Alaska's natural resource industries: a checkup on 2014 health and issues of concern.

• Author: Griffin, Judy
• Position: NATURAL RESOURCES

The natural resource industries are widely recognized as the major economic driver for revenue and employment in Alaska. When much of the nation suffered through declining jobs in recent years, the overall vitality of these industries helped state residents maintain healthy employment levels.

The year 2014 likely will be recounted as a pretty good year for oil and gas, tourism, and fisheries and another year of struggle for the forestry industry. Here's an overview of how these natural resource industries are faring in 2014 and the challenges affecting future prospects.

Forestry

Still Straddling Timber Supply Issues

The Alaska forestry industry has been reduced to a sliver of its former dimensions. It's tough to observe a shrinking economy in which jobs have declined precipitously, mills have been shuttered, and communities have lost residents as well as the former commerce generated by logging and manufacturing. Says Owen Graham, executive director of the Alaska Forest Association, "I worked here when we had pulp mills and saw mills and everybody was working."

Graham explains that the timber industry in Alaska continues to cope with the "economic dilemma" created by federal government administration and policies affecting timber land. The forestry industry is seeking to curb the declining harvests and loss of value-added operations in Southeast Alaska. The much smaller segments in Southcentral and the Interior are faring better.

As recently as 2000, three mid-sized sawmills operated in Southeast; today only Viking Lumber Company, Inc., in the town of Klawock on Prince of Wales Island, remains. A press release from the office of Governor Sean Parnell in 2012 described the losses: "In the past decade, Southeast Alaska timber jobs declined from 1,500 to roughly 200, the region's population dropped 12 percent, and six schools closed."

It's no comfort to the forest industry that markets for timber products are favorable. Viking Lumber, which currently has only enough timber to get through to February of next year, would double production if the raw materials were available, according to Graham.

Although the US Forest Service (USFS) has promised to create an efficient and sustainable industry, the federal management of the timber natural resource in Alaska today is viewed by the forestry industry as being characterized by limited timber sales, offerings for which yields are associated with higher operating costs, and unreliable execution of agreements.

The Tongass National Forest, the largest national forest in the country and the dominant source of Alaska timber, formerly supplied several pulp mills and sawmills in Southeast. It was the dominant contributor to a 1973 harvest from national forests of about 590 million board feet.

Several events and changes of course in federal policies have whittled away at the federally managed resource harvests. The 1990 Tongass Timber Reform Act increased wilderness and roadless area in the Tongass and eliminated the guaranteed annual timber supply to the mills. An estimated four thousand timber industry jobs at pulp mills, sawmills, and logging operations in 1990, primarily in Southeast, were reduced by more than half by 1999, according to an October 2010 article in Alaska Economic Trends, a publication of the Alaska Department of Labor and Workforce Development.

The 1990 Tongass Timber Reform Act also gave the USFS authority to make unilateral contract modifications to the two long-term timber sales. In 1997, USFS imposed harvest constraints that resulted in large increases in the cost of harvesting national forest timber. The agency adopted a new land management plan for the Tongass and announced an emphasis on "ecosystem management." New harvesting constraints included requirements that 30 to 50 percent of the timber be left standing in most previously developed areas and establishment of larger buffers on non-fish streams and beaches. In addition, a system of old-growth reserves removed the highest value and least-cost-to-harvest timber lands from potential sales...