0654-B1

Products, Energy and Restoration in Fire-Prone Forests

Heather K. Rogers^[1] and C. Larry Mason

Abstract

A century of fire suppression has left large areas of forestland in the inland west of the United States overstocked with small diameter suppressed trees. These forests have unprecedented fuel loads and are at a high risk of catastrophic fire. Harvest costs for small diameter trees frequently exceed log values. Rural communities who are most at risk from forest fires, are often economically depressed. Fuel removal treatments customized to local market conditions and combined with investments in technology will create opportunities for rural economies while reducing the environmental and economic losses associated with catastrophic forest fires. Other environmental benefits such as improved habitat, reductions in reliance upon fossil fuels to generate electricity, and increases in available surface water supplies will be realized as well. Investments in management to reduce forest fire risk have been limited because misallocation of costs, poor valuation of non-market values, and underestimates of biomass utility have caused past assessments of the economic and environmental benefits of fuel reduction programs in the forests of the inland west to be underestimated. A broader more interdisciplinary accounting of fire risk reductions will highlight potential investment and policy opportunities.

In the eastern portion of Washington state more than 1 ½ million acres of mostly federal forestlands are at risk of catastrophic forest fire. Similar conditions exist in other states in the inland west. Fire suppression policies and past logging practices have resulted in fuel load accumulations within these overstocked forests for most of a century. These unprecedented fuel conditions contribute to increased likelihood of ignition as well as intense fire behavior that becomes difficult, dangerous, and expensive to control. The United States incurred more than $2,000,000,000 in fire fighting cost in 2000 and predictions indicate billions more will be spent in the future. (USDA FS, 2001). When trees burn other important resources are affected as well. Habitat for threatened and endangered species such as salmon and spotted owls may be destroyed. Undesirable green house gases that contribute to global warming are released into the atmosphere. Soils exposed to intense heat are likely to erode while regeneration may be expensive and take decades to achieve. Aesthetics and recreational opportunities are lost. However, such large-scale fire disturbances can be avoided. If thinned to reduce fuel loads, these forests can be restored to more open fire-safe conditions much like those found by early settlers. Technological advancements in bio-mass-to-energy conversions make possible the utilization of the harvested wood fiber as a renewable and non-polluting fuel source with economic benefits to rural communities. Other opportunities for local small business investment become possible as well. Studies show that some logs may be manufactured to produce engineered wood products, furniture, fencing, flooring, and other products to further enhance rural economic development. Yet, to date, attempts to estimate the costs and benefits of fuel removal activities have been narrowly focused.

Old Economics

Future Economics

While some cost estimates presented in this paper may be preliminary, research being conducted at the University of Washington, College of Forest Resources, and Washington State University, Department of Natural Resource Sciences, in combination with information from the literature would indicate that misallocation of costs, poor valuation of non-market values, and underestimates of biomass utility have caused past assessments of the economic and environmental benefits of fuel reduction programs in the forests of the inland west to be underestimated. A broader more interdisciplinary accounting of fire risk reductions will highlight potential investment and policy opportunities.

When thinnings of low value, predominantly small diameter trees are evaluated exclusively from a harvest cost to log return perspective, the bottom line is a substantial economic loss as shown in the accounting simulation to the left under the heading, Old Economics. Small piece sizes result in costly handling. Long hauls to scarce and distant markets add further to the high cost of harvest and delivery which, when charged against the low market value of small logs results in a net loss of $345/acre. However, in the simulation to the right entitled Future Economics, a wider set of values has been included. Real (misallocated) costs that could be avoided with fire risk reduction should be considered. They include: 2) Reduced fire fighting costs are calculated as an average fire fighting cost per acre for the last ten years discounted on a 40 year fire interval using a rate of return of 5%. 3) Reduced fatalities value is derived from total fatalities for 10 years valued at the EPA benchmark of $5,000,000 each then divided by the total acres burned. 4) Reduced facility losses are calculated as total property losses over acres burned. 9) Regeneration savings are valued at the average cost to plant a burned acre. Regeneration following intense forest fires has been problematic and costs could be much higher. Non-market values such as: 5) Community value for fire reduction is a somewhat arbitrary placeholder based on interviews that could fluctuate dramatically. The important point here is the assumption of the positive value for increased fire safety. 6) Reductions in carbon emissions assume a carbon credit value of $5/ton and an atmospheric emissions offset of 9 tons of carbon/acre. When small diameter fuel reductions provide biomass for cogeneration, carbon emissions are reduced and rural economic development is encouraged. Potential revenues from bio-mass to energy programs such as: 7) Utility savings associated with transmission efficiencies gained from locating energy generation close to rural users. 8) Green energy credits (premiums) paid by environmentally sensitive industries for energy produced without fossil fuel consumption. 10) tax receipts to rural counties from increased economic activity are included as additional positive revenues. Lastly, studies in Colorado, indicate that removal of drought stressed trees will increase available surface water for irrigation ditches and salmon streams. The value based on irrigation pricing, has been shown to approximate $100/acre/year. Additional positive values could be attributed to the aesthetic and wildlife benefits of avoided forest fires.

The New Bottom Line: a negative cost becomes a positive investment; fuel reductions in overstocked forests can be economically and environmentally attractive. Needed will be policy changes to facilitate a long-term commitment for a public investment in fuel reduction that is established in a prudent fiscal recognition of true costs and values. Long-term programs of fuel removals along with periodic thinnings and low intensity controlled burns to maintain forest health could provide consistent raw material supplies for manufacturing and cogeneration operations. Certainty of supply will encourage private investments that will further reduce public costs of fire risk reduction. Healthier forests and investments in biomass to energy projects strategically located in rural communities are possible.

References:

Agee, J. K. 1993. Fire Ecology of Pacific Northwest Forests. Island Press. WA.D.C. 493p.

Gosnell, R. 1999. Forestry can help solve water problems. Colorado Water. 2/99: 10-13.

Leaf, C.F. 1999. Platte River Basin Water Balance Model. Res. Paper PRHRC-5, Platte River hydrol. Res. Center, Merino, Co. 12p.

Levan-Green, S. and J. Livingston. 2001. Exploring the Uses for Small-Diameter Trees, For. Prod. Jour., 51(9):10-21.

USDA Forest Service, U.S. Dept. of Interior, and Western Governors' Association. 2001. A Collaborative Approach for Reducing Wildfire Risks to Communities and the Environment, Ten Year Comprehensive Strategy. May, 2001.