Power To Good Earth

I never cease to be amazed by life’s unexpected twists and turns. This afternoon, I listened in on a web press conference hosted by Cal Joyner, the Forest Services’ Southwest Region Regional Forester, and the Four Forest Restoration Initiative [4FRI], a regional collaborative that we know well because of our years of advocacy for thinning dead and dying trees from the Southwest’s federally owned firetraps, otherwise known as national forests.

The subject was a changing of the guard within the 4FRI restoration project – at 300,000 acres the largest such project ever undertaken by the U.S. Forest Service. Pioneer Forest Resources, based in Billings, Montana, has been the designated contractor for this project for several years, but the company has been unable to secure the financing needed to build necessary wood processing infrastructure in northern Arizona.

Enter Good Earth Power AZ LLC, an apparently deep-pocketed and politically well-connected company based in – of all unlikely places – the Sultanate of Oman. In the category of strange twists and turns, this is one of the strangest I’ve ever seen.

That Pioneer was willing to hand off its beloved project to Good Earth is a tribute to the enormous and long running dedication of one man: Marlin Johnson, a Forest Service retiree who, when we met in the fall of 2001, was supervising the Forest Service’s regional timber shop in Albuquerque, New Mexico. You can find the fruits of our conspiratorial labors in “The New Pioneers,” a special Evergreen issue we published in the summer of 2002.

In my opinion, forest restoration in the Southwest is where it is today because of Johnson’s uncompromising dedication to the simple but irrefutable idea that the region’s economic and environmental necessities are one in the same. More to the point, the widely recognized and publicly supported idea that the Southwest’s forests ought to be pulled back from the brink of ecological collapse is a mandate that cannot be fulfilled without major investments in wood processing capacity that hasn’t existed in the Southwest for 20 years.

It thus comes as no surprise that in today’s press conference, Good Earth Power Ltd co-founder and CEO, Jason Rosamond, announced that his company will be making major investments in the region, not just in a Winslow, Arizona facility that will convert wood fiber into a variety of biofuels, but first in other smaller existing facilities that can, with modernization, process trees thinned from the region’s overstocked forests. This is precisely what Pioneer had planned to do once it had the financing it needed. Unfortunately, Wall Street’s 2007 collapse slowly sapped Pioneer’s financial strength, as it did that of many other forest products companies in the West, though only recently did Pioneer run out of options.

As you might imagine, there were several questions about Good Earth’s knowledge of the Southwest’s forests. What could a company based in Oman possibly know about the region’s forests or fickle U.S. markets for wood fiber, to say nothing of the regulatory maze that has become a lucrative feeding ground for taxpayer-paid lawyers?

Mr. Rosamond’s quick and confidently conveyed answer was that Good Earth has hired one of the nation’s largest and most respected forestry consulting firms to guide its work. Neither he nor the Forest Service would disclose who this is, pending a completion of negotiations with the firm, but it is apparently a company that already has “millions of acres” in its management portfolio. This suggests vital capacity and knowledge that can be quickly brought to bear.

Frankly, I’d never heard of Good Earth Power, so I went to their website and learned, among other things, that the company’s financial advisor, Walid Kamhawi, was a managing director of the Blackstone Group, one of Wall Street’s largest investment houses. Wall Street’s billions are heavily invested in many of the forestry world’s largest real estate investment trusts, but these involve private timberlands. If Blackstone has committed capital to this project, which involves federal forestlands that have been the focus of environmental litigation for 30 years, it is a first and a sea change of inestimable importance because it brings with it a political cache that the West’s timber industry hasn’t had in decades.

Early on in the hour-long press conference, Mr. Rosamond made it clear that Good Earth intends to do as much business locally as it possibly can, including funding training programs that will prepare workers for the vital on-the-ground work that lies ahead. This is a significant and politically astute commitment given the fact that most of the region’s logging and sawmilling infrastructure has been litigated out of existence over the last 20 years.

Were I Mr. Rosamond, I would immediately contact the Intertribal Timber Council [ITC], a Portland, Oregon based organization that is working on legislation designed to link at-risk federal forests with adjacent tribal forests.

ITC represents the political interests of U.S. tribes that own and manage timberland. The organization’s “Anchor Forests” proposal is designed to bring environmentally and culturally sensitive tribal forest management programs to federal lands for the benefit of all stakeholders, including beleaguered taxpayers who are currently on the hook for more than $1 billion a year in firefighting costs. In the Southwest, where tribes are significant timberland owners, the opportunities for mutual success are huge.

Good Earth intends to plow 50 percent of its Southwest profits back into communities that have been devastated by the collapse of the federal sale program. Just how this might work is impossible to know at the moment, but it is consistent with the amount of money the region’s long-gone lumbermen poured back into their mill-dependent communities for decades.

This is a huge project – so large that the Forest Service said today that the ramp up process will take at least three years. Once at capacity, forest thinnings will yield about 800,000 tons of sawlogs and 450,000 tons of biomass annually. The math here is startling: more than 13,300 truckloads of sawlogs and another 7,500 truckloads of biomass. No wonder Good Earth is in conversation with wood processing mills in the U.S. and Canada about available and viable [read profitable] markets for a wide variety of products the project could yield.

Mr. Rosamond, whose abrupt manner of speaking suggests a man hell-bent on success, hopes to pick a site for Good Earth’s mill in Winslow sometime in the next 60 days. But the federal and state environmental permitting processes for the biofuels processing plant could take two or more years. Meantime, he hopes to fast-track the installation of a finger-joining facility – also wisely borrowed from Pioneer’s meticulously prepared blue print – that can produce high value dimension lumber engineered from small diameter, low-value trees that are already flowing from a 900-plus acre portion of the old Pioneer project.

Over the next three to six months, Mr. Rosamond hopes to accomplish what normally takes 18 to 24 months. With job-hungry state and federal governments in tow, it is possible, though taxpayer-funded bureaucracies aren’t known for their speed or political sensitivity.

One might legitimately ask why no U.S. company has been willing to step into this political maelstrom, and the answer would be that the West’s lumbermen have been stepping into political firefights since the mid-1980s, and have almost nothing to show for having invested their hard-earned capital in numerous federal programs that haven’t worked because Congress refuses to correct legal and regulatory problems that are of its own making.

Until these problems are rectified – and here the Blackstone connection could help – Good Earth is likely to become ensnared in the same crazy quilt of conflicting regulations that have kept savvy U.S. lumbermen – and tribes – on the sidelines in a region that desperately needs their capital and know-how.

We wish Good Earth great success – and stand ready to help them in any way we can. Their track records in energy development and marketing, community infrastructure investment, water development and treatment and agriculture are impressive. Here’s hoping that what is working in impoverished Africa will also work in the once prosperous American Southwest.