If Tongass logging is free enterprise, let it stand on its own

The Tongass National Forest in June 2024. (Jasz Garrett / Juneau Independent)

By Hunter McIntosh

I believe in markets. I believe in competition. And I believe a business should be able to stand on its own two feet.

I also believe in speaking bluntly when the situation dictates.

When government provides the resource, absorbs much of the cost, helps build the infrastructure and then calls the result "free enterprise," that is not a market. It is a handout.

That is what bothers me about the Trump administration's effort to rescind the Roadless Rule.

Most Alaskans already know the environmental argument. What gets far less attention is the economics.

If Washington wants to make an economic case for opening roadless areas of the Tongass to industrial logging, I have a simple request: Show us the unsubsidized balance sheet.

Show taxpayers what Tongass timber looks like when the purchaser pays the actual cost of doing business: preparing the sale, reaching the timber, building and maintaining roads, transporting logs, administering the program and restoring the land afterward (which rarely happens).

Because when you put the whole cost on the page, the story changes.

From fiscal years 2005 through 2014, the Forest Service reported spending an average of $12.5 million a year on Tongass timber-related expenditures while receiving just $1.1 million a year in timber revenues. That did not include agency spending for road construction and maintenance. Those are Forest Service figures reported by the U.S. Government Accountability Office.

More than $11 spent administering the timber program for every dollar received — before all road costs were counted.

Taxpayers for Common Sense later examined Forest Service data from 1999 through 2018 and calculated roughly $632 million in inflation-adjusted costs against about $34 million in timber receipts. The net taxpayer loss: approximately $598 million.  

That is not capitalism. That is corporate welfare with a chainsaw.

I am not anti-timber. Small local mills in Southeast Alaska should have opportunities to succeed. But industrial-scale federal Tongass timber is different. Proposals to make that industry "work" have included infrastructure subsidies, publicly funded equipment, below-cost timber, taxpayer-funded marketing and workforce assistance (most of which come from Washington State and Oregon).

At some point we have to ask: If government has to provide the trees, prepare the sale, subsidize the roads, help finance the equipment, create the market and absorb the losses, is the problem really a shortage of timber?

Or is the market telling us the economics simply do not work?

Even the administration's own analysis acknowledges the limitations. USDA says rescinding the rule could make millions of additional roadless acres nationally operable and available, while acknowledging actual harvesting will be constrained by budgets, operability and market conditions. Meanwhile, the Forest Service already faces billions in deferred road and bridge maintenance.

Washington already cannot afford the roads it has. The answer, apparently, is to open places where there are no roads and potentially build more.

That is not fiscal conservatism. It is not government efficiency. And it is certainly not free enterprise.

What makes this harder to justify is that Southeast Alaska already has market-based industries creating jobs from the same forest without liquidating it.

Tourism and commercial fishing depend on intact watersheds, wild salmon, scenery, wildlife and undeveloped landscapes. Our small-ship industry brings Americans into the Tongass to hike, kayak, fish, watch wildlife and experience a place that still feels wild. 

Commercial fishermen depend on those same watersheds because salmon nurseries do not stop at the edge of Forest Service jurisdiction.

We do not sell trees. We sell the fact that the trees are still standing.

That is not sentiment. It is economics.

Washington is proposing to subsidize a historically money-losing timber program while putting at risk the natural capital that tourism and commercial fishing depend upon. Government helps one industry reach the resource and absorbs much of the public cost, while other businesses are expected to absorb the consequences.

That is government picking winners and losers — and favoring the industry taxpayers have repeatedly had to prop up.

My first choice is simple: keep the Roadless Rule and stop subsidizing uneconomic industrial logging in the Tongass. Let timber compete on the same terms every other private business is expected to compete on.

If a company can buy federal timber at a price reflecting the full public cost, finance the infrastructure necessary to reach it, operate responsibly and still make money, then it has a business.

But if Washington insists on continuing the subsidy game, economic parity should apply.

For every federal dollar used to subsidize industrial Tongass timber, put a matching dollar into Southeast Alaska's U.S.-flagged small-ship tourism industry and another into commercial fisheries.

One dollar for timber. One for American-flag tourism. One for commercial fishing.

Those dollars could support American vessel construction, maritime workforce development, docks, trails, fisheries science, working waterfronts, fleet modernization, salmon habitat and enforcement of federal coastwise laws protecting American maritime commerce.

To be clear, I do not want a subsidy arms race. I want the federal government to stop pretending that one favored industry's subsidy is "economic development" while successful industries beside it are told to survive in the marketplace.

If Tongass timber is economically viable, prove it.

Put the full cost on the balance sheet. Charge for the roads. Charge for sale preparation and administration. Account for maintenance, restoration and the opportunity cost of diverting Forest Service resources from other uses.

Then let the market decide.

Because the market may already be telling us what Tongass timber is worth. Washington simply does not like the answer.

A standing forest is not idle inventory. A roadless watershed is not wasted land. A salmon stream is not an obstacle between a logging road and a tree.

They are productive economic assets.

The administration should retain the Roadless Rule. But if it is determined to spend federal dollars keeping industrial Tongass timber afloat, then it owes equal treatment to the tourism businesses and commercial fishermen expected to live with the consequences.

Either believe in the market or do not.

Just stop calling one industry's taxpayer subsidy free enterprise.

Hunter McIntosh is the president and executive director of The Boat Company where he is carrying on his family’s legacy of conservation, education and philanthropy.