Plum Creek reaped millions in land deals

While Weyerhaeuser blames the shortage of logs in the region for closing two mills in Columbia Falls, it might have a better supply if Plum Creek hadn’t sold nearly 700,000 acres of timberlands in the past 15 years.

“For some time now our operations in Montana have been running below capacity as a result of an ongoing shortage of logs in the region,” said Doyle R. Simons, president and chief executive officer in the announcement that the company would close the plywood and dimension lumber mills in Columbia Falls, resulting in the loss of 100 mill worker jobs. “These closures will allow us to align the available log supply with our manufacturing capacity, including adding shifts at our Kalispell facilities. These moves will improve the operating performance of our remaining mills and best position these mills for long-term success.”

Weyerhaeuser merged with Plum Creek earlier this year. The land sales came prior to the merger.

Fingers have long pointed at the Forest Service for the lack of logs. To be sure, log production from the Flathead National Forest isn’t what it was decades ago, when harvest in some years was well over 100 million board feet. But it has risen in the past few years, from about 23 million board feet annually to about 30 million board feet annually in more recent years.

The future, the Forest Service predicts, will likely stay around 27 to 38 million board feet annually, depending on budgets, with a timber base of about 600,000 acres in most alternatives, according to a recent release of draft forest plans.

Flathead National Forest Supervisor Chip Weber said recently that while Plum Creek certainly received logs from private logging companies that purchased timber from the Flathead, it had not directly bid on timber sales in the Flathead since at least 2010.

Politicians, mills and laymen alike all have asked for greater yields off national forest lands. But the company hasn’t been holding its own timberlands, either.

In 2000, Plum Creek owned about 1.44 million acres of land in Montana, nearly all of it timberlands.

But over the years, it continued to liquidate its assets and made hundreds of millions in the process. The largest single land deal was the Montana Legacy project in the Swan Valley. In that deal, which netted the company $510 million — about half from government sources secured by former Sen. Max Baucus — the Nature Conservancy and the Trust for Public Lands purchased more than 320,000 acres of land.

Lands included in the deal were scattered over five counties. About 223,400 acres were in Missoula County, 42,800 in Mineral, 35,500 in Lake, 13,800 in Lincoln and 3,900 in Powell counties.

About 155,000 acres of that land eventually went into Forest Service ownership and another 114,589 acres went to the state of Montana through purchases. The Bureau of Land Management purchased a little more than 3,000 acres and the Conservancy still owns and manages about 34,899 acres. About 1,800 acres were purchased privately.

“The signing of the Montana Legacy Project is the largest land conservation in American history,” said Baucus at the time. “We have a moral obligation to leave things better than we found it for our kids and grandkids to enjoy.”

The deal was seen as a conservation victory. It eliminated much of the “checkerboard” ownership in the Swan Valley, where Plum Creek owned a section and the Forest Service, or state, owned a section. The deal kept the land intact for future generations. But it also took the land management decisions out of Plum Creek hands — at least to a degree.

The deal also included a “fiber agreement” which allowed Plum Creek to log the Forest Service lands that were part of the Montana Legacy, but that deal was terminated at the beginning of the year after a legal challenge by environmental groups.

Neither the Conservancy or a former Plum Creek official would comment on how much timber was in the agreement, but Dave Hanna, Crown of the Continent program director for The Nature Conservancy in Montana, noted the lands have little, if any, merchantable timber left.

Plum Creek also sold thousands of acres to real estate interests. In a 2008 interview with then CEO Rick Holley, the company announced it had sold about 27,000 acres since 2003 in Montana and about 3,000 acres were sold for outright development — housing and other projects he termed “higher and better use.”

One controversial land sale was Metcalf Lake in the Swan Valley. The company sold the lake and 160 acres of land around it for more than $2 million. The lake was a renowned trophy trout fishery. Today it is privately held, and for sale again.

Then in October 2014, there was another big land deal with the Nature Conservancy. The company announced it was selling 117,000 acres of its timberlands in the Blackfoot Valley to the nonprofit for about $85 million. At the time, the company said the land was higher elevation property, had been partially burned by wildfire and so an area where the timber grew slowly.

After the deal and more than a decade of real estate transactions, Plum Creek’s landholdings in Montana had now dipped to 772,000 acres — what it owned when it announced its merger with Weyerhaeuser in November of 2015.

It’s own land sales aside, the company still maintains the Forest Service could boost its harvests. Tom Ray, Montana Resources Team Leader for Weyerhaeuser, notes the Forest Service is still the largest landowner in the region.

There is always pressure on the Forest Service to put more logs in the mills. The Flathead’s 30 million board feet of harvest annually is still less than half of the annual capacity of a comparatively small mill like the F.H. Stoltze Land and Lumber Mill in Columbia Falls can utilize in a year, never mind what Weyerhaeuser and other region mills can consume.

Politicians have come up with a variety of ideas in the past few years. Sen. Steve Daines, R-Mont., has suggested changes to the Equal Access to Justice Act. The Act allows a plaintiff that files suit against the federal government to recoup its court and legal costs if it prevails in a lawsuit. But Daines in the past has claimed the Act is being abused by environmental groups who routinely sue the Forest Service to challenge timber sales. He’d like to require that environmental groups who want to challenge a sale post a bond.

Sen. Jon Tester, D-Mont., has taken a different tact. His Forest Jobs and Recreation Act looks for a compromise, blending guaranteed timber sales with wilderness designations on Forest Service lands across the state.

Both Tester and Daines also agree that by designating large wildfires as natural disasters, it would free up Forest Service funds to complete environmental reviews of timber projects. Right now, the Forest Service is using about half its budget to fight wildfires.

But the ideas are just that for the time being. None of them have gained traction in Washington, D.C., where bills have to make it through Congress, and the opinions of the rest of country, before they become law.