I concur with the ARO's recommendation and affirm the Forest Supervisor's decision. Your requested relief is denied.

Transcription

1 United States Department of Agriculture Forest Service Alaska Region P.O. Box Juneau, AK File Code: 1570 Date: August 7, 2008 Larry Edwards Gabriel Scott Greenpeace Cascadia Wildlands Project Box 6484 Box 853 Sitka, AK Cordova, AK Mark Rorick Wanda Culp Juneau Group of the Sierra Club Box Mendenhall Peninsula. Road Hoonah, AK Juneau, AK Dear Appellants: Pursuant to 36 CFR (b)(1), I have reviewed the administrative record for the Iyouktug Timber Sales Final Environmental Impact Statement (FEIS) and Record of Decision (ROD). The Tongass Forest Supervisor signed the ROD. I have also considered the Appeal Reviewing Officer's (ARO) recommendation (enclosed) regarding the disposition of your appeal (Appeal Number ). The ARO recommended that the Forest Supervisor's decision be affirmed. Decision I concur with the ARO's recommendation and affirm the Forest Supervisor's decision. Your requested relief is denied. My decision incorporates, by reference, the entire administrative record, which includes the appeal and project planning records, and constitutes the final administrative decision of the Department of Agriculture [36 CFR (c)]. The ROD may be implemented 15 days following the date of this decision [36 CFR 215.9(b)]. Sincerely, /s/ Dennis E. Bschor DENNIS E. BSCHOR Regional Forester Enclosure cc: Tongass Forest Supervisor, Hoonah District Ranger, Tongass Appeals Coordinator Caring for the Land and Serving People Printed on Recycled Paper

2 United States Department of Agriculture Forest Service Alaska Region P.O. Box Juneau, AK File Code: 1570 Date: August 7, 2008 Route To: Subject: To: Iyouktug Timber Sale Appeal Appeal Deciding Officer This is my recommendation, as Appeal Reviewing Officer, on the action you should take, as Appeal Deciding Officer, on the pending appeals of the Iyouktug Timber Sales project. The following appeals were filed under 36 CFR 215: , filed by Tongass Conservation Society (TCS); , filed by the Southeast Alaska Conservation Council (SEACC) and the Sitka Conservation Society (SCS); , filed by Greenpeace, Cascadia Wildlands Project, Juneau Group of the Sierra Club, and Wanda J. Culp (Greenpeace et al). The decision being appealed is the decision by the Tongass National Forest Supervisor, Forrest Cole, to authorize the sale of timber and the construction of roads on Chichagof Island, Alaska. The selected alternative, Alternative 3 with modifications, would allow the harvest of approximately 41.8 million board feet (MMBF) of timber, the construction of about 2.8 miles of new National Forest System (NFS) road, 3.8 miles of temporary road, and the reconstruction of about 6.3 miles of existing road. Preliminary implementation planning indicates that the timber volume from the Iyouktug project will be offered through various small sales (less than 3 MMBF per year) and one or more large sales over an extended period of time following the Record of Decision (ROD). Background The 2008 Tongass Forest Plan Amendment was completed while the Iyouktug project was being planned. The 2008 Forest Plan Amendment ROD was signed on January 23, 2008, and became effective on March 17, The ROD for the 2008 Forest Plan Amendment adopts the Timber Sale Program Adaptive Management Strategy, under which portions of the suitable land base become available for project-level planning in three phases. The Iyouktug project is within the Phase 1 portion of the suitable land base, which allows planning to continue for this project and implementation once the planning process is completed. A Notice of Intent for the Iyouktug Timber Sales Environmental Impact Statement (EIS) was published on August 28, On October 5, 2007, a Notice of Availability of the Draft EIS was published in the Federal Register. The Tongass Forest Supervisor signed the ROD for the Final EIS (FEIS) on April 10, The Southeast Alaska Conservation Council (SEACC) and It s Cool to Be Safe Printed on Recycled Paper

3 Iyouktug Timber Sale Appeals 2 the Sitka Conservation Society; Tongass Conservation Society; and Greenpeace, Cascadia Wildlands Project, Juneau Group of the Sierra Club, and Wanda J. Culp filed appeals of the ROD. My review of these appeals was conducted pursuant to 36 CFR The appeal and planning records have been carefully reviewed in my consideration of the objections raised by the appellants and their requested relief. The Sitka Ranger District office prepared the enclosed indices of the documentation supporting the decision, which are keyed to specific points raised by the appellants. My recommendation hereby incorporates by reference the entire appeal record. Following submittal of their appeal, SEACC and SCS engaged in informal discussions with the Forest Supervisor per 36 CFR (d)(1) to address the appeal points and determine if they could be resolved. The Forest Service received a letter from SEACC and SCS dated August 5, 2008, and it was agreed that appeal point SEACC Issue 1 has been withdrawn as a result of the Forest Supervisor modifying portions of his decision. The withdrawn appeal point is identified in this response under the appropriate appeal point. This letter represents the formal review and disposition of the remaining points of appeal (36 CFR ). Each appeal is discussed separately below, including recommendations for action on the relief sought by each appellant. The appellants list many interrelated issues in their appeals of the Iyouktug project. Although I may not have listed each specific issue, I have considered all of the issues raised in the appeals and believe that they are adequately addressed in the following discussions. Appeal , filed by the Tongass Conservation Society (TCS). Issue 1a: Whether the FEIS included a reasonable alternative that addressed small sales, no entry into roadless areas, and impacts on deer habitat and fragmentation. Appellant asserts: The Iyouktug FEIS failed to consider an alternative which would have addressed small sales, no entry into roadless areas, and impacts on deer habitat and fragmentation, in violation of NEPA's requirement to consider "all reasonable alternatives;" The 1997 Forest Plan was ruled to be "illegal" by the court because of an error in the market demand analysis, and therefore the Iyouktug decision is also illegal. Had this error not occurred, an alternative may have been selected with less environmental impact and in less environmentally sensitive areas. Regulations implementing NEPA at 40 CFR (a) states that agencies shall rigorously explore and objectively evaluate all reasonable alternatives, and for alternatives which were eliminated from detailed study, briefly discuss the reasons for their having been eliminated.

4 Iyouktug Timber Sale Appeals 3 The Council on Environmental Quality (CEQ) has clarified these regulations, stating that what constitutes a reasonable range of alternatives depends on the nature of the proposal and the facts in each case (CEQ Forty Most Asked Questions #1b) The project's Purpose and Need (FEIS, page 1-4) includes four components that are identified to help move the project area toward the desired future conditions in the Forest Plan. Two of those objectives are to: Seek to provide a long-term, stable supply of timber to local sawmills and timber operators, and; Provide a diversity of opportunities for resource uses that contribute to the local and regional economies of Southeast Alaska to support a wide range of natural resource employment opportunities within the region. The Iyouktug FEIS has four action alternatives. The Proposed Action (Alternative 2) was partially designed to meet the needs of local timber operators for smaller sales over a period of time with an emphasis on shovel yarding. This alternative was also designed to meet the needs of large operators for large sales and helicopter harvest. Based on issues identified through scoping, three alternatives to the Proposed Action were developed. Alternative 3 was developed to minimize impacts to deer habitat connectivity while providing for an economic timber supply. Alternative 4's primary focus was to not harvest in inventoried roadless areas. The goal of Alternative 5 was to maximize the economic return of timber harvest in the project area and partially address concerns about effects to roadless areas. The timber in Alternative 5 would be offered through various small sales anticipated to be less than 3 MMBF per year, with harvest by ground-based logging. Alternative 5 would have 0.5 miles of temporary road and 1.6 miles of NFS road constructed in roadless areas; all miles of temporary road would be decommissioned and all miles of NFS road would remain open in roadless areas. The FEIS also considered 12 alternatives that were eliminated from detailed study (FEIS Volume B, pages 2-4 through 2-7) and briefly explained why each alternative was eliminated. Several of the alternatives eliminated consisted of various combinations that minimized road building, used ground-based harvest systems that are better suited to local operators who cannot afford to helicopter log, stayed out of roadless areas, and had small-volume sales for local mill operators. The appellants commented on the DEIS (FEIS Volume C, Appendix B, pages 52-55) and requested that the FEIS address small sales, no entry into roadless areas, and impacts on deer habitat and fragmentation in a single alternative. The Forest Service considered these comments and responded (FEIS Volume C, Appendix B, pages 105, 107, 109, ) with an explanation of how alternatives responded to the issues, and why some alternatives were considered but eliminated from detailed analysis. Specific responses regarding the range of alternatives include: Every alternative does not have to address every issue. Each alternative was analyzed to determine how it addressed the issues, and all alternatives respond to the issues to

5 Iyouktug Timber Sale Appeals 4 varying degrees. The decision maker can choose and modify any alternative in the ROD (Appendix B, page 107, SCS-17). Under NEPA, an agency's consideration of alternatives is sufficient if it considers an appropriate range of alternatives, even if it does not consider every available alternative. An agency need not, therefore, discuss alternatives similar to alternatives actually considered, or alternatives which are infeasible, impractical, or inconsistent with the basic policy objectives for the management of the area. By providing a range of alternatives even if some are not studied in detail, we provide the decision maker with enough information to make an informed decision. The decision maker can consider modifications to alternatives in the ROD (FEIS Appendix B, page 114, SCS-37). In regard to the Iyouktug project being illegal because of its tie to the 1997 Forest Plan, the 2008 Tongass Plan Amendment and associated EIS have been prepared in response to the court's decision on the 1997 Plan. The 2008 Plan corrected the deficiencies identified by the court, and the Iyouktug project was considered a Category 2 timber sale in the ROD for the Plan. Category 2 projects were assumed to be implemented in Alternatives 5 and 6 in the 2008 Plan, and the 2008 Forest Plan EIS considered the cumulative effects of each of the projects. Alternative 6, with modifications, was the Selected Alternative in the ROD for the Plan FEIS. My review of the alternatives indicates a range of total new road miles from 7.2 to 17.6, including an alternative (Alternative 4) that had no new roads in roadless areas. Sale volume ranged from 16.5 to 58.1 MMBF, including an alternative (Alternative 5) that offered less than 3 MMBF annually as small sales, and the acres harvested in roadless areas ranged from 0 to 1,871. Total project harvest acres ranged from 883 to 4,185. The No Action alternative, which is part of the range of alternatives, would have no roads built and no timber harvested. In my opinion, the range of alternatives analyzed in detail represents a reasonable range given the project's stated Purpose and Need and the issues identified. In addition, the effects on the resources identified by the appellants are analyzed--they are just not packaged in a single alternative as desired by the appellants. Moreover, the decision maker had the option to select a modified alternative to further reflect the appellant's concerns if he deemed them to best meet the trade-off between resource protection, social values, and timber sale economics. In addition, I conclude that the Iyouktug project is not "illegal" because its effects have been fully disclosed and corrections to the market demand have been made in the FEIS for the 2008 Forest Plan Amendment. As a result, there is no need for additional alternatives to be considered.

6 Iyouktug Timber Sale Appeals 5 Issue 1b: Whether the temporary Tongass National Forest exemption from the Roadless Area Conservation Rule (RACR) is consistent with NEPA. Appellant asserts: The current temporary Tongass National Forest exemption from the RACR's exemption on road building and timber harvest in inventoried roadless areas published in the Federal Register (68 Federal Register, December 30, 2003) is illegal because there was no environmental analysis as required by NEPA. The December 30, 2003, final rule to temporarily exclude the Tongass National Forest from the RACR has a specific section entitled "Need for a Supplemental Environmental Impact Statement (SEIS) (page 75141)." In that section, it discussed the supplemental information report (SIR) that was completed to determine if there were significant new circumstances or information since the RACR FEIS was completed in November of The December 30, 2003, Federal Register notice noted that: The conclusion in the supplemental information report is that the identified new information and changed circumstances do not result in significantly different environmental effects from those described in the roadless rule FEIS. Such differences as may exist are not of a scale or intensity to be relevant to the adoption of this final rule or to support selection of another alternative from the roadless rule FEIS. Consequently, the overall decision-making picture is not substantially different from what it was in November 2000, when the roadless rule FEIS was completed. The effects of adopting the proposed rule as final have been displayed to the public and thoroughly considered. For all these reasons, no additional environmental analysis is required. In my opinion, the need for additional NEPA analysis was carefully examined in the SIR for the final rule to temporarily exempt the Tongass from the roadless rule. The conclusion of that SIR was that no additional NEPA analysis was needed because previous NEPA documents were sufficient and I concur with that.

7 Iyouktug Timber Sale Appeals 6 Issue 1c: The RACR FEIS analyzed impacts to roadless areas based on acreage from the 1999 TLRMP decision. Since the 1999 decision was vacated by the court, the Tongass National Forest exemption for roadless areas was "rolled back" to the 1997 TLRMP decision that has less roadless acres exempted. The impacts from these acreage differences are not analyzed. Appellant asserts: That approximately 234,000 acres in the 1999 Forest Plan ROD decision that were in mostly natural Land Use Designation s (LUD) were "rolled back" to development LUD's in the 1997 TLRMP decision and the effects from this change were not analyzed. The effects of implementing the 1997 Tongass Forest Plan were fully analyzed and displayed to the public during the development of the EIS for that plan. That analysis was updated in the Supplemental EIS completed in 2003 (2003 SEIS). The 2000 RACR FEIS assumed that the current forest plan at the time, the 1999 ROD, would be the operative plan under the Tongass Exempt Alternative in that FEIS. The 1999 ROD was subsequently vacated by the courts in March of The 234,000 acres that changed back to development LUD's (as in the 1997 Plan) when the 1999 ROD was vacated represent 1.4 percent of the Tongass and 2.5 percent of the inventoried roadless acres on the Forest (SIR, page14). Re-allocating these areas back to development LUD's as they were under the 1997 Forest Plan reduced the total area allocated to the old-growth conservation reserve system in the 1999 ROD by 1.7 percent. Implementation of the 1997 Forest Plan was determined to not have effects that were significantly different from those of the 1999 ROD (SIR, page 14, 68 Federal Register, 75141, December 30, 2003). In sum, the effects to inventoried roadless areas and from the referenced acreage changes have been analyzed and considered in the 1997 FEIS, the 1999 ROD, the 2000 Roadless FEIS, and the 2003 SEIS. The fact that the 1999 ROD was subsequently vacated by the courts does not invalidate the analysis of effects contained in the 1997 Tongass Plan EIS and the 2003 SEIS. Nor does it result in effects that have not already been studied and fully considered in the agency s decisionmaking process. The 2000 RACR FEIS and the 2003 final rule to temporarily exempt the Tongass rightfully relied on the effects analyses in those documents. The record shows that the effects have been fully evaluated and no further analysis is necessary.

8 Iyouktug Timber Sale Appeals 7 Issue 1d: Whether the Forest Service provided adequate rationale for the temporary roadless exemption for the Tongass National Forest. Appellant asserts: The current temporary Tongass National Forest exemption from road building and timber harvest in inventoried roadless areas published in the Federal Register (68 Federal Register, December 30, 2003) did not provide any rationale for the exemption. As discussed above in response to TCS Issue 1b, the SIR examined whether there were new significant circumstances or information that would require additional NEPA analysis. The SIR reviewed Economics, Subsistence, Transportation, Recreation, Biodiversity, Social, Minerals, Forest Health, Karst, and Water Quality resources, and the conclusions reached for all of those resources were that the analyses completed for the RACR FEIS were still applicable. The SIR's conclusions were included in the final rule that established the temporary exemption. In addition, the preamble to the final rule explained that: Exempting the Tongass from the prohibitions of the roadless rule returns management of the Tongass to the direction contained in a forest plan that has undergone thorough scientific review, which found the Tongass Forest Plan to be consistent with the available science. The Department [of Agriculture] has concluded that the social and economic hardships to Southeast Alaska [of implementation of the roadless rule] outweigh the potential long-term ecological benefits because the Tongass Forest Plan adequately provides for the ecological sustainability of the Tongass. As discussed in the roadless rule FEIS (Volume. 1, pages 3 202, to 3 350, to 3 392), substantial negative economic effects are anticipated if the roadless rule is applied to the Tongass, which include the potential loss of approximately 900 jobs in Southeast Alaska. With the adoption of this final rule, the potential negative economic effects should not occur in Southeast Alaska. The record indicates there is ample rationale for the temporary roadless exemption on the Tongass National Forest.

9 Iyouktug Timber Sale Appeals 8 Appeal , filed by the Southeast Alaska Conservation Council (SEACC) and the Sitka Conservation Society (SCS); Issue 1: Whether the Forest Service considered information in the Hoonah Community Forest (HCF) project. This appeal point was withdrawn as a result of negotiations at informal meetings with the Forest Supervisor per 36 CFR (d)(1). Issue 2: Whether the ROD and FEIS improperly rely on direction contained in the 1997 TLRMP. That the court-overturned 1997 TLRMP cannot be "insulated" by relying on the transition language contained in the ROD approving the 2008 Forest Plan Amendment. The Forest Service prepared the 2008 Tongass Plan Amendment, FEIS, and ROD in response to the 9 th Circuit Court s decision in Natural Resources Defense Council vs. Forest Service (421 F.3d 797). Although the Regional Forester s decision on the 2008 Plan Amendment is undergoing the Forest Service administrative appeal process provided at 36 CFR 217, I believe the 2008 Plan Amendment adequately addresses the deficiencies identified by the th Circuit Court decision. The Iyouktug project is identified as a Category 2 project in the 2008 ROD for the Tongass Plan Amendment. As stated in that ROD, the Forest Service reviewed the projects in this category and determined that they were consistent with the goals and objectives of the amended Plan. The effects of the Iyouktug project have been considered and disclosed in the Iyouktug FEIS and associated project records, and as the 2008 Forest Plan Amendment ROD and FEIS assumed that it would be implemented, any potential cumulative effects of the Iyouktug project in conjunction with other projects and activities on the Tongass were considered in the analysis for the Plan Amendment (2008 Forest Plan Amendment ROD, pages 69-70). : In my opinion, the Iyouktug project appropriately relied on the 1997 Tongass Plan and the 2008 Plan Amendment.

10 Iyouktug Timber Sale Appeals 9 Issue 3a: Whether the Forest Supervisor s consideration of the need to meet annual and planning cycle market demand is reasonable, relies on biased procedures, and depends on information not disclosed in the FEIS. The Forest Service continues to erroneously interpret congressional direction in Section 101 of the Tongass Timber Reform Act (TTRA) i.e., there is no need to meet market demand for Tongass timber. Section 101 of TTRA amended the ANILCA timber supply mandate with the following text in Section 705(a): Subject to appropriations, other applicable law, and the requirements of the National Forest Management Act of 1976 (Public Law ), except as provided in subsection (d) of this section, the Secretary shall, to the extent consistent with providing for the multiple use and sustained yield of all renewable forest resources, seek to provide a supply of timber from the Tongass National Forest which (1) meets the annual market demand for timber from such forest, and (2) meets the market demand from such forest for each planning cycle. (FEIS, Volume C, page A-5, paragraph 6). Under the TTRA, the Forest Service must seek to provide a supply of timber that meets annual and planning-cycle demand for timber from the Tongass National Forest. Natural Resources Defense Council v. U.S. Forest Service, 421 F.3d at 806. SEACC 3b: Whether the FEIS fails to disclose all the relevant factors and information used to calculate the goal for timber volume to be offered in FY08 (124 MMBF) The annual demand calculations rely on Brackley (2007) [sic][the correct citation is Brackley et al. 2006] and they are faulty because this model relies on flawed and unsupported assumptions which include: 1) Pacific Rim markets determine Tongass timber demand; 2) Tongass timber can be competitive; 3) there will be a resurrection of mill capacity reminiscent of the pulp mill era; and 4) Brackley s study does not provide a pricing analysis nor does it consider the high production costs incurred by Tongass timber operators; The annual demand calculations rely on the Morse methodology to support the Iyouktug sale, contributing almost one-third of the projected offering for The FEIS violates NEPA and ANILCA because it fails to explain the specific factors considered in setting the projected

11 Iyouktug Timber Sale Appeals 10 offering level, the data relied on to justify those different elements of the methodology, and information on whether it followed agency guidance for updating the information used in the methodology. As an example, appellants state that Appendix A of the FEIS does not disclose how the annual demand projections have compared to what has been offered, sold, and harvested over the last 7 years. The project record includes documents developed as part of the 2008 Tongass Forest Plan Amendment, such as the Addendum to the Brackley et al. study (Brackley, Allen M. and Haynes, Richard W. 2007), the Final EIS, all of its appendices, and the ROD. All of these documents, especially Appendix G of the Final EIS for the Amendment, deal extensively with these issues. Based on my reading of this appeal, and the referenced appeal of the 2008 Tongass Forest Plan Amendment, it is my understanding that appellants believe demand for Tongass timber should be estimated based on demand in the domestic market, and not in foreign countries around the Pacific Rim. The PNW demand studies included by reference in the project record define the Pacific Rim as all countries around the Rim, including the United States. These studies estimate demand for timber from the Tongass derived from demand for end products in user markets in California, Oregon, and Washington in addition to British Columbia, Alaska, the Russian Far East, and major consuming regions of Japan, Korea, Taiwan, and China. There is no basis, therefore, for appellants assertion that the demand studies are flawed because demand in Pacific Rim markets does not determine Tongass timber demand. The PNW demand studies also acknowledge that the timber industry in Southeast Alaska faces competitive challenges. However, Tongass timber can be competitive in current markets. Alaska is one of the last places in western North America that produces products from slowgrown large old trees. Old-growth trees and some younger trees in Alaska have special highquality strength and appearance characteristics. Wood products manufactured in Alaska generally go into high-end markets, such as window casings and door moldings. These markets are arbitraged throughout the Pacific Rim, meaning that prices for these products are similar regardless of what market it goes into domestic or foreign. Brackley and Haynes (in press) illustrate how Alaska producers have shifted in and out of domestic markets. Brackley et al. (2006) accounted for this market arbitrage by assuming export products would be synonymous with high-value products that could be sold in domestic or foreign markets based on price. Accordingly, I find that the record demonstrates that the Forest Service has acknowledged the competitive challenges and opportunities faced by the timber industry in Southeast Alaska. Appellants also contend that the Iyouktug project is flawed because the 2006 Brackley et al. study assumes that there will be a resurrection of mill capacity reminiscent of the pulp mill era. In fact, the PNW long-term demand analyses have scenarios that cover several possible futures. As stated in the Addendum to this study, PNW acknowledges that [c]hallenges still remain with the utilization of utility logs due to a limited fiber market. Until such markets evolve, it is difficult to see the evolution of an integrated industry characteristic of scenarios 3 and 4. In addition, the Addendum and the Forest Plan Amendment ROD state that the most likely scenario to develop over the next several years is Scenario 2 of the Brackley et al. study, which does not

12 Iyouktug Timber Sale Appeals 11 assume construction of any additional mills in Southeast Alaska, but expansion of utilization of existing mill capacity. Consequently, I find that the Iyouktug decision was not based on an assumption that an integrated timber industry (with additional mills to process low-quality wood) would be re-established in Southeast Alaska. Price is a primary driver of any demand and supply analysis, including Brackley et al. (2006). Stumpage price projections in the PNW demand studies are linked to price series used and projected in the Resource Panning Act assessments (such as Haynes et al. 2007). Stumpage prices in Alaska are estimated as a function of prices in western Washington and Oregon. Costs are embedded in prices. Alaska markets directly interact with producers and consumers in other U.S. regions through this price relationship. Brackley and Haynes (in press) explain that market arbitrage is used to understand parity among prices in spatially distinct markets where there is the opportunity for open exchange (trade). Market arbitrage is a powerful force that keeps prices of different species, grades, and locations within some fixed proportion to each other. Abstracting from transportation and transactions costs, for example, prices of one species and grade will not exceed prices for other species of a similar grade in the long run because of possibilities of substitution. Tying price in Alaska to price in the Pacific Northwest is how market arbitrage is included implicitly in the demand assessment. The mix of products that go into end markets from Alaska are, on average, higher quality and more valuable than the average lumber markets in Washington, Oregon, and British Columbia (Brackley and Haynes in press). The type of lumber products in the demand projections reflects this higher value by the type of markets they compete in. Consequently, I find that although price is not explicit in the PNW demand studies, it is reflected through this mix of generally higher value products that go into various end markets, and by the assumption that Alaska price is a function of U.S. price. Appendix A of the Iyouktug FEIS references the 2000 Forest Service report that established the Morse methodology. In addition, in the Iyouktug FEIS (Volume C, Appendix A, page 6, Figure A-1) the Tongass timber harvest (MMBF per year) from 2001 to 2007 is shown. Harvest has fluctuated from a low of 18.7 MMBF in 2007 to a high of 50.8 in There has been a decline from 2005 to References on how to calculate timber market demand are in the project record and/or on the Alaska region public website and are readily available. For example, the website under forest management reports has links to reports including expected timber purchases, cut and sold reports, volume under contract, and so on. Appendix A of the Iyouktug FEIS explains in detail the procedures used and the rationale for them. Appendix A also references the document (Alexander, 2008) that updates the original Morse methodology to reflect the current PNW demand studies (Brackley et al. 2006, and the Addendum to it), and explains the reasons for doing so. As previously mentioned, the Addendum to the Brackley et al. study concluded that the most likely scenario to play out over the next several years is scenario 2 of the Brackley et al. study, not a further reduction in operations as suggested by appellants. Moreover, the project record includes several annual monitoring and evaluation reports, which compare annual timber volume sold and harvested to the Forest Plan s ASQ. Based on this information in the project record, and the understanding that the Morse methodology is intended to generate a supply target rather

13 Iyouktug Timber Sale Appeals 12 than an annual demand estimate, I conclude that the lack of a table comparing the Morse methodology s annual sales targets to volume sold and harvested does not make the Iyouktug FEIS misleading. I believe the FEIS disclosed all the relevant factors related to supply and demand of Tongass timber. The Iyouktug FEIS appropriately tiered to the 2008 Forest Plan Amendment FEIS where the appellants' points are best addressed since they are Forest-wide concerns. Issue 4: Whether the Forest Service improperly elevated timber over subsistence use of deer in conducting multiple use balancing when choosing the Selected Alternative for the Iyouktug project. The Forest Service should not have approved logging in roadless areas in order to minimize adverse impacts on subsistence uses and resources. The Purpose and Need for the Iyouktug project is described on pages 1-4 of the FEIS, which states that the project was proposed to respond to the goals and objectives of the Tongass Forest Plan, to help move the project area towards the desired conditions described in that Plan, and to meet the needs of timber operators. The Purpose and Need also includes the following components: Maintain and promote wood production from suitable timber lands, providing a supply of wood to meet society s needs; Seek to provide a stable supply of timber from the Tongass National Forest, which meets the annual planning-cycle market demand, while managing these lands for sustained yields, consistent with sound multiple-use and sustained-yield objectives; Seek to provide a long-term, stable supply of timber for local sawmills and timber operators; and Provide a diversity of opportunities for resource uses that contribute to the local and regional economies of Southeast Alaska. Although the effect of the project on subsistence uses was not identified as a significant issue for the Iyouktug EIS, the EIS does consider and disclose these effects. As stated in the EIS, deer are one of the subsistence resources most commonly used by the residents of Southeast Alaska, and the residents of Hoonah, Haines, and Juneau obtain approximately 75 percent of their average deer harvest from Wildlife Analysis Area (WAA) 3551, which includes the VCU's of the project area. The analysis of the effects of the project on subsistence uses included, among other things, the analysis of the effects of the project on habitat connectivity for deer (which was identified as a significant issue) (FEIS, pages 3-7 to 3-23), and the effects of the project on overall habitat

14 Iyouktug Timber Sale Appeals 13 capability (see my response to Issues 3, 4, and 5 of the Greenpeace et al. appeal for a complete discussion of the adequacy of this analysis). Based on the analysis in the Iyouktug FEIS and the findings in the 1997 Forest Plan FEIS, the Iyouktug FEIS concluded that all of the alternatives, including the no-action alternative, would result in a significant possibility of a significant restriction on the subsistence use of deer (Iyouktug FEIS, page 3-141). Section 810(a)(3) of ANILCA requires that no use or occupancy of lands under Federal jurisdiction can significantly restrict subsistence uses until the Federal agency determines that: (A) such a significant restriction of subsistence uses is necessary, consistent with sound management principles for the utilization of the public lands, (B) the proposed activity will involve the minimal amount of public lands necessary to accomplish the purposes of such use, occupancy, or other disposition, and (C) reasonable steps will be taken to minimize adverse impacts upon subsistence uses and resources resulting from such actions. As discussed on pages to of the FEIS, the Forest Supervisor concluded that the potential restrictions associated with the Iyouktug project are necessary, consistent with sound management of public lands, and that the amount of public lands necessary to implement the alternatives, including the Selected Alternative, is the minimum necessary to accomplish the purposes of that alternative. The Forest Supervisor indicated that he considered the public s concerns related to subsistence uses, and that he believes the Selected Alternative was designed to minimize impacts to habitat connectivity, which affects subsistence harvest (ROD, page 10). Forest-wide standards and guidelines for wildlife, fish, riparian areas, and biodiversity will also help minimize the effects on deer and other subsistence resources (FEIS, page 3-142). With regards to whether the Forest Supervisor improperly elevated the need to supply timber above subsistence concerns for the project area, the Forest Plan allocated approximately 71 percent of the NFS lands within the project area to the timber production LUD. These lands are to be managed for the production of sawtimber and other wood products on an even-flow, longterm sustained yield basis. The Forest Plan allocated an additional four percent of the land within the project area to the scenic viewshed LUD. The desired future condition for these lands states, in part, that they will produce a yield of timber that contributes to the Forest-wide sustained yield while minimizing the visibility of developments (1997 Forest Plan, pages and 3-144). As discussed above, the Iyouktug project was designed to move the project area towards the desired future condition for these LUD's as set forth in the Forest Plan, and to contribute to the harvest levels identified in the Plan. Each LUD is managed in accordance with the goals and objectives and standards and guidelines for that LUD. In making his decision, the Forest Supervisor stated: I carefully considered the issues and concerns raised during scoping, the subsistence hearings, and comments on the DEIS. I considered the 1997 Forest Plan direction relevant to this project, the ROD for the 2008 Forest Plan, and the competing interests and values of the public. I considered all viewpoints and incorporated them where feasible and consistent with the Purpose and Need of the project (ROD, pages 6-7).

15 Iyouktug Timber Sale Appeals 14 I evaluated the trade-off between resource protection, social values, and timber sale economics. The Selected Alternative provides a beneficial mix of resources for the public, within a framework of existing laws, regulations, policies, public needs and desires, and the capabilities of the land, while meeting the stated Purpose and Need for the project (ROD, page 7). In my opinion, the Forest Supervisor s decision to harvest timber within the timber production and scenic viewshed LUD's in the Iyouktug project area is consistent with the Forest Plan goals and objectives for these areas and within his authority. With regard to whether the Forest Service should not have approved logging in roadless areas in order to minimize adverse impacts on subsistence uses and resources, I believe the Iyouktug FEIS, ROD, and project record demonstrate that the Forest Supervisor has taken reasonable steps to minimize the potential effects of the project on subsistence uses, particularly the subsistence use of deer, as discussed above. While the Selected Alternative does include some road construction and timber harvest within two of the three roadless areas included in the project area, most harvest will partial harvest using helicopter yarding, and the roads will be decommissioned or closed after harvest. In my opinion, the Forest Supervisor has taken reasonable steps to minimize the potential effects of the project on subsistence uses and resources. Issue 5: Whether the Forest Service adequately considered cumulative effects on deer. That without leaving the roadless areas intact, the adequacy of the mitigation measures to minimize impacts to subsistence use of deer is in question; The FEIS failed to take a hard look at severe winters when analyzing the cumulative effects on deer; The Iyouktug ROD violates NFMA's species viability requirements. Regarding appellants' first assertion, the FEIS (Volume B, pages 3-33 through 3-34) describes (in qualitative terms) the relative effects of road development and timber harvesting on wildlife in general within the three Inventoried Roadless Areas potentially affected by sale alternatives. The ROD, FEIS, and planning record detail the numerous measures prescribed for the planning area in order to mitigate negative impacts to deer habitat (and subsequent effects on deer populations and deer potentially available for subsistence use). Forest Plan standards and guidelines that are an integral part of the overall conservation strategy, such as old growth reserves, riparian management areas, beach fringe protection, and goshawk and marten guidelines were incorporated into the selected alternative (as well as all other alternatives).

16 Iyouktug Timber Sale Appeals 15 For this specific sale, deer habitat mitigations include: dropping units from the original unit pool (Document 726, Wildlife and Subsistence Resource Specialist Report, page 22); dropping units from the selected alternative to maintain low elevation habitat for deer (ROD, page 8); modifying units to maintain deer winter habitat and habitat connectivity (ROD, page 17); and closing all constructed, and reconstructed roads after sale closure (with the minor exception of 0.4 miles of roads to rock pits that will remain open). Effects on connectivity, productive old growth habitat, and coarse canopy stands were analyzed and disclosed in the Wildlife and Subsistence Resource Specialist Report (pages 26-32) and the FEIS (Volume B, pages 3-7 though 3-21), including the cumulative effects for each action alternative (Wildlife and Subsistence Resource Specialist Report, pages and FEIS Volume B, pages 3-21 through 3-23 ). Effects on deer by alternative were also analyzed and disclosed in the Wildlife and Subsistence Resource Specialist Report (pages 72-89) and the FEIS (Volume B, pages 3-85 through 3-93), including the potential direct and cumulative effects on habitat capability, high value and prime deer winter habitat, and summer habitat (Wildlife and Subsistence Resource Specialist Report, page 89 and FEIS Volume B, pages 3-93 and 3-94). The FEIS (page 3-94) discloses that the cumulative reduction of elevational connectivity in association with a cumulative reduction in deer habitat capability as a result of past, proposed and future harvest activities and the severe winter will likely result in a further decline in the deer population. The proposed sale will have an impact on deer habitat and resulting deer populations. It would be almost impossible to conduct a timber sale without affecting deer habitat. However, old growth reserves and standards and guides are in place, and numerous mitigation measures (as described above) will be applied in order to minimize effects yet still offer an economically viable sale. In my opinion, the FEIS and supporting documentation adequately describe the mitigating measures and adequately disclose the anticipated effects on deer populations from implementing the selected alternative. Regarding the hard look at severe winters, the FEIS describes the effects of high snow winters in qualitative terms. FEIS Volume B, page 3-93 states that periodic severe winters may result in a major decline in a population. The Wildlife and Subsistence Resource Specialist Report (page 77) looked closely at prime deer winter habitat, defined as high volume POG (high volume strata) on south and west facing aspects below 800 feet in elevation. These stands were considered the most important habitat for deer during winter snow conditions. Table 3MI-10 (FEIS Volume B, page 3-93) describes this information in quantitative terms in showing the percent reduction in this habitat by alternative. It is not appropriate to use the current deer model to attempt to quantitatively display effects of stochastic events, such as a higher than average snow winter. The deer model uses average winter snow depth as one of the parameters to estimate winter habitat capability. Snow depths in the project area were predicted to be moderate to high (Wildlife and Subsistence Resource Specialist Report, page 75, paragraph 4). No low snow depths were predicted (FEIS Volume C, page 113, paragraph 5). An average snow depth may change over time. However, it may take decades or longer to show a significant difference, and these differences may not even then move a stand from one category to a higher or lower category. The model is not designed and should

17 Iyouktug Timber Sale Appeals 16 not be used to reflect a one-time event, even though that event may happen with greater frequency (2008 Forest Plan Amendment FEIS Volume 1, page 3-296, paragraph 3). In my opinion, the FEIS looked closely and discussed adequately the possible effects of periodic severe winters. There were also several specific mitigations taken to protect deer habitat and I find all of them to be adequate. Regarding viability, the proposed action is within guidelines of the Tongass Forest Plan and therefore meets NFMA requirements for species viability. As described in the 2008 Plan Amendment ROD (page 16), the analysis in the 2008 Plan Amendment FEIS concluded that the amended Forest Plan will provide an amount and distribution of habitat adequate to maintain viable populations of vertebrate species in the planning area and will maintain the diversity of plant and animal communities. I conclude that the proposed action does not violate NFMA species viability requirements. Issue 6a: Whether the financial efficiency analysis in the FEIS is misleading. The FEIS substantially underestimates the extent of the loss (to the public) because it relies on the same $101/MBF cost figure when determining the estimated revenues and costs of each of the project alternatives, although these figures are grossly inadequate, without substantiation, and out-of-date; That even if there was documentation to support these figures at the time they were developed, costs have risen substantially since that time and therefore the FEIS violates NEPA because it relies on outdated, misleading information. NEPA requires the disclosure of effects on the human environment, not the administrative costs of managing timber sale projects. The task for the agency is to weigh the economic and other benefits of the project against its environmental costs. The Forest Service is not required to consider, as part of the NEPA process, the administrative costs of preparing EIS's, sale layout, and sale administration. Moreover, depending on the perspective, the cost of NEPA compliance might be considered a cost of undertaking the project, a cost of protecting the environment, or a cost of public land management. Even though NEPA does not require it, the administrative costs associated with implementing the Iyouktug project are addressed. The Iyouktug FEIS uses the average costs across the Alaska Region for administering timber sales. These costs are based on calculations outlined in the Declaration of Forrest Cole (lodged with District Court in NRDC v. Forest Service, dated July 13, 2004, Case Number J04-010CV (JKS)). The administrative costs of timber harvest cited on page 3-43 of the Iyouktug FEIS are based on an average cost per thousand board feet (MBF) for planning and support charges: $41 for NEPA preparation; $23 for sale preparation; $9 for sale administration; and $28 for engineering support and represent the most current information

18 Iyouktug Timber Sale Appeals 17 available. These estimated costs are useful for comparing relative differences between alternatives. The Forest Service must use estimates of costs and revenues for timber sales in project NEPA documents as the actual costs and revenues will not be finally determined until the sales are sold. In my opinion there is no violation of NEPA. The rationale and costs represent the best information available and when the costs are applied to each alternative, they serve to illustrate the relative differences between alternatives. Issue 6b. Whether the FEIS fails to disclose the costs associated with using public work funds to cover the cost of road construction when the value of the timber to be sold is insufficient to cover those costs. As an example, appellants point to the Midway timber sale, with a bid value of $52,467 and a public road contract costing $2,500,000. Table 3TR-2 (FEIS, page 3-156) displays the projected road costs by alternative. Page 3-45 of the FEIS states, " that in some years, public works funds are available to pay for all, or a portion of, road construction or reconstruction costs in a timber sale for roads that will be used in the long-term administration of the forest." In any given year, funds may or may not be received for road work and that is clearly identified. Public works funding is dependent on monies received through Congressional appropriation and varies from year-to-year. As an example, the 2008 Consolidated Appropriations Act (P.L , December 26, 2007) appropriated $3,445,000 to be used to fund road improvements on the Tongass. The underlying authority to build roads for National Forest purposes is at 23 United States Code 205 (2008 Forest Plan Amendment FEIS, Volume 2, Appendix H, page 106). When funds are received they are used by the Forest for projects that best meet the Forest's needs and are not tied to timber sale receipts. This allows development or expansion of the transportation network without requiring one resource to carry the entire burden of road construction costs (2008 Forest Plan Amendment FEIS, Volume 2, Appendix H, page 53). In essence, there is no required "ledger sheet" that has to balance road costs with timber receipts as implied by the appellants. There is no mandate that the Forest Service make money by offering timber for sale. This point was emphasized in the Declaration of Tongass Forest Supervisor Forrest Cole (lodged with District Court in NRDC v. Forest Service, dated July 13, 2004, Case Number J04-010CV (JKS)), where it states: The Tongass National Forest is not managed to produce a maximum net revenue flow to the Treasury. Administrative costs of numerous Tongass programs, such as recreation, wildlife, fisheries, trails, and subsistence exceed the receipts from those programs.

19 Iyouktug Timber Sale Appeals 18 The Forest Service is directed to sell commercial timber sales at not less than appraised rates. The Alaska Region implements this direction by established appraisal methodologies. In calculating what timber is worth, quarterly values are derived from timber product publications whereby logging and manufacturing costs for the timber sale projects are subtracted from timber worth. Forest Service administrative costs play no part in the calculation of appraised value. If sales are determined to be deficit following the appraisal methodologies, a base rate (lowest value the Forest Service will accept for the timber sale project) is established and the project is offered for bid. In my opinion, the costs for road construction and reconstruction have been displayed in the analysis and there is no requirement for the timber sales to "break even" when balanced against those costs. Issue 6c. Whether the Timber Financial Efficiency Analysis in the FEIS is misleading because of missing or outdated cost information. The road haul costs are out of date and the costs used were based on 2004 published data and do not reflect the price increases in gas and diesel fuel since 2004; There is no disclosure of pond value to potential purchasers outside of the Hoonah area; That barging or rafting costs are not included in the financial analysis and would be an additional cost for export of yellow cedar, interstate shipping, or transporting logs to a mill located somewhere other than Hoonah; The average calculation from Housley (2007) doesn t explain whether these costs increase the per mile of transport considered for the FEIS, and that in any case fuel costs and shipping costs have doubled since The appellants are correct that fuel and shipping costs have increased substantially since The fuel and shipping costs used for this analysis are based on 2005 data. This 2005 data did not get incorporated until mid-2006 and the FEIS states, "[t]he costs and values used reflect data updated for the 2nd Quarter of 2006" (Volume B, page 3-41). The project costs represent the most current information available that was incorporated into NEAT-R for this analysis. In addition, the NEAT-R program used for the FEIS analysis is designed to display relative differences between alternatives and is not meant to reflect absolute values (Volume B, page 3-42). The stumpage value of standing Federal timber is disclosed in the FEIS as the indicated bid value for each alternative and can be found in Table 3TE-3 (Volume B, 3-42). Pond value is not displayed in the FEIS because it is an intermediate value that does not represent the value of