[Congressional Record Volume 140, Number 40 (Thursday, April 14, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: April 14, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                            TIMBER CONTRACTS

  Mr. MURKOWSKI. Madam President, my office was just advised by the 
Department of Agriculture that they have seen fit to cancel timber 
contracts affecting the Alaska Pulp Co. and, as a consequence of that, 
my State faces a future of some 1,100 Alaskans losing their jobs. These 
are jobs in Wrangell, Sitka, Hoona, Corner Bay, False Island, Rowan 
Bay, small communities that depended on the Alaska lumber and pulp 
timber contracts to provide an assured supply of pulp timber so that 
the pulp mill in Sitka and the sawmill in Wrangell can continue to 
operate.
  Madam President, these are relatively small communities. Wrangell has 
a population of about 2,300. The sawmill is a main source of employment 
of about 300 jobs associated with longshoring and timber cutting. While 
the Sitka pulp mill is down, every effort has been made to try to 
convince the Forest Service that the sanctity of the contract should be 
maintained, and that time should be allocated so that a medium-density 
fiberboard plant can be considered and placed in the pulp mill.
  Now, what we have here is an extraordinary example, I think, of the 
Clinton administration not practicing what it preaches. This is rural 
America, Madam President. These are situations in my State, as far as 
the pulp mill is concerned, where we have very little year-round 
manufacturing. As a matter of fact, we have two major plants that 
operate year round, one in Sitka and one in Ketchikan. The one in Sitka 
was forced to close for economic reasons. However, they appealed to the 
Forest Service to allow them approximately 6 months to complete a 
feasibility study for refitting the mill to manufacture medium-density 
fiber pulp.
  Now, the advantage of that and how it coincides with the objective of 
the administration, which is encouraging development in rural America 
by using new technology that would upgrade processing facilities and 
reduce air and water pollution, would seemingly fit into the 
administration's goals.
  The proposed medium-density fiber mill would use 25 percent less 
timber, and water pollution is virtually eliminated. The concept of 
jobs is a major factor in the administration's relative analysis of how 
America should progress because conversion of that pulp mill to medium-
density fiber would involve about 150 high-paying jobs in the city of 
Sitka, replacing some 300-plus jobs lost with the closure of the pulp 
mill.
  Now, what we have here is extraordinary, because we have an 
interpretation, a rather unique interpretation, I might add, by the 
lawyers for the Forest Service in the Department of Agriculture that 
have extrapolated that indeed it is an obligation of the Government to 
cancel this contract based on the fact that there is a termination of 
Alaska pulp companies' continuous year-round operation in violation of 
the contract.
  I challenge that. That is totally inaccurate. They have continued to 
cut timber. That timber has been going to the Wrangell mill, going 
through the sawmill; other timber that cannot go to the sawmill has 
been sold to the Ketchikan pulp mill. To suggest that the conditions of 
the contract are unfulfilled as a consequence of the termination of the 
pulp mill is absolutely inconsistent with reality. Yet, they have 
chosen to come down with that decision.
  What they have done is they have made a policy decision instead of a 
legal decision.
  It was rather interesting to note, and I am quite aware of this, that 
the Department of Agriculture had two letters. They had one letter 
authorizing an extension, if you will, considering the aspects of the 
feasibility study, which still has some 4 months to go, and then they 
had another letter of outright rejection.
  Well, the attorneys prevailed, and the letter calling for outright 
canceling of the contract was issued, and now there are about 1,100 
Alaskans that are going to be out of jobs and are not going to sleep 
very well tonight, Madam President, because there is an arbitrary 
decision that the Government is holding this company in breach of 
contract.
  Now, what are the damages to the Government? It is pretty hard to 
make a case. You know, if timber is being cut, jobs are being provided, 
a tax base is occurring. Is that not of some benefit to the Government?
  But they have chosen to cancel the contract, saying the company is in 
breach because it shut down the pulp mill. But the pulp mill is not the 
only function. There is a sawmill that company owns, and there is a 
timber operation that provides employment.
  Now, what this is going to do, Madam President, is result in a full 
employment act for lawyers. This is going to be litigated. The cost to 
the taxpayers is in the millions of dollars, close to $1 billion, and 
the Government could very well, in the opinion of the Senator from 
Alaska, lose this suit.
  The administrators that call these shots, those lawyers, do you think 
we are going to be able to hold them accountable? Absolutely not. They 
are nameless. They are faceless. They are out there and they are 
responding to the extreme environmental community in the United States 
that wants to cease timber cutting in the national forest.
  The southern part of my State is all in the national forest. But it 
is just not a national forest, Madam President. People live there. They 
raise their children there; they have their homes there; they have 
their jobs there. And now, arbitrarily, we have come down and said 
their contract is in breach because they shut down the pulp mill. No 
consideration for the continuing timber cutting that goes on, for the 
continuation of the Wrangell mill.
  It is absolutely inexcusable. It is the height of governmental 
irresponsibility. And to suggest that there is any rational explanation 
is one I guess that we will simply have to wait for because we do not 
have the full text.
  This decision shows a total callous disregard for Alaskans. This is 
one issue we have been totally unified on. The Governor, bipartisan, 
Republicans and Democrats, all of our cities have said: Give this 
company an opportunity to continue with its feasibility study another 4 
months; give this company the consideration to invest $60 million in 
new technology. The State of Alaska, through its loan program, has 
committed to fund in excess of $40 million to let this new technology 
be introduced and save those jobs.
  Madam President, I wish you could take a tour through southeastern 
Alaska timber with me. You would recognize that, yes, this is virgin 
old-growth timber. But it lives and dies. Just like with wheat, 30 
percent is dead or dying. That percentage that is dead or dying has no 
other use than wood fiber. You cannot run it through a sawmill because 
you do not have a viable, live, healthy log. You have dead or dying 
trees, and the consistency is only utilized in an operation that 
utilizes fiber.
  It is rather interesting to note that in the new plant, the medium-
density fiberboard is suited for just that kind of timber.
  Now we are left with a situation where the dead and dying trees--30 
percent of the timber, I might add, most of which is western hemlock--
will have little or no market. Or perhaps some of it can be sent to the 
Ketchikan mill, which is down, obviously, on difficult economic times 
because their pulp mills are being replaced by pulp mills in other 
areas of the world where the timber grows much faster. So the economics 
of Alaska's two pulp mills, I might add, are very questionable.
  So we have this decision by the Department of Agriculture. I, 
personally, as well as Senator Stevens, met with the Secretary of 
Agriculture. We met with the Assistant Secretary of Agriculture, Jim 
Lyons. We met with the Chief of the Forest Service, Jack Ward Thomas, 
to communicate our concern, to ask for consideration, recognizing that 
these people have the administrative authority to make the 
recommendations and make the decisions.
  But it was not made by them, in my opinion, Madam President. It was 
made by the lawyers, the lawyers who have been bamboozled by the 
extreme environmentalists who want to cease timber cutting in the 
forest.
  They look upon the forest as something that is out there. They do not 
realize that people live there. They do not realize that a big chunk of 
our State is made up of the Tongass National Forest.
  I suggest that without the dependable supply of a long-term timber 
contract, it is going to be very, very difficult to finance the 
fiberboard plant in the Sitka region. They gave us a rather curious 
window, I guess, in offering that perhaps a 10-year contract to induce 
the fiberboard plant can be put together, replacing the existing 
contract which has about 17 years left to run.
  We all know that an effort to negotiate a new contract will face an 
environmental impact statement process and be a field day for the 
environmental group that is opposed to any timber cutting in the 
Tongass National Forest. So it is a doubtful alternative.
  The Forest Service really should have tried to promote the usage of 
this new technology to produce the clean product that will aid the 
environment. Instead, it made a purely political decision. And I might 
add this decision was not made in Alaska by the Forest Service. This 
decision was made by the bureaucrats in Washington, DC, dictated by the 
extreme environmental community and its access at the very top levels 
of this administration at the expense of the hardworking people of my 
State of Alaska.
  I think it is terrible. It is a heartless, crass, sellout. An 
administration that so bases its recommendations on rural economic 
development, simply plays into the hands of the extreme 
environmentalists who do not care about real people. They only want to 
see the Tongass locked up, its resources locked up.
  We have more of the Tongass in perpetual wilderness--two-thirds tied 
up in wilderness forever--than we do available for timber cutting. We 
are not arguing that. We are not asking for opening of the wilderness. 
We are simply asking for the Forest Service to practice what they 
preach, and that is multiple use, instead of arbitrarily shutting down 
half of the total year-round manufacturing in our State of Alaska, and 
not giving us breathing room for an alternative.
  So, Madam President, I saw my senior Senator, Senator Stevens, 
earlier expressing his frustration with this decision. I, personally, 
tonight attempted to contact the Secretary of Agriculture, Mr. Espy. He 
is out of the country. I attempted to personally contact the Assistant 
Secretary. He happened to be in the Pacific Northwest. I finally got 
the Chief of the Forest Service, Jack Ward Thomas, leaving town, and I 
said we are entitled to an explanation. We are entitled to have these 
people in Alaska, in Sitka and Wrangell, who are going to be put out of 
work, told how they can still have hope, some kind of hope for their 
homes and their future and their children. I said, ``Will you come up 
to Wrangell, and will you come up to Sitka, and explain to us how this 
medium-fiber-density plant can possibly be encouraged under this 10-
year window of contract that might be out there?''
  Much to the chief's credit, Jack Ward Thomas indicated yes, that was 
his job; and yes, he would do it. So we look forward to him coming back 
to Washington. He has not seen this letter. We look forward to him 
reviewing the letter, finding out, and interpreting just what this 
window of hope might mean. For Wrangell, I understand there is about a 
6-month supply of timber, so the likelihood of the mill continuing to 
operate for that period seems reasonable.
  But it is a black day for Alaska, Madam President. And it is 
certainly frustrating to have to deal with an administration that on 
one hand suggests that, yes, use your new technology, use the natural 
resources, and then turns around and makes a legal decision that 
ultimately is going to cost the taxpayers of this country millions and 
millions, and perhaps $1 billion.

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