The largest potential economic impacts to communities from timber sale lawsuits come in the form of lost jobs, labor income and federal, state and local taxes, according to a study by the University of Montana’s Bureau of Business and Economic Research.
The report was paid for by an agency that often has to defend itself against timber sale lawsuits, the U.S. Forest Service, and a pro-timber industry coalition, the Montana Forest Products Retention Roundtable.
It was conducted by BBER director of forest industry research Todd Morgan and director of survey research John Baldridge.
The report provides information on government costs and other impacts associated with lawsuits filed against timber sales in the Northern Region of the Forest Service.
Information came from the Forest Service, and from a case study of the Spotted Bear River project on the Flathead National Forest.
The study found that litigation involving the Spotted Bear project cost the Forest Service about $95,000 and the U.S. Fish and Wildlife Service $4,500.
Morgan found that, hypothetically, the economic impacts of litigation – had the Forest Service not prevailed in court – could have exceeded $10 million and cost 130 jobs for the state's forest products industry and local communities.
From 2008 to 2013, the Northern Region had more than 70 timber projects litigated, more than any other Forest Service region.
Recently, litigation has encumbered 40 percent to 50 percent of the Northern Region’s planned timber harvest volume and treatment acres.
Litigation on the Spotted Bear project alone took up more than a quarter of the Flathead National Forest’s fiscal year 2013 timber program. From June 2012 to June 2013, 54 percent of the timber sale volume in the Northern Region and 64 percent of the acreage (35,485 acres) were litigated.
The estimated financial impact of litigation-encumbered timber volume on the Northern Region’s congressionally appropriated timber program budget was $9.8 million in 2013 and $6.8 million in 2014.
“The (Forest Service’s) ability to implement management activities is believed by many to be impaired by litigation,” the study’s authors wrote. “In particular by the costs of litigation and the related time and effort of FS personnel dealing with litigation.”
The Spotted Bear project’s purpose was to cut trees on 1,193 acres, perform prescribed burns on 1,346 acres and thin 660 acres of saplings, producing 7.3 million board feet of timber with an estimated market value of $729,000.
The Forest Service estimated that the project would create 136 jobs, $7.4 million of income to workers and $2.7 million in tax revenue.
However, in 2012, two environmental groups, Friends of the Wild Swan and the Swan View Coalition, sued to stop the sale on the grounds that inadequate analysis was conducted on the impacts to grizzly bears, lynx, wolverine, fisher, bull trout and west-slope cutthroat trout.
The groups also contended that the agency failed to comply with the National Environmental Policy Act, the National Forest Management Act and the Endangered Species Act.
“When a project is litigated, it is typically the agency’s environmental analysis of the project that is questioned,” Morgan said. “And the agency with its legal counsel must defend the analysis. The relatively simple SBR project we examined spent over 1,000 days in litigation.”
On Feb. 23, a district court judge ruled in favor of the Forest Service on the Spotted Bear case. The decision was not appealed to the 9th U.S. Circuit Court within the 60-day appeal period. The timber sale proceeded, and the Forest Service did not lose any timber sale revenue or have to pay any plaintiff’s attorney fees.
Morgan said that the environmental analysis of one project is often linked to other Forest Service projects because highly interrelated issues, such as endangered species habitat, are the basis of many cases.
This means that many projects that are not being directly litigated are often stalled because of the uncertainty that exists while cases remain in the courts. Morgan wrote that the delays affect local businesses and communities, even when the agency prevails in court and the timber sales eventually move forward.
The study found that 1,833 hours of work spent by Flathead National Forest employees on Spotted Bear litigation were hours spent not implementing the project or delivering other services.
Michael Garrity, executive director of the Alliance for the Wild Rockies, a Helena-based organization that has sued to stop many timber sales in the state, didn’t put much stock in the report.
“The Forest Service loses money on almost all of their timber sales, almost $1,400 per acre, so it never makes sense to me how stopping the government from losing money costs money,” he said. “I can’t be any more straightforward than that. The (BBER) gets a lot of money from the timber industry, so I guess they are just doing what they are getting paid to do. This report is not in any published research journal or anything. They’re making their funders happy. There is no academic credibility behind that report at all.”
Garrity, who says he is an economist by training, said the report makes no mention of the negative environmental effects of timber sales or the positive effects to taxpayers of stopping a timber sale.
“Obviously, I have my biases, but Congress appropriates money (to the Forest Service for logging), it’s very clearly a subsidy, so anything that reduces that subsidy is a good thing,” he said. “There’s also a lot of timber sales that keep getting delayed because there isn’t a demand.
"I checked yesterday, and the price of lumber is down 26 percent for the year. The housing industry really hasn’t recovered yet from the recession. To say delaying a timber sale costs money, it’s hard to take that seriously because there’s a lot of timber sales sitting out there they haven’t cut because there’s not a market for the timber.”
U.S. Sen. Steve Daines, R-Mont., released a statement Thursday regarding the report.
“This eye-opening study confirms what we long suspected: Litigation against common-sense timber projects is having far-reaching, damaging impacts on Montana jobs, access to recreation and our environment,” Daines said. “It is unacceptable that mills in Montana have to go far outside of our state to get logs, largely because 40 to 50 percent of the timber sale volume in Region 1 has been encumbered by litigation in recent years.
"I will continue fighting to protect responsible harvests from obstructionist tactics so we can get more Montanans back to work, improve forest health, increase access to public lands and provide much-needed sustainable revenues to our forested counties.”