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CROP and “Levelized” Supply A New Planned Harvest Protocol for Northern Arizona

CROP and “Levelized” Supply A New Planned Harvest Protocol for Northern Arizona. Presented by Catherine M. Mater President — Mater Engineering Corvallis, Oregon Tel: 541-753-7335 Fx: 541-752-2952 E-mail: catherine@mater.com www.mater.com. Contracts Tasks :

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CROP and “Levelized” Supply A New Planned Harvest Protocol for Northern Arizona

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  1. CROP and “Levelized” SupplyA New Planned Harvest Protocol for Northern Arizona • Presented by • Catherine M. Mater • President—Mater Engineering • Corvallis, Oregon • Tel: 541-753-7335 Fx: 541-752-2952 • E-mail: catherine@mater.com • www.mater.com January 2004Mater Engineering, Ltd.

  2. Contracts Tasks: • Update planned resource removal data within “investor landscape” focused on 5-year period of time (including Fire Plan removal volume). • Develop Resource Offering Maps (ROM) for the “investor landscape” based on five-year planned inventory offering. • Establish CROP mapping with primary players in the “investor landscape” to create levelized supply. • Create the nation’s first “investor landscape” marketing plan based on CROP. January 2004Mater Engineering, Ltd.

  3. To explain “investor landscape”, “levelized” and “CROP”, you have to know . . . . . . where and why it all began January 2004Mater Engineering, Ltd.

  4. Small logs sold Large logs sold Timber Volume Sold by Diameter and YearA-S, Coconino, Kaibab (Williams RD) January 2004Mater Engineering, Ltd.

  5. Offered Sold Offered vs. Sold Volume A-S, Coconino, Kaibab NF January 2004Mater Engineering, Ltd.

  6. Stable Unstable Offered Coconino and Kaibab Timber Offering by Ranger District 1995 - 2002 Sold January 2004Mater Engineering, Ltd.

  7. Unstable January 2004Mater Engineering, Ltd.

  8. Key Questions: What to do withsmall logs(5”-12”) and biomass (< 5”) material. How toinvite new investmentinto the region. January 2004Mater Engineering, Ltd.

  9. What was clear: • Change the dynamics of resource offering in aninvestor landscape . . . • . . . wherelevel supply andrisk reductionare perhaps more important than increased volume. January 2004Mater Engineering, Ltd.

  10.  Flagstaff Investor Landscape ~200 miles January 2004Mater Engineering, Ltd.

  11. CROP (coordinated resource offering protocol) • Nation’s first benchmark project in investor landscape coordination of projected resource offering: • Within agencies (ie RD’s within NF system) • Between agencies (USFS, BLM, state, Counties, Indian nations, etc.) January 2004Mater Engineering, Ltd.

  12. CROP • Focus is on “levelized” supply between key players, not necessarily adding more supply. • Premise: • “Levelized” effort must apply to volume, diameter, and species in locational context. January 2004Mater Engineering, Ltd.

  13. Why levelized? January 2004Mater Engineering, Ltd.

  14. New research results soon to be released: • USDA FS Southern Research Station • Mater Engineering, Ltd • University of Oregon Ecosystem Workforce Program • Pinchot Institute for Conservation Assessing Community Benefits from Land Management Activities on the National Forests January 2004Mater Engineering, Ltd.

  15. Three simple questions? • Who buys Forest Service timber sales? • Who performs service contracts for the Forest Service? 3. Who benefits? Demographics, Consistency, Impacts January 2004Mater Engineering, Ltd.

  16. Bitterroot Willamette, Deschutes Nantahala Coconino Arapaho-Roosevelt Six National Forests Selected: January 2004Mater Engineering, Ltd.

  17. Methodology: • 1998 – 2002 FY timber sale and service contract data obtained by FS and analyzed by Mater and U of O. • Identified 142 timber sale purchaser (“loggers” “industry”); interviewed 71; at least 50% represented from each forest. • Interviewed 131 service contractors (labor, equipment, technical); average response rate 74%. January 2004Mater Engineering, Ltd.

  18. How do timber purchasers perceive FS programs? Do perceptions match performance? January 2004Mater Engineering, Ltd.

  19. Performance: Only the Bitterroot & the Nantahalaexhibited continuous declines in sales volume offered between 1998 - 2002. The Arapaho-Roosevelt, Willamette, Deschutes, and Coconino offered sales volumes in 2000 – 2002 which were close to or exceeded sales volumes offered in 1998 – 1999. Supply: total volume 78% of timber purchasers noted a decrease in total volume of timber sales offered by the forest service over the last five years. January 2004Mater Engineering, Ltd.

  20. Lack of levelized, steady offerings may foster perceptions of diminishing sales volumes and may reduce ability to respond to timber sales offerings in absence of long-term harvest planning protocol. January 2004Mater Engineering, Ltd.

  21. We also discovered that NF timber sales: • employed more local laborthan service contracts and • provided more direct benefits to local forest-based communities January 2004Mater Engineering, Ltd.

  22. What we seek to discoverin N. AZthrough the implementation of a levelized CROP protocol at an investor landscape level: Is it possible to . . . • Invite investmentto the regions focused on small log processing. • Increase the valueof resource sales. • Reduce the disparitybetween offered and sold. • Increase environmental supportfor long term removal activity. January 2004Mater Engineering, Ltd.

  23. So . . . what do investors look for? January 2004Mater Engineering, Ltd.

  24. 5 market-driven factors • How much is proposed for removal (5-year period)? • How levelized is the removal flow over time? • Where will the volume come from? • What is the comparative credibility of the projected removals? • What are the associated risks? January 2004Mater Engineering, Ltd.

  25. Market-driven factors: • How much is proposed for removal (5-year period)? January 2004Mater Engineering, Ltd.

  26. Investor landscape included: • Kaibab NF – (Williams RD only) • Coconino NF • Prescott NF – (Bradshaw RD only) • Tonto NF – (Payson & Pleasant Valley RDs) • Apache-Sitgreaves NF • AZ State Trust Lands • AZ Dept. of Transportation January 2004Mater Engineering, Ltd.

  27. AZ State Trust Lands: currently projected to provide 5% of total 5-year estimated volume; 72% in 5” – 12”. Anticipates a “very large” increase in small stem removal but unable to estimate for this project. • AZ Dept. of Transportation: Unable to provide log removal estimates for this project, but acknowledges that “a drastic increase” in road mile treatment will occur during the next few years ( ~ 7,100 road miles). January 2004Mater Engineering, Ltd.

  28. Other: • Camp Navajo: (Still working on their management plan and projections; unable to give information on volume removal and diameter size for this project effort. Only know acres to be treated at this point. • White Mountain Apache Nation: ? January 2004Mater Engineering, Ltd.

  29. } Potential Sawlog Volume • Total projected removal (5-year) for all forests = 838,343 ccf • < 5” = 64,439 ccf (8%) • 5” – 9” = 351,177 (42%) • 9” – 12” = 209,707 (25%) • > 12” = 213,020 (25%) • NF system removals will equal 95% of total volume (793,343 ccf) January 2004Mater Engineering, Ltd.

  30. Within NF System Removals: • For < 5”: Apache-Sitgreaves will provide 90% of volume • For 5+” : Apache-Sitgreaves = 58% Coconino = 25% January 2004Mater Engineering, Ltd.

  31. January 2004Mater Engineering, Ltd.

  32. January 2004Mater Engineering, Ltd.

  33. If looking at small log processing, investors look at: • 30% factor; if need 70,000 ccf/yr (~35mmbf/yr) will want to see ~90,000 ccf/yr (~45mmbf/yr) available/yr. • 25% of volume to be in 9” – 12” for assumed higher grade recovery and yield. • Consistency in flow. • Reasonable log haul distances (within 100 miles). January 2004Mater Engineering, Ltd.

  34. For the potential small sawlog volume (5” – 12”): • Investor landscape will produce: • 172,000 ccf in 2004 • 144,000 ccf in 2005 • 166,000 in 2006 • 201,000 ccf in 2007 January 2004Mater Engineering, Ltd.

  35. Market-driven factors: • How levelized will be the supply? • Where will the volume come from? January 2004Mater Engineering, Ltd.

  36. 5” + January 2004Mater Engineering, Ltd.

  37.  11% Kaibab NF 2003-2007: 5” - 12+”  58% Apache-Sitgreaves NF  2% Prescott NF 4% Tonto NF  25% Coconino NF January 2004Mater Engineering, Ltd.

  38. 5” and greater 2003 - 2007 Bradshaw RD • 2% of the total volume (12,748 ccf) 26% 5”-9” 37% 9”-12” 37% >12” January 2004Mater Engineering, Ltd.

  39. 5” and greater 2003 - 2007 Williams RD • 11% of the total volume (84,988 ccf) 27% 5”-9” 35% 9”-12” 38% >12” January 2004Mater Engineering, Ltd.

  40. 5” and greater 2003 - 2007 Peaks RD • 6% of the total volume (47,048 ccf) 38% 5”-9” 27% 9”-12” 34% >12” January 2004Mater Engineering, Ltd.

  41. 5” and greater 2003 - 2007 Mormon Lake RD • 7% of the total volume (53,408 ccf) 38% 5”-9” 28% 9”-12” 34% >12” January 2004Mater Engineering, Ltd.

  42. 5” and greater 2003 - 2007 Mogollon RD • 11% of the total volume (81,488 ccf) 40% 5”-9” 27% 9”-12” 33% >12” January 2004Mater Engineering, Ltd.

  43. 5” and greater 2003 - 2007 Payson RD • 2% of the total volume (13,342 ccf) 17% 5”-9” 18% 9”-12” 66% >12” January 2004Mater Engineering, Ltd.

  44. 5” and greater 2003 - 2007 Pleasant Valley RD • 2% of the total volume (15,000 ccf) 14% 5”-9” 16% 9”-12” 70% >12” January 2004Mater Engineering, Ltd.

  45. 5” and greater 2003 - 2007 Black Mesa RD • 20% of the total volume (148,632 ccf) 48% 5”-9” 22% 9”-12” 30% >12” January 2004Mater Engineering, Ltd.

  46. 5” and greater 2003 - 2007 Lakeside RD • 14% of the total volume (106,022 ccf) 53% 5”-9” 23% 9”-12” 24% >12” January 2004Mater Engineering, Ltd.

  47. 5” and greater 2003 - 2007 Springerville RD • 18% of the total volume (131,828 ccf) 63% 5”-9” 23% 9”-12” 14% >12” January 2004Mater Engineering, Ltd.

  48. 5” and greater 2003 - 2007 Alpine RD • 6% of the total volume (47,400 ccf) 60% 5”-9” 26% 9”-12” 14% >12” January 2004Mater Engineering, Ltd.

  49.  6%  11% Williams RD  7% Morman Lake RD 54% stable supply 39% unstable supply  11% Mogollon RD  20% Black Mesa RD  14% Lakeside RD  2% Bradshaw RD  18% Springerville RD  2% Payson RD  6% Alpine RD  2% Pleasant Valley RD Peaks ROM #1: 2003-2007: 5” - 12+” 14% 2% 2% January 2004Mater Engineering, Ltd.

  50. = 2003 (5%) = 2004 (23%) = 2005 (19%) = 2006 (23%) = 2007 (29%) ROM #2 5” – 9”: Where 60% or more of the NF volume will come from 5-year (total: 340,677 ccf) January 2004Mater Engineering, Ltd.

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