Wood Pellet Production Picks Up Steam With New Facilities Announced for Mid-Atlantic, Texas

Wood pellet manufacturer Enviva LP has announced plans for its fifth U.S. facility, a 454,000 metric tons of plant at Courtland, Va., expected to begin production in the first half of 2013.
Separately, German Pellets GmbH announced plans to build its first wood pellet facility in the U.S. in Tyler County, Texas, north of Beaumont.  The company said the facility will produce 500,000 metric tons of wood pellets annually, with production scheduled to be begin in the third quarter of 2012.

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Supreme Court Hints It Might Hear Appeal on Regulation of Forest Roads

Attorney Generals from 26 states have joined with scores of national, regional, and state forestry organizations in asking the Supreme Court to overturn an Oregon Appellant Court Decision that could require EPA permits to build or repair forest roads.

If left standing, the Oregon decision would overturn 35 years of regulatory treatment of forest roads as “non-point” water runoff currently regulated by state agencies through EPA-sanctioned Best Management Practices (BMPs).

Although there is no assurance that the Supreme Court will review the Oregon case, forestry forces were encouraged by a request from the High Court for a review of the appeals petitions by the U.S. Solicitor General.

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Chinese Exports May ‘Jump Start’ Domestic Lumber Markets

Marshall Thomas, president of F&W Forestry Services, Inc., believes the dramatic increase in log and lumber exports to China and other Far Eastern countries may provide “a possible jump start to our southern pine economic engine” that has been hit hard by the prolonged slump in the U.S. housing market.

Although a recovery in domestic housing construction to a 1.3 million start level may be three or more years away, Thomas said the dramatic increase in exports, now largely from Pacific U.S. and Canadian ports, is providing some relief for long-distressed U.S. timber markets. Thomas believes U.S. East Coast ports, especially those in the Southeast that have immediate access to the southern pine belt, will likely share in he Far East export surge when expansion of the Panama Canal is completed in 2014, making those ports accessible to the super large container ships soon to ply global ocean trade routes.

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Wetter Weather, Improving Market Conditions Bring Welcome Price Boost To Some Timber Growers

For the first time since 2009, F&W Forestry Services – a leading U.S. forest management and consulting firm – reports “substantial” quarter-over-quarter increases in prices received by tree growers for virtually all timber products, from large lumber-size trees for home building and other construction projects to smaller pulpwood for the paper industry.

Marshall Thomas, president of F&W based in Albany, Ga., which operates in most major forested regions of the U.S. and in the southern tier of South America, said the 2009 increase in timber prices was largely weather related.  Writing in the fall edition of his firm’s newsletter, The F&W Forestry Report, Thomas said:

“This (fall) quarter is likely a weather-related bump too, since the South, unlike the Mid-west, has had some timely rainfall,” Thomas writes.  “But there are some indications of increased demand for pine pulpwood and sawtimber which could be leveraging the weather bump.”

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Professional Forestry Groups Urge Supreme Court To Overturn Decision On Forest Roads Regulation

A group of respected professional forestry organizations has filed a “friend of the court” brief with the U.S. Supreme Court urging the nation’s highest tribunal to overturn an Oregon lower court ruling that if  left standing could lead to EPA permit requirements for forest roads.

The group, led by the Society of American Foresters (SAF), hopes to help persuade the Supreme Court that forest roads are best monitored by the existing four-decade-old system of state-supervised Best Management Practices (BMPs) rather than by requiring permits from the Environmental Protection Agency, as could result from the Oregon ruling.

The foresters’ brief is one of many filed with the Supreme Court in the Oregon case.  Oral arguments are expected to be heard later this year with a decision likely this winter or early spring.  The case, with its potential of permit requirements for building and maintaining millions of miles of forest roads, has raised deep concerns among forestland owners across the nation.

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Southeast Agricultural Land Values Decline For 4th Year As Corn Belt, Middle America Regions Soar

Agricultural land values in the Southeastern region of the nation declined for the fourth straight year while Corn Belt agricultural land continued to soar, according to the 2012 survey of rural real values conducted by the U. S. Department of Agriculture.

“The United States farm real estate values, a measurement of the value of all land and buildings on farms, averaged $2,650 per acre for 2012, up 10.9 percent from revised 2011,” the USDA survey found.  “Regional changes in the average value of farm real estate ranged from 26.7 percent increases in the Northern Plains region to a decline of 4.1 percent in the Southeast region.”

The survey does not address forestland values but does include a break out of cropland and pasture land by states.

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Supreme Court To Hear Appeal Of Oregon Ruling On Regulation Of Forest Roads

The U.S. Supreme Court announced in late June that it will hear an appeal of a lower court ruling in an Oregon case holding that forest logging roads were a potential “point source” of pollution from storm water run off requiring regulation and permitting by the Environmental Protection Agency (EPA).  An appeal to the high court of the potentially far-reaching Oregon ruling had been filed by forestry groups and supported by attorneys general of 26 states.  The Supreme Court is expected to hear oral arguments in the case this fall or winter and issue a final decision by next spring or early summer.

Prior to the Supreme Court’s review announcement, EPA had filed formal notice that as a result of the Oregon ruling it would review its regulations to specify that “logging roads” are not included in the definition of “storm water discharge associated with industrial activity” — a point raised in the Oregon case.  But the agency said its rule-making would include studies of “water quality impacts of forest roads…on existing voluntary programs designed to address them to determine if additional Agency [EPA] action is necessary.” This appears to be a reference to existing state Best Management Practices (BMPs).

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Increased Rainfall, Possible El Nino Return Brighten Near-Term Timber Market Prospects

Increased rainfall across much of the drought-stricken Southeast and Mid-South has brought short-term improvement in timber markets in some parts of the region, but prospects for a return of El Nino weather conditions is “potentially the brightest hope for the near future,” President Marshall writes in the summer issue of his firm’s newsletter, The F&W Forestry Report.

“While NWS [National Weather Service] won’t say we are back to El Nino yet, at least there is a 50-50 chance we will get there in the next six months,” Thomas writes.  “Oftentimes it takes a little rain to help tree markets find their potential, for buyers to feel enough pressure to pay their top price.  We haven’t had enough rain in a long time, Southwide, to put real pressure on our markets.  Maybe, just maybe, there is enough increased demand in our depressed markets for a little (or a lot) of rain to decrease supply enough so we can see how high prices can go.”

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Pulpwood Demand At Near Record; U.S. Wood Pellet Exports Now Even With Canada

Although sawtimber demand remains weak due to the housing slump, two other forest products — pulpwood and wood pellets — are going great guns.

Pulp and paper mills in the U.S. South consumed a near record level of pulpwood in 2010, according to a newly released report of the U.S. Forest Service, and appear to be running strong this year, according to industry leaders.  And while the number of pulp mills in the region has declined in recent years, individual mill production has increased sharply.

In a separate report, wood pellet exports to Europe from North America set a new record in 2011 and the U.S. has pulled even with Canada in these shipments.  The report, compiled by Wood Resources International of Seattle, said six pellet export plants are now operating in the U.S., four others are in the “trial shipment” stage, and plans for six more have been announced.

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Supreme Court Signal On Forest Roads Case Expected By Summer

Attorneys and other authorities following an Oregon federal appeals court ruling involving environmental regulation of forest roads think the U.S. Supreme Court will announce by early summer if will consider an appeal of the case. The Oregon decision, if not overturned by the nation’s highest court, would treat water run-off from forest roads as potential point-source pollution and subject to permit requirements by the Environmental Protection Agency or state agencies under its oversight.

As it now stands, the Oregon decision would apply initially to the Northwestern states and Alaska. But it is a source of enormous concern to forestland owners and the forest industry throughout the U.S. There is no assurance that the Supreme Court will consider the appeal and is expected to make known its intention in the case by early summer.

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