In 1995, gross timber industry sales on the Kenai Peninsula reached a high of nearly $33.8 million, or 2.2 percent of total sales recorded boroughwide. In 1999, timber sales dropped to $11.8 million, or .7 percent of total sales throughout the borough.
With the spruce bark beetle epidemic setting the pace, Bernie Brown, vice president and chief financial officer for Gates Construction, predicted the industry might enjoy another decade before resources are depleted.
"On the favorable side, there are eight to 10 years of life left (in the industry)," Brown said. "That's not directly on the peninsula, but going to the west side (of Cook Inlet) and the Kachemak area. I don't see much favorable after that period."
Gates Construction has done business on the peninsula for six years and focuses on two markets -- round logs shipped to Canada and wood chips going to Japanese markets. Brown said the company has 43 direct employees but estimates "total employment directly affected by our company reaching about 240 people on the peninsula."
Approximately 85 percent of the company's business is done between Nikiski and Sterling on the north and Homer on the south.
The future of the local timber industry is directly tied to the destruction caused by the beetle, according to Brown.
"If we cna harves the bulk of it in the next two years, then it wil stillhave some value. But there's some land rigt now thta we couldn't pay anything for the timber. We could chipit and come out OK, but we couldn't pa for it."
Bernie Brown, vice president, CFo, Gates Construction
"If we can't harvest wood at a rate to keep up with the beetle, if certain large tracts of land are kept off the market and the federal and state and borough continue to not release timber for sale, then most of it will end up becoming a chipping show in which they have to pay to have it removed instead of being paid for the timber," Brown said.
The federal, state and borough governments are behind the eight ball, according to Brown. Land owned by the federal government accounts for 63.4 percent of the Kenai Peninsula Borough's acres. The state owns 22.9 percent and the borough is owner of .7 percent.
"If we can harvest the bulk of it in the next two years, then it will still have some value," he said. "But there's some land right now that we couldn't pay anything for the timber.
"We could chip it and come out OK, but we couldn't pay for it."
Brown said the industry's focus is shifting away from harvesting timber to minimizing the risk of fire.
"Getting it removed quickly is going to become the focal point," he said. "It's not a matter of making a little money, but how we get it removed to protect the public."
Gates is not a clear-cut company," according to Brown.
"We go in and leave green trees that we find," he said. "We try to leave seed trees in there to naturally regenerate.
"But the value of timber declines every year. That's just a simple fact of the beetle."
On the plus side, Brown said, every year Gates Construction has been able to "find a way to scratch out another bare living."
Kathryn Thomas is co-owner of Arctech Services Inc. The company employs approximately 20 folks directly and does business with another 10 small logging companies.
Arctech operates a log yard in Homer and barges its product to a mill in British Columbia.
Thomas said she tried locating markets for peninsula timber by turning to contacts made as chair of the Alaska State Chamber of Commerce from 1995 to 1996.
"It gave me a little clout when I went to see people because they remembered me from those days," Thomas said.
A large log broker and buyer for markets around the world came through.
"He helped us put together a market that provided an outlet for folks that had been sitting on a timber base they couldn't do anything with," Thomas said.
"That market helps us pay for cleaning up the dead trees or removing them."
Thomas characterized this as "real tough times" for the peninsula's timber industry.
"We can utilize this market that we have to get these trees down, and then we can look toward reforestation," she said, "but it's going to be tough to do anything else here.
"It's kind of a shame. I feel like we owe our grandkids an apology," Thomas said. "If we had addressed this 10 or 15 years ago, we would have harvested trees and replanted and we would have a large percent of the peninsula in regrowth."
Like Brown, Thomas urged the federal, state and borough governments to seriously address the industry's current state of affairs.
"If we're going to protect our lifestyle that I grew up with on the peninsula, we have to get the federal government and the state and the borough to address the trees on their land," she said. "It's time for government to deal with their mess."
Native corporations and private landowners are taking the lead, according to Thomas. Native corporations own 9.5 percent of the Kenai Peninsula Borough and 3.3 percent is held in private ownership. Cities account for another .2 percent.
"They've come to the table now and are trying to deal with fire hazard on their land, and they're looking to reforest their land," Thomas said.
"They also see that a longer-term investment value calls for them to remove those trees and clean it up."
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