Western Debate Hides Timber’s Flight South : Forests: Wood-products companies are leaving the Northwest for economic reasons. The retreat hasn’t eased tensions between loggers and environmentalists.

The public debate over U.S. forests has a distinctly Western flavor.

Throughout the West, loggers and environmentalists are wrangling over protection for the northern spotted owl, logging techniques and harvest rates. The wood-products industry claims that up to 100,000 timber-related jobs could be lost in Washington, Oregon and other Western states by tighter logging rules.

And compromise seems as rare as an endangered species. Only Thursday, California legislators killed Gov. Pete Wilson’s controversial Grand Accord, a package of bills designed to bring peace between most of the state’s loggers and conservationists.

Yet all this may be missing the timber for the trees.

The heart and much of the future of the forest products business is no longer in the West; it has quietly been migrating to the South.

U.S. timber companies have found the South hospitable because of its low land and labor prices, modern mills, proximity to two-thirds of the U.S. market, productive climate and forests that are 90% privately owned, thus exempt from many federal environmental regulations.

The result: Southern wood is 26% cheaper to produce.

“We don’t believe that there is anywhere else in the world where you can grow a tree and make it into a product more efficiently than in the wood-basket area of the South,” says Sheila Weidman of Georgia-Pacific Corp., the largest U.S. timberland owner which a decade ago moved its corporate headquarters from Portland, Ore., to Atlanta.

Yet the fact that the largest wood-products companies--for economic reasons--have for years been retreating from the Pacific Northwest has hardly eased tensions between West Coast loggers and environmentalists. Both sides have dug in, particularly on the public relations front, over the last stands of old-growth trees.

Industry representatives say the contention that large economic forces are the real culprit offers little solace to loggers about to lose their jobs. The argument only gives comfort to old-growth advocates.

“It’s a red herring that preservationists are using to generate public support,” said Ralph Saperstein, vice president of the Northwest Forestry Assn., which represents forest products manufacturers in Oregon and Washington.

Environmentalists respond that the shift is proof of the Western forests’ growing competitive disadvantage, now that 80% of the old growth has been cut. It also means, they say, that the timber industry has become a far less bedrock economic force in the West--quite apart from environmentalists’ efforts to protect old growth and endangered species.

Beyond this, environmentalists contend that the West’s old growth--the invaluable remains of the world’s only temperate-zone rain forest--is but a fraction of the 483 million acres of U.S. timberland. Blaming their efforts to save the trees, they say, is a ploy by the timber industry to divert the attention of loggers and their families from the larger transition to a second-growth timber economy.

“It’s easy to point the finger at environmentalists,” said Jeffrey T. Olson, a forest economist with the Washington-based Wilderness Society. “But these changes began long before the spotted owl was even an issue.”

How much the West’s role has already declined is apparent from a Wilderness Society report released last fall, written by Olson and H. Michael Anderson, a forest planning specialist.

Between 1978 and 1990, according to the study, the seven largest U.S. lumber and plywood companies reduced their manufacturing capacity in the Pacific Northwest by 34% while increasing capacity in the South by 121%. Lumber industry investment in the Northwest fell 60% during those dozen years.

As wood-processing capacity continues to shift from the West to the South, the former region’s share of the lumber market among major U.S. and Canadian producing regions is likely to drop to 35% by the year 2000 from 44% in 1976, according to a separate report prepared last year for John Hancock Mutual Life Insurance Co., one of the largest institutional investors in U.S. timberland.

Western industry representatives are quick to point out that there still will be logging in Western states.

Increased investments in the South are “just good business,” says Con Schallau, a forest economist with the American Forest Resource Alliance, an industry group. “But to say that we have abandoned the Pacific Northwest is just not true.”

Still, investments by some of the biggest forest products companies reveal the faith they have put in Southeastern forests--a preference that for some took hold as long as 15 years ago:

* Most of Georgia-Pacific’s operations are in North and South Carolina, Georgia, Florida, Alabama, Mississippi, Arkansas and Louisiana. The company has 56 wood-processing facilities in Washington, Oregon and California, compared to 230 in the South.

* New York-based International Paper Co., the world’s largest wood-products company in terms of sales, has recently divested some of its Western holdings, leaving only 6% of its timber property in the West--compared to 69% in the South.

* Louisiana-Pacific Corp. may still be based in Portland, but it has been reducing operations in the Pacific Northwest for 10 years. As of 1990, Louisiana-Pacific had 940 million board-feet of lumber capacity in the West, compared to 1.2 billion in the South.

* Even Tacoma, Wash.-based Weyerhaeuser Co.--a name historically associated with the Western timber industry--now has half its timberland holdings in the South.

Most industry groups blame the slowdown in Western logging on environmentalists’ efforts to preserve old-growth forest. They say plenty has been set aside already--by industry count, about 5 million acres of old growth in wilderness areas, national parks and other reserves in Oregon, Washington and California.

Not knowing which trees will be preserved next and what the cutting rules will be, say the timber companies, discourages long-term investment.

“If there is a shift, it is because of the regulatory uncertainty,” said Andrea Tuttle, an Arcata, Calif.-based environmental policy specialist and former consultant to the state Senate Select Committee on Forest Resources.

But others see environmentalists being used as scapegoats for such industry mismanagement as over-cutting of timber stocks.

“It really bothers me when I see all these reports blaming the woes of the timber industry on environmentalists,” said Jim Pfeifer, a Boise, Ida., strategic-planning consultant who worked on the Wilderness Society study. “It’s just not true,” said Pfeifer, a veteran of 15 years as a planner with large wood-products companies. “As they cut out their timberlands, they closed down facilities.”

Beyond these arguments, however, is a major factor that few dispute: The South’s timber-friendly climate.

With about 230 frost-free days a year--compared to 134 in a typical central Oregon forest--intensively farmed Southern forests grow trees twice as fast. Genetic improvements in Southern trees are also considered ahead of the rest of the nation. So-called “super trees” there can be profitably harvested in 15 to 30 years, compared to the 60-to-80-year growth cycle in the Pacific Northwest.

The South is harvesting its fourth generation of efficient “plantation” forest. The old growth that might have provoked preservationist sentiment is long gone with the wind.

Estimates vary widely about the coming timber shortage in the West, but there is little optimism.

“If you look across the board at the changes we’re thinking of in the West, we’re looking at drops in harvest of 10% to 25%,” said Brian J. Greber, a forest economist at Oregon State University in Corvallis. “And I don’t see the market share shifting back and growing again on the West Coast to any extent.”

The industry cites 263 mill closings since 1980 in Oregon, Washington, Idaho and California--which threw 24,430 people out of work.

“Until very recently, our members have been making major capital improvements,” says Don Zea, a spokesman for the California Forestry Assn. “They have had to shut down mills in some regions where they simply can’t get the trees.”

Industry critics counter that as mills designed to handle large-diameter old-growth trees have run out of big logs, some larger companies have been reluctant to invest in expensive retooling to adjust to the smaller trees of a second-growth forest.

“There does seem to be a split between national companies that have lands elsewhere and the ones that I think are really determined to make a go of it in California,” says Robert A. Ewing, program manager of the state Forest and Range Resources Assessment Program.

Meanwhile, calls by loggers to amend the Endangered Species Act already have increased since the U.S. Fish and Wildlife Service recommended that almost 7 million acres be preserved for the northern spotted owl.

In the end, though, all sides agree that logging will continue in the West.

Some innovative regional companies, such as Sierra Pacific Industries--the largest private timber owner in California--”hope to carve out a niche for themselves in a certain size of timber and certain kind of product,” consultant Tuttle says. Even the big companies, she notes, “are not entirely fleeing. They have retained residual capacity here.”

Olson, of the Wilderness Society, sees a better, if diminished, future for Western logging.

“There will be an industry here 20 years from now--an industry that will be much better equipped to deal with market changes that are coming on at a rapid rate,” he said. “But the pattern that emerges is inescapable: It’s a basic redeployment of capital to the South.”