Tower Fire Salvage. Economics Report. Prepared by: Doug Nishek Forester. for: Priest Lake Ranger District Idaho Panhandle National Forests

Transcription

1 Tower Fire Salvage Economics Report Prepared by: Doug Nishek Forester for: Priest Lake Ranger District Idaho Panhandle National Forests April 2016

2 In accordance with Federal civil rights law and U.S. Department of Agriculture (USDA) civil rights regulations and policies, the USDA, its Agencies, offices, and employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by program or incident. Persons with disabilities who require alternative means of communication for program information (e.g., Braille, large print, audiotape, American Sign Language, etc.) should contact the responsible Agency or USDA s TARGET Center at (202) (voice and TTY) or contact USDA through the Federal Relay Service at (800) Additionally, program information may be made available in languages other than English. To file a program discrimination complaint, complete the USDA Program Discrimination Complaint Form, AD-3027, found online at and at any USDA office or write a letter addressed to USDA and provide in the letter all of the information requested in the form. To request a copy of the complaint form, call (866) Submit your completed form or letter to USDA by: (1) mail: U.S. Department of Agriculture, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue, SW, Washington, D.C ; (2) fax: (202) ; or (3) program.intake@usda.gov. USDA is an equal opportunity provider, employer and lender.

3 Table of Contents Introduction... 1 Relevant Laws, Regulations, and Policy... 1 Regulatory Framework... 1 Methodology... 1 Affected Environment... 2 Existing Condition... 2 Environmental Consequences... 2 Cumulative Effects... 4 References Cited... 4 Tables Table 1. Project Feasibility... 3 i

4 Introduction The management of the Idaho Panhandle National Forests (IPNF) has the potential to affect local economies. People are an important part of the ecosystem. Use of resources and recreational visitation to the Forest generates employment and income in the surrounding communities and counties and generates revenues that are returned to the federal treasury. This section presents concepts used to delineate an affected area and methods used to analyze the economic effects of the Tower Fire Salvage and Reforestation project, including the project feasibility. Relevant Laws, Regulations, and Policy Regulatory Framework NEPA requires that consequences to the human environment be analyzed and disclosed, based on issues. NEPA does not require a monetary benefit-cost analysis. If an agency prepares an economic efficiency analysis, then one must be prepared and displayed for all alternatives [40 CFR ]. The preparation of NEPA documents is also guided by CEQ regulations for implementing NEPA [40 CFR ]. The development of timber sale programs and individual timber sales is guided by agency direction found in Forest Service Manual (FSM) Forest Service Handbook (FSH) guides the financial and, if applicable, economic efficiency analysis for timber sales. Methodology Project feasibility is used to determine if a project is feasible if it will sell, given current market conditions. It relies on the Region 1 Transaction Evidence Appraisal (TEA) System. The TEA uses regression analysis of recently sold timber sales to predict bid prices. The most recent appraisal model for the area of interest was used to estimate the stumpage value (expected high bid resulting from the timber sale auction) for the timber project. The estimated stumpage value for each alternative was compared to the base rates (revenues considered essential to cover regeneration plus minimum return to the federal treasury) for that alternative. The project is considered to be feasible if the estimated stumpage value exceeds the base rates. If the feasibility analysis indicates that the project is not feasible (estimated stumpage value is less than the base rates), the project may need to be modified. Infeasibility indicates an increased risk that the project may not attract bids and may not be implemented. Many of the costs and benefits associated with a project are not quantifiable. For example, the benefit to wildlife from habitat improvement is not quantifiable. These costs and benefits are described qualitatively, in the individual resource reports. Title 40, Code of Federal Regulations for NEPA (40 CFR ) indicates For the purposes of complying with the Act, the weighing of the merits and drawbacks of the various alternatives need not be displayed in a monetary cost-benefit analysis and should not be when there are qualitative considerations. Management of the forest is expected to yield positive benefits, but not necessarily financial benefits. Costs for various vegetation, recreation, wildlife, road and burning activities are based on recent experienced costs and professional estimates. 1

5 Affected Environment Existing Condition The combination of small towns and rural settings, larger towns such as Coeur d Alene, Idaho, and the urban area of Spokane, Washington create a diverse social environment for the geographical region around the Idaho Panhandle National Forests. Local residents pursue a wide variety of life-styles, but many share a common theme, an orientation to the outdoors and natural resources, especially within the smaller communities. This is evident in both vocational and recreational pursuits including employment in logging and milling operations, outfitter and guide businesses, hiking, hunting, fishing, camping and many other recreational activities. Timber, tourism and agricultural industries are important to the economy of local areas. Despite the common concern for, and dependence on natural resources within the local communities, social attitudes vary widely with respect to their management. Local residents hold a broad spectrum of perspectives and preferences range from complete preservation to maximum development and utilization of natural resources. Timber management activities within the project area have the potential to impact the economic conditions of local communities and counties. To estimate the potential effect on jobs and income, a zone of influence (or impact area) was delineated. Counties were selected based on commuting data suggesting a functioning economy and where the timber is likely to be processed (log flows). Recent data on log flows from the IPNF was provided by the University of Montana s Bureau of Business and Economic Research (McIver et al. 2012). The zone of influence for this project is comprised of Boundary, Bonner, Kootenai, Benewah, and Shoshone counties in Idaho. Environmental Consequences The estimation of project feasibility was based on an alternative feasibility model, which took into account logging system, timber species and quality, volume removed per acre, lumber market trends, costs for slash treatment, and the cost of specified roads, temporary roads and road maintenance. Changes to resources such as wildlife habitat have been measured using changes to habitat conditions and will not be described in financial or economic terms for this project. Changes to all the resource areas considered are available in the project record. Table 1 summarizes the base rates, delivered log price and total revenue for each alternative. Alternatives compared to the most efficient solution are a component of the economic trade-off, or opportunity cost, of achieving that alternative. The no action alternative would not harvest timber, plant trees, or take other restorative actions and, therefore, incur no costs. As indicated earlier, many of the benefits associated with natural resource management are non-market benefits. These benefits should be considered in conjunction with the information presented here. Summary: Of the action alternatives, alternative 2 is more economically feasible compared to alternative 3. Alternative 2 generates more total revenue that may be used to fund other restoration projects not included in the timber sale design criteria. Alternative 1 does not propose any salvage harvesting and therefore not expected to generate any economic value. 2

6 Table 1. Project Feasibility Category Timber Harvest Measure Acres To Be Harvested 1 Base Rates ($/CCF) Appraised Stumpage Rates ($/CCF) Delivered Log Price to Breakeven ($/MBF) Alternative 1 (No Action) Alternative 2 Alternative 3 0 5, ,173 N/A $ $ Total Estimated Volume CCF 35.1 MMBF 51.9 CCF 25.9 MMBF Predicted High Bid ($/CCF) Predicted High Bid Value ($) ,238,338 2,922,230 Timber Sale and Required Design Criteria Present Value Costs ($) Present Value Revenue ($) Present Net Value($) ,397,383 3,695,121 1,297,738 1,721,123 2,491, ,593 As stated in the proposed action, some acres proposed for treatment may eventually be dropped during project layout and implementation. For example, it is likely that more small streams, springs and wet areas would be located in the proposed units. Once riparian buffer zones are implemented, the units may no longer be viable. In addition, other areas may be eliminated because they are too steep for ground based machinery and do not have the topography or proper access suitable for cable yarding. It is estimated that approximately 30 to 50 percent of the proposed acres (1,281 to 2,136 acres) will be dropped during this process. Of the action alternatives, alternative 2 is more economically feasible compared to alternative 3. Alternative 2 generates more total revenue that may be used to fund other restoration projects not included in the timber sale design criteria. Alternative 1 does not propose any salvage harvesting and therefore not expected to generate any economic value. 1 The acre and volume figures in the Emergency Situation Request (ESD) are from preliminary estimates made in the fall of The acre and volume figures for this report are based on field reconnaissance from the winter of These acres do not include treatments in riparian areas since the trees would not be removed. 3

7 Cumulative Effects Many factors influence and affect the local economies, including changes to industry technologies, economic growth, international trade, adjacent private and state forest management, and the economic diversity and dependency of the counties. Past, present and reasonably foreseeable activities on National Forest and other lands within the project area were analyzed in the environmental analysis, none of the activities were projected to have a measurable effect on the economic issues for the alternatives. Therefore, there would be no cumulative effects. However, the jobs and income associated with the action alternatives, especially alternative 2, are expected to bring the local economy some increased relative stability during the life of the project. References Cited Chelsea P. McIver, Sorenson, Colin B., Charles E. Keegan, Charles Gale, Todd A. Morgan. Aug Capacity and Capability of Mills in the Idaho Panhandle National Forest Impact Zone. Submitted to: Krista Gebert, USDA Forest Service, Region One, Purchase Order No. AG-03R6-P Available online: 4