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Letter from Ed: Is the Hardwood Industry Going to Take a Stand?
Is the Hardwood Industry Going to Take a Stand?

By Edward C. Brindley,
Date Posted: 2/1/2010

            A letter from George Barrett, owner and publisher of the Hardwood Review, recently really hit head on the problems in the hardwood industry. It is interesting to me that a publisher and friend is taking the bull by the horns to encourage the hardwood industry to take a stand to save its future. I was struck by his bold ideas and well chosen points which I will share in this editorial.

            Keep in mind that I am not necessarily agreeing with his stand. I have yet to make up my mind on many of the points he raises. But I do realize that the hardwood industry in the United States is in dire straits, and the outcome will impact the wood pallet market.

            George recently wrote a letter to Thomas Vilsack, Secretary of the U.S. Department of Agriculture. He called for government assistance on a variety of factors, including a subsidy for hardwood lumber products that benefit carbon sequestration, a major consideration for climate change mitigation.

            In a separate editorial in Hardwood Review, George challenged the hardwood industry to consider what role the government might play in stabilizing it. Historically the hardwood industry has mostly avoided any government involvement. Flying underneath the regulatory radar seemed like a way of maintaining independence and controlling our own industry. George argued in his editorial that today conditions have changed.

            The federal government has recently been in the business of handing out money and assistance to all kinds of big industries. Some are considered too big or too important to let them fail. Some new and budding industries are considered to have needs that are so big they require government involvement.

            Close to home for the lumber business, the U.S. Departments of Energy and Agriculture threw $564 million at the construction of 19 bio-refinery demonstration projects.

            Certainly our government has seemed willing to spend us into deficits; it is wasting billions in the name of climate protection. At the Copenhagen climate summit, Secretary of State Hillary Clinton committed the United States to raise $100 billion a year by 2020 to help developing nations address climate change problems.

            Tens of thousands of jobs have disappeared in the hardwood industry. The need to create new jobs and maintain existing ones is unquestionable.

            Last year, the U.S. government developed the Biomass Crop Assistance Program (BCAP) to 1) increase America’s energy independence, and 2) spur on rural economic development. George indicates that climate change mitigation is probably an important goal behind this BCAP initiative.

            The BCAP matches payments of up to $45/dry ton for the collection, harvesting, storage, and transportation of eligible biomass. While nobody in the forest products industry would dispute that utilizing biomass from the forests is better than using fossil fuels, using biomass only limits additional carbon emissions. Maintaining or increasing the use of hardwood lumber is even better because hardwood lumber and lumber products (as well as softwood lumber) are carbon-negative products. Many lumber products last for very long periods, locking up CO2 for decades and even centuries; this includes flooring, home construction, furniture, and even pallets.

            George wanted to know why the USDA is willing to double the market price of biomass to build a carbon-neutral energy source while ignoring the opportunity to support carbon-negative industries, such as U.S. hardwoods, which provide needed jobs for rural communities and superior climate change mitigation. He proposed a minimum $100 payment for every ton of atmospheric CO2 stored in hardwood lumber.

            George stated in his recent editorial, “Whether or not government is part of the solution, it is clearly time to start thinking outside of our box. Over the next six months, we will be laying the groundwork for a meeting of industry leaders who are willing to take a hard look at the problems and envision solutions for a brighter future. We will invite concerned members from all sectors of the industry, academia, government and the environmental community to work collectively towards innovative solutions to common problems. It is our hope that the white papers and actionable items that flow from this and subsequent meetings will ignite a true revitalization of the hardwood industry.”

            The sawmill and lumber products industries are diverse and fragmented. We build valuable, unique products, but have had a difficult time getting all of our horses to pull together.

            George argued in his recent editorial that the federal government could unite the industry around a national system for certifying the sustainability of U.S. hardwood lumber. A recent resolution by Congress recognizing the sustainable benefits of hardwood lumber is only the first step. George called for a program similar to what other commodities have to certify quality standards. George argued that a new certification program overseen by the government would help improve access to international markets.  The U.S. government has assisted other countries with financial help and often turned a deaf ear about policies that allow other countries unfair competition. At the very least, the U.S. government could help level the trading field so our people and products have a chance to compete. While many nations restrict raw material exports, the U.S. exports logs and rough lumber without restrictions. In addition, an increase in public timber offerings could help bring more logs to mills, and thus more lumber to the market at reasonable prices.

            The world today seems to be preoccupied with the idea of locking up carbon in the atmosphere. But at the same time we have been willing to turn our backs on the hardwood lumber industry, one of the few industries that is already achieving this carbon goal. A little encouragement and support from the federal government might go a long way. North American hardwood forests are underutilized, and hardwood products lock away sequestered carbon for decades to come.

            In his letter to Secretary Vilsack, George stated, “A minimum $100 payment for every ton of atmospheric CO2 stored in hardwood lumber would only raise sawmill receipts by 10-25%, but would go a long way towards saving the U.S. hardwood lumber industry and the thousands of rural jobs it still represents.” He reminds us that hardwood lumber is a carbon-negative product. Every piece of hardwood lumber from a sawmill effectively locks up 2.0 to 3.1 tons of atmospheric CO2 for tens or hundreds of years.

            We will keep you posted about developments that come from the efforts of George and the Hardwood Review. He is seeking to bring various interests in the industry together this year to discuss major changes to the way the hardwood industry does business. This includes developing new business models, increasing collaboration, installing new industry standards and seeking government assistance.

            While I have my reservations about seeking government assistance, this may be the time to act in some profound way to save one of the most environmentally responsible, longstanding, family-based industries in the country.

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