in the recent 
economic crisis. Unemployment in the forest products sector is now 
estimated at 250,000 to 300,000 jobs, or roughly 20% of our workforce. 
Even in this reduced condition, the 1.08 million people in various 
segments of the wood and paper industry represent a larger share of 
U.S. employment than the automobile industry (828,500 as of November, 
2008).
    The national forests can help sustain the industry through the 
downturn by being a reliable supplier of fiber, both for areas 
dominated by national forest timber and places where private landowners 
are reluctant to sell into fallen log markets. Losing infrastructure 
will harm all landowners and make the task of managing the national 
forests more difficult. I struggle constantly to find some measure of 
certainty and stability in the Forest Service's long-term management 
programs. Similarly, each year the Forest Service faces the challenge 
of planning their programs without certainty about the funding levels 
they will receive from Congress. In essence, we're trying to manage 
national forests for fifty to one hundred year rotations based on one-
year appropriations, two-year Congressional cycles, and four-year 
Presidential cycles.

Forest Planning
    Incorporating long-term forest health strategies into forest plans 
is essential. There is no excuse for not incorporating long-term forest 
health strategies into every forest plan, yet many forest plans have 
been approved with scant attention to long-term desired conditions that 
will minimize the risks of fires and insect epidemics, especially when 
the planning was done during periods of above-average precipitation and 
below-average mountain pine beetle and fire activity. Over the past 
decade, the States of Wyoming and South Dakota, along with local 
counties, have prioritized their involvement in forest planning as 
Cooperating Agencies, and that has been a very positive development.
    Even the best forest plan has little real value if the necessary 
resources are not available for plan implementation. Adequate funding 
is a perennial issue. Compared to the costs of fire suppression, 
rehabilitation and restoration, preventative management is a bargain. I 
did a cursory analysis of the costs and revenues associated with a 
recent timber sale on the Black Hills NF that was designed specifically 
to reduce the risk of forest fires west of Rapid City. The net project 
cost, including NEPA and sale preparation expenses minus timber sale 
revenues, was $260 per acre. Compared to the $901 cost per acre for 
suppression and rehabilitation for the 2005 Ricco Fire, that investment 
of $260 per acre looks pretty smart.

Project Implementation
    On average, NEPA compliance represents about 50% of the Forest 
Service's cost of analyzing, preparing and selling a timber sale. The 
Forest Service's appeals process is still a cumbersome, time consuming 
and expensive means of resolving issues. If a decision is appealed and 
remanded, there is no process for the responsible Line Officer to 
quickly address and repair the flaws; instead, the process requires a 
new round of analysis, public review and comment, and another appeal 
period before the modified project can be implemented. This simply 
cannot happen in less than 6 months.
    I am also concerned about the lack of a process that allows prompt 
salvage of dead trees following a fire or insect epidemic. Prompt 
salvage of dead trees is the common-sense response that most private 
landowners would make to utilize the dead trees and start the process 
of restoration. Salvage of fire-killed trees will also reduce the risk 
of a re-burn 10 or 20 years into the future, when dead trees have 
fallen to the ground and become additional fuel. However, salvage of 
fire-killed trees following a forest fire on the national forests is no 
longer a routine "next step". In contrast, all of the Forest Service's 
actions to suppress a fire and implement emergency rehabilitation are 
designed to move quickly. One suggestion is to allow the Forest Service 
to consider salvage of fire-killed trees as part of the total response 
of fire suppression, rehabilitation, and restoration.
    The Healthy Forests Restoration Act (HFRA) is working well, 
although I am concerned that in some instances either the Forest 
Service is too cautious about using HFRA. The single most helpful 
feature of the HFRA is the Administrative Review process, which levels 
the playing field for the Forest Service, and significantly increases 
the incentives for parties to be a constructive part of the analysis 
and design process. I would like to see the HFRA Administrative Review 
process adapted for all projects.

Definition of Biomass
    My company is seriously exploring a partnership to construct and 
operate a $50 million, 19 MW electrical co-generation facility adjacent 
to our sawmill in Spearfish, SD. The benefits of this facility include:

A. Increasing our nation's supply of renewable energy, thus decreasing 
        our dependency on foreign oil.

B. Utilization of slash from timber sales on the Black Hills NF and 
        private timberlands. About 5,000 large slash piles are created 
        each year, and most of those are burned during the winter 
        months. That generates huge volumes of smoke and carbon, and 
        frankly, wastes a resource.

C. 40 to 50 additional jobs for families in our local community.

    I am very concerned about the RES (Renewable Electricity Standard) 
definition of Biomass. The RFS (Renewable Fuels Standard) definition 
inexplicably excluded nearly all federal fiber from counting toward 
renewable biofuels. Unfortunately, HR 2454, the American Climate and 
Energy Security Act just approved by the House Energy and Commerce 
Committee is on the verge of repeating this mistake by disqualifying 
any fiber from Federal lands if it comes from a "mature" forest stand. 
This would exclude nearly all trees we harvest in the Black Hills.
    Similarly, jack pine and aspen forests in the Lake states, mixed 
oak stands in the Appalachians, and loblolly stands in the Southeastern 
US are all generally considered mature when harvested. This provision 
would be devastating and would have the effect of prohibiting most, if 
not all, Forest Service fiber from being counted as renewable biomass. 
Considering the unhealthy state of much of the Western forests, and the 
pressing need to develop additional capacity of renewable energy, this 
would be a mistake of historic proportions.
    My recommendation to the Congress is that slash and other biomass 
from a national forest timber sale, which conforms to applicable laws, 
including NFMA and NEPA, and the forest plan, should qualify under the 
RES.

Biomass Crop Assistance Program
    Title IX of the 2008 Farm Bill established the Biomass Crop 
Assistance Program to support the establishment and production of crops 
for conversion to bio-energy and to assist with collection, harvest, 
storage, and transportation of eligible material, including woody 
biomass, for use in a biomass conversion facility. This program should 
help support forest products industries that also produce renewable 
energy, and these industries should qualify for the harvest and 
transportation assistance support provided by this program. Currently, 
USDA is still in the early phases of conducting a NEPA analysis on this 
program. I encourage the Administration to act quickly to complete the 
regulations and implement this program.

HFRA Biomass Commercial Utilization Grant Program
    Similarly, Section 203 of the Healthy Forests Restoration Act 
authorized $5 million dollars annually for grants to offset the costs 
incurred to purchase biomass. That grant program would also be very 
helpful to my company, and other companies, in expanding utilization of 
woody biomass, and I urge the Congress to re-authorize and fund that 
grant program.

Housing
    The mortgage crisis and subsequent housing market crash helped 
create the current economic crash. Historically, rebounds in the 
housing economic rebounds have led our nation out of recessions and 
economic downturns. The $8,000 Home Buyer Tax Credit authorized by the 
American Recovery and Reinvestment Act of 2009 is helpful and 
important, but I would like to see the federal government do more to 
help. HR 1119, introduced by Rep Lincoln Davis, would expand homebuyer 
tax credit to all buyers, not just first time homebuyers, and expands 
it from $8,000 to 3.5% of the limitation determined under the Federal 
Home Loan Mortgage Corporation Act. As first time buyers are only about 
half of the housing market, the credit should be expanded to all 
purchases of primary residences.

National Forest Advisory Board
    In January 2003, the Secretary of Agriculture approved the 
formation of a National Forest Advisory Board for the Black Hills NF. 
Fifteen members were subsequently appointed to the Board based on 
familiarity with national forest issues, ability to represent a 
particular interest group, and demonstrated skill in working toward 
mutually beneficial solutions.
    The formation of the advisory board was one of the recommendations 
of an August 2001 Forest Summit, convened by then-Senator Tom Daschle 
in Rapid City. Since then, the National Forest Advisory Board has 
become an integral part of the management of the Black Hills NF. The 
Board's primary duty is to "provide advice and recommendations on a 
broad range of forest issues such as forest plan revisions or 
amendments, travel management, forest monitoring and evaluation, and 
site-specific projects having forestwide implications.
    This Advisory Board has made great contributions to management of 
the Black Hills NF through public airing and constructive discussion of 
contentious issues by a group representing diverse interests. I believe 
it could serve as a model for other national forests.

Reforestation
    Finally, I'm concerned about the reforestation backlog on the 
national forests. In April 2005, the GAO reported that national forest 
reforestation needs are accumulating because of the increased acreage 
affected by natural disturbances, i.e., forest fires and insect 
epidemics. The Congress should require the Forest Service to identify 
reforestation needs, and then develop a strategy to accomplish that 
reforestation. Reforestation would yield multiple benefits, including 
water quality, wildlife habitat, and carbon capture and sequestration.

Conclusion
    In summary, I want to thank you for the privilege of testifying 
here today. Management of the national forests is complex and sometimes 
contentious, and requires capable leadership. My company is committed 
to sustainable forest management, jobs, families and communities. As I 
said earlier, I'm the 3rd generation entrusted with running our 
business, and I started grooming the 4th generation years ago. Of all 
the variables I deal with, the one that keeps me awake most at nights 
is the long-term reliability of a national forest timber sale program. 
Again, I am honored that you asked me to testify today, and I would be 
delighted to work with Chairman Baca, Representative Lummis, and the 
Subcommittee in finding solutions to the many issues discussed here 
today.

    Mr. Baca. Thank you very much, Mr. Neiman. Next, I have Mr. 
Smith.

 STATEMENT OF MATT SMITH, ON BEHALF OF THE SOCIETY OF AMERICAN 
                 FORESTERS, FALCONER, NEW YORK

    Mr. Smith. Yes. Thank you. Chairman Baca and Members of the 
Committee, thank you for the opportunity to testify to you 
today about something that I am more than a little passionate 
about. That is our nation's forests. On behalf of the Society 
of American Foresters, I would also like to take the 
opportunity to thank you for your tireless work to improve the 
renewable fuel standard passed in the 2007 Energy Bill. My name 
is Matt Smith, and for the last 20 plus years, I have been a 
private forestry consultant in western New York and the 
Allegheny region of Northwest Pennsylvania. I have also spent 
the last 4 or 5 years working almost exclusively in the area of 
forest carbon and the voluntary carbon markets.
    It is an interesting point that when I received the call to 
be here today, which was about 6 days ago, I was in the woods 
working with a private landowner on a timber harvest, and it is 
an important point that I will come back to here at the end of 
my testimony. Forests are inseparably linked to American 
society and culture. We have heard a lot today about all that 
forests give us. They give us wood products, jobs, food, fuel, 
clean air, carbon uptake and storage, recreational 
opportunities, clean water, and a host of other benefits. The 
story of America's forest contains many success stories, but it 
is not all that we hear about. We hear much about the 
challenges, and we have heard a lot about all of these 
challenges today.
    Catastrophic wildfires, invasive species, changes in land 
use, and climate change are challenges you may be quite 
familiar with. Although there are other challenges, the global 
economic crisis, the housing crisis, and foreign competition, 
as you have heard, are eroding our traditional wood product 
markets. The good news is new markets are evolving. However, we 
are running into regulatory and policy obstacles. We have a 
renewable fuel standard that needlessly restricts most woody 
biomass, a cap and trade bill that doesn't recognize domestic 
forests, and an energy bill with a renewable energy standard 
that also restricts biomass, woody biomass. All of these 
provisions we are told are in place to protect forests when in 
fact if implemented they will harm them in the long run.
    In response to the growing concern about anthropogenic 
climate change and the diverse opinions that have existed and 
continue to exist on the issue, the Society of American 
Foresters assembled a team of professionals from across the 
country under the climate change task force, a group which I 
was proud to participate in. I think each of you have been 
provided with a copy of our full report. If not, you will very 
soon. I would like to just summarize some of the key points 
that we learn by reviewing the body of available research on 
forests and climate. Forests and climate are inseparably 
linked. Dramatic changes to one will inevitably affect the 
other. Global warming is probable and forest management can 
mitigate its effects. Also, wood products from sustainably 
managed forests are not only renewable products, they are 
products that when used in place of fossil fuel intensive 
materials such as concrete and steel drastically reduce our 
countrywide greenhouse gas footprint.
    Biomass is a key renewable energy source for the future 
producing clean energy while increasing the ancillary benefits 
from forests. Wildland fires and land use change represent 
significant emissions of greenhouse gases globally, emissions 
that can be mitigated through sound sustainable management. 
And, lastly, forests sequester significant amounts of 
atmospheric carbon, amounts that can increase with delivered 
management activities. Our current administration stands at a 
unique opportunity in time. They stand poised to initiate clean 
energy and climate change programs that will define 
environmental policies on greenhouse gases for future 
generations. This opportunity will either embrace forests and 
its positive impact on the climate change issue or it will 
leave it behind. Much of what we will have to deal with in this 
new market opportunity for forests for the future will be 
determined today in today's policy debate.
    We would like to leave the Committee with several action 
items to think about as you consider the testimonies given 
today. Regarding the American Clean Energy and Security Act, we 
would like to encourage the Committee to consider ensuring the 
role today for forest offsets in cap and trade. Also, ensuring 
that early actors in today's voluntary markets receive 
recognition in future Federal programs. Next, to ensure that 
investments and offsets in clean technology continue by 
guaranteeing a smooth transition from the voluntary market to 
the mandatory market. Next, to ensure the future for woody 
biomass by redefining woody biomass in current regulations. 
Next, to restore forest health on Federal and public lands. 
Public lands are destined on a trajectory to become possibly 
sources of CO2 through fires and decay versus the sinks that 
they could be. And, lastly, to encourage new and existing 
markets.
    And I just want to make a quick statement on that harvest I 
was on when I received the call to be here today. That forest 
was a thinning. Low grade products were removed from that 
forest to improve forest health. They were low value products 
in any market. But it was able to yield $14,000 to that 
landowner 1-1/2 years ago when I sold that timber. Today, if 
faced with the same management challenge that forest, that 
treatment, would not be applicable in a commercial setting. 
There is no market for the material we removed from that 
forest, a real impact and a real measure of what is happening 
with the erosion of our traditional forestry markets today.
    This is a very important issue for the SAF as well, having 
now approved the task force on understanding and improving 
global competitiveness in the U.S. forest sector, and the 
Society of American Foresters will keep you abreast of the 
findings. I would like to thank the Committee and the SAF for 
allowing me to share this information with you on its nation's 
forests. It has been my extreme pleasure to be here with you 
today, and I look forward to your questions and comments. Thank 
you.
    [The prepared statement of Mr. Smith appears follows:]

   Prepared Statement of Matthew S. Smith, CF, ACF, on behalf of the 
                  Society of American Foresters (SAF)

    Chairman Peterson, Chairman Holden, and Members of the Committee, 
thank you for the opportunity to testify on the important topic of our 
nation's forests. On behalf of the Society of American Foresters, I 
would also like to thank you for your tireless work to improve the 
Renewable Fuels Standard (RFS) passed in the 2007 Energy Bill.
    My name is Matthew Smith, I am a Private Consulting Forester, SAF 
certified forester, Member of the Association of Consulting Foresters, 
Adjunct Professor of Forestry at SUNY Environmental Science and 
Forestry in Syracuse, NY, Sustainable Forestry Auditor, Member of the 
Chicago Climate Exchange Forestry Committee, and Director of Ecosystem 
Services at FORECON Inc. I am here today representing the Society of 
American Foresters for which I serve as Western New York Chairman, and 
member of the SAF Climate Change Task Force.
    The Society of American Foresters (SAF) is the national scientific 
and educational organization representing the forestry profession in 
the United States. Founded in 1900 by Gifford Pinchot, the first Chief 
of the Forest Service, SAF was chartered to advance the science, 
education, technology, and practice of forestry for the benefit of 
society. Today SAF publishes several scientific peer-reviewed journals, 
certifies foresters and accredits forestry schools among other things. 
With over 14,000 members SAF is largest professional forestry society 
in the world. SAF members include natural resource professionals in 
public and private settings, researchers, CEOs, administrators, 
educators, and students.

Our Forests
    The United States is blessed with abundant forest resources. In 
fact the US holds approximately eight percent of the world's forests, 
placing it among the top 4 countries in the world. The US forest base 
is estimated at some 755 million acres, and has been stable at this 
level for about the last 100 years. The US forests are dominated by 
private non industrial landowners, which combined own roughly 57% of 
the forests in the country. This forest base is however, dynamic, with 
about one million acres of forest lost to other land uses annually. 
Fortunately, these losses are typically offset by new forest 
establishment, such as abandoned agricultural land, in other regions.
    While America's forests are fairly stable in area, they grow in 
volume, with growth exceeding removals over the past 50 years. Advances 
in forest management techniques along with natural factors have 
resulted in increased production from our forest base. In spite of this 
increased production of wood volume, US demand for forest products 
still exceeds annual production by 4.2 million cubic feet. As a result, 
the US imports approximately 36% of its wood products annually. The 
import of wood products to American shores raises key environmental 
concerns as much of this supply can come from regions without the 
environmental and sustainable qualities of wood that is grown 
domestically.
    Forests are inseparably linked to American society and culture. 
Forests give us innumerable benefits including; wood products, jobs, 
food, fuel, clean air, carbon uptake and storage, recreation 
opportunities, clean water, cultural benefits, open space, wildlife, 
biodiversity, scenic landscapes, and many more. Forests are unique as a 
natural resource because they can provide these values in concert with 
one another, on a renewable basis, through sound sustainable forest 
management.
    I'd like to illustrate the critical contribution forests make to 
America by taking a brief look at my home State of New York. When most 
people think of New York, they think of Time Square, Broadway musicals, 
and sky scrapers. Most people have little appreciation for how 
significant the forest resources in New York are, or how important they 
are to our state-wide economy. New York State currently has an 
estimated 18.8 million acres of forests (61% of land area), owned 
primarily by private landowners. These forests provide NY with over 
55,000 jobs in rural communities, and have an estimated net economic 
impact of almost $12 billion dollars each year. Recently, with the 
downturn in housing starts, increased energy costs, and depressed wood 
product markets many of these jobs have been lost, resulting in a 
significant reduction in the economic contribution realized from the 
forest economy. The situation in New York is just an example of what is 
happening across the country. Forests, and the communities that rely on 
them, are under pressure from both human influence, and natural 
factors.

Challenges for the Future of America's Forests
    The story of America's forests contains many successes, including 
their abundance, diversity, ecological services, recreational 
opportunities, and vast array of wood products they produce. Many 
times, however, it is the challenges to our forest resources that we 
hear the most about, and understandably so. Catastrophic wildfires, 
invasive species, changes in land use (deforestation), climate change, 
global competition, and increased demand for traditional and emerging 
forest products are just some of the challenges we face.
    In the past five years, over 42 million acres of federal forests 
has burned in the US. In 2006 wildfires in the US burned nearly 10 
million acres, cost $1.9 billion to suppress, and were 166% greater in 
extent than the previous 10-year average. Due to climate change and 
public land management practices, future fires are likely to be more 
severe, cost more to suppress, and have greater impacts on air and 
water quality, wildlife habitat and infrastructure. Current estimates 
show that 180 million acres of federal forests in the US are at an 
unnaturally high risk of catastrophic wildfire. At present, harvest 
levels on national forests are about one-eighth of the growth resulting 
in forests that are overly dense, unhealthy and prone to unnaturally 
severe wildfire. In Oregon, tree mortality on federal lands from 
insects, disease, and fire is reported to be six times the level of 
harvest. Though there is some debate, it is generally agreed that 
continuation of this situation will not lead to healthy, sustainable 
forests that store carbon and serve the national interests. In eastern 
Washington, federal forests will soon become a source of carbon 
emissions rather than a sink due to decay from insect and disease 
infestation and catastrophic wildfires. This picture is true of many of 
our federal forests, especially those in the West.
    In 2006, almost eight percent of US forests (58 million acres) were 
at significant risk to insects and disease, either natural or 
introduced. This issue continues to be of significance nation wide, 
perhaps most significantly with the spread of Mountain Pine Beetle in 
the Western US. In New York we are also battling infestations of 
foreign pests such as Sirex Wood Wasp, Asian Long Horned Beetle, 
Hemlock Wooly Adelgid, and potentially the Emerald Ash Borer in our 
forests. The impacts of a warming climate on insect and disease 
pathogens is largely unknown. It is believed, however, that forest 
pests held in check by winter low temperatures may spread as the 
average temperature increases.
    Perhaps the greatest challenge our forests face is forest loss to 
alternative land uses. As our US population grows, it is estimated that 
approximately 44 million acres of private forestland in the US could 
experience drastic increases in housing density in the next three 
decades. As has been stated above, the host of values presented by 
forests are significant, however these benefits are only realized if 
the forests stay as forests. Frequently, forest loss can be attributed 
to a failure to recognize all of the values presented by the forested 
property.
    Hand in hand with keeping forests intact is having healthy and 
integrated markets for forest products and services. Landowners are 
much more likely to keep and manage their forestland if they have value 
as forests. This key component to preventing forest conversion is often 
overlooked and/or misunderstood by Congress. Emerging markets, such as 
ecosystem services, renewable energy and carbon offset projects, could 
also help to keep forests forested by adding an additional revenue 
stream to landowners. At the moment, however, we have a Renewable Fuels 
Standard that needlessly restricts most woody biomass, a cap and trade 
bill that doesn't recognize domestic forests and an energy bill with a 
Renewable Energy Standard that restricts woody biomass. All of these 
provisions, we are told, are in place to `protect' forests. To be 
perfectly clear, these policies will only harm our domestic forests and 
leave foresters with fewer options to manage forestland for the benefit 
of society.
    Meeting the needs of a growing global demand for forest values in 
the face of these challenges is a reality we face for the future. As 
our population grows and spreads into the rural areas of our country, 
and as the impacts of a warming climate are realized, these pressures 
will increase exponentially. These challenges can only be addressed 
with thoughtful, deliberate, sustainable forest management.

The SAF Climate Change Task Force Report 2009
    In response to the growing concern about anthropogenic climate 
change and the diverse opinions that exist on the impact it would have 
on forests, the SAF assembled a group of 12 experts from across the 
country to form the SAF Climate Change Task Force. The group was 
assembled in 2007 and was charged with reviewing the body of available 
research on climate change, clean energy, forestry, and carbon 
sequestration. The objective for this group was to inform its 
membership and the public by summarizing the most current and best 
available research in the form of a Task Force report. The report was 
completed in 2008 and was published early in 2009. The end result is a 
very comprehensive and current presentation of the science of climate 
change as it impacts and is impacted by forest resources and the role 
forests play in the global climate budget. The findings of the report 
are summarized below.
    Forests are shaped by climate. Changes in temperature and 
precipitation regimes have the potential to dramatically impact forests 
nationwide. Climate is also shaped by forests. This interrelationship 
means that dramatic change to one will somehow influence the other. 
Climate change has the potential to transform entire forest systems, 
shifting forest distribution and composition.
    Wood products from sustainably managed forests can be replenished 
continually, providing a plentiful and dependable supply of both trees 
and wood products. Substituting wood for fossil fuel-intensive products 
can substantially improve environmental performance and store carbon in 
wood products while also supporting other ecological services, such as 
clean water, clean air, wildlife habitat, and recreation. Life Cycle 
Inventory analysis reveals that when wood products in construction are 
used instead of steel, concrete, brick or vinyl materials, the wood 
products store more carbon and use less fossil energy.
    Green House Gas (GHG) emissions can be reduced through the 
substitution of biomass for fossil fuels to produce heat, electricity, 
and transportation fuels. Biomass can also be used to produce a wide 
range of plastics and chemicals traditionally made from fossil fuels. 
Product substitution involves the use of biomass to replace products 
that would emit more GHG per functional unit. While some of the 
increasing need for sustainable electric power can be met by renewable 
energy sources such as solar and wind, biomass is the only renewable 
that can meet our demand for carbon-based liquid fuels and chemicals.
    Wildland fires are a major contributor to national and 
international GHG emissions. The EPA has estimated that wildfire 
emissions in the lower 48 states and Alaska released an average of 
105.5 million metric tons/year (range: 65.3 to 152.8) of carbon dioxide 
into the air from 2000 to 2005. Active forest management to improve 
forest health and reduce hazardous fuels can dramatically reduce CO2 
emissions while also enhancing wildlife habitat, recreational and 
scenic values, and reducing the threat of wildfires to communities and 
critical infrastructure. This management can also contribute to the 
health of rural communities and economies by providing family-wage 
jobs.
    Land use change from forests to non-forest use releases carbon and 
other GHG's stored in forests. No other anthropocentric activity, 
besides energy production, releases more carbon emissions globally: 150 
billion tons or 33 percent of the total emissions between 1850 and 
1998. While this is mostly an international problem and U.S. forestland 
area has remained relatively stable since the 1920s, forest land use 
and carbon policies need to encourage the retention and enhancement of 
forestland. Again, healthy and diverse markets will play a large role 
in preventing forestland loss.
    Managed forests are unique in that they contribute to GHG reduction 
while simultaneously providing essential environmental and social 
benefits including clean water, wildlife habitat, recreation, forest 
products, and other values and uses. The important metric is net carbon 
uptake and storage. Forests of all ages and types have remarkable 
capacity to sequester and store carbon. Enhancement of this capacity 
depends on active, informed forest management.
    Market-based instruments encourage environmentally sound behavior 
through market signals rather than through explicit directives 
regarding pollution control levels or methods. When well designed and 
implemented, these instruments will create incentives that alter the 
producer's pollution control strategy in ways that benefit the producer 
while meeting pollution reduction policy goals. Market-based climate 
change policy instruments provide economic incentives that promote 
innovation in the development of pollution abatement technologies 
because it is always in the entity's best interest to do so.
    It seems surprising that society currently seems reluctant to 
embrace forest conservation and management as part of the climate 
change solution. Time is of the essence and the forestry profession 
must transmit a clear, urgent message to society that global warming is 
probable and forest management can mitigate climate change effects. 
History has repeatedly demonstrated that the health and welfare of 
human society is fundamentally dependent on the health and welfare of a 
nation's forests. Society at large, the U.S. Congress, and state 
legislators must not only appreciate this fact, but also recognize that 
the sustainable management of forests can, to a substantial degree, 
mitigate the dire effects of atmospheric pollution and global climate 
change.

A Unique Opportunity in Time
    Ours is an exciting time to be working in the environmental field. 
The increased environmental focus generated by concerns centered on 
climate change is creating increased opportunities in the area of 
forestry. New products such as biomass and bio-fuels, voluntary 
greenhouse gas reduction (cap and trade) programs for forest offsets, 
and the development of ecosystem markets for forest based services such 
as water and biodiversity are transforming how we view and value our 
forests. The capture and recognition of these new products and services 
from forests stand to have significant positive impacts on forests and 
forestry in the US.
    The emerging markets for forestry derivatives like carbon credits 
and biomass are proven to have significant positive impacts on climate 
change. The realization of income streams from these products holds 
huge potential to alleviate financial pressures to change forest land 
use, incentivize the expanded use of sustainable management practices 
on private lands, create jobs and stimulate economies in rural areas, 
and also to expand the ecosystem services provided by forests nation 
wide. It is important however to recognize that these benefits can only 
be realized if Congress and the Federal Government allow forests to 
fully participate in these programs and markets.
    Our current Administration stands poised to initiate clean energy 
and climate change programs that will define environmental policies on 
greenhouse gases for future generations. This opportunity can either 
result in increased opportunities to embrace forests and their benefits 
for the future, or create barriers to their contribution to the climate 
change problem. Much of the future for forests in the realm of climate 
change programs will lie in how policies for these programs are 
designed today.

Action Items for the Committee
1. Ensure a role for all forest offsets in Federal cap and trade
    Numerous bills have been proposed on climate change over the past 
few years. Most recently the American Clean Energy and Security Act was 
approved by the House Energy and Commerce Committee. The Act, however, 
did not recognize domestic forestry offsets.
    As legislation moves forward, attention must be paid to the role of 
terrestrial offsets from forestry projects. Forest offsets provide low 
cost, measurable, real carbon reductions to cap and trade systems. 
Forests provide these climate benefits with unequalled ancillary 
benefits such as clean water, biodiversity, and recreational 
opportunities--benefits not realized by any other offset type. 
Moreover, forests can provide these benefits now. Domestic offset 
projects allowed in any Federal cap and trade program must include 
opportunities for afforestation, reforestation, forest management, and 
harvested wood products (long-lived wood products). Further, the 
Federal Government must develop credible, accurate, and economically 
viable opportunities to recognize the important contribution forestry 
projects make to the climate change program.

2. Ensure that early actors in qualified voluntary programs are 
        recognized
    With the development of voluntary GHG reduction markets and 
programs in the US, has come an age of innovation, investment, and 
development for terrestrial offsets such as agriculture and forestry. 
Millions of tons of carbon dioxide have been sequestered in and traded 
from independently verified terrestrial offsets in the US and abroad. 
These early actors have not only led the way with early climate change 
actions, but they have developed innovative new technologies and 
processes to quantify, produce, and report carbon instruments in this 
new industry, to the benefit of all. Current language in the American 
Clean Energy and Security Act would significantly limit the recognition 
of these early actors.

3. Ensure that investments in offsets and clean technology continue
    The American Clean Energy and Security Act includes provisions for 
a list of approved offsets to be developed at a later date by the 
Environmental Protection Agency (possibly out as far as 2012). The 
impact of this provision will likely result in slowed or no investment 
in the offsets sector as developers and owners of offset projects wait 
to see if their actions will be recognized in the Federal program. The 
SAF encourages the Committee to push for a comprehensive listing 
(including forestry and agriculture) of approved offset types and 
programs as soon as is possible in order to maintain growth and 
investments in this industry.

4. Encourage Woody Biomass Energy
    As the House Agriculture Committee is well aware, the definition of 
`renewable biomass' in the Renewable Fuels Standard passed in the 2007 
Energy Independence and Security Act must be corrected. This 
prescriptive, restrictive definition serves as a disincentive to 
restore forest health in many areas and only hampers efforts to reach 
renewable fuels mandates. The SAF recently submitted testimony with the 
House Agriculture Committee on this problem and that testimony is 
attached. Further, the most recent version of the American Clean Energy 
and Security Act includes a Renewable Energy Standard (RES) of which 
the definition of biomass is overly restrictive, especially on federal 
lands. Attached to this testimony is the SAF's most recent letter to 
the House Energy & Commerce Committee explaining the problems with the 
definition.

5. Encourage existing and new markets
    Without markets, whether they're traditional or emerging, foresters 
cannot manage forest land. With the plethora of challenges facing 
domestic forests-wildfire, insects & disease, conversion, climate 
change-forests across the nation will need to be managed by 
professional foresters to conserve their many values and ensure they 
provide these values for future generations. Congress must be 
thoughtful about the laws it passes and must avoid perverse and 
unintended consequences.

6. Restore Forest Health on Federal and Public Forests
    Our vast public forests, much like private forests, can be either a 
sink for CO2 or a source of CO2. The deplorable state of forest health 
on public forests, especially in the West, indicates that most of these 
lands will soon become of a source of CO2 through emissions from 
wildfires and decay. This problem also adversely affects wildlife 
habitat, water quality, aesthetic values and costs the Federal 
Government billions of dollars each year. The current law, regulations 
and case law governing federal forest management does not allow federal 
land managers to solve this problem. Congress must act to provide the 
authorities needed to appropriately deal with this problem.

Closing
    I would like to thank the Committee and The Society of American 
Foresters for allowing me to share with you this information on our 
nation's forests, its challenges, and opportunities for the future. It 
has been my extreme pleasure to be here with you today. I look forward 
to your questions and comments.

    Mr. Baca. Thank you very much, Mr. Smith, and I appreciate 
each and every one of the panelists. I know that we went a 
little bit longer on the 5 minutes, and the reason I did that 
is because you were patient enough to wait and so we needed to 
be patient enough to hear your comments as well, so I 
appreciate that very much. I want to thank all the panelists 
for being here and for being patient and waiting until we were 
done voting. Now we will begin with the process of asking some 
of the questions. And I will begin myself by asking Mr. Bentz a 
question first. Thank you for your testimony today. I am 
intrigued by your findings on energy ecosystem service market, 
and in my area in southern California we have a significant 
problem with water, pollution through the form of perchlorate 
contamination. Perchlorate is a rocket fuel additive that can 
be found in some of the well heads due to defense constructions 
that occurred at one time in San Bernardino County. Can you 
explain for the Subcommittee in greater detail what the role of 
the forest watershed play in water purification?
    Mr. Bentz. Forests have a huge impact in purifying the 
water. When the water goes into the soils, first of all, the 
trees, the root systems, hold the water there and uptakes the 
chemicals. It helps clean it out. So forests maintain the soils 
in place so the soils don't move and again provide cover, and 
so they do contribute tremendously to clean water. Also, they 
provide shade. They maintain temperature of the water along our 
streams so that our repairing areas are really critically 
important for maintaining water quality and having forests in 
those repairing areas is also very important.
    Mr. Baca. Along the same line, is there a feasible way that 
this type of purification can stop contamination from harmful 
chemicals like perchlorate?
    Mr. Bentz. I am not aware of that. No, sir.
    Mr. Baca. Okay. Under the renewable energy market it seems 
to be an emerging opportunity to supplement the declining 
traditional timber market. How do you see this playing out for 
the family forest owners?
    Mr. Bentz. In the renewable energy component?
    Mr. Baca. Yes.
    Mr. Bentz. The renewable energy component allows these 
lower value woods to find the market. We are seeing markets for 
pulpwood and some of these other byproducts going away as our 
paper industry declines, and so having these renewable energy 
markets available allows landowners to sell these lower value 
woods into these things, so it is an extremely important 
economic resource for the family forest landowners.
    Mr. Baca. Mr. Koehn, the Federal Government currently 
requires flood insurance in certain areas, also participation 
in some agricultural commodity programs require insurance. Do 
you think the high cost of firefighting suggests that we might 
want to examine requiring fire insurance in certain fire prone 
areas?
    Mr. Koehn. I believe that there is some communities in this 
country that do have the requirement for fire insurance in some 
of the fire prone communities. I don't think that is a national 
requirement. I think that is done at the state and local level, 
so there is, I believe, in some cases an example for that.
    Mr. Baca. Okay. Do you believe that the national standards 
for long-term forest health, even ones that might pre-empt 
current state laws are necessary?
    Mr. Koehn. It depends on which practice and piece of 
statute that we are talking about.
    Mr. Baca. All right. What can we do at the Federal level to 
ensure that our states, local governments implement long-term 
forest health strategies to minimize the risk of fire, insects 
epidemics, and prevent harmful greenhouse gas emissions?
    Mr. Koehn. Well, on a fire front, as long as we continue to 
have the support and the resources that we have from partners 
like the U.S. Forest Service, state fire assistance funds and 
helps the states provide those kinds of assistance when the 
fire whistle blows and they need yellow shirts from back east 
or other states, those things are important. Your other 
question about, forgive me, help me, beyond the fire was--you 
had a second part to your question. I am sorry.
    Mr. Baca. Okay. The second part, what can we do at the 
Federal level to ensure that our states and local Government 
implement long-term forest health strategies to minimize the 
risk of fire and insect epidemics and prevent harmful 
greenhouse gas emissions?
    Mr. Koehn. All right. As far as the insect and disease go, 
and the same thing with fire, well-managed forests are more 
resilient than forests that are not well managed, so if a 
forest is growing vigorous and doing well, its potential to 
withstand catastrophic fires improve, and its potential to 
withstand insect and disease infestations is improved, so a 
rigorous, well-managed forest is probably the best preventative 
way to deal with some of those issues. We also probably could 
support and would advocate for funding for APHIS for early 
detection for insect and disease. I am in a state that has been 
struggling for the last couple of years with emerald ash borer 
as many other states are, and if we had not had the opportunity 
for early detection the problem would be much worse.
    Mr. Baca. Okay. Thank you. I have additional questions for 
the rest of you, but I am going to pass and call on the other 
Members, but I am going to ask one yes or no answer. Based on 
what I heard today from both the deputy secretary as well and 
from all of you in some sense or another, do you think that we 
should have a hearing in biomass?
    Mr. Koehn. Yes.
    Mr. Bentz. Yes.
    Mr. McPeek. Yes.
    Mr. Monaghan. Yes, sir.
    Mr. Smith. Yes, sir.
    Mr. Baca. Okay. Thank you. With that then, I will go to Ms. 
Lummis to ask the first question. You have 5 minutes.
    Ms. Lummis. Thank you, Mr. Chairman. Given the presence of 
the former Chairman of the Agriculture Committee, I would defer 
the questions that I have to him for the time being, but I 
would like to ask a couple later.
    Mr. Baca. Mr. Goodlatte.
    Mr. Goodlatte. Thank you, Mr. Chairman. That was very 
generous. I was prepared to wait on you but if you don't--first 
of all, I want to thank you all for your testimony. I find it 
very helpful. I am in concert with most of you who believe that 
we need to have fair consideration of our forest products in 
terms of any renewable fuels standard and policy, so I am a 
supporter of Congresswoman Herseth Sandlin's legislation that 
would change those provisions to allow woody biomass to be 
counted in that program.
    Mr. McPeek, I am a member of and have been a supporter of 
The Nature Conservancy for many, many years, and like many of 
the things that you do. I was concerned, however, about a 
statement that you had in your statement regarding the biomass 
putting too much pressure on--I want to quote you directly, but 
I can't put my finger on it right now, too much pressure on our 
national forests, and I wonder if you could cite for me some 
examples of that. Virginia as a whole is 62 percent forested, 
and my district it is an even higher percentage, closer to 70 
percent of all of the land in my district is forested. About 
half of that is in our national forest, about half of it is in 
private land ownership. The half that is in private land 
ownership produces about 96 or 97 percent of the forest 
products, both for the paper mills. I have four of those in my 
district, and we have a lot of hardwood lumber production as 
well.
    And the national forest, which comprises 50 percent of the 
forest land, produces somewhere between 3 and 4 percent of the 
wood products. Where is it that you see that a program to 
generate greater biofuel production from forest products would 
put undue pressure on our national forest land? It seems like 
right now whatever undue pressure may exist on private forest 
land. I wonder if you might----
    Mr. McPeek. First, thanks very much for your support over 
the years. We greatly appreciate it. We are not against a real 
energy standard that includes woody biomass at all. It is 
really just a matter of having the necessary sideboards to not 
have incentives to clear native forests on private land and 
have sustainable practices on public land. Sustainable forest 
management also creates a sustainable industry if we manage the 
forests. Unsustainably, the industry won't be able to sustain 
itself either. So in terms of the overall climate change issue 
the cap on greenhouse gas emissions is the best approach to 
dealing with that issue. We have not taken a position on the 
renewable energy standard but if there was one all we would 
recommend are those sideboards that prevent those kinds of----
    Mr. Goodlatte. But wouldn't putting a cap on greenhouse gas 
emissions raise the cost of a wide variety of energy sources 
and those that are potentially more greenhouse gas friendly, 
and since trees grow by absorbing carbon dioxide presumably 
they are more friendly than other types of sources of energy. 
But I am in favor of increasing production of all sources of 
energy because I think we have a very serious risk that we are 
already starting to see right now as oil prices start to climb 
again of pricing ourselves out of being internationally 
competitive without greater domestic production of energy. But 
a part of that production to me should be biomass production 
from forest products. And I wonder if some of the other panel 
members would like to comment on that. Do you think that simply 
putting a cap on CO2 emissions is the best way to 
address this problem as opposed to increasing the production of 
energy from forest products?
    Mr. Monaghan. If energy provides a market to landowners, I 
think it is proven that landowners will do the right thing and 
respond to those market incentives by doing a better job of 
forest management. I don't see it as anything but a win-win 
situation. I have never seen a situation where you take a 
market incentive away from someone and they respond by making a 
positive action in the future. They are more likely to reinvest 
in sound forest management if they have a market incentive for 
doing so.
    Mr. Goodlatte. Thank you. Mr. Bentz.
    Mr. Bentz. Right now we think the forests are sequestering 
about 10 percent of our carbon nationally, and we believe that 
with active management of our forests that that number could be 
doubled to as much as 20 percent, so we actually see a lot of 
room to improve our forest management and our carbon 
sequestration at the same time providing all these benefits as 
well.
    Mr. Goodlatte. The current Waxman-Markey bill dealing with 
climate change makes no mention of domestic forest offsets. I 
wonder if some of you might comment on the benefits of domestic 
carbon offsets in a cap and trade system and how do we ensure 
that these offsets are real? Mr. Koehn, is that something you 
are familiar with?
    Mr. Koehn. I can speak to that in the sense that some of 
the things that we do in forestry don't always meet the same 
kind of rigor that you require for a tradable credit but we do 
believe that there should be some allowance in programs for 
credit for landowners who do undertake some of these projects 
but maybe not have the rigor that is required for something 
that might be traded on the Chicago climate exchange or 
something like that, so it is difficult with the accounting to 
demonstrate that in some cases, but we believe that some of 
these positive aspects should be recognized in some other forms 
of programs that we could offer through state and private 
forestry programs.
    Mr. Goodlatte. Mr. Chairman, I see my time has expired.
    Mr. Baca. Thank you very much, Mr. Goodlatte. At this time, 
I would like to call on the gentleman from Mississippi, Mr. 
Childers, for 5 minutes you are recognized.
    Mr. Childers. Thank you, Mr. Chairman. I guess I am 
directing this to everyone, and anyone feel free to jump in but 
specifically, Dr. Monaghan, you are familiar with certainly our 
district. Northern Mississippi has a lot of sawmills. We have a 
lot of forest land. And I am a relative new member of Congress. 
Apparently, the timber sellers in Canada, this is having a 
negative impact on us, and I have some of the most 
sophisticated sawmills. They are really remarkable in north 
Mississippi, specifically one in Tippah and Grenada County that 
I am thinking about. I take that at face value when they tell 
me this is happening to them, but what can Congress do to help 
our timber sellers, if you will, which would ultimately help 
our mills as well in the market? What can Congress do that they 
are not doing already?
    Mr. Monaghan. Well, the Canadian lumber agreement 
settlement in the past few years looked at that situation very 
closely with regard to competition or what we would call unfair 
competition from other countries. So a promotion of fair and 
even trade is obviously one of the things that was discovered 
that there were certain situations where the Canadian 
Government was subsidizing some of the industries up there so 
it created unfair situations. But as far as what we could do in 
the future in a situation like that, one of the primary things, 
of course, is to look at any situation that comes along as an 
opportunity to provide markets for forest landowners, and 
because if they have a market that means that somewhere along 
the line those industries, those sawmills, other buyers of wood 
products, are in a favorable situation as well.
    So I think just fair competition and promoting free 
enterprise would do the job. If we try to artificially support 
our forest industries and our forest--the private forest 
landowners, it is hard to maintain that through artificial 
incentives, but for certain we need to be fair about any new 
programs, any new legislation, any new tax policy. We need to 
be fair and make sure it doesn't create a disincentive.
    Mr. Childers. Thank you. The Canadian lumber agreement, if 
that is its proper name, was supposed to do that, and can I 
just ask you all this, are we--by the way, Mr. Chairman, I 
would just like to say that I am proud to have Dr. Monaghan 
here because very rarely do we have anybody who talks like I 
talk. He comes in here----
    Mr. Baca. I noticed that accent.
    Mr. Childers. I appreciate him being here. Are we not doing 
our part on that agreement? Are we not enforcing our own 
agreement, do you think?
    Mr. Monaghan. I honestly can't answer that.
    Mr. Childers. Mr. Neiman. I was going to you with that 
question. I saw you reaching for the mic, so thank you.
    Mr. Neiman. I have had a real struggle the last number of 
years watching the whole interaction. It appears to be a one-
way street when you look at how we deal with the Canadian 
Government. I think it has been very unfair. We have watched 
two judges from Canada picked with one from down here to make 
decisions. Millions of dollars passed back the year before last 
to the Canadian Government. I think our Government got $1 
billion and they got $5 billion or $6 billion. There has just 
been a number of issues that really disturbs me. I wish you 
could just figure out ways to make it fairer and balanced. 
Canada has a whole different philosophy. They continue to do 
everything possible, including labor incentives and discounts 
on their stumpage, just endless benefits. It is a whole 
different philosophy and in turn it is our responsibility as a 
Government from my end to hold them accountable and create the 
tariffs that balance that out. Otherwise, they have an extreme 
advantage not counting when you look at what the exchange rate 
has done. We have watched the exchange rate this year drop from 
our dollar to $1.30 down to $1.18 and back up. They have a lot 
of advantages that can really hurt our industry.
    Mr. Childers. So we are not doing our part?
    Mr. Neiman. You are correct.
    Mr. Childers. My time has expired. Thank you all.
    Mr. Baca. Thank you very much. Since Ms. Lummis yielded to 
the past Chairman, Mr. Goodlatte, I am going to call on Ms. 
Lummis to ask her questions.
    Ms. Lummis. Thank you kindly, Mr. Chairman. My questions 
are for Mr. Neiman, and thank you all for waiting for us during 
our voting time. As was pointed out earlier, Wyoming being 
97,000 square miles, the 9th largest state in the country, one 
sawmill in the entire state and it is Mr. Neiman's. What are 
the biggest factors, Jim, in forcing the forest products 
industry to struggle so much when we have this vast renewable 
resource?
    Mr. Neiman. I think you can go to one basic area and the 
inconsistency or the lack of supply of national forest timber 
from all forests is the biggest. You can then drop down to a 
number of different reasons, increased NEPA cost to the forest, 
litigation, appeals. It just goes on and on, the different 
things that stymied the Forest Service. It is like our courts 
have control over our decision making process on the forest. If 
you look at Wyoming as a whole, you had a mill in Dubois, 
Wyoming, you had one on Laramie, you had one in Saratoga, you 
had one in Newcastle, you had one in Riverton, you had one in 
Sheridan. They are all gone.
    The problem goes back to the improper lack of applying true 
science. A lot of this started in the 1960's and 1970's with 
the misperception of clear cutting. A lot of those forests were 
shut down with the perception that clear cutting is bad and 
lodgepole needs to be clear cut if you study the science. So 
what does Mother Nature do with fire and with bugs? It clear 
cuts. It is an even age stand, so we got to allow the 
foresters--we got to get the science down to the lowest 
possible level we can to make the decisions.
    Ms. Lummis. Thank you. With regard to your co-generation 
facility that is proposed, can you expand on how a co-gen 
facility at your sawmill would improve forest management in the 
Black Hills National Forest?
    Mr. Neiman. If I look at it from the big picture, the Black 
Hills National Forest produces about 5,000 slash piles a year. 
That ends up being a hundred and some thousand tons, bone dry 
tons, of carbon if you want to look at it in terms of carbon, 
that they burn and it costs them between $1.5 million and $2 
million to burn those piles. Then they have to treat those 
slash piles for weed treatment from 5 to 10 years because it 
has changed the soil type. We could go in and grind those piles 
up at no cost to the Forest Service, turn that into energy and 
have renewable energy in our case, supply steam to Black Hills 
State University, which is really excited about being a green 
college. The benefits go on and on. When you look on the 
private side, private lands, what that can do to help ranchers, 
it is the same identical benefit.
    Ms. Lummis. Thank you. I also want to ask what actions are 
needed at the Federal level to move forest management plans to 
prompt removal of dead and dying trees from beetle kill or 
fires?
    Mr. Neiman. Is that question for myself?
    Ms. Lummis. Yes, for you, Mr. Neiman.
    Mr. Neiman. You need prompt action. You need a process, 
particularly in ponderosa you sometimes have 2 months to get in 
and remove those before the bugs have got in and bored in. We 
have less time in ponderosa, so it is critical to take action. 
But the real solution is to figure out how to get ahead of the 
bugs within the forest. You can prevent that by getting in and 
doing proper management.
    Ms. Lummis. And can the forest products industry help with 
that?
    Mr. Neiman. Sure. Right now in the Black Hills, that forest 
is growing about 150 million a year, the annual growth. The ASQ 
is about 83. We just got back up. We need a capacity of between 
120, 130 million. We are begging for more wood. So, otherwise, 
we got to go to Montana and Nebraska and the economy will not 
allow it. We have had to curtail because of the additional 
cost. Our working circle has shrunk. We would beg to move into 
higher cuts and move in quickly, remove the bugs, and thin 
around the area. You got to keep in mind that bugs are endemic 
to every forest. They don't just appear. The forest becomes 
unhealthy and creates an epidemic by the multiplication of the 
bugs, but you got to recognize bugs are endemic to every forest 
nationwide so by proper forest health we can help and it helps 
our companies too.
    Ms. Lummis. And, Mr. Chairman, so slash piles can be either 
burned and produce more carbon with no benefit to the economy 
or they can be used to produce products that augment the 
nation's renewable energy resources, is that true?
    Mr. Neiman. Yes.
    Ms. Lummis. Well, I am delighted that we have had this 
array of testimony today, and, Mr. Chairman, I deeply 
appreciate your holding this hearing. Thank you so much.
    Mr. Baca. Thank you very much. I know that we have gone 
around. Is there any pressing time on your part because I know 
that somebody had to leave earlier, and, if not, we would like 
to ask if there are additional questions. I know I have some 
additional questions I would like to ask. If there are any 
other Members that want to ask additional questions, we can 
turn around and ask, but since we have not completed--hearing 
that there is no one pressing to leave, we will keep you here a 
little longer. I have a question for Mr. Smith. First of all, 
thank you very much for the informative testimony, and thank 
you very much for the six additional points that we will look 
at too as well. It is something that I wrote them all down so 
hopefully we can look at these points.
    But as you mentioned earlier, I am well aware of the 
devastation caused by wildfires, but I was surprised by your 
testimony to learn about how major contributors they are to 
greenhouse gas emission. How do you think that we best get 
across to society and to mainstream America the message that 
forest conservation and management are critical steps in 
helping stop negative effects of climate change?
    Mr. Smith. Well, thank you for the question. Forests are 
part of the answer for climate change, but without management 
forest can end up being a net source through wildfire and 
decay. Education and an appreciation for the impacts of our 
activities on the forest landscape seems to be the knowledge 
gap that we are missing with the general public. Folks have 
lost their attachment to the forest and have lost an 
appreciation for what we look for from the forest and what 
occurs when we stop management. I have listened very closely to 
your opening comments, Mr. Baca, about what can we do to 
safeguard our forest fighters, what can we do about the 
wildfire issue. The answer to me is clear: Loosen the reins of 
the U.S. Forest Service and allow them to continue to manage 
the forest, thin the forest, and maintain it in a healthy 
condition.
    This is the only way to curtail the deep budgets that we 
need to fight wildfire and the risks we take in the loss of 
homes and the loss of life through firefighters. But in the 
climate change issue, this is all tied together, create markets 
for renewable fuels, create markets for things like carbon 
credits, do things to strengthen our traditional markets, and 
you have the tools you need to manage the forests in a way that 
contributes positively to the issue of climate change.
    Mr. Baca. Okay. The next question I have, and, thank you, 
being from the west I have seen the firsthand devastation of 
the bark beetle. You mentioned in your testimony several other 
pests that are attacking the eastern forests. I haven't spent 
enough time in other areas so could you please compare the pest 
destruction in the forest to those in the west?
    Mr. Smith. Well, what is happening in the east is not at 
the scale and not at the magnitude of what is happening with 
the mountain pine beetle, but what we have are invasive pests 
that enter our ports, enter our shores from other places. They 
come in. They have very few natural predators, and unchecked 
they are allowed to exploit some of our resources. One of the 
most substantial right now, one of the primary concerns in the 
Lakes States and western New York, Northwest Pennsylvania is, 
of course, the emerald ash borer, an insect for which we have 
no real practical control, but one that is having an enormous 
economic impact. It focuses on our white ash and green ash 
resources, and if you are a baseball fan that is important to 
you. Ash is the primary species that we use to make baseball 
bats and a variety of other products that are important to 
every day life.
    So we have the same types of things happening throughout 
the country, in the South, in the West, and in the East, and 
these are important issues. They are important issues that we 
need to consider as we have legislation enacted to try to 
filter these things before they get to our shores because once 
they are here, they are very problematic to deal with.
    Mr. Baca. Thank you very much. I am a baseball fan. In 
fact, we have our baseball game coming up on June 17, but we 
use aluminum bats. But for major league baseball that is a 
concern that we really have right now because all of the bats 
are wooden bats, and most of the professional baseball players 
prefer wooden bats. Have they addressed that problem or that 
problem, has it come to their attention at this point?
    Mr. Smith. Well, one of my clients is----
    Mr. Baca. It affects the quality of the kind of bat that 
you also produce.
    Mr. Smith. Well, there are very few trees that make a major 
league quality bat. The specifications for a major league 
quality bat are very high. One of our clients is Louisville 
Slugger. We have managed some of their lands in Pennsylvania 
and New York for a very long time. This is, of course, of 
paramount concern to them, but there is very little right now 
that we can do about it. There are eradication procedures to 
try to take the affected white ash out of the environment and 
destroy it in an effort to curtail the spread of the insect, 
but right now nothing really has been all that effective. So it 
is one of very high concern, and something we are working very 
hard to take care of.
    Mr. Baca. That is something that we can look at. The next 
question I have for you, Mr. Smith, too as well, many critics 
say that the forestry offset simply pay landowners for some 
things that are already being done for forest carbon is hard to 
measure. How can we create forest offset projects that provide 
bona fide climate benefits?
    Mr. Smith. Thank you very much for going there. I was 
hoping we would end up in this place. I am very passionate 
about what should happen in the realm of forest offsets. 
Private landowners make decisions every day of what to do with 
their resource. Outside of regulatory requirements, they make 
free will decisions, free will decisions that are either to the 
benefit or to the loss of society when it comes to ecosystem 
services like carbon sequestration. The climate change benefits 
from a well-managed private sector forest are not guaranteed, 
so commitments on the part of a private forest landowner 
specifically to manage their forest sustainably and in a way 
that accrues carbon over time is additional and is an 
additional climate change benefit that we have not had to date.
    This is the cornerstone argument for why managed forests 
should be allowed in the Waxman-Markey legislation, but it is 
very problematic that it leaves the determination to what 
eligible offset is until later to be determined by the EPA. 
This is problematic. There have been hundreds of millions of 
dollars invested in the voluntary carbon market to date, 
investments that will significantly slow down, if not stop, if 
this community doesn't know what will be allowed in Federal 
regulation in 2012 or whenever it decides to take effect. So 
forests are important, forests are real. Foresters have been 
measuring the forests and measuring volume change in the 
forests since the profession began.
    We can quantify how much carbon is sequestered by forests, 
we can make an argument for additionality, and we can make 
provisions for permanence. They are a real and strong 
contributor and produce low cost emission reductions and are 
available today. Not tomorrow, they are available today.
    Mr. Baca. Thank you. Ms. Lummis, do you have any additional 
questions you want to ask?
    Ms. Lummis. You know, I do have one, Mr. Chairman. Thank 
you. And I learned this just over the break. I have always 
thought when it came to NEPA and FLIPMA that local governments 
were supposed to receive the opportunity to cooperate with the 
Federal Government with regard to land planning. That is not 
the word that is used in the law. That is the word that is used 
in the rules. The law says coordinate with local and state 
government, not cooperate, coordinate. And so they are supposed 
to be on equal footing, not have state and local governments 
cooperating with what the Federal Government wants, and I 
didn't even know that. I am embarrassed that I didn't know that 
until now. So my question is for Mr. Neiman. Would you talk 
about the involvement of state and local governments in forest 
planning and forest management, and how that is working out?
    Mr. Neiman. One of the primary reasons we have been at 
least partially successful in the Black Hills is the attempt 
both on South Dakota's side and the Wyoming side to get 
cooperating agency status. That has been instrumental in 
helping us have a voice at the state level from both states and 
with local communities, so that has been very, very critical. 
One other thing that I would suggest that could happen in other 
areas that could help out a bunch, a number of years ago it was 
in early 2000, 2001, and this was with the lockup of our 
forest. Our first drop was in 1997 and again we went down to 
zero in 2002 with forest lawsuits. And at that time, Senator 
Daschle implemented the National Forest Advisory Committee 
which brought environmental communities and all working groups 
from around the Black Hills, off-road riders and different 
interest groups to the table to settle issues instead of it 
being a national decision. So both cooperating agency status 
and that national advisory Committee appointed that time that 
is now a very effective group, working group. If you ever get a 
chance, I will introduce you to someone if you come up to the 
Black Hills. The pride they have now sitting down with The 
Nature Conservancy, different groups that are involved there, 
it is really rewarding to hear that they take ownership and 
have an involvement in the success of the Black Hills.
    Ms. Lummis. Thank you, Mr. Chairman. I wish all of the 
forests were managed as well as the Black Hills National 
Forest. I am not saying that there aren't problems there too, 
but it is certainly an example of how things can be done better 
than in the BT and some of the other forests that I have seen. 
Thank you very, very much.
    Mr. Neiman. Mr. Chairman, we are proud to recognize, as I 
stated earlier, that over close to Nemal the first U.S. Forest 
Service timber sale of all the 150 some national forests 
started there so we are proud to state that we are also the 
oldest managed forest.
    Mr. Baca. Also, thank you. Thank you very much for the 
statement too. I know that we have all been--I got one more set 
of questions, and I am going to ask Mr. McPeek. Again, thank 
for your testimony. As you mentioned in your testimony, the 
2008 Farm Bill included important progress in policies related 
to forestry conservation, access to water and water 
conservation, the two areas near and dear to my heart, with the 
ever worsening drought situation in southern California. What 
is your opinion is the best way for us to expand the progress 
made in the farm bill so that we can best utilize water 
resource capacities or capabilities of America's forest?
    Mr. McPeek. Mr. Chairman, I should probably get back to you 
if that is okay with a more detailed answer on that. I think we 
can give you some pretty good ideas about that.
    Mr. Baca. Okay.
    Mr. McPeek. I am not prepared to do that today.
    Mr. Baca. All right. What we will do then is for any 
Members that are here and those that are not here, we will ask 
them to submit a statement. But at this time, I would like to 
just basically thank all of you for participating in today's 
hearing and your thoughtful testimony. Your knowledge and your 
research will be used by Congress to find out the best policy 
to preserve, protect, and properly utilize America's forests. 
And again we have come up with some ideas. I think we all agree 
that maybe we should have a biomass hearing, so I think we will 
go in that direction. Again, I want to thank each and every one 
of you. I want to thank the Members for being here today. With 
that then, we will adjourn. But before we adjourn, I would like 
to state under the rules of the Committee, the Committee record 
of today's hearing will remain open for 10 calendar days to 
receive additional materials, supplementary written responses 
from the witnesses to any question posed by Members. This 
hearing of the Subcommittee on Department Operations, 
Oversight, Nutrition, and Forestry is adjourned. Thank you very 
much.
    [Whereupon, at 5:34 p.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

Supplemental Material Submitted By Matthew S. Smith, CF, ACF, on behalf 
               of the Society of American Foresters (SAF)

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