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Log It or Lose It: New Economic Opportunities Open as the Forest Service Changes Its Management Tactics in Northern Arizona

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by Farris Gillman, Lucas Narducci, and Patrick Paul

Opportunity for business in Arizona is booming.  In a May 2019 ranking in Chief Executive Magazine, Arizona jumped to seventh best state to do business. Arizona is well known for its mineral deposits, but timber was once one of the state’s leading industries.

Northern Arizona has millions of acres of National Forest, including the largest Ponderosa Pine tree forest in the world. From the 1870’s to the 1980’s logging was a dominant industry in the area, but the Timber Wars of the 1980’s all but destroyed the industry in Arizona. Since then, a combination of prolonged drought and delayed forest management has turned the sylvan areas of the state into a veritable tinder box. Fire danger is a concern for every member of the forest communities. As a solution, logging operations are being incentivized to return to the Northern Arizona by the Forest Service, U.S. Bureau of Reclamation, Arizona Commerce Authority, Arizona State Department of Forestry and Fire Management, Salt River Project, and other private organizations.

A Brief History of Federal Forest Management

Beginning in the 1980’s the country was swept by the Timber Wars – a bitter battle that was waged between the timber industry and environmentalists over forest management that effectively crushed the timber industry on federal land in the West.

The aggressive firefighting policies of the Forest Service coupled with the rapid decline in the timber industry left the country with national forests that became overgrown, including the forests in Northern Arizona.

In 1995, the Forest Service began amending its approach to forest fire management, including mechanical thinning and selective fire suppression. This effectively nationalized the work once completed by the logging companies, but now with no economic output, and all done at the taxpayers’ expense. Today the Forest Service employs more firefighting personnel than every other type of employee combined. In 2017, the Forest Service received, and spent, a budget of more than $2 billion for fire suppression alone.

In Arizona, these forest management techniques have had limited success, and Arizona has paid the price in lives lost, and structures and acreage burned.

  • In 1990, the Dude Fire on the Mogollon Rim lasted 10 days, burned 44 square miles, and killed six firefighters in a burn over.
  • In 2002, the Rodeo-Chediski Fire consumed nearly half a million acres and over 400 structures.
  • In 2011, the Wallow Fire burned 538,000 acres (roughly 841 square miles) and 72 structures in the Apache National Forest.
  • In 2013, 19 firefighters lost their lives in the Yarnell Hill fire. 

Looking Forward, Finding a Proactive Solution

Logging companies, once vilified for destroying the environment, are now being called upon to save those forests and the communities that call those woods home. Logging has been limited in Northern Arizona due to the combination of various restrictions, including limitations on logging larger trees and short lease terms of roughly three years.

With the help of new local leadership, the Forest Service is undertaking a massive reforestation project called 4FRI, which covers 2.4 million acres, including the Apache-Sitgreaves, Coconino, Kaibab, and Tonto national forests. 4FRI is a collaboration between the Forest Service, U.S. Bureau of Reclamation, Arizona Commerce Authority, Arizona State Department of Forestry and Fire Management, Salt River Project, and other private organizations. The goal is (a) to produce a healthy forest that is resilient to forest fires and (b) to protect local communities and state-wide watersheds from the dangers of massive, high-intensity wildfires.

The Request for Proposals

The second, and current, phase of 4FRI is to issue a Request for Proposals (“RFP”), to allow companies to bid for contracts to mechanically thin 605,000 to 818,000 acres of national forest land in Northern Arizona. The RFP is open to and seeking a range of bidders, including large and small companies, with an emphasis on proposals that are “sustainable, innovative, feasible, and cost-effective to increase the pace of the scale of forest restoration.”

The RFP solicitation was issued September 13, 2019. Proposals will be due February 3, 2020.  Contract awards are anticipated for April 2020. The outcome of the RFP will be to award one or more Multiple-Award, Firm Fixed Price, Indefinite Delivery Indefinite Quantity, Integrated Resource Service Contract with Options, Multi-year task orders with Economic Price Adjustment and Rate Redetermination for mechanical forest restoration services.

4FRI organizers hope to have contracts to treat roughly 50,000 acres of forested land per year. There is also an expectation that contact terms will vary for areas that are particularly difficult to access, let alone log. The RFP also identifies a number of possible economic incentives that may be available to successful bidders.

How We Can Help

Our law firm, founded in Arizona in 1938, is a full-service firm of over 400 attorneys in numerous practice groups.  Our Natural Resources team is located in the western region of the United States and has practices spanning the nation. In conjunction with the firm’s other practice groups, we can provide our clients with the various legal service areas necessary. Most of our lawyers have long-standing relationships with local, state, and federal regulators and a personal awareness of and experience in the geographic areas in which we practice.