The U.S. pulp and paper industry, a mainstay market for timber growers, turned in another strong year in 2012 with prospects good for a repeat performance in 2013.

A survey by F&W Forestry Services of financial reports of eight major publicly-owed pulp and paper corporations showed sales of a wide variety of pulpwood-based products at home and abroad remained strong in 2012 but with a few signs of slowing toward year end.

The mood expressed by company CEOs in reports to shareholders and the financial community was generally upbeat with a bit more caution than in recent years because of economic unease in the U.S. and uncertainties in Europe and China.  The U.S. and Canada are big exporters of wood pulp and paper products.

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Following one of the wettest summers on record, timber markets across the southern pine belt appear headed into a promising winter season with prospects of rising demand and prices for tree growers.  That’s the outlook seen by Marshall Thomas, president of one of the nation’s largest forestry consulting and marketing firms, F&W Forestry Services, Inc., based in Albany, Ga.

Writing in his firm’s fall newsletter, F&W Forestry Report, Thomas said some timber products—notably pine pulpwood and hardwood sawtimber and pulpwood—are already reflecting generally higher wet weather price and demand patterns.  He thinks this is likely to extend to larger, lumber-sized pine timber if even normal wet rainfall patterns prevail in he coming winter.

“All in all, timber markets look positive as we move into the typical fall dry season with more ground water than we’ve had in years. The creeks and associated wetlands held water during the summer. While they are drying out some now, most foresters believe that even normal rainfall this winter will create some real issues with logging and make all-weather logging sites very valuable—something we have already seen in the rain-soaked eastern U.S. this summer.”

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Some 75 U.S. environmental groups led by the Natural Resources Defense Council (NRDC) and the more militant Dogwood Alliance have mounted an all-out campaign against exports of U.S. wood pellets to Europe to reduce air pollution from coal-fired electricity generation plants.

The environmental battle cry, as voiced by the Dogwood Alliance, is that “European utility companies are driving the destruction of Southern forests in the name of ‘renewable energy’.”

The environmental groups have been fired up by the dramatic growth over the past five years of wood pellet production primarily in the U.S. South largely for shipment to the European Union countries that are under mandate to cut carbon emissions by 20 percent by 2020 by reducing coal consumption.  The pellet boom has resulted in the establishment of 68 plants, in operation or planned, from Virginia to Texas, according to a forestry research source.

The environmental groups are particularly agitated that most of the wood being converted into pellets is coming from whole trees rather than from woody biomass such as timber harvest residues, including tops and branches.

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In a seven-to-one decision, the U.S. Supreme Court has overturned an Oregon federal appellate court ruling that could have required EPA permits for forest logging roads on grounds they are connected to industrial stream pollution.

The landmark decision by the nation’s highest court gave high marks to state-administered Best Management Practices (BMP) as an effective means of protecting the nation’s water and forest resources, citing Oregon as an example.

“The EPA’s decision (that forest logging roads don’t require permits) exists against a background of state regulation with respect to storm water runoff,” the Supreme Court decision said.  “The State of Oregon has made an extensive effort to develop a comprehensive set of best practices to manage storm water runoff from logging roads…Indeed, Congress has given express instructions to the EPA to work ‘in consultation with state and local officials’ to alleviate storm water pollution by developing the precise best management practices Oregon has established here.”

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A large bi-partisan group of U.S. senators and representatives has introduced legislation in both houses of Congress seeking to block further court efforts by environmental groups to get around a U.S. Supreme Court decision holding that forest logging roads do not require EPA permits. The roads legislation was included in a new version of the Farm Bill without food stamps that passed the House on July 11th with all Republican votes. The forest roads legislation would write into law rules the Environmental Protection Agency has followed for 37 years that storm water run-off from forest roads is not considered a potential source of stream pollution and thereby does not require permits under the Clean Water Act. That position was essentially upheld by the Supreme Court in a seven-to-one decision in March, but the environmental group that brought the original lawsuit is attempting to get around the high court ruling through further litigation. Sponsors hope to pass the measure on its own merits or as an amendment to other legislation, such as the Farm Bill. However, the Farm Bill as passed by the House has a highly uncertain future. (This article includes developments that occurred after the print edition of the F&W Forestry Report went to press.)

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