Performance Audit Report Yield Forecasts Southern Regional Forest Agreement, Tumut sub-region Issue The Auditor General s Performance Audit Sustaining Native Forest Operations: Forests NSW of April 2009 included an action item (Recommendation 3), requiring Forests NSW to Undertake and publicly report the results of a review of yield estimates for native forests in Southern Region including Eden, South Coast & Tumut This report addresses the review of yield estimates for Tumut sub-region of the Southern RFA region, in the form of a review of timber supply from the Tumbarumba area. Background In 2009 Forests NSW conducted a major review of 1999 Regional Forest Agreement (RFA) wood supply modelling for South Coast sub-region. In this study, estimates of future yields from native forest were modelled using FRAMES (the Forests NSW Forest Resource And Management Evaluation System). Components of this system include: Inventory of standing volume using ATLAS Cruiser software. Definition of net harvest area definition using ArcGIS software. Simulation of growth and harvest using the custom-built simulator. Yield scheduling using Remsoft Woodstock planning system. Project Design The modelling undertaken as part of this review provides more detail on Wood Supply Agreement (WSA) volumes for the period 2008 2020. Modelling was focussed on high quality large sawlogs with other product volumes resulting as subsequent outputs. The structure of the FRAMES system was retained with all components reviewed and updated as required. These include: Native forest inventory updated - 70% of plots replaced. Remeasurement includes areas harvested up to the end of 2007 Net harvestable area recalculated Volume, growth, mortality and yield functions revised Improved sub-area modelling Page 1 of 8 17/01/12
Refined silviculture simulation to better match current practices Improved species level modelling Improved yield scheduling. Current resource The area base for this forecast covers the Bago Maragle and Tumut management areas within the Tumut sub-region (see Figure 1). Tables 1 and 2 summarise the breakdown of the resource in terms of net harvestable area (the area available for timber production) and the silvicultural treatment (harvesting systems) applied across the sub-region. Management Areas Gundagai Tumut Batlow Talbingo Tumbarumba Bago Maragle Tumut Planted Forests Figure 1: Extent of study area for Tumut sub-region yield estimates. Page 2 of 8 17/01/12
Table 1: Net harvestable area by Tumut sub-region management areas Management Area Gross Area (ha) Net Mapped Area (ha) Net Harvestable Area (ha) Bago Maragle 47,737 32,106 30,249 Tumut 18,978 13,887 13,084 Total 64,715 45,993 43,333 Table 2: Proportion of Silvicultural treatment by Management Area Management Area STS AGS Bago Maragle ash 66% 34% Tumut 100% Weighted average 76% 24% Note: STS Single Tree Selection, AGS Australian Group Selection Estimates of the standing volume current at the time of this study were derived from 186 strategic inventory plots that are established across the sub-region at the rate of approximately 1 plot per 200 hectares. The volume of high quality large sawlog (HQL) and associated probable limits of error (PLE) are shown in Table 3. PLE is the confidence limits at 95% probability expressed as a percentage of the mean. Table 3: Standing volume of High Quality Large sawlog (HQL) and associated Probable Limits of Error (PLE) by Management area Management Area Standing HQL ( 000 m3) Standing HQL (%) PLE (%) Bago Maragle 1,286.4 80% 30% Tumut 316.7 20% 29% Total 1,603.1 100% The forests of the Tumut sub-region are dominated by Alpine Ash and Mountain Gum. Table 4 summarises the breakdown of HQL by species groups. Table 4: Proportion of High Quality Large sawlog (HQL) and associated Probable Limits of Error (PLE) by species group Species/species group Standing HQL (%) PLE (%) Alpine Ash 59% 36% Mountain Gum 26% 29% Other 15% 37% Total HQL 1 21% 1 PLE for total HQL is lower as it is based on all plots across the population. Page 3 of 8 17/01/12
Scenarios Two wood supply scenarios were modelled using Woodstock and updated net harvestable area and growth models. Even Flow scenario The objective of this scenario was to maximise the even supply of HQL volume and a non-declining supply of Alpine Ash over a 50 year period, while maintaining a smoothed longer term word flow for HQL over a greater than 100 year planning horizon. Wood Supply Agreement (WSA) scenario The objective of this scenario was to meet current (2008-2020) WSA volumes, while continuing to maximise long term sustainable supply levels of HQL. Timber supply volumes specified in the Regional Forest Agreement were also matched in this scenario. These levels were HQL volumes of 20,000 m 3 /year for Alpine Ash and 20,000 m 3 /year for hardwood (non Alpine Ash). Results Even flow scenario Table 5 and Figure 2 summarise the results of the even flow scenario, showing the HQL and other product volumes per year available for each 5 year period. Table 5: Available volume (m3/year) over 50 year period for all products Even Flow scenario. Product class 5 year period 1 2 3 4 5 6 7 8 9 10 High quality large 27,500 29,832 30,507 29,500 30,125 29,545 27,500 27,707 27,500 27,903 High quality small 4,909 5,792 5,473 5,370 5,589 4,823 4,622 5,190 5,870 6,163 HQL Alpine Ash 17,500 17,832 20,507 17,500 20,125 19,545 17,500 17,500 17,500 17,903 HQL hardwood 10,000 12,000 10,000 12,000 10,000 10,000 10,000 10,207 10,000 10,000 Low quality s/log 21,668 18,472 15,682 15,347 14,833 20,572 15,362 18,266 14,451 14,427 Pure Alpine Ash 8,664 12,098 13,633 12,118 15,092 15,323 13,275 13,583 13,269 12,578 Pulp hardwood 9,457 19,059 20,476 20,930 18,849 22,469 20,163 21,036 18,686 18,882 Table 6 shows the forecast HQL volume for the Even Flow scenario summarised by Management Area and species group. Table 6: Available HQL volume (m3/year) over 50 year period for high quality products by Management Area for Even Flow scenario. Management 5 year period Area Bago Maragle AA 1 10,433 17,513 20,507 17,498 20,125 14,063 17,305 14,337 16,864 17,903 Bago Maragle hw 2 1,987 8,701 10,000 9,413 7,431 4,711 9,692 4,160 8,666 9,384 Tumut Alpine Ash 7,067 320 0 2 0 5,482 195 3,163 636 0 Tumut hardwood 8,013 3,299 0 2,587 2,569 5,289 308 6,047 1,334 616 Total HQL 27,500 29,833 30,507 29,500 30,125 29,545 27,500 27,707 27,500 27,903 1 AA=Alpine Ash 2 hw=hardwood Page 4 of 8 17/01/12
Figure 2: Even flow scenario - available volume (m3/year) over 50 year horizon for high and low quality product grades. Wood Supply Agreement (WSA) scenario Table 7 and Figure 3 summarise the results of the scenario to meet existing wood supply agreement commitments covering the period 2008 to 2020. Results are given all products per year for each 5 year period. The HQL Alpine Ash and HQL hardwood are components parts of the High quality large volume. Table 7: Available volume (m 3 /year) over 50 year period for high quality products WSA scenario. Product class 5 year period 1 2 3 4 5 6 7 8 9 10 High quality large 40,000 40,000 40,000 23,000 26,000 26,000 26,000 25,054 23,000 23,685 High quality small 6,273 7,159 6,018 5,066 5,479 3,980 4,191 4,936 6,307 6,716 HQL Alpine Ash 20,000 20,000 20,000 16,671 19,544 16,000 16,000 16,000 19,632 21,351 HQL hardwood 20,000 20,000 20,000 6,329 6,456 10,000 10,000 9,054 3,368 2,333 Low quality s/log 36,021 27,336 25,894 9,425 11,280 18,496 14,137 13,579 7,985 7,938 E2 pulp 29,411 45,540 53,083 21,809 28,180 34,681 31,563 30,761 20,397 19,996 E1 pulp 1 1,716 2,623 3,634 6,216 6,847 8,565 8,383 9,866 8,074 Page 5 of 8 17/01/12
Figure 3: Wood supply agreement scenario - available volume (m 3 /year) over 50 year horizon for high and low quality product grades. Table 8 shows the forecast HQL volume for the Wood Supply Agreement scenario summarised by management area and species group. Table 8: Available HQL volume (m 3 /year) over 50 year period for high quality products by Management Area and Species Group for Wood Supply Agreement scenario. Management 5 year period Area Bago Maragle AA 1 10,063 19,991 20,000 16,671 19,544 12,103 15,995 15,587 18,978 21,351 Bago Maragle hw 2 8,733 15,958 20,000 2,774 2,996 6,233 9,992 8,268 1,911 1,505 Tumut Alpine Ash 9,937 9 0 0 0 3,897 5 413 654 0 Tumut hardwood 11,267 4,042 0 3,555 3,460 3,767 9 786 1,457 828 Total HQL 40,000 40,000 40,000 23,000 26,000 26,000 26,001 25,054 23,000 23,684 1 AA=Alpine Ash 2 hw=hardwood Page 6 of 8 17/01/12
Comparison Table 9 compares the results of the two scenarios. These results show that higher volumes required in the first three 5-year periods to meet Wood Supply Agreement commitments are balanced by reductions in future periods. Table 9: Comparison of HQL volume (m 3 /year) available from Even Flow and Wood Supply Agreement scenarios. Period Even Flow scenario Wood Supply Difference Agreement scenario 1 27,500 40,000 12,500 2 29,832 40,000 10,168 3 30,507 40,000 9,493 4 29,500 23,000-6,500 5 30,125 26,000-4,125 6 29,545 26,000-3,545 7 27,500 26,000-1,500 8 27,707 25,054-2,653 9 27,500 23,000-4,500 10 27,903 23,685-4,218 Table 10 compares the HQL volume breakdown by species group from the recent analysis (2008 base year) with the 1999 analysis undertaken for the Regional Forest Agreement (RFA). Table 10: Available HQL volume (m 3 /year) over 50 year horizon for high quality products by Species Group for Wood Supply Agreement scenario. 1999 (RFA) scenario 2008 WSA scenario Difference Species group 2008-12 2013-17 2018-22 2008-12 2013-17 2018-22 2008-12 2013-17 2018-22 HQL (total volume) 39,268 53,004 61,005 40,000 40,000 40,000 732-13,004-21,005 Alpine Ash 18,607 17,827 23,716 20,000 20,000 20,000 1,393 2,173-3,716 Mountain Gum 15,172 27,520 26,747 13,249 12,253 13,482-1,923-15,267-13,265 Other Species 5,486 7,653 10,536 6,751 7,747 6,518 1,265 94-4,019 Page 7 of 8 17/01/12
Conclusion This review demonstrates that available high quality large (HQL) sawlog will remain constant at 40,000 m 3 per year for the remainder of the Wood Supply Agreement, which differs from the increase in supply that was predicted in 1999 forecasts made for the Regional Forest Agreement (RFA). The breakdown of HQL volume is 50% Alpine Ash and 50% hardwood for the duration of the Wood Supply Agreement. Following the end of the Wood Supply Agreement in 2020, HQL volume can be sustainably harvested at average level of 24,600 m 3 per year. The breakdown of HQL volume for the period 2020-2057 changes to 73% Alpine Ash and 27% other species. The main contributing factor to the reduction in future volume was a significant over-estimation in inventory predictions of HQL volume from large diameter Mountain Gum that were used for the RFA modelling. Forests NSW identified this issue and addressed the problem by updating the inventory and conducting recovery studies to calibrate the predicted volumes for the hardwood species group. These updated results are reflected in the modelling conducted for this review. There will be several challenges associated with supplying the modeled volume, including the economics of recovering volume from remote areas; meeting customer expectations and requirements; and incremental reduction in available area due to environmental constraints including the progressive declaration of Endangered Ecological Communities (EECs). Page 8 of 8 17/01/12