When You Are Up To Your Armpits In Elephants

James D. Petersen Co-founder and Executive Director The non-profit Evergreen Foundation 2009 Montana Loggers Association Convention Hilton Garden Inn, Kalispell, Montana Saturday, May 16, 2009

Good morning.

I have never felt so poorly prepared for a speech in all my life.

It isn’t that I haven’t worked on my remarks, or that I don’t understand the subject matter; it is that so much is at stake and so few seem to get it – the “it” here being the fact that Montana’s timber industry is teetering on the brink of collapse at the precise same moment when it ought to be laying the cornerstone for its own bright future.

I had a ring-side for the spectacular but tragically unnecessary collapse of the timber industries in Arizona and New Mexico. I watched as mill after mill closed its doors, like a long row of dominos toppling one into the other. It has left both states without the means to deal with the ecological collapse of their dying forests. Now instead of mills toppling like dominos, the trees are – millions of them, crashing to earth in forests where, even if we hear their sound, we are powerless to do anything about it.

What no one seems to understand is that the same steady cadence of collapse can now be heard here in western Montana. It is the elephant in our room that no one seems to want to talk about, the sound of the collapse of The Last Best Place.” Unless you who sit before me this morning chose to do something about this, you too will become like collapsing dominos.

My friend Jim Hurst threw in the towel in August of 2005. I later wrote an essay about his heartbreaking decision for the Wall Street Journal. Two months ago Plum Creek shut down the old Ksanka mill, which Jim’s father had started in 1951. I have a picture of the two Jim’s walking side by side back to young Jim’s office the day he auctioned the Owens & Hurst mill. I believe it is one of the finest photographs I’ve ever taken, not because it was well composed – it wasn’t – but because of what it says about a father’s love for his son and a son’s love for his father. There they are, arm in arm, walking into the future.

In my mind’s eye, I picture myself as Jimmy Stewart in the 1939 Hollywood classic, “Mr. Smith Goes to Washington.” Only instead of going to Washington, D.C., I go to Eureka, Montana where I tearfully filibuster the case for keeping the town’s last sawmill alive.

In the film, our nation’s capitol was a hotbed of corruption, just as it is in real life. But in the movie, the corrupt confess their guilt and Jefferson Smith triumphs. But no one has ever confessed their guilt in Eureka, and in real life, no one went there to argue Jim Hurst’s case, though I have reason to believe our governor and congressional delegation tried to help from behind the scenes. But no one stepped into the public square, as I imagine myself doing it, to declare, in the loudest possible voice, “This is wrong, damn it, this is wrong: it is wrong morally, it is wrong environmentally, it is wrong economically and it is wrong ethically, it is wrong for our forests and it is wrong for our communities, and the Congress needs to fix it right now!”

But on auction day, the only people there were a few curious onlookers, the auctioneer and a flock of buzzards flying from one carcass to the next, looking for bones that had not already been picked clean.

Jim Hurst had a great little mill. It could handle logs so small that a man could pick one of them up and put it into the back of his pickup truck. No equipment was needed, except for an ax or a saw. Yet Jim was able to turn countless pickup loads of these small logs into quite usable lumber – a feat that flies honorably in the face of the ridiculous claim that mill owners salivate over big logs from so-called “ancient forests.”

But now Jim is gone from our midst, and so is Owens & Hurst, and now Plum Creek’s mills at Ksanka and Pablo are also gone. Which domino will be the next to fall? And will anyone Congress or our State Legislature notice? I hope so. I hope and pray that they see that our timber economy and our forests are both collapsing at the same time. I hope and pray that they understand that the only way to save our forests requires that we first save what is left of our forest industry? And lastly, I hope and pray that we are all saved before it is too late.

I my dark moments I remember Jack Ward Thomas’s very vivid description of what we were all witnessing a decade ago on public forest policy battlefields all over the rural West: “And now the victors walk among the dead and bayonet the wounded”

When Keith Olson was putting the finishing touches on today’s program he sent me an e-mail note asking for the title of my remarks. He also said something about me being the conscience of our industry. I would never have thought of myself in such a light, but if being your conscience means that I am willing to speak publicly about things that most folks only whisper about in privacy, then Keith is right: I am your conscience.

This morning, your conscience wants to talk about the elephants in the room that no one else ever seems to want to talk about. This being the case, I decided on the following title: “When you are up to your armpits in elephants, it is difficult to remember that your original job was to drain the swamp.”

And no mistake, we are all mired in a swamp. And we are up to our armpits in elephants. But I think I finally see a way out of the muck and mire that has been sucking us into the abyss for so many years. And the way out – the route to a better future – is biomass. So I am going to talk about biomass too. Paula Short, Tom Tidwell and Todd Morgan have already shared keen insights with you. Now it is my turn in the barrel.

Let me begin by saying that there is absolutely nothing that qualifies me to be at this podium this morning. I am not a forester or a scientist or an engineer or an economist. I am a writer. On life’s food chain, this puts me somewhere between pond scum and the telemarketers who call you at home during the dinner hour.

But I have been writing about forests and forestry and logging and sawmilling for about 25 years now. It is from this slightly more qualified vantage point that I will speak. And what I hope to do over the next few minutes is connect some biomass dots or, to be more blunt, connect the elephants that are in the room with us that will have great influence over the outcome of the woody biomass to energy debate, especially here in western Montana.

Elephant No. 1 is the one that perennially irritates me the most: Congress. It’s bad enough that Congress continues to twiddle its thumbs while the West burns to the ground. Worse though is the current debate over whether to include federal biomass in renewable energy legislation that is slowly making its way through Congress. If you wonder where this insanity begins, I’ll tell you. It begins with an unholy alliance between Elephant No. 2, several large pulp and paper producers, and Elephant No.3, the Natural Resources Defense Council. Elephant No.3 doesn’t want federal biomass to be included in the energy standard because it fears resurgence in the timber industry that it loves to hate. Elephant No. 2, the pulp and paper producers, are in league with Elephant No. 3 because they fear that including federal biomass in the legislation will drive up the price of fiber.

I’ve got news for Elephant No. 2. Your problem is far more serious than whatever competitive headwinds you may face if federal biomass is included in federal renewable energy legislation. Your problem is that you aren’t competitive on the global pulp and paper stage. You are being eaten alive by Scandinavian companies that are investing billions of dollars in South America, where land, labor and regulatory costs are a fraction of what they are in the U.S.; where pulp mills actually sit in the middle of plantations, not 40 or 50 miles away from them, and where trees reach pulp-size maturity in 5-7 years.

Newsprint makers are also being clobbered by the worldwide web. How many big city newspapers have gone broke this year? Three, four, five? I’ve lost count, but at least three of the biggest newspapers in the country are teetering on the brink of bankruptcy. Their advertising revenues are in free fall, thanks in large part to Google – a company that I suspect will eventually bury Microsoft too. What we have here are business models that no longer work.

I have some sympathy for Elephant No. 2. Our domestic pulp and paper producers have huge capital investments in our country and have had for more than 100 years. The jobs they provide pay very well. But killing off whatever hope and potential federal biomass holds as a source of renewable energy is not going to save what is left of our domestic pulp and paper industry.

Viewed through history’s long lens, this is an old story. The West’s largest timber companies – those that own huge mills and millions of acres of timberland - have been trying to kill off their upstart competitors since the 1920s. In the 1940s they tried to hijack the entire federal timber sale program – and would have succeeded had it not been for Democrats in the Truman Administration who saw the West’s great national forests as economic engines they could use to jumpstart the nation’s post-war expansion. Yes, you heard me right: Democrats were the ones who opened the West’s great national forests to the wave of entrepreneurship that built many of the West’s once bustling lumber towns; and Democrats, not Republicans, were the ones who following the Second World War paved the way for the hundreds of family-owned sawmills that put down roots all over the West – including every rural community here in western Montana.

It has been a long and bruising battle – and it still is. Imagine my horror on learning that some of the biggest publicly traded forest products companies in the country were working furiously behind the scenes to sabotage the Bush Administration’s Healthy Forests Restoration Act. Why? Because they saw the thinnings that forest restoration would yield as competition for their own wood – and their fiduciary responsibility is to their shareholders, not the nation’s dead and dying federal forests. It’s the same in pulp and paper. These companies – all of them publicly traded – have a fiduciary responsibility to their shareholders, not to you, not to me and not to the economic or social well being of our country. Those fiduciary responsibilities, those trust obligations, reside in our elected officials.

Elephant No. 4 is the once mighty United States Forest Service, our oldest elephant. For many years, he was also our best elephant. The whole country loved him – so much so that they named him: Smokey. And in the early 1950s Smokey was voted one of the two most admired citizens in the entire country. The other was the United States Marine Corps. No elephant ever worked harder for rural America’s timber towns than Smokey.

A few lumbermen – also elephants, No 5 to be exact – were never very happy with Elephant No. 4, no matter how much timber he drug in from the forest. They always seemed to want more, even when public worries about over-cutting were in the headlines. Oh, for the good old days. But those days are gone now, never to return, and we are left to face a much different elephant than old Smokey.

Some people believe this new elephant – he is Elephant No. 6 – is a good for nothing slacker and doesn’t care if he ever brings us any wood. But I think they are wrong. I think Elephant No. 6 – we’ll call him Woody for lack of a better name – I think this new elephant whose last name is Biomass would like to show us what he can do, if only the Congress will let him.

It is long past time for the Congress to give Woody Biomass, No. 6 in our string of elephants, the legitimate chance he needs to show us what he can do in our dead and dying federal forests. Let’s stop fiddling around on 10 or 20 or 100-acre show-and-tell plots; let’s put Woody to work on tracts of federal forestland that are large enough to make a difference both ecologically and economically.

Some of you have heard me say that I think it is time for our nation to return its national forests to Indian tribes from whom we stole them more in the 1800s. I still believe this, but I don’t think it will happen in the near term, if ever. Nor do I believe that the Forest Service is to blame for our current state of affairs. The Forest Service is a public agency – albeit one that has wandered far from its original mission. Today, it serves at the behest of political parties and special interest groups that have vastly different visions for the future of our nation’s publicly-owned forests.

There is, nevertheless, a great deal of excitement inside the Forest Service for the woody biomass potential our national forests hold – more excitement than I’ve seen in a very long time. I believe the agency sees a new and quite fruitful mission for itself. We need to help them bring their new mission to life because it holds enormous potential for our communities, our mills and you who do the heavy lifting in our forests. And, no, it won’t be a timber sale program in the conventional sense of the word, but if the Forest Service does an honest job of restoring forests – paying close attention to things like basal area and structural, species and age class diversity – restoration will provide much more than just biomass. It will provide the trees that our state’s reconfigured mills are geared to handle; not the big old trees that have already begun to decay at their cores, but smaller, more uniformly sized trees that are solid through and through.

Now to Elephant No. 7, our Western Federal Forestland Elephant: Elephant No. 7 is dying. He is staring sadly into our faces in the hope that we will see his plight and do something about it before it is too late. He is dying because he cannot get the sunlight, soil nutrients or moisture he needs to keep growing. Surrounded by thousands more just like him, he is parched and malnourished. While we watch and wait for a miracle that will never come, he is starving to death and dying of thirst in the same death throes.

But he could still be a fine elephant, if only we would take better care of him. But we are doing a terrible job. And the result is that he is an overgrown mess. He looks a lot like the old dogs we’ve all seen walking beside highways in driving rainstorms. If someone does not soon stop and pick up that dog he will die. Similarly, if we don’t soon start picking up the mess in our federal forests, they will die too. In fact, they are already dying. And we are to blame because we know how to save them. We have almost 100 years of science that tells us what we must do. Why aren’t we doing it? Why are we failing ourselves, our communities and the very forests that are central to our lives?

Enter Elephant No. 8: Climate Change. There is no question about the fact that the climate is changing. It changes every day. But that is not what the climate change debate is about. It is about assigning responsibility to air polluters who are said to be the chief causes of an increase in carbon dioxide levels in our atmosphere. But many climate scientists doubt that rising CO2 levels have any impact on the climate. They point to shifting Pacific Ocean currents and the 1,500-year solar cycle.

Not being a scientist, I have no idea who is right in this debate, but I can smell a rat as well as the next person, and there is plenty of evidence which suggests that so-called “cap and trade” legislation currently moving through Congress isn’t much more than an extortion racket. But a great many companies have climbed on board the climate change bandwagon because they correctly perceive political and economic advantages their competitors do not have.

What I like about this now contentious global debate is that it gives us the opportunity to hitch Elephant No. 8 to two more very important elephants: Forest Health and Renewable Energy, Elephants 9 and 10, respectively. Together, these three elephants are capable of leading us into what looks to me to be a very bright future.

Let’s understand here that those who are promoting Climate Change are the same folks who were promoting earlier elephants: Global Warming, Elephant No. 12 on our list, and, before that, the Next Ice Age, Elephant No. 11. When the Ice Age elephant was laughed out of the circus ring, his promoters simply changed his name, first to Global Warming and then, in a stroke of sheer genius, to Climate Change. Now it does not matter which elephant is in the race. There will always be a crisis and there is now an inexhaustible supply of guilty parties from whom large sums of money can be extorted.

My cynicism aside, the climate change debate gives us an unprecedented opportunity to argue the case for managing our federal forests in ways that increase their carbon storage capacity, no matter its source, no matter the guilty party, no matter the amount.

I want to have this debate with every environmentalist in the country, because if we are really serious about replacing air polluting fossil fuels with lesser polluting renewable fuels, including solar, wind and woody biomass, and if we are serious about reducing CO2 levels in our atmosphere, we simply cannot ignore this next elephant that is standing quietly in our midst, waiting to be recognized. He is Elephant No. 13, and he possesses the miraculous ability to transform carbon dioxide into wood fiber through a process called photosynthesis – a process that powers itself with the free, non-polluting energy of the sun. He can thus increase the carbon storage capacity of our federal forests.

Yet despite his miraculous powers, our Photosynthesis Elephant will need our help, and he will need the help of No. 6, our new Forest Service elephant. Working as a team, which is what elephants do best, they can design perpetual thinning and stand tending programs capable of increasing the carbon storage capacity of our federal forests while, at the same time, decreasing the billions of tons of pollutants that wildfires spew into our earth’s atmosphere every year.

I emphasize the word “perpetual” because we cannot thin our forests once and expect that they will magically hold themselves in perfect balance until the end of time. They won’t – because there is no steady state in nature. Chaos is constant, and everywhere. But we can limit nature’s wild swings by dedicating ourselves to the constant task of forest stewardship – the thinning and stand tending work that we must do if our forests are to provide the long list of things that we Americans want and need.

I am reminded of a wisdom shared with me by my old friend Alan Houston, a PhD wildlife biologist at the Ames Plantation in middle Tennessee. We were out walking on the Cumberland Plateau one bright and beautiful October morning in 1996 when he turned to me out of the blue and said something so stunningly memorable that I can still quote it verbatim. He said, “When we leave forests to nature, which so many people today seem to want to do, we get whatever nature serves up, which can be pretty devastating at times, but with forestry we have options, and a degree of predictability not found in nature.”

There are two more very large elephants in the room with us this morning that we have to talk about: Plum Creek Timber, No. 14 and Smirfit-Stone, No. 15.

Many believe Plum Creek will be gone from Montana within two years, but the company insists it is here for the long pull. I have no idea, but the fact that they have permanently closed two sawmills in as many months is not a very encouraging sign. Who knows what will happen to the stud mill in Evergreen. Even in good times, the stud market is brutally competitive. Are they as efficient as stud mills in western Oregon and Washington? I don’t know, but if I were a betting man, I would say Evergreen’s transportation costs are higher than those of stud mills on Interstate 5. Is it any different at the Evergreen plywood plant? Again, I don’t know, but I wish them well because this valley desperately needs the family-wage jobs Plum Creek provides.

Of all their manufacturing facilities in this valley, I’d say the medium density fiberboard plant in Columbia Falls is the most competitive, but it consumes mountains of chips. If I am correctly interpreting what Tom Ray told an Interlake reporter two or three weeks ago, he hopes to buy a lot of chips from mills in northern Idaho, western Montana and British Columbia. Let’s hope he is successful, because if he is it means that the mills in Idaho, western Montana and British Columbia are still with us, and so are you.

But let us also remember that Plum Creek’s first responsibility is to its shareholders, not you or me. This is the dread in publicly traded companies that live in fear of Wall Streeters who don’t know the first damned thing about forestry and don’t care to learn.

Now we come to Smirfit Stone – Elephant No. 15, who may soon vanish from our midst. I have been around western Montana long enough to remember when the sign on the gate at Frenchtown read Hoerner-Waldorf. Then it said Champion International and now it says Smirfit-Stone. It may soon say “Closed.” The company’s stock now trades over the counter under the symbol SSCCQ. On Wednesday, you could have bought all the shares you wanted for nine-tenths of a cent per share.

I feel badly for the Frenchtown plant’s workforce. They’ve been on a real roller coaster over the last few years. But it’s been no worse for them than it’s been for the rest of us. The only difference is that something in my gut tells me their ride is almost over. I will be pleasantly surprised if the Frenchtown mill is part of the restructured company when it emerges from Chapter 11 bankruptcy. How do you explain to your creditors and the court that you want to continue to operate a mill in western Montana that has to bring its fiber hundreds of miles because the fiber you can see on the hills behind the mill isn’t available? This is the Jim Hurst story writ large across the sky.

If Smirfit Stone folds up its Frenchtown operation, western Montana sawmills that have been selling their residual chips to the facility for decades will have to find new markets. I cannot envision a scenario in which these chips would be trucked or railed to the West Coast. The haul would cost more than the value of the chips.

But I can imagine a scenario in which our governor, Elephant No. 16, our two U.S. Senators, Elephant Nos. 17 and 18, respectively, our lone House member, Elephant No. 19, the new Forest Service, Elephant No. 6 and local conservationists, they would be Elephant No. 20, and the surviving mills, Elephant No. 21 in our growing string, sit down at a table and map a plan that will put small biomass power plants in every western Montana town that has a mill, and if not a mill, a ready supply of chips that can come quickly and easily from nearby dead and dying national forests. And this, dear friends, is what the biomass to energy revolution ought to be all about – and it is why it is so damned important for our delegation and our governor to enter the battle for federal biomass on the side of economic and environmental righteousness. The very idea that federal biomass might be excluded from renewable energy legislation now winding its way through Congress is more than mind-boggling. It’s unconscionable and indefensible.

Some who read these remarks on the worldwide web may think I am trying to push Smirfit-Stone, and perhaps even Plum Creek, over a cliff. I am not. Their employees are just as valuable as the employees of any company represented in this room. But these are big publicly-traded companies with armies of lawyers and lobbyists and public relations consultants in their camps. They can, and do, fend very nicely for themselves – and that is how it is in the world of free markets and fiduciary responsibilities.

But you have the same responsibilities in your companies and your families. And all of us in this room have a shared responsibility to do all we can to help pull our federal forests back from ecological collapse because they are our future. Without them, we have nothing to sell the world: not products, not tourism, not a safe and healthy environment, not employment in mills or forests, nothing; and nothing is not an option.

There is one last elephant in the room with us this morning, No. 22. For most of you I suppose No. 22 is the biggest, baddest elephant of all. It is the equipment sitting idle at your shops and the very real prospect that most of it will stay parked during the coming logging season, simply because there is no work available. Most folks in our valley only have to worry about house payments. You have the added worry of payments on machines that cost several hundred thousand dollars apiece. I hope that your bankers are sophisticated enough to understand what is at stake in the near term, and what potential the long term holds. If they do not understand, we need to bring them into this fold very quickly so we can teach them how to help you.

If there is a take home message here, it is that you are as important to the future of our forests in our state as the mills that will undoubtedly become frontline investors in biomass generation and co-generation if we can align the political stars in our constellation. Without you, woody biomass that is choking the very life out of our forests does not flow to mills or power plants. It stays in the woods where it fuels forest fires instead. This is not acceptable in a world that is worried about climate change or the buildup of atmospheric CO2 or the loss of forests.

This is gut check time for all of us. We are mired in a swamp filled with elephants. We have to find a way to quickly drain it. If we fail a lot of elephants are going to perish, some of them symbolic, but most of them real. Of those that are real, some are probably too old and too tired to make it to safety. But others are still strong enough to pull their weight and more. These are the elephants we must ride to safety.

Were I a betting man, I’d put my money on No. 6, the Forest Service’s new elephant: Woody Biomass. He can make it out of this swamp, but only if a lot of our elephants and their elephant helpers get behind him in the mud and the muck that is our imperfect political process and push with every ounce of strength they have.

I intend to be right there with them, pushing as hard as I can, just as I have for the last 25 years. I may not be the strongest elephant helper in the pack, but I have been running in and out of swamps for the sheer joy of it all my life. Why stop now?

This is not going to be easy, but then it never has been. What is different this time is that we are riding a winning elephant: Woody Biomass. But he can only win if federal biomass is included in Obama Administration renewable energy legislation. If he loses it will be a tragedy for our country, our communities and our forests. But if he wins your future and the future of our forests and our communities will be safe and secure.

We could win or we could lose. Either way, I want to be able to look myself in the mirror and say that I pushed as hard as I possibly could on all of the elephants mired in our swamp. And when I look in my mirror, I hope I see you right there beside me, pushing as hard as you possibly can.

Thank you.