Future Of Forests And Forest Products

McEvoy, T.J. 2002. The Future of Forests and Forest Products: Some Thoughts on What’s to Come in Our Industry. Forest Products Equipment Journal. January Issue, pp 13 - 14. [Updated to Fall 2009]

Some Thoughts about the Future of Forests and Forest Products Almost every attempt to predict the future of the forest products industry since the end of World War II has not even come close to describing what has happened. For instance, economists have been predicting shortfalls of timber since the late 50's, shortfalls that never appeared. Another example: companies that moved from the West coast to the Southeastern U.S., relying on growth projections for genetically-improved Southern pine forests, now have discovered their projections over-estimate actual yields. In other words, trees are not growing as fast as they had predicted, causing excess capacity for some mills and forcing others to contemplate moving elsewhere; this time, experts say, to the hardwood forests of the Northeast. And who among us predicted the meteoric rise of radical environmentalism which has virtually brought the U.S. Forest Service -- debatably, the premier land managing agency in the world -- to its knees? So much has happened in forestry over the past thirty years that the only constant anymore is change. What used to be a staid, comfortably predictable but sometimes boring field is now at the center of many debates, and no one has a crystal ball, or at least no one is willing to say where we are headed. But “the wave of the future is here, and there is no avoiding it.” The future is a single path from a virtually infinite array of opportunities. But divining that path is anybody’s guess. Sure, “past is prologue,” and circumstances of the present affect the chances of any given future, but the connection between here-and-now and next year, or twenty years from now, ends there. In a sense, the future only exists as we know it in the present, and this is why few of us are ever prepared for what’s next. But there are some ‘indicators’ worth thinking about to help divine alternative futures for forests and forest industry in the U.S. The next economic expansion (which I predict will be sooner, rather than later) will launch a

period of economic growth the likes of which the world has never seen. And the mantra of this expansion is ‘globalism’; whether we had intended it or not, our fate is now tied to the rest of world and we are fast approaching a single, worldwide economy that floats (or sinks) all ships. The U.S. is poised to lead this expansion, but doing business in this “brave new world” will be far different than in the past. We will likely gain in areas of high technology and investment, but at the expense of labor: there are just too many emerging economies, like China which recently joined the World Trade Organization, that have unbelievably cheap labor. For many third-world countries, exploitation of low-cost labor is the only way to grow their economies and the U.S. -- and other wealthy nations around the world -must be willing to help. One day soon, a wood supplier in the U.S. will be able to communicate with a manufacturing facility in China, through a simultaneous-translation function over the World Wide Web (in other words, language barriers are no longer a problem), effecting a transaction almost as easily as selling wood to a buyer in a neighboring state. It will be cheaper to export wood for processing in China, and importing the finished product, than manufacturing at home. I don’t advocate exporting jobs, but the American economy is no longer insulated, and it will become less so in the future. Our success will increasingly depend on the successes of our trading partners. This is not especially good news for a labor-intensive industry, unless it attempts to position itself to take advantage of these changes. If you have avoided the Internet revolution, it is time to learn about it. Within the next ten years, most business now conducted by traditional means will take place over the Internet. Closer to home, forest ownership is changing. The generation that lived through “multiple-use,” “green gold,” “wood is renewable” and all the other cliches, is passing its woodlands on to its heirs or younger buyers. These new owners are even more distant from the land than their predecessors, and so are less likely to manage lands for traditional forest values. Among new owners who recently acquired

land, the most commonly stated reason as to why they obtained forest is: it came with the house or home site. Of course there is a chance these new owners will take over the management efforts of those who came before them, provided there are no regulations that prevent them from doing so. But state and local regulation of harvesting practices and forest use will increase in the future making harvest and extraction of timber a much more involved process than it is today. For many of these new owners, the hassle (not to mention what many of them have been led to believe is environmental degradation) of harvesting will not be worth the income, unless stumpage is a lot more valuable than it is today -- which is a distinct possibility. Sometime soon -- certainly within the next 20 years, maybe within the next five -- the U.S. Forest Service will change its charter, removing the ‘timber production’ element from its mission. When this happens, Forest Service lands will no longer serve as local timber baskets, and many unprepared timber-dependent communities will suffer. The argument raised by those who champion a ‘hands-off’ policy is this: public lands are too important for “watershed protection, critical habitats for threatened species, wilderness (a designation only Congress has the right to grant), recreation, and to demonstrate ecosystem-approaches to managing private lands.” Although I don’t completely agree with these arguments, the facts are this type of sentiment is held by a majority of Americans: leave our public lands alone if private forests are capable of meeting demand. The future of public lands - federal and state -- is that of reserves; extractive uses of these lands will be the exception rather than the rule. There are just too many people who want it this way. Less wood supply from public lands means more demand from private lands, and higher stumpage prices. But is the price differential enough to compel new owners to manage, even if local regulations will allow them to do so? Your guess is as good as anyone’s, but one day society may take the position that our forests are ‘too valuable’ for timber production.

So where will timber come from, and what about demand? Remember back in the mid70's we were hearing about the pending “paperless society” thanks to computers? Yet the computer revolution has done nothing to reduce paper use in the developed world, and it is doubtful anything on the horizon will replace the need for ‘hard-copies.’ Witness, too, the very recent demise of ‘electronic-books.’ There will most likely always be a demand for wood fiber, but here is the catch: the source of this fiber may not be trees, or trees growing in forests. Our paper habits aside, demand for wood will likely increase with population, at least in the foreseeable future, because it is still a popular and cost-effective building material. For how long, no one knows. But consider this: breakthroughs in bioengineering may allow us to ‘grow’ wood fiber in vats. Extruded two-by-sixes and other structural members, possibly with characteristics superior to natural wood, may one day displace the need to process trees. And, who knows, a by-product of the process might be a protein that is easily processed into a cheap, but highly nutritious food that we’ll all get used to (One can imagine the advertisements for ‘proto-chicken’ -- “Tastes better than chicken, and no bones!”). Of course there will always be a demand for natural wood since it has a beauty and texture that will prove impossible to duplicate (even though Pergo flooring has come close!). One day (perhaps far into the future, but maybe not) people will hang veneer panels of wood on walls for aesthetic purposes in the same way we today enjoy fine paintings, photography and other objects. Real solid wood may become so scarce in the distant future that even pieces we now throw into the fire will be cherished, but for decorative and/or historical purposes. Here is another technological future to consider: energy, one of the highest costs of production today may one day be a minor cost. In a universe composed of mass and energy, it seems unlikely that a shortage of one is apt to stop the progress of humankind. And if you’re the type who likes to

contemplate conspiracies, consider the possibility that energy has already been resolved and the powers-that-be are keeping it secret because the world might not survive the revolution that would result from limitless energy, destroying overnight the basis upon which perhaps two-thirds of the world’s production depends. If and when the physics of energy supply is resolved (or revealed), releasing the innovation will be tricky. But in the near-term, wood – especially for home heating – will become a fuel that transitions us into the limitless energy period described above. Not chunk wood in Franklin stoves, but chips and pellets processed less than a mile from the stump and burned in gasification systems capable of yielding far greater efficiencies, and a new, very promising soil amendment: charcoal, also known as biochar. Less than 50 years ago, archaeologists roaming the Amazon Basin discovered highly productive agricultural soils, high in carbon and clearly the product of humans. These soils were three to five times more productive than surrounding Oxisols, and black from carbon concentrations as high as 20 to 30 percent. Labeled terra preta de indios, Portuguese for ‘burnt earth of the Indians,’ it was the preColumbian creation of these soils that allowed populations to thrive in the Amazon region for thousands of years before the Spanish arrived in the early 16th Century. These carbon-rich soils have only recently been studied over the past 20 years by soil scientists who have successfully exported the technology to the developed world. Adding carbon to soils greatly increases the soil’s ability to hold water and nutrients, but more importantly – especially when it comes to forest soils – the highly porous and inert carbon provides living spaces for micro-flora and fauna that are essential to forest ecosystems. And, since the carbon comes from plant materials and not fossil fuels, when it is added to soils as ‘biochar,’ the overall effect is a net removal of carbon for the global carbon budget. Thus by using biochar as a soil amendment, carbon is sequestered in soils where it can do some good; so much so that production of biochar will

have a positive effect on forest product markets, and on forest ecosystems after energy is extracted from the wood (gasification yields mostly hydrogen, some methane and carbon monoxide). The left-over carbon is applied to soils, increasing the capacity of soil ecosystems to do their business. Although biochar is still an emerging science, I am convinced it will prove to be the agricultural and forestry revolution on the 21st Century. Heavy-handed regulation, the Internet, globalism, wood growing in vats, limitless energy -perhaps all of this is nothing more than the wanderings of an undisciplined, fertile imagination and none of it will come to pass. But who would have predicted less than 100 years ago humans traveling in airplanes, or inter-planetary exploration?

Thirty years ago, the idea of a computer on every desk

was ridiculed by most of the people who designed room-sized, mainframe computer systems. And twenty years ago, a facsimile machine seemed nothing short of magical; now they’re in every office. Fifteen years ago almost no one had heard of the World Wide Web, and its unbridled growth fueled a business cycle (an economic expansion followed by contraction) the likes of which this country has never seen. If wealth had evaporated at any other time in American history as much as it did during the first 18 months of the 21st Century, it would most likely have caused a depression that would have made the “Great Depression” look like a market correction. But we have survived, and will continue to survive and prosper. The big question is: What’s next and are you ready for it? **************************** Please do not use any material from this article without acknowledging the source.